UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934


Date of Report (Date of Earliest Event Reported): March 3, 2011 (February 25, 2011)

ATLAS THERAPEUTICS CORPORATION
(Exact name of registrant as specified in its charter)

Nevada
 
000-53298
 
20-8758875
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)


520 S. El Camino Real, 8th Floor
San Mateo, CA 94402
(Address of principal executive offices)

Registrant’s telephone number, including area code: (213) 291-1847

11759 Crystal Avenue
Chino, CA 91710
(Former address of principal executive offices)

 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation to the registrant under any of the following provisions:
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 

 
 
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
Certain information contained in this Current Report on Form 8-K include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  The statements herein which are not historical reflect our current expectations and projections about our future results, performance, liquidity, financial condition, prospects and opportunities and are based upon information currently available to us and our management and our management’s interpretation of what is believed to be significant factors affecting the businesses, including many assumptions regarding future events.  Such forward-looking statements include statements regarding, among other things:

  
our ability to gain acceptance of our products;

  
our anticipated future sales and profitability;

  
our future financing plans;

  
our anticipated needs for working capital;

  
our growth strategies, including future product offerings;

  
the anticipated trends in our industry;

  
acquisitions of other companies or assets that we might undertake in the future;  and

  
competition existing today or that will likely arise in the future.

     Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words “may,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology.  Actual results, performance, liquidity, financial condition, prospects and opportunities could differ materially from those expressed in, or implied by, these forward-looking statements as a result of various risks, uncertainties and other factors, including the ability to raise sufficient capital to continue our operations.  Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the risks outlined under “Risk Factors” and matters described in this Current Report on Form 8-K generally.  In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained herein will in fact occur.

Potential purchasers of our common stock or other securities should not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.
 
 
 

 
 
EXPLANATORY NOTE
 
This Current Report on Form 8-K is being filed in connection with a series of transactions consummated by the Registrant and certain related events and actions taken by the Registrant.

This Current Report on Form 8-K includes the following items:

Item 1.01
Entry into a Material Definitive Agreement
Item 2.01
Completion of Acquisition or Disposition of Assets
Item 3.02
Unregistered Sales of Equity Securities
Item 5.01
Changes in Control of Registrant
Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.06
Change in Shell Company Status
Item 9.01
Financial Statements and Exhibits
 
 
 

 

Item 1.01  Entry into a Material Definitive Agreement

On February 25, 2011, Atlas Therapeutics Corporation (the “Registrant”), Atlas Acquisition Corp., a wholly-owned subsidiary of the Registrant (“Atlas Sub”), and Peak Wellness, Inc. (“Peak”), entered into an Intellectual Property Purchase Agreement (the “Purchase Agreement”), pursuant to which Atlas Sub purchased certain intellectual property assets from Peak (the “Acquisition”).

In connection with the Purchase Agreement, we issued a secured promissory note to Peak (the “Promissory Note”) in the amount of $700,000 with interest accruing at an interest rate of 3% per annum.  The Promissory Note is payable in two installments as follows: $350,000 plus accrued interest is due within 180 days after the closing date of the Agreement and $350,000 plus accrued interest is due on the first anniversary of the closing date of the Agreement.

In connection with the Purchase Agreement and the Promissory Note, we entered into a security agreement with Peak to secure payments due under the Promissory Note (the “Security Agreement”). Pursuant to the Security Agreement, we granted Peak a continuing security interest in the assets purchased from Peak. The Security Agreement also secures all of our obligations to Peak, whether related or unrelated to the Promissory Note. Upon an event of default of the Security Agreement, Peak will have all the rights of a secured party under the Uniform Commercial Code.

Reference is made to Item 2.01 for a description of the Purchase Agreement, the Promissory Note, the Security Agreement and the related transactions.  The descriptions of the agreements are qualified in its entirety by reference to the complete text of the agreements, which are attached hereto as exhibits and incorporated by reference herein. You are urged to read the entire agreements and the other exhibits attached hereto.

All references to “us,” “we,” “our,” “the Company” and “the Registrant” refer to Atlas Therapeutics Corporation and its wholly-owned subsidiary following the consummation of the Acquisition.

Item 2.01  Completion of Acquisition or Disposition of Assets

Pursuant to the Purchase Agreement, we acquired from Peak all intellectual property pertaining to MYO-T12, a natural-myostatin inhibitor, including the formula and process for making MYO-T12, certain trademarks, trade secrets, patent applications and certain domain names.  The purchase price for the assets was $1,150,000, of which $450,000 was paid in cash and $700,000 via the issuance of the Promissory Note.  The source of the funds for the purchase price was a private placement (discussed below in Item 3.02 of this Current Report) we conducted in connection with the Acquisition. The Promissory Note is payable in two installments as follows: $350,000 plus accrued interest due within 180 days after the closing date and $350,000 plus accrued interest due on the first anniversary of the closing date. Peak was granted a security interest in the acquired assets as security for the payment of the Promissory Note pursuant to the Security Agreement. In addition to the foregoing, we issued Peak 7,024,000 shares of our common stock as additional consideration under the Purchase Agreement.

The closing of the Acquisition occurred on February 25, 2011 (the “Closing Date”). In connection with the Purchase Agreement, Dr. Carlon Colker, the principal of Peak, entered into an employment agreement to serve as our Chief Medical Officer and Executive Vice President.  For a description of Dr. Colker’s employment agreement, see “Item 6. Executive Compensation – Employment Agreements” below.
 
 
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This transaction may be deemed to have resulted in a change in control of the Registrant.  Upon the closing of the Acquisition, Georgette Mathers resigned as our Chief Executive Officer and Chief Financial Officer, and J.B. Bernstein was appointed to the Board of Directors of the Registrant.  In addition, Mr. Bernstein was appointed our Chief Executive Officer, President, Secretary and Treasurer and Dr. Colker was appointed our Chief Medical Officer and Executive Vice President.

The appointments of the new officers of the Registrant and the resignation of Ms. Mathers as an officer of the Registrant were effective on the Closing Date. The appointment of the new director will be effective upon the expiration of the 10-day period beginning on the date of the filing and mailing of an Information Statement with the Securities Exchange Commission (the “SEC”) pursuant to Section 14(f) of the Securities Exchange Act of 1934, as amended (“Exchange Act”). At such time, Ms. Mathers shall resign as a director of the Registrant. In connection with the Acquisition, Ms. Mathers transferred all of her shares of common stock to various individuals, including certain of the persons set forth below on the “Post-Acquisition” table in “Item 4.  Security Ownership of Certain Beneficial Owners and Management.”

The foregoing description of the Purchase Agreement and the transactions contemplated thereby are subject to the more detailed provisions set forth in the agreement, which is attached hereto as Exhibit 2.1 and which is incorporated herein by reference.  All references to the Purchase Agreement and other exhibits to this Current Report are qualified, in their entirety, by the text of such exhibits.
 
FORM 10 INFORMATION

Information in response to this item 2.01 below is keyed to the item number of Form 10.

Part I

Item 1.  Description of Business.

Overview

Atlas Therapeutics Corporation (“us,” “we,” “our,” “the Company” and “the Registrant”) was incorporated in the State of Nevada on April 11, 2007. Its principal offices are in San Mateo, California. The Registrant was a development stage company with the principal business objective of becoming a premier franchisor of retail shipping, postal, courier and business service centers by providing a wide range of convenient, value-added business services to consumers, mobile and traveling professionals and the small office/home office market. The Registrant entered into the Intellectual Property Purchase Agreement (“Purchase Agreement”) in February 2011 pursuant to which it purchased certain intellectual property from Peak Wellness, Inc., an integrative medical healthcare  provider focused on private, personal medical and healthcare coupled with nutrition, diet, and weight loss counseling, sports rehabilitation, physical therapy, and exercise physiology.  As a result of the Purchase Agreement, the Registrant entered into a new business, a summary of which is described below.

General

We are a corporation focused on the formulation, acquisition and distribution of nutritional, nutraceutical, physical performance enhancement and wellness products.  Led by our new Chief Executive Officer, J.B. Bernstein, and our new Chief Medical Officer, Dr. Carlon Colker, our management team has the experience in the formulation and development of such products as well as the marketing expertise required to bring these products to market. With the Acquisition, we have acquired our first proprietary formulation—MYO-T12, and plan to formulate or acquire additional products in the future.
 
 
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MYO-T12 has been developed to take advantage of the following market place characteristics:

  
High incidence and high growth of targeted lifestyle objectives;
 
  
Identifiable market segments and known consumer purchasing patterns for targeted market segment;
 
  
Low-cost manufacturing and distribution; and
 
  
Branded consumer product preferences.
 
We believe that the combination of the above marketplace characteristics, combined with our management’s experience and current and future products will enable our business model to be successful.

Market Overview

The total U.S. retail market for nutritional supplements is highly fragmented and is rapidly growing. We believe that the rapid growth in this market segment is due to a number of factors, including (i) increased interest in healthier lifestyles, (ii) publication of research findings supporting the positive health effects of certain nutritional supplementation products and (iii) the aging of the “baby boom” generation combined with the tendency of consumers to purchase an increasing number of nutritional maximization and wellness products as they age.  We believe we are well-positioned to capitalize on the growth of the nutritional and wellness markets.
 
Our Current Product—MYO-T12

In connection with the Acquisition, we obtained all rights, trademarks and know-how to a nutrition and physician maximization product known as MYO-T12.  MYO-T12 has been shown in a clinical study to influence human body production of a genetic protein called myostatin. MYO-T12 is manufactured to optimize biological activity. MYO-T12 is manufactured to optimize biological activity and has demonstrated its potential in redefining existing standards of physical enhancement.   Myostatin is a   substance identified in recent years as being the most overwhelming force inhibiting muscle growth and recovery. Myostatin is a protein produced by nearly every vertebrate animal including humans. Early science recognized that there were rare animals and people that naturally lacked the gene needed to produce myostatin, and were incredibly healthy while being well-muscled and immensely strong. But for the rest of the human race of myostatin producers, gaining muscles is a comparative struggle. T o even slightly overcome a person’s myostatin levels, a person needs to weight train with incredible intensity and frequency. Even then, results are often disappointing and often lead people to use and abuse illegal performance-enhancing drugs including testosterone and growth hormone.

In 2005, Carlon M. Colker, M.D., FACN, our Chief Medical Officer, discovered that a natural substance known to inhibit myostatin is found in significant levels in standard store-bought fertilized chicken eggs (Journal of the American College of Nutrition, Volume 25, No. 5; Abstract 65; October 2006).  These eggs, which are in the food supply, are 100% natural and are eaten regularly across the United States. The key to myostatin inhibition is the production of biologically active substances by approximately 20,000 cells in the blastodisc of the fertile egg, barely visible to the naked eye. These cells produce myostatin inhibition.  When magnified by a proprietary de-bulking and high-grade handling process, a concentrated biologically active powder is made. This powder is the main ingredient in MYO-T12.
 
 
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We believe that the underlying proprietary formulation technology of MYO-T12 will provide us with a compelling product in the competitive marketplace. We believe MYO-T12 is the only supplement of its kind:

  
backed by more than a decade of evolutionary bench work and published scientific research;
  
shown in study subjects to produce high-grade short-term suppression of myostatin in 100% of the human test study subjects; and
  
shown to reduce blood levels of myostatin among study subjects by an average of 46% in only 12-18 hours after first use.

MYO-T12 is not on any known banned substance list for the major sports organizations and fully excluded from any restrictions of the World Anti-Doping Agency or the International Olympic Committee.

Strategy

Our strategy is to become a leader in supplying quality branded products via an online platform while generating growth and profitability.  We have chosen to focus specifically on the formulation and distribution of nutrition/physical maximization and wellness products.  As such, we seek to gain market share in the rapidly growing marketplace by (i) distributing  our  core branded product--MYO-T12, (ii) formulating, and developing new and complementary product lines, (iii) expanding our marketing efforts through highly targeted and carefully researched/customized nationwide multimedia marketing campaigns, and (iv) making strategic product acquisitions.  In addition to the foregoing, recognizing the fragmented nature of the nutritional and wellness industry, we hope to capitalize on the significant opportunities for growth through strategic acquisitions.  We will seek acquisitions that serve to expand our brand name, broaden our product offerings or facilitate entry into complementary distribution channels.

Marketing, Sales and Distribution

     We believe e-commerce is a sustainable and permanent business model that can enable us to penetrate our market.  We believe brand-focused web retailers that can provide quality products and outstanding customer service are becoming the preferred forum for purchasing by many consumers.  While traditional retailers are often plagued by excessive overhead and local marketing, e-commerce companies do not face these daunting challenges.  Multi-faceted targeted marketing campaigns can be created simultaneously, which would allow us to reach various market segments with relative ease and with little expense.  We will target customers who are looking for proactive, non-invasive, and non-pharmaceutical ways to stay healthy by providing MYO-T12 and other future products via an online platform.

     We are focused on a direct to end-user e-commerce based sales model.  We believe this model will give us an advantage over our competitors both by collecting the full retail price for our current and future products as well as eliminating the servicing costs associated with traditional retail ventures. Our long-range goal is not only to penetrate the fitness and nutritional maximization supplement marketplace but also to create an icon brand.  Initially, assuming we have sufficient funds, we will (i) engage in web-based marketing to generate product awareness in the traditional print advertising in sector specific publications, (ii) use television and radio promotions and (iii) benefit from celebrity ambassadors for each target market segment.

     Our objective is to utilize management’s marketing and sales abilities and resources to generate revenue and establish a market presence in key product categories that can be expanded as we grow.  We will focus on seamless order processing, simplified consumer purchase decisions and providing clean and standardized marketing data, which will enable us to remain relevant to our customers’ evolving needs.
 
 
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Research and Development

Our research and development efforts with respect to the formulation of MYO-T12 are substantially complete.  Much of our basic scientific work with respect thereto was performed by Dr. Colker, our Chief Medical Officer, prior to the Acquisition. We intend to focus our research and development activities on creating additional nutritional maximization and wellness products.

Manufacturing; Raw Materials and Suppliers

Rather than seeking to acquire or build a manufacturing facility, we will initially leverage management’s existing relationships to outsource manufacturing of MYO-T12 to trusted third party manufacturers.  We believe this arrangement will provide us with an advantage in our margins and improve our return on assets.

We expect that all of the raw materials for our current product will be sourced by the manufacturer   from third-party suppliers. Neither we nor our manufacturer has significant long-term supply contracts with the suppliers.  Any shortages in our raw materials could result in materially higher raw material prices and adversely affect our ability to outsource the manufacture of our product.  

Competition

The market for nutritional maximization and wellness products is highly competitive.  Competition is based primarily on price, quality, customer service, marketing and product effectiveness.  Our competition includes numerous nutritional supplement companies that are highly fragmented in terms of geographic market coverage, distribution channels and product categories.  In addition, large pharmaceutical companies and packaged food and beverage companies compete with us in the nutritional supplement market.  These companies and certain nutritional supplement companies have broader product lines and/or larger sales volumes than us and have greater financial and other resources available to them and possess extensive manufacturing, distribution and marketing capabilities.  Other companies are able to compete more effectively due to a greater extent of vertical integration.  Private label products of our competitors, which in recent years have significantly increased in certain nutrition categories, compete directly with our products.  In several product categories, private label items are the market share leaders.  Increased competition from such companies, including private label pressures, could have a material adverse effect on our results of operations and financial condition.  Many companies within our industry are privately-held and therefore, we are unable to assess the size of all of our competitors or where we rank in comparison to such privately-held competitors with respect to sales.  

Governmental Regulation

The formulation, manufacturing, packaging, labeling, advertising, distribution and sale of our products are subject to the laws and regulations of various federal governmental agencies, including the Food and Drug Administration (“FDA”), the Federal Trade Commission (“FTC”), the U.S. Department of Agriculture, the U.S. Consumer Products Safety Commission, the Environmental Protection Agency and the Postal Service, and also various agencies of the states, localities and countries in which we operate and sell our products.
 
 
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            The FDA regulates foods and dietary supplements through the Food, Drug and Cosmetic Act (“FDCA”) and amendments thereto, including the Dietary Supplement Health and Education Act of 1994, as amended (“DSHEA”), which is intended to promote access to safe, quality dietary supplements and information about dietary supplements.  DSHEA establishes a statutory class of dietary supplements, including vitamins, minerals, herbs, amino acids and other dietary substances for human use to supplement the diet, as well as concentrates, metabolites, extracts or combinations of such dietary ingredients.  Generally, under DSHEA, dietary ingredients on the market before October 15, 1994 may be used without further notification to the FDA.  However, dietary ingredients not marketed prior to October 15, 1994 may be “new dietary ingredients” under DSHEA and may require a submission to the FDA at least 75 days prior to marketing such ingredients evidencing a history of use or other evidence of safety to establish that the ingredient will reasonably be expected to be safe.  We cannot assure you that the FDA will accept the evidence of safety for any new products that we may want to market, and the FDA’s refusal to accept such evidence could prevent the marketing of such dietary ingredients.  In addition, increased FDA enforcement could lead the FDA to challenge dietary ingredients already on the market as “illegal” under the FDCA because of the failure to file a new dietary ingredient notification.  The FDA can also stop a company from selling a dietary supplement that is toxic or unsanitary and can take action against any products that pose a significant or unreasonable risk of illness or injury.
 
DSHEA permits statements of “nutritional support” for dietary supplements that may describe how particular dietary ingredients affect the structure, function or general well-being of the body or describe the mechanism of action by which dietary ingredients affect the foregoing.  These statements of nutritional support, or “structure/function claims,” may not make a health claim or disease claim, meaning that a statement may not claim to diagnose, treat, prevent, cure or mitigate an illness or disease unless the claim was authorized by the FDA.  A structure/function claim in advertising or on a product label must have substantiation that the claim is truthful and not misleading, and have a disclaimer that the statement has not been evaluated by the FDA and that the product is not intended to diagnose, treat, cure or prevent any disease.  We cannot assure you that a regulatory agency, court or other third party will not deem one or more of our product claims or labels to be impermissible and take adverse action against us.
 
     In addition, DSHEA provides that certain “third-party literature,” such as a reprint of a peer-reviewed scientific publication linking a particular dietary ingredient with health benefits, may be used “in connection with the sale of a dietary supplement to consumers” without the literature being subject to the same regulation as labeling.  Such literature must not be false or misleading, the literature may not “promote” a particular manufacturer or brand of dietary supplement and must present a balanced view of the available scientific information on the subject matter.  We cannot assure you that all third-party literature that we would like to disseminate in connection with our products will satisfy each of these requirements, and failure to satisfy all requirements could prevent use of the literature or subject us to adverse actions by regulatory agencies or other third parties.

In June 2007, the FDA published final Good Manufacturing Practices (“GMPs”) specifically for the dietary supplement industry.  The effective compliance date for companies like ours with fewer than 500 employees was June 22, 2009.  These GMPs are more detailed than the GMPs previously applicable to us and result in increased expenses, changes to our processes or products and/or implementation of additional recordkeeping and administrative procedures.  Among other things, these GMPs: (i) require identity testing on all incoming dietary ingredients, (ii) call for a “scientifically valid system” for ensuring finished products meet all specifications, (iii) include requirements related to process controls, including statistical sampling of finished batches for testing and requirements for written procedures, and (iv) require extensive recordkeeping.  We do not currently expect the incremental cost of ongoing compliance efforts to be material.  

While we believe we are currently in compliance with the GMPs, there can be no assurance that our operations or those of our suppliers will be in compliance in all respects at all times.  Additionally, there is a potential risk of increased audits as the FDA and other regulators seek to ensure compliance with the GMPs.
 
 
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In December 2006, Congress passed legislation requiring companies that manufacture or distribute over-the-counter (“OTC”) products or dietary supplements to report serious adverse events allegedly associated with their products to the FDA and institute recordkeeping procedures for all alleged adverse events (serious and non-serious).  The legislation requires manufacturers and distributors of OTC products or dietary supplements to report to the FDA any serious adverse event reports received, even if the party making the report provides no medical or other information to the manufacturer or distributor.  There is a risk that consumers, the press or government regulators could misinterpret adverse event reports as evidence of causation by the ingredient or product complained of, which could lead to consumer confusion, damage to our reputation, additional regulations, banned or recalled ingredients or products, increased insurance costs and a potential increase in product liability litigation, among other things.  Any of the foregoing could have a material adverse effect on our results of operations and financial condition.
 
The FTC exercises jurisdiction over the advertising of nutritional and dietary supplements under the Federal Trade Commission Act.  The FTC can challenge and stop advertising that is not adequately substantiated. In November 1998, the FTC published an advertising guideline for the dietary supplement industry entitled “Dietary Supplements: An Advertising Guide for Industry.”  These guidelines reiterate many of the policies regarding dietary supplements the FTC has periodically announced over the years, particularly with respect to the substantiation of claims made in advertising of dietary supplement products.  In the past several years, the FTC has instituted several enforcement actions against dietary supplement companies alleging false and misleading advertising of certain products.  These enforcement actions have resulted in consent decrees and/or the payment of fines by certain of the companies involved.  
 
The National Advertising Division (“NAD”) of the Council of Better Business Bureaus oversees an industry-sponsored self-regulatory system that permits competitors to resolve disputes over advertising claims.  The NAD also has its own advertising monitoring program, and initiates its own challenges to advertising that it has reviewed.  The NAD has no enforcement authority of its own, but may refer matters that the NAD views as violating FTC rules, regulations or guidance to the FTC for further action.   We cannot assure you that in the future the NAD will not deem one or more of our advertising claims to be impermissible.

Federal agencies, primarily the FDA and FTC, have a variety of procedures and enforcement remedies available to them, including initiating investigations, issuing warning letters and cease and desist orders, requiring reformulation of products, requiring corrective labeling or advertising, requiring consumer redress (for example, requiring that a company offer to repurchase products previously sold to consumers), seeking injunctive relief or product seizures, and imposing civil penalties or commencing criminal prosecution.  In addition, certain state agencies have similar authority.  These federal and state agencies have in the past used these remedies in regulating participants in the dietary supplement industry. In addition, the FDA has been able to generate a significant amount of media coverage when concerned about an ingredient or product.  When the media covers such a story, the reputation of a company, product or ingredient may be seriously damaged, even if the information provided is incomplete or incorrect.
 
 
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     Our future international activities are subject to regulation in each country in which we sell or distribute our products.  In markets outside the United States, before commencing operations or marketing our products, we may be required to obtain approvals, licenses or certifications from a country’s ministry of health or comparable agency.  Approvals or licensing may be conditioned on reformulation of products or may be unavailable with respect to certain products or product ingredients.  We must also comply with product labeling and packaging regulations that vary from country to country.  Furthermore, the regulations of these countries may conflict with those in the United States and with each other, sometimes causing higher costs and expenses, product reformulations, and delay.  In countries in which we do not have direct relationships with retailers, independent distributors generally have responsibility for compliance with applicable foreign laws and regulations.  These distributors are independent contractors over whom we have limited control.
 
As a result of our efforts to comply with applicable statutes and regulations, from time to time we may have to reformulate, eliminate or relabel certain of our products and revised certain aspects of our sales, marketing and advertising programs, which could have a material adverse effect on our results of operations and financial condition.
 
We may be subject to additional laws or regulations by the FDA or other federal, state, county, local or foreign regulatory authorities, the repeal of laws or regulations which we consider favorable, such as DSHEA, or more stringent interpretations of current laws or regulations, from time to time in the future.  There has recently been several new laws proposed at the federal level that would be unfavorable to our industry and our company, if enacted as proposed.  We are unable to predict the nature of such future laws, regulations, interpretations or applications, nor can we predict what effect additional governmental regulations, legal proceedings or administrative orders, when and if promulgated or initiated, would have on our business in the future.  Such changes could, however, require the reformulation of certain products to meet new standards, the recall or discontinuance of certain products not able to be reformulated, additional recordkeeping requirements, expanded documentation of the properties of certain products, new or different labeling, additional scientific substantiation, additional personnel, or new or additional processes, procedures or requirements.  Any or all of such changes or requirements and the related costs to comply with such changes or requirements could have a material adverse affect on our results of operations and financial condition.

Employees

As of the date of this Current Report, we had 2 employees comprised of our Chief Executive Officer and our Chief Medical Officer. While our Chief Executive Offer will be a full-time employee, he will devote a small portion of his time to his other businesses. Our Chief Medical Officer will be a part-time employee.  None of these employees is covered by a collective bargaining agreement and our management considers relations with employees to be good.

Facilities

Our headquarters are located at 520 S. El Camino Real, 8th Floor, San Mateo, CA 94402. Our headquarters are located in the current office space of our Chief Executive Officer, who is providing the office space to us free of charge. We intend to search for additional office space for our operations.

Legal Proceedings

We are not involved in any pending or threatened legal proceedings.
 
 
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Item 1A.  Risk Factors.

Our business, operations and financial condition are subject to various risks.  Some of these risks are described below and you should take these risks into account in making a decision to invest in our Common Stock.  If any of the following risks actually occurs, we may not be able to conduct our business as currently planned and our financial condition and operating results could be seriously harmed.  In that case, the market price of our Common Stock could decline and you could lose all or part of your investment in our Common Stock. Additional risks and uncertainties not presently known to management, or which management believes are immaterial, may also impair our operations.
 
RISKS RELATING TO THE COMPANY

Our limited operating history makes it difficult to evaluate our future prospects and results of operations .

We are a development stage company and have a limited operating history. Our future prospects should be considered in light of the risks and uncertainties experienced by early stage companies in evolving markets such as the market for our product in the United States.  We will continue to encounter risks and difficulties that companies at a similar stage of development frequently experience, including the potential failure to:

  
Offer products to attract customers;
 
  
Increase awareness of our brand and develop customer loyalty;
 
  
Respond to competitive market conditions;
 
  
Respond to changes in our regulatory environment;
 
  
Manage risks associated with intellectual property rights;
 
  
Maintain effective control of our costs and expenses; and
 
  
Attract, retain and motivate qualified personnel.
 
If we are unable to address any or all of the foregoing risks, our business may be materially and adversely affected.

MYO-T12 is our sole product and we are highly dependent on the successful marketing and sales of MYO-T12. There is no assurance that we will be able to develop any additional products.
 
MYO-T12 is our only product.  We may fail to successfully market and promote MTO-T12.  Successfully marketing and promoting products such as MTO-T12 is a complex and uncertain process, dependent on the efforts of management, outside consultants and general economic conditions, among other things.  Any factors that adversely impact the marketing and sales of MYO-T12 including, but not limited to, competition, acceptance in the marketplace, or delays related to production and distribution or regulatory issues, will likely have a negative impact on our cash flow and operating results.  The commercial success of our product also depends upon:

  
the quality and acceptance of other competing brands and products;
  
creating effective distribution channels and brand awareness;
  
critical reviews;
  
the availability of alternatives;
  
general economic conditions; and
  
other tangible and intangible factors.
 
 
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Each of these factors is subject to change and cannot be predicted with certainty. We cannot assure you that we will be successful in developing or marketing any potential enhancements to MYO-T12 or any other products.  Our inability to successfully market our current products and/or successfully develop and market additional products, or any enhancements to our products which we may develop, would have a material adverse effect on the our business and results of operations.
 
Our independent registered public accounting firm has issued a “going concern” opinion.

Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. We plan to continue to provide for our capital requirements by issuing additional equity. No assurance can be given that additional capital will be available when required or on terms acceptable to us. We also cannot give assurance that we will achieve sufficient revenues in the future to achieve profitability and cash flow positive operations. The outcome of these matters cannot be predicted at this time and there are no assurances that, if achieved, we will have sufficient funds to execute our business plan or to generate positive operating results. Our independent registered public accounting firm has indicated that these matters, among others, raise substantial doubt about our ability to continue as a going concern.

