UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 10-Q

 

 

 

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2018

 

Commission file number: 0-55320

 

Intiva BioPharma Inc.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware   26-2049376
(State of Incorporation)   (I.R.S. Employer Identification No.)

 

4340 E Kentucky Ave., Suite 206, Glendale, CO 80246

(Address of principal executive offices) (Zip Code)

 

(303) 495-7583

(Registrant’s telephone number, including area code)

 

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [  ]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

  Large accelerated filer [  ] Accelerated filer [  ]
  Non-accelerated filer [  ]

Smaller reporting company [X]

    Emerging growth company [X]

 

If an emerging growth company, indicate by the check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 43,772,096 shares as of May 9, 2018.

 

 

 

     
 

 

TABLE OF CONTENTS

 

Item   Description   Page
    PART I - FINANCIAL INFORMATION    
         
ITEM 1.   FINANCIAL STATEMENTS.   3
ITEM 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.   11
ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.   14
ITEM 4.   CONTROLS AND PROCEDURES.   14
         
    PART II - OTHER INFORMATION    
         
ITEM 1.   LEGAL PROCEEDINGS.   15
ITEM 1A.   RISK FACTORS.   15
ITEM 2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.   15
ITEM 3.   DEFAULT UPON SENIOR SECURITIES.   15
ITEM 4.   MINE SAFETY DISCLOSURES.   15
ITEM 5.   OTHER INFORMATION.   15
ITEM 6.   EXHIBITS.   15

 

  2  
 

 

PART 1 - FINANCIAL INFORMATION

 

ITEM 1 - FINANCIAL STATEMENTS

 

Intiva BioPharma Inc.

Consolidated Balance Sheets

 

    March 31, 2018     June 30, 2017  
    (Unaudited)        
Assets            
Current Assets                
Cash   $ 733,399     $ 242,778  
Due from related party     114,667       141,329  
Total current assets     848,066       384,107  
                 
Deposit for acquisition of Kinder Holdings Corp.     -       86,670  
                 
License     337,915       302,915  
Total Assets   $ 1,185,981     $ 773,692  
                 
Liabilities and Stockholders’ Equity                
Current Liabilities                
Accounts payable and accrued expenses   $ 53,138     $ 210,405  
Total current liabilities     53,138       210,405  
                 
Stockholders’ Equity                
Preferred stock, $.0001 par value; 10,000,000 authorized; none issued     -       -  
Common stock-$.0001 par value; 200,000,000 shares authorized; 43,756,096 shares issued and outstanding -March 31, 2018; and 32,615,112 shares- June 30, 2017     4,376       3,262  
Additional paid in capital     2,616,966       1,235,457  
Common stock subject to forfeiture     (275,001 )     -  
Common stock subscription receivable     -       (484,000 )
Accumulated deficit     (1,213,498 )     (191,432 )
Total Stockholders’ Equity     1,132,843       563,287  
Total Liabilities and Stockholders’ Equity   $ 1,185,981     $ 773,692  

 

See accompanying notes to consolidated financial statements.

 

  3  
 

 

Intiva BioPharma Inc.

Consolidated Statements of Operations and Comprehensive Loss

For the Three and Nine Months Ended March 31, 2017 and 2018

(Unaudited)

 

    Three Months Ended March 31,     Nine Months Ended March 31,  
    2017     2018     2017     2018  
                         
Revenue   $ -     $ -     $ -     $ -  
                                 
Operating expenses                                
Professional fees     -       93,782       -       279,160  
Research and development     61,196       875       61,196       90,720  
Stock based compensation     -       45,833       -       434,516  
General and administrative     6,025       127,238       6,025       217,670  
Total operating expenses     67,221       267,728       67,221       1,022,066  
                                 
Net loss   $ (67,221 )   $ (267,728 )   $ (67,221 )   $ (1,022,066 )
                                 
Loss per share - basic and diluted   $ (0.003 )   $ (0.01 )   $ (0.003 )   $ (0.02 )
                                 
Weighted average shares outstanding - basic and diluted     24,000,000       44,578,382       24,000,000       42,298,532  

 

 

See accompanying notes to consolidated financial statements.

 

  4  
 

 

Intiva BioPharma Inc.

Consolidated Statements of Cash Flows

For the Nine Months Ended March 31, 2017 and 2018

(Unaudited)

 

    Nine Months Ended March 31,  
    2017     2018  
             
Cash flows from operating activities                
Net loss   $ (67,221 )   $ (1,022,066 )
Adjustments to reconcile net loss to net cash used in operating activities                
Stock based compensation     -       434,516  
Changes is assets and liabilities                
Decrease in due from related party     -       26,662  
Increase in advance from officers     52,000       -  
Increase (decrease) in accounts payable and accrued expenses     67,196       (134,803 )
Cash used in operating activities     51,975       (695,691 )
                 
Cash flows from investing activities                
Cash paid for license     -       (35,000 )
Cash paid for acquisition deposit     (50,000 )     (12,900 )
Cash used in investing activities     (50,000 )     (47,900 )
                 
Cash flows from financing activities                
Cash proceeds from issuance of common stock     -       1,261,592  
Payment of offering costs     -       (27,380 )
Cash provided by financing activities     -       1,234,212  
                 
Net increase in cash and cash equivalents     1,975       490,621  
Cash and cash equivalents, beginning of period     -       242,778  
Cash and cash equivalents, end of period   $ 1,975     $ 733,399  
                 
Supplemental disclosure of non-cash investing and                
financing activities                
Shares issued for Kinder Exchange   $ -     $ 99,570  

 

See accompanying notes to consolidated financial statements.

 

  5  
 

 

Intiva BioPharma Inc.

Notes to Consolidated Financial Statements

Unaudited

 

Note 1 – Nature of Business and Basis of Presentation

 

The Company was incorporated on November 10, 1952 in Michigan as Gantos, Inc. On July 21, 2008, the Company completed its change in domicile to Delaware and subsequently changed its name to Kinder Holding Corp. (the “Company”). As of October 13, 2017, the Company completed a reverse acquisition of Intiva BioPharma Inc., a Colorado corporation (“BioPharma”) through an exchange of shares (the “Share Exchange Transaction”). In connection with the Share Exchange Transaction, the Company changed its name to Intiva BioPharma Inc. on November 8, 2017.

 

As further described in Note 3, BioPharma became a wholly-owned subsidiary of the Company. Since this transaction resulted in the existing shareholders of BioPharma acquiring control of the Company, for financial reporting purposes, the business combination has been accounted for as an additional capitalization of the Company (a reverse acquisition with BioPharma as the accounting acquirer). The operations of BioPharma were the only continuing operations of the Company. The accompanying financial statements as of March 31, 2018 and for the three and nine-month periods ended March 31, 2017 and 2018 present the historical financial information of BioPharma.

 

BioPharma was incorporated under the laws of the State of Colorado on March 27, 2017 to pursue pre-clinical and drug development activities, in accordance with U.S. Food and Drug Administration (“FDA”) protocols, for certain pharmaceutical formulations that include cannabinoids. It is pursuing the formulation and development of cannabinoid-based drugs for medical conditions and disorders, and owns a license covering certain intellectual property, including certain patent applications, and has filed six of its own provisional patent applications for other drugs that include cannabinoids and other substances, including terpenes, that are intended to be developed with the objective of treating certain medical conditions and disorders. It was formed as a corporate subsidiary of the Colorado corporation Intiva USA Inc. (“Intiva USA”), which is a subsidiary of the Ontario, Canada corporation, INTIVA Inc., now known as Kanativa Inc.

 

All share and per share amounts have been adjusted in the footnotes and accompanying financial statements to give effect to the Share Exchange Transaction.

 

As disclosed in Note 3, for financial reporting purposes, the Share Exchange Transaction is accounted for as an additional capitalization of BioPharma with BioPharma as the accounting acquirer (reverse acquirer). The operations of BioPharma are the continuing operations of the Company.

 

Principles of Consolidation

 

The accompanying consolidated financial statements include BioPharma and its wholly owned subsidiaries: Intiva Kotzker Pharmaceuticals Inc. (“Intiva Kotzker”) and Intiva Sharir Inc. (collectively “the Company”), and were prepared from the accounts of the Company in accordance with accounting principles generally accepted in the United States of America (US GAAP). All significant intercompany transactions and balances have been eliminated on consolidation.

 

Basis of Presentation

 

The Financial Statements presented herein have been prepared in accordance with the accounting policies described in the June 30, 2017 audited financial statements and should be read in conjunction with the notes to financial statements which appear as part of those financial statements.

 

The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to intangible assets, income taxes, insurance obligations and contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other resources. Actual results may differ from these estimates under different assumptions or conditions.

 

  6  
 

 

Intiva BioPharma Inc.

Notes to Consolidated Financial Statements

Unaudited

 

In the opinion of Management, the information furnished in these interim financial statements reflects all adjustments necessary for a fair statement of the financial position and results of operations and cash flows as of March 31, 2018 and for the three and nine-month periods ended March 31, 2017 and 2018. All such adjustments are of a normal recurring nature.

 

Note 2 – Recently Issued Accounting Pronouncements

 

In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04, Intangibles - Goodwill and Other (Topic 350). ASU 2017-04 simplifies the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires an entity to perform its annual, or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The amendment should be applied on a prospective basis. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company intends to early adopt the ASU in 2018.

 

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The standard will be effective for the Company in the first quarter of 2018. Early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements.

 

There are no other recently issued accounting pronouncements that the Company has yet to adopt that are expected to have a material effect on its financial position, results of operations, or cash flows.

 

Note 3 –Share Exchange Agreement and Acquisition Deposit

 

On August 8, 2017, the Company entered into a Share Exchange Agreement, as amended and restated on October 13, 2017, (the “Agreement”), with BioPharma. Pursuant to the terms of the Agreement, the Company agreed to issue to the shareholders of BioPharma 42,642,712 post-reverse stock-split shares of the Company’s common stock, par value $0.0001 (“Common Stock”), in exchange for all of the issued and outstanding shares of BioPharma capital stock, thereby making BioPharma a wholly-owned subsidiary of the Company. As part of the Closing of the Agreement, the 20,000,000 pre-reverse split shares of the Company’s Common Stock previously purchased by Intiva USA, effective on June 26, 2017 in a change in control transaction from the Company’s control shareholders, shall be canceled.

 

Subsequent to the Closing, the Company agreed to undertake to implement certain corporate actions, including filing with the State of Delaware a Certificate of Amendment to the Company’s Certificate of Incorporation to:

 

Increase the number of shares of authorized Common Stock to 200,000,000 shares from 100,000,000 shares.
Change the name of the company from Kinder Holding Corp. to Intiva BioPharma Inc.
Implement a one for six (1:6) reverse stock split of the Company’s issued and outstanding shares of common stock, par value $0.0001 per share.

 

On October 13, 2017, the Closing of the Agreement became effective, and as a result of the Share Exchange, BioPharma became a wholly-owned subsidiary of the Company and the results of business will be consolidated on the Company’s consolidated financial statements. For financial reporting purposes, the transaction is to be accounted for as an additional capitalization of BioPharma with BioPharma as the accounting acquirer (reverse acquirer). The operations of BioPharma will be the continuing operations of the Company.

 

  7  
 

 

Intiva BioPharma Inc.

Notes to Consolidated Financial Statements

Unaudited

 

In June 2017, pursuant to a Debt Purchase Agreement, BioPharma paid $86,670 to a former director of the Company to satisfy the debt obligation of the Company to the director and for BioPharma to purchase the debt obligation. The amount paid and additional costs paid by BioPharma on behalf of the Company subsequent to June 30, 2017 of $12,900 aggregated $99,570, was classified as a non-current asset on the accompanying June 30, 2017 consolidated balance sheet.

 

Note 4 – License Agreement

 

In March 2017, Intiva Kotzker licensed certain intellectual property from Kotzker Consulting LLC (“Kotzker Consulting”), an unrelated entity. The licensed intellectual property includes patent applications relating to the use of cannabinoid receptor modulators and terpenes in the acute treatment during exposure to organophosphorus nerve agents and/or organophosphorus insecticides. Under terms of the agreement, Intiva Kotzker shall use its commercially reasonable efforts to develop and commercialize the licensed products, and, in particular, will be responsible for the design, manufacturing, preclinical, clinical, and regulatory development activities of the licensed products and shall bear the costs of such activities. As consideration for entering into the agreement, Intiva Kotzker agreed to: (i) pay Kotzker Consulting $180,000, (ii) pay patent prosecution costs incurred as of the date of the agreement of $15,000 and (iii) issue to Kotzker Consulting 31,550 shares of Intiva Inc.’s common stock valued at $78,875 ($2.50 per share based on recent private placement to third parties of Intiva Inc.’s common stock). The Company has capitalized legal fees of $29,040 incurred in conjunction with acquiring the license agreement, As of June 30, 2017, $65,000 was due under the license agreement, which amount was paid in August 2017. The total value ascribed to the License Agreement with Kotzker Consulting is $302,915. The license agreement terminates, on a country by country basis, upon the expiration of the licensed patent for the licensed intellectual property, or when a competitor generic product utilizing the licensed technology is marketed in the particular country.

 

On February 28, 2018, the Company obtained a worldwide exclusive license with respect to a proprietary delivery system for cannabinoid-based medications. Upon execution of the agreement, $35,000 was paid to the licensor, and payments of $30,000 and $35,000 are required by August 31, 2018 and February 28, 2019, respectively. The Company is required to pay milestone payments upon obtaining regulatory approval of pharmaceutical licensed products and royalties based upon sales of licensed products. The Company may grant sublicenses under the terms of the agreement.

 

N ote 5 –Stockholders’ Equity

 

Common stock

 

In May 2017, BioPharma commenced a private placement of 1,116,400 units of Common Stock and Warrants at a price of $1.25 per unit. Each unit consisted of ten shares of Common Stock, one Class A Warrant to purchase one share of Common Stock at $0.25 per share, one Class B Warrant to purchase one share of Common Stock at $0.38 per share and one Class C Warrant to purchase one share of Common Stock at $0.50 per share. As of June 30, 2017, 778,400 units had been sold, for total gross proceeds of $973,000, including 387,200 units which were subscribed but for which funds had not been received. The 3,872,000 shares underlying the subscribed units in the amount of $484,000 were included as issued and outstanding shares at June 30, 2017, and the related $484,000 subscription receivable was recorded as a component of stockholders’ equity on the June 30, 2017 consolidated balance sheet. Subsequent to June 30, 2017, the Company received proceeds of $484,000 for the subscribed shares. In July and August 2017, BioPharma sold an additional 338,000 units (3,380,000 shares) for gross proceeds of $422,500.

 

On August 10, 2017, BioPharma adopted the “2017 Stock Incentive Plan” and granted an aggregate of 6,400,000 shares of BioPharma Common Stock to five officers and directors of the Company, valued at $800,000 ($0.125 per share). One-third of each grant vested as of the initial date of grant (August 10, 2017), and 8-1/3% upon the end of each calendar quarter beginning December 31, 2017. In March 2018, the Company cancelled 1,166,667 unvested shares previously issued to its former CEO. As of March 31, 2018, 2,200,008 of the shares issued (valued at $275,001) are subject to forfeiture until vesting occurs.

 

  8  
 

 

Intiva BioPharma Inc.

Notes to Consolidated Financial Statements

Unaudited

 

On August 25, 2017, BioPharma entered into consulting agreements with two unrelated individuals for (i) developing and maintaining social media portals and (ii) identifying and developing potential strategic partners for the Company’s various drug development activities. The agreements are each for a three-month term, payable monthly in shares of the Company’s common stock, valued at $0.125 per share, of an aggregate 304,800 shares and 138,000 shares, respectively. As of March 31, 2018, an aggregate 442,800 shares of common stock, valued at $55,350, representing all amounts due pursuant to the consulting agreements, have been issued to the two individuals.

 

On September 1, 2017, BioPharma commenced a private placement sale of its common stock at $0.25 per share. The Company sold 100,000 shares for gross proceeds of $25,000, before offering costs of $4,916.

 

In January 2018, BioPharma commenced a unit private placement of Common Stock and Warrants at a price of $2.10 per unit. Each Unit consisted of two shares of Common Stock and one Warrant to purchase an additional share of common stock at a price of $2.90 per share for a term of six months commencing with the date of acceptance of the underlying subscription agreement. As of March 31, 2018, the Company received proceeds of $25,200 from the sale of 12,000 units.

 

On March 31, 2018, the Company’s board of directors approved and recommended for adoption by the stockholders of the Company a 2018 Equity Incentive Plan and has reserved 8,000,000 shares of Common Stock for issuance under the terms of that Plan. No awards have been granted under this Plan as of the date of this report.

 

Warrants

 

The relative fair value of the warrants attached to the common stock issued in the May 2017 private placement of units was estimated at the date of grant using the Black-Sholes pricing model. The relative fair value attached to the common stock component is $1,139,573 and the relative fair value of the warrants is $255,927 as of the grant date.

 

The following table summarizes information about warrants outstanding at March 31, 2018:

 

    Number     Exercise Price     Expires  
Class B     1,038,000     $ 0.38       June 7, 2018  
Class C     1,046,400     $ 0.50       July 14, 2018  

 

During the quarter ended March 31, 2018, warrants were exercised as follows:

 

    Number     Exercise Price     Gross Proceeds  
Class A     812,400     $ 0.25     $ 203,100  
Class B     14,400     $ 0.38     $ 5,472  
Class C     12,000     $ 0.50     $ 6,000  

 

The relative fair value of the warrants attached to the common stock issued in the January 2018 private placement of units was estimated at the date of grant using the Black-Sholes pricing model. The relative fair value attached to the common stock component is $19,762 and the relative fair value of the warrants is $5,438 as of the grant date. As of March 31, 2018, there are 12,000 warrants exercisable at a price of $2.90 per share through July 15, 2018.

   

  9  
 

 

Intiva BioPharma Inc.

Notes to Consolidated Financial Statements

Unaudited

 

Note 6 –Related Party Transactions

 

BioPharma was formed as a subsidiary of Intiva USA, which is a subsidiary of Kanativa Inc. (formerly INTIVA Inc.).

 

At June 30, 2017, BioPharma was owed $141,329 from Intiva USA for advances made by BioPharma on behalf of Intiva USA in conjunction with the Share Exchange Agreement (See Note 3). During the nine months ended March 31, 2018, $26,662 was repaid by Intiva USA. The balance due from Intiva USA at March 31, 2018 of $114,667 is classified as a current asset on the accompanying March 31, 2018 consolidated balance sheet.

 

In March 2018, the Company cancelled 1,166,667 unvested shares of common stock previously issued to its former CEO under the Company’s 2017 Stock Incentive Plan.

 

The Company’s Chairman, and Chief Financial Officer are also officers and/or a director of Kanativa Inc., and other subsidiaries and affiliated entities of Kanativa Inc.

 

Note 7 – Subsequent Events

 

On April 22, 2018, the Company extended the expiration date of its Class B Warrants from May 7, 2018, to June 7, 2018.

 

Through May 2, 2018, 16,000 Class B warrants have been exercised at $0.38 per share for total proceeds of $6,080.

 

  10  
 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION

 

Forward-Looking Statements

 

The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Certain statements that the Company may make from time to time, including all statements contained in this registration statement that are not statements of historical fact, constitute “forward-looking statements”. Forward-looking statements may be identified by words such as “plans,” “expects,” “believes,” “anticipates,” “estimates,” “projects,” “will,” “should,” and other words of similar meaning used in conjunction with, among other things, discussions of future operations, financial performance, product development and new product launches, market position and expenditures. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.

 

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help you understand our historical results of operations during the periods presented and our financial condition for the three and nine months ended March 31, 2017 and 2018. This MD&A should be read in conjunction with our financial statements as of June 30, 2017 (audited). See section entitled “Forward-Looking Statements” above.

 

Overview

 

We are a start-up company with no revenues from operations. Notwithstanding our successful raise of $1,844,092 in equity capital during the period from April 2017 to March 31, 2018, there is substantial doubt that we can continue as an on-going business for the next twelve months without the success of our business operations. We do not anticipate that BioPharma will generate revenues from its research and development activates related to its drug development projects for the near future.

 

As a relatively new business engaged in start-up operations and activities, we will require substantial additional funding to successfully complete any of our drug development projects. At present, we cannot estimate the substantial capital requirements needed to secure regulatory approvals for our drug candidates. Nevertheless, we estimate we will need at a minimum $1 million during the next 12 months to commence our drug development projects. We also must fund the estimated $100,000 in operating costs related to being a public company. Failure to obtain this necessary capital at acceptable terms, if at all, when needed, may force us to delay, limit, or terminate our drug development efforts to secure regulatory approvals and would adversely impact our planned research and development efforts in connection with the Company’s future drugs, which may make it more difficult for us to attain profitability.

