UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
March 14, 2022
(Date of earliest event reported)
NovAccess Global Inc.
(Exact name of registrant as specified in its charter)
| Colorado | 000-29621 | 84-1384159 | ||
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
| 8584 E. Washington Street, No. 127, Chagrin Falls, Ohio 44023 |
| (Address of principal executive offices) (Zip Code) |
| 8834 Mayfield Road, Suite C, Chesterland, Ohio 44026 |
| (Former name or former address, if changed since last report) |
(213) 642-9268
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| None | N/A |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed, on January 31, 2022, NovAccess Global Inc. (“NovAccess,” the “company,” “we” and “our”) entered into a preferred stock redemption agreement (the “redemption agreement”) with Daniel G. Martin, our sole board member and chairman, TN3, LLC, a company owned by Mr. Martin, Dr. Dwain K. Morris-Irvin, our chief executive officer, and Irvin Consulting, LLC, a company owned by Dr. Irvin. TN3 owned 25,000 shares of our Series B convertible preferred stock (the “preferred shares”). Pursuant to the redemption agreement, on March 14, 2022, NovAccess redeemed 24,400 of the preferred shares and Irvin Consulting purchased 600 of the preferred shares from TN3. In this Current Report on Form 8-K, we refer to the redemption of TN3’s preferred shares on March 14, 2022 and the other transactions required by the redemption agreement collectively as the “redemption transaction.”
Also in connection with closing the redemption transaction, on March 14, 2022, we entered into a common stock distribution agreement (the “stock distribution agreement”) with Innovest Global, Inc. (“Innovest”). Innovest acquired 7.5 million shares of our common stock when Innovest sold StemVax, LLC to NovAccess in September 2020. Pursuant to the stock distribution agreement, Innovest has agreed to distribute its NovAcess common stock to Innovest’s shareholders once we have registered the shares. Mr. Martin is the former chairman and chief executive officer of Innovest.
This description of the redemption and stock distribution agreements is incomplete and is qualified by the full text of the agreements, which are filed as exhibits to this Form 8-K.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
Upon completion of the redemption transaction, pursuant to the redemption agreement we became obligated to pay to TN3 a total of $250,000 over a period of eleven months, with payment accelerated if the company raises at least $2.5 million of equity capital. We have already paid $50,000 of the redemption price. We will make eight additional $25,000 payments to TN3 beginning on April 1 and continuing the first day of each month with the final payment due on November 1, 2022. Dr. Irvin forgave $7,223 of his December 30, 2021 $25,000 loan to the company to satisfy Irvin Consulting’s obligation to reimburse NovAccess for Irvin Consulting’s portion of the redemption price for the 600 preferred shares it purchased from TN3.
Item 3.02 Unregistered Sales of Equity Securities.
Pursuant to the redemption agreement, on March 14, 2022, NovAccess issued to TN3 1,502,670 shares of unregistered common stock, which is equal to 10% of our outstanding common stock on the date the redemption agreement was signed. We issued the shares to TN3 in a transaction not involving a public offering that is exempt from registration under the Securities Act of 1933 pursuant to Section 4(a)(2) of the Act.
Item 5.01 Changes in Control of Registrant.
Upon completion of the redemption transaction, Mr. Martin resigned from the NovAccess board and was replaced by John A. Cassarini and Dr. Irvin. Mr. Cassarini and Dr. Irvin’s business experience is summarized below.
John A. Cassarini, age 55, has decades of capital markets experience as an investor and portfolio manager. During the past five years he has been a private investor. Prior to that, he managed small-cap portfolios for numerous institutions, including Lehman Brothers, Barclays and Ingalls & Snyder. Mr. Cassarini has a BA in finance from Fordham University and an MBA from Columbia University.