We have a history of losses and cash flow deficits, and we expect to continue to operate at a loss and to have negative cash flow for the foreseeable future, which could cause the price of our stock to decline.

We have incurred net losses since our inception. At September 30, 2010, we had cumulative net losses of approximately $133,000.  We also had negative cash flow from start-up activities.  As such, there is substantial doubt about our ability to continue as a going concern.  Historically, we have funded our operations from internally generated funds and the proceeds from the sale of equity securities.  Our growth strategy is to implement our strategic business plan, which is likely to result in additional losses and negative cash flow for the foreseeable future. We cannot give assurances that we will ever become profitable.

We will likely need to raise additional funds in the future to grow our business, which funds may not be available on acceptable terms or at all. If we are unable to raise funds as needed, we may not be able to maintain or expand our business.

We expect that the net proceeds from the private placement we conducted in connection with the Acquisition (the “Private Placement”), together with cash generated from operations, will be sufficient to fund our projected operations for at least the next six months.  It is likely that in the future we will require substantial funds to fund operating expenses, to develop manufacturing, marketing and sales capabilities and to cover public company costs. We may seek additional funding through public or private financing or through collaborative arrangements with strategic partners.

The extent of our capital needs will depend on numerous factors, including (i) our profitability, (ii) the release of competitive products by our competition, (iii) the level of investment in research and development and (iv) the amount of our capital expenditures.  We cannot assure you that we will be able to obtain capital in the future to meet our needs.  If we cannot obtain additional funding, we may be required to limit our marketing efforts and decrease or eliminate capital expenditures.

We cannot be certain that additional capital will be available on favorable terms, if at all. In addition, any available additional financing may not be adequate to meet our goals. Any equity financing would result in dilution to stockholders.
 
 
10

 

If we are unable to manage our growth, our business may be materially and adversely affected.

We need to manage growth in operations to maximize our potential growth and achieve our expected revenues.  In order to maximize potential growth in our current market, we believe that we must fully utilize our marketing operations.  This will require a constant flow of working capital.  Engaging the full capacity of our limited staff may place a significant strain on our management, operations, and accounting and information systems.  We expect that we will need to continue to improve our financial controls, operating procedures and management information system.  The failure to manage our growth could adversely affect our business and operations.

If we are not able to implement our strategies to achieve our business objectives, our business operations and financial performance may be adversely affected.

Our business plan is based on circumstances currently prevailing and the bases and assumptions that certain circumstances will or will not occur as well as the inherent risk and uncertainties involved in various stages of development.  However there is no assurance that we will be successful in implementing our strategies or that our strategies, even if implemented, will lead to the successful achievement of our objectives.  If we are not able to successfully implement our strategies, our business operations and financial performance may be adversely affected.
 
If we lose the services of our key personnel, we may be unable to replace them, and our business, financial condition and results of operations could be adversely affected.

Our success largely depends on the continued skills, experience, efforts and policies of our management and other key personnel and our ability to continue to attract, motivate and retain highly qualified employees. In particular, the services of J.B. Bernstein, our Chief Executive Officer, and Carlon Colker, MD, FACN, our Chief Medical Officer, are integral to the creation of our current and future products and the execution of our business strategy. Dr. Colker will continue to maintain a separate medical practice and other activities relating to Peak and will not devote his full-time to our business. In addition, his obligations to his medical practice and his activities at Peak will take precedence over his obligations to our business. Furthermore, Dr. Colker is not subject to any non-competition or non-solicitation restrictions subsequent to the termination of his employment with us.

If one or more of our key employees leaves our employment, we will need to find a replacement with the combination of skills and attributes necessary to execute our strategy. Because competition for skilled employees is intense, and the process of finding qualified individuals can be lengthy and expensive, we believe that the loss of the services of key personnel could adversely affect our business, financial condition and results of operations. We cannot assure you that we will continue to retain such personnel.

In addition, we do not presently have a Chief Financial Officer who is familiar with the accounting and reporting requirements of a U.S. publicly-listed company.  No assurances can be given that we will be able to identify or afford the financial requirements of qualified candidates.  The position of Chief Financial Officer of a U.S. publicly-listed company is critical to the operations of such a company, and our failure to fill this position in a timely and effective manner will negatively impact our business.
 
 
11

 

Our future success will depend on our ability to anticipate and respond in a timely manner to changing consumer demands.

Our future success will depend on the appeal of our current and future products to a broad range of consumers whose preferences cannot be predicted with certainty and are subject to change.  If our current and future products do not meet consumer demands, our sales may decline.  In addition, our growth depends upon our ability to develop new products through product line extensions and product modifications, which involve numerous risks.  We may not be able to accurately identify consumer preferences, translate our knowledge into customer accepted products or successfully integrate these products with our existing product platform or operations.  We may also experience increased expenses incurred in connection with product development, marketing and advertising that are not subsequently supported by a sufficient level of sales, which would negatively affect our margins.  Furthermore, product development may divert management’s attention from other business concerns, which could cause sales of our existing product to suffer.  We cannot assure you that newly developed products will contribute favorably to our operating results.

If our current or future products fail to properly perform, our business could suffer due to increased costs and reduced income.  Failure of our current or future products to meet consumer expectations could result in decreased sales, delayed market acceptance of our products, increased accounts receivable and divert our resources to reformulation or alternative products.

Our business is dependent on continually developing or acquiring new and advanced products and processes and our failure to do so may cause us to lose our competitiveness and may cause our profits to decline.

To remain competitive in our industry, we believe it is important to continually develop new and advanced products and processes.  There is no assurance that our competitors’ new products and processes will not render our existing products obsolete or non-competitive.  Our competitiveness in the marketplace relies upon our ability to enhance our current products, introduce new products, and develop and implement new technologies and processes.  Our failure to evolve and/or develop new or enhanced products may cause us to lose our competitiveness in the marketplace and may cause our profits to decline.

Adverse publicity or consumer perception of our products and any similar products distributed by others could harm our reputation and adversely affect our sales and revenues.

We are highly dependent upon positive consumer perceptions of the safety and quality of our products as well as similar products distributed by our competitors.  Consumer perception of nutritional maximization products and our products in particular can be substantially influenced by scientific research or findings, national media attention and other publicity about product use.  Adverse publicity from such sources regarding the safety, quality or efficacy of neutraceuticals, in general, and our products in particular, could harm our reputation and results of operations.  The mere publication of reports asserting that such products may be harmful or questioning their efficacy could have a material adverse effect on our business, financial condition and results of operations, regardless of whether such reports are scientifically supported or whether the claimed harmful effects would be present at the dosages recommended for such products.
 
We may be exposed to material product liability claims, which could increase our costs and adversely affect our reputation and business.

As a marketer and distributor of products designed for human consumption, we are subject to product liability claims if the use of our products is alleged to have resulted in injury.  Previously unknown adverse reactions resulting from human consumption of these ingredients could occur.  The cost of defending against such claims can be substantially higher than the cost of settlement even when such claims are without merit.  The high cost to defend or settle product liability claims could have a material adverse effect on our business and operating results.
 
 
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Our insurance coverage may be insufficient to cover our legal claims or other losses that we may incur in the future.

We expect to maintain insurance, including property, general and product liability and other forms of insurance to protect ourselves against potential loss exposures.  In the future, insurance coverage may not be available at adequate levels or on adequate terms to cover potential losses.  If insurance coverage is inadequate or unavailable, we may face claims that exceed coverage limits or that are not covered, which could increase our costs and adversely affect our operating results.

If side effects associated with our current or future products are indentified, we may be required to withdraw such products from the market, change the labeling of our product and/or be subject to product liability claims.

There is a potential for all ingested products to result in side effects in certain consumers.  Although we are not aware of any adverse effects on the health of consumers, if any such side effects are identified after marketing and sale of the product, the product may be required to be withdrawn from the market or require a change in labeling. If a product liability claim is brought against us, it may, regardless of merit or eventual outcome, result in damage to our reputation, breach of contracts with consumers, decreased demand for our products, costly litigation and loss of revenue.

A shortage in the supply of, or a price increase in, raw materials could increase our costs or adversely affect our sales and revenues.

We expect that all of the raw materials will be sourced by our manufacturer   from third-party suppliers with whom we do not, and our manufacturer may not, have significant long-term supply contracts.  Any shortages in our raw materials could result in materially higher raw material prices and adversely affect our ability to outsource the manufacture of our product.  Price increases from a supplier will affect our profitability if we are not able to pass price increases on to customers.  The inability to obtain adequate supplies of raw materials in a timely manner or a material increase in the price of our raw materials could have a material adverse effect on our business, financial condition and results of operations.

Our research and development may be costly and/or untimely, and there are no assurances that our research and development will either be successful or completed within the anticipated timeframe, if ever at all.

The continued research and development of MYO-T12 and its subsequent commercialization is important to our success.  In addition, the development of new products requires significant research, development and testing efforts. We have limited resources to devote to and limited capabilities to conduct the continued development of MYO-T12 and new products. We currently have only one employee who is engaged in research and development. We may enter into agreements with third party vendors to engage in research and development for us.  However, the failure of the third-party research to perform under agreements entered into with us, or our failure to renew important research agreements with a third party, may delay or curtail our research and development efforts. The research and development of new products is costly and time consuming, and there are no assurances that our research and development will either be successful or completed within the anticipated time frame, if at all.  Even if a new product is developed, there is no assurance that it will be commercialized or result in sales.
 
 
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We may not be able to protect our intellectual property rights upon which our business relies, which could cause our assets to lose value.

Our business depends and will continue to depend on our intellectual property, including our valuable brands, content, services and internally developed technology. We believe our intellectual property rights are important to our continued success and our competitive position.  However, we may be unable or unwilling to strictly enforce our intellectual property rights, including our trademarks, from infringement.  In addition, we have not patented our intellectual property nor have we submitted a patent application to the U.S. Patent and Trademark Office for our product. Our failure to enforce our intellectual property rights could diminish the value of our brands and product offerings and harm our business and future growth prospects.

In addition, unauthorized parties may attempt to copy or otherwise obtain and use our services, technology and other intellectual property, and we cannot be certain that the steps we have taken to protect our proprietary rights will prevent any misappropriation or confusion among consumers and merchants, or unauthorized use of these rights. Advancements in technology have exacerbated the risk by making it easier to duplicate and disseminate intellectual property. In addition, as our business becomes more global in scope, we may not be able to protect our proprietary rights in a cost-effective manner in a multitude of jurisdictions with varying laws. If we are unable to procure, protect and enforce our intellectual property rights, we may not realize the full value of these assets, and our business may suffer. If we must litigate in the United States or elsewhere to enforce our intellectual property rights or determine the validity and scope of the proprietary rights of others, such litigation may be costly and divert the attention of our management.
 
We may be subject to intellectual property rights claims, which are costly to defend, could require us to pay damages and could limit our ability to sell some of our products.

We may become subject to intellectual property litigation or infringement claims, which could cause us to incur significant expenses to defend such claims, divert management’s attention or prevent us from manufacturing, selling or using some aspect of our current or future products.  If we choose or are forced to settle such claims, we may be required to pay for a license to certain rights, pay royalties on both a retrospective and prospective basis, and/or cease manufacturing and selling certain infringing products.  Future infringement claims against us by third parties may adversely impact our business, financial condition and results of operations.

Intense competition from existing and new entities may adversely affect our revenues and profitability .

We face competitors that will attempt to create, or are already creating, products that are similar to ours.  Many of our current and potential competitors have significantly longer operating histories and significantly greater managerial, financial, marketing, technical and other competitive resources, as well as greater name recognition, than we do.  These competitors may be able to respond more quickly to new or changing opportunities and customer requirements and may be able to undertake more extensive promotional activities, offer more attractive terms to customers or adopt more aggressive pricing policies.  We cannot assure you that we will be able to compete effectively with current or future competitors or that the competitive pressures we face will not harm our business.

Our inability to extend the maturities of, or to refinance, our short-term debt could result in defaults, and in certain instances, foreclosures on our assets.

In connection with the Acquisition, we issued the Promissory Note to Peak in the amount of $700,000 with an annual interest rate of 3% per annum.  Equal payments of $350,000 (plus accrued interest) are due six months and one year from the closing of the Acquisition.  We cannot assure you that our business will generate sufficient cash flow from operations to repay this obligation. Failure to obtain extensions of the maturity dates of, or to refinance, this obligation or to obtain additional equity financing to meet this debt obligation would result in an event of default with respect to such obligation and could result in the foreclosure on the intellectual property purchased from Peak. The foreclosure on such collateral would have a material adverse effect on our business and operations.
 
 
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Even if we are able to locate a source of additional capital, we may not be able to negotiate terms and conditions for receiving the additional capital that are acceptable to us.

Any future capital investments could dilute or otherwise materially adversely affects the holdings or rights of our existing shareholders.  In addition, new equity or convertible debt securities issued by us to obtain financing could have rights, preferences and privileges senior to our common stock.  There is no assurance that any additional financing will be available, or if available, will be on terms favorable to us.

We have not developed independent corporate governance.

We do not presently have independent directors or audit, compensation, or nominating committees. This lack of independence and independent controls over our corporate affairs may result in conflicts of interest between our officers, directors and our shareholders. We presently have no policy to resolve such conflicts. As a result, our directors have the ability to, among other things, determine their own level of compensation. Until we comply with such corporate governance measures to appoint a majority of independent directors and form audit and other board committees in a manner consistent with rules of a national securities exchange, there is no assurance that we will not be subject to any conflicts of interest. As a result, potential investors may be reluctant to provide us with funds necessary to expand our operations.

We are dependent on third-party suppliers and manufacturers.

We rely on third parties to provide us with the raw materials for our product and to manufacture our products.  If our suppliers cannot provide us with the required raw materials in a timely fashion or our manufacturer is unable to produce sufficient quantities of our product, our business and revenues will be adversely affected.

The scientific support for our products is subject to uncertainty.

Our research, scientific knowledge and clinical testing supporting the benefits of our products is an essential element of our ability to legally market our products.  We believe that the findings and opinions of our Chief Medical Officer and our research are sound and that we have a reasonable basis to market the MYO-T12 product.  There is, however, the risk that new or undiscovered information may become available that may undermine or refute our scientific support.  A reduction in the credibility of our scientific support for the nutritional benefits of our products could have a material adverse effect on our operations and financial conditions.
 
We may be subject to uncertain and costly compliance with government regulations.

The manufacturing, processing, formulating, packaging, labeling, distributing, selling and advertising of our current and future products may be subject to regulation by one or more federal agencies.  The most active regulation has been administered by The Food and Drug Administration (the “FDA”) which regulates our products pursuant to the Federal Food, Drug and Cosmetic Act (the “FDCA”) and regulations promulgated thereunder. In addition, the Dietary Supplement and Health Education Act (DSHEA), which amended the FDCA, created a separate regulatory framework for the safety and labeling of dietary supplements. In particular, the FDA regulates the safety, manufacturing, labeling and distribution of dietary supplements, including vitamins, minerals and herbs, food additives, food supplements, over-the-counter drugs and prescription drugs, medical devices and cosmetics.  In addition, the Federal Trade Commission (the “FTC”) has overlapping jurisdiction with the FDA to regulate the labeling, promotion and advertising of dietary supplements, over the counter drugs, cosmetics and foods.
 
 
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Compliance with applicable FDA, FTC and any state or local statute is critical.  We believe that our current product is not subject to FDA or FTC oversight and that we are in compliance with applicable statutes. However, there can be no assurance that, should the FDA or FTC amend their guidelines or impose more stringent interpretations of current laws or regulations, we would be able to comply with these new guidelines.  We are unable to predict the nature of such future laws, regulations, interpretations or applications, nor can we predict what effect additional governmental regulations or administrative orders, when and if promulgated, would have on our business in the future.  These regulations could, however, require the reformation of our coffee to meet new standards, market withdrawal or discontinuation of certain products not able to be reformulated.

Advertising of dietary supplement products is subject to regulation by the FTC under the Federal Trade Commission Act (the “FTCA”), which prohibits unfair methods of competition and unfair or deceptive trade acts or practices in or affecting commerce.  The FTCA provides that the dissemination or the causing to be disseminated of any false advertising pertaining to drugs or foods, which would include dietary supplements, is an unfair or deceptive act or practice.  Under the FTC's Substantiation Doctrine, an advertiser is required to have a “reasonable basis” for all objective product claims before the claims are made. Accordingly, we are required to have adequate substantiation of all material advertising claims made for our products.  Failure to adequately substantiate claims may be considered either deceptive or unfair practices.

We are unable to develop a naturally occurring mammalian follistatin-based myostatin inhibitor.

Pursuant to Peak’s settlement agreement with a third party, such third party retained all rights to develop a naturally occurring mammalian follistatin-based myostatin inhibitor in which the follistatin is extracted from a single mammalian species.  As a result, we are prohibited from developing a naturally occurring mammalian follistatin-based myostatin inhibitor, which may limit our ability to improve our current product or develop additional products. Our inability to develop a naturally occurring mammalian follistatin-based myostatin inhibitor could have an adverse effect on our operations.

We have limited recourse in the event there are any breaches of the representations, warranties and covenants under the Purchase Agreement.

The Purchase Agreement provides that in the event of a breach of a representation, warranty or covenant of Peak, our sole remedy for such breach is against Peak. Accordingly, our inability to recover against Peak for any breach under the Purchase Agreement could have a material adverse effect on our operations.
 
RISKS RELATED TO OUR COMMON STOCK

There is no active public trading market for our common stock.

There is currently no active public market for our common stock.  An active trading market may not develop or, if developed, may not be sustained. The lack of an active market may impair a stockholder’s ability to sell such stockholder’s shares of common stock at the time the stockholder wishes to sell them or at a price that the stockholder considers reasonable. The lack of an active market may also reduce the market value and increase the volatility of our shares of common stock. An inactive market may also impair our ability to raise capital by selling shares of common stock and may impair our ability to acquire other companies or assets by using shares of our common stock as consideration.
 
 
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Trading in our common stock over the last 12 months has been limited, so investors may not be able to sell as many of their shares as they want at prevailing prices.

Shares of our common stock are traded on the OTC Bulletin Board under the symbol “MVNP”.  There has been no trading in our shares since December 23, 2010.  If limited trading in the common stock continues, it may be difficult for investors to sell such shares in the public market at any given time at prevailing prices.  Also, the sale of a large block of common stock could depress the market price of the common stock to a greater degree than a company that typically has a higher volume of trading of its securities.

An active and visible trading market for our common stock may not develop.

We cannot predict whether an active market for our common stock will develop in the future. In the absence of an active trading market:

  
Investors may have difficulty buying and selling or obtaining market quotations;

  
Market visibility for our common stock may be limited; and

  
A lack of visibility for our common stock may have a depressive effect on the market price for our common stock.

The OTCBB is an unorganized, inter-dealer, over-the-counter market that provides significantly less liquidity than NASDAQ Capital Market or the NYSE Amex.  The trading price of the common stock is expected to be subject to significant fluctuations in response to variations in quarterly operating results, changes in analysts’ earnings estimates, announcements of innovations by us or our competitors, general conditions in the industry in which we operate and other factors.  These fluctuations, as well as general economic and market conditions, may have a material or adverse effect on the market price of our common stock.

The market price for our stock may be volatile.
 
The market price for our stock may be volatile and subject to wide fluctuations in response to factors including the following:

  
actual or anticipated fluctuations in our quarterly operating results;

  
changes in financial estimates by securities research analysts;

  
conditions in neutraceutical markets;

  
changes in the economic performance or market valuations of other neutraceutical companies;

  
announcements by us or our competitors of new products, acquisitions, strategic partnerships, joint ventures or capital commitments;

  
addition or departure of key personnel;

  
intellectual property or other litigation; and

  
general economic or political conditions.

 
 
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In addition, the securities market has from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies.  These market fluctuations may also materially and adversely affect the market price of our stock.
 
Our stockholders may experience significant dilution if future equity offerings are used to fund operations or acquire complementary businesses.

If our future operations or acquisitions are financed through the issuance of equity securities, our stockholders could experience significant dilution. In addition, securities issued in connection with future financing activities or potential acquisitions may have rights and preferences senior to the rights and preferences of our common stock. We also intend to establish an incentive compensation plan for our management and employees. We expect to grant options to purchase shares of our common stock to our directors, employees and consultants. The issuance of shares of our common stock upon the exercise of these options may result in dilution to our stockholders.

Our current management can exert significant influence over us and make decisions that are not in the best interests of all stockholders.

Our executive officers and directors beneficially own as a group approximately 16.5% of our outstanding shares of common stock. As a result, these stockholders will be able to assert significant influence over all matters requiring stockholder approval, including the election and removal of directors and any change in control. In particular, this concentration of ownership of our outstanding shares of common stock could have the effect of delaying or preventing a change in control, or otherwise discouraging or preventing a potential acquirer from attempting to obtain control. This, in turn, could have a negative effect on the market price of our common stock. It could also prevent our stockholders from realizing a premium over the market prices for their shares of common stock. Moreover, the interests of the owners of this concentration of ownership may not always coincide with our interests or the interests of other stockholders and, accordingly, could cause us to enter into transactions or agreements that we would not otherwise consider.

Compliance with changing corporate governance regulations and public disclosure, and our management’s inexperience with such regulations, will result in additional expenses and creates a risk of non-compliance.
 
Our reporting obligations as a public company will place a significant strain on our management, operational and financial resources and systems for the foreseeable future.  Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and related SEC regulations, have created uncertainty for public companies and significantly increased the costs and risks associated with accessing the public markets and public reporting.  Our management team will need to invest significant time and financial resources to comply with both existing and evolving standards for public companies, which will lead to increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities.  In addition, our management has little experience with compliance with U.S. securities laws.  This inexperience may cause us to fall out of compliance with applicable regulatory requirements, which could lead to enforcement action against us and a negative impact on our stock price.
 
 
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If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud.

We are subject to reporting obligations under the U.S. securities laws.  Accordingly, we are required to include a management report on our internal controls over financial reporting in our annual report, which contains management’s assessment of the effectiveness of our internal controls over financial reporting.  Our management may conclude that our internal controls over our financial reporting are not effective. Effective internal controls, particularly those related to revenue recognition, are necessary for us to produce reliable financial reports and are important to prevent fraud.  As a result, our failure to achieve and maintain effective internal controls over financial reporting could result in the loss of investor confidence in the reliability of our financial statements, which in turn could harm our business and negatively impact the trading price of our stock.  Furthermore, we anticipate that we will incur considerable costs and use significant management time and other resources in an effort to comply with the other requirements of the Sarbanes-Oxley Act.

Our common stock may be considered a “penny stock,” and thereby be subject to additional sale and trading regulations that may make it more difficult to sell.
 
Our common stock, which is currently and will be quoted for trading on the OTC Bulletin Board, may be considered to be a “penny stock” if it does not qualify for one of the exemptions from the definition of “penny stock” under Section 3a51-1 of the Exchange Act.  Our common stock may be a “penny stock” if it meets one or more of the following conditions: (i) the stock trades at a price less than $5.00 per share; (ii) it is NOT traded on a “recognized” national exchange; (iii) it is not quoted on the Nasdaq Capital Market, or even if so, has a price less than $5.00 per share; or (iv) is issued by a company that has been in business less than three years with net tangible assets less than $5 million.  The principal result or effect of being designated a “penny stock” is that securities broker-dealers participating in sales of our common stock will be subject to the “penny stock” regulations set forth in Rules 15g-2 through 15g-9 promulgated under the Exchange Act.  For example, Rule 15g-2 requires broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document at least two business days before effecting any transaction in a penny stock for the investor’s account.  Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor.  This procedure requires the broker-dealer to: (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor’s financial situation, investment experience and investment objectives.  Compliance with these requirements may make it more difficult and time consuming for holders of our common stock to resell their shares to third parties or to otherwise dispose of them in the market or otherwise.
 
We do not foresee paying cash dividends in the foreseeable future and, as a result, our investors’ sole source of gain, if any, will depend on capital appreciation, if any.

We do not plan to declare or pay any cash dividends on our shares of common stock in the foreseeable future and currently intend to retain any future earnings for funding growth. As a result, investors should not rely on an investment in our securities if they require the investment to produce dividend income. Capital appreciation, if any, of our shares may be investors’ sole source of gain for the foreseeable future. Moreover, investors may not be able to resell their common stock at or above the price they paid for them.
 
 
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We could issue “blank check” preferred stock without stockholder approval with the effect of diluting then current stockholder interests and impairing their voting rights, and provisions in our charter documents and under Nevada law could discourage a takeover that stockholders may consider favorable.

Our certificate of incorporation provides for the authorization to issue up to 25,000,000 shares of “blank check” preferred stock with designations, rights and preferences as may be determined from time to time by our board of directors. Our board of directors is empowered, without stockholder approval, to issue a series of preferred stock with dividend, liquidation, conversion, voting or other rights which could dilute the interest of, or impair the voting power of, our common stockholders. The issuance of a series of preferred stock could be used as a method of discouraging, delaying or preventing a change in control. For example, it would be possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of our company. In addition, advanced notice is required prior to stockholder proposals.
 
 
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Item 2.  Financial Information.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Plan of Operation

We intend to be an e-commerce company focusing on the formulation, acquisition and distribution of nutritional, neutraceutical, physical performance enhancement and wellness product to retail customers via an innovative online platform. We will initially offer our core brand product, MYO-T12, a myostatin-inhibiting product.  We intend to provide a pathway for consumers to easily access the product through an easy to navigate website and targeted marketing campaigns.  Our operations will be supported by outside third party vendors, who will also provide the order processing controls, such as electronic data interface with our customers.  Our plan of action over the next twelve months is to continue our operations to market and distribute nutrition maximization and wellness products.

Liquidity and Capital Resources

As of February 25, 2011, we had $902,270 in cash and $5,564,270 in total assets (which includes $4,662,000 of intangible assets). We used cash of $450,000 as part of the acquisition of the MYO-T12 asset from Peak.  We received $1,430,000 from the Private Placement out of which we paid $75,000 in costs associated with the purchase of MYO-T12. We believe we have sufficient funds to operate our business for the next six months but we may need to raise additional capital from the issuance of our debt or equity instruments.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Critical Accounting Policies

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes, and disclosure of contingent liabilities at the date of the financial statements. Estimates are used for, but not limited to, the selection of the useful lives of property and equipment, provision necessary for contingent liabilities, fair values, revenue recognition, taxes, budgeted costs and other similar charges. Management believes that the estimates utilized in preparing its financial statements are reasonable and prudent. Actual results could differ from these estimates.
 
Property and equipment

Property and equipment are recorded at cost less accumulated depreciation and any impairment losses.  The cost of an asset comprises of its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use.  Expenditures incurred after the fixed assets have been put into operation, such as repairs and maintenance and overhaul costs, are normally charged to the profit and loss account in the year in which it is incurred.

In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of the asset beyond its originally assessed standard of performances, the expenditure is capitalized as an additional cost of the asset.
 
 
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Depreciation is computed using the straight-line method over the estimated useful lives of the assets, less any estimated residual value.  Estimated useful lives of our assets are as follows:

Office equipment
5 years
   
Any gain or loss on disposal or retirement of a fixed asset is recognized in the profit and loss account and is the difference between the net sales proceeds and the carrying amount of the relevant asset. When property and equipment are retired or otherwise disposed of, the assets and accumulated depreciation are removed from the accounts and the resulting profit or loss is reflected in income.
 
Expenditures for maintenance and repairs are charged to expense as incurred. Additions, renewals and betterments are capitalized.