 

Results of Operations for the three and nine months ended March 31, 2018

 

Net loss for the nine months ended March 31, 2018 was $1,022,066, an increase of $267,728 from the net loss of $754,338 for the six months ended December 31, 2017.

 

During the three months and nine months ended March 31, 2018, the Company’s efforts were focused on equity private placement financing activities, consummation of the Share Exchange Transaction, filings with the U.S. Patent Office and FDA, and initial research and development activities on its products. Professional fees of $279,160 for the nine months ended March 31, 2018 consisted of legal fees to external counsels and our chief operating officer for patent and FDA related matters, legal fees for securities related matters and filings as the Company completed the Share Exchange transaction, and audit fees for the period ended June 30, 2017, quarterly financial statement review and other required regulatory filings.

 

General and administrative costs during the quarter ended March 31, 2018 consisted primarily of internal travel and promotion costs related to our financing activities, director and officer liability insurance, website development and technical consulting. General and administrative costs of $$217,670 include costs associated with the Company’s migration from a private to public entity, and incurring transfer agent and other external costs associated with the transition.

 

  11  
 

 

Research and development costs of $90,720 for the nine months ended March 31, 2018 includes $75,000 paid under an agreement with a contract manufacturer with significant expertise in pre-clinical and clinical trial development and regulatory approvals to develop an injectable formulation for our drug candidate (see “Contractual Obligations and Commitments” below).

 

On August 10, 2017, the Company granted an aggregate of 6,400,000 shares of BioPharma Common Stock to five officers and directors of the Company, subject to forfeiture restrictions. Restrictions lapsed as to one-third of each grant as of the initial date of grant, and restrictions as to one-twelfth of each grant will lapse quarterly for a two-year period commencing on the last day of each calendar quarter beginning on October 1, 2017. Stock based compensation for the three and nine months ended March 31, 2018 includes $45,833 and $434,516, respectively, as the value of shares vested under the grant. In March 2018, the Company cancelled 1,166,667 unvested shares previously issued to its former CEO. During the nine months ended March 31, 2018 the Company recorded $55,350 as the value of common stock issued to two individuals under consulting agreements.

 

Results of Operations for the three and nine months ended March 31, 2017

 

The Company was incorporated on March 27, 2017. The Company’s parent, Intiva USA, paid all operating costs and expenses and obligations related to acquisition of the license agreement, including costs incurred prior to incorporation of the Company, through March 31, 2017 in exchange for the issuance to Intiva USA of 24,000,000 shares of the Company’s common stock. During this initial period ended March 31, 2017, $61,196 was incurred for initial research and development of potential licenses and patents. General and administrative costs of $6,025 include internal costs associated with formation and potential fund raising.

 

Liquidity and Capital Resources

 

While management of the Company believes that the Company will be successful in its current and planned activities, there can be no assurance that the Company will be successful in its drug development activities, and raise sufficient equity, debt capital or strategic relationships to sustain the operations of the Company.

 

Our ability to create sufficient working capital to sustain us over the next twelve-month period, and beyond, is dependent on our raising additional equity or debt capital, or entering into strategic arrangements with one or more third parties.

 

There can be no assurance that sufficient capital will be available to us. We currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources.

 

Availability of Additional Capital

 

Notwithstanding our success in raising gross proceeds of $1,539,000 from the private sale of equity securities through March 31, 2018 and approximately $305,000 from the exercise of common stock warrants, and our expectation that we will be successful in raising up to an additional $1million during the next twelve months, there can be no assurance that we will continue to be successful in raising equity capital and have adequate capital resources to fund our operations or that any additional funds will be available to us on favorable terms or in amounts required by us. If we determine that it is necessary to raise additional funds, we may choose to do so through public or private equity or debt financing, a bank line of credit, or other arrangements. If we are unable to obtain adequate capital resources to fund operations, we may be required to delay, scale back or eliminate some or all of our plan of operations, which may have a material adverse effect on our business, results of operations and ability to operate as a going concern.

 

Any additional equity financing may be dilutive to our stockholders, new equity securities may have rights, preferences or privileges senior to those of existing holders of our shares of common stock. Debt or equity financing may subject us to restrictive covenants and significant interest costs.

 

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Capital Expenditure Plan During the Next Twelve Months

 

To date, we raised approximately $1.85 million, in equity capital (including exercised warrants) and we may be expected to require up to an additional $1 million in capital during the next 12 months to fully implement our business plan and fund our operations. Our plan is to utilize the capital that we raise to fund our ongoing research efforts, as well as the costs incurred by being a public reporting company. However, there can be no assurance that we will continue to be successful in raising capital in sufficient amounts and/or at terms and conditions satisfactory to the Company. Our revenues are expected to come from our drug development projects. As a result, we will continue to incur operating losses unless and until we have obtained regulatory approval with respect to one of our drug development projects and commence to generate sufficient cash flow to meet our operating expenses. There can be no assurance that we will obtain regulatory approval and the market will adopt our future drugs. In the event that we are not able to successfully: (i) raise equity capital and/or debt financing; or (ii) market our drugs after obtaining regulatory approval, our financial condition and results of operations will be materially and adversely affected.

 

Going Concern Consideration

 

Our registered independent auditors have issued an opinion on our financial statements as of June 30, 2017 which includes a statement describing our going concern status. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills and meet our other financial obligations. This is because we have not generated any revenues and no revenues are anticipated until we begin marketing any drugs that we successfully develop. Accordingly, we must raise capital from sources other than the actual sale from any drugs that we develop. We must raise capital to continue our drug development activities and stay in business.

 

Off-Balance Sheet Arrangements

 

As of June 30, 2017 and March 31, 2018, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Act of 1934.

 

Contractual Obligations and Commitments

 

As of June 30, 2017, we did not have any contractual obligations. On September 19, 2017, we entered into an agreement with a contract manufacturer with significant expertise in pre-clinical and clinical trial development and regulatory approvals to develop an injectable formulation for our drug candidate in the Kotzker Development Project with the objective of applying for FDA approval. It is anticipated that the drug candidate will be developed utilizing the new drug application 505(b)(2) regulatory pathway for use in the treatment during and immediately following exposure to organophosphorus nerve agents. The formulation of the drug candidate will be based on one or more synthetic cannabinoids. We paid $75,000 to the contract manufacturer upon signing the contract, which further provides that we pay an additional $20,000 upon completion of the drug formulation and $20,000 upon completion of Phase 1 development. No payment schedule has yet been agreed to upon completion of Phase 2 and Phase 3 development stage and the contract may be terminated by either party.

 

On February 28, 2018, we obtained a worldwide exclusive license with respect to a proprietary delivery system for cannabinoid-based medications. We paid $35,000 upon execution of the agreement, and payments of $30,000 and $35,000 are required by August 31, 2018 and February 28, 2019, respectively. We are required to pay milestone payments once we have obtained regulatory approval of pharmaceutical licensed products and royalties based upon sales of licensed products. We may grant sublicenses under the terms of our agreement.

 

Critical Accounting Policies

 

Our significant accounting policies are described in the notes to our financial statements as of March 31, 2018 and are included elsewhere in this report.

 

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Plan of Operation

 

Our plan of operation now relates to our newly acquired subsidiary BioPharma. For a complete discussion of our plan of operation, see the Form 8-K filing announcing the acquisition filed October 16, 2017.

 

Accounting for a Business Combination

 

As a result of the closing of the share exchange agreement with BioPharma, the transaction will be accounted for as a reverse acquisition with us being the surviving registrant. As a result of any reverse acquisition, if the acquired entity’s stockholders will exercise control over us, the transaction will be deemed to be a capital transaction where we are treated as a non-business entity. Therefore, the accounting for the transaction is identical to that resulting from a reverse merger, except no goodwill or other intangible assets will be recorded. For accounting purposes, the acquired entity will be treated as the accounting acquirer and, accordingly, will be presented as the continuing entity.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of disclosure controls and procedures.

 

As of March 31, 2018, the Company’s chief executive officer and chief financial officer conducted an evaluation regarding the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act. Based upon the evaluation of these controls and procedures as provided under the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013), our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this report.

 

Changes in internal controls.

 

During the quarterly period covered by this report, no changes occurred in our internal control over financial reporting that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

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PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

None.

 

ITEM 1A. RISK FACTORS

 

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Risk Factors in our Form 8-K as filed with the SEC on October 16, 2017, which could materially affect our business, financial condition or future results. The risks described in our Form 8-K are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

During the quarter ended March 31, 2018 we issued and sold the unregistered securities set forth in the table below.

 

Date   Persons or Class of Persons   Securities   Consideration
1/15/2018   1 accredited investor   24,000 shares of common stock   $25,200
1/1/2018 through 3/31/2018   48 accredited investors   838,800 shares of common stock   $214,572

 

We relied upon the exemption from registration contained in Rule 506(b) of Regulation D under the Securities Act, as the securities were sold only to accredited investors, without the use of general solicitation or advertising. No underwriters or placement agents were used and no commissions were paid in the above stock transactions. Restrictive legends were placed on the certificates evidencing the securities issued in all of the above transactions.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURE

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

None.

 

ITEM 6. EXHIBITS

 

Regulation S-K Number   Document
2.1   Bankruptcy Court Order Confirming Sale of Public Shell Entity to Park Avenue Group, Inc. (1)
2.2   Amended and Restated Share Exchange Agreement between the Registrant and Intiva BioPharma Inc., dated October 13, 2017 (2)
3.1   Certificate of Incorporation (1)
3.2   Certificate of Merger (1)
3.3   Certificate of Amendment of Certificate of Incorporation (1)
3.4   Certificate of Amendment of Certificate of Incorporation
3.5   Bylaws (1)
10.1   2017 Stock Incentive Plan

 

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Regulation S-K Number   Document
10.2   Licensing Agreement between the Company and Kotzker Consulting LLC
10.3   Exclusive License Agreement between the Company and Accu-Break Pharmaceuticals, Inc.
10.4   2018 Equity Incentive Plan
31.1   Rule 13a-14(a) Certification of Alain Bankier
31.2   Rule 13a-14(a) Certification of Evan L. Wasoff
32.1   Certification of Alain Bankier Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2   Certification of Evan L. Wasoff Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101   Financial statements from the Quarterly Report on Form 10-Q of Intiva BioPharma Inc. for the quarterly period ended March 31, 2018, formatted in XBRL: (i) the Balance Sheets; (ii) the Statements of Operations; (iii) the Statements of Cash Flows; and (iv) the Notes to Financial Statements (7)

 

 

  (1) Filed as an exhibit to the Registration Statement on Form 10, filed November 14, 2014.
  (2) Filed as an exhibit to the Current Report on Form 8-K dated October 13, 2017, filed October 16, 2017.
  (3) In accordance with Rule 406T of Regulation S-T, the information in these exhibits shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  INTIVA BIOPHARMA INC.
     
Dated: May 15, 2018 By: /s/ Alain Bankier
    Alain Bankier, Chief Executive Officer
     
  By:  /s/ Evan L. Wasoff
    Evan L. Wasoff, Chief Financial Officer

 

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INTIVA BIOPHARMA INC.

 

2017 STOCK INCENTIVE PLAN

 

Section 1. Purpose . The purpose of this 2017 Stock Incentive Plan (the “Plan”) is to promote the interests of Intiva BioPharma Inc., a Colorado corporation (the “Company”), and the interests of the Company’s shareholders by attracting and retaining Employees, Non-Employee Directors and Consultants, and giving such persons the opportunity to acquire shares of common stock of the Company. By encouraging such ownership of common stock, the Company seeks to attract, retain and motivate such Employees, Non-Employee Directors and Consultants, and to encourage them to devote their best efforts to the business and financial success of the Company and its Affiliates.

 

Section 2. Definitions . As used herein the following terms have the following meanings:

 

(a) “Affiliate” means, except as provided in Section 9(a), any person with whom the Company would be considered a single employer under Section 414(b) of the Code (controlled group of corporations) or Section 414(c) of the Code (partnerships, proprietorships, etc., under common control).

 

(b) “Award” means Restricted Shares granted under the Plan.

 

(c) “Award Agreement” means a written agreement between the Company and a Participant that sets forth the terms, conditions, restrictions and/or limitations applicable to an Award granted under the Plan.

 

(d) “Board” means the Board of Directors of the Company.

 

(e) “Code” means the Internal Revenue Code of 1986, as amended.

 

(f) “Committee” means the Compensation Committee of the Board or such other committee of the Board as may be designated by the Board to administer the Plan. To the extent that no Committee exists that has the authority to administer the Plan, the functions of the Committee shall be exercised by the Board.

 

(g) “Common Stock” means the common stock of the Company.

 

(h) “Consultant” means any natural person who is an individual consultant or advisor of the Company or an Affiliate who is not an Employee or Non-Employee Director, provided that bona fide services are rendered by the consultant or advisor and such services are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the issuer’s securities.

 

(i) “Employee” means any officer or employee of the Company or an Affiliate.

 

 

 

 

(j) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(k) “Fair Market Value” means fair market value of a share of Common Stock on the date of grant or other date in question, as determined by the Committee in accordance with Section 409A of the Code and the regulations thereunder.

 

(l) “Non-Employee Director” means an individual duly elected or chosen as a member of the Board of Directors of the Company or an Affiliate who is not also an Employee of the Company or an Affiliate.

 

(m) “Participant” means an Employee, Non-Employee Directors or Consultant granted an Award under the Plan.

 

(n) “Plan Date” means the date of adoption and approval of the Plan by the Company’s shareholders.

 

(o) “Restricted Shares” means shares of Common Stock subject to certain forfeiture restrictions that is granted to a Participant pursuant to Section 7.

 

(p) “Securities Act” means the Securities Act of 1933, as amended.

 

Section 3. Number of Shares of Common Stock . The total number of shares of Common Stock for which Awards may be granted by the Company from time to time under the Plan shall not exceed __% of the outstanding shares of Common Stock on a fully diluted basis, subject to adjustment as provided herein. If any Award granted under the Plan is canceled or forfeited, or terminates, expires or lapses, for any reason, the shares of Common Stock then subject to such Award shall again be available for grant of any Awards under the Plan.

 

Section 4. Administration; Indemnification . The following provisions shall apply to the administration of the Plan by the Committee:

 

(a) Administration . The Plan shall be administered by the Committee. The Committee shall have total and exclusive responsibility to control, operate, manage and administer the Plan in accordance with its terms, the Company’s Articles of Incorporation, Bylaws and applicable law. The Committee shall have all the authority that may be necessary or helpful to enable it to discharge its responsibilities with respect to the Plan. Without limiting the generality of the preceding sentence, the Committee shall have the exclusive right to: (i) interpret the Plan and the Awards granted hereunder, including the Award Agreements; (ii) determine eligibility for participation in the Plan; (iii) decide all questions concerning eligibility for, and the amount of, Awards granted under the Plan; (iv) construe any ambiguous provision of the Plan or any Award Agreement; (v) prescribe the form of the Award Agreements (which need not be identical); (vi) correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award Agreement; (vii) issue administrative guidelines as an aid to administer the Plan and make changes in such guidelines as it from time to time deems proper; (viii) make regulations for carrying out the Plan and make changes in such regulations as it from time to time deems proper; (ix) determine whether Awards should be granted singly, in combination or in tandem; (x) to the extent permitted under the Plan, grant waivers of Plan terms, conditions, restrictions and limitations; (xi) accelerate the vesting of an Award when such action or actions would be in the best interests of the Company; (xii) grant Awards in replacement of Awards previously granted under the Plan or any other employee benefit plan of the Company; and (xiii) take any and all other actions it deems necessary or advisable for the proper operation or administration of the Plan. Any action or determination by the Committee shall be final and binding.

 

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(b) Indemnification . Neither the members of the Board nor the Committee shall be liable for any act, omission or determination taken or made in good faith with respect to the Plan or any Awards granted under it, and members of the Board or the Committee shall be entitled to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including attorneys’ fees, the costs of settling any suit (provided such settlement is approved by independent legal counsel selected by the Company), and amounts paid in satisfaction of a judgment, except a judgment based on a finding of bad faith) arising therefrom to the fullest extent permitted by law.

 

Section 5. Eligibility . The Committee shall select Participants from those Employees, Non-Employee Directors and Consultants that, in the opinion of the Committee, are in a position to make a significant contribution to the success of the Company. Once a Participant has been selected for an Award by the Committee, the Committee shall determine the type and size of Award to be granted to the Participant and shall establish in the related Award Agreement the terms, conditions, restrictions and limitations applicable to the Award, in addition to (and not in contravention of) those set forth in the Plan and the administrative guidelines and regulations, if any, established by the Committee.

 

Section 6. Form of Awards . Awards may be granted under the Plan, in the Committee’s sole discretion, in the form of Restricted Shares pursuant to Section 7. All Awards shall be subject to the terms, conditions, restrictions and limitations of the Plan. The Committee may, in its sole discretion, subject any Award to such other terms, conditions, restrictions and/or limitations (including without limitation the time and conditions of vesting or settlement of an Award and restrictions on transferability of any shares of Common Stock issued or delivered pursuant to an Award), provided they are not inconsistent with the terms of the Plan.

 

Section 7. Restricted Shares .

 

(a) Grant of Restricted Shares . Awards may be granted in the form of Restricted Shares in such numbers and at such times as the Committee shall determine. The Committee shall impose such terms, conditions and restrictions on Restricted Shares as it may deem advisable, including without limitation the purchase price for such Restricted Shares (if any) and the period over which and the conditions upon which the Restricted Shares may become vested or be forfeited.

 

(b) Restricted Period . At the time an Award of Restricted Shares is granted, the Committee shall establish a period during which such Restricted Shares remain subject to forfeiture (the “Restricted Period”) and the conditions upon which such Restricted Shares will become vested or forfeited. Each Award of Restricted Shares may have a different Restricted Period in the sole discretion of the Committee.

 

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(c) Other Terms and Conditions . Except as otherwise provided herein, Restricted Shares shall constitute issued and outstanding shares of Common Stock. Restricted Shares awarded to a Participant under the Plan shall be registered in the name of the Participant or, at the option of the Committee, in the name of a nominee of the Company, and shall be issued in book-entry form or represented by a stock certificate. Subject to the terms and conditions of the Award Agreement, a Participant to whom Restricted Shares have been awarded shall have the right to receive dividends thereon during the Restricted Period and to enjoy all other shareholder rights with respect thereto. A breach of the terms and conditions established by the Committee pursuant to the Award of the Restricted Shares may result in a forfeiture of the Restricted Shares. At the time of an Award of Restricted Shares, the Committee may, in its sole discretion, prescribe additional terms, conditions, restrictions and limitations applicable to the Restricted Shares, including without limitation rules pertaining to the termination of employment or service (by reason of death, permanent and total disability, retirement, cause or otherwise) of a Participant prior to expiration of the Restricted Period.

 

(d) Miscellaneous . Nothing in this Section shall prohibit the exchange of Restricted Shares pursuant to a plan of merger or reorganization for shares of Common Stock or other securities of the Company or another entity that is a party to the reorganization, provided that the shares or securities so received in exchange for Restricted Shares shall, except as provided in Section 13, become subject to the restrictions applicable to such Restricted Shares. Any shares of Common Stock received as a result of a stock split or stock dividend with respect to Restricted Shares shall also become subject to the restrictions applicable to such Restricted Shares.

 

(e) Withholding Tax . Except as otherwise provided in an Award Agreement, the following withholding tax provisions shall apply to an Award of Restricted Shares:

 

(i) A Participant may elect, within 30 days of the date of grant of an Award of Restricted Shares and on notice to the Company, to realize income for federal income tax purposes equal to the fair market value of the Restricted Shares on the date of grant by making an election under Section 83(b) of the Code. In such event, the Participant shall make arrangements satisfactory to the Company to pay at the time required by applicable law any federal, state or local taxes required to be withheld with respect to such Restricted Shares. In accordance with any applicable administrative guidelines it establishes, the Committee may allow a Participant to satisfy the tax withholding requirements of this subsection by permitting the Participant to deliver to the Company previously acquired fully vested shares of Common Stock held for the minimum amount of time necessary to avoid adverse accounting treatment and having an aggregate Fair Market Value (determined as of the date of delivery of the shares) equal to the minimum amount of such required withholding taxes.

 

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(ii) If no election is made by the Participant pursuant to subsection (e)(i) hereof, then upon vesting of the Restricted Shares, the Participant (or in the event of the Participant’s death, the administrator or executor of the Participant’s estate) shall pay to the Company or its Affiliate, or make arrangements satisfactory to the Company regarding payment of, any federal, state or local taxes of any kind required by law to be withheld with respect to the Restricted Shares. In accordance with any applicable administrative guidelines it establishes, the Committee may allow a Participant to pay the amount of taxes required by this subsection by (i) withholding shares of Common Stock from the Restricted Shares that are vesting, or (ii) permitting the Participant to deliver to the Company previously acquired fully vested shares of Common Stock held for the minimum amount of time necessary to avoid adverse accounting treatment, in each case having an aggregate Fair Market Value (determined as of the date of delivery of the shares) equal to the minimum amount of such required withholding taxes.