Dwain K. Morris-Irvin, PhD, MPH, age 54, is a published researcher and patent author. Dr. Irvin stepped into the CEO role at NovAccess in October 2020, after heading the biotechnology division of Innovest Global. NovAccess acquired StemVax, LLC from Innovest in September 2020. Dr. Irvin received his PhD from the University of California, Los Angeles School of Medicine, his MPH from UCLA School of Public Health, and trained at The Wallenberg Neuroscience Center at Lund University in Lund, Sweden. He was also a professor, faculty member at Cedars-Sinai Medical Center, Department of Neurosurgery. Dr. Irvin received his PhD in Molecular & Medical Pharmacology and Developmental Neuroscience with an emphasis on neural stem cell fate and differentiation. His research focused on neural development and notch signaling in mammalian neural stem cells. He also worked as an NIH/NINDS post-doctoral fellow in Dr. Anders Bjorklund’s laboratory in Lund, Sweden. There, his focus was on research projects that investigated the potential role of cell replacement therapy for patients with Parkinson’s disease. They developed several protocols for the efficient generation of dopaminergic neurons from forebrain and ventral midbrain stem and progenitor cells. Dr. Irvin also worked as a research scientist, assistant professor, and faculty member at Cedars-Sinai Medical Center, Department of Neurosurgery. He led research investigations in the role of adaptive immunity in Parkinson’s disease. He also developed two patents in the area of immunotherapy for brain tumor patients, specifically glioblastoma multiforme (GBM). His research team focused on molecular mechanisms that impart therapeutic resistance in cancer cells, including cancer stem cells, to develop novel immunotherapies for brain tumor patients.
In addition, after completion of the redemption transaction Irvin Consulting owns 600 NovAccess preferred shares and there are no other shares of NovAccess preferred stock outstanding. Each preferred share is convertible at the option of the holder into 10,000 shares of our common stock and entitles the holder to cast 40,000 votes on any action presented to our shareholders. Dr. Irvin is the sole member of Irvin Consulting and the beneficial owner of the preferred shares held by Irvin Consulting. As a result, Dr. Irvin can cast 63.0% of the votes on any action presented to our shareholders.
For more information about the preferred stock redemption transaction, please refer to our Schedule 14F-1/A filed with the Securities and Exchange Commission on February 25, 2022.
Item 9.01 Financial Statements and Exhibits.
Exhibit 10.2 Common Stock Distribution Agreement dated March 14, 2022 between NovAccess Global Inc. and Innovest Global, Inc.
Exhibit 104 Cover Page Interactive Data File (formatted as Inline XBRL)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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NovAccess Global Inc. |
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Dated: March 14, 2022 |
By: /s/ Dwain K. Morris-Irvin Dwain K. Morris-Irvin Chief Executive Officer |
Exhibit 10.2
Common Stock Distribution Agreement
This Common Stock Distribution Agreement (this “Agreement”) is entered into effective March 14, 2022 by NovAccess Global Inc., a Colorado corporation (“NovAccess”), and Innovest Global, Inc., a Nevada corporation (“Innovest”).
Recitals
A. Innovest owns 7,500,000 shares of NovAccess common stock, no par value (the “Shares”), that NovAccess issued to Innovest in consideration for the acquisition of StemVax, LLC.
B. NovAccess intends to register the Shares for resale under the Securities Act of 1933 to allow Innovest to distribute the Shares to its shareholders, and Innovest intends to distribute the Shares to its shareholders.
NovAccess and Innovest (together, the “Parties”) agree as follows:
1 Registration of Shares
NovAccess intends to register the Shares for resale under the Securities Act of 1933 (the “Securities Act”) on Form S-1, Form A-1 or other appropriate registration statement (the “Registration”). NovAccess will be responsible for the cost of the Registration. After the date the Registration is effective under the Securities Act (the “Effective Date”), and until the Distribution (as defined below) is completed, NovAccess agrees to use its reasonable best efforts to: (i) maintain the effectiveness of the Registration; (ii) comply on a timely basis with all filing requirements applicable to it pursuant to the Securities and Exchange Act of 1934; and (iii) cause NovAccess’ common stock to be quoted on the OTC Market or listed on a national securities exchange.
2. Distribution of Shares
After the Effective Date, and so long as the Registration remains effective, Innovest agrees within 45 days following the Effective Date to distribute the Shares to the shareholders of Innovest on a pro rata basis based on their holdings of stock of Innovest and Innovest’s articles of incorporation (the “Distribution”). Innovest will be responsible for the cost of the Distribution; provided, however, that NovAccess will be responsible for any costs charged by NovAccess’ transfer agent to reissue (but not mail) the Shares. Innovest’s obligation to make the Distribution is contingent upon there being no law, rule, judgment or order, whether preliminary, temporary or permanent, in effect that prevents, makes illegal or prohibits the completion of the Distribution.