Long-lived assets

We apply the provisions of Financial Accounting Standard Board (“FASB”) Accounting Standards Codification (“ASC”) No. 360, “Property, Plant and Equipment”. ASC 360 requires long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets.  Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.

The Company tests long-lived assets, including property, plant and equipment and other assets, for recoverability at least annually or more frequently upon the occurrence of an event or when circumstances indicate that the net carrying amount is greater than its fair value.  Assets are grouped and evaluated at the lowest level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets.  The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to the future estimated cash flows expected to result from the use of the asset.  If the carrying amount of the asset exceeds estimated expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying amount of the asset to its fair value.  The estimation of fair value is generally measured by discounting expected future cash flows as the rate the Company utilizes to evaluate potential investments.  The Company estimates fair value based on the information available in making the necessary estimates, judgments and projections.  There was no impairment of long-lived assets since our acquisition of the assets from Peak.

Income taxes
 
The Company accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years.  Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.  A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain.

The Company records a valuation allowance for deferred tax assets, if any, based on its estimates of its future taxable income as well as its tax planning strategies when it is more likely than not that a portion or all of its deferred tax assets will not be realized.  If the Company is able to utilize more of its deferred tax assets than the net amount previously recorded when unanticipated events occur, an adjustment to deferred tax assets would increase the Company’s net income when those events occur.

 
 
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Revenue recognition

The Company’s revenue policies are in compliance with the United States Accounting Guide.  The Company recognizes revenue when the following fundamental criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the price to the customer is fixed or determinable and (iv) collection of the resulting receivable is reasonably assured.  Revenue is not recognized until title and risk of loss is transferred to the customer, which occurs upon delivery of goods, and objective evidence exists that customer acceptance provisions have been met.  Deposits or advance payments from customers prior to delivery of goods and passage of title of goods are recorded as advance from customers.
 
Cost of sales
 
Cost of sales for our wellness product consists of manufacturing costs of our contract manufacturer, shipping, marketing, warehouse and distribution costs.

Selling, general and administrative costs
 
Selling, general and administrative costs including employee salaries, sales commissions, sales allotment fees rent for sub-leases/office space and advertising and marketing expenses.
 
Fair value of financial instruments
 
The Company’s financial instruments include cash and cash equivalents, accounts receivable, advances to suppliers, other receivables, accounts payable, accrued expenses, taxes payable, and notes payable. Management has estimated that the carrying amounts approximate their fair value due to the short-term nature.

Subsequent events
 
The Company has evaluated subsequent events that have occurred through February 25, 2011.

Earnings per share

The Company computes earnings per share (“EPS”) in accordance with SFAS 128, “Earnings Per Share”, which was subsequently codified within ASC 260, “Earning Per Share”.  ASC 260 requires companies with complex capital structures to present basic and diluted EPS.  Basic EPS is measured as net income divided by the weighted average common shares outstanding for the period.  Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later.  Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.
 
 
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Recent accounting pronouncements
 
The Company does not believe that the adoption of any recently issued, but not yet effective, accounting standards will have a material effect on its financial position and results of operations.
 
Item 3.  Properties.

Our headquarters are located at 520 S. El Camino Real, 8th Floor, San Mateo, CA 94402. Our headquarters are located in the current office space of our Chief Executive Officer, who is providing the office space to us free of charge. We intend to search for additional office space for our operations.

Item 4.  Security Ownership of Certain Beneficial Owners and Management.

Pre-Acquisition

The following table sets forth information known to the Registrant regarding the beneficial ownership of the Registrant’s common stock as of February 24, 2011 (the date prior to the closing of the Acquisition and the Private Placement) by:

 
each person known by the Registrant to be the beneficial owner of more than 5% of the outstanding shares of the Registrant common stock based solely on Schedule 13D/13G filings with the Securities and Exchange Commission;

 
each of the Registrant’s officers and directors; and

 
all executive officers and directors of the Registrant, as a group.
 
 Unless otherwise indicated, the Registrant believes that all persons named in the table below have sole voting and investment power with respect to all shares of common stock beneficially owned by them. As of February 24, 2011, there were 49,000,000 shares of Common Stock outstanding, prior to the issuance of shares in connection with the Acquisition and the Private Placement.

Name of Beneficial Owner
Number of Shares Beneficially Owned
Percentage of Class
 
Georgette Mathers (1)
28,000,000
57.1%
     
Directors and officers as a group (1 person)
28,000,000
57.1%

(1) The business address is Atlas Therapeutics Corporation, 520 S. El Camino Real, 8th Floor, San Mateo, CA 94402.

Post-Acquisition

The following table sets forth information known to the Registrant regarding the beneficial ownership of the Registrant’s common stock as of February 25, 2011 (the closing date of the Acquisition and the Private Placement) by:

 
each person known by the Registrant at that date  to be the beneficial owner of more than 5% of the outstanding shares of the Registrant common stock based solely on Schedule 13D/13G filings with the Securities and Exchange Commission;

 
each of the Registrant’s officers and directors at such date; and

 
all executive officers and directors of the Registrant at such date, as a group.
 
 
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 Unless otherwise indicated, the Registrant believes that all persons named in the table below have sole voting and investment power with respect to all shares of common stock beneficially owned by them. As of February 25, 2011, there were 60,790,666 shares of Common Stock outstanding, after giving effect of the issuance of shares in connection with the Acquisition and the Private Placement.

Name of Beneficial Owner (1)
Number of Shares Beneficially Owned
Percentage of Class
 
J.B. Bernstein
3,000,000
4.9%
Carlon Colker, MD, FACN (2)
7,024,000
11.6%
Peak Wellness, Inc. (2)
7,024,000
11.6%
Hariri Family Ltd. Partnership (3)
8,300,000
13.7%
Ultra Pro Sports, LLC (4)
7,750,000
12.7%
North Winds Venture (5)
3,333,333
5.5%
Georgette Mathers (6)
0
                 -
     
Directors and officers as a group (3 persons)
10,024,000
16.5%

(1) Unless otherwise indicated, the business address of each of the individuals is c/o Atlas Therapeutics Corporation, 520 S. El Camino Real, 8th Floor, San Mateo, CA 94402.

(2) Represents shares held by Peak Wellness, Inc., a corporation wholly-owned by Carlon Colker, MD, FACN. Dr.  Colker has sole voting and investment control over these securities.

(3) Robert Hariri, MD, PhD, and Margaret Hariri have voting and investment control over these securities.

(4) Janine Divenuto has sole voting and investment control over these securities.

(5) Ron Hariri has sole voting and investment control over these securities.

(6) In connection with the Acquisition, Ms. Mathers transferred all of her shares of common stock to various individuals, including certain of the persons set forth on this table.
 
Change in Control

Reference is made to Item 5.01 for a description of the change in control of the Registrant as a result of the transactions disclosed herein.

Item 5.  Directors and Executive Officers.
 
In connection with the execution of the Purchase Agreement, the Registrant caused the appointment and election of J.B. Bernstein to the Registrant’s Board of Directors. Any additional appointments to the Board of Directors will become effective ten days following the filing and mailing of a Schedule 14F-1 to the Registrant’s stockholders of record. The following table sets forth information regarding our current executive officers and directors:
 
Name
Age
Position
J.B. Bernstein
43
Chief Executive Officer, President, Secretary, Treasurer and Director
Carlon Colker, M.D., FACN
45
Chief Medical Officer, Executive Vice President
Georgette Mathers
57
Director
     
 
 
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The Registrant’s officers and directors are elected annually for a one year term or until their respective successors are duly elected and qualified or until their earlier resignation or removal.

J.B. Bernstein joined us as Chief Executive Officer, President, Secretary, Treasurer and Director in February 2011. As a 21-year veteran of the sports industry, Mr. Bernstein is widely respected for his expertise in sports marketing and licensing. As the CMO of Seven Figures Management, a sports marketing and athlete representation firm, Mr. Bernstein is in charge of all day-to-day operations including overseeing all existing sponsorships, negotiating new sponsorships, handling marketing and licensing for all clients, maintaining client relations, and developing new business. With a particular focus on baseball and football, Mr. Bernstein has represented such legends as Barry Bonds, Barry Sanders, Emmitt Smith and Curtis Martin. From 1990 to 1994, Mr. Bernstein was the director of business development for The Upper Deck Company. Since 1994, he has been president and owner of Pro Access, a sports marketing and promotion company. Since 2007, Mr. Bernstein has been also been Chief Marketing Officer and Managing Director of Seven Figures Management LLC, a sports marketing and promotion company.  Mr. Bernstein received his master's degree from in 1987 from The London School of Economics and his bachelor's degree in political economics in 1986 from the University of Massachusetts Amherst. He has achieved a Ph.D. in physics in 2006 from the University of Southern California and is currently pursuing his second Ph.D. a related field.

Carlon M. Colker, M.D., FACN joined us as Chief Medical Officer and Executive Vice President in February 2011. Since 1996, he has headed Peak Wellness, Inc. of Greenwich, Connecticut, which sold us the MYO-T12 intellectual property pursuant to the Purchase Agreement. His practice specialties include internal medicine, sports medicine, and sports nutrition. Dr. Colker is an attending physician at Beth Israel Medical Center in New York City and in Greenwich Hospital in Connecticut. As a special care physician, Dr. Colker has taken care of the most critically-ill patients in the intensive care unit at both St. Joseph Medical Center and Stamford Hospital in Connecticut. In addition to his practice, Dr. Colker is also one of the premier published researchers in the field of integrative care and a Fellow of the American College of Nutrition. He is widely regarded as one of the world’s foremost experts on wellness, physical performance, athletic enhancement, and performance nutrition. Having been a part of the health and fitness industry for over 20 years, in the late 1980s he helped design and build the first wellness program on the East Coast. Dr. Colker is an internationally recognized consultant on health and fitness and has worked with governments, large health systems, and private companies, as well as with numerous Olympic and professional athletes and celebrities. Dr. Colker’s expertise is utilized at the highest level by sports teams and world class athletes and from around the globe. Offering his expert opinion and advice, he has appeared on such shows as ESPN’s Outside the Lines, NBC’s Health Segment, Court TV, and ABC World News Tonight. Dr. Colker received his BA from Manhattanville College and his MD from Sackler School of Medicine in May 1993.

Georgette Mathers has been a member of Board of Directors since January 2009. From January 2009 until the closing of the Acquisition, she served as of our Chief Executive Officer, Chief Financial Officer, President, Treasurer and Secretary.  Ms. Mathers is a corporate paralegal and has worked in the legal profession for over 20 years.  Since 2006, Ms. Mathers has served as a corporate administrator for the law offices of Rowland W. Day II, our former legal counsel.
 
 
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The Board of Directors and Committees
 
Our Board of Directors does not maintain a separate audit, nominating or compensation committee. Functions customarily performed by such committees are performed by our Board of Directors as a whole. We are not required to maintain such committees under the rules applicable to companies that do not have securities listed or quoted on a national securities exchange or national quotation system. If we are successful in listing our common stock on the NYSE Amex or the Nasdaq Capital Market, we would be required to have, prior to listing, an independent audit committee formed, in compliance with the requirements for such listing and in compliance with Rule 10A-3 of the Exchange Act.
 
Family Relationships
 
There are no family relationships between or among the directors, executive officers or persons nominated or chosen by our stockholders or us to become directors or executive officers.
 
Code of Ethics
 
We intend to adopt a code of ethics that applies to our officers, directors and employees. We will file copies of our code of ethics in a Current Report on Form 8-K. You will be able to review these documents by accessing our public filings at the SEC’s website at www.sec.gov. In addition, a copy of the code of ethics will be provided without charge upon request to us. We intend to disclose any amendments to or waivers of certain provisions of our code of ethics in a Current Report on Form 8-K.

Item 6.  Executive Compensation.

Summary Compensation Table

The table below sets forth the compensation earned for services rendered to the Registrant for the fiscal years indicated, by its named executive officers.

SUMMARY COMPENSATION TABLE
Name and Position
Fiscal Year
Salary
Bonus
Stock Awards
Option Awards
Non-Equity Incentive Plan Compensation
All Other Compensation
Total
Georgette Mathers, Former Chief Executive Officer and Chief Financial Officer
2008
2009
2010
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
                 
Chong Kim, Former Chief Executive Officer
2008
 
-
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
                 

Employment Agreements

J.B. Bernstein

On February 25, 2011, concurrent with the closing of the Acquisition, the Registrant entered into an employment agreement with J.B. Bernstein, pursuant to which Mr. Bernstein will serve as Chief Executive Officer of the Registrant.
 
 
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Pursuant to Mr. Bernstein’s employment agreement, the term of employment with the Registrant is for four years, commencing on February 25, 2011.  The agreement provides that Mr. Bernstein will work on a full-time basis and will receive a one-time signing bonus of $20,000 plus an annual base salary of $120,000.  For the term of the employment agreement, Mr. Bernstein shall be entitled to receive an annual cash bonus of up to 50% of his base salary depending on the Registrant’s achievement of certain milestones.  The agreement shall automatically renew for successive one- year periods at a base salary of $120,000, unless a notice of non-renewal is provided by either party within 90 days prior to the expiration date.  In connection with the Acquisition, Ms. Mathers, our former Chief Executive Officer, transferred 3,000,000 shares to Mr. Bernstein upon commencement of his employment.

Upon the adoption of a stock option plan, the Registrant will grant Mr. Bernstein an option to purchase shares of common stock of the Registrant consistent with the option awards granted to similarly situated executives, as determined by the Registrant’s board of directors after consultations with Mr. Bernstein. The option vests in annual equal installments over the term of the employment agreement.
 
Mr. Bernstein is entitled to receive twelve months’ base salary in the event his employment with the Registrant is terminated other than by death or for cause by the Registrant.  In the event Mr. Bernstein’s employment is terminated for cause (as defined in the employment agreement), he shall be entitled to receive only the base salary owed to him as of the date of termination.  

Mr. Bernstein’s employment agreement contains customary non-competition and non-solicitation provisions that extend to twelve months after termination of Mr. Bernstein’s employment with the Registrant. Mr. Bernstein also agreed to customary terms regarding the protection and confidentiality of trade secrets, proprietary information and technology, designs and inventions.
Mr. Bernstein shall be entitled to participate in such employee benefit plans and insurance offered by the Registrant to similarly situated employees of the Registrant subject to eligibility requirements, restrictions and limitations of any such plans.
 
Carlon Colker MD, FACN

On February 25, 2011, concurrent with the closing of the Acquisition, the Registrant entered into an employment agreement with Carlon Colker, MD, FACN, pursuant to which Dr. Colker will serve as Chief Medical Officer and Executive Vice President of the Registrant.

Pursuant to Dr. Colker’s employment agreement, the term of employment with the Registrant is for three years, commencing on February 25, 2011.   The agreement provides that Dr. Colker will work on a part-time basis and will receive an annual base salary of $60,000.  For the term of the employment agreement, Dr. Colker shall be entitled to receive an annual cash bonus of up to 50% of his base salary depending on the Registrant’s achievement of certain milestones.  The agreement shall automatically renew for successive one-year periods at a base salary of $150,000, unless a notice of non-renewal is provided by either party within 90 days prior to the expiration date. Pursuant to the terms of his employment agreement, Dr. Colker will continue to maintain a separate medical practice and other activities relating to Peak and those activities will take precedence over his obligations to the Registrant.

Upon the adoption of a stock option plan, the Registrant will grant Dr. Colker an option to purchase shares of common stock of the Registrant consistent with the option awards granted to similarly situated executives, as determined by the Registrant’s board of directors after consultations with Dr. Colker. The option vests in annual equal installments over the term of the employment agreement.
 
 
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Dr. Colker is entitled to receive twelve months’ base salary in the event his employment with the Registrant is terminated other than by death or for cause by the Registrant.  In the event Dr. Colker’s employment is terminated for cause (as defined in the employment agreement), he shall be entitled to receive only the base salary owed to him as of the date of termination.  

Dr. Colker’s employment agreement contains customary non-competition and non-solicitation provisions that extend to termination of Dr. Colker’s employment with the Registrant.  Dr. Colker will not be subject to any non-competition and non-solicitation provisions subsequent to the termination of his employment with the Registrant. Dr. Colker also agreed to customary terms regarding the protection and confidentiality of trade secrets, proprietary information and technology, designs and inventions.

Dr. Colker shall be entitled to participate in such employee benefit plans and insurance offered by the Registrant to similarly situated employees of the Registrant subject to eligibility requirements, restrictions and limitations of any such plans.

Director Compensation

We do not currently pay our directors any cash fees.

Item 7.  Certain Relationships and Related Transactions, and Director Independence.

Our headquarters are located in the current office space of our Chief Executive Officer, who is providing the office space to us free of charge.

Reference is also made to Item 2.01 for a description of the Acquisition and Item 3.02 for a description of the Private Placement.

Item 8.  Legal Proceedings.

We have no material proceedings pending nor are we aware of any pending investigation or threatened litigation by any third party.
 
Item 9.  Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters.

There is no established public trading market for our common stock.  While quotations for our common stock are quoted in the OTC Bulletin Board under the symbol “MVNP,” there have been no trades in our common stock since December 23, 2010. We have granted piggyback registration rights to the holders of the common stock and warrants issued to investors in the Private Placement.

Record Holders

As of the date of this Current Report, there are approximately 40 shareholders of record holding a total of 60,790,666 shares of common stock.

Dividends

We have not declared any cash dividends since inception and do not anticipate paying any dividends in the foreseeable future. The payment of dividends is within the discretion of the Board of Directors and will depend on our earnings, capital requirements, financial condition, and other relevant factors. There are no restrictions that currently limit our ability to pay dividends on our common stock other than those generally imposed by applicable state law.
 
 
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Transfer Agent

The transfer agent for our common stock is Island Stock Transfer, with an address at 100 Second Avenue South, Suite 705S, St. Petersburg, Florida, 33701. Island Stock Transfer’s telephone number is 727-289-0010.

Equity Compensation Plan Information

The Registrant did not maintain an equity compensation plan for the fiscal year ended December 31, 2010.

Item 10.  Recent Sales of Unregistered Securities.

Reference is made to Item 2.01 and Item 3.02 for a description of recent sales of the Registrant’s unregistered securities in connection with the Acquisition and the Private Placement.

Item 11.  Description of Registrant’s Securities to be Registered.

The Registrant’s Common Stock was registered under the Exchange Act pursuant to a Form 8-A (File Number 000-53298) that was filed on July 1, 2008.

General

The Registrant’s authorized capital stock consists of 300,000,000 shares of common stock, $0.001 par value, and 25,000,000 shares of preferred stock, $0.001 par value.  As of the date hereof, 49,000,000 shares of common stock and no shares of preferred stock were issued and outstanding.
 
Common Stock

Subject to preferences that may apply to shares of preferred stock outstanding at the time, the holders of outstanding shares of common stock are entitled to receive dividends out of assets legally available therefore at times and in amounts as the Registrant’s board of directors may determine. Each stockholder is entitled to one vote for each share of common stock held on all matters submitted to a vote of the stockholders. Cumulative voting is not provided for in our articles of incorporation, which means that the majority of the shares voted can elect all of the directors then standing for election. The common stock is not entitled to preemptive rights and is not subject to conversion or redemption. Upon the occurrence of a liquidation, dissolution or winding-up, the holders of shares of common stock are entitled to share ratably in all assets remaining after payment of liabilities and satisfaction of preferential rights of any outstanding preferred stock. There are no sinking fund provisions applicable to the common stock. The outstanding shares of common stock are fully paid and non-assessable.

Preferred Stock

The Registrant’s board of directors is empowered to designate and issue from time to time one or more classes or series of preferred stock and to fix and determine the relative rights, preferences, designations, qualifications, privileges, options, conversion rights, limitations and other special or relative rights of each such class or series so authorized. Such action could adversely affect the voting power and other rights of the holders of the Registrant’s capital shares or could have the effect of discouraging or making difficult any attempt by a person or group to obtain control of the Registrant.  The Registrant has no current intention to issue a class or series of preferred stock.
 
 
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Warrants

Pursuant to the Private Placement, we issued warrants to purchase 4,766,666 of the Registrant’s common stock. Each warrant is exercisable at $0.60 per share and is redeemable by the Registrant in the event the Registrant’s common stock exceeds $3.00 for twenty of thirty trading days. The expiration date of the warrants is February 25, 2014. The warrants are subject to standard anti-dilution protections and piggy-back registration rights.
 
Item 12.  Indemnification of Officers and Directors.

The current bylaws of the Registrant provides that the Registrant shall indemnify any director, officer, employee or agent of the Registrant, or any person serving in any such capacity of any other entity or enterprise at the request of the Registrant, against any and all legal expenses (including attorneys' fees), claims and/or liabilities arising out of any action, suit or proceeding, except an action by or in the right of the Registrant.

The Registrant is permitted by the Bylaws to purchase and maintain insurance for any person who is or was a director, officer, employee, or agent of the Registrant or who is or was serving at the request of the Registrant in any capacity against any liability asserted.

Our company is incorporated under the laws of the State of Nevada. Section 78.7502 of the Nevada Revised Statutes (NRS) provides that a Nevada corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or proceeding if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, does not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and that, with respect to any criminal action or proceeding, he had reasonable cause to believe that his conduct was unlawful.

Section 78.7502 of the Nevada Revised Statutes further provides a Nevada corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including amounts paid in settlement and attorneys' fees actually and reasonably incurred by him in connection with the defense or settlement of the action or suit if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation. Indemnification may not be made for any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.
 
 
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Section 78.751 of the Nevada Revised Statutes provides that discretionary indemnification under Section 78.7502 unless ordered by a court or advanced pursuant to subsection 2 of Section 78.751, may be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances. The determination must be made by:

  
By the stockholders;

  
By the board of directors by majority vote of a quorum consisting of directors - who were not parties to the action, suit or proceeding;

  
If a majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding so orders, by independent legal counsel in a written opinion; or

  
If a quorum consisting of directors who were not parties to the action, suit or proceeding cannot be obtained, by independent legal counsel in a written opinion.

The articles of incorporation, the bylaws or an agreement made by the corporation may provide that the expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the corporation as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he is not entitled to be indemnified by the corporation. The provisions of this subsection do not affect any rights to advancement of expenses to which corporate personnel other than directors or officers may be entitled under any contract or otherwise by law.

The indemnification and advancement of expenses authorized in or ordered by a court pursuant to NRS Section 78.751:

  
does not exclude any other rights to which a person seeking indemnification or advancement of expenses may be entitled under the articles of incorporation or any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, for either an action in his official capacity or an action in another capacity while holding his office, except that indemnification, unless ordered by a court pursuant to Section 78.7502 or for the advancement of expenses made pursuant to subsection 2 of Section 78.751, may not be made to or on behalf of any director or officer if a final adjudication establishes that his acts or omissions involved intentional misconduct, fraud or a knowing violation of the law and was material to the cause of action; and

  
continues for a person who has ceased to be a director, officer, employee or agent and inures to the benefit of the heirs, executors and administrators of such a person.
 
 
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Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the “Securities Act”), may be permitted to directors, officers and controlling persons of our company under Nevada law or otherwise, we have been advised the opinion of the Securities and Exchange Commission is that such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.  In the event a claim for indemnification against such liabilities (other than payment by us for expenses incurred or paid by a director, officer or controlling person of our company in successful defense of any action, suit, or proceeding) is asserted by a director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction, the question of whether such indemnification by it is against public policy in the Securities Act and will be governed by the final adjudication of such issue.

Item 13.  Financial Statements and Supplementary Data.

See Item 9.01 of this Form 8-K for the financial statements required hereunder.

Item 14.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 15.  Financial Statements and Exhibits.

The exhibits are listed and described in Item 9.01 of this Form 8-K.

Item 3.02  Unregistered Sale of Equity Securities

In connection with the Acquisition, the Registrant issued an aggregate of 4,766,666 shares of common stock and warrants to purchase 4,766,666 shares of common stock to certain investors on February 25, 2011 (the “Private Placement”). Each warrant had a three-year term and is exercisable at $0.60 per share and are redeemable by the Registrant in the event the Registrant’s common stock exceeds $3.00 for twenty of thirty trading days. The warrants are subject to standard anti-dilution protections. The Registrant granted the investors in the Private Placement piggy-back registration rights for the securities issued in the Private Placement. The Registrant received gross proceeds of approximately $1.4 million in the Private Placement.

The securities issued in the Private Placement were not registered under the Securities Act.  These securities qualified for exemption under Rule 506 promulgated under Section 4(2) of the Securities Act since the issuance by the Registrant did not involve a “public offering” and each offeree was an “accredited investor.”
 
Item 5.01  Changes in Control of Registrant

On the Closing Date, the Registrant consummated the transactions contemplated by the Purchase Agreement, pursuant to which a wholly-owned subsidiary of the Registrant purchased intellectual property pertaining to MYO-T12, a natural-myostatin inhibitor, from Peak (the “Acquisition”). Simultaneous with the closing of with the Acquisition, the Registrant issued an aggregate of 4,766,666 shares of common stock and warrants to purchase 4,766,666 shares of common stock to certain investors. In addition, new officers and a new director were appointed to serve the Registrant. Reference is made to Item 2.01 and Item 3.02 of this Current Report on Form 8-K for a more extensive description of these transactions.

Other than the transactions and agreements disclosed in this Current Report on Form 8-K, the Registrant knows of no arrangements which may result in a change in control of the Registrant.

No officer, director, promoter, or affiliate of the Registrant has, or proposes to have, any direct or indirect material interest in any asset proposed to be acquired by the Registrant through security holdings, contracts, options, or otherwise.

 
 
33

 
 
Item 5.02  
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

(a)    Resignation of Directors and Officers

On February 25, 2011, in connection with the closing of the Acquisition, Georgette Mathers resigned as CEO, CFO, President, Secretary, and Treasurer of the Registrant.  Upon effectiveness of an information statement required by Rule 14f-1 promulgated under the Exchange Act, Ms. Mathers will resign as a director of the Registrant.  There was no disagreement between Ms. Mathers and the Registrant.

(b)  Appointment of Directors and Officers

Simultaneously with the Closing, the following individuals were appointed executive officers and director of the Registrant as follows:

Name
 
Position Held
J.B. Bernstein
 
Chief Executive Officer and Director
Carlon Colker
 
Chief Medical Officer and Executive Vice President
     

The appointment of additional directors shall be effective ten days following the filing of a Schedule 14F-1 to the stockholders of the Registrant.

Reference is made to Item 2.01 above for certain information regarding the executive officers and directors of the Registrant and the employment agreements entered into between the executive officers and the Registrant.

Item 5.06  Change in Shell Company Status.

As the result of the consummation of the Acquisition pursuant to the Purchase Agreement, the Registrant is no longer a shell company. The information set forth above in Items 1.01 and 2.01 of this Current Report on Form 8-K is incorporated herein by reference in its entirety.
 
Item 9.01  Financial Statements and Exhibits

(a)  
Financial statements.

The following table sets forth our balance sheet as of (i) September 30, 2010 and (ii) on a pro forma basis after giving effect to the Acquisition and the Private Placement as of such date.
 