 

(iii) If the Participant does not satisfy his obligations under subsections (e)(i) or (e)(ii) hereof, the Company or its Affiliate shall, to the extent permitted by law, have the right to deduct from any compensation payable to the Participant, whether or not pursuant to the Plan or an Award Agreement, and regardless of the form of payment, any federal, state or local taxes of any kind required by law to be withheld with respect to the Restricted Shares.

 

Section 8. Transferability; Divorce .

 

(a) Transferability . An Award granted under the Plan shall be transferable by the Participant only by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Participant only by the Participant, or if the Participant is legally incompetent, by the Participant’s legal representative. When a Participant dies, the personal representative, beneficiary, or other person entitled to succeed to the rights of the Participant may acquire the rights under an Award. Any such successor must furnish proof satisfactory to the Committee of the successor’s entitlement to receive the rights under the Award under the Participant’s will or under the laws of descent and distribution.

 

(b) Divorce . Incident to a Participant’s divorce, the Participant may request that the Company agree to observe the terms of a domestic relations order which may or may not be part of a qualified domestic relations order (as defined in Code Section 414(p)) with respect to all or part of one or more Awards made to the Participant under the Plan. The Company’s decision regarding such a request shall be made by the Committee, in its sole and absolute discretion, based upon the best interests of the Company. The Committee’s decisions need not be uniform among the Participants. As a condition of participation, a Participant agrees to hold the Company harmless from any claim that may arise out of the Company’s observance of the terms of any such domestic relations order.

 

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Section 9. Termination .

 

(a) Termination of Employment . Transfers of employment by an Employee between the Company and any of its Affiliates shall not be considered to be a termination of employment for the purposes of this Plan. Nothing in the Plan or in any Award Agreement evidencing an Award granted under the Plan shall confer upon any Participant any right to continue in the employ of the Company or any Affiliate or in any way interfere with the right of the Company or any Affiliate to terminate the employment of the Participant at any time, with or without cause. For purposes of this subsection and subsection (b) of this Section, “Affiliate” shall mean any person with whom the Company would be considered a single employer under Section 414(b) of the Code (controlled group of corporations) or Section 414(c) of the Code (partnerships, proprietorships, etc., under common control), provided that in applying Section 1563(a)(1), (2) and (3) for purposes of determining a controlled group of corporations under Section 414(b) of the Code, the language “at least 50 percent” shall be used instead of “at least 80 percent” each place it appears in Section 1563(a)(1), (2) and (3), and in applying Treasury Regulation Section 1.414(c)-2 for purposes of determining trades or businesses (whether or not incorporated) that are under common control for purposes of Section 414(c) of the Code, the language “at least 50 percent” shall be used instead of “at least 80 percent” each place it appears in Treasury Regulation Section 1.414(c)-2.

 

(b) Termination of Consulting Services . Transfers of consulting services by a Consultant between the Company or any of its Affiliates shall not be considered to be a termination of consulting services for the purposes of this Plan. Nothing in the Plan or in any Award Agreement evidencing an Award granted under the Plan to a Consultant shall confer upon any Consultant any right to continue as a Consultant of the Company, or any Affiliate or in any way interfere with the right of the Company or any Affiliate to terminate the services of the Consultant at any time, with or without cause.

 

(c) Termination of Membership on the Board . Nothing in the Plan or in any Award Agreement evidencing an Award granted under the Plan to a Non-Employee Director shall confer upon any Non-Employee Director any right to continue as a Non-Employee Director of the Company or any Affiliate.

 

Section 10. Adjustments Upon Changes in Shares of Common Stock . In the event that, after the Plan Date, the outstanding shares of Common Stock shall be changed into or exchanged for a different number or kind of shares of capital stock or other securities of the Company or of another corporation through reorganization, merger or consolidation, recapitalization, reclassification, stock split, split-up, combination or exchange of shares or increase because of any distributions paid in shares of Common Stock, the Committee shall appropriately adjust (i) the number and kind of shares of Common Stock subject to any outstanding Award, and (ii) the number and kind of shares of Common Stock for which Awards may be granted under the Plan, as set forth in Section 3 hereof, and such adjustments shall be effective and binding for all purposes of the Plan. All such adjustments shall be made or authorized in a manner intended to comply with requirements of Section 409A of the Code.

 

Section 11. Amendment and Termination of the Plan . Subject to the right of the Board to terminate the Plan prior thereto, the Plan shall terminate at the expiration of 10 years from the Plan Date. No Awards may be granted after termination of the Plan. The Board may alter or amend the Plan and may make an alteration or amendment thereof which operates to increase the total number of shares of Common Stock as to which Awards may be granted under the Plan. No termination or amendment of the Plan shall adversely affect the rights of a Participant under an outstanding Award, except with the consent of such Participant.

 

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Section 12. Award Amendment and Cancellation . The Committee may amend the terms of any outstanding Award granted pursuant to the Plan, but except as otherwise provided herein, no such amendment shall adversely affect in any material way the Participant’s rights under an outstanding Award without the consent of the Participant.

 

Section 13. Company Changes . Upon (a) the dissolution or liquidation of the Company; (b) a reorganization, merger or consolidation (other than a merger or consolidation effecting a reincorporation of the Company in another state or any other merger or consolidation in which the equityholders of the surviving entity and their proportionate interests therein immediately after the merger or consolidation are substantially identical to the shareholders of the Company and their proportionate interests therein immediately prior to the merger or consolidation) of the Company with one or more entities, following which the Company is not the surviving entity (or survives only as a subsidiary of another corporation in a transaction in which the equityholders of the parent of the Company and their proportionate interests therein immediately after the transaction are not substantially identical to the shareholders of the Company and their proportionate interests therein immediately prior to the transaction); (c) the sale of all or substantially all the assets of the Company; or (d) any person or entity, including a “group” as contemplated by section 13(d)(3) of the Exchange Act, acquires or gains ownership or control (including, without limitation, power to vote) of more than 50% of the outstanding shares of Common Stock or other equity interests of the Company (based upon voting power) but excluding an initial public offering of the Company’s equity, subject to the terms of any applicable Award Agreement, the Board serving prior to the date of the applicable event shall accelerate the vesting dates of all outstanding Awards such that all such Awards are vested in full immediately prior to the applicable event. The foregoing sentence shall not apply to any company event described in this Section 13 to the extent that provision is made in writing for the assumption or continuation of the Awards theretofore granted, or for the substitution for such Awards for new awards relating to the equity of a successor or acquiring entity, or an Affiliate thereof, with appropriate adjustments as to the number of shares, in which event the Plan and Awards theretofore granted shall continue in the manner and under the terms so provided.

 

Section 14. Securities Act Compliance .

 

(a) Nothing herein, in any Award Agreement entered into hereunder, or in any Awards granted hereunder, shall require the Company to sell or issue any shares of Common Stock pursuant to an Award if such sale or issuance would, in the opinion of counsel for the Company, constitute a violation of the Securities Act or any similar or superseding statute or statutes, or any applicable state “blue sky” law, in any case as then in effect.

 

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(b) At the time of any grant of any Awards, or sale or issuance of any shares of Common Stock pursuant thereto, the Company may, as a condition precedent to the grant of such Awards or the sale or issuance of such shares of Common Stock, require from the holder of such Award (or in the event of his death, his representatives, legatees, or distributees) such written representations, if any, concerning his/her (or the transferee’s) status as a sophisticated and/or “accredited” investor under applicable federal and state securities laws and his (or the transferee’s) intentions with regard to the retention or disposition of the Awards or the shares of Common Stock being acquired pursuant to such Awards, and such written covenants and agreements, if any, as to the manner of acquisition of such Awards and/or the disposal of such shares of Common Stock as, in the opinion of counsel to the Company, may be necessary to ensure that any acquisition or disposition by such holder (or in the event of his death, his legal representatives, legatees, or distributees) will not involve a violation of the Securities Act or any similar or superseding statute or statutes, or any other applicable federal or state statute, rule, or regulation, as then in effect.

 

(c) Certificates for shares of Common Stock, if issued, shall have appropriate legends, or statements of other applicable restrictions, endorsed thereon, that the Committee deems appropriate to reflect any restrictions on transfer.

 

Section 15. Restrictions on Transfer of Shares of Common Stock . The shares of Common Stock acquired pursuant to Awards shall be subject to such restrictions and agreements regarding sale, assignment, encumbrances or other transfer as are in effect among the shareholders of the Company at the time such shares of Common Stock are acquired, as well as to such other restrictions as the Committee shall deem advisable.

 

Section 16. No Fractional Shares of Common Stock . No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan or any Award granted hereunder, provided that the Committee in its sole discretion may round fractional shares to the nearest whole share or settle fractional shares in cash.

 

Section 17. Gender . Words of any gender used in the Plan shall be construed to include any other gender, unless the context requires otherwise.

 

Section 18. Governing Law . All questions arising with respect to the provisions of the Plan or any Award Agreement entered into hereunder or any Award shall be determined by application of the internal laws of the State of Colorado (without regard to principles of conflicts of law), except to the extent Colorado law is preempted by federal law.

 

Section 19. Government and Stock Exchange Regulations . The Plan, and the granting of Awards thereunder, and the obligation of the Company to sell and deliver shares of Common Stock upon the issuance of Awards, shall be subject to all applicable governmental laws, rules and regulations, and to such approvals by any governmental agencies as may then be required, and shall also be subject to all applicable rules and regulations of any stock exchange upon which the securities of the Company may then be listed. The Committee is expressly authorized to impose such restrictions and limitations as it may deem advisable upon Awards in order to satisfy any such regulatory requirements.

 

Section 20. Effective Date of the Plan . The Plan shall become effective as of the Plan Date.

 

Section 21. Section 409A . The Plan and all Awards issued hereunder are intended to be exempt from or comply with the requirements of Section 409A of the Code, and shall be interpreted in accordance with such intent.

 

[Signature Page Follows.]

 

8

 

 

To record adoption and approval of the Plan by the Board of Directors of the Company as of the Plan Date of August 10, 2017, the Company has caused its authorized officer to execute the Plan.

 

  INTIVA BIOPHARMA INC.
     
  By:              
  Name:  
  Title:  

 

9

 

 

 

EXCLUSIVE LICENSE AGREEMENT

 

THIS EXCLUSIVE LICENSE AGREEMENT (the “Agreement”), effective as of this 29th day of March, 2017, between KOTZKER CONSULTING LLC , a Delaware limited liability company having a business address of 20 Highview Ln, Yardley, PA 19067 (the “ LICENSOR ”) and INTIVA KOTZKER PHARMACEUTICALS INC. , a Colorado corporation having a business address at 3773 Cherry Creek North Drive, Suite 575, Denver Colorado 80209 (the “ LICENSEE ”).

 

RECITALS

 

WHEREAS, LICENSOR owns or has exclusively licensed all right, title and interest in certain Licensed Technology (as hereinafter defined), for the use of cannabinoids alone or in combination with various other active pharmaceutical ingredients and/or excipients (i) as preventative and therapeutic neuroprotectives against nerve agents and pesticides and (ii) for the treatment of diseases for a variety of therapeutic categories;

 

WHEREAS, LICENSOR desires to license LICENSOR’s right, title and interest in the Licensed Technology in the Licensed Field and in the Territory (as hereinafter defined), and LICENSEE desires to secure such license in order to develop, commercialize, sell, and license throughout the Territory products that embody or employ the Licensed Technology;

 

NOW THEREFORE, in consideration of the premises, and the receipt of good and valuable consideration the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

1. DEFINITIONS

 

1.1 “Accounting Period” shall mean each 3 month period ending March 31, June 30, September 30, and December 31 during the term of this Agreement.

 

1.2 “Affiliate” with respect to each party shall mean any corporation or other legal entity controlling, controlled by, or under common control with such party. The term “control” means possession, direct or indirect, of the powers to direct or cause the direction of the management and policies of an entity, whether through the ownership of voting securities, by contract or otherwise.

 

1.3 “Approval” shall mean such approval or approvals as are necessary from an applicable Regulatory Authority for the marketing of the Products for use in the Licensed Field in a jurisdiction within the Territory.

 

1.4 “Effective Date” shall mean the date first written above.

 

CONFIDENTIAL 1  
 

 

1.5 “FDA” shall mean the United States Food and Drug Administration and any successor thereto.

 

1.6 “First Commercial Sale” shall mean the first sale of any Licensed Product by LICENSEE, its Affiliates or Sublicensees, but not including transfers or dispositions of Licensed Product for charitable, promotional, pre-clinical, clinical, regulatory or governmental purposes for which LICENSEE receives no payment.

 

1.7 “License” shall have the meaning ascribed to that term in Section 2.1(a).

 

1.8 “Licensed Field” the use of cannabinoids alone or in combination with various other active pharmaceutical ingredients and/or excipients (i) as preventative and therapeutic neuroprotectives against nerve agents and pesticides and (ii) for the treatment of diseases for a variety of therapeutic categories.

 

1.9 “Licensed Inventions” shall mean the inventions claimed in the Licensed Patents.

 

1.10 “Licensed Know-how” shall include all technology, materials, research data, designs, formulas, process information, manufacturing information, application information, commercialization information, clinical data, scientific data, medical data, and any other information useful from time to time for the design, development, manufacturing, use, and/or commercialization of the Licensed Products, whether or not eligible for protection under the patent laws of the United States or elsewhere and whether or not any such technology, materials, information, data and the like related thereto, would be enforceable as a trade secret or the copying of which would be enjoined or restrained by a court as constituting unfair competition, which is developed by, or in the possession or control of, LICENSOR now or at any time during the term of this Agreement other than such information that is independently developed by LICENSEE or its agents, as evidenced by contemporaneous written records.

 

1.11 “Licensed Patents” shall mean any and all rights arising out of or resulting from (i) the patents and patent application set forth in Schedule 1.11 attached to this Agreement, as well as any additional patents or patent applications related to any aspect of any Licensed Technology Improvements, Licensed Know-how, Licensed Products, and/or Licensed Technology (as herein defined) filed prior to or during the term of this Agreement and (ii) any letters patent granted in respect of all such applications, as well as, without limitation, any substitutions, divisions, continuations, continuations-in-part, reissues, renewals, re-examinations, extensions, supplementary protection certificates, confirmations, registrations, revalidations and the like, of any and all such patents and patent applications and any international equivalents thereof.

 

1.12 “Licensed Products” shall mean any and all products, (including any and all) doses, strengths, formulations, compositions and methods thereof containing cannabinoids alone or in combination with various other active pharmaceutical ingredients and/or excipients for use in the Licensed Field utilizing the Licensed Technology.

 

1.13 “Licensed Technology” shall mean the aggregate of the Licensed Inventions, the Licensed Know-how, the Licensed Products and the Licensed Patents and any other information and/or technology related to the Licensed Products and/or the design and/or the manufacturing of the Licensed Products.

 

CONFIDENTIAL 2  
 

 

1.14 “Licensed Technology Improvements” shall have the meaning ascribed to that term in Section 2.2.

 

1.15 “Net Sales” shall mean the Gross Sales (as defined and calculated in accordance with US generally accepted accounting principles (“ GAAP ”) of Licensed Products by LICENSEE or any of its Affiliates or Sublicensees (“ Sellers ”) to a third party that is not an Affiliate or Sublicensee of LICENSEE (“ Customer ”), less applicable Sales Returns and Allowances (as defined below), and corresponding to the definition of actual net sales used in the audited consolidated financial statements of LICENSEE:

 

1.16 “Sales Returns and Allowances” means the sum of

 

  (a) (i) as determined under US GAAP, trade, cash, and quantity discounts or rebates (other than price discounts granted at the time of invoicing and which are included in the determination of Gross Sales), credits or allowances given or made for rejection or return of, and for uncollectible amounts on, previously sold Licensed Products or for retroactive price reductions (including any types of rebates and charge-backs), (iii) taxes, duties, or other governmental charges levied on or measured by the billing amount for Licensed Products, and (iv) credits for allowances given or made for wastage, replacement, indigent patient, and any other sales programs for Licensed Products; and
  (b) periodic adjustments of the amount determined in (a) to reflect amounts actually incurred by LICENSEE for items (i), (ii), (iii), and (iv) in clause (a).

 

For purposes of determining Gross Sales, a “sale” shall not include transfers or dispositions for charitable, promotional purposes or for pre-clinical, clinical, regulatory or governmental testing purposes for which a Seller receives no payment.

 

If a Seller commercially uses or disposes of any Licensed Product by itself (as opposed to use or disposition of the Licensed Product as a component of a combination of active functional elements) other than in a bona fide sale to a bona fide Customer, the Gross Sales price of the Licensed Product for purposed of calculating Gross Sales shall be the price which would be then payable in an arm’s length transaction with such a Customer. If a Seller commercially uses or disposes of any Licensed Product as a component of a combination of active functional elements other than in a bona fide sale to a bona fide Customer, the Gross Sales price of the Licensed Product for purposes of calculating Gross Sales shall be determined in accordance with the definition of “Sales Returns and Allowances” above, using as the Gross Sales price of the combination that price which would then be payable in an arm’s length transaction.

 

Transfer of a Licensed Product within a Seller or between or among LICENSEE and its Affiliate and Sublicensees for sale by the transferee shall not be considered a sale, commercial use or disposition for the purpose of the foregoing subsections; in the case of such transfer the Gross Sales price shall be the Gross Sales price of the Licensed Product when sold to a third party by the transferee.

 

CONFIDENTIAL 3  
 

 

1.16 “Patent Right” shall mean any right, title or interest in any Licensed Patent.

 

1.17 “Regulatory Authorities” shall mean the governmental authorities responsible for regulating the development, marketing, and/or sales of pharmaceutical products in a particular country.

 

1.18 “Seller” shall mean with respect to any sale of a Licensed Product the party responsible for such sale, where such party may be, as applicable, LICENSEE, an Affiliate of LICENSEE or a Sublicensee.

 

1.19 “Sublicensee” shall mean any unrelated third party licensed by LICENSEE or by an Affiliate thereof to develop or have developed, make or have made, use or have used, sell or have sold, import or have imported any Licensed Product. For the avoidance of doubt, a wholesaler, distributor, or similar entity which purchases any Licensed Product from LICENSEE or any of its Affiliates in a bona fide arms-length transaction, shall not be deemed to be a Sublicensee. The agreement evidencing such sublicense shall contain relevant terms and conditions substantially similar to those in this Agreement and shall be subject to the review and approval by LICENSOR, such approval not to be unreasonably withheld. Notwithstanding the foregoing, if LICENSEE sublicenses to a third party who has financial wherewithal equal to or greater than the LICENSEE, the approval of LICENSEE shall not be required.

 

1.20 “Term” shall mean the period during which this Agreement is in effect, commencing on the Effective Date and continuing until the termination of this Agreement.

 

1.21 “Territory” shall mean the World.

 

1.22 “Valid Claim” shall mean any pending or issued claim of any patent application or patent that has not been finally rejected or declared invalid or unenforceable by a patent office or court of competent jurisdiction in any unappealed and unappealable decision. Notwithstanding other provisions of this Agreement, if a claim of a pending patent application within the Licensed Patents has not issued as a claim of an issued patent within the Licensed Patents in any particular country in the Territory, within ten (10) years after the initiation of the examination from which such claim takes priority, such pending claim shall not be a Valid Claim in such country in the Territory for purposes of this Agreement.

 

2. LICENSE

 

2.1 Grant of License. Subject to the provisions of this Agreement, LICENSOR hereby grants LICENSEE, including LICENSEE’s Affiliates,

 

(a) a royalty-bearing, Territory-wide license (the “License”) in the Licensed Field under the Patent Rights to the Licensed Technology, as well as under the Licensed Patents, the Licensed Know-how, and the Licensed Technology, regardless of whether such Licensed Patents are actually granted, to use the Licensed Know-how and Licensed Technology and to develop and have developed, make and have made, use and have used, sell and have sold, offer for sale and have offered for sale, import and have imported, export and have exported, any and all inventions claimed in the Licensed Patents related to the Licensed Products and/or any compounds, chemicals, substrates, devices, tools, dies, molds or any other materials whatsoever that are useful in the development and/or manufacturing and/or sale of the Licensed Products, and particularly including, without limitation, such license to develop and have developed, make and have made, use and have used, sell and have sold, offer for sale and have offered for sale, import and have imported, export and have exported Licensed Products, which license shall be exclusive even as to LICENSOR, and

 

CONFIDENTIAL 4  
 

 

(b) the parties acknowledge and agree that LICENSEE is permitted to seek funding for the development of the Licensed Product, from an Affiliate or funding source without receipt of such funds being deemed a sale or sublicense that would entitle LICENSOR to receive any portion of the particular funding , and

 

(c) the right to grant bona fide sublicenses to third parties, to develop and have developed, to make and have made, use and have used, sell and have sold, import and have imported, export and have exported, Licensed Products, and to exercise all other rights under the License; provided, however, LICENSEE shall not have the right to grant any sublicense or to transfer any of its rights under the License unless each such sublicense or other transfer granted by LICENSEE contains terms and conditions under which the Sublicensee or transferee will be bound in the same manner as LICENSEE is under this Agreement. A copy of the proposed agreement shall be provided to LICENSOR prior to the execution of the Agreement.