3 Representations of NovAccess
NovAccess represents to Innovest as follows:
3.1 Authority; No Conflict. The board of directors of NovAccess has authorized the execution, delivery and performance of this Agreement by NovAccess. The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or provision of, or constitute a default under, any organizational documents, agreement or instrument to which NovAccess or any of its subsidiaries is a party or to which it or any of its assets, operations or subsidiaries are subject.
3.2 Legal Proceedings. None of NovAccess or its affiliates is a party to any claim, action, suit, proceeding, or governmental investigation (“Action”), and, to NovAccess’ knowledge, there is no threatened Action, in either case, that challenges or seeks to prevent, enjoin, or otherwise delay the transactions contemplated by this Agreement.
4 Representations of Innovest
Innovest represent to NovAccess as follows:
4.1 Authority; No Conflict. The board of directors of Innovest has authorized the execution, delivery and performance of this Agreement by Innovest. The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or provision of, or constitute a default under, any organizational documents, agreement or instrument to which Innovest or any of its subsidiaries is a party or to which it or any of its assets, operations or subsidiaries are subject.
4.2 Legal Proceedings. None of Innovest or its affiliates is a party to any Action, and, to Innovest’s knowledge, there is no threatened Action, in either case: (a) relating to or affecting the Shares or in which a charging order against the Shares has been sought or awarded; or (b) that challenges or seeks to prevent, enjoin, or otherwise delay the transactions contemplated by this Agreement.
4.3 The Shares. The Shares are free and clear of all liens, encumbrances, charges and assessments of every nature (“Encumbrance”) and will be free and clear of all Encumbrances on the Effective Date. No person or entity has any right to acquire the Shares. Innovest agrees that it will not sell or otherwise transfer the Shares other than the Distribution.
5 Additional Agreements of the Parties
5.1 Publicity and Announcements. No Party may publicly disclose (orally or in writing) or issue any press release regarding the existence or terms of this Agreement, or the transactions contemplated by this Agreement, without the prior written approval of the other Parties (which shall not be unreasonably withheld or delayed), except to the extent that NovAccess (based on the advice of counsel) is required to make any public disclosure or filing regarding the subject matter of this Agreement.
5.2 Further Actions. The Parties agree to take all actions reasonably necessary to effectuate the transactions contemplated by this Agreement.
6 Termination Rights
NovAccess and Innovest may terminate this Agreement at any time by mutual written consent. Innovest may terminate this Agreement prior to the Effective Date if the Effective Date has not occurred by 5:00 P.M. Cleveland time on December 31, 2022; provided, however, that Innovest may not terminate this Agreement if it is in breach of any of its covenants or agreements contained in this Agreement.
7 Miscellaneous
7.1 Notices. All notices and other communications under this Agreement must be in writing and will be deemed given when sent by email (with electronic confirmation of transmission) to the following email addresses (or to another email address that a Party may have specified by notice given to the other Parties pursuant to this provision): (a) to NovAccess to Dwain K. Morris-Irvin at DIrvin@NovaccessGlobal.com; (b) to Innovest at SBailey@GreenpointCapitalPartners.com.
7.2 Entire Agreement. This Agreement constitutes the entire agreement between the Parties and supersedes all other agreements, whether oral or written, with respect to the subject matter of this Agreement. This Agreement may be modified or amended only by a written agreement signed by the Parties against whom the amendment is sought to be enforced.
7.3 Governing Law. This Agreement will be governed by the laws of Ohio without giving effect to applicable conflict of law provisions. With respect to any litigation arising out of or relating to this Agreement, each party agrees that it will be filed in and heard by the state or federal courts with jurisdiction to hear such suits located in Cuyahoga County, Ohio.
7.4 Assignment. This Agreement may not be assignable by a Party without prior written consent of the other Parties.
7.5 Counterparts. This Agreement may be executed in any number of counterparts, including electronically, each of which counterparts will be deemed to be an original, and such counterparts will constitute but one and the same instrument.
< Signatures on Next Page >
In Witness Whereof, the Parties have signed this Agreement as of the date listed above.
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NovAccess Global Inc. |
Innovest Global, Inc. |
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/s/ Dwain K. Morris-Irvin |
/s/ Shaheed Bailey |
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By Dwain K. Morris-Irvin Chief Executive Officer |
By Shaheed Bailey Chief Executive Officer |