 
34

 
 
                     
Atlas Therapeutics Corporation
 
(a development stage company)
 
UNAUDITED CONDENSED PRO FORMA BALANCE SHEET
 
February 25, 2011
 
                     
   
Balances at
               
   
September 30,
   
Pro Forma
     
Pro Forma
 
   
2010
   
Adjustments
     
Balances
 
ASSETS
                   
Current assets
                   
Cash and cash equivalents
  $ 14       (450,000 )
 (a)
  $ 902,270  
              (75,000 )
 (g)
       
              1,427,256  
 (e)
       
Total current assets
    14       902,256         902,270  
                           
Intangible Assets
    -       450,000  
 (a)
    4,662,000  
              700,000  
 (b)
       
              3,512,000  
 (c)
       
                           
Total assets
  $ 14     $ 5,564,256       $ 5,564,270  
                           
LIABILITIES AND STOCKHOLDERS' EQUITY
                         
Current liabilities
                         
Accounts payable and accrued expenses
    12,986       3,000  
 (f)
  $ 15,986  
Accounts payable to related party
    32,511       -         32,511  
Note payable to Peak Wellness, Inc. bearing interest at 3%
    -       700,000  
 (b)
    700,000  
Note payable
    7,500       -         7,500  
Total current liabilities
    52,997       703,000         755,997  
                           
Derivative liability for private placement warrants
    -       1,401,400  
 (i)
    1,401,400  
                           
Total liabilities
    52,997       2,104,400         2,157,397  
                           
Stockholders' (deficit) equity
                         
Preferred stock, $.001 par value; 25,000,000 shares authorized; no shares issued and outstanding
    -       -         -  
                           
Common stock, $.001 par value, 300,000,000 shares authorized; 49,000,000 shares issued and outstanding at September 30, 2010, 60,790,666 shares issued and outstanding on a pro forma basis after closing of private placement and completion of transaction with Peak
    49,000       7,024  
 (c)
    60,791  
              4,758  
 (e)
       
              9  
 (d)
       
                           
Additional paid-in capital
    31,000       3,504,976  
 (c)
    5,057,065  
              1,425,233  
 (e)
       
              (25,000 )
 (d)
       
              22,256  
 (d)
       
              1,500,000  
 (h)
       
              (1,401,400 )
 (i)
       
                           
Deficit accumulated during development stage
    (132,983 )     (3,000 )
 (f)
    (1,710,983 )
              (75,000 )
 (g)
       
              (1,500,000 )
 (h)
       
                           
                           
Total stockholders' (deficit) equity
    (52,983 )     3,459,856         3,406,873  
                           
Total liabilities and stockholders' equity
  $ 14     $ 5,564,256       $ 5,564,270  
             
                           
 
 
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Pro Forma Financial Statement Adjustments
             
                 
The preliminary adjustments to record the acquisition of MYO-T12 are as follows:
         
                 
(a)
Cash portion $(450,000) of purchase price paid to the seller, Peak Wellness, Inc. ("Peak").
                 
(b)
Issuance of a promissory note to Peak in connection with the purchase of MYO-T12, with a face amount of $700,000 payable in two equal installments of $350,000 plus interest at the rate of 3%. This first installment is due 180 days after the closing and the second installment is due on the first anniversary of the closing.
 
 
(c)
Issuance of 7,024,000 shares of Common Stock to Peak as part of the purchase price of MYO-T12, representing 12% of the fully diluted voting Common Stock of the Company, recorded at the most recent trading price of $0.50 per share for a total amount of $3,512,000.
 
 
(d)
Represents funds received from a stockholder and used as advance of legal fees of $25,000 in connection with the private placement of common stock, $2,744 of which is allocated to the purchase of 9,146 shares of stock in the private placement.
 
                 
(e)
Closing of private placement of 4,766,666 shares of common stock for gross proceeds of $1,430,000 (including $2,744 allocated from funds received in Note (d) and release of $1,427,256 from escrow).
 
                 
(f)
Accrual of consulting fees in connection with the acquisition of MYO-T12.
                 
(g)
Legal fees of $75,000 incurred in connection with the acquisition of MYO-T12 that were paid at closing.
                 
(h)
Issuance of 3,000,000 shares of the Company's common stock by a stockholder directly to the CEO in connection with the CEO's employment agreement granting him those shares with immediate vesting and no risk of forfieture, recorded at the most recent trading price of $0.50 per share for a total amount of $1,500,000.
 
 
(i)
Liability recorded for the value of 4,766,666 warrants issued in the private placement at a per warrant value of $0.294.
 
 
36

 

(b)  
Exhibits.
  
Exhibit No.
Description
3.1
Articles of Incorporation of the Registrant (1)
3.2
Bylaws of the Registrant (2)
3.3
Certificate of Amendment to Articles of Incorporation (3)
4.1
Form of Warrant *
10.1
Intellectual Property Purchase Agreement, dated February 25, 2011, by and among the Registrant, Atlas Acquisition Corp. and Peak Wellness, Inc.*
10.2
Secured Promissory Note, dated February 25, 2011, by and among the Registrant and Peak Wellness, Inc. *
10.3
Security Agreement, dated February 25, 2011, by and among the Registrant and Peak Wellness, Inc. *
10.4
Employment Agreement, dated February 25, 2011, by and among the Registrant and J.B. Bernstein *
10.5
Employment Agreement, dated February 25, 2011, by and among the Registrant and Carlon Colker, MD, FACN *
10.6
Intellectual Property Assignment Agreement, dated February 25, 2011, by and among Atlas Acquisition Corp. and Peak Wellness, Inc.*

*           Filed herewith

(1)
Incorporated by reference to Exhibit 3(a) to the Registrant’s Registration Statement on Form SB-2 (File Number 333-144082), filed on June 27, 2007.
(2)
Incorporated by reference to Exhibit 3(b) to the Registrant’s Registration Statement on Form SB-2 (File Number 333-144082), filed on June 27, 2007.
(3)
Incorporated by reference to Exhibit 3 to the Registrant’s Information Statement on Schedule 14C, filed on June 9, 2010.
 
 
37

 

SIGNATURES

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 hereunto duly authorized.
 
 
ATLAS THERAPEUTICS CORPORATION
 
       
Dated: March 3, 2011
By:
/s/  J.B. Bernstein  
    Name:  J.B. Bernstein   
    Title:    Chief Executive Officer   
       
 
 
 
 
  38

 
 
Exhibit 4.1
 
 
THE SECURITIES EVIDENCED BY THIS CERTIFICATE AND ANY UNDERLYING SHARES OF COMMON STOCK HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“SECURITIES ACT”), AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE COMPANY STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
 

Warrant No. W-[    ]
Number of Shares: [     ]

Date of Issuance: February 25, 2011

ATLAS THERAPEUTICS CORPORATION
 
Common Stock Warrant
 
Atlas Therapeutics Corporation (the “ Company ”), for value received, hereby certifies that        [       ], or its registered assigns (the “ Registered Holder ”), is entitled, subject to the terms of this Common Stock Warrant (the “ Warrant ”) set forth below, to purchase from the Company, at any time after the date hereof and on or before February 25, 2014 (the “ Expiration Date ”), up to [        ] ([     ]) shares of common stock of the Company (the “ Warrant Stock ”), par value $0.001 per share (the “ Common Stock ”), at a per share exercise price (the “ Exercise Price ”) equal to Sixty Cents ($0.60) per share (subject to adjustment as set forth in Section 2).
 
1.              Exercise .
 
 
(a)            Method of Exercise .   This Warrant may be exercised by the Registered Holder, in whole or in part, by delivering the form appended hereto as Exhibit A duly executed by such Registered Holder (the “ Exercise Notice ”), at the principal office of the Company, or at such other office or agency as the Company may designate in writing prior to the date of such exercise, accompanied by payment in full of the Exercise Price payable with respect to the number of shares of Warrant Stock purchased upon such exercise.  The Exercise Price must be paid by cash, check or wire transfer in immediately available funds for the Warrant Stock being purchased by the Registered Holder.
 
(b)            Effective Time of Exercise .   Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which the Exercise Notice has been delivered to the Company (the “ Exercise Date ”) as provided in this Section 1.  At such time, the person or persons in whose name or names any certificates for Warrant Stock shall be issuable upon such exercise as provided in Section 1(c) below shall be deemed to have become the holder or holders of record of the Warrant Stock represented by such certificates.
 
(c)            Delivery to Holder .   As soon as practicable after the exercise of this Warrant in whole or in part, and in any event within three (3) business days thereafter (the “ Warrant Stock Delivery Date ”), the Company will cause to be issued in the name of, and delivered to, the Registered Holder, or as such Registered Holder (upon payment by such Registered Holder of any applicable transfer taxes) may direct:
 
(i)           a certificate or certificates for the number of shares of Warrant Stock to which such Registered Holder shall be entitled, and
 
(ii)           in case such exercise is in part only, a new warrant or warrants (dated the date hereof) of like tenor, calling in the aggregate on the face or faces thereof for the number of shares of Warrant Stock equal (giving effect to any adjustment therein) to the number of such shares called for on the face of this Warrant minus the number of such shares purchased by the Registered Holder upon such exercise as provided in Section 1(a).
 
 
1

 
 
 
(d) Registered Holder’s Exercise Limitations .  The Company shall not effect any exercise of this Warrant, and a Registered Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent (but only to the extent) that the Registered Holder or any of the Registered Holder’s affiliates, would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of this Section 1(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act (as defined herein) and the rules and regulations promulgated thereunder, it being acknowledged by the Registered Holder that the Company is not representing to the Registered Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Registered Holder is solely responsible for any schedules required to be filed in accordance therewith.  To the extent that the limitation contained in this Section 1(d) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Registered Holder together with any Affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Registered Holder, and the submission of an Exercise Notice shall be deemed to be the Registered Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Registered Holder together with any Affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination.  Upon the written or oral request of a Registered Holder, the Company shall within two business days confirm orally and in writing to the Registered Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Registered Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported.  The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant.  The Registered Holder, upon not less than 61 days’ prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 1(d), provided that the Beneficial Ownership Limitation shall in no event exceed 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Registered Holder and the provisions of this Section 1(d) shall continue to apply.  Any such increase or decrease will not be effective until the 61st day after such notice is delivered to the Company.  The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 1(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
 
2.              Adjustments .
 
(a)            Stock Splits and Dividends . If the outstanding shares of the Company’s Common Stock shall be subdivided into a greater number of shares or a dividend in Common Stock shall be paid in respect of Common Stock, the Exercise Price in effect immediately prior to such subdivision or at the record date of such dividend shall, simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend, be proportionately reduced and the number of Warrant Stock issuable upon exercise of the Warrant shall be proportionately increased.  If the outstanding shares of Common Stock shall be combined into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall, simultaneously with the effectiveness of such combination, be proportionately increased and the number of shares of Warrant Stock issuable upon exercise of the Warrant shall be proportionately decreased.
 
 
 
2

 
 
(b)            Fundamental Transaction .   If, at any time while this Warrant is outstanding, (i) the Company effects any merger or consolidation of the Company with or into another person, (ii) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company or another person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (each, a “ Fundamental Transaction ”), then, upon any subsequent exercise of this Warrant, the Registered Holder shall have the right to receive, for each share of Warrant Stock that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “ Alternate Consideration ”) receivable as a result of such merger, consolidation or disposition of assets by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event. For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Registered Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Registered Holder a new warrant consistent with the foregoing provisions and evidencing the Registered Holder’s right to exercise such warrant into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 2(b) and insuring that this Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.
 
(c)            Dilutive Issuances .  If the Company shall sell or grant any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Common Stock or any security convertible or exercisable for Common Stock (a “ Common Stock Equivalent ”) entitling the holder to acquire shares of Common Stock, at an effective price per share less than the then Exercise Price (such lower price, the “Base Share Price” and such issuances collectively, a “ Dilutive Issuance ”) (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is less than the Exercise Price, such issuance shall be deemed to have occurred for less than the Exercise Price on such date of the Dilutive Issuance), then, the Exercise Price shall be reduced and only reduced to equal the Base Share Price.  Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued.  Notwithstanding the foregoing, no adjustments shall be made under this Section 2(c) with respect to any Exempt Issuance.  “Exempt Issuance” shall include the following issuances:
 
 
3

 
 
 
(i)  
Common Stock and Common Stock Equivalents issued by the Company upon conversion of or as a dividend or distribution;
 
(ii)  
shares of Common Stock or Common Stock Equivalents issued to officers, directors or employees of, or consultants, advisors or agents to, the Company or any of its subsidiaries pursuant to stock agreements, purchase plans, employee incentive programs, stock options or warrants,  the granting of which to such persons were approved by the disinterested members of the Board of Directors of the Company;
 
(iii)  
shares of Common Stock or Common Stock Equivalents issued upon the exercise of Options or shares of Common Stock issued upon the conversion or exchange of Common Stock Equivalent, in each case provided such issuance is pursuant to the terms of such Option or Common Stock Equivalent;
 
(iv)  
shares of Common Stock or Common Stock Equivalents issued by reason of a dividend, stock split, split-up or other distribution of shares of Common Stock;
 
(v)  
shares of Common Stock or Common Stock Equivalents issued as all or part of the consideration for the acquisition (whether by merger or otherwise) by the Company for stock or assets of any other entity in a transaction approved by the Board of Directors of the Company including but not limited to shares issued in connection with that certain Asset Purchase Agreement entered into between the Company and Peak Wellness, Inc.;
 
(vi)  
shares of Common Stock or Common Stock Equivalents issued to banks, equipment lessors or other financial institutions, or to real property lessors, pursuant to a debt financing, equipment leasing or real property leasing transaction approved by the Board of Directors of the Company;
 
(vii)  
shares of Common Stock or Common Stock Equivalents issued to suppliers or third party service providers in connection with the provision of goods or services pursuant to transactions approved by the Board of Directors of the Company;
 
(viii)  
shares of Common Stock or Common Stock Equivalents issued pursuant to any transaction determined by the Board of Directors of the Company to be strategic; provided, however, that such issuance is approved by the Board of Directors of the Company and such issuance is not for the principal purpose of raising equity capital;
 
(ix)  
shares of Common Stock or Common Stock Equivalents issued pursuant to licensing, joint venture and other strategic business transactions approved by the Board of Directors of the Company; and
 
(x)  
shares of Common Stock issued pursuant to any or Common Stock Equivalents issued and outstanding as of the date of this Agreement.
 
 
 
4

 
 
 
The Company shall notify the Registered Holder, in writing, no later than three (3) trading days following the issuance of any Common Stock or Common Stock Equivalents subject to this Section 2(c), indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the “ Dilutive Issuance Notice ”).  For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 2(c), upon the occurrence of any Dilutive Issuance, after the date of such Dilutive Issuance the Holder is entitled to receive a number of shares of Warrant Stock based upon the Base Share Price regardless of whether the Holder accurately refers to the Base Share Price in the Notice of Exercise.  For purposes of the adjusted Exercise Price under this Section 2(c), the following shall be applicable:
 
i.           Issuance of Options.  If the Company in any manner grants any Options and the lowest price per share for which one share of Common Stock is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option is less than the Base Share Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price per share.  For purposes of this Section 2(c)(i), the “lowest price per share for which one share of Common Stock is issuable upon exercise of such Options or upon conversion, exercise or exchange of such Convertible Securities issuable upon exercise of any such Option” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon the granting or sale of the Option, upon exercise of the Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option.  No further adjustment of the Exercise Price or number of shares of Warrant Stock shall be made upon the actual issuance of such shares of Common Stock or of such Convertible Securities upon the exercise of such Options or upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities.
 
ii.           Issuance of Convertible Securities.  If the Company in any manner issues or sells any Convertible Securities and the lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the Base Share Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale of such Convertible Securities for such price per share.  For the purposes of this Section 2(c)(ii), the “lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or exchange of such Convertible Security.  No further adjustment of the Exercise Price or number of shares of Warrant Stock shall be made upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities, and if any such issue or sale of such Convertible Securities is made upon exercise of any Options for which adjustment of this Warrant has been or is to be made pursuant to other provisions of this Section 2(c), no further adjustment of the Exercise Price or number of shares of Warrant Stock shall be made by reason of such issue or sale.
 
iii.           Change in Option Price or Rate of Conversion.  If the purchase price provided for in any Options, the additional consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time, the Exercise Price and the number of shares of Warrant Stock in effect at the time of such increase or decrease shall be adjusted to the Exercise Price and the number of shares of Warrant Stock which would have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold.  For purposes of this Section 2(c)(iii), if the terms of any Option or Convertible Security that was outstanding as of the date of issuance of this Warrant are increased or decreased in the manner described in the immediately preceding sentence, then such Option or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease.  No adjustment pursuant to this Section 2(c)(iii) shall be made if such adjustment would result in an increase of the Exercise Price then in effect or a decrease in the number of shares of Warrant Stock.
 
 
 
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iv.           Calculation of Consideration Received.  In case any Option is issued in connection with the issue or sale of other securities of the Company, together comprising one integrated transaction in which no specific consideration is allocated to such Options by the parties thereto, the Options will be deemed to have been issued for a consideration of $0.01.  If any shares of Common Stock, Options or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the net amount received by the Company therefor.  If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of such consideration received by the Company will be the fair value of such consideration, except where such consideration consists of publicly traded securities, in which case the amount of consideration received by the Company will be the Closing Sale Price of such security on the date of receipt.  If any shares of Common Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities, as the case may be.  The fair value of any consideration other than cash or publicly traded securities will be determined by the Company.
 
v.           Record Date.  If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be.
 
(d)            Adjustment Certificate .   When any adjustment is required to be made in the Exercise Price pursuant to this Section 2, the Company shall promptly mail to the Registered Holder a certificate setting forth (i) a brief statement of the facts requiring such adjustment, (ii) the Exercise Price after such adjustment and (iii) the kind and amount of stock or other securities or property into which this Warrant shall be exercisable after such adjustment.
 
3.              Transfers .
 
(a)            Unregistered Security .   The holder of this Warrant acknowledges that this Warrant has not been registered under the Securities Act and agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of this Warrant or any Warrant Stock issued upon its exercise in the absence of (i) an effective registration statement under the Securities Act as to this Warrant or such Warrant Stock and registration or qualification of this Warrant or such Warrant Stock under any applicable U.S. federal or state securities law then in effect or (ii) an opinion of counsel, reasonably satisfactory to the Company, that such registration and qualification are not required.
 
(b)            Transferability .   Subject to the provisions of Section 3(a) hereof, this Warrant and all rights hereunder are transferable, in whole or in part, to (i) any entity controlling, controlled by or under common control of the Registered Holder, or (ii) to any other proposed transferee by surrendering the Warrant with a properly executed assignment (in the form of Exhibit B hereto) at the principal office of the Company.
 
 
 
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(c)            Warrant Register .   The Company will maintain a register containing the names and addresses of the Registered Holders of this Warrant.  Until any transfer of this Warrant is made in the warrant register, the Company may treat the Registered Holder of this Warrant as the absolute owner hereof for all purposes; provided , however , that if this Warrant is properly assigned in blank, the Company may (but shall not be required to) treat the bearer hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.  Any Registered Holder may change such Registered Holder’s address as shown on the warrant register by written notice to the Company requesting such change.
 
4.              Redemption .
 
(a)            Redemption of Warrant.   This Warrant may be redeemed, at the option of the Company, at any time after it becomes exercisable and prior to its expiration, at the office of the Company or, if appointed, the Company’s warrant agent, upon the notice referred to in Section 4(b) hereof, at the price of $0.01 per share underlying the Warrant (the “ Redemption Price ”), in the event that (i) the last closing sale price of the Common Stock has been equal to or greater than $3.00 per share (subject to adjustments for splits, dividends, recapitalizations and similar events) on each of twenty (20) trading days within any thirty (30) day trading period ending on the third business day prior to the date on which notice of redemption is given to the holder and (ii) during each day of the foregoing twenty (20) day trading period and through the date the Company exercises its redemption rights it must have an effective registration statement with a current prospectus in compliance with Sections 5 and 10 of the Securities Act on file with the Securities and Exchange Commission pursuant to which the underlying Common Stock may be sold.
 
(b)            Date Fixed for, and Notice of, Redemption .  In the event the Company shall elect to redeem the Warrant, the Company shall fix a date for the redemption. Notice of redemption shall be mailed by first class mail, postage prepaid, by the Company not less than thirty (30) days prior to the date fixed for redemption to the Registered Holders of the Warrant to be redeemed at their last addresses as they shall appear on the registration books. Any notice mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the Registered Holder received such notice.
 
(c)            Exercise After Notice of Redemption .  The Warrants may be exercised in accordance with this Warrant at any time after notice of redemption shall have been given by the Company and prior to the time and date fixed for redemption.  On and after the redemption date, the Registered Holder shall have no further rights except to receive, upon surrender of the Warrants, the Redemption Price.
 
5 .               Termination .   This Warrant (and the right to purchase securities upon exercise hereof) shall terminate at 5:00 p.m., Eastern time, on the Expiration Date.
 
6.              Notices of Certain Transactions .   In case:
 
(a)           the Company shall take a record of the holders of its Common Stock (or other stock or securities at the time deliverable upon the exercise of this Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, or
 
 
 
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(b)           of any capital reorganization of the Company, any reclassification of the capital stock of the Company, any consolidation or merger of the Company, any consolidation or merger of the Company with or into another corporation (other than a consolidation or merger in which the Company is the surviving entity), or any transfer of all or substantially all of the assets of the Company, or
 
(c)           of the voluntary or involuntary dissolution, liquidation or winding-up of the Company, or
 
(d)           of any Fundamental Transaction,
 
then, and in each such case, the Company will mail or cause to be mailed to the Registered Holder of this Warrant a notice specifying, as the case may be, (i) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (ii) the effective date on which such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation, winding-up or Fundamental Transaction is to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such other stock or securities at the time deliverable upon such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up) are to be determined.   Failure to send such notice shall not act to invalidate any such transaction.
 
7.              Reservation of Stock .   The Company covenants that at all times it will have authorized, reserve and keep available, solely for the issuance and delivery upon the exercise of this Warrant, such shares of Warrant Stock and other stock, securities and property, as from time to time shall be issuable upon the exercise of this Warrant.  The Company covenants that all Warrant Stock that may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).  The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the shares of Warrant Stock upon the exercise of the purchase rights under this Warrant by the Registered Holder.  The Company will take all such reasonable action as may be necessary to assure that such Warrant Stock may be issued as provided herein without violation of any applicable law or regulation.
 
8.              Replacement of Warrants .   Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement (with surety if reasonably required) in an amount reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will issue, in lieu thereof, a new Warrant of like tenor.
 
9.              Notices .   Any notice required or permitted by this Warrant shall be in writing and shall be deemed duly given upon receipt, when delivered personally or by courier, overnight delivery service or confirmed facsimile, or 48 hours after being deposited in the regular mail as certified or registered mail (airmail if sent internationally) with postage prepaid, addressed (a) if to the Registered Holder, to the address of the Registered Holder most recently furnished in writing to the Company and (b) if to the Company, to the address set forth on the signature page of this Warrant or as subsequently modified by written notice to the Registered Holder.
 
10.            No Rights as Stockholder .   Until the exercise of this Warrant, the Registered Holder of this Warrant shall not have or exercise any rights by virtue hereof as a stockholder of the Company.
 
 
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11.            No Fractional Shares .   No fractional shares of Common Stock will be issued in connection with any exercise hereunder.  In lieu of any fractional shares which would otherwise be issuable, the Company shall round the amount of Warrant Stock issuable to the nearest whole share.
 
12.            Amendment or Waiver .   Any term of this Warrant may be amended or waived upon written consent of the Company and the Registered Holder.
 
13.            Headings .   The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.
 
14.            Governing Law .   This Warrant and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of New York, without giving effect to principles of conflicts of law.
 
15.            Representations and Covenants of the Registered Holder .   This Warrant has been entered into by the Company in reliance upon the following representations and covenants of the Registered Holder:
 
(a)            Investment Purpose .   The Registered Holder is acquiring the Warrant and the Warrant Stock issuable upon exercise of the Warrant for its own account, not as a nominee or agent and with no present intention of selling or otherwise distributing any part thereof.
 
(b)            Private Issue .   The Registered Holder understands: (i) that the Warrant is not registered under the Securities Act or qualified under applicable state securities laws on the ground that the issuance contemplated by this Warrant will be exempt from the registration and qualifications requirements thereof pursuant to Section 4(2) of the Securities Act and any applicable state securities laws, and (ii) that the Company’s reliance on such exemption is predicated on the representations set forth in this Section 15.
 
(c)            Disposition of Registered Holder’s Rights .   In no event will the Registered Holder make a disposition of the Warrant or the Warrant Stock issuable upon exercise of the Warrant in the absence of (i) an effective registration statement under the Securities Act as to this Warrant or such Warrant Stock and registration or qualification of this Warrant or such Warrant Stock under any applicable U.S. federal or state securities law then in effect or (ii) an opinion of counsel, reasonably satisfactory to the Company, that such registration and qualification are not required.  Whenever the restrictions imposed hereunder shall terminate, as hereinabove provided, the Registered Holder or holder of a share of Common Stock then outstanding as to which such restrictions have terminated shall be entitled to receive from the Company, without expense to such holder, one or more new certificates for the Warrant or for such shares of Common Stock not bearing any restrictive legend.
 
(d)            Financial Risk .   The Registered Holder has such business and financial experience as is required to give it the capacity to protect its own interests in connection with its investment.
 
(e)            Accredited Investor .   The Registered Holder is an “accredited investor” as defined by Rule 501 of Regulation D promulgated under the Securities Act.
 
16.            No Impairment .   The Company will not, by amendment of its Certificate of Incorporation or through reorganization, consolidation, merger, dissolution, sale of assets or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will (subject to Section 12 above) at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Registered Holder of this Warrant against impairment.
 
 
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IN WITNESS WHEREOF, the parties have executed this Warrant as of the date first above written.
 
 
  ATLAS THERAPEUTICS CORPORATION
 
By:  ________________________________
Name:
Title:
 
 
 
           

 
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Exhibit A
 
WARRANT EXERCISE FORM
 

The undersigned hereby irrevocably elects to exercise the within Warrant to the extent of purchasing ______ shares of Common Stock of Atlas Therapeutics Corporation, a Nevada corporation, and hereby makes payment of $___________ in payment therefore, all in accordance with the terms and conditions of the Warrant dated ________, 2011.
 
 
Name:  ______________________________________

 
Signature:  ___________________________________
 

Signature of joint holder (if applicable): _____________________________________________



Date:  ___________________
 
 

(a)  
INSTRUCTIONS FOR ISSUANCE OF STOCK
 
(if other than to the registered holder of the within Warrant)


Name:  ______________________________________

 
Address:  _____________________________________________________________________
 

Social Security or Taxpayer Identification Number of Recipient:  _________________________


 
 
 
 

 
 
Exhibit B
 
ASSIGNMENT FORM
 


FOR VALUE RECEIVED, _____________________ hereby sells, assigns and transfers unto _______________________ the right to purchase Common Stock of Atlas Therapeutics Corporation, a Nevada corporation, represented by this Warrant to the extent of shares as to which such right is exercisable and does hereby irrevocably constitute and appoint ______________________, Attorney, to transfer the same on the books of the Company with full power of substitution in the premises.


Date: __________
 

Signature:  ______________________________________

 
Signature of joint holder (if applicable):

_____________________________________________


 
 

Exhibit 10.1
 
INTELLECTUAL PROPERTY PURCHASE AGREEMENT
 
This INTELLECTUAL PROPERTY PURCHASE AGREEMENT (this “ Agreement ”) is entered into as of February 25, 2011 by and among Peak Wellness, Inc., a Connecticut corporation doing business as Peak Wellness Biopharma (“ Seller ”),  Atlas Therapeutics Corporation, a Nevada corporation (“ Atlas ”), and Atlas Acquisition Corp., a Nevada corporation and wholly-owned subsidiary of Atlas (“ Buyer ”).  Seller, Atlas and Buyer are referred to collectively herein as the “ Parties ”.
 