 

2.2 Improvements. The parties acknowledge and agree that this Agreement shall apply to any and all improvements, modifications, enhancements, or other changes to the Licensed Technology created, conceived, developed, or reduced to practice by LICENSOR during the term of this Agreement within the Licensed Field (collectively, the “Licensed Technology Improvements”). Licensed Technology Improvements within the Licensed Field shall be considered to be a part of the Licensed Technology and shall be licensed to LICENSEE in accordance with the provisions of this Agreement.

 

3. DEVELOPMENT OBLIGATIONS

 

3.1 LICENSEE’s Obligations. LICENSEE shall use its commercially reasonable efforts to develop and commercialize the Licensed Products, and, in particular, LICENSEE will be responsible for the design, manufacturing, preclinical, clinical, and regulatory development activities of the Licensed Products in the Territory and shall bear the costs of such activities. LICENSEE shall be responsible for the good laboratory practices (“ GLP ”) and/or GLP pre-clinical toxicology studies, good manufacturing practices (“ GMP ”), GMP manufacturing of the Licensed Products, including the development of associated compounds, chemicals, substrates, devices, tools, dies, molds, and or related materials. In addition, the parties may elect to perform non-GLP pre-clinical toxicology studies as a prelude to GLP studies. In the event that LICENSEE, after using its commercially reasonable efforts, decides to halt or stop development, the termination provisions of Section 9 below shall apply.

 

CONFIDENTIAL 5  
 

 

3.2 Progress Reports. At intervals no longer than every six (6) months, LICENSEE shall provide a written summary status report of progress made toward commercialization, summarizing achievements toward commercialization in the last six months and communicate with LICENSOR by telephone or through in-person meetings on progress made toward achieving the development and commercialization of one or more Licensed Products.

 

3.3 Cooperation of LICENSOR. Upon execution of the Agreement, LICENSOR, in consideration of the various continuing payment obligations of LICENSEE under Article 5 (Royalties and Milestone Payments and Equity Interest) and Article 9 (Termination), shall provide to LICENSEE such assistance, and cooperation as shall be requested and pre-authorized in writing by LICENSEE relating to the development and commercialization of Licensed Products, such assistance and cooperation will be provided by LICENSOR to LICENSEE at a rate of $250/hour for consultant time and a minimum retainer of two (2) hours a month. LICENSEE shall, as it deems necessary, separately contract with LICENSOR for consulting services regarding the design and/or manufacturing and/or commercialization and/or general business purposes of the Licensed Products. The terms of such consulting agreement to be mutually agreed but will include a rate of $250/hour for consultant time and a minimum retainer of two (2) hours a month and guaranteed availability of ten (10) hours per month, being paid within 30 days of invoicing, and will be terminable by either party on sixty (60) days written notice. All other terms to be separately negotiated between LICENSOR and LICENSEE.

 

3.4 Provision of Product in Support of Development and Sales . LICENSEE will manufacture or will have manufactured the finished and packaged Licensed Products in support of development activities and for commercial sales.

 

4. FILING, PROSECUTION AND MAINTENANCE OF LICENSED PATENTS

 

4.1 Responsibility. LICENSEE, at its expense, shall be responsible, and shall have sole decision-making authority, for the preparation, filing, prosecution and maintenance of all patent applications and patents included in the Licensed Patents; provided, however, that if the LICENSEE determines to cease the preparation, filing, prosecution or maintenance of any patent application or patent included in the Licensed Patents, then LICENSOR, at its option and expense, shall have the right to assume responsibility for such preparation, filing, prosecution and maintenance. Prior to abandoning any patent application, Licensee will provide Licensor an adequate opportunity to assume such prosecution at its own expense before the application goes abandoned.

 

4.2 Delivery of Existing Documents. With respect to each Licensed Patent, each document or a draft thereof pertaining to the filing, prosecution, or maintenance of such Licensed Patent, including, without limitation, each patent application, office action, response to office action, request for terminal disclaimer, request for reissue or reexamination of any patent issuing from such application, and all other prosecution items contained in the file maintained by or for LICENSOR in respect of such Licensed Patent in the possession of LICENSOR or its counsel at the Effective Date shall be provided to LICENSEE within fifteen (15) days of the Effective Date and any such documents received by LICENSOR or its counsel from any patent office after the Effective Date shall be provided within fifteen (15) days after receipt.

 

CONFIDENTIAL 6  
 

 

5. ROYALTIES, MILESTONE PAYMENTS AND EQUITY

 

5.1 Royalties. Beginning with the First Commercial Sale in any country of any Licensed Product by LICENSEE or any of its Affiliates or Sublicensees, LICENSEE shall pay to LICENSOR royalties in accordance with the following schedule for Licensed Products sold by LICENSEE or its Affiliates and Sublicensees until the later to occur of (i) the expiration date of the last to expire of the Licensed Patents; or (ii) when a competitive generic product utilizing the Licensed Technology is marketed in the particular country in the Territory., LICENSEE will pay to LICENSOR the royalty specified below, for the manufacture, use, sale, import or offer for sale of such Licensed Product in the country where such manufacture, use, sale, import or offer for sale of such Licensed Product occurs, infringe a Valid Claim of any Licensed Patent or violate an exclusive marketing right granted by any governmental agency in such country in the absence of the License granted by Article 2 or a sublicense granted under Article 2:

 

  (i) Three percent (3%).
     
  (ii) For sales of Licensed Products by Sublicensees, ten percent (10%) of the total revenue received by LICENSEE, or any Affiliate of LICENSEE, from any other person or organization in the form of royalties, milestone payments or any other consideration (including the proportionate share of such non-cash consideration, for example and without limitation, stock, real property, and ownership interests) in respect of sublicense(s) granted by LICENSEE or any of its Affiliates under Article 2 (the “Sublicensee Revenue) in all countries in the Territory with the exception for Israel where LICENSOR shall receive eighteen percent (18%) of the Sublicensee Revenue. Notwithstanding the foregoing, in no event shall LICENSOR receive Sublicensee Revenue that is less cumulatively than the three percent (3%) royalty LICENSOR is entitled to if the sale had been made by LICENSEE to the Third Party. Additionally, regardless of LICENSEE’s sublicense to a Third Party, LICENSOR shall receive the Milestone Payments as set forth in Section 5.2 either from the LICENSOR or the Sublicensee;
     
  (iii) To the extent funds received by the LICENSEE or any Affiliate, from a Sublicensee or any other source are provided for and used for developing Licensed Products, such funds are not considered Sublicensee Revenue under Section 5.1(iii) and such funds shall not be subject to any royalty payment whatsoever to LICENSOR.

 

Only one royalty under this Section 5.1 shall be due and payable to LICENSOR by LICENSEE in respect of the sale of any Licensed Product, regardless of the number of Valid Claims covering such Licensed Product or any other considerations. Royalty payments shall be made within sixty (60) days after the end of the Accounting Period in which the sale is made.

 

CONFIDENTIAL 7  
 

 

5.2 Upfront and Milestone Payments. In addition to the payments provided for in Section 5.1, LICENSEE shall pay LICENSOR the following amounts upon the occurrence of the following events:

 

  In consideration for access to the Licensed Patents and Licensed Technology, LICENSEE shall make the following payments to LICENSOR:

 

LICENSEE shall be responsible for the patent prosecution expenses from October 1, 2016 through the earlier of the date of execution of this Agreement or the date that LICENSEE elects to terminate negotiations with respect to this Agreement (the “Patent Expenses”). The Patent Expenses shall not exceed $15,000. If it executes this Agreement, it shall pay one third (1/3) of the Patents Expenses upon execution of this Agreement (the “Closing”). One Third (1/3) of the Patent Expenses shall be paid sixty (60) days following Closing and one third (1/3) of the Patent Expenses shall be paid one hundred twenty (120) days following Closing.

 

TIME LICENSOR SHALL RECEIVE PAYMENTS   PAYMENT  
       
Upon execution of this Agreement (the “Closing”):   $ 60,000  
Sixty (60) days following Closing:   $ 60,000  
One hundred twenty days (120) following Closing:   $ 60,000  

 

  Development Milestone payments shall be paid by LICENSEE to LICENSOR as follows:

 

A. for the “family” of Licensed Products for use as a preventative and therapeutic neuroprotective against nerve agents and pesticides, LICENSEE shall make a one time payment of $500,000 as follows:

 

i. $250,000 upon no later than thirty (30) days from acceptance of submission of the regulatory filing of the first Licensed Product as preventative and therapeutic neuroprotectives against nerve agents and/or pesticides by the applicable Regulatory Authority.

 

ii. $250,000 upon no later than thirty (30) days from Approval of the first Licensed Product as preventative and therapeutic for use as neuroprotectives against nerve agents and/or pesticides by the applicable Regulatory Authority.

 

B. for the treatment of diseases LICENSEE shall make a one-time payment of $500,000 as follows:

 

i. $250,000 upon no later than thirty (30) days from acceptance of submission of the regulatory filing of the first Licensed Product for treatment of a disease (i.e. a product that is not as preventative and therapeutic neuroprotectives against nerve agents and/or pesticides) by the applicable Regulatory Authority.

 

CONFIDENTIAL 8  
 

 

ii. $250,000 upon no later than thirty (30) days from Approval of the First Licensed Product for treatment of a disease by the applicable Regulatory Authority.

 

5.3 Credits for Payments to Third Parties. In the event that LICENSEE and/or LICENSEE’s Affiliate is required to pay royalties to any third parties with respect to the development or commercialization of a Licensed Product, LICENSEE will have the right to offset such royalties against any payments owed to LICENSOR pursuant to Section 5.1, provided that no such offset shall result in a reduction of the royalties owed to LICENSOR pursuant to Section 5.1 to an amount that is less than fifty percent (50%) of the amount that would otherwise be due in respect of any Accounting Period.

 

5.4 Overdue Payments. The payments due under this Agreement shall, if overdue, bear interest until payment at a per annum rate equal to the lesser of ten (10) percent and the maximum permitted by law. The payment of such interest shall not preclude LICENSOR from exercising any other rights it may have as a consequence of the lateness of any payment.

 

5.5 Currency. All royalty payments and milestone payments under this Agreement shall be in United States Dollars. Whenever conversion from any foreign currency shall be required, such conversion shall be at the rate of exchange thereafter published in the Wall Street Journal for the business day closest to the end of the applicable Accounting Period.

 

5.6 Equity Interest . In consideration for entering into this Agreement, LICENSOR shall receive , within 30 calendar days, 31,550 shares of Intiva Inc. (“Intiva”) stock. This number reflects approximately one half of one percent of the amount of shares outstanding as of the date of this Agreement.

 

Upon approval of the first Licensed Product, LICENSOR shall be issued US$180,000 value of Intiva’s stock based upon the share price determined at the most recent private placement price per share with an unrelated third party, or if Intiva shares are publicly traded the average closing price for the previous 30 days (the “Additional Stock”). For purposes of illustration, if in the last private placement with an unrelated third party, the par share value of Intiva’s stock was equal to $5.00 per share, LICENSOR shall be issued 36,000 share of Additional Stock.

 

If the parties determine that the development of the Licensed Product is unfeasible, as demonstrated by the failure to develop a formulation or to establish a satisfactory regulatory pathway or a determination that the formulation to be Marketed may not be economically viable, but LICENSEE elects to acquire an interest in the Licensed Patents, in consideration for LICENSEE continuing to pay the cost of prosecuting the Licensed Patents and the issuance to LICENSOR of the Additional Stock referenced above which would not otherwise be issued to LICENSOR, LICENSOR and LICENSEE shall at the time LICENSEE elects to no longer seek to develop the Product agree that LICENSEE shall acquire a twenty five percent (25%) interest in the Licensed Patents, provided that LICENSEE has paid LICENSOR $180,000.

 

CONFIDENTIAL 9  
 

 

6. REPORTS AND PAYMENTS

 

6.1 Books of Accounts. LICENSEE shall keep, and shall cause each of its Affiliates and Sublicensees, if any, to keep full and accurate books of accounts containing all particulars that may be necessary for the purpose of calculating all royalties payable to LICENSOR. Such books of account shall be kept at their principal place of business and, with necessary supporting data shall, during all reasonable times for the two (2) years next following the end of the calendar year to which each shall pertain, be open for inspection at reasonable times by LICENSOR or its designee at LICENSOR’s expense for the purpose of verifying royalty statements or compliance with this Agreement. In the event that any audit performed under this Section 6.1 reveals an underpayment in excess of seven and one half percent (7.5%) of the total amount determined by the auditor to be due LICENSOR (the “Underpayment”), LICENSEE shall bear the full cost of such audit and shall remit any amounts due to LICENSOR within forty-five (45) days of receiving notice thereof from LICENSOR. LICENSOR shall have the right to audit yearly, provided however if such audit reveals an Underpayment, LICENSOR shall thereafter have the right to audit on a semi-annual basis (with the audit returning to a yearly basis after three (3) sequential semi-annual audits are conducted with no Underpayments discovered).

 

6.2 Quarterly Payments. In each year the amount of royalty due shall be calculated on a cash received basis on the Licensee and Affiliates and Sublicensees books as of the end of each Accounting Period as defined in Section 1.1 of this Agreement and shall be paid within the next sixty (60) day period following such date, every such payment to be supported by the accounting prescribed in Section 6.3.

 

6.3 Accounting Reports. With each quarterly payment, LICENSEE shall deliver to LICENSOR a full and accurate accounting to include at least the following information:

 

(a) Quantity of each Licensed Product sold by LICENSEE and its Affiliate or Sublicensees (by country);

 

(b) Inventory of each Licensed Product at end of each period held by LICENSEE and its Affiliate or Sublicensees (by country);

 

(c) Gross Sales billed and Net Sales received by LICENSEE or any of its Affiliates or Sublicensees (“Sellers”) for the sale of each Licensed Product with full detail of Sales Returns and Allowances used to determine the Net Sales;

 

(d) Names and addresses of all Sublicensees of LICENSEE; and

 

(e) Total Royalties payable to LICENSOR.

 

CONFIDENTIAL 10  
 

 

7. INFRINGEMENT

 

7.1 Infringement of Licensed Patents. Each party shall promptly notify the other party of evidence of infringement of a claim of a Licensed Patent by a third party. If either party shall have supplied the other party with written evidence demonstrating prima facie infringement of a claim of a Licensed Patent in the Licensed Field by a third party, LICENSEE shall have the right to take steps to protect the Patent Right in such claim, either upon notice from LICENSOR requesting such action, or on its own initiative. LICENSEE shall notify LICENSOR, within three (3) months of one party providing the other with evidence of infringement, whether LICENSEE intends to prosecute the alleged infringement. If LICENSEE notifies LICENSOR that it intends to so prosecute, LICENSEE shall (at its expense), within three (3) months of its notice to LICENSOR either (i) cause infringement to terminate or (ii) initiate and diligently prosecute legal proceedings against the infringer and in LICENSOR’s name if so required by law. In the event LICENSEE notifies LICENSOR that LICENSEE does not intend to prosecute said infringement, LICENSOR may, upon notice to LICENSEE, initiate legal proceedings against the infringer at LICENSOR’s expense. No settlement, consent judgment, or other voluntary final disposition of the suit which invalidates or restricts the claims of such Patent Rights may be entered into without the consent of the other party, which consent shall not be unreasonably withheld, but provided that, in the event one party (“the Objecting Party”) withholds consent for a proposed settlement, the party proposing the settlement may decline to support further costs of such suit or settlement discussions, and the Objecting Party shall be required to continue such suit or settlement discussions at its own expense. LICENSEE shall indemnify LICENSOR against any order for payment that may be made against LICENSOR in such proceedings brought by LICENSEE. LICENSOR shall indemnify LICENSEE against any order for payment that may be made against LICENSEE in such proceedings brought by LICENSOR to the extent arising out of any proceedings which LICENSOR brings at its own expense pursuant to Section 7.1 following LICENSEE’s decision not to prosecute any alleged infringement.

 

7.2 Cooperation. In the event one party shall initiate or carry on legal proceedings to enforce any Patent Right against any alleged infringer, the other party shall fully cooperate with and supply all assistance reasonably requested by the party initiating or carrying on such proceedings. The party which institutes any suit to protect or enforce a Patent Right shall have sole control of that suit and shall bear the reasonable expenses (including legal fees) incurred by said other party in providing such assistance and cooperating as is requested pursuant to this Section. The party initiating or carrying on such legal proceedings shall keep the other party informed of the progress of such proceedings and said other party shall be entitled to counsel in such proceedings but at its own expense. Any award paid by third parties as the result of such proceedings (whether by way of settlement or otherwise) shall first be applied to reimbursement of the unreimbursed legal fees and expenses incurred by either party and then the remainder shall be divided between the parties as follows:

 

(a) If the amount is based on lost profits, LICENSEE shall receive an amount equal to the damages the court determines LICENSEE has suffered as a result of the infringement less the amount of any royalties that would have been due LICENSOR on sales of Licensed Product lost by LICENSEE as a result of the infringement had LICENSEE made such sales, and LICENSOR shall receive an amount equal to the royalties it would have received if such sales had been made by LICENSEE, and

 

(b) As to awards other than those based on lost profits, sixty percent (60%) to the party initiating such proceedings and forty percent (40%) to the other party.

 

CONFIDENTIAL 11  
 

 

7.3 Infringement Actions by Third Parties. In the event that the making, selling or using of a Licensed Product in the Licensed Field infringes the intellectual property rights of others, LICENSEE will have the first right to control any negotiation or litigation with respect thereto; however no settlement, consent judgment or other voluntary final disposition of the infringement allegation may be entered into without the written consent, which shall not be unreasonably withheld, of LICENSOR.

 

7.4 Further Assurances; Progress Reports. For the purpose of the proceedings referred to in this Article 7, LICENSOR and LICENSEE shall permit the use of their names and shall execute such documents and carry out such other acts as may be necessary. The party initiating or carrying on such legal proceedings shall keep the other party informed of the progress of such proceedings and said other party shall be entitled to counsel in such proceedings but at its own expense, said expenses to be offset against any damages received by the party bringing any infringement suit against a third party in accordance with Section 7.2.

 

8. IDEMNIFICATION; REPRESENTATIONS AND WARRANTIES

 

8.1 Indemnification.

 

(a) LICENSEE shall indemnify, defend and hold harmless LICENSOR and its directors, officers, medical and professional staff, employees, independent contractors, and agents and their respective successors, heirs and assigns (each an “Indemnitee” under this Section 8.1(a)), against any liability, damage, loss or expense (including reasonable attorney’s fees and expenses of litigation) (collectively, “Losses”) incurred by or imposed upon such Indemnitees or any one of them in connection with any claims, suits, actions, demands or judgments arising out of any theory of product liability (including, but not limited to, actions in the form of tort, warranty, or strict liability) concerning any Licensed Product made, used or sold pursuant to any right or license granted under this Agreement other than Losses arising out of claims of infringement of intellectual property rights held by third parties by the practice of the Licensed Inventions, the existence of which rights constitute a breach of the representations and warranties given by LICENSOR under Section 8.2(b) or (c).

 

(b) LICENSOR shall indemnify, defend and hold harmless LICENSEE and its directors, officers, medical and professional staff, employees, independent contractors, and agents and their respective successors, heirs and assigns (each an “Indemnitee” under this Section 8.1(b)), against Losses incurred by or imposed upon such Indemnitees or any one of them in connection with any claims, suits, actions, demands or judgments arising out of any claims of infringement of intellectual property rights held by third parties by the practice of the Licensed Inventions, the existence of which rights constitute a breach of the representations and warranties given by LICENSOR under Section 8.2(b) or (c); provided that in no event shall Licensor’s liability for this indemnity and defense obligation exceed in the aggregate the total amount of Consideration actually paid to Licensor under this Agreement.

 

CONFIDENTIAL 12  
 

 

(c) No Indemnitee under clause (a) or clause (b) of this Section 8.1 shall be entitled to any indemnification under such clause for any Loss to the extent that such Loss is attributable to the negligent activities, reckless misconduct or intentional misconduct of such Indemnitee.