WITNESSETH
 
WHEREAS , Seller is an integrative medical and healthcare provider focused on private, personal medical and healthcare coupled with nutrition, diet, and weight loss counseling, sports rehabilitation, physical therapy, and exercise physiology;
 
WHEREAS , Seller has developed and owns a proprietary formula and the natural myostatin inhibiting product known as MYO-T12 (“ MYO-T12 ”);
 
WHEREAS , Seller is engaged in formulating MYO-T12 (the “ MYO-T12 Activities ”); and
 
WHEREAS , Seller wishes to sell, and Buyer wishes to buy, certain of Seller’s assets used in connection with the MYO-T12 Activities on the terms and subject to the conditions set forth herein.
 
NOW, THEREFORE , in consideration of the premises set forth above, which are incorporated in this Agreement as if fully set forth below, and the mutual promises herein made, and in consideration of the representations, warranties and covenants herein contained, the Parties agree as follows.
 
ARTICLE I
DEFINITIONS
 
Section 1.1   Definitions .  For purposes of this Agreement:
 
Accounts Receivable ” means all accounts receivable related to the MYO-T12 Activities owed to Seller or any of its Affiliates prior to the Closing, including (i) any refund or credit of taxes and (ii) any other rebate or refund arising from the MYO-T12 Activities prior to the Closing Date.
 
 “ Acquired Assets ” means all of Seller’s right, title, and interest in and to all of the following assets of Seller and used, held for and/or necessary in connection with the MYO-T12 Activities as conducted as of the date of this Agreement and the Closing Date:
 
(a)        all Intellectual Property, including without limitation, those set forth and described on Section 3.7 of the Disclosure Schedule   (which shall include U.S. Patent Application No. 11/750, 128 entitled “Avian Follistatin Product” filed May 17, 2007);
 
 
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(b)        all goodwill relating to the MYO-T12 Activities and the Acquired Assets as of the  Closing Date;
 
(c)        all documents in seller’s possession relating to the Intellectual Property, including licenses and sublicenses of the Intellectual Property to which Seller is a party, if any, and such other documents or materials that contain information necessary or relevant to the Intellectual Property to conduct the MYO-T12 Activities;
 
(d)        Invention Agreements/Assignments;
 
(e)        the business records related to the MYO-T12 Activities; and
 
(f)         all rights, if any, to indemnification, warranties, claims and causes of action against third parties relating to any of the foregoing.
 
provided , however , notwithstanding anything to the contrary set forth in this definition, the Acquired Assets shall not include any Excluded Assets.
 
Affiliate ” has the meaning set forth in Rule 12b-2 promulgated under the Exchange Act.
 
Agreement ” has the meaning set forth in the preamble.
 
Assumed Liabilities ” means all Transfer Taxes.
 
Basket ” has the meaning set forth in Section 8.4(a) .
 
Bill of Sale ” has the meaning set forth in Section 2.5(a)(i) .
 
Business Contracts ” means the Contracts relating to the manufacture, distribution, marketing or sales in respect of the MYO-T12.
 
Business Day ” means any day other than a Saturday, a Sunday or a day on which banks located in New York, New York, shall be authorized or required by law to close.
 
Buyer ” has the meaning set forth in the preamble.
 
Buyer Indemnified Party ” has the meaning set forth in Section 8.2 .
 
Cash ” means cash, cash equivalents, marketable securities and liquid investments.
 
Closing ” has the meaning set forth in Section 2.4 .
 
Closing Date ” has the meaning set forth in Section 2.4 .
 
Colker ” means Dr. Carlon M. Colker.
 
Confidentiality Agreement ” means Section 5 of the Memorandum of Agreement, dated as of November 11, 2010, by and between Atlas and Seller, regarding the terms and conditions relating to the use and treatment of confidential information disclosed by the Parties.
 
 
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Contract ” means any written or oral agreement, contract, arrangement, commitment, promise, obligation, right, instrument, document or other similar understanding, which in each case is in writing and signed by parties intending to be bound thereby.
 
 “ Damages ” has the meaning set forth in Section 8.2 .
 
 “ Decree ” means any judgment, decree, ruling, injunction, assessment, attachment, undertaking, award, charge, writ, executive order, administrative order or any other order of any Governmental Authority.
 
Defenses and Claims ” has the meaning set forth in Section 2.2 .
 
Disclosure Schedule ” has the meaning set forth in Article III .
 
Disclosure Supplement ” has the meaning set forth in Section 5.6 .
 
Employment Agreement ” has the meaning set forth in Section 7.2(d) .
 
Environmental Laws ” means, as enacted and in effect on or prior to the Closing Date, all federal, state, local and foreign statutes, laws (including case or common law), regulations, ordinances, rules, judgments, orders, decrees, codes, injunctions, permits, concessions, grants, franchises, licenses, or agreements relating to human health and safety, the environment or emissions, discharges or releases of pollutants, contaminants, Hazardous Substances or wastes into the environment including, without limitation, ambient air, surface water, ground water, facilities, structures, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, Hazardous Substances or wastes or the investigation, clean-up or other remediation thereof.  Without limiting the generality of the foregoing, “Environmental Laws” include: (i) the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq. , as amended; (ii) the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 26 U.S.C. § 4611 and 42 U.S.C. § 9601 et seq ., as amended; (iii) the Superfund Amendment and Reauthorization Act of 1984, as amended; (iv) the Clean Air Act, 42 U.S.C. § 7401 et seq ., as amended; (v) the Clean Water Act, 33 U.S.C. § 1251 et seq ; (vi) the Safe Drinking Water Act, 42 U.S.C. § 300f et seq. ; and (vii) the Occupational Safety and Health Act of 1976, 29 U.S.C. § 651, as amended, and all rules and regulations promulgated thereunder.
 
Equipment ” means tangible personal property (other than Inventory) used in the MYO-T12 Activities, including machinery, equipment, fixtures, trade fixtures, store models, computer hardware and furniture.
 
Exchange Act ” means the Securities Exchange Act of 1934, as amended.
 
 
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Excluded Assets ” means all assets of Seller that are not expressly included in the Acquired Assets, including:
 
(a)        (i) certificates of incorporation or organizational documents, qualifications to conduct business as a foreign corporation, arrangements with registered agents relating to foreign qualifications, taxpayer and other identification numbers, seals, minute books, stock transfer books, stock certificates and other documents relating to the organization, maintenance, existence and operation of Seller; (ii) subject to Section 6.3 , books and records related to Taxes paid or payable by Seller; and (iii) any Tax asset of or with respect to Seller;
 
(b)        capital stock of any of Seller’s Subsidiaries;
 
(c)        all Permits;
 
(d)       all insurance policies and binders and all claims, refunds and credits from insurance policies or binders due or to become due with respect to such policies or binders, except for claims for Liabilities relating to the MYO-T12 Activities and/or Acquired Assets arising before or on the Closing Date;
 
(e)        Seller’s rights under this Agreement or any Related Agreement;
 
(f)         Seller’s rights under any Contracts;
 
(g)        Inventory and other products;
 
(h)        Equipment;
 
(i)         Accounts Receivable;
 
(j)         Leases;                      
 
(k)        Seller’s integrative health and medical practice; and
 
(l)         Cash.
 
Excluded Liabilities ” means all the Liabilities of Seller other than the Assumed Liabilities, including without limitation, the following:
 
(a)        any Liability not relating to or arising out of the MYO-T12 Activities, including without limitation, any Liability relating to or arising out of the Excluded Assets;
 
(b)        any Liability of Seller for Taxes except Transfer Taxes;
 
(c)        all Liabilities for accounts payable arising on or prior to the Closing;
 
(d)        all Liabilities, if any, relating to employees of Seller including, without limitation, Liabilities in connection with withheld payroll Taxes, payroll, workman’s compensation benefits and employee withholding or arising under the Employee Retirement Income Security Act of 1974, as amended;
 
(e)        all Liabilities of Seller under this Agreement or any Related Agreement and the transactions contemplated hereby or thereby;
 
 
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(f)         any Liability of Seller for Leases or Contracts;
 
(g)        any and all Liability under the civil action and related Settlement Agreement, Release and Covenant Not to Sue described in Section 3.10; and
 
(h)        all Liabilities and Litigation relating to the Acquired Assets and/or the MYO-T12 Activities incurred or arising on or prior to the Closing Date (or arising from acts or omissions on or prior to the Closing Date).
 
FDA ” has the meaning set forth in Section 3.3 .
 
GAAP ” means United States generally accepted accounting principles consistently applied.
 
Governmental Authority ” means any federal, state, local or foreign governmental or regulatory authority, agency, commission, court, body or other governmental entity.
 
Hazardous Substances ” means any substance that is toxic, ignitable, reactive, corrosive, radioactive, caustic, or regulated as a hazardous substance, contaminant, toxic substance, toxic pollutant, hazardous waste, special waste, or pollutant, including, without limitation, petroleum, its derivatives, by-products and other hydrocarbons, poly-chlorinated bi-phenyls and asbestos regulated under, or which is the subject of, applicable Environmental Laws.
 
Holder ” has the meaning set forth in Section 8.4(a) .
 
Indemnified Party ” has the meaning set forth in Section 8.4(a) .
 
Indemnifying Party ” has the meaning set forth in Section 8.4(a) .
 
Intellectual Property ” shall mean proprietary information or subject matter relating to any product or service relating to the MYO-T12 Activities or suggested by or resulting from any such product or service relating to the MYO-T12 Activities including, but not limited to: (a) all issued patents and patent applications, together with all reissuances, continuations, continuations-in-part, divisionals, extensions and reexaminations thereof concerning the MYO-T12 Activities; (b) all inventions, technology, trade secrets, know-how, technical information and data, improvements, formulas, research, development, laboratory notebooks, processes, diagrams, designs, drawings, engineering, test procedures and specifications, manufacturing specifications, configurations, packaging, search results, and any documents or materials relating thereto concerning the MYO-T12 Activities; (c) any and all registered and unregistered trademarks, service marks, trade dress, logos, slogans, trade names and Internet domain names, together with all goodwill associated therewith relating to the MYO-T12 Activities, and all pending applications, registrations, and renewals in connection therewith relating to the MYO-T12 Activities; (d) all copyrightable material together with all registrations and applications for registration therefor and renewals in connection therewith including, without limitation, marketing materials, web pages, newsletters, advertising materials and circulars relating to the MYO-T12 Activities; (e) customer lists, marketing data, designs and drawings relating to the MYO-T12 Activities; (f) all computer software, source code, object code and media storage devices (including data and databases) relating to the MYO-T12 Activities; and (g) all other documents and information in Seller’s possession, custody or control describing the Intellectual Property.
 
 
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Invention Agreements/Assignments ” means all written agreements or instruments of assignment for agreements entered into by all persons, including employees, agents, consultants and contractors of Seller with Seller assigning and conveying to Seller full, effective, exclusive and original ownership of the Intellectual Property, as set forth in Section 1.1(b) of the Disclosure Schedule .
 
Inventory ” means all merchandise and products, supplies, containers, labels, packaging material, maintenance supplies, and other similar items sold by Seller in connection with the MYO-T12 Activities.
 
IRC ” means the Internal Revenue Code of 1986.
 
Knowledge ” of Seller (and other words of similar import) means the knowledge of the individuals set forth in Section 1.1(a) of the Disclosure Schedule with respect to the applicable matter set forth herein after the conduct of reasonable inquiry and diligence.  “ Knowledge ” of Buyer or Atlas (and other words of similar import) means the knowledge of the individuals set forth in Section 1.1(a) of the Disclosure Schedule with respect to the applicable matter set forth herein after the conduct of reasonable inquiry and diligence.
 
Leases ” means all leases, subleases, licenses, concessions and other agreements (written or oral) pursuant to which Seller holds any leasehold or subleasehold estates and other rights to use, occupy or operate the Acquired Assets and/or in connection with the MYO-T12 Activities as currently conducted.
 
Liability ” means any liability or obligation of whatever kind or nature (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, whether at law or equity in contract or in tort or otherwise, and whether due or to become due) regardless of when arising or asserted.
 
Lien ” means any mortgage, pledge, lien, charge, security interest, option, right of first refusal, easement, security agreement or other encumbrance or restriction on the use or transfer of any property; provided , howeve r, that “Lien” shall not be deemed to include any license of Intellectual Property.
 
Litigation ” means any pending or threatened action, cause of action, suit, claim, cross claim, third party claim, investigation, audit, demand, hearing or proceeding, whether civil, criminal, administrative or arbitral, whether at law or in equity, whether in contract or in tort or otherwise, and whether before any Governmental Authority.
 
Material Adverse Effect ” means any effect or change that has a material adverse effect on the business, assets, prospects, financial condition, operating results or operations of the Acquired Assets and/or in connection with the MYO-T12 Activities as presently conducted, taken as a whole.
 
 
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Memorandum of Agreement ” means that certain Memorandum of Agreement, dated as of November 11, 2010, by and between Atlas and Seller, as amended.
 
MYO-T12 ” has the meaning set forth in the preamble.
 
MYO-T12 Activities ” has the meaning set forth in the recitals.
 
Note ” has the meaning set forth in Section 2.3(b) .
 
Outside Date ” has the meaning set forth in Section 9.1(b)(ii) .
 
Parties ” has the meaning set forth in the preamble.
 
Permit ” means any franchise, approval, permit, license, order, registration, certificate, variance or similar right obtained from any Governmental Authority.
 
Person ” means an individual, a partnership, a corporation, a limited liability company, limited liability partnership, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or any other entity, including any Governmental Authority or any group of any of the foregoing.
 
Purchase Price ” has the meaning set forth in Section 2.3 .
 
Purchase Price Allocation ” has the meaning set forth in Section 2.6 .
 
Registrable Securites ” has the meaning set forth in Section 8.4(a) .
 
Related Agreements ” means the Bill of Sale, the Employment Agreement, the Note, the Security Agreement and all other agreements entered into in connection with this Agreement and the foregoing documents.
 
Representative ” means, when used with respect to a Person, the Person’s controlled Affiliates (including Subsidiaries) and such Person’s and any of the foregoing Persons’ respective officers, directors, managers, members, shareholders, partners, employees, agents, representatives, advisors (including financial advisors, bankers, consultants, legal counsel and accountants).
 
Securities Act ” means the Securities Act of 1933, as amended.
 
Security Agreement ” has the meaning set forth in Section 2.3(b) .
 
Seller ” has the meaning set forth in the preamble.
 
Seller Indemnified Party ” has the meaning set forth in Section 8.3 .
 
 “ Subsidiary ” means, with respect to any Person, means, on any date, any Person (a) the accounts of which would be consolidated with and into those of the applicable Person in such applicable Person’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date or (b) of which securities or other ownership interests representing more than fifty percent of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests or more than fifty percent of the profits or losses of which are, as of such date, owned, controlled or held by the applicable Person or one or more subsidiaries of such Person.
 
 
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Tax ” or “ Taxes ” means any United States federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, stamp, occupation, premium, windfall profits, environmental (including taxes under Section 59A of the IRC), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated or other tax of any kind whatsoever, whether computed on a separate or consolidated, unitary or combined basis or in any other manner, including any interest, penalty or addition thereto, whether disputed or not.
 
Tax Return ” means any return, declaration, report, claim for refund or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
 
 “ Third Party Claim ” has the meaning set forth in Section 8.5 .
 
Transaction Proposal ” has the meaning set forth in Section 5.9 .
 
Transfer Tax ” has the meaning set forth in Section 6.5 .
 
Section 1.2   Interpretations .  Unless otherwise indicated herein to the contrary:
 
(a)   When a reference is made in this Agreement to an Article, Section, Annex, Exhibit, Schedule, clause or subclause, such reference shall be to an Article, Section, Annex, Exhibit, Schedule, clause or subclause of this Agreement.
 
(b)   The words “include,” “includes” or “including” and other words or phrases of similar import, when used in this Agreement, shall be deemed to be followed by the words “without limitation.”
 
(c)   The words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement.
 
(d)   The word “if” and other words of similar import shall be deemed, in each case, to be followed by the phrase “and only if.”
 
(e)   The use of “or” herein is not intended to be exclusive.
 
(f)   The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms.  Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of names and pronouns shall include the plural and vice versa.
 
 
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(g)   All terms defined in this Agreement have the same defined meanings when used in any certificate or other document made or delivered pursuant hereto, unless otherwise defined therein.
 
(h)   Any reference herein to law or to a legal requirement (or, with respect to any statute, ordinance, code, rule or regulation, any provision thereof) shall be deemed to include reference to all laws and or to such legal requirement and any legal requirement promulgated thereunder (or provision thereof, as applicable), including any successor thereto, respectively, in each case, as may be amended.
 
(i)   References herein to a Person are also to its permitted successors and assigns.  Any reference herein to a Governmental Authority shall be deemed to include reference to any successor thereto.
 
(j)   Any reference herein to “Dollars” or “$” shall mean United States dollars.
 
ARTICLE II
PURCHASE AND SALE
 
Section 2.1   Purchase and Sale of Assets .  On the terms and subject to the conditions set forth in this Agreement, Buyer will purchase from Seller, and Seller will sell, transfer, assign, convey and deliver to Buyer at the Closing all of the Acquired Assets, free and clear of all Liens.
 
Section 2.2   Assumed Liabilities .  On the terms and subject to the conditions set forth in this Agreement, Buyer will assume and become responsible for the Assumed Liabilities after the Closing.  Buyer agrees to pay, perform, honor and discharge, or cause to be paid, performed, honored and discharged, all Assumed Liabilities in accordance with the terms thereof after  the Closing.  Nothing herein shall be deemed to deprive Buyer of any defenses, set-offs or counterclaims which Seller may have had or which Buyer shall have with respect to any of the Assumed Liabilities (the “ Defenses and Claims ”).
 
Section 2.3   Purchase Price . In full consideration for the assignment or transfer of the Acquired Assets, the consideration to be paid by Buyer (the “ Purchase Price ”) for the Acquired Assets shall consist of:
 
(a)   A cash payment in an amount equal to the sum of $450,000 (such amount, the “ Cash Payment ”), which shall be payable at the Closing.
 
(b)   A promissory note in the amount of $700,000, bearing interest at the rate of 3% per annum, substantially in the form, and subject to the terms, conditions and covenants, of Exhibit A hereto (the “ Note ”).  As security for payment of the Note, Buyer shall execute a security agreement, substantially in the form of Exhibit B hereto (the “ Security Agreement ”), providing the Seller with a first priority security interest in the Acquired Assets.  The Note shall be payable in two installments in accordance with the following schedule:
 
(i)   $350,000 plus all accrued interest thereon shall be due and payable no later than one hundred and eighty (180) days after the Closing Date; and
 
 
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(ii)   $350,000 plus all accrued interest thereon shall be due and payable on the first anniversary of the Closing Date.
 
(c)    Atlas shall issue to Seller 7,024,000 shares (the “ Shares ”) of Atlas’ voting common stock, $0.001 par value, representing 12% of the fully-diluted voting common stock of Atlas.
 
Section 2.4   Closing .  The closing of the transactions contemplated by this Agreement (the “ Closing ”) shall take place at the offices of Ellenoff, Grossman & Schole LLP located at 150 E. 42 nd Street, New York, New York (or such other location as shall be mutually agreed upon by Seller and Buyer), commencing at 10:00 a.m. local time on February 25, 2011 or on such other date as shall be mutually agreed upon by the Parties (the “ Closing Date ”).  For purposes of this Agreement and the transactions contemplated hereby, the Closing will be deemed to occur and be effective, and title to and risk of loss associated with the Acquired Assets and relating to the MYO-T12 Activities, shall be deemed to occur at 12:01 am, New York City time, on the Closing Date.
 
Section 2.5   Deliveries at Closing .
 
(a)   At the Closing, Seller will deliver to Buyer the following duly executed documents and other items:
 
(i)   a Bill of Sale substantially in the form of Exhibit C hereto (the “ Bill of Sale ”);
 
(ii)   an officer’s certificate to the effect that each of the conditions specified in Section 7.1(a) and Section 7.1(a) is satisfied;
 
(iii)   the receipt of all third party consents and notices to or from third parties that are required to be delivered or obtained pursuant to Section 7.1(c) and delivered by Seller;
 
(iv)   the Employment Agreement;
 
(v)   an officer’s certificate of Seller enclosing a copy of the certificate of incorporation of Seller, the by-laws of Seller, resolutions of Seller’s board of directors approving the transactions contemplated by this Agreement and a certification as to incumbency of the officers of Seller executing and delivering this Agreement;
 
(vi)   the opinion of counsel for Seller substantially in the form of Exhibit D hereto (the “ Legal Opinion ”);
 
(vii)   Invention Agreements/Assignments; and
 
(viii)   the actual possession of or unfettered access to the Acquired Assets.
 
 
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(b)   At the Closing, Buyer and Atlas will deliver to Seller the following duly executed documents and other items:
 
(i)   the Employment Agreement;
 
(ii)   the Security Agreement;
 
(iii)   an officer’s certificate to the effect that each of the conditions specified in Section 7.2(a) and Section 7.2(b) are satisfied;
 
(iv)   the Cash Payment;
 
(v)   the Note; and
 
(vi)   the Shares.
 
Section 2.6   Allocation .  Buyer and Seller agree to allocate the Purchase Price (as finally determined hereunder), the Assumed Liabilities and all other relevant items among the Acquired Assets in accordance with Section 1060 of the IRC and the Treasury Regulations thereunder. Consistent with the foregoing, Buyer and Seller shall allocate the Purchase Price and the Assumed Liabilities (and all other relevant items) as of the Closing Date in accordance with Section 2.6 of the Disclosure Schedule (the “ Purchase Price Allocation ”).  The Purchase Price Allocation shall be conclusive and binding on the parties, and Buyer and Seller agree (and agree to cause their respective subsidiaries and Affiliates) to prepare and file IRS Form 8594 and all Tax Returns on a basis consistent with the Purchase Price Allocation.  None of the Parties will take any position inconsistent with the Purchase Price Allocation on any Tax Return or in any audit or Tax proceeding, unless otherwise required by law.
 
ARTICLE III
SELLER’S REPRESENTATIONS AND WARRANTIES
 
Seller represents and warrants to Buyer that the statements contained in this Article III are true and correct as of the date of this Agreement and as of the Closing Date, except as set forth in the disclosure schedule accompanying this Agreement (the “ Disclosure Schedule ”).  The Disclosure Schedule has been arranged in paragraphs corresponding to the numbered and lettered paragraphs contained in this Agreement for the convenience of the Parties.
 
 
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Section 3.1   Organization of Seller ; Good Standing ; Subsidiaries . Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Connecticut and has all requisite corporate or similar power and authority to own, lease and operate its assets and to carry on its business (including the MYO-T12 Activities) as now being conducted.  To Seller’s Knowledge, it is duly qualified to do business in each jurisdiction where the nature of the business conducted or property owned by it, make such qualification necessary, other than those jurisdictions in which the failure to so qualify would not have a Material Adverse Effect on the Acquired Assets.  Seller does not own any direct or indirect subsidiaries.
 
Section 3.2   Authorization of Transaction .
 
(a)   Seller has full power and authority (including full corporate power and authority) to execute and deliver this Agreement and all other Related Agreements and to perform its obligations hereunder and thereunder.
 
(b)   The execution, delivery and performance of this Agreement and all other Related Agreements have been duly authorized by Seller’s Board of Directors and stockholders.
 
(c)   This Agreement (assuming due authorization and delivery by Buyer and Atlas) constitutes the valid and legally binding obligation of Seller, enforceable against Seller in accordance with its terms and conditions, subject to applicable bankruptcy, insolvency, moratorium or other similar laws relating to creditors’ rights and general principles of equity.
 
Section 3.3   Noncontravention ; Government Filings .  Neither the execution and delivery of this Agreement or the Related Agreements nor the consummation of the transactions contemplated hereby and thereby, including the transfer of the Acquired Assets, will (a) conflict with or result in a breach of the articles of incorporation or bylaws, or other organizational documents, of Seller, (b) to Seller’s Knowledge, violate any law or Decree to which Seller is, or its respective assets or properties are, subject (including, without limitation, those promulgated by the Food and Drug Administration of the U.S. Department of Health and Human Services (the “ FDA ”) or by any foreign, federal, state or local regulatory authority performing functions similar to those preformed by the FDA), or (c) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or require any notice under any material Contract to which Seller is a party or by which it is bound except, in the case of either clause (b) or (c), for such conflicts, violations, breaches, defaults, accelerations, rights or failures to give notice as would not, individually or in the aggregate, have a Material Adverse Effect.  To Seller’s Knowledge, Seller is not required to give any notice to, make any filing with, or obtain any authorization, consent or approval of any Governmental Authority in order for the Parties to consummate the transactions contemplated by this Agreement or any Related Agreement (including, without limitation, those promulgated by the FDA or by any foreign, federal, state or local regulatory authority performing functions similar to those preformed by the FDA), except where the failure to give notice, file or obtain such authorization, consent or approval would not, individually or in the aggregate, have a Material Adverse Effect or prevent or materially impair or delay Seller’s ability to consummate the transactions contemplated hereby or perform its obligations hereunder on a timely basis.
 
 
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Section 3.4   Title to Assets .  At the Closing, Seller has good, valid and marketable title to, or the right to use, the Acquired Assets, and Seller will convey at the Closing good, valid and marketable title to, or Seller’s right to use, all of the Acquired Assets, free and clear of all Liens.  Except as set forth in Section 3.4 of the Disclosure Schedule , no financing statement under the Uniform Commercial Code with respect to any of the Acquired Assets is effective in any jurisdiction, and Seller has not signed any financing statement or any security agreement authorizing any secured party thereunder to file any such financing statement against any of the Acquired Assets.
 
Section 3.5   Sufficiency of Acquired Assets .  The Acquired Assets immediately after the Closing shall constitute all of the assets necessary for Buyer to produce the MYO-T12 product.
 
Section 3.6   Absence of Certain Changes .  Except as set forth in Section 3.6 of the Disclosure Schedule and as otherwise contemplated or permitted hereby, from the execution date of the Memorandum of Agreement through the Closing Date, there has not occurred any Material Adverse Effect with respect to the Acquired Assets.
 
Section 3.7   Intellectual Property .  Seller warrants and represents that:
 
(a) Section 3.7(a) of the Disclosure Schedule is an accurate and complete list of the Intellectual Property rights owned by Seller, and all agreements pursuant to which Seller entitles third parties to exploit the Intellectual Property, and represents all such rights as are sufficient, necessary or desirable for Buyer to conduct the MYO-T12 Activities;
 
(b) Seller has full right, power and authority to grant all of the rights, title and interests granted in the Intellectual Property to the Buyer in this Agreement. Neither Protein Factor Inc., Alex Rogers nor any other third party has any rights, title or interests in the Intellectual Property or the Acquired Assets;
 
(c) all of the Intellectual Property is valid, subsisting and enforceable, in whole and in part, and Seller has not undertaken or omitted to undertake any acts, and no circumstances or grounds exist, that would invalidate, reduce or eliminate, in whole or in part, the enforceability or scope of, the Buyer’s entitlement to exclusively exploit such rights or otherwise impair the conduct of the MYO-T12 Activities;
 
(d) Seller owns or has a valid and binding license or other right to use all of the Intellectual Property necessary to conduct the MYO-T12 Activities and there are no other items of Intellectual Property that are material to the ordinary conduct of the MYO-T12 Activities;
 
(e) Seller has sole, exclusive, valid, irrevocable, unencumbered rights, interests and title to the Intellectual Property and has not granted any encumbrances or other agreements thereon or thereto, and the Intellectual Property is free and clear of all Liens;

(f) to Seller’s Knowledge, neither the MYO-T12 Activities nor the Intellectual Property infringes the intellectual property or proprietary rights of any third party;
 
 
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(g) to Seller’s Knowledge, no third party is infringing or misappropriating any Intellectual Property owned, licensed or used by Seller;
 
(h) there are no suits, actions or proceedings presently pending or, to Seller’s Knowledge, threatened against Seller that assert that the MYO-T12 Activities or the existence, ownership or operation of the Intellectual Property infringes or misappropriates any third party’s intellectual property rights or challenge the validity, legality, enforceability or ownership of any Intellectual Property owned by Seller;
 
(i) Except as set forth in Section 3.7(i) of the Disclosure Schedule , Seller has not entered into any agreement to indemnify any other Person against any charge of infringement of any Intellectual Property;
 
(j) there are no royalties, fees or other payments payable by Seller to any Person by reason of the ownership, use, license, sale or disposition of any Intellectual Property;
 
(k) Seller has taken commercially reasonable and customary measures and precautions to protect and maintain the confidentiality of all Intellectual Property and otherwise to maintain and protect the full value of all Intellectual Property;

(l) the consummation of the transactions contemplated by this Agreement or the Related Agreements will not result in the termination or impairment of any of the Intellectual Property;
 
(m) Seller has delivered or made available to Buyer correct and complete copies of all documents in its possession relating to the Intellectual Property, including licenses and sublicenses of the Intellectual Property to which Seller is a party, and such other document or materials that contain information necessary or relevant to the Intellectual Property to conduct the MYO-T12 Activities;
 
(n) to Seller’s Knowledge, all persons, including, without limitation, employees, agents, consultants and contractors of Seller who have contributed to or participated in the conception and development of any Intellectual Property have entered into written agreements with Seller assigning and conveying to Seller full, effective, exclusive and original ownership of all such Intellectual Property, and copies of all such written agreements or instruments of assignment have been delivered to Buyer; and
 
(o) Seller agrees that, upon Buyer’s request, it will, at Buyer’s expense, sign all papers, take all rightful oaths, and do all acts which may be necessary, desirable or convenient for securing and maintaining patents, trademarks or other protection for the Intellectual Property in any and all countries and for vesting title thereto in Buyer, its successors, assigns and legal representatives or nominees, or which may be necessary to exploit or defend its rights in the Intellectual Property.  Seller hereby authorizes and requests that the Commissioner of Patents and Trademarks of the United States and any official of any country or countries foreign to the United States whose duty it is to issue patents or other evidence or forms of intellectual property on applications as aforesaid , to issue the same for the Intellectual Property to Buyer its successors, assigns and legal representatives, or to such nominees as it may designate.
 
 
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Section 3.8   Tax Matters .   Except as set forth in Section 3.8 of the Disclosure Schedule : (a) all Tax Returns which Seller is required to file on or before the Closing Date have been or will be duly and timely filed, (b) Seller has not requested or been granted an extension of time for filing any Tax Return that has not yet been filed, (c) all information provided in each such Tax Return is true, correct and complete to best of Seller’s Knowledge, information and belief, (d) Seller has timely paid all Taxes that have become due and payable as Taxes imposed on it, pursuant to such Tax Returns or otherwise, or pursuant to any assessment received by it, (e) to Seller’s Knowledge, all Taxes that the Seller is or was required to withhold or collect have been duly held or collected and, to the extent required, have been paid in full to the appropriate Governmental Authority, (f) to Seller’s Knowledge, no penalty, interest or other charge is or will become due with respect to the late filing of any such Tax Return or late payment of any such Tax, (g) no claim exists against Seller for any Taxes, and no assessment, deficiency or adjustment has been asserted or proposed with respect to any Tax Return of or with respect to Seller, and (h) no Lien for Taxes exists against any of the Acquired Assets (other than Liens for Taxes not yet due or payable).
 
Section 3.9   Legal   Compliance .  Seller, to its Knowledge, is and has been in compliance with all applicable laws relating to the MYO-T12 Activities and/or the Acquired Assets, except where any such noncompliance by Seller would not result in any Material Adverse Effect to the Acquired Assets.
 
Section 3.10   Litigation ; Decrees .  There is no Litigation pending or, to Seller’s Knowledge, is threatened which (a) would have a Material Adverse Effect, (b) challenges the validity or enforceability of this Agreement or seeks to enjoin or prohibit consummation of the transactions contemplated hereby, (c) involves a claim for product liability or (d) relates to the Intellectual Property of Seller.  To Seller’s Knowledge, Seller is not subject to any outstanding Decree which (i) has a Material Adverse Effect or (ii) would prevent or materially impair or delay Seller’s ability to consummate the transactions contemplated hereby or perform its obligations hereunder on a timely basis.  Seller has no outstanding obligations, and is not subject to any restrictions, in connection with the civil action captioned Peak Wellness, Inc. and Carlon M. Colker, M.D. v. Richard P. Green II, Richard P. Green III, Richard P. Green, Celldyne Biopharma, LLC and Celdyne Laboratories, LLC or the related Settlement Agreement, Release and Covenant Not to Sue by and between the parties thereto.
 
Section 3.11   [omitted] .
 
Section 3.12   Studies .
 
(a)  To Seller’s Knowledge, the studies conducted by or on behalf of Seller concerning MYO-T12 were and, if still ongoing, are being conducted in material compliance with all laws and regulations applicable thereto in the jurisdictions in which they were or are being conducted and with all laws and regulations applicable to the studies from which data will be submitted to support marketing approval. Seller has no Knowledge of any well-controlled clinical study, the aggregate results of which is inconsistent with or otherwise call into question the results of any study conducted by or on behalf of Seller concerning MYO-T12. The Seller has not received any written notices or statements from the FDA or any other governmental agency or authority imposing, requiring, requesting or suggesting a clinical hold, termination, suspension or material modification for or of any studies conducted by or on behalf of Seller concerning MYO-T12.
 
 
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(b)  Seller has not received any written notices or statements from the FDA or any other governmental agency, and otherwise has no Knowledge or reason to believe, that (i) any drug application or marketing authorization application for MYO-T12 is or has been rejected or determined to be non-approvable or conditionally approvable; (ii) a delay in time for review and/or approval of a marketing authorization application or marketing approval application in any other jurisdiction for MYO-T12 is or may be required, requested or being implemented; (iii) one or more studies for MYO-T12 shall or may be requested or required as a precondition to or condition of issuance or maintenance of a marketing approval for MYO-T12; (iv) any license, approval, permit or authorization to conduct any trial of or market concerning MYO-T12 has been, will be or may be suspended, revoked, modified or limited, except in the cases of clauses (i), (ii), (iii) and (iv) where such rejections, determinations, delays, requests, suspensions, revocations, modifications or limitations would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
 
Section 3.13   Insurance .   Schedule 3.13 of the Disclosure Schedule sets forth the insurance policies maintained by Seller in connection with the MYO-T12 Activities. To Seller’s Knowledge, the insurance coverage provided by such policies: (a) is with reputable and solvent insurance companies, (b) is on such terms, (c) covers such categories of risk, (d) contains such deductibles and retentions, and (e) is in such amounts as, with respect to each of the criteria set forth in the foregoing clauses (a) through (e), is suitable and customary for Persons engaging in similar business in all material respects.  Seller has not received any notice of default or written notice of any pending or threatened termination or cancellation, coverage limitation or reduction, or material premium increase with respect to any such policy.  There are no claims related to the Seller, the Acquired Assets or the MYO-T12 Activities pending under any such insurance policies.
 
Section 3.14   Environmental Laws .  To Seller’s Knowledge, Seller has not received any written notice from any Governmental Authority or third party claimant regarding any material violation of Environmental Laws or any material Liabilities arising under Environmental Laws with respect to the MYO-T12 Activities and/or Acquired Assets, in each of the foregoing cases, the subject matter of which would be reasonably expected to have a Material Adverse Effect.
 
Section 3.15   Employees .  As of the date hereof and the Closing Date, Colker is the sole employee of Seller involved in the MYO-T12 Activities.  Neither Buyer nor Atlas will be obligated to employ any employee of Seller subsequent to the consummation of this Agreement (except as provided in the Employment Agreement).
 
Section 3.16   Powers of Attorneys .  No Persons hold any general or specific powers of attorney from Seller relating to the Acquired Assets or the MYO-T12 Activities.
 
Section 3.17   Brokers’ Fees .  Seller has not entered into any Contract to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated hereby for which Buyer could become liable or obligated to pay.
 
 
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Section 3.18   Disclosure of Information . Seller has had an opportunity to ask questions and receive answers from Atlas regarding the terms and conditions of the Equity Issuance and the business, properties, prospects and financial condition of Atlas.
 
Section 3.19   Investment Purpose . Seller is acquiring the Shares solely for the purpose of investment. Seller acknowledges that the Shares are not registered under the Securities Act.  Seller does not have any agreement or understanding, directly or indirectly, with any person to distribute any of the Shares.
 
Section 3.20   Restricted Securities . Seller understands that the Shares will be characterized as “restricted securities” under the federal securities laws, inasmuch as they are being acquired from Atlas in a transaction not involving a public offering, and that under such laws and applicable regulations such Shares may not be resold without registration under the Securities Act, except in certain limited circumstances. Seller further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Shares and on requirements relating to Atlas that are outside Seller’s control, and that Atlas is under no obligation and may not be able to satisfy. Seller understands and acknowledges that it may not rely on the exemption from registration set forth in Rule 144 promulgated under the Securities Act for the resale of the Shares for at least one year following the consummation of the Agreement.
 
Section 3.21   Accredited Investor . Seller is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.  The information provided by Seller to Buyer in its investor questionnaire attached hereto as Exhibit E is true and accurate in all material respects.
 
Section 3.22   Information Supplied .  To Seller’s Knowledge, none of: (i) the information, documents or other due diligence matters supplied or to be supplied by or on behalf of the Seller in connection with this Agreement and the Related Agreements, (ii) the representations and warranties of Seller contained in this Agreement or any Related Agreement and (iii) the Disclosure Schedules attached hereto, taken as a whole, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading.
 
Section 3.23   Disclaimer of Other Representations and Warranties .  Except for the representations and warranties contained in this Article IV or expressly contained in any Related Agreement, Seller makes no other representation or warranty, express or implied.
 
 
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ARTICLE IV
 REPRESENTATIONS AND WARRANTIES OF BUYER AND ATLAS
 
Each of Buyer and Atlas represents and warrants to Seller that the statements contained in this Article IV are true and correct as of the date of this Agreement and the Closing Date.
 
Section 4.1   Organization ; Good Standing .
 
Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has all requisite corporate or similar power and authority to own, lease and operate its assets and to carry on its business as now being conducted.  Buyer is a wholly-owned subsidiary of Atlas that was formed specifically in connection with the transactions contemplated by this Agreement and has not conducted any business or acquired any property, except in connection with the transactions contemplated by this Agreement.  Atlas is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has all requisite corporate or similar power and authority to own, lease and operate its assets and to carry on its business as now being conducted.
 
Section 4.2   Authorization of Transaction .
 
(a)   Buyer has full power and authority (including full corporate or other entity power and authority) to execute and deliver this Agreement and the Related Agreements and to perform its obligations hereunder and thereunder. The execution, delivery and performance of this Agreement and the Related Agreements have been duly authorized by Buyer.  This Agreement (assuming due authorization and delivery by Seller and Atlas) constitutes the valid and legally binding obligation of Buyer, enforceable against Buyer in accordance with its terms and conditions, subject to applicable bankruptcy, insolvency, moratorium or other similar laws relating to creditors’ rights and general principles of equity.
 
(b)   Atlas has full power and authority (including full corporate or other entity power and authority) to execute and deliver this Agreement and all other Related Agreements and to perform its obligations hereunder and thereunder. The execution, delivery and performance of this Agreement and all other Related Agreements have been duly authorized by Atlas.  This Agreement (assuming due authorization and delivery by Seller and Buyer) constitutes the valid and legally binding obligation of Atlas, enforceable against Atlas in accordance with its terms and conditions, subject to applicable bankruptcy, insolvency, moratorium or other similar laws relating to creditors’ rights and general principles of equity.
 
Section 4.3   Noncontravention .  Neither the execution and delivery of this Agreement and all other Related Agreements, nor the consummation of the transactions contemplated hereby (including the assignments and assumptions referred to in Article II ) or thereby will (a) conflict with or result in a breach of the certificate of incorporation or bylaws, or other organizational documents, of Buyer or Atlas, (b) violate any law or Decree to which Buyer or Atlas is, or its respective assets or properties are, subject or (c) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or require any notice under any Contract to which Buyer or Atlas is a party or by which it is bound, except, in the case of either clause (b) or (c), for such conflicts, breaches, defaults, accelerations, rights or failures to give notice as would not, individually or in the aggregate, have a material adverse effect on Buyer or Atlas.  Neither Buyer nor Atlas is required to give any notice to, make any filing with, or obtain any authorization, consent or approval of any Governmental Authority in order for the Parties to consummate the transactions contemplated by this Agreement or any Related Agreement, except where the failure to give notice, file or obtain such authorization, consent or approval would not, individually or in the aggregate, prevent or materially impair or delay Buyer’s or Atlas’ ability to consummate the transactions contemplated hereby or perform its obligations hereunder on a timely basis.
 
 
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Section 4.4   Litigation ; Decrees .  There is no Litigation pending or, to Buyer’s Knowledge and to Atlas’ Knowledge, is threatened in writing which challenges the validity or enforceability of this Agreement or seeks to enjoin or prohibit consummation of the transactions contemplated hereby.  Neither Buyer nor Atlas is subject to any outstanding Decree which would prevent or materially impair or delay Buyer’s or Atlas’ ability to consummate the transactions contemplated hereby or perform its obligations hereunder on a timely basis.
 
Section 4.5   Brokers’ Fees .  Neither Buyer nor Atlas has entered into any Contract to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement for which Seller or any of its Affiliates could become liable or obligated to pay.
 
Section 4.6   Disclosure of Information . Buyer and Atlas have had an opportunity to ask questions and receive answers from the current distributor and manufacturer of MYO-T12 regarding the manufacturing, distribution and sales history of MYO-T12 and the MYO-T12 Activities.
 
Section 4.7   Capitalization. Section 4.7 of the Disclosure Schedule sets forth the type and number of shares of all authorized, issued and outstanding capital stock of Atlas as of the date hereof.  Atlas’ common stock is presently quoted on the OTC Bulletin Board under the symbol “MVNP” and is not subject to any notice of suspension or delisting.  Except for the warrants to be issued in a concurrent private placement, there are no outstanding or authorized stock appreciation rights, phantom stock, warrants, convertible securities, script or similar rights with respect to Atlas’ capital stock and no person has any right of first refusal, preemptive right, right of participation or any similar right to participate in the issuance of the Shares or to acquire any equity securities of Atlas.
 
Section 4.8   Shares .  The Shares represent twelve percent (12%) of the fully-diluted voting common stock of Atlas as of the date of Closing.
 
Section 4.9   Information Supplied .  To Buyer and Atlas’ Knowledge, none of: (i) the information, documents or other due diligence matters supplied or to be supplied by or on behalf of Buyer and Atlas in connection with this Agreement and the Related Agreements, (ii) the representations and warranties of Buyer and Atlas contained in this Agreement or any Related Agreement and (iii) the Disclosure Schedules attached hereto, taken as a whole, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading.
 
Section 4.10   Disclaimer of Other Representations and Warranties .  Except for the representations and warranties contained in this Article IV or expressly contained in any Related Agreement, neither Buyer, Atlas nor any Person on behalf of Buyer or Atlas makes any other representation or warranty, express or implied.
 
 
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ARTICLE V
PRE-CLOSING COVENANTS
 
The Parties agree as follows with respect to the period between the execution of this Agreement and the Closing (except as otherwise expressly stated to apply to a different period):
 
Section 5.1   Efforts; Cooperation .
 
(a)   Upon the terms and subject to the conditions set forth in this Agreement (including Section 5.2(a) ), each of the Parties shall use its reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other Parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated hereby. Without limiting the generality of the foregoing, (i) Seller shall use its reasonable best efforts to cause the conditions set forth in Section 7.1 to be satisfied or fulfilled, and (ii) Buyer and Atlas shall use their reasonable best efforts to cause the conditions set forth in Section 7.2 to be satisfied or fulfilled.
 
(b)   Without limiting the generality of Section 5.1 (a) , the Parties shall not take any action to materially diminish the ability of any Party to consummate, or materially delay any Party’s ability to consummate, the transactions contemplated hereby, including taking any action that is intended or would reasonably be expected to result in any of the conditions to any Party’s obligations to consummate the transactions contemplated hereby set forth in Section 6.11(b) to not be satisfied.
 
(c)   Without limiting the generality of Section 5.1(a) , Seller shall cooperate with Buyer and vendors, suppliers, distributors, manufacturers and other Persons engaged by Buyer or its Representatives with respect to the transition of the Acquired Assets from Seller to Buyer.
 
Section 5.2   Notices and Consents .  Prior to the Closing and as necessary following the Closing:
 
(a)   Seller will give, or will cause to be given, any notices to third parties, and Seller will use its commercially reasonable efforts to obtain any third party consents or sublicenses, in connection with the matters referred to in Section 5.2 (a) of the Disclosure Schedule or as are otherwise necessary and appropriate to consummate the transactions contemplated hereby.
 
(b)   Each of the Parties will give any notices to, make any filings with, and use its commercially reasonable efforts to obtain any authorizations, consents, and approvals of Governmental Authorities in connection with the matters referred to in Section 5.2 (b) of the Disclosure Schedule or as are otherwise necessary and appropriate to consummate the transactions contemplated hereby.
 
 
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Section 5.3   Preservation of MYO-T12 Activities .  Except as otherwise contemplated hereby or as required by law, Seller will use commercially reasonable efforts to maintain the MYO-T12 Activities as presently conducted, including without limitation (i) maintaining its present operations, physical facilities, working conditions and relationships with suppliers, distributors, manufacturers, customers, creditors, contractors and employees, (ii) preserve and maintain the Acquired Assets (subject to normal wear and tear), (iii) preserve the goodwill relating to the MYO-T12 Activities, (iv) preserve any and all Permits, (v) conduct the MYO-T12 Activities only in the ordinary course of business consistent with past practices and in compliance with all applicable laws, and (vi) prevent any development or changes which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
 
Section 5.4    MYO-T12 Activities .  Without limiting the generality of Section 5.3 , except as contemplated hereby or as required by law, without Buyer’s prior written consent (which shall not be unreasonably withheld, conditioned or delayed), Seller shall not, without the prior written consent of the Buyer, take any of the following actions with respect to the Acquired Assets or the MYO-T12 Activities:
 
(i)  take any action or enter into any transaction that would be required to be disclosed on Schedule 3.7 of the Disclosure Schedules ;

(ii) create, incur or assume any obligations which (a) materially affects the Intellectual Property, the MYO-T12 Activities or the Acquired Assets or (b) the Buyer’s ability to use the Intellectual Property or the Acquired Assets, and to conduct the MYO-T12 Activities in substantially the same manner and conditions as conducted by Seller on the date of this Agreement;

(iii)  transfer or license to any person or otherwise extend, materially amend or modify, permit to lapse or fail to preserve any of the Intellectual Property, other than nonexclusive licenses in the ordinary course of business consistent with past practice, or disclose to any person who has not entered into a confidentiality agreement any trade secrets;

(iv) incur, create, assume, prepay or otherwise become liable for any indebtedness (directly, contingently or otherwise), make a loan or advance to or investment in any third party, or guarantee or endorse any indebtedness, liability or obligation of any person;

(v)  fail to maintain its books, accounts and records in all material respects in the ordinary course of business consistent with past practice;

(vi)  fail to use commercially reasonable efforts to keep in force insurance policies or replacement or revised policies providing insurance coverage with respect to the Acquired Assets or the MYO-T12 Activities in an amount and scope of coverage as are currently in effect;

(vii)  waive, release, assign, settle or compromise any claim, action or proceeding (including any suit, action, claim, proceeding or investigation relating to this Agreement or the transactions contemplated hereby), other than waivers, releases, assignments, settlements or compromises that involve only the payment of monetary damages (and not the imposition of equitable relief on, or the admission of wrongdoing by, Seller or any Subsidiary) not in excess of $1,000 individually or in the aggregate, or otherwise pay, discharge or satisfy any claims, liabilities or obligations;
 
 
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(viii)  close or materially reduce the MYO-T12 Activities, or effect any layoff or other personnel reduction or change, of employees involved in the MYO-T12 Activities;

(ix)  acquire, including by merger, consolidation, acquisition of stock or assets, or any other form of business combination, any corporation, partnership, limited liability company, other business organization or any division thereof, or any material amount of assets;

(x)  make any capital expenditure in excess of $5,000;

(xi)  adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;

(xii)  voluntarily incur any material liability or obligation (whether absolute, accrued, contingent or otherwise);

(xiii)  sell, lease, license, transfer, exchange or swap, mortgage or otherwise pledge or encumber (including securitizations), or otherwise dispose of any material portion of its properties, assets or rights;

(xiv)  take any action that would reasonably be expected to delay or impair the obtaining of any consents or approvals of any Governmental Authority to be obtained in connection with this Agreement;

(xv)  change the terms of agreements with vendors, suppliers, distributors, manufacturers or customers; or

(xvi)  authorize or agree to do any of the foregoing actions.

Section 5.5   Notice of Developments .  Each of  Seller and Buyer will give prompt written notice to the other Party of (a) the existence of any fact or circumstance, or the occurrence of any event, of which it has Knowledge which would reasonably be likely to cause a condition to a Party’s obligations to consummate the transactions contemplated hereby set forth in Section 6.11(b) not to be satisfied as of a reasonably foreseeable Closing Date, (b) the receipt of any notice or other communication from any Governmental Authority or any securities market or securities regulator in connection with the transactions contemplated by this Agreement, and/or (c) the existence of any fact or circumstance, or the occurrence of any event, of which it has Knowledge which would reasonably be likely to cause its representations and warranties set forth in this Agreement and the Related Agreements to be untrue, misleading or incomplete; provided , however , that the delivery of any such notice pursuant to this Section 5.5 shall not be deemed to amend or supplement this Agreement and the failure to deliver any such notice shall not constitute a waiver of any right or condition to the consummation of the transactions contemplated hereby by any Party.  Seller will give prompt written notice to Buyer of (a) any Material Adverse Effect, (b) any event, occurrence or emergency not in the ordinary course of business, and (c) any material event involving the Intellectual Property.
 
 
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Section 5.6   Notice of Supplemental Disclosure .  Without limiting the obligations of Seller contemplated by Section 5.5 , from and after the date hereof but prior to the second Business Day prior to the Closing Date, Seller may inform Buyer pursuant to this Section 5.6 that any representation or warranty of Seller was, may have been or may have been deemed to have been inaccurate when made and provide a proposed supplement to the Disclosure Schedule delivered as of the date hereof to correct such actual or potential inaccuracy as if set forth on the Disclosure Statement as of the date hereof (a “ Disclosure Supplement ”).  If the inaccuracies contemplated by such Disclosure Supplement are sufficiently material in Buyer’s sole and reasonable judgment to prevent the satisfaction of the condition set forth in Section 7.1(a) , Buyer may terminate this Agreement.
 
Section 5.7   Access ; Confidentiality .
 
(a)   Upon the request of Buyer, Seller has and will continue to permit Buyer and its Representatives to have, upon reasonable advance written notice, reasonable access to all premises, properties, personnel, books and records and Contracts of or related to the MYO-T12 Activities during normal business hours, and in a manner so as not to interfere unreasonably with the normal business operations of Seller.
 
(b)   Any information (except publicly available or freely usable material obtained from another source) respecting any Party or its Affiliates will be kept in strict confidence by all the Parties to this Agreement and their respective Representatives.  Except as required by law, each Party and their respective Affiliates and Representatives will not disclose another Party’s information and/or the terms of the transactions contemplated hereunder at any time, currently, or on or after the Closing, regardless of whether the Closing takes place, except as reasonably required by the receiving Party’s Representatives, in which instance such Persons shall be advised of the confidential nature of the information and the terms of the transaction and shall themselves be required by the receiving Party to keep such information confidential.  Notwithstanding the foregoing, all information obtained pursuant to this Section 5.7 shall be subject to the terms and conditions of the Confidentiality Agreement.
 
Section 5.8   Bulk Transfer Laws ; Bulk Transfer Sales Tax .  Seller and Buyer waive compliance with applicable bulk transfer or similar laws, if any,  and applicable bulk transfer sales tax clearance or similar laws, if any.   Seller shall indemnify and hold harmless the Buyer Indemnified Parties from any Damages arising from claims made by Person under applicable bulk sales or similar laws, if any, and bulk transfer sales tax clearance or similar laws, if any, applicable to the transactions contemplated in this Agreement.  
 
 
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Section 5.9   Non-Solicitation .  Until the earlier of (x) the Closing Date, or (y) the termination of this Agreement pursuant to Article IX, whichever is earlier, (a) Seller shall not (and cause its Representatives not to), directly or indirectly: (i) solicit, encourage, assist, initiate or facilitate the making, submission or announcement of any Transaction Proposal, (ii) furnish any non-public information regarding Seller, the MYO-T12 Activities and/or the Acquired Assets to any Person (other than Buyer and its Representatives) in connection with or in response to a Transaction Proposal, (iii) engage, participate in or continue discussions or negotiations with any Person with respect to, or which could be expected to lead to, a Transaction Proposal, or (iv) discuss, negotiate or enter into any letter of intent, agreement in principle or other similar agreement related to any Transaction Proposal; and (b) Buyer and Atlas shall not enter into any letter of intent, agreement in principal or other similar agreement for a merger, take-over bid, plan of arrangement, consolidation, asset sale, share sale or exchange, business combination or similar transaction, involving Buyer and/or Atlas, on one hand, and any third party, on the other hand.  Seller shall promptly advise Buyer of any inquiries from other parties regarding a Transaction Proposal.  Buyer and Atlas shall promptly advise Seller of any inquiries from other parties regarding any possible agreement in principal or other similar agreement for a merger, take-over bid, plan of arrangement, consolidation, asset sale, share sale or exchange, business combination or similar transaction, involving Buyer or Atlas, on one hand, and any third party, on the other hand.  As used herein, “ Transaction Proposal ” means (other than the transactions contemplated by this Agreement) any inquiry, proposal or offer, or any indication of interest in making an offer or proposal, from any Person at any time relating to (i) the Acquired Assets or the MYO-T12 Activities, and/or (ii) a merger, take-over bid, plan of arrangement, consolidation, asset sale, share sale or exchange, business combination or similar transaction, involving the Acquired Assets or relating to the MYO-T12 Activities, on one hand, and any third party, on the other hand.  The breach of this Section 5.9 by either party will result in payment by the breaching party of liquidated damages in the amount of One Million Dollars ($1,000,000) to the non-breaching party.  The Parties agree that, in the event of the breach of this Section 5.9 , the foregoing amount payable by the breaching party to the non-breaching party shall be treated as liquidated damages and not a penalty.
 
ARTICLE VI
OTHER COVENANTS
 
The Parties agree as follows with respect to the period from and after the Closing:
 
Section 6.1   Cooperation .  The Parties shall cooperate with each other, and shall use their commercially reasonable efforts to cause their respective Representatives to cooperate with each other, to provide an orderly transition of the Acquired Assets and the MYO-T12 Activities from Seller to Buyer as requested by any Party and at the requesting Party’s sole cost and expense (and without liability of any kind to the other Party cooperating with such request in providing such requested actions other than arising from the cooperating Party’s gross negligence, willful misconduct or bad faith in connection therewith).
 
Section 6.2   Further Assurances ; Inadvertent Transfers of Assets .
 