 

(d) Any Indemnitee under clause (a) or clause (b) of this Section 8.1 shall give the party from whom indemnification under such clause is sought (the “Indemnitor”) prompt written notice of any Losses or discovery of fact upon which such Indemnitee intends to base a request for indemnification under such clause, provided, however, that an Indemnitor’s obligations to such Indemnitee under this Section 8.1 shall not be rendered inapplicable as a result of the failure by such Indemnitee to notify such Indemnitor as required under this Section 8.1(d), unless such failure materially prejudices such Indemnitor’s ability to take action with respect to any such Loss.

 

(e) Each Indemnitor under this Section 8.1 agrees, at its own expense, to provide attorneys reasonably acceptable to an Indemnitee under this Section 8.1 to defend against any actions brought or filed against such Indemnitee with respect to the subject of indemnity contained herein, whether or not such actions are rightfully brought. Each Indemnitee under this Section 8.1 shall be entitled to participate in, but not control, the defense of such action and to employ counsel of its own choice for such purpose; provided, however, that such employment shall be at such Indemnitee’s own expense.

 

(f) Each Indemnitor shall have the sole right to consent to the entry of any judgment, enter into any settlement or otherwise dispose of any Loss, on such terms as such Indemnitor, in its sole discretion, shall deem appropriate.

 

8.2 Representations and Warranties.

 

Mutual representations:

 

(a) LICENSOR and LICENSEE represent and warrant to each other that: (i) it is duly organized and validly existing under the laws of its jurisdiction of incorporation or formation, and has full corporate or other power and authority to enter into this Agreement and to carry out the provisions hereof; (ii) it is duly authorized and has Board approval, in the case of LICENSEE and manager/member approval in the case of LICENSOR, to execute and delivery this Agreement and to perform its obligations hereunder and thereunder, and the person or persons executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate/company action; (iii) this Agreement is legally binding upon it, enforceable in accordance with its terms, and does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material law or regulations of any court, governmental body or administrative or other agency having jurisdiction over it; (iv) neither it nor any of its Affiliates have been debarred or is subject to debarment and will not use in any capacity, in connection with the services to be performed under this Agreement, and person who has been debarred pursuant to Section 306 of the United States Food, Drug and Cosmetic Act or who is subject of conviction in such section..

 

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LICENSOR represents to LICENSEE that:

 

(a) To the best of LICENSOR’s actual knowledge with respect solely to its Licensed Technology, as of the Effective Date there is no fact or circumstance that would prevent the use of the Licensed Technology to develop Licensed Products that could be Approved by a Regulatory Authority.

 

(b) LICENSOR is the sole and exclusive owner of all right, title and interest in and to the Patent Rights to the Licensed Patents originally listed on Schedule 1.11 and such rights, and all other rights granted to LICENSEE under the License existing as of the date hereof, are not subject to any encumbrance, lien or claim of ownership by any third party. LICENSOR has obtained all necessary assignments and made all appropriate filings with respect thereto in order to secure its sole and exclusive ownership rights in and to such Patent Rights, and all other rights granted to LICENSEE as of the date hereof. During the term of this Agreement, LICENSOR shall not knowingly take any action that would encumber the rights granted to LICENSEE hereunder.

 

(c) Except for the grant by LICENSOR to LICENSEE of the License and other rights in Article 2, which relate solely to the Licensed Product, LICENSOR has not, directly or indirectly, expressly or by implication, by action or omission or otherwise (i) assigned, transferred or conveyed any right, title or interest in or to the Patent Rights in the Licensed Patents and/or any other rights granted to LICENSEE under the License, (ii) granted any license or other right, title or interest in or to the Patent Rights in the Licensed Patents and/or any other rights granted to LICENSEE under the License, or (iii) agreed to or is otherwise bound by any covenant not to sue for any infringement, misuse or otherwise with respect to the Patent Rights in the Licensed Patents and/or any other rights granted to LICENSEE under the License.

 

(d) To the best of LICENSOR’s knowledge, there is no actual or threatened infringement by a third party of the Patent Rights in the Licensed Patents.

 

8.3 Limitation on Damages and Disclaimer. WITH THE EXCEPTION FOR INTENTIONAL MISCONDUCT OR GROSS NEGLIGENCE OF SUCH PARTY, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL, COLLATERAL, EXEMPLARY, PUNITIVE, OR CONSEQUENTIAL DAMAGES, INCLUDING LOSS OF INCOME, PROFIT OR SAVINGS, OF ANY PARTY, INCLUDING THIRD PARTIES, REGARDLESS OF THE FORM OF THE ACTION OR THE THEORY OF RECOVERY, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

OTHER THAN WARRANTIES SET FORTH HEREIN, EACH PARTY MAKES NO WARRANTY, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR ANY IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO ANY PATENT, TRADEMARK, SOFTWARE, TRADE SECRET, TANGIBLE RESEARCH PROPERTY, INFORMATION OR DATA LICENSED OR OTHERWISE PROVIDED TO THE OTHER PARTY HEREUNDER AND HEREBY DISCLAIMS THE SAME.

 

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8.4 Insurance . Licensee will maintain insurance in amounts and areas of coverage that are considered commercially reasonable in this industry. The Licensee will obtain such insurance coverages and will provide each other with proof of such insurance coverage.

 

9. TERMINATION

 

9.1 Upon Expiration of Patent Rights and Exclusive Marketing Rights.

 

(a) Unless otherwise terminated as provided for in this Agreement, the License and other rights granted to LICENSEE in Article 2 will continue on a country by country and Licensed Product by Licensed Product basis, and shall expire in each country for each Licensed Product sold in that country when the manufacture, use, sale, import or offer for sale of such Licensed Product in said country on the later to occur of (i) the expiration date of the last to expire of the Licensed Patents or when a competitor generic product utilizing the Licensed Technology is marketed in the particular country in the Territory. In such an event, the License, with respect to such country and such Licensed Product, will be automatically converted to a fully paid-up royalty–free perpetual license that grants LICENSEE the same bundle of rights as the License, including all the rights under Section 2.1(b) to grant sublicenses.

 

(b) Notwithstanding the foregoing, in the event LICENSOR and/or LICENSEE are unable to obtain patent protection for a Licensed Product in any particular country, the License shall be in effect with respect to such Licensed Product in such country, with LICENSEE paying LICENSOR fees equal to the normal royalty rates and subject to the conditions specified in Section 5.1, for a period of ten (10) years after the First Commercial Sale of said Licensed Product in such country, so long as generic competition (where “generic competition” exists when a product having the same active pharmaceutical ingredient as a Licensed Product, and utilizing the Licensed Technology, is marketed by a competitor in the same country as said Licensed Product) is absent with regard to said Licensed Product, as consideration for the right to use the Licensed Know How and the unpatented Licensed technology as well as any continuing technical and informational marketing support from LICENSOR. At the earlier of the expiration of the ten (10) year period or when generic competition begins with regard to said Licensed Product in a country for which there is no Licensed Patent, the License, with respect to such country and Licensed Product, will convert to the fully paid-up royalty-free perpetual license described in Section 9.1(a), including all the rights under Section 2.1(b) to grant sublicenses.

 

(c) If LICENSEE was able to operate for some period under the protections of patent rights with regard to a particular Licensed Product in a particular country, then, for so long as generic competition is absent with regards to said Licensed Product in said particular country and upon the expiration of such patent rights and/or exclusive marketing rights, as described in Section 9.1(a), LICENSEE shall continue to pay LICENSOR fees equal to the normal royalty rates and subject to the conditions specified in Section 5.1 for the right to use the Licensed Know How and the unpatented Licensed Technology as well as any continuing technical and informational marketing support from LICENSOR.

9.2 Upon Default, Generally. If either party shall fail to faithfully perform any of its obligations under this Agreement, the non-defaulting party may give written notice of the default to the defaulting party. Unless such default is corrected within sixty (60) days after such notice, the notifying party may terminate this Agreement upon thirty (30) days prior written notice; provided, however, in the event that prior to the expiration of any such sixty (60) day period, such breaching party has in good faith commenced to use commercially reasonable efforts to remedy such breach and the completion of such remedy, due to reasons beyond the control of such breaching party, requires more than sixty (60) days to complete, then such sixty (60) day period shall be extended for so long as such breaching party is continuing in good faith to use commercially reasonable efforts to remedy such breach.

 

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9.3 If Commercially Unfeasible. LICENSEE may terminate this Agreement on thirty (30) days written notice to Licensor, without penalty and at any time, if LICENSEE, at its sole discretion, determines that further development, manufacture, and/or sales of the Licensed Products will be commercially unfeasible.

 

9.4 Effect on Sublicenses. In the event that the License granted to LICENSEE under this Agreement is terminated, any sublicense under such License granted prior to termination of said License shall remain in full force and effect, provided that:

 

(a) the Sublicensee is not then in breach of its sublicense agreement;

 

(b) the Sublicensee agrees to be bound to LICENSOR as the licensor under the terms and conditions of this Agreement, as modified by the provisions of this Section 9.4;

 

(c) LICENSOR shall have the right to receive any payments payable to LICENSEE under such sublicense agreement to the extent that they are reasonably and equitably attributable to such Sublicensee’s right under such sublicense to use and exploit Patent Rights in the Licensed Patents and other rights granted in the License;

 

(d) the Sublicensee agrees to be bound by the development and commercialization obligations of LICENSEE pursuant to Article 3 (whether set by the parties or by arbitration) in the field and territory of the sublicense;

 

(e) LICENSOR has the right to terminate such sublicense upon thirty (30) days prior written notice to LICENSEE and such Sublicensee in the event of any material breach of the obligation to make the payments described in clause (c) of this Section 9.3, unless such breach is cured prior to the expiration of such thirty (30) day period, and shall further have the right to terminate such sublicense in the event of Sublicensee’s failure to meet its development obligations pursuant to clause (d) hereof; and

 

(f) LICENSOR shall not assume, and shall not be responsible to each Sublicensee for, any representations, warranties or obligations of LICENSEE to such Sublicensee, other than to permit such Sublicensee to exercise any rights to the Patent Rights in the Licensed Patents and other rights under the License that are granted under such sublicense agreement consistent with the terms of this Agreement.

 

9.5 Payments. Upon termination of the License granted hereunder, LICENSEE shall pay LICENSOR all royalties, milestone payments and any other amounts due or accrued up to and including the date of termination and (ii) for twelve (12) months following the date of termination, the sale of Licensed Products manufactured prior to the termination date, if LICENSEE and LICENSOR separately agree to conduct such sales.

 

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10. CONFIDENTIAL INFORMATION

 

10.1 Definitions. Each party receiving information (the “Receiving Party”) disclosed to it by the other party (the “Disclosing Party”) acknowledges that by reason of its relationship to the Disclosing Party hereunder, between the parties, will have, or has had, access to certain information and materials, including the terms of this Agreement and information concerning the Disclosing Party’s business, plans, technology, products and/or services that are confidential and of substantial value to the Disclosing Party (“Confidential Information”).

 

10.2 Obligation to Protect Confidential Information. Each Receiving Party agrees that it shall (i) take every reasonable precaution to protect the confidentiality of Disclosing Party’s Confidential Information from unauthorized access or use and (ii) not use the Disclosing Party’s Confidential Information in any way for the Receiving Party’s own account or the account of any third party except for the purposes of performing its obligations under this Agreement. Upon termination of this Agreement and at the request of the Disclosing Party, the Receiving Party will return to Disclosing Party all of the Disclosing Party’s Confidential Information in its possession or within its control or destroy such Confidential Information and certify in writing to the Disclosing Party that all such information has been destroyed; however, Receiving Party shall have the right to retain one (1) copy of the Disclosing Party’s Confidential Information solely for the purpose of determining Receiving Party’s obligations under this Agreement.

 

10.3 Exclusions. Confidential Information does not include any information that the Receiving Party can demonstrate by written records: (a) was known to the Receiving Party prior to its disclosure by the Disclosing Party; (b) was independently developed by the Receiving Party without use of or reference to the Disclosing Party’s Confidential Information; (c) was or becomes publicly known through no wrongful act of the Receiving Party; (d) was rightfully received from a third party whom the Receiving Party had reasonable grounds to believe was authorized to make such disclosure without restriction; or (e) has been approved for public release by the Disclosing Party’s prior written authorization. Further, if the Receiving Party is required to disclose Confidential Information pursuant to a subpoena, court order or other similar process (“Court Order”), it is agreed that the Receiving Party shall provide the Disclosing Party with notice of such request(s), to the extent that such notice is legally permissible, so that the Disclosing Party may seek an appropriate protective order. In the event that the Disclosing Party is not successful in obtaining a protective order and the Receiving Party is compelled to disclose the Confidential Information, the Receiving Party may disclose such information solely in accordance with and for the limited purpose of compliance with the Court Order without liability hereunder.

 

10.4 Disclosures Required by Law. In addition, either party may disclose, on a confidential basis, the existence and terms of this Agreement to existing or potential investors in such party, or in connection with a private or public offering of such party’s securities. Furthermore, either party may disclose, on a confidential and need-to-know basis, the existence and terms of this Agreement and the proposed terms of this Agreement to its counsel, accountants, directors and other similar advisors (the “Representatives”). The foregoing shall not, however, operate or grant either party any rights under any patents, trade secrets, copyrights, or any other proprietary rights of the other party.

 

CONFIDENTIAL 17  
 

 

10.5 Remedies. The parties acknowledge that money damages would be both incalculable and an insufficient remedy for any breach of the confidentiality provisions of this Agreement, and that any such breach would cause the other party irreparable harm. Accordingly, the parties hereto agree that in the event of any such breach or threatened breach hereof by a party or by its respective Representatives, the other party to this Agreement shall be entitled, in addition to any other available remedies at law, to seek equitable relief, including injunctive relief and specific performance without the posting of any bond or other security.

 

11. MISCELLANEOUS

 

11.1 Entire Agreement. This Agreement constitutes the entire understanding between the parties with respect to the subject matter hereof.

 

11.2 Notices. All notices and other communications required or permitted under this Agreement shall be in writing and shall be sent by registered or certified mail (return receipt requested and postage prepaid), or delivered by hand, by messenger or by a recognized overnight delivery service, addressed to each party as follows:

 

if to LICENSOR:

 

KOTZKER CONSULTING LLC

20 Highview Ln.

Yardley, PA 19067

Attn: Joseph Morgan, M.D.

 

With a copy to:

 

Gerard P. Norton

Fox Rothschild LLP

997 Lenox Drive, Building 3

Lawrenceville, NJ

08543

 

if to LICENSEE:

 

INTIVA KOTZKER PHARMACEUTICALS INC.

3773 Cherry Creek North Drive

Suite 575

Denver Colorado 80209

Attn: Jeffery Friedland

 

CONFIDENTIAL 18  
 

 

With a copy to:

 

Robert I. Goldfarb

Robert I. Goldfarb P.A.

6100 Hollywood Blvd, Suite 207

Hollywood, FL 33024

 

Each such notice or other communication shall for all purposes of this Agreement be treated as effective or having been given (i) if sent by registered or certified mail, the earlier of receipt and five (5) business days after dispatch, and (ii) if delivered in person, by messenger, or by overnight courier, on the business day delivered.

 

11.3 Amendments; Waivers. This Agreement may be amended or any of its terms or conditions may be waived only by a written instrument executed by the parties or, in the case of a waiver, by the party waiving compliance. The failure of either party at any time or times to require performance of any provision hereof shall in no manner affect its rights at a later time to enforce the same. No waiver by either party of any condition shall be deemed as a further or continuing waiver of such condition or term or of any other condition or term.

 

11.4 Assignment, Successors. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns; provided that this Agreement shall not be assignable by LICENSOR without LICENSEE’s written consent (which consent shall not be unreasonably withheld, delayed or conditioned) except for the right to receive royalties or other payments payable herein, and further provided that LICENSEE may, with the consent of LICENSOR (which consent shall not be unreasonably withheld, delayed or conditioned), transfer its interest or any part thereof under this Agreement to a wholly-owned subsidiary of LICENSEE or to any assignee or purchaser of the portion of its business associated with the manufacture and sale of Licensed Product, so long as such transferee assumes and agrees to be bound by the provisions of this Agreement.

 

11.5 Force Majeure. Any delays in or failures of performance by either party under this Agreement shall not be considered a breach of this Agreement if and to the extent caused by occurrences beyond the reasonable control of the party affected, including but not limited to: acts of God, acts, regulations, or laws of any government, strikes or the concerted acts of workers, fires, floods, explosions, riots, wars, rebellion, and sabotage. Any time for performance hereunder shall be extended by the actual time of delay caused by such occurrence; provided, however, that either party shall have the right to terminate this Agreement if any such extension endures for more than twelve (12) consecutive months.

 

11.6 Publicity. Neither party shall use the name of the other party or any staff member, officer, employee or student of the other party or any adaptation thereof in any advertising, promotional or sales literature, publicity or in any document employed to obtain funds or financing without the prior written approval of the party or individual whose name is to be used. Notwithstanding the foregoing, the parties agree that LICENSEE may disclose to its Representatives, investors and potential investors that Dr. Joseph Morgan is the physician and scientist who conceived of the concepts and is reflected as the inventor in the patent applications.

 

CONFIDENTIAL 19  
 

 

11.7 Governing Law. This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Colorado, without regard to its choice of law principles.

 

11.8 Alternative Dispute Resolution. For any and all claims, disputes, or controversies arising under, out of, or in connection with this Agreement, except issues relating to the validity, construction or effect of any Patent Right, which the parties shall be unable to resolve within sixty (60) days, then either party may after such sixty (60) day period advise the other party of its intent to pursue such claim, dispute, or controversy in Alternative Dispute Resolution (ADR) in a writing which describes in reasonable detail the nature of such dispute. By not later than five (5) business days after the recipient has received such notice of dispute, each party shall have selected for itself a representative who shall have the authority to bind such party and shall additionally have advised the other party in writing of the name and title of such representative. By not later than ten (10) business days after the date of such notice of dispute, such representatives shall agree upon a third party, which is in the business of providing Alternative Dispute Resolution (ADR) services (hereinafter, “ADR Provider”) and shall schedule a date with such ADR Provider to engage in ADR. Thereafter, the representatives of the parties shall engage in good faith in an ADR process under the auspices of the selected ADR Provider. If within the aforesaid ten (10) business days after the date of the notice of dispute the representatives of the parties have not been able to agree upon an ADR Provider and schedule a date to engage in ADR, or if they have not been able to resolve the dispute within thirty (30) business days after the conclusion of ADR, the parties shall have the right to pursue any other remedies legally available to resolve such dispute in either the state or federal courts of Colorado, to whose jurisdiction for such purposes each of LICENSOR and LICENSEE hereby irrevocably consents and submits. Notwithstanding the foregoing, nothing in this Section 11.8 shall be construed to waive any rights or timely performance of any obligations existing under this Agreement.

 

11.9 Severability. If any provision(s) of this Agreement are or become invalid, are ruled illegal by any court of competent jurisdiction or are deemed unenforceable under then current applicable law from time to time in effect during the term thereof, it is the intention of the parties that the remainder of this Agreement shall not be affected thereby. It is further the intention of the parties that in lieu of each such provision which is invalid, illegal or unenforceable, there be substituted or added as part of this Agreement a provision which shall be as similar as possible in economic and business objectives as intended by the parties to such invalid, illegal or enforceable provision, but shall be valid, legal and enforceable.

 

11.10 Independent Contractors. It is expressly agreed that LICENSOR, on the one hand, and LICENSEE, on the other hand, shall be independent contractors and that the relationship between the two parties shall not constitute a partnership, joint venture or agency. Neither LICENSOR, on the one hand, nor LICENSEE, on the other hand, shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other, without the prior written consent of the other party to do so. All persons employed by a party shall be employees of such party and not of the other party and all costs and obligations incurred by reason of any such employment shall be for the account and expense of such party.

 

11.11 Survival. Sections 5, 6, 8, 9 10 and 11 shall survive the expiration or termination of this Agreement.

 

11.12 Counterparts. This Agreement may be executed in two counterparts, each of which shall be enforceable against the party actually executing such counterpart, and both of which together shall constitute one instrument.

 

11.13 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not considered in construing or interpreting this Agreement.

 

THE PARTIES have duly executed this Agreement as of the date first shown above written.

 

[signature page follows]

 

CONFIDENTIAL 20  
 

 

[signature page to Exclusive License Agreement]

 

LICENSOR:   LICENSEE:
KOTZKER CONSULTING LLC   INTIVA KOTZKE R PHARMACEUTICALS INC.
                                           
BY:     BY:  
NAME:     NAME:  
TITLE:     TITLE:  
         
         
         
         

 

CONFIDENTIAL 21  
 

 

Schedule 1.11

 

Patents and Patent Applications

 

Country   Status   Application #   Filing Date   Publication #   Publication Date
Canada   Pending   2,895,805   18-Jun-2015        
European Patent Office   Published   13866227.5   17-Jul-2015   2934512   28-Oct-2015
Israel   Pending   238946   21-May-2015        
India   Pending   1877/KOLNP/2015   16-Jun-2015        
United States   Published   14/649,951   05-Jun-2015   2015-0313868   05-Nov-2015
Untiled States   Expired   61/738,782   18-Dec-2012        
PCT   Expired   PCT/US13/76223   18-Dec-2013   2014/100231   26-Jun-2014

 

CONFIDENTIAL 22  
 

 

 

EXCLUSIVE LICENSE AGREEMENT

 

THIS EXCLUSIVE LICENSE AGREEMENT (the “Agreement”), effective as of this 28th day of February, 2018, between ACCU-BREAK PHARMACEUTICALS, INC. , a Florida corporation having a business address of 6100 Hollywood Boulevard, Suite 207, Hollywood, FL 33024 (the “Licensor”) and INTIVA BIOPHARMA INC. , a Delaware corporation having a business address at 4340 East Kentucky Avenue, Suite 206, Denver, CO 80246 (the “Licensee”).

 

RECITALS

 

WHEREAS, Licensor owns all right, title and interest in certain Licensed Technology (as hereinafter defined), for use with Cannabinoids (as hereinafter defined) in recreational, Medicinal and Pharmaceutical (as both terms are hereinafter defined) products for the treatment of various medical conditions and disorders for humans and animals; and

 

WHEREAS, Licensee desires to license Licensor’s right, title and interest in the Licensed Technology in the Licensed Field and in the Territory (as hereinafter defined), and Licensee desires to secure such license in order to develop, commercialize, sell, and license throughout the Territory products that embody or employ the Licensed Technology;

 

NOW THEREFORE, in consideration of the premises, and the receipt of good and valuable consideration the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

1. DEFINITIONS

 

1.1 “Accounting Period” shall mean each three-month period ending March 31, June 30, September 30, and December 31 during the term of this Agreement.

 

1.2 “Affiliate” with respect to each party shall mean any corporation or other legal entity controlling, controlled by, or under common control with such party. The term “control” means possession, direct or indirect, of the powers to direct or cause the direction of the management and policies of an entity, whether through the ownership of voting securities, by contract or otherwise.

 

1.3 “API” means active pharmaceutical ingredient.

 

1.4 “Cannabinoids” means any of the chemical compounds that are the active components of the Cannabis genus of plants and its three species, Cannabis sativa, Cannabis indica, and Cannabis ruderalis ; whether the compounds are synthetically produced or plant-derived, as well as cannabinoid compounds, formulations or products, that include single and/or multiple Cannabinoids including both synthetic and plant-derived Cannabinoids, as well as any and all Cannabinoid analogues. For formulations or compounds which may include combinations of API’s, other than Cannabinoids or terpenes, it is being agreed that if the API is another FDA approved Pharmaceutical, Licensor approval will be required to ensure that the API is not the subject of a current Licensor product, or the product of another licensee of the Licensor.

 

CONFIDENTIAL 1  
 

 

1.5 “Effective Date” shall mean the date first written above.

 

1.6 “FDA” shall mean the United States Food and Drug Administration and any successor thereto.

 

1.7 “First Commercial Sale” shall mean the first sale of any Licensed Product by Licensee, its Affiliates or Sublicensees, but not including transfers or dispositions of Licensed Product for charitable, promotional, pre-clinical, clinical, regulatory or governmental purposes for which Licensee receives no payment.

 

1.8 “GMP” means good manufacturing practices required in order to conform to the guidelines recommended by agencies that control the authorization and licensing of the manufacture and sale of food and beverages, cosmetics, Pharmaceutical products, dietary supplements, and medical devices.

 

1.9 “License” shall have the meaning ascribed to that term in Section 2.1(a).

 

1.10 “License Fee” shall have the meaning ascribed to that term in Section 5.1(a).

 

1.11 “Licensed Field” shall mean the use of Cannabinoids, together with the Licensed Technology for recreational, Medicinal and Pharmaceutical purposes in humans and animals.

 

1.12 “Licensed Inventions” shall mean the inventions claimed in the Licensed Patents.

 

1.13 “Licensed Know-how” shall include all technology, materials, research data, designs, formulas, process information, manufacturing information, application information, commercialization information, clinical data, scientific data, medical data, and any other information useful from time to time for the design, development, manufacturing, use, and/or commercialization of the Licensed Products, whether or not eligible for protection under the patent laws of the United States or elsewhere and whether or not any such technology, materials, information, data and the like related thereto, would be enforceable as a trade secret or the copying of which would be enjoined or restrained by a court as constituting unfair competition, which is developed by, or in the possession or control of, Licensor now or at any time during the term of this Agreement other than such information that is independently developed by Licensee or its agents, as evidenced by contemporaneous written records.

 

1.14 “Licensed Patents” shall mean any and all rights arising out of or resulting from (i) the patents and patent application set forth in Schedule 1.14 attached to this Agreement, as well as any additional patents or patent applications related to any aspect of any Licensed Technology Improvements, Licensed Know-how, Licensed Products, and/or Licensed Technology (as herein defined) filed prior to or during the term of this Agreement and (ii) any patent granted in respect of all such applications, as well as, without limitation, any substitutions, divisions, continuations, continuations-in-part, reissues, renewals, re-examinations, extensions, supplementary protection certificates, confirmations, registrations, revalidations and the like, of any and all such patents and patent applications and any international equivalents thereof.

 

CONFIDENTIAL 2  
 

 

1.15 “Licensed Products” shall mean any and all products comprising tablets with Cannabinoids) utilizing the Licensed Technology for the delivery of a recreational, Medicinal or Pharmaceutical Cannabinoids product in specific dosage forms.

 

1.16 “Licensed Technology” shall mean the aggregate of the Licensed Inventions, the Licensed Know-how, the Licensed Products and the Licensed Patents and any other information and/or technology related to the Licensed Products and/or the design and/or the manufacturing of the Licensed Products.

 

1.17 “Licensed Technology Improvements” shall have the meaning ascribed to that term in Section 2.2.

 

1.18 “Medicinal” shall mean any product containing marijuana, hemp or cannabis produced and sold for health, wellness, or nutritional purposes, including as herbal medicine, including products produced or sold through U.S. state-licensed or regulated marijuana programs and comparable programs in other countries and jurisdictions.

 

1.19 “Milestone Payments” shall have the meaning ascribed to that term in Section 5.1(b).

 

1.20 (a) “Net Sales” shall mean the Gross Sales (as defined and calculated in accordance with US generally accepted accounting principles (“GAAP”)) of Licensed Products by Licensee or any of its Affiliates or Sublicensees (“Sellers”) to a third party that is not an Affiliate or Sublicensee of Licensee (“Customer”), less applicable Sales Returns and Allowances (as defined below), and corresponding to the definition of actual net sales used in the audited consolidated financial statements of Licensee:

 

“Sales Returns and Allowances” means the sum of

 

  (a) (i) as determined under US GAAP, trade, cash, and quantity discounts or rebates (other than price discounts granted at the time of invoicing and which are included in the determination of Gross Sales), credits or allowances given or made for rejection or return of, and for uncollectible amounts on, previously sold Licensed Products or for retroactive price reductions (including any types of rebates and charge-backs), (ii) taxes, duties, or other governmental charges levied on or measured by the billing amount for Licensed Products, and (iii) credits for allowances given or made for wastage, replacement, indigent patient, and any other sales programs for Licensed Products; and
  (b) periodic adjustments of the amount determined in (a) to reflect amounts actually incurred by Licensee for items (i), (ii), and (iii) in clause (a).

 

(b) For purposes of determining Gross Sales, a “sale” shall not include transfers or dispositions for charitable, promotional purposes or for pre-clinical, clinical, regulatory or governmental testing purposes for which a Seller receives no payment.

 

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(c) If a Seller commercially uses or disposes of any Licensed Product by itself (as opposed to use or disposition of the Licensed Product as a component of a combination of active functional elements) other than in a bona fide sale to a bona fide Customer, the Gross Sales price of the Licensed Product for purposed of calculating Gross Sales shall be the price which would be then payable in an arm’s length transaction with such a Customer.

 

(d) Transfer of a Licensed Product within a Seller or between or among Licensee and its Affiliate and Sublicensees for sale by the transferee shall not be considered a sale, commercial use or disposition for the purpose of the foregoing subsections; in the case of such transfer the Gross Sales price shall be the Gross Sales price of the Licensed Product when sold to a third party by the transferee.

 

1.21 “Patent Right” shall mean any right, title or interest in any Licensed Patent.

 

1.22 “Pharmaceutical” means relating to drugs and subject to a variety of laws and regulations that govern the patenting, testing, safety, efficacy and marketing of drugs under the rules and regulations of the FDA or similar international agencies

 

1.23 “Regulatory Authorities” shall mean the governmental authorities responsible for regulating the development, marketing, and/or sales of Pharmaceutical products in a particular country.

 

1.24 “Seller” shall mean with respect to any sale of a Licensed Product the party responsible for such sale, where such party may be, as applicable, Licensee, an Affiliate of Licensee or a Sublicensee.

 

1.25 “Sublicensee” shall mean any third party licensed by Licensee or by an Affiliate thereof to develop or have developed, make or have made, use or have used, sell or have sold, import or have imported any Licensed Product. For the avoidance of doubt, a wholesaler, distributor, or similar entity which purchases any Licensed Product from Licensee or any of its Affiliates, shall not be deemed to be a Sublicensee.

 

1.26 “Sublicensee Payments” shall have the meaning ascribed to that term in Section 5.2(ii).

 

1.27 “Term” shall mean the period during which this Agreement is in effect, commencing on the Effective Date and continuing until the termination of the Agreement.

 

1.28 “Territory” shall mean the World.

 

1.29 “Valid Claim” shall mean any pending or issued claim of any patent application or patent that has not been finally rejected or declared invalid or unenforceable by a patent office or court of competent jurisdiction in any unappealed and unappealable decision.

 

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2. LICENSE

 

2.1 Grant of License. Subject to the provisions of this Agreement, Licensor hereby grants Licensee, including Licensee’s Affiliates,

 

(a) during the Term, a royalty-bearing, Territory-wide license (the “License”) in the Licensed Field under the Patent Rights to the Licensed Technology, as well as under the Licensed Patents, the Licensed Know-how, and the Licensed Technology, regardless of whether such Licensed Patents are actually granted, to use the Licensed Know-how and Licensed Technology and to develop and have developed, make and have made, use and have used, sell and have sold, offer for sale and have offered for sale, import and have imported, export and have exported, any and all inventions claimed in the Licensed Patents related to the Licensed Products and/or any compounds, chemicals, substrates, devices, tools, dies, molds or any other materials whatsoever that are useful in the development and/or manufacturing and/or sale of the Licensed Products, and particularly including, without limitation, such license to develop and have developed, make and have made, use and have used, sell and have sold, offer for sale and have offered for sale, import and have imported, export and have exported Licensed Products, which license shall be exclusive even as to Licensor, and

 

(b) the right to grant bona fide sublicenses to third parties, to develop and have developed, to make and have made, use and have used, sell and have sold, import and have imported, export and have exported, Licensed Products, and to exercise all other rights under the License; provided, however, Licensee shall not have the right to grant any sublicense or to transfer any of its rights under the License unless each such sublicense or other transfer granted by Licensee contains terms and conditions under which the Sublicensee or transferee will be bound in the same manner as Licensee is under this Agreement. A copy of the proposed agreement shall be provided to Licensor prior to the execution of the Agreement.

 

2.2 Improvements. The parties acknowledge and agree that this Agreement shall apply to any and all improvements, modifications, enhancements, or other changes to the Licensed Technology created, conceived, developed, or reduced to practice by Licensor during the Term of this Agreement within the Licensed Field (collectively, the “Licensed Technology Improvements”). Licensed Technology Improvements within the Licensed Field shall be considered to be a part of the Licensed Technology and shall be licensed to Licensee in accordance with the provisions of this Agreement.

 

3. DEVELOPMENT OBLIGATIONS

 

3.1 Licensee’s Obligations. Licensee shall use its commercially reasonable efforts to develop and commercialize one or more Licensed Products, and, in particular, Licensee will be responsible for the (i) development and manufacture of recreation and medicinal License Products and (ii) design, development, manufacturing, preclinical, clinical, and regulatory development activities of Pharmaceutical Licensed Products in the Territory and shall bear the costs of such activities. Licensee shall be responsible for the GMP manufacturing of the Licensed Products, where applicable, including the development of associated compounds, chemicals, substrates, devices, tools, dies, molds, and or related materials.

 

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3.2 Progress Reports. At intervals no longer than every six (6) months, Licensee shall communicate with Licensor by telephone or through in-person meetings on progress made toward achieving the development and commercialization of one or more Licensed Products.

 

3.3 Cooperation of Licensor. Licensor, in consideration of the various continuing payment obligations of Licensee under Article 5 (License Fees, Milestone Payments and Royalties) and Article 9 (Termination), shall provide to Licensee such assistance, consultation and cooperation as shall be reasonably requested by Licensee relating to the development and commercialization of Licensed Products. Licensee shall, as it deems necessary, separately contract with Licensor for consulting services regarding the design and/or manufacturing of the Licensed Products. Licensor shall make available its personnel to provide such consulting services at commercially reasonable consulting rates, and in accordance with other terms to be separately negotiated between Licensor and Licensee. No compensation shall be paid to Licensor for any disclosures required under this Agreement.

 

3.4 Provision of Product in Support of Development and Sales . Licensee will manufacture or will have manufactured the finished and packaged Licensed Products in support of development activities and for commercial sales.

 

4. FILING, PROSECUTION AND MAINTENANCE OF LICENSED PATENTS

 

4.1 Responsibility. Licensor, at its expense, shall be responsible, and shall have sole decision-making authority, for the preparation, filing, prosecution and maintenance of all existing patent applications and patents included in the Licensed Patents. Additionally, Licensee, at its expense, shall be responsible and shall work together with Licensor with respect to the preparation, filing and prosecution of any new patent applications using the Licensed Technology with the Licensed Products.

 

4.2 Delivery of Existing Documents. With respect to each Licensed Patent, each document or a draft thereof pertaining to the filing, prosecution, or maintenance of such Licensed Patent, including, without limitation, each patent application, office action, response to office action, request for terminal disclaimer, request for reissue or reexamination of any patent issuing from such application, and all other prosecution items contained in the file maintained by or for Licensor in respect of such Licensed Patent in the possession of Licensor or its counsel at the Effective Date shall be provided to Licensee within thirty (30) days of the Effective Date and any such documents received by Licensor or its counsel from any patent office after the Effective Date shall be provided within fifteen (15) days after receipt.

 

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5. LICENSE FEES, MILESTONE PAYMENTS AND ROYALTIES

 

5.1 License Fees and Milestone Payments.

 

(a) Licensee shall pay Licensor a License fee in the total amount of $100,000 (the “License Fee”), which License Fee shall be payable as follows:

 

  The amount of $35,000 in the form of cash for access to the Licensed Technology will be paid by Licensee to Licensor upon the date of execution of this Agreement;
  The amount of $30,000 in the form of cash shall be due within one hundred eighty (180) days from the date of execution of this Agreement; and
  The amount of $35,000 in the form of cash or (at the option of Licensee) common stock of Licensee, shall be due within one (1) year from the date of execution of this Agreement.

 

(b) With respect specifically to Pharmaceutical Licensed Products, milestone payments (the “Milestone Payments”) may be paid in cash or (at the option of Licensee) common stock of Licensee pursuant to the following:

 

  A milestone payment of $100,000 shall be due upon approval of filing by each Regulatory Authority of each Pharmaceutical Licensed Product;
     
  A milestone payment of $100,000 shall be due upon approval by each Regulatory Authority of each Pharmaceutical Licensed Product;
     
  A milestone payment of $50,000 shall be due upon achievement of $10,000,000 of cumulative Net Sales for any and all of the Licensed Products (for clarity purposes, this payment is a one-time only payment) in the Territory;
     
  A milestone payment of $50,000 shall be due upon achievement of $25,000,000 of cumulative Net Sales for any and all of the Licensed Products (for clarity purposes, this payment is a one-time only payment) in the Territory;
     
  A milestone payment of $50,000 shall be due upon achievement of $50,000,000 of cumulative Net Sales for any and all of the Licensed Products (for clarity purposes, this payment is a one-time only payment) in the Territory.

 

(c) For the purposes of this Section 5.1, if License Fees and/or Milestone Payments are paid with common stock of Licensee, the shares shall not be registered under federal securities laws and shall be valued using the weighted average over the five (5) trading days immediately preceding the due date of the payment.

 

5.2 Royalties. Beginning with the First Commercial Sale in any country of any Licensed Product by Licensee or any of its Affiliates or Sublicensees, Licensee shall pay to Licensor royalties in accordance with the following schedule for Licensed Products sold by Licensee or its Affiliates and Sublicensees so long as the manufacture, use, sale, import or offer for sale of such Licensed Product would, in the country where such manufacture, use, sale, import or offer for sale of such Licensed Product occurs, infringe a Valid Claim of any Licensed Patent or violate an exclusive marketing right granted by any governmental agency in such country in the absence of the License granted by Article 2 or a sublicense granted under Article 2:

 

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  (i)  For sales of Licensed Products by Licensee and/or any Affiliate, four percent (4%) of the annual Net Sales thereof.
     
  (ii)  For sales of Licensed Products by Sublicensees, twenty-five percent (25%) of the total revenue received by Licensee, or any Affiliate of Licensee, from any other person or organization in the form of royalties, milestone payments or any other consideration (including the proportionate share of such non-cash consideration, for example and without limitation, stock, real property, and ownership interests) in respect of sublicense(s) granted by Licensee or any of its Affiliates under Article 2 (“Sublicensee Payments”);
     
  (iii)  Notwithstanding the foregoing (i) and (ii), the License Fee and Milestone Payments shall be offset against any amounts due to Licensor for royalties and Sublicensee Payments and only after the License Fee and Milestone Payments have been reimbursed in full to Licensee shall Licensor be entitled to a royalty payment or Sublicensee Payments. In other words, the License Fee and Milestone Payments shall be treated as a credit against Licensee’s obligations under this Section 5.2. For purposes of illustration, if Licensee has paid Licensor $100,000 in License Fees and Licensee has begun selling a recreational Licensed Product, Licensor shall not receive any royalty on the Net Sales of that recreational Licensed Product until the cumulative Net Sales for that Licensed Product equals Two Million Five Hundred Thousand Dollars ($2,500,000 multiplied by 4%, which equals $100,000).
     
  (iii)   Development funds received by the Licensee and/or any Affiliate, from a Sublicensee or any other source, will not be considered revenue under Section 5.2(iii) and such funds shall not be subject to any royalty payment whatsoever to Licensor.

 

5.3 Overdue Payments. The payments due under this Agreement shall, if overdue, bear interest until payment at a per annum rate equal to the lesser of ten percent (10%) and the maximum permitted by law. The payment of such interest shall not preclude Licensor from exercising any other rights it may have as a consequence of the lateness of any payment.

 

5.4 Currency. All License Fees, Milestone Payments and royalty payments under this Agreement shall be in United States Dollars. Whenever conversion from any foreign currency shall be required, such conversion shall be at the rate of exchange thereafter published in the Wall Street Journal for the business day closest to the due date of the payment.

 

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6. REPORTS AND PAYMENTS

 

6.1 Books of Accounts. Licensee shall keep, and shall cause each of its Affiliates and Sublicensees, if any, to keep full and accurate books of accounts containing all particulars that may be necessary for the purpose of calculating all Milestone Payments and royalties payable to Licensor. Such books of account shall be kept at their principal place of business and, with necessary supporting data shall, during all reasonable times for the three (3) years next following the end of the calendar year to which each shall pertain, be open for inspection at reasonable times by Licensor or its designee at Licensor’s expense for the purpose of verifying royalty statements or compliance with this Agreement. In the event that any audit performed under this Section 6.1 reveals an underpayment in excess of ten percent (10%) of the total amount determined by the auditor to be due Licensor (the “Underpayment”), Licensee shall bear the full cost of such audit and shall remit any amounts due to Licensor within ninety (90) days of receiving notice thereof from Licensor. Licensor shall have the right to audit yearly, provided however if such audit reveals an Underpayment, Licensor shall thereafter have the right to audit on a semi-annual basis (with the audit returning to a yearly basis after three (3) sequential semi-annual audits are conducted with no Underpayments discovered).

 

6.2 Quarterly Payments. In each year the amount of Milestone Payment and royalty due shall be calculated on a cash received basis as of the end of each Accounting Period as defined in Section 1.1 of this Agreement and shall be paid within the sixty (60) days next following such date, every such payment to be supported by the accounting prescribed in Section 6.3.

 

6.3 Accounting Reports. With each semiannual/quarterly payment, Licensee shall deliver to Licensor a full and accurate accounting to include at least the following information:

 

(a) Quantity of each Licensed Product sold by Licensee and its Affiliate or Sublicensees (by country);

 

(b) Gross Sales billed and Net Sales received by Licensee or any of its Affiliates or Sublicensees (“Sellers”) for the sale of each Licensed Product;

 

(c) Quantities of each Licensed Product used by Licensee and its Affiliate or Sublicensees;

 

(d) Names and addresses of all Sublicensees of Licensee; and

 

(e) Total Milestone Payments and/or royalties payable to Licensor.

 

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7. INFRINGEMENT

 

7.1 Infringement of Licensed Patents. Each party shall promptly notify the other party of evidence of infringement of a claim of a Licensed Patent by a third party. If either party shall have supplied the other party with written evidence demonstrating prima facie infringement of a claim of a Licensed Patent in the Licensed Field by a third party, Licensee shall have the right to take steps to protect the Patent Right in such claim, either upon notice from Licensor requesting such action, or on its own initiative. Licensee shall notify Licensor, within three (3) months of one party providing the other with evidence of infringement, whether Licensee intends to prosecute the alleged infringement. If Licensee notifies Licensor that it intends to so prosecute, Licensee shall (at its expense), within three (3) months of its notice to Licensor either (i) cause infringement to terminate or (ii) initiate and diligently prosecute legal proceedings against the infringer and in Licensor’s name if so required by law. In the event Licensee notifies Licensor that Licensee does not intend to prosecute said infringement, Licensor may, upon notice to Licensee, initiate legal proceedings against the infringer at Licensor’s expense. No settlement, consent judgment, or other voluntary final disposition of the suit which invalidates or restricts the claims of such Patent Rights may be entered into without the consent of the other party, which consent shall not be unreasonably withheld, but provided that, in the event one party (“the Objecting Party”) withholds consent for a proposed settlement, the party proposing the settlement may decline to support further costs of such suit or settlement discussions, and the Objecting Party shall be required to continue such suit or settlement discussions at its own expense. Licensee shall indemnify Licensor against any order for payment that may be made against Licensor in such proceedings brought by Licensee. Licensor shall indemnify Licensee against any claim of damages that may be made against Licensee to the extent arising out of any proceedings which Licensor brings at its own expense pursuant to Section 7.1 following Licensee’s decision not to prosecute any alleged infringement.

 

7.2 Cooperation. In the event one party shall initiate or carry on legal proceedings to enforce any Patent Right against any alleged infringer, the other party shall fully cooperate with and supply all assistance reasonably requested by the party initiating or carrying on such proceedings. The party which institutes any suit to protect or enforce a Patent Right shall have sole control of that suit and shall bear the reasonable expenses (excluding legal fees) incurred by said other party in providing such assistance and cooperating as is requested pursuant to this Section. The party initiating or carrying on such legal proceedings shall keep the other party informed of the progress of such proceedings and said other party shall be entitled to counsel in such proceedings but at its own expense. Any award paid by third parties as the result of such proceedings (whether by way of settlement or otherwise) shall first be applied to reimbursement of the unreimbursed legal fees and expenses incurred by either party and then the remainder shall be divided between the parties as follows:

 

(a) If the amount is based on lost profits, Licensee shall receive an amount equal to the damages the court determines Licensee has suffered as a result of the infringement less the amount of any royalties that would have been due Licensor on sales of Licensed Product lost by Licensee as a result of the infringement had Licensee made such sales, and Licensor shall receive an amount equal to the royalties it would have received if such sales had been made by Licensee, and

 

(b) As to awards other than those based on lost profits, sixty percent (60%) to the party initiating such proceedings and forty percent (40%) to the other party.

 

7.3 Infringement Actions by Third Parties. In the event that the making, selling or using of a Licensed Product in the Licensed Field infringes the intellectual property rights of others, Licensee will have the first right to control any negotiation or litigation with respect thereto; however, no settlement, consent judgment or other voluntary final disposition of the infringement allegation may be entered into without the written consent, which shall not be unreasonably withheld, of Licensor.

 

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7.4 Further Assurances; Progress Reports. For the purpose of the proceedings referred to in this Article 7, Licensor and Licensee shall permit the use of their names and shall execute such documents and carry out such other acts as may be necessary. The party initiating or carrying on such legal proceedings shall keep the other party informed of the progress of such proceedings and said other party shall be entitled to counsel in such proceedings but at its own expense, said expenses to be offset against any damages received by the party bringing any infringement suit against a third party in accordance with Section 7.2.

 

8. IDEMNIFICATION; REPRESENTATIONS AND WARRANTIES

 

8.1 Indemnification.

 

(a) Licensee shall indemnify, defend and hold harmless Licensor and its directors, officers, medical and professional staff, employees, independent contractors, and agents and their respective successors, heirs and assigns (each an “Indemnitee” under this Section 8.1(a)), against any liability, damage, loss or expense (including reasonable attorney’s fees and expenses of litigation) (collectively, “Losses”) incurred by or imposed upon such Indemnitees or any one of them in connection with any claims, suits, actions, demands or judgments arising out of any theory of product liability (including, but not limited to, actions in the form of tort, warranty, or strict liability) concerning any Licensed Product made, used or sold pursuant to any right or license granted under this Agreement other than Losses arising out of claims of infringement of intellectual property rights held by third parties by the practice of the Licensed Inventions, the existence of which rights constitute a breach of the representations and warranties given by Licensor under Section 8.2(b) or (c).

 

(b) Licensor shall indemnify, defend and hold harmless Licensee and its directors, officers, medical and professional staff, employees, independent contractors, and agents and their respective successors, heirs and assigns (each an “Indemnitee” under this Section 8.1(b)), against Losses incurred by or imposed upon such Indemnitees or any one of them in connection with any claims, suits, actions, demands or judgments arising out of (i) any theory of product liability (including, but not limited to, actions in the form of tort, warranty, or strict liability) concerning any Licensed Product made, used or sold by Licensee or any of its Affiliates or Sublicensees pursuant to any right or license granted under this Agreement, but only to the extent that any such claim, suit, action, demand or judgment owes to a failure on the part of Licensor to advise Licensee as to some unsafe element of the Licensed Technology that was within Licensor’s actual knowledge (provided, however, that Licensor shall not have any affirmative obligation to make a determination as to the safety of the Licensed Technology), (ii) any theory of product liability (including, but not limited to, actions in the form of tort, warranty, or strict liability) concerning any Licensed Product made, used or sold by Licensor or any of its Affiliates or Sublicensees and (iii) any claims of infringement of intellectual property rights held by third parties by the practice of the Licensed Inventions, the existence of which rights constitute a breach of the representations and warranties given by Licensor under Section 8.2(b) or (c).

 

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(c) No Indemnitee under clause (a) or clause (b) of this Section 8.1 shall be entitled to any indemnification under such clause for any Loss to the extent that such Loss is attributable to the negligent activities, reckless misconduct or intentional misconduct of such Indemnitee.

 

(d) Any Indemnitee under clause (a) or clause (b) of this Section 8.1 shall give the party from whom indemnification under such clause is sought (the “Indemnitor”) prompt written notice of any Losses or discovery of fact upon which such Indemnitee intends to base a request for indemnification under such clause, provided, however, that an Indemnitor’s obligations to such Indemnitee under this Section 8.1 shall not be rendered inapplicable as a result of the failure by such Indemnitee to notify such Indemnitor as required under this Section 8.1(d), unless such failure materially prejudices such Indemnitor’s ability to take action with respect to any such Loss.

 

(e) Each Indemnitor under this Section 8.1 agrees, at its own expense, to provide attorneys reasonably acceptable to an Indemnitee under this Section 8.1 to defend against any actions brought or filed against such Indemnitee with respect to the subject of indemnity contained herein, whether or not such actions are rightfully brought. Each Indemnitee under this Section 8.1 shall be entitled to participate in, but not control, the defense of such action and to employ counsel of its own choice for such purpose; provided, however, that such employment shall be at such Indemnitee’s own expense.

 

(f) Each Indemnitor shall have the sole right to consent to the entry of any judgment, enter into any settlement or otherwise dispose of any Loss, on such terms as such Indemnitor, in its sole discretion, shall deem appropriate.

 

8.2 Representations and Warranties.

 

Licensor represents to Licensee that:

 

(a) To the best of Licensor’s actual knowledge with respect solely to its Licensed Technology, there is no fact or circumstance that could adversely affect the acceptance, or the subsequent approval, by any regulatory authority of any filing, application or request with respect to the development or commercialization of any Licensed Product, existing on the Effective Date.

 

(b) Licensor is the sole and exclusive owner of all right, title and interest in and to the Patent Rights to the Licensed Patents originally listed on Schedule 1.14 and such rights, and all other rights granted to Licensee under the License existing as of the date hereof, are not subject to any encumbrance, lien or claim of ownership by any third party. Licensor has obtained all necessary assignments and made all appropriate filings with respect thereto in order to secure its sole and exclusive ownership rights in and to such Patent Rights, and all other rights granted to Licensee as of the date hereof. During the term of this Agreement, Licensor shall not knowingly take any action that would encumber the rights granted to Licensee hereunder.

 

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(c) Except for the grant by Licensor to Licensee of the License and other rights in Article 2, which relate solely to the Licensed Product, Licensor has not, directly or indirectly, expressly or by implication, by action or omission or otherwise (i) assigned, transferred or conveyed any right, title or interest in or to the Patent Rights in the Licensed Patents and/or any other rights granted to Licensee under the License, (ii) granted any license or other right, title or interest in or to the Patent Rights in the Licensed Patents and/or any other rights granted to Licensee under the License, or (iii) agreed to or is otherwise bound by any covenant not to sue for any infringement, misuse or otherwise with respect to the Patent Rights in the Licensed Patents and/or any other rights granted to Licensee under the License.

 

(d) To the best of Licensor’s knowledge, there is no actual or threatened infringement by a third party of the Patent Rights in the Licensed Patents.

 

8.3 Limitation on Damages and Disclaimer. WITH THE EXCEPTION FOR INTENTIONAL MISCONDUCT OF SUCH PARTY, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL, COLLATERAL, EXEMPLARY, PUNITIVE, OR CONSEQUENTIAL DAMAGES, INCLUDING LOSS OF INCOME, PROFIT OR SAVINGS, OF ANY PARTY, INCLUDING THIRD PARTIES, REGARDLESS OF THE FORM OF THE ACTION OR THE THEORY OF RECOVERY, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

OTHER THAN WARRANTIES SET FORTH HEREIN, EACH PARTY MAKES NO WARRANTY, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR ANY IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO ANY PATENT, TRADEMARK, SOFTWARE, TRADE SECRET, TANGIBLE RESEARCH PROPERTY, INFORMATION OR DATA LICENSED OR OTHERWISE PROVIDED TO THE OTHER PARTY HEREUNDER AND HEREBY DISCLAIMS THE SAME.

 

8.4 Insurance . Each party will maintain insurance in amounts and areas of coverage that are considered commercially reasonable in this industry.

 

9. TERMINATION

 

9.1 Upon Expiration of Patent Rights and Exclusive Marketing Rights. Unless otherwise terminated as provided for in this Agreement, the License and other rights granted to Licensee in Article 2 will continue on a country by country and Licensed Product by Licensed Product basis, and shall expire in each country for each Licensed Product sold in that country when the manufacture, use, sale, import or offer for sale of such Licensed Product would not, in said country, infringe a Valid Claim of any Licensed Patent or violate an exclusive marketing right granted by any governmental agency in such country in the absence of the License granted by Article 2 or a sublicense granted under Article 2. Upon such expiration, the License, with respect to such country and such Licensed Product, will be automatically converted to a fully paid-up royalty–free perpetual license that grants Licensee the same bundle of rights as the License, including all the rights under Section 2.1(b) to grant sublicenses.

 

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9.2 Upon Default, Generally. If either party shall fail to faithfully perform any of its obligations under this Agreement, the non-defaulting party may give written notice of the default to the defaulting party. Unless such default is corrected within sixty (60) days after such notice, the notifying party may terminate this Agreement upon thirty (30) days prior written notice; provided, however, in the event that prior to the expiration of any such sixty (60) day period, such breaching party has in good faith commenced to use commercially reasonable efforts to remedy such breach and the completion of such remedy, due to reasons beyond the control of such breaching party, requires more than sixty (60) days to complete, then such sixty (60) day period shall be extended for so long as such breaching party is continuing in good faith to use commercially reasonable efforts to remedy such breach.

 

9.3 If Commercially Unfeasible. Licensee may terminate this Agreement, as to a particular Licensed Product, without penalty and at any time, if Licensee, at its sole discretion, determines that further development, manufacture, and/or sales of the Licensed Products will be commercially unfeasible.

 

9.4 Effect on Sublicenses. In the event that the License granted to Licensee under this Agreement is terminated, any sublicense under such License granted prior to termination of said License shall remain in full force and effect, provided that

 

(a) the Sublicensee is not then in breach of its sublicense agreement;

 

(b) the Sublicensee agrees to be bound to Licensor as the licensor under the terms and conditions of this Agreement, as modified by the provisions of this Section 9.4;

 

(c) Licensor shall have the right to receive any payments payable to Licensee under such sublicense agreement to the extent that they are reasonably and equitably attributable to such Sublicensee’s right under such sublicense to use and exploit Patent Rights in the Licensed Patents and other rights granted in the License;

 

(d) the Sublicensee agrees to be bound by the development and commercialization obligations of Licensee pursuant to Article 3 (whether set by the parties or by arbitration) in the field and territory of the sublicense;

 

(e) Licensor has the right to terminate such sublicense upon thirty (30) days prior written notice to Licensee and such Sublicensee in the event of any material breach of the obligation to make the payments described in clause (c) of this Section 9.4, unless such breach is cured prior to the expiration of such thirty (30) day period, and shall further have the right to terminate such sublicense in the event of Sublicensee’s failure to meet its development obligations pursuant to clause (d) hereof; and

 

(f) Licensor shall not assume, and shall not be responsible to each Sublicensee for, any representations, warranties or obligations of Licensee to such Sublicensee, other than to permit such Sublicensee to exercise any rights to the Patent Rights in the Licensed Patents and other rights under the License that are granted under such sublicense agreement consistent with the terms of this Agreement.

 

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9.5 Payments. Upon termination of the License granted hereunder, Licensee shall pay Licensor all royalties due or accrued on (i) the sale of Licensed Products up to and including the date of termination and (ii) for twelve (12) months following the date of termination, the sale of Licensed Products manufactured prior to the termination date, if Licensee and Licensor separately agree to conduct such sales.

 

10. CONFIDENTIAL INFORMATION

 

10.1 Definitions. Each party receiving information (the “Receiving Party”) disclosed to it by the other party (the “Disclosing Party”) acknowledges that by reason of its relationship to the Disclosing Party hereunder, between the parties, will have, or has had, access to certain information and materials, including the terms of this Agreement and information concerning the Disclosing Party’s business, plans, technology, products and/or services that are confidential and of substantial value to the Disclosing Party (“Confidential Information”).

 

10.2 Obligation to Protect Confidential Information. Each Receiving Party agrees that it shall (i) take every reasonable precaution to protect the confidentiality of Disclosing Party’s Confidential Information from unauthorized access or use and (ii) not use the Disclosing Party’s Confidential Information in any way for the Receiving Party’s own account or the account of any third party except for the purposes of performing its obligations under this Agreement. Upon termination of this Agreement and at the request of the Disclosing Party, the Receiving Party will return to Disclosing Party all of the Disclosing Party’s Confidential Information in its possession or within its control or destroy such Confidential Information and certify in writing to the Disclosing Party that all such information has been destroyed; however, Receiving Party shall have the right to retain one (1) copy of the Disclosing Party’s Confidential Information solely for the purpose of determining Receiving Party’s obligations under this Agreement.

 

10.3 Exclusions. Confidential Information does not include any information that the Receiving Party can demonstrate by written records: (a) was known to the Receiving Party prior to its disclosure by the Disclosing Party; (b) was independently developed by the Receiving Party without use of or reference to the Disclosing Party’s Confidential Information; (c) was or becomes publicly known through no wrongful act of the Receiving Party; (d) was rightfully received from a third party whom the Receiving Party had reasonable grounds to believe was authorized to make such disclosure without restriction; or (e) has been approved for public release by the Disclosing Party’s prior written authorization. Further, if the Receiving Party is required to disclose Confidential Information pursuant to a subpoena, court order or other similar process (“Court Order”), it is agreed that the Receiving Party shall provide the Disclosing Party with notice of such request(s), to the extent that such notice is legally permissible, so that the Disclosing Party may seek an appropriate protective order. In the event that the Disclosing Party is not successful in obtaining a protective order and the Receiving Party is compelled to disclose the Confidential Information, the Receiving Party may disclose such information solely in accordance with and for the limited purpose of compliance with the Court Order without liability hereunder.

 

CONFIDENTIAL 15  
 

 

10.4 Disclosures Required by Law. In addition, either party may disclose, on a confidential basis, the existence and terms of this Agreement to existing or potential investors in such party, in connection with a private or public offering of such party’s securities, or if required by law. Furthermore, either party may disclose, on a confidential and need-to-know basis, the existence and terms of this Agreement and the proposed terms of this Agreement to its counsel, accountants, directors and other similar advisors (the “Representatives”). The foregoing shall not, however, operate or grant either party any rights under any patents, trade secrets, copyrights, or any other proprietary rights of the other party.

 

10.5 Remedies. The parties acknowledge that money damages would be both incalculable and an insufficient remedy for any breach of the confidentiality provisions of this Agreement, and that any such breach would cause the other party irreparable harm. Accordingly, the parties hereto agree that in the event of any such breach or threatened breach hereof by a party or by its respective Representatives, the other party to this Agreement shall be entitled, in addition to any other available remedies at law, to seek equitable relief, including injunctive relief and specific performance without the posting of any bond or other security.

 

11. MISCELLANEOUS

 

11.1 Entire Agreement. This Agreement constitutes the entire understanding between the parties with respect to the subject matter hereof.

 

11.2 Notices. All notices and other communications required or permitted under this Agreement shall be in writing and shall be sent by registered or certified mail (return receipt requested and postage prepaid), or delivered by hand, by messenger or by a recognized overnight delivery service, addressed to each party as follows:

 

if to Licensor:

 

ACCU-BREAK PHARMACEUTICALS, INC.

Accu-Break Pharmaceuticals, Inc.

6100 Hollywood Boulevard, Suite 207

Hollywood, FL 33024

Telephone: 954-989-4150

E-mail: r.goldfarb@accubreak.com

 

if to Licensee:

 

INTIVA BIOPHARMA INC.

4340 East Kentucky Avenue, Suite 206

Denver, CO 80246

Telephone:

E-mail: jfriedland@intivabiopharma.com

 

Each such notice or other communication shall for all purposes of this Agreement be treated as effective or having been given (i) if sent by registered or certified mail, the earlier of receipt and five (5) business days after dispatch, and (ii) if delivered in person, by messenger, or by overnight courier, on the business day delivered.

 

CONFIDENTIAL 16  
 

 

11.3 Amendments; Waivers. This Agreement may be amended or any of its terms or conditions may be waived only by a written instrument executed by the parties or, in the case of a waiver, by the party waiving compliance. The failure of either party at any time or times to require performance of any provision hereof shall in no manner affect its rights at a later time to enforce the same. No waiver by either party of any condition shall be deemed as a further or continuing waiver of such condition or term or of any other condition or term.

 

11.4 Assignment; Successors. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns; provided that this Agreement shall not be assignable by Licensor without Licensee’s written consent (which consent shall not be unreasonably withheld, delayed or conditioned) except for the right to receive royalties or other payments payable herein, and further provided that Licensee may, with the consent of Licensor (which consent shall not be unreasonably withheld, delayed or conditioned), transfer its interest or any part thereof under this Agreement to a wholly-owned subsidiary of Licensee or to any assignee or purchaser of the portion of its business associated with the manufacture and sale of Licensed Product, so long as such transferee assumes and agrees to be bound by the provisions of this Agreement and provided further that such transferee shall give to Licensor financial statements which financial statements shall reflect that its tangible net worth is equal to or greater than Licensee’s net worth as reflected in Licensee’s financial statement provided to Licensor at the time of such request. Except as provided in the immediately preceding sentence, this Agreement shall be assignable by Licensee only with the consent in writing of Licensor, not to be unreasonably withheld, provided that the proposed assignee has sufficient resources and capabilities to operate a business in the Licensed Field.

 

11.5 Force Majeure. Any delays in or failures of performance by either party under this Agreement shall not be considered a breach of this Agreement if and to the extent caused by occurrences beyond the reasonable control of the party affected, including but not limited to: acts of God, acts, regulations, or laws of any government, strikes or the concerted acts of workers, fires, floods, explosions, riots, wars, rebellion, and sabotage. Any time for performance hereunder shall be extended by the actual time of delay caused by such occurrence; provided, however, that either party shall have the right to terminate this Agreement if any such extension endures for more than twelve (12) consecutive months.

 

11.6 Publicity. Neither party shall use the name of the other party, nor the officers or employees of the other party, nor any adaptation thereof in any advertising, promotional or sales literature, publicity or in any document employed to obtain funds or financing without the prior written approval of the party or individual whose name is to be used, such approval not to be unreasonably withheld.

 

11.7 Governing Law. This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Colorado, without regard to its choice of law principles.

 

CONFIDENTIAL 17  
 

 

11.8 Alternative Dispute Resolution. For any and all claims, disputes, or controversies arising under, out of, or in connection with this Agreement, except issues relating to the validity, construction or effect of any Patent Right, which the parties shall be unable to resolve within sixty (60) days, the party raising such dispute shall promptly advise the other party of such claim, dispute, or controversy in a writing which describes in reasonable detail the nature of such dispute. By not later than five (5) business days after the recipient has received such notice of dispute, each party shall have selected for itself a representative who shall have the authority to bind such party and shall additionally have advised the other party in writing of the name and title of such representative. By not later than ten (10) business days after the date of such notice of dispute, such representatives shall agree upon a third party, which is in the business of providing Alternative Dispute Resolution (ADR) services (hereinafter, “ADR Provider”) and shall schedule a date with such ADR Provider to engage in ADR. Thereafter, the representatives of the parties shall engage in good faith in an ADR process under the auspices of the selected ADR Provider. If within the aforesaid ten (10) business days after the date of the notice of dispute the representatives of the parties have not been able to agree upon an ADR Provider and schedule a date to engage in ADR, or if they have not been able to resolve the dispute within thirty (30) business days after the conclusion of ADR, the parties shall have the right to pursue any other remedies legally available to resolve such dispute in either the state or federal courts of New York, to whose jurisdiction for such purposes each of Licensor and Licensee hereby irrevocably consents and submits. Notwithstanding the foregoing, nothing in this Section 11.8 shall be construed to waive any rights or timely performance of any obligations existing under this Agreement.

 

11.9 Severability. If any provision(s) of this Agreement are or become invalid, are ruled illegal by any court of competent jurisdiction or are deemed unenforceable under then current applicable law from time to time in effect during the term thereof, it is the intention of the parties that the remainder of this Agreement shall not be affected thereby. It is further the intention of the parties that in lieu of each such provision which is invalid, illegal or unenforceable, there be substituted or added as part of this Agreement a provision which shall be as similar as possible in economic and business objectives as intended by the parties to such invalid, illegal or enforceable provision, but shall be valid, legal and enforceable.

 

11.10 Independent Contractors. It is expressly agreed that Licensor, on the one hand, and Licensee, on the other hand, shall be independent contractors and that the relationship between the two parties shall not constitute a partnership, joint venture or agency. Neither Licensor, on the one hand, nor Licensee, on the other hand, shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other, without the prior written consent of the other party to do so. All persons employed by a party shall be employees of such party and not of the other party and all costs and obligations incurred by reason of any such employment shall be for the account and expense of such party.

 

11.11 Survival. Sections 5, 6, 7, 8, 9, 10 and 11 shall survive the expiration or termination of this Agreement.

 

11.12 Counterparts. This Agreement may be executed in two counterparts, each of which shall be enforceable against the party actually executing such counterpart, and both of which together shall constitute one instrument.

 

11.13 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not considered in construing or interpreting this Agreement.

 

[signature page follows]

 

CONFIDENTIAL 18  
 

 

THE PARTIES have duly executed this Agreement as of the date first shown above written.

 

[signature page to Exclusive License Agreement]

 

Licensor:   Licensee:
ACCU-BREAK PHARMACEUTICALS, INC.  

INTIVA BIOPHARMA INC.

     
BY: / s/ Elliot F. Hahn   BY: /s/ Alain Bankier
NAME: Elliot F. Hahn, Ph.D   NAME: Alain Bankier
TITLE: Executive Chairman   TITLE: Chief Strategy Officer and Director

 

CONFIDENTIAL 19  
 

 

 

INTIVA BIOPHARMA INC.

 

2018 EQUITY INCENTIVE PLAN

 

 
 

 

Table of Contents

 

1. PURPOSE 1
2 . SHARES SUBJECT TO THE PLAN 1
2.1. Number of Shares Available 1
2.2. Lapsed, Returned Awards 1
2.3. Minimum Share Reserve 1
2.4. Automatic Share Reserve Increase 1
2.5. Limitations 2
2.6. Adjustment of Shares 2
3 . ELIGIBILITY 2
4 . ADMINISTRATION 2
4.1. Committee Composition; Authority 2
4.2. Committee Interpretation and Discretion 4
4.3. Section 162(m) of the Code and Section 16 of the Exchange Act 4
4.4. Documentation 5
4.5. Foreign Award Recipients 5
5 . OPTIONS 5
5.1. Option Grant 5
5.2. Date of Grant 5
5.3. Exercise Period 6
5.4. Exercise Price 6
5.5. Method of Exercise 6
5.6. Termination of Service 6
5.7. Limitations on Exercise 7
5.8. Limitations on ISOs 7
5.9. Modification, Extension or Renewal 8
5.10. No Disqualification 8
6. RESTRICTED STOCK AWARDS 8
6.1. Restricted Stock Purchase Agreement 8
6.2. Purchase Price 8
6.3. Terms of Restricted Stock Awards 8
6.4. Termination of Service 9
7 . STOCK BONUS AWARDS 9
7.1. Terms of Stock Bonus Awards 9

 

i

 

 

7.2. Form of Payment to Participant 9
7.3. Termination of Service 9
8. STOCK APPRECIATION RIGHTS 9
8.1. Terms of SARs 10
8.2. Exercise Period and Expiration Date 10
8.3. Form of Settlement 10
8.4. Termination of Service 10
9 . PAYMENT FOR SHARE PURCHASES 10
10. GRANTS TO NON-EMPLOYEE DIRECTORS 11
11. WITHHOLDING TAXES 11
11.1. Withholding Generally 11
11.2. Stock Withholding 11
12. TRANSFERABILITY 11
12.1. Transfer Generally 11
12.2. Award Transfer Program 12
13. PRIVILEGES OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES 12
13.1. Voting and Dividends 12
13.2. Restrictions on Shares 13
14. CERTIFICATES 13
15. ESCROW; PLEDGE OF SHARES 13
16. REPRICING; EXCHANGE AND BUYOUT OF AWARDS 13
17. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE 14
18. NO OBLIGATION TO EMPLOY 14
19. CORPORATE TRANSACTIONS 14
19.1. Assumption or Replacement of Awards by Successor 14
19.2. Assumption of Awards by Intiva 14
19.3. Non-Employee Directors’ Awards 15
20. ADOPTION AND STOCKHOLDER APPROVAL 15
21. TERM OF PLAN/GOVERNING LAW 15
22 . AMENDMENT OR TERMINATION OF PLAN 15
23 . NONEXCLUSIVITY OF THE PLAN 15
24 . INSIDER TRADING POLICY 15
25 . ALL AWARDS SUBJECT TO COMPANY CLAWBACK OR RECOUPMENT POLICY 16
26 . DEFINITIONS 16

 

ii

 

 

INTIVA BIOPHARMA INC.

 

2018 EQUITY INCENTIVE PLAN

 

1. PURPOSE . The purpose of this Plan is to provide incentives to attract, retain and motivate eligible persons whose present and potential contributions are important to the success of Intiva, and any Parents, Subsidiaries and Affiliates that exist now or in the future, by offering them an opportunity to participate in Intiva’s future performance through the grant of Awards. Capitalized terms not defined elsewhere in the text are defined in Section 26 .

 

2. SHARES SUBJECT TO THE PLAN .

 

2.1. Number of Shares Available . Subject to Sections 2.6 and 19 and any other applicable provisions hereof, the total number of Shares reserved and available for grant and issuance pursuant to this Plan as of the date of adoption of the Plan by the Board, is Eight Million (8,000,000) Shares, plus (a) any reserved shares not issued or subject to outstanding grants under Intiva’s 2017 Stock Incentive Plan (the “ Prior Plan ”) on the Effective Date (as defined below), and (b) shares that are subject to awards granted under the Prior Plan that cease to be subject to such awards by forfeiture or otherwise after the Effective Date.

 

2.2. Lapsed, Returned Awards . Shares subject to Awards, and Shares issued under the Plan under any Award, will again be available for grant and issuance in connection with subsequent Awards under this Plan to the extent such Shares: (a) are subject to issuance upon exercise of an Option or SAR granted under this Plan but which cease to be subject to the Option or SAR for any reason other than exercise of the Option or SAR; (b) are subject to Awards granted under this Plan that are forfeited or are repurchased by Intiva at the original issue price; (c) are subject to Awards granted under this Plan that otherwise terminate without such Shares being issued; or (d) are surrendered pursuant to an Exchange Program. To the extent an Award under the Plan is paid out in cash rather than Shares, such cash payment will not result in reducing the number of Shares available for issuance under the Plan. Shares used to pay the exercise price of an Award or withheld to satisfy the tax withholding obligations related to an Award will become available for future grant or sale under the Plan. For the avoidance of doubt, Shares that otherwise become available for grant and issuance because of the provisions of this Section 2.2 will not include Shares subject to Awards that initially became available because of the substitution clause in Section 19.2 hereof.

 

2.3. Minimum Share Reserve . At all times Intiva will reserve and keep available a sufficient number of Shares as will be required to satisfy the requirements of all outstanding Awards granted under this Plan.

 

2.4. Automatic Share Reserve Increase . The number of Shares available for grant and issuance under the Plan will be increased on July 1, of each of the first ten (10) calendar years during the term of the Plan, by the lesser of (a) fifteen percent (15%) of the number of Shares issued during the most recently completed fiscal year or (b) such number of Shares determined by the Board.

 

Intiva BioPharma Inc. 2018 Equity Incentive Plan - Page 1

 

 

2.5. Limitations . No more than eighty percent (80%) Shares will be issued pursuant to the exercise of ISOs.

 

2.6. Adjustment of Shares . If the number of outstanding Shares is changed by a stock dividend, extraordinary dividends or distributions (whether in cash, shares or other property, other than a regular cash dividend) recapitalization, stock split, reverse stock split, subdivision, combination, consolidation, reclassification, spin-off or similar change in the capital structure of Intiva, without consideration, then (a) the number and class of Shares reserved for issuance and future grant under the Plan set forth in Section 2.1 , including shares reserved under sub-clauses (a) and (b) of Section 2.1 , (b) the Exercise Prices of and number and class of Shares subject to outstanding Options and SARs, (c) the number and class of Shares subject to other outstanding Awards, (d) the maximum number and class of Shares that may be issued as ISOs set forth in Section 2.5 , (e) the maximum number and class of Shares that may be issued to an individual or to a new Employee in any one calendar year set forth in Section 3 and (f) the number and class of Shares that may be granted as Awards to Non-Employee Directors as set forth in Section 10 , will be proportionately adjusted, subject to any required action by the Board or the stockholders of Intiva and in compliance with applicable securities laws; provided that fractions of a Share will not be issued.

 

If, by reason of an adjustment pursuant to this Section 2.6 , a Participant’s Award Agreement or other agreement related to any Award or the Shares subject to such Award covers additional or different shares of stock or securities, then such additional or different shares, and the Award Agreement or such other agreement in respect thereof, will be subject to all of the terms, conditions and restrictions which were applicable to the Award or the Shares subject to such Award prior to such adjustment.

 

3. ELIGIBILITY . ISOs may be granted only to Employees. All other Awards may be granted to Employees, Consultants, Directors and Non-Employee Directors; provided such Consultants, Directors and Non-Employee Directors render bona fide services not in connection with the offer and sale of securities in a capital-raising transaction. No Participant will be eligible to receive an Award or Awards for more than one million (1,000,000) Shares in any calendar year under this Plan except that new Employees of Intiva or of a Parent or Subsidiary of Intiva are eligible to be granted up to a maximum of an Award or Awards for two million (2,000,000) Shares in the calendar year in which they commence their employment.

 

4. ADMINISTRATION .

 

4.1. Committee Composition; Authority . This Plan will be administered by the Committee or by the Board acting as the Committee. Subject to the general purposes, terms and conditions of this Plan, and to the direction of the Board, the Committee will have full power to implement and carry out this Plan, except, however, the Board will establish the terms for the grant of an Award to Non-Employee Directors. The Committee will have the authority to:

 

(a) construe and interpret this Plan, any Award Agreement and any other agreement or document executed pursuant to this Plan;

 

Intiva BioPharma Inc. 2018 Equity Incentive Plan - Page 2

 

 

(b) prescribe, amend and rescind rules and regulations relating to this Plan or any Award;

 

(c) select persons to receive Awards;

 

(d) determine the form and terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and conditions include, but are not limited to, the Exercise Price, the time or times when Awards may vest and be exercised (which may be based on performance criteria) or settled, any vesting acceleration or waiver of forfeiture restrictions, the method to satisfy tax withholding obligations or any other tax liability legally due and any restriction or limitation regarding any Award or the Shares relating thereto, based in each case on such factors as the Committee will determine;

 

(e) determine the number of Shares or other consideration subject to Awards;

 

(f) determine the Fair Market Value in good faith and interpret the applicable provisions of this Plan and the definition of Fair Market Value in connection with circumstances that impact the Fair Market Value, if necessary;

 

(g) determine whether Awards will be granted singly, in combination with, in tandem with, in replacement of, or as alternatives to, other Awards under this Plan or any other incentive or compensation plan of Intiva or any Parent, Subsidiary or Affiliate;

 

(h) grant waivers of Plan or Award conditions;

 

(i) determine the vesting, exercisability and payment of Awards;

 

(j) correct any defect, supply any omission or reconcile any inconsistency in this Plan, any Award or any Award Agreement;

 

(k) determine whether an Award has been vested and/or earned;

 

(l) determine the terms and conditions of any, and to institute any Exchange Program;

 

(m) reduce or waive any criteria with respect to Performance Factors;

 

(n) adjust Performance Factors to take into account changes in law and accounting or tax rules as the Committee deems necessary or appropriate to reflect the impact of extraordinary or unusual items, events or circumstances to avoid windfalls or hardships provided that such adjustments are consistent with the regulations promulgated under Section 162(m) of the Code with respect to persons whose compensation is subject to Section 162(m) of the Code;

 

(o) adopt rules and/or procedures (including the adoption of any subplan under this Plan) relating to the operation and administration of the Plan to accommodate requirements of local law and procedures outside of the United States;

 

Intiva BioPharma Inc. 2018 Equity Incentive Plan - Page 3

 

 

(p) make all other determinations necessary or advisable for the administration of this Plan; and

 

(q) delegate any of the foregoing to one or more executive officers pursuant to a specific delegation as permitted by applicable law, including Section 157(c) of the Delaware General Corporation Law.

 

4.2. Committee Interpretation and Discretion . Any determination made by the Committee with respect to any Award will be made in its sole discretion at the time of grant of the Award or, unless in contravention of any express term of the Plan or Award, at any later time, and such determination will be final and binding on Intiva and all persons having an interest in any Award under the Plan. Any dispute regarding the interpretation of the Plan or any Award Agreement will be submitted by the Participant or Intiva to the Committee for review. The resolution of such a dispute by the Committee will be final and binding on Intiva and the Participant. The Committee may delegate to one or more executive officers the authority to review and resolve disputes with respect to Awards held by Participants who are not Insiders, and such resolution will be final and binding on Intiva and the Participant.

 

4.3. Section 162(m) of the Code and Section 16 of the Exchange Act . When necessary or desirable for an Award to qualify as “performance-based compensation” under Section 162(m) of the Code, the Committee administering the Plan in accordance with the requirements of Rule 16b-3 and Section 162(m) of the Code will consist of at least two individuals, each of whom qualifies as (a) a Non-Employee Director under Rule 16b-3, and (b) an “outside director” pursuant to Code Section 162(m) and the regulations issued thereunder. At least two (or a majority if more than two then serve on the Committee) such “outside directors” will approve the grant of such Award and timely determine (as applicable) the Performance Period and any Performance Factors upon which vesting or settlement of any portion of such Award is to be subject. When required by Section 162(m) of the Code, prior to settlement of any such Award at least two (or a majority if more than two then serve on the Committee) such “outside directors” then serving on the Committee will determine and certify in writing the extent to which such Performance Factors have been timely achieved and the extent to which the Shares subject to such Award have thereby been earned. Awards granted to Participants who are subject to Section 16 of the Exchange Act must be approved by two or more “non-employee directors” (as defined in the regulations promulgated under Section 16 of the Exchange Act). With respect to Participants whose compensation is subject to Section 162(m) of the Code, and provided that such adjustments are consistent with the regulations promulgated under Section 162(m) of the Code, the Committee may adjust the performance goals to account for changes in law and accounting and to make such adjustments as the Committee deems necessary or appropriate to reflect the impact of extraordinary or unusual items, events or circumstances to avoid windfalls or hardships, including without limitation (a) restructurings, discontinued operations, extraordinary items, and other unusual or non-recurring charges, (b) an event either not directly related to the operations of Intiva or not within the reasonable control of Intiva’s management, or (c) a change in accounting standards required by generally accepted accounting principles.

 

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4.4. Documentation . The Award Agreement for a given Award, the Plan and any other documents may be delivered to, and accepted by, a Participant or any other person in any manner (including electronic distribution or posting) that meets applicable legal requirements.

 

4.5. Foreign Award Recipients . Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws and practices in other countries in which Intiva, its Subsidiaries and Affiliates operate or have Employees or other individuals eligible for Awards, the Committee, in its sole discretion, will have the power and authority to: (a) determine which Subsidiaries and Affiliates will be covered by the Plan; (b) determine which individuals outside the United States are eligible to participate in the Plan, which may include individuals who provide services to Intiva, Subsidiary or Affiliate under an agreement with a foreign nation or agency; (c) modify the terms and conditions of any Award granted to individuals outside the United States or foreign nationals to comply with applicable foreign laws, policies, customs and practices; (d) establish subplans and modify exercise procedures and other terms and procedures, to the extent the Committee determines such actions to be necessary or advisable (and such subplans and/or modifications will be attached to this Plan as appendices); provided, however , that no such subplans and/or modifications will increase the share limitations contained in Section 2.1 hereof; and (e) take any action, before or after an Award is made, that the Committee determines to be necessary or advisable to obtain approval or comply with any local governmental regulatory exemptions or approvals. Notwithstanding the foregoing, the Committee may not take any actions hereunder, and no Awards will be granted, that would violate the Exchange Act or any other applicable United States securities law, the Code, or any other applicable United States governing statute or law.

 

5. OPTIONS . An Option is the right but not the obligation to purchase a Share, subject to certain conditions, if applicable. The Committee may grant Options to eligible Employees, Consultants and Directors and will determine whether such Options will be Incentive Stock Options within the meaning of the Code (“ ISOs ”) or Nonqualified Stock Options (“ NSOs ”), the number of Shares subject to the Option, the Exercise Price of the Option, the period during which the Option may vest and be exercised, and all other terms and conditions of the Option, subject to the following terms of this section.

 

5.1. Option Grant . Each Option granted under this Plan will identify the Option as an ISO or an NSO. An Option may be, but need not be, awarded upon satisfaction of such Performance Factors during any Performance Period as are set out in advance in the Participant’s individual Award Agreement. If the Option is being earned upon the satisfaction of Performance Factors, then the Committee will: (a) determine the nature, length and starting date of any Performance Period for each Option; and (b) select from among the Performance Factors to be used to measure the performance, if any. Performance Periods may overlap and Participants may participate simultaneously with respect to Options that are subject to different performance goals and other criteria.

 

5.2. Date of Grant . The date of grant of an Option will be the date on which the Committee makes the determination to grant such Option, or a specified future date. The Award Agreement and a copy of this Plan will be delivered to the Participant within a reasonable time after the granting of the Option.

 

Intiva BioPharma Inc. 2018 Equity Incentive Plan - Page 5

 

 

5.3. Exercise Period . Options may be vested and exercisable within the times or upon the conditions as set forth in the Award Agreement governing such Option; provided, however , that no Option will be exercisable after the expiration of ten (10) years from the date the Option is granted; and provided further that no ISO granted to a person who, at the time the ISO is granted, directly or