(a)   In case at any time after the Closing any further action is necessary to carry out the purposes of this Agreement, each of the Parties will, at the requesting Party’s sole cost and expense, take such further action (including the execution and delivery of such other reasonable instruments of sale, transfer, conveyance, assignment, assumption and confirmation, providing materials and information) as the other Party may reasonably request which actions shall be reasonably necessary to transfer, convey or assign to Buyer all of the Acquired Assets or to confirm Buyer’s assumption of the Assumed Liabilities.
 
 
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(b)   Without limiting the provisions of Section 6.2 (a) , to the extent that either of the Parties discovers any additional assets or properties, including any Intellectual Property, which should have been transferred or assigned to Buyer as Acquired Assets but were not so transferred or assigned, Buyer and Seller shall cooperate and execute and deliver any instruments of transfer or assignment reasonably necessary to transfer and assign such asset or property to Buyer without further consideration.  Without limiting the provisions of Section 6.2 (a) , to the extent that either Buyer or Seller discovers any assets or properties, including any Intellectual Property, which is an Excluded Asset which was inadvertently or otherwise mistakenly transferred or assigned to Buyer, Buyer and Seller shall cooperate and execute and deliver any instruments of transfer or assignment reasonably necessary to transfer and assign such asset or property back to the applicable Seller.
 
Section 6.3   Access ; Enforcement ; Record Retention .  From and after the Closing, upon request by Buyer, Seller will permit Buyer and its Representatives to have reasonable access during normal business hours, and in a manner so as not to interfere unreasonably with the normal business operations of Seller, to all premises, properties, management, personnel, accountants, attorneys, other advisors and books and records (including books and records related to Taxes paid or payable by Seller) and Contracts of or related to the MYO-T12 Activities, the Acquired Assets or the Assumed Liabilities; provided , however , that, for avoidance of doubt, the foregoing shall not require Seller to take any such action if it (a) may result in a waiver or breach of any attorney/client privilege, (b) could reasonably be expected to result in violation of applicable law, or (c) providing such access or information would be reasonably expected to be disruptive to its operations.  Without limiting the generality of the immediately preceding sentence, such reasonable access may be for the purposes of (i) preparing Tax Returns, (ii) monitoring or enforcing rights or obligations of Buyer under this Agreement or any of the Related Agreements, or (iii) complying with the requirements of any Governmental Authority.  Seller agrees to maintain the files or records which are contemplated by the first sentence of this Section 6.3 in a manner consistent in all material respects with its document retention and destruction policies, as in effect from time to time, for seven years  following the Closing.
 
Section 6.4   Non-Competition; Non-Solicitation of Employees .
 
(a)   For period of five years from the date of this Agreement, Seller shall not, directly  engage in, be employed by, own,  manage, operate, control, participate in the ownership,  management, operation or control of,  provide financing to, or otherwise participate in (whether as a  member, manager, director, officer, employee, representative, subcontractor, partner, consultant, proprietor, or agent, any other business or any Person for the purpose of assisting in such other business or Person in the development of: (i) any myostatin modulating, regulatory or inhibiting products,  (ii) any fertile egg-based products; and/or (iii) any follistatin-based products; provided, however, that the foregoing shall not prevent any of Seller or its Affiliates from owning, in the aggregate, not more than one percent (1%) of the outstanding capital stock or other equity interests in any Person, so long as Seller and its Affiliates have no participation in the management or operation of, and perform no services for, such Person. Notwithstanding the foregoing, this Section 6.4(a) shall not restrict Seller from engaging in any business (other than the MYO-T12 Activities and activities in connection with the Acquired Assets) in which it is engaged as of the date hereof.
 
 
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(b)   Seller acknowledges and agrees that its breach of this Section 6.4 would result in irreparable harm to Buyer for which Buyer’s remedies at law would be inadequate.  Seller therefore agrees and consents that temporary and permanent injunctive relief may be granted to Buyer in a proceeding brought to enforce this Section 6.4 , and Seller will not claim as a defense thereto that Buyer has an adequate remedy at law.  Seller acknowledges and agrees that (i) it will materially benefit from the consummation of the transactions contemplated by this Agreement, (ii) the agreement of Seller to the covenants in this Section 6.4 is a material inducement by Seller to persuade Buyer to consummate the transactions contemplated by this Agreement, and Buyer would not have otherwise done so if Seller did not agree to such covenants, and (iii) the Seller is agreeing to the covenants of this Section 6.4 freely, voluntarily, and without duress or coercion.
 
(c)   If a court of competent jurisdiction declares in a final judgment that any term or provision of this Section 6.4 is invalid or unenforceable, the Parties agree that the court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration or area of the term or provision, to delete specific words or phrases or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified after the expiration of the time within which the judgment may be appealed.
 
Section 6.5   Tax Matters .  Buyer shall pay any stamp, documentary, registration, use, transfer, sales, added-value or other non-income Tax (a “ Transfer Tax ”) imposed under applicable law in connection with the transactions contemplated hereby.  Seller and Buyer shall cooperate to prepare and timely file any Tax Returns required to be filed in connection with Transfer Taxes described in the immediately preceding sentence.
 
Section 6.6   Insurance Matters .  Buyer acknowledges that, upon Closing, all insurance coverage provided in relation to Seller and the MYO-T12 Activities that is maintained by Seller or its Affiliates (whether such policies are maintained with third party insurers or with Seller or its Affiliates) shall cease to provide any coverage to Buyer in connection with the MYO-T12 Activities and no further coverage shall be available to Buyer in connection with the MYO-T12 Activities under any such policies.  Nothing in the foregoing sentence shall limit or restrict Buyer’s right to insurance claims Seller may have under insurance policies with respect to the MYO-T12 Activities or relating to the conduct, operation, ownership and/or use of the Acquired Assets arising before or on the Closing Date and which are included in the Acquired Assets.  Pursuant to Schedule 6.6. of the Disclosure Schedules , nothing in the foregoing paragraph shall prohibit Seller from maintaining appropriate insurance to cover any Excluded Liabilities.
 
Section 6.7   Press Releases and Public Announcements .  No Party shall issue any press release or make any public announcement relating to the existence or subject matter of this Agreement without the prior written approval of the other Party; provided , however , that any Party may make any public disclosure it believes in good faith is required by applicable law or any listing or trading agreement concerning its publicly-traded securities (in which case the disclosing Party will use its reasonable best efforts to advise the other Party prior to making the disclosure to the extent practicable and permissible under applicable law); and provided , further , that each of the Parties may make internal announcements to their respective employees that are not inconsistent in any material respects with the Parties’ prior public disclosures regarding the transactions contemplated by this Agreement.
 
 
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Section 6.8   [omitted]
 
Section 6.9   Financial Statements . Until such time as the Note is paid in full, Buyer shall send a copy of its annual financial statements to the Seller.
 
Section 6.10   [omitted]
 
Section 6.11   Registration Rights .
 
(a)   Registration Rights . If Atlas at any time proposes to file a registration statement to register any of its securities under the Securities Act for sale to the public, whether for its own account or for the account of other security holders or both, except with respect to registration statements on Forms S-4, S-8 or another form not available for registering the Shares (“Registrable Securities”), provided the Registrable Securities are not otherwise registered for resale by the Seller pursuant to an effective registration statement or may be sold pursuant to Rule 144 promulgated under the Securities Act in which case they shall be deemed to no longer be Registrable Securities, each such time Atlas will give at least fifteen (15) days' prior written notice to the record holder of the Registrable Securities of its intention so to do. Upon the written request of the holder, received by Atlas within ten (10) days after the giving of any such notice by Atlas, to register any of the Registrable Securities not previously registered as permitted by the Securities and Exchange Commission for an offering to be made on a continuous basis pursuant to Rule 415, Atlas will cause such Registrable Securities as to which registration shall have been so requested to be included with the securities to be covered by the registration statement proposed to be filed by Atlas, all to the extent required to permit the sale or other disposition of the Registrable Securities so registered by the holder of such Registrable Securities (the “Holder” or “Holders”).  In the event that any registration pursuant to this Section 6.11 shall be, in whole or in part, an underwritten public offering of common stock of Atlas, the number of shares of Registrable Securities to be included in such an underwriting may be reduced by the managing underwriter if and to the extent that Atlas and the underwriter shall reasonably be of the opinion that such inclusion would adversely affect the marketing of the securities to be sold by Atlas therein; provided, however, that Atlas shall notify the Holder in writing of any such reduction and reasons therefor. Notwithstanding the foregoing provisions, Atlas may withdraw or delay or suffer a delay of any registration statement referred to in this Section 6.11 without thereby incurring any liability to the Holder due to such withdrawal or delay. Notwithstanding anything to the contrary herein, in the event that the Securities and Exchange Commission limits the amount of Registrable Securities that may be sold by selling security holders in a particular Registration Statement, Atlas may scale back (i.e. remove) from such registration statement such number of Registrable Securities on behalf of all selling security holders who have exercised similar registration rights on a pro-rata basis based on the total number of Registrable Securities held by such selling security holder.
 
(b)   Expenses .  Atlas will pay all expenses incurred by it in complying with Section 6.11, including, without limitation, all registration and filing fees, fees and disbursements of Atlas’ counsel and independent public accountants and fees and expenses incurred in connection with complying with state securities or “blue sky” laws. In no event shall Atlas be responsible for any broker or similar commissions of any Holder or any legal fees or other costs of any Holder.
 
 
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(c)   Indemnification by Holders . Each Holder shall, severally and not jointly, indemnify and hold harmless Atlas, its directors, officers, agents and employees, each Person who controls Atlas (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against any losses, claims, damages or liabilities incurred by Atlas arising out of or based solely upon: (i) such Holder’s failure to comply with the prospectus delivery requirements of the Securities Act or (ii) any untrue or alleged untrue statement of a material fact provided by Holder contained in any registration statement under which the Registrable Securities were registered, any preliminary or final prospectus contained therein, or in any amendment or supplement thereto or in any preliminary or final prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading.
 
ARTICLE VII
CONDITIONS TO OBLIGATION TO CLOSE
 
Section 7.1   Conditions to Buyer’s and Atlas’ Obligation s .  Buyer’s and Atlas’ obligations to consummate the transactions contemplated hereby in connection with the Closing are subject to satisfaction or waiver of the following conditions:
 
(a)   the representations and warranties set forth in Article III shall have been true and correct in all material respects (except that any representation and warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects) on the date hereof (except to the extent expressly made as of an earlier date, in which case as of such date as if made at and as of such date), except where the failure of such representations and warranties to be so true and correct in all material respects (or true and correct for any representation and warranty that is qualified as to “materiality” or “Material Adverse Effect”) has not resulted in a Material Adverse Effect on the Acquired Assets or the MYO-T12 Activities or diminution of the benefits of Buyer hereunder;
 
(b)   Seller shall have performed and complied with its covenants and agreements hereunder through the Closing in all material respects;
 
(c)   (i) all notices to third parties have been delivered on or prior to the Closing shall have been delivered, and all third party consents or sublicenses have been received on or prior to the Closing shall have been received, except where the failure to deliver such notices or to receive such consents or sublicenses would not have a Material Adverse Effect, and (ii) Buyer shall have received evidence of each of the foregoing reasonably satisfactory to it;
 
(d)   no Decree shall be in effect which (i) prohibits consummation of any of the transactions contemplated by this Agreement, or (ii) would be reasonably expected to result in any of the transactions contemplated by this Agreement being rescinded following consummation thereof;
 
(e)   each delivery contemplated by Section 2.5(a) to be delivered to Buyer shall have been delivered;
 
(f)   Colker shall have entered into the Employment Agreement;
 
 
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(g)   Buyer shall have completed its due diligence investigation of Seller, the MYO-T12 Activities and the Acquired Assets, and the results of such investigation are satisfactory to the Buyer in its sole discretion, but such due diligence shall be completed no later than ­­­­­­­­­­February 24, 2011;
 
(h)   Seller shall have terminated all Contracts set forth in Schedule 7.1(h) of the Disclosure Schedules ;
 
(i)   Buyer shall have received the Legal Opinion; and
 
(j)    There shall have been no Material Adverse Effect.
 
Section 7.2   Conditions to Seller’s Obligations .  Seller’s obligation to consummate the transactions contemplated hereby in connection with the Closing are subject to satisfaction or waiver of the following conditions:
 
(a)   the representations and warranties set forth in Article IV shall have been true and correct in all material respects (except that any representation and warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects) on the date hereof (except to the extent expressly made as of an earlier date, in which case as of such date as if made at and as of such date), except where the failure of such representations and warranties to be so true and correct in all material respects (or true and correct for any representation and warranty that is qualified as to “materiality” or “Material Adverse Effect”) has not resulted in a Material Adverse Effect on Buyer or diminution of the benefits of Seller hereunder;
 
(b)   Buyer and Atlas shall have performed and complied with its covenants and agreements hereunder through the Closing in all material respects;
 
(c)   no material Decree shall be in effect which (i) prohibits consummation of any of the transactions contemplated by this Agreement, or (ii) would be reasonably expected to result in any of the transactions contemplated by this Agreement being rescinded following consummation thereof;
 
(d)   Buyer or Atlas shall have entered into an employment agreement with Colker with a minimum term of three years and customary terms acceptable to Colker, including confidentiality and non-competition provisions (the “ Employment Agreement ”);
 
(e)   Buyer and Atlas shall have advised Seller that the gross proceeds from the financing contemplated by Buyer and Atlas exceeded $­­­­­1,000,000 and that the cash held by Buyer and Atlas, as of the Closing Date, exceeds $800,000 in the aggregate; and
 
(f)   each delivery contemplated by Section 2.5(b) to be delivered to Seller shall have been delivered.
 
Section 7.3   No Frustration of Closing Conditions .  Neither Buyer, Atlas or Seller may rely on the failure of any condition set forth in Section 7.1 or Section 7.2 to be satisfied if such failure was caused by such Party’s or its Affiliates’ failure to comply with the terms and conditions of this Agreement with respect to satisfying the conditions to the consummation of the transactions contemplated hereby or by any other breach of a representation, warranty or covenant hereunder.
 
 
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ARTICLE VIII
INDEMNIFICATION
 
Section 8.1   Survival of Representations and Warranties .  The representations and warranties of the Parties will survive the Closing and will remain in full force and effect thereafter until the second anniversary of the Closing Date, after which time they shall be of no further force or effect and upon which no claim for indemnification may be made with respect to breaches thereof; provided , however , that the representations and warranties set forth in Sections 3.2 , 3.4 , 3.5 , 3.7 , 3.8 , 3.10 , 3.12 ,   3.14 , 3.22 , 4.2 , 4.4 , 4.9 and 4.10 shall survive indefinitely.  There shall be no limitation on the time during which a claim for indemnification may be made for any instance of fraud by any Party of any provision of this Agreement or any Related Agreement.
 
Section 8.2   Indemnification Provisions for Buyer’s Benefit .  Subject to the limits set forth in this Article VIII , from and after the Closing, Seller shall defend and hold Buyer, Atlas and their respective Affiliates and officers, directors, stockholders, employees, agents and other Representatives (each, a “ Buyer Indemnified Party ”) harmless from and against any and all actual losses, claims, liabilities, debts, damages, fines, penalties, costs (in each case, including reasonable out-of-pocket expenses (including reasonable fees and expenses of counsel) (collectively, “ Damages ”) incurred as a result of:
 
(a)   any breach of any representation or warranty of Seller set forth in this Agreement;
 
(b)   any failure to perform any covenant or agreement of Seller set forth in this Agreement;
 
(c)   any of the Excluded Liabilities;
 
(d)   the conduct of the MYO-T12 Activities and the operation or ownership of the Acquired Assets on or prior to the Closing Date and/or from acts or omissions related thereto arising on or prior to the Closing Date;
 
(e)   any Excluded Assets; and/or
 
(f)   the noncompliance by Seller with respect to any bulk transfer law in connection with the transactions contemplated by this Agreement.
 
Section 8.3   Indemnification Provisions for Seller’s Benefit .  Subject to the limits set forth in this Article VIII , from and after the Closing, Buyer and Atlas shall defend and hold Seller, its Affiliates and its and their respective officers, directors, stockholders, employees, agents and other Representatives (each, a “ Seller Indemnified Party ”) harmless from and against any and all Damages incurred as a result of:
 
 
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(a)   any breach of any representation or warranty of Buyer and Atlas set forth in this Agreement;
 
(b)   any failure to perform any covenant or agreement of Buyer and Atlas set forth in this Agreement;
 
(c)   MYO-T12 Activities (as presently conducted or as may be conducted from time to time) or the ownership of the Acquired Assets after the Closing Date; and
 
(d)   any of the Assumed Liabilities.
 
Section 8.4   Limitations on Indemnification; Calculation of Damages .
 
Notwithstanding anything to the contrary set forth in this Article VIII :
 
(a)   No Buyer Indemnified Party nor Seller Indemnified Party (the “ Indemnified Party ”) shall be entitled to recover from Seller or Buyer, respectively (the “ Indemnifying Party ”), for any claim for indemnity in respect of Damages arising under Section 8.2(a) or Section 8.3(a) , respectively, unless and until, and then only to the extent that, the total of all such claims against Seller or Buyer, respectively, in respect of such Damages exceeds $50,000 (the “ Basket ”), and in such event from dollar one.
 
(b)   The Buyer Indemnified Parties and the Seller Indemnified Parties shall not be entitled to recover from Seller or Buyer, respectively, Damages that are punitive Damages, Damages for lost profits or diminution in value or consequential, exemplary or special Damages.
 
(c)   Any claim for indemnification must be asserted by an Indemnified Party within seventy-two (72) months of the Closing Date.
 
Section 8.5   Matters Involving Third Parties .
 
(a)   If any third party shall notify any Indemnified Party of any third party claim, demand, assessment or the commencement of any Litigation (each, a “ Third Party Claim ”) which may give rise to a claim for indemnification pursuant to this Article VIII , the Indemnified Party shall promptly (and in any event within ten (10) Business Days after receiving notice of the Third Party Claim or the commencement of Litigation with respect thereto) notify the Indemnifying Party thereof in writing stating that the Third Party Claim may give rise to a claim for indemnification against the Indemnifying Party and specifying the facts constituting the basis for such claim and the amount, to the extent known, of the claim asserted; provided , however , that no delay on the part of the Indemnified Party in notifying the Indemnifying Party shall relieve the Indemnifying Party from any obligation hereunder unless (and then solely to the extent) the Indemnifying Party thereby is prejudiced.
 
(b)   The Indemnifying Party will have the right at any time to assume the defense against the Third Party Claim with counsel of its choice reasonably satisfactory to the Indemnified Party and control the defense of such Third Party Claim so long as the Indemnifying Party conducts such defense in a reasonably diligent manner.
 
 
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(c)   From and after the date that the Indemnifying Party has assumed and is conducting the defense of the Third Party Claim in accordance with Section 8.5 (b) , (i) the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in, but not control, the defense of the Third Party Claim; (ii) the Indemnifying Party and the Indemnified Party shall cooperate fully with each other and their respective counsel in connection with the defense, negotiation or settlement of any such Third Party Claim, including providing access to any relevant books and records, properties, employees and Representatives; provided , however , that, for avoidance of doubt, the foregoing shall not require any Party to waive, or take any action which has the affect of waiving, its attorney-client privilege with respect thereto; (iii) the Indemnifying Party will not consent to the entry of any judgment on or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnified Party (which shall not be unreasonably withheld, conditioned or delayed) unless the judgment or proposed settlement involves only the payment of money damages by the Indemnifying Party and does not impose an injunction or other equitable relief upon the Indemnified Party; and (iv) the Indemnified Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnifying Party (which shall not be unreasonably withheld, conditioned or delayed).
 
(d)   In the event that the Indemnifying Party has not assumed the defense of the Third Party Claim after notice thereof, (i) the Indemnified Party may defend against the Third Party Claim in any manner it reasonably may deem appropriate; (ii) the Indemnifying Party will reimburse the Indemnified Party promptly and periodically for the costs of defending against the Third Party Claim (including reasonable attorneys’ fees and expenses) to the extent such costs are Damages for which the Indemnified Party is actually entitled to indemnification hereunder; and (iii) the Indemnifying Party will remain responsible for any costs the Indemnified Party may incur resulting from the Third Party Claim to the extent such costs are Damages for which the Indemnified Party is actually entitled to indemnification hereunder.
 
Section 8.6   Claims and Payment; Treatment of Payments .  On each occasion that any Indemnified Party shall be entitled to indemnification under this Article VIII , the Indemnifying Party shall, at each such time, promptly pay the amount of such indemnification following the receipt of notice of a claim therefor.  All notices of claims for indemnification hereunder by any Indemnified Party shall be made with reasonable particularity and shall state the amount of Damages sought thereunder.  Any indemnification payments made pursuant to this Agreement shall be treated for tax purposes as an adjustment to the Purchase Price, unless otherwise required by applicable law.
 
Section 8.7   Exclusive Remedy .  From and after the Closing, other than in the event of fraud, the remedies set forth in this Article VIII shall be the sole and exclusive remedy of the Indemnified Parties for Damages relating to the subject matter hereof.
 
 
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ARTICLE IX
TERMINATION
 
Section 9.1   Termination of Agreement .  The Parties may terminate this Agreement at any time prior to the Closing as provided below:
 
(a)   by the mutual written consent of the Parties;
 
(b)   by either Party by giving written notice to the other Party if:
 
(i)   any court of competent jurisdiction or other competent Governmental Authority shall have issued a statute, rule, regulation, or Decree or taken any other action permanently restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated by this Agreement and such statute, rule, regulation, order or Decree or other action shall have become final and non-appealable provided , however , that the right to terminate this Agreement under this Section 9.1(b)(i) shall not be available to a Party if the failure to consummate the Closing because of such action by a Governmental Authority shall be due to the failure of such Party to have fulfilled any of its obligations under this Agreement;
 
(ii)   the Closing shall not have occurred prior to ­­­March 4, 2011 (the “ Outside Date ”); provided , however , that the right to terminate this Agreement under this Section 9.1(b)(ii) shall not be available to a Party if its failure to fulfill any obligation under this Agreement has been the cause of, or resulted in, the failure of the Closing to have occurred on or before the Outside Date; and
 
(c)   by Buyer by giving written notice to Seller as and to the extent Buyer has a right of termination pursuant to Section 5.6 .
 
Section 9.2   Effect of Termination .  If any Party terminates this Agreement pursuant to Section 9.1 , all rights and obligations of the Parties hereunder shall terminate upon such termination and shall become null and void (except that Section 5.7(b) , Section 5.9 , Article X and this Section 9.2 shall survive any such termination) and no Party shall have any Liability to any Party hereunder or to any of their respective Representatives; provided , however , that nothing in this Section 9.2 shall relieve any Party from Liability under Article VIII for any breach of any of the representations and warranties (but solely to the extent such breach was willful, grossly negligent or fraudulent) set forth in this Agreement occurring prior to any such termination.
 
ARTICLE X
MISCELLANEOUS
 
Section 10.1     Expenses . Except as otherwise expressly set forth herein, each Party will bear its own costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby, including all fees of law firms, commercial banks, investment banks, accountants, public relations firms, experts and consultants.
 
Section 10.2   Entire Agreement .  This Agreement, the Related Agreements and the Confidentiality Agreement constitute the entire agreement between the Parties and supersede any prior understandings, agreements or representations (whether written or oral) by or between the Parties, written or oral, to the extent they relate in any way to the subject matter hereof.
 
 
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Section 10.3   Incorporation of Annexes, Exhibits and Disclosure Schedule .  The Annexes and Exhibits to this Agreement and the Disclosure Schedule are incorporated herein by reference and made a part hereof.
 
Section 10.4   Amendments and Waivers .  No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by each Party except as expressly provided herein.  No waiver of any breach of this Agreement shall be construed as an implied amendment or agreement to amend or modify any provision of this Agreement.  No waiver by any Party of any default, misrepresentation or breach of warranty or covenant hereunder, whether intentional or not, shall be valid unless the same shall be in writing and signed by the Party making such waiver, nor shall such waiver be deemed to extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent default, misrepresentation or breach of warranty or covenant.  No conditions, course of dealing or performance, understanding or agreement purporting to modify, vary, explain or supplement the terms or conditions of this Agreement shall be binding unless this Agreement is amended or modified in writing pursuant to the first sentence of this Section 10.4 except as expressly provided herein.  Except where a specific period for action or inaction is provided herein, no delay on the part of any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof.
 
Section 10.5   Succession and Assignment .  This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.  No Party may assign either this Agreement or any of its rights, interests or obligations hereunder without the prior written consent of the other Parties.

Section 10.6   Notices .  All notices, requests, demands, claims and other communications hereunder shall be in writing except as expressly provided herein.  Any notice, request, demand, claim or other communication hereunder shall be deemed duly given (a) when delivered personally to the recipient; (b) one Business Day after being sent to the recipient by reputable overnight courier service (charges prepaid); (c) upon receipt of confirmation of receipt if sent by facsimile transmission; or (d) three Business Days after being mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid, and addressed to the intended recipient as set forth below:
 
 
If to Seller:
Peak Wellness, Inc.
 
195 Field Point Road
 
Greenwich, Connecticut 06830
 
 
Attention: Carlon M. Colker, M.D., FACN
 
 
Facsimile: (203) 629-0589
 
With a copy (which shall not constitute notice to Seller) to:

Shapiro Law Offices, LLC
104 Court Street
Middletown, Connecticut 06457
Attention: Jonathan M. Shapiro
Facsimile: (860) 347-3874
 
 
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If to Buyer:
Atlas Therapeutics Corporation
 
1759 Chrystal Avenue
 
Chino, California 91710
 
 
Attention: Mr. J.B. Bernstein
 
 
Facsimile: (305) 513-5855
 
With a copy (which shall not constitute notice to Buyer) to:

Ellenoff Grossman & Schole LLP
150 East 42 nd Street
New York, New York 10017
Attention: Stuart Neuhauser, Esq.
Facsimile: (212) 370-7889

Any Party may change the address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other Parties notice in the manner set forth in this Section 10.6 .
 
Section 10.7   Governing Law .  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
 
Section 10.8   Arbitration . Unless otherwise prohibited by law or specified below, all disputes, claims and causes of action, in law or equity, arising from or relating to this Agreement or its enforcement, performance, breach, or interpretation shall be resolved solely and exclusively by final and binding arbitration held in New York, New York through Judicial Arbitration & Mediation Services/Endispute (“ JAMS ”) or the American Arbitration Association (“ AAA ”) under the then existing JAMS or AAA commercial arbitration rules as decided by the filing party. However, nothing in this Section 10.8 is intended to prevent either party from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration. Each party in any such arbitration shall be responsible for its own attorneys’ fees and related costs and necessary disbursements.  The laws of the State of New York shall apply to any arbitration hereunder.  In any arbitration hereunder, this Agreement and any Related Agreement shall be governed by the laws of the State of New York applicable to a contract negotiated, signed, and wholly to be performed in the State of New York, which laws the arbitrator shall apply in rendering his or her decision.  The arbitrator shall have no authority to award punitive or other exemplary damages. This arbitration clause shall survive the termination of this Agreement or any Related Agreement.
 
 
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Section 10.9   Waivers of Jury Trial .  EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
 
Section 10.10   Specific Performance ; Consent to Jurisdiction .  Each Party acknowledges and agrees that the other Parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise breached, so that, in addition to any other remedy that a Party may have under law or equity, a Party shall be entitled to injunctive relief to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof.  Any action brought by either Party against the other to compel arbitration or for specific enforcement or injunction relief shall be brought only in the state courts or federal courts sitting in New York, New York.  Each of the Parties irrevocably and unconditionally waives any objection to the laying of venue in, and any defense of inconvenient forum to the maintenance of, any Litigation so brought and waives any bond, surety or other security that might be required of any other Party.
 
Section 10.11   Severability .  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement.  In the event that any of the provisions of this Agreement shall be held by a court or other tribunal of competent jurisdiction to be illegal, invalid or unenforceable, such provisions shall be limited or eliminated only to the minimum extent necessary so that this Agreement shall otherwise remain in full force and effect.  The Parties further agree to replace such invalid or unenforceable provision of this Agreement with a valid and enforceable provision which will achieve, to the extent possible, the economic, business and other purposes of the invalid or unenforceable provision.
 
Section 10.12   No Third Party Beneficiaries .  This Agreement shall not confer any rights or remedies upon any Person other than Buyer, Atlas, Seller and their respective successors and permitted assigns.
 
Section 10.13   Mutual Drafting .  The Parties have participated jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.
 
Section 10.14   Disclosure Schedule .  All capitalized terms not defined in the Disclosure Schedule shall have the meanings ascribed to them in this Agreement.  The representations and warranties of Seller in this Agreement are made and given, and the covenants are agreed to, subject to the disclosures and exceptions set forth in the Disclosure Schedule.  All attachments to the Disclosure Schedule are incorporated by reference into the Disclosure Schedule in which they are directly or indirectly referenced. The information contained in the Disclosure Schedule is in all respects provided subject to the Confidentiality Agreement.
 
 
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Section 10.15   Headings .  The section headings contained in this Agreement and the Disclosure Schedule are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.
 
Section 10.16   Counterparts; Facsimile and Electronic Signatures .  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument.  This Agreement or any counterpart may be executed and delivered by facsimile copies or delivered by electronic communications by portable document format (.pdf), each of which shall be deemed an original.
 
{Remainder of page intentionally left blank.}
 
 
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written.
 
 
 
PEAK WELLNESS, INC.
 
d/b/a PEAK WELLNESS BIOPHARMA
 
       
 
By:
/s/ Carlon Colker  
    Name: Carlon Colker, M.D.  
    Title: President  
       
 
  ATLAS THERAPEUTICS CORPORATION  
       
 
By:
/s/ Georgette Mathers  
    Name: Georgette Mathers  
    Title: President  
       
 
  ATLAS ACQUISITION CORP.  
       
 
By:
/s/ J.B. Bernstein  
    Name:  J.B. Bernstein  
    Title:  Chief Executive Officer  
       

 
 
 
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Exhibit 10.2
 
SECURED PROMISSORY NOTE
 
US$700,000.00  New York, New York
February 25, 2011  
 
FOR VALUE RECEIVED, Atlas Acquisition Corp., a Nevada corporation  (“Maker”), hereby promises to pay to the order of Peak Wellness, Inc., a Connecticut corporation doing business as Peak Wellness Biopharma and having its principal place of business at 195 Field Point Road, Greenwich, CT 06830 (“Payee”), in accordance with the terms hereinafter provided, the principal amount of Seven Hundred Thousand U.S. Dollars (US$700,000.00), together with accrued but unpaid interest thereon, all as provided in this Secured Promissory Note (as the same may be supplemented, modified, amended or restated from time to time in the manner provided herein, this “Note”).   This Note is being issued pursuant to that certain Intellectual Property Purchase Agreement dated as of February 25, 2011 by and among Maker, Payee, Atlas Therapeutics Corporation (“Atlas”) and Dr. Carlon Coker (the “IPPA”).

This Note shall bear interest at the rate of Three Percent (3%) per annum. Interest shall be computed on the basis of a 360-day year of twelve 30-day months and shall accrue and be payable on each Payment Date (as defined below).
 
Payments of principal, together with accrued and unpaid interest thereon, shall be due in two equal installments of Three Hundred Fifty Thousand Dollars ($350,000.00) each, on (i) the 180 th day following the date hereof, and (ii) the one-year anniversary of the date hereof (the dates provided in clauses (i) and (ii) above, each a  “Payment Date”).

Payments due under this Note shall be in lawful money of the United States and in immediately available funds in accordance with the written instructions of Payee.  In the absence of such instructions, Maker shall make the payment by check timely delivered to Payee.

This principal amount of this Note and all accrued by unpaid interest thereon may be prepaid, in whole or in part, at any time by Maker without penalty or premium.  Prepayments shall be applied first to accrued and unpaid interest and then to principal.

The obligations of Maker hereunder are secured by a security interest in certain assets of Maker pursuant to that Security Agreement of even date herewith executed by Maker in favor of Payee.

Maker waives demand, presentment, protest and notice of any kind and consents to the extension of time for payments or other indulgence with respect to this Note, all without notice.

If an Event of Default (as defined below) occurs and is continuing, Payee may, by written notice given to Maker, declare the principal of and accrued interest on this Note to be due and payable immediately.  In the event any action is commenced by Payee to enforce his rights under this Note and Payee prevails in such action, Maker shall reimburse Payee for Payee’s reasonable legal fees incurred in connection therewith.
 
 
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For the purposes of this Note, an “Event of Default” means the occurrence of any of the following: (a) Maker shall fail to make any payment of principal or interest on a Payment Date, and such failure shall continue unremedied for a period of (10) days after written notice from Payee, or (b) Maker fails to comply with any of its other obligations under this Note and such default shall continue unremedied for a period of thirty (30) days after written notice from Payee, or (c) Maker, pursuant to or within the meaning of any Bankruptcy Law (as hereinafter defined):  (i) commences a voluntary case; (ii) becomes subject to an involuntary case which is not withdrawn, discharged or stayed within sixty (60) days after the commencement thereof; (iii) consents to the appointment of a Custodian (as hereinafter defined) for Maker or for all or substantially all of Maker’s property; (iv) becomes subject to the appointment of a Custodian for Maker or for all or substantially all of Maker’s property which appointment is not withdrawn, discharged or stayed within sixty (60) days after the appointment thereof; or (v) makes a general assignment for the benefit of Maker’s creditors.  As used in this Note, the term “Bankruptcy Law” means Title 7, Title 11 or Title 13 of the United States Code or any similar federal or state law for the relief of debtors, and the term “Custodian” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

In no event whatsoever shall the amount of interest paid or agreed to be paid to Payee exceed the maximum amount permissible under applicable law.  If Payee shall receive as interest, an amount which would exceed the highest lawful rate, the amount which would be excessive interest shall be applied to the reduction of the principal amount outstanding under this Note (without prepayment premium or penalty).

Maker shall have the right to set-off against and apply the principal and interest owing under this Note against any and all claims, liabilities, obligations or other damages which may be asserted by Maker and/or Atlas, in good faith, to be owing by Payee under the IPPA and the other Related Agreements (as defined in the IPPA) to which Payee is a party, including, without limitation, the indemnification obligations of Payee under the IPPA.

This Note may not be assigned, transferred, sold or pledged by Payee without the prior written consent of Maker.  Any assignment, transfer, sale or pledge by Payee without the prior written consent of Maker shall be null and void ab initio .   This Note shall be binding upon Maker and its successors and inure to the benefit of Payee and Payee’s heirs, executors, administrators and permitted assigns.  If any term of this Note shall be held invalid, illegal or unenforceable, the validity of all other terms and provisions hereof shall in no way be affected thereby.  This Note may not be changed, modified or terminated orally, but only by an agreement in writing, signed by the party to be charged therewith.  No delay, failure or omission by the Payee or any subsequent holder in respect of the exercise of any right or remedy granted hereunder or allowed by law to the Payee or other holder shall constitute a waiver of the right to exercise the same at any future time or in the same or other circumstances.
 
 
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This Note shall be governed by and construed in accordance with the laws of the State of New York without giving effect to the principles of conflicts of law.   Any legal suit, action or proceeding arising out of or relating to this Note shall be instituted exclusively in New York Supreme Court, County of New York, or in the United Stated District Court for the Southern District of New York.  Each of the parties hereto hereby: (i) waives any objection which they may now have or hereafter have to the venue of any such suit, action or proceeding, and (ii) irrevocably consents to the jurisdiction of the New York Supreme Court, County of New York, and the United States District Court for the Southern District of New York in any such suit, action or proceeding.  The parties further agree to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York and agree that service of process upon a party mailed by certified mail to such party’s address shall be deemed in every respect effective service of process upon such party in any such suit, action or proceeding.

Any notice, request or other communication required or permitted hereunder shall be in writing and shall be deemed to have been duly given if personally delivered or mailed by registered or certified mail, postage prepaid, or delivered by facsimile transmission, to such party at its address or telecopier number set forth below, or such other address or telecopier number as such party may hereinafter specify by notice to each other party thereto:

If to Maker, to:
 
Atlas Acquisition Corp.
520 S. El Camino Real, 8th Floor
San Mateo, CA 94402
Attention:  J.B. Bernstein
Facsimile: (305) 513-5855

With a copy to:

Ellenoff Grossman & Schole LLP
150 East 42 nd Street
New York, New York 10017
Attention:  Stuart Neuhauser, Esq.
Facsimile:  (212) 370-7889
 
 
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If to Payee:

Peak Wellness, Inc.
195 Field Point Road
Greenwich, Connecticut 06830
Attention:  Carlon M. Colker, M.D., FACN
Facsimile:  (203) 629-0589

With a copy to:

Shapiro Law Offices, LLC
104 Court Street
Middletown, Connecticut 06457
Attention:  Jonathan M. Shapiro
 
Facsimile:  (860) 347-3874
 

If one or more provisions of this Note are held to be unenforceable under applicable law, such provisions shall be excluded from this Note, and the balance of this Note shall be interpreted as if such provisions were so excluded and shall be enforceable in accordance with its terms.

By acceptance of this Note, Payee agrees to the terms and conditions set forth herein.

IN WITNESS WHEREOF, the undersigned Maker has executed this Secured Promissory Note as of the date first written above.

 
  ATLAS ACQUISITION CORP.  
       
 
By:
/s/ J.B. Bernstein  
    Name:  J.B. Bernstein  
    Title:  Chief Executive Officer  
       

 
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Exhibit 10.3
 
SECURITY AGREEMENT

This Security Agreement (the “ Security Agreement ”) dated this 25 th of February 2011, is made and executed by and between Peak Wellness, Inc., a Connecticut corporation doing business as Peak Wellness Biopharma (“ Secured Party ”), and Atlas Acquisition Corp., a Nevada corporation (“ Grantor ”).

RECITALS

WHEREAS, pursuant to that certain Intellectual Property Purchase Agreement (the “ IPPA ”) of even date herewith, by and among, the Secured Party, Atlas Therapeutics Corporation and Grantor, Grantor is indebted to the Secured Party in the aggregate principal amount of Seven Hundred Thousand Dollars ($700,000) (the “ Debt ”) as evidenced by that certain Promissory Note of the Grantor to the Secured Party, dated as of the date hereof, and in the form of Exhibit A attached hereto (the “ Note ”);

WHEREAS, it is a condition of the IPPA and the Note that Grantor execute and deliver this Security Agreement to the Secured Party, to secure, for the full benefit of the Secured Party and any and all future holders from time to time of the Note, the full payment and performance of the Note and the other obligations referred to herein; and

WHEREAS, capitalized terms used in this Security Agreement but not elsewhere defined herein shall have the respective meanings ascribed to such terms in the IPPA.

NOW THEREFORE , for and in valuable consideration and the Purchase Price set forth in the IPPA, Grantor hereby agrees with the Secured Party as follows:
 
1.            GRANT OF SECURITY .  To secure the full payment of the Note and performance of the obligations contained in the Note, Grantor hereby grants to the Secured Party, for the benefit of the Secured Party and any subsequent holder of the Note, a continuing security interest in and to the Acquired Assets, as such term is defined in the IPPA (hereinafter the “ Collateral ”).  Grantor further agrees that the Secured Party shall have the rights stated in this Security Agreement with respect to the Collateral as well as other rights which the Secured Party may have under the laws of the State of New York.

2.            FURTHER ASSURANCES . Grantor will, and the Secured Party may, from time to time execute (if required) and file or record, at the cost and expense of Grantor, all financing statements, amendments or supplements thereto, continuation statements with respect thereto and all other instruments, including the filing of this Security Agreement, which may be necessary or which the Secured Party may from time to time reasonably deem appropriate and request (if the Secured Party chooses not to act on its own), in order to perfect, protect and maintain the security interests hereby granted.  Grantor will promptly deliver to the Secured Party a copy of each such instrument filed or recorded by it and evidence of its filing or recording in the manner required.  Grantor further agrees that a carbon, photographic, photostatic or other reproduction of this Security Agreement or of a financing statement is sufficient as a financing statement.
 
 
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3.            REPRESENTATIONS AND WARRANTIES .  Grantor hereby represents and warrants to the Secured Party that:
 
(a)           Grantor holds good and marketable title to the Collateral, free and clear of all liens and encumbrances except for the lien of this Security Agreement. No financing statement covering any of the Collateral is on file in any public office other than those which reflect the security interest created by this Security Agreement or to which the Secured Party has specifically consented.  Grantor shall defend the Secured Party’s rights in the Collateral against the claims and demands of all other persons;

(b)           Grantor agrees to take whatever actions are required by the Secured Party to perfect and continue the Secured Party’s security interest in the Collateral;

(c)           Grantor shall notify the Secured Party in writing at the Secured Party’s address prior to any: (i) change in Grantor’s name; (ii) change in Grantor’s assumed business name; or (iii) change in the jurisdiction of its organization.  No change in Grantor’s name or jurisdiction will take effect until after the Secured Party has received notice;

(d)           The execution and delivery of this Security Agreement shall not violate any law or agreement governing Grantor or to which Grantor is a party;

(e)           To the extent the Collateral consists of general intangibles, as defined by the Uniform Commercial Code (the “ UCC ”), (i) the Collateral is enforceable in accordance with its terms, is genuine, and fully complies with all applicable laws and regulations concerning form, content and manner of preparation and execution; and (ii) all persons appearing to be obligated on the Collateral have authority and capacity to contract and are in fact obligated as they appear to be on the Collateral. There shall be no setoffs or counterclaims against any of the Collateral, and no agreement shall have been made under which any deductions or discounts may be claimed concerning the Collateral except those disclosed to the Secured Party in writing;

(f)           Grantor shall not sell, offer to sell, or otherwise transfer or dispose of the Collateral. Grantor shall not pledge, mortgage, encumber or otherwise permit the Collateral to be subject to any lien, security interest, encumbrances, or charge, other than the security interest provide for in this Security Agreement, without the prior written consent of the Secured Party.  This includes security interests even if junior in right to the security interest granted under this Security Agreement. Unless waived by the Secured Party, all proceeds from any disposition of the Collateral for whatever reason shall be held in trust for the Secured Party and shall not be commingled with any other funds, provided, however, that this requirement shall not constitute consent by the Secured Party to any sale or other disposition. Upon receipt, Grantor shall immediately deliver any such proceeds to the Secured Party;
 
 
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(g)           Grantor agrees to keep and maintain, and to cause others to keep and maintain, if applicable, the Collateral in good order, repair and condition at all times while this Security Agreement remains in effect. Grantor further agrees to pay when due all claims for work done on, or services rendered or material furnished in connection with the Collateral so that no lien or encumbrance may ever attach to or be filed against the Collateral;

(h)           The Secured Party, or any person or persons designated by it, shall have the right, from time to time, to call at Grantor’s place or places of business during reasonable business hours, and, without hindrance or delay, to inspect, audit, check and make extracts from Grantor’s books, records, journals, orders, receipts and any correspondence and other data relating to the Collateral or to Grantor’s business and shall have the right to make such verification concerning the Collateral as Secured Party may consider reasonable under the circumstances, all at Grantor’s expense;
 
(i)           Grantor shall pay, when due, all taxes, assessments, and liens upon the Collateral, or its use or operation;

(j)           Grantor shall comply promptly with all laws, ordinances, rules and regulations of all governmental authorities, now or hereafter in effect, applicable to the ownership, production, disposition, or use of the Collateral;

(k)           Without the prior written consent of the Secured Party, Grantor will not enter into any merger or consolidation, or sell, lease or otherwise dispose of all or substantially all of its assets, or enter into any transaction outside the ordinary course of Grantor’s business unless it provides for the full payment and satisfaction of the obligations under the Note; and
 
(l)           In addition to any other notices required pursuant to this Security Agreement, Grantor will promptly advise the Secured Party in reasonable detail:  (i) of the assertion or imposition of any lien against any or all of the Collateral; (ii) of any material adverse change in the composition or aggregate value of the Collateral; (iii) concerning the commencement of or any material development in any investigation of Grantor, or any administrative or judicial proceeding against Grantor, by any governmental authority if such investigation or proceeding may result in the imposition of any lien against the Collateral or any part thereof (whether or not any such lien has then been claimed or asserted); or (iv) concerning any other event likely to have a material adverse effect on the aggregate value of the Collateral or on the perfection or priority of the Secured Party’s security interest therein.
 
4.            CROSS-COLLATERIZATION .  In addition to the Note, this Security Agreement shall secure all obligations, debts, and liabilities, plus interest thereon, of Grantor to the Secured Party, any one or more of them, as well as all claims by the Secured Party against Grantor or any one or more of them whether now existing or hereafter arising, whether related or unrelated to the purpose of the Note, whether voluntary or otherwise, whether due or not due, direct or indirect, determined or undetermined, absolute or contingent, liquidated or unliquidated whether Grantor may be liable individually or jointly with others, whether obligated as guarantor, surety, accommodation party or otherwise, and whether recovery upon such amounts may be or hereafter may become barred by any statute of limitation, and whether the obligation to repay such amounts may be or hereafter may become otherwise unenforceable.
 
 
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5.            GRANTOR’S RIGHT TO POSSESSION .  Until default under the Note, Grantor may have possession of the tangible assets and beneficial use of all the Collateral and may use it in any lawful manner not inconsistent with this Security Agreement, provided that Grantor’s right to possession and beneficial use shall not apply to any Collateral where possession of the Collateral by the Secured Party is required by law to perfect the Secured Party’s security interest in such Collateral. The Secured Party shall not be required to take any steps necessary to preserve any rights in the Collateral against prior parties, neither to protect nor to preserve nor to maintain any security interest given to secure the indebtedness.

6.            RIGHTS, POWERS AND LIMITATION OF LIABILITY .
 
(a)            Appointment as Grantor’s Attorney-in-Fact . Grantor hereby irrevocably appoints the Secured Party as Grantor’s agent and attorney-in-fact, with full power in Grantor’s name or its own name and at Grantor’s expense, and whether the Secured Party acts directly or through one or more of its representatives, to execute, endorse and deliver any and all agreements, assignments, pledges, instruments, documents, and any other writings, and to take any and all other actions, which the Secured Party may in its sole discretion deem necessary or desirable to effect the terms and purposes of this Security Agreement, including without limitation:  (i) to take any action which the Secured Party is authorized to take under Section 6(b) hereof in the event Grantor fails to perform or comply with any of its duties, covenants or agreements hereunder; and (ii) to exercise, during the continuation of an Event of Default, any and all rights and remedies specified in Section 8 hereof;
 
(b)            Right to Perform for Grantor . If Grantor fails at any time to perform or comply with any of its obligations, covenants or agreements hereunder, the Secured Party may (but shall not be obligated to) take such action, in its own name or as the Debtor’s attorney-in-fact as provided in Section 6(a) hereof, as the Secured Party shall deem necessary or desirable to effect such performance or compliance, including without limitation:  (i) the preservation and maintenance of the Collateral and the payment, discharge, contest and/or settlement of any and all taxes and third-party claims and charges; (ii) the removal or avoidance of the imposition of liens against any or all of the Collateral; and (iii) the timely collection of payments due and the enforcement of remedies available under or with respect to the Collateral and related warranties and other agreements; and (iv) the execution and filing (to the extent permitted under the UCC and other applicable law) of financing and continuation statements and amendments and other documents with appropriate governmental authorities;
 
 
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(c)            Limitation of Liability .  Grantor agrees that the Secured Party shall have no obligation to exercise any of its rights, powers and remedies hereunder and no liability to Grantor or any other person for not doing so.  Grantor further agrees that to the extent the Secured Party does exercise any of such rights, powers or remedies (i) the Secured Party shall be accountable to Grantor and/or any other persons only for amounts it actually receives as the result of such exercise (and not for amounts to which it is or may be entitled or which it might have received had it elected to take additional action) and (ii) neither the Secured Party nor any of its representatives shall have any liability to Grantor or any other person for any act or omission in connection with such exercise except for (A) the Secured Party’s or any such representative’s failure to exercise reasonable care as required under the UCC or to otherwise comply with UCC provisions or (B) the Secured Party’s or any such representative’s willful misconduct.
 
7.            DEFAULT .  Each of following shall constitute an Event of Default under this Security Agreement:

(a)            Payment Default . Grantor fails to make any payment when due under the Note;

(b)            Other Defaults .  Grantor fails to comply with or to perform any other material term, obligation, covenant or condition contained in this Security Agreement or in any of the Related Agreements;

(c)            Default in Favor of Third Parties . In the event that Grantor defaults under any loan, extension of credit, security agreement, purchase and sale agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Grantor’s assets or Grantor’s ability to repay the Note or perform its respective obligations under this Security Agreement;

(d)            Defective Collateralization . This Security Agreement ceases to be in full force and effect, including failure of any collateral document to create a valid and perfected security interest or line, at any time and for any reason;

(e)            False Statements . Any warranty, representation, or statement made or furnished to the Secured Party by Grantor or on Grantor’s behalf under this Agreement is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter;

(f)            Bankruptcy . The appointment of a receiver for any part of Grantor’s assets, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor; and/or

(g)            Creditor or Forfeiture Proceedings . Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency against any collateral securing the indebtedness. This includes a garnishment of any of Grantor’s accounts.
 
 
 
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8.            RIGHTS AND REMEDIES ON DEFAULT .  If an Event of Default occurs under this Security Agreement, at any time thereafter, the Secured Party shall have all the rights of a secured party under the UCC.  In addition and without limitation, the Secured Party may exercise any one or more of the following rights and remedies:

(a)           all obligations under the Note and hereunder may (notwithstanding any provisions thereof), at the option of the Secured Party and without demand, notice or legal process of any kind, be declared, and immediately shall become, due and payable;
 
(b)           without notice, demand or legal process of any kind, the Secured Party may take possession of any or all of the Collateral (in addition to Collateral of which it already has possession), wherever it may be found, and for that purpose may pursue the same wherever it may be found, and may, without a breach of the peace, enter into any of Grantor’s premises where any of the Collateral may be or be supposed to be, and search for, take possession of, remove, keep and store any of the Collateral until the same shall be sold or otherwise disposed of, and the Secured Party shall have the right to store the same in any of Grantor’s premises without cost to the Secured Party, and Secured Party may exercise from time to time any rights and remedies available to it under applicable law, including the UCC, in addition to, and not in lieu of, any rights and remedies expressly granted in this Security Agreement or in any other instrument or agreement executed by Grantor;
 
(c)           at the Secured Party’s request, Grantor will, at Grantor’s expense, assemble the Collateral at one or more places, reasonably convenient to both parties, where the Collateral may, at the Secured Party’s option, remain, at Grantor’s expense, pending sale or other disposition thereof;
 
(d)           the Secured Party may, at any time in the Secured Party’s discretion, transfer any Collateral into its own name or that of the Secured Party’s nominee, and the Secured Party may, pursuant to Section 6(a) of this Security Agreement, execute any such documents as may be necessary to effectuate said change;
 
(e)           the Secured Party shall have the right, either itself or through a receiver, to:  (i) collect the payments, rents, income, or revenues from the Collateral and hold the same as security for the amounts due under the Note or apply it to payment of the indebtedness under the Note in such order of preference as the Secured Party may determine; (ii) notify any account debtors that accounts have been assigned to the Secured Party and that the Secured Party has a security interest therein; (iii) to direct all such account debtors to make payments to the Secured Party of all or any part of the sums owing Grantor by such account debtors; (iv) to enforce collection of any of the accounts by suit or otherwise; (v) to surrender, release or exchange all or any part of said accounts; or (vi) to compromise, settle, extend or renew for any period (whether or not longer than the original period) any indebtedness thereunder or evidenced thereby;
 
 
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(f)           the Secured Party shall have the full power to sell, lease, transfer, or otherwise deal with the Collateral or proceeds thereof in the Secured Party’s own name or that of Grantor. The Secured Party may sell the Collateral at public auction or private sale. Unless the Collateral threatens to decline speedily in value or of a type customarily sold on a recognized market, the Secured Party shall give Grantor, as required by law, reasonable notice of the time and place of any public sale or the time after which any private sale or any other disposition of the Collateral is to be made. The requirements of reasonable notice shall be met if such notice is given at least ten (10) days before the time of the sale or disposition. All expenses relating to the disposition of the Collateral, including without limitation the expenses of retaking, holing, insuring, preparing for sale and selling the Collateral, shall become a part of the indebtedness secured by this Security Agreement and shall be payable on demand, with interest at the Note rate from date of expenditure until repaid. Any proceeds of any sale, lease or other disposition by the Secured Party of any of the Collateral shall be applied as follows:  (i) first , to the payment of the Secured Party’s reasonable expenses in connection with the Collateral, including reasonable attorneys’ fees and legal expenses; (ii) second , to the payment of all other obligations in such manner as the Secured Party may deem advisable; and (iii) third , the balance, if any, to or at the direction of Grantor.  Grantor shall remain liable for any deficiency; and/or.

(g)           Except as may be prohibited by applicable law, all of the Secured Party’s rights and remedies, whether evidenced by this Security Agreement or other writing, shall be cumulative and may be exercise singularly or concurrently. Election by the Secured Party to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Grantor under this Agreement, after Grantor’s failure to perform, shall not affect the Secured Party’s right to declare a default and exercise its remedies.

9.            TERM .
 
(a)           This Security Agreement shall continue in full force and effect until each and all of the obligations under the Note and any arising hereunder have been paid and discharged in full, whereupon (subject to Section 9(b) below) this Security Agreement shall automatically terminate.  Such termination shall not in any way affect or impair the rights and obligations of the parties hereto relating to any transactions or events prior to such termination, and all indemnities by Grantor shall survive such termination.
 
(b)           If after receipt of any payment of, or the proceeds of any Collateral for, all or any part of the obligations, the Secured Party is compelled to surrender or voluntarily surrenders such payment or proceeds to any person because such payment or application of proceeds is or may be avoided, invalidated, recaptured, or set aside as a preference, fraudulent conveyance, impermissible setoff or for any other reason, whether or not such surrender is the result of (i) any judgment, decree or order of any court or administrative body having jurisdiction over the Secured Party, or (ii) any settlement or compromise by the Secured Party of any claim as to any of the foregoing with any person (including the primary obligor with respect to any of the Obligations), then the Obligations or part thereof affected shall be reinstated and continue and this Security Agreement shall be reinstated and continue in full force as to such Obligations or part thereof as if such payment or proceeds had not been received, notwithstanding any previous cancellation of any instrument evidencing any such Obligation or any previous instrument delivered to evidence the satisfaction thereof or the termination of this Security Agreement.
 
 
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10.   NOTICES .  All notices, requests, demands and other communications provided for herein shall be in writing and shall be (a) hand delivered, (b) sent by certified, registered or express U.S. mail, return receipt requested, or reputable next-day courier service or (c) given by telex, telecopy, telegraph or similar means of electronic communication.  All such communications shall be effective upon the receipt thereof, and addressed to the intended recipient as set forth below:
 
 
If to the Secured Party:
Peak Wellness, Inc.
 
195 Field Point Road
 
Greenwich, Connecticut 06830
 
 
Attention: Carlon M. Colker, M.D., FACN
 
 
Facsimile: 203-629-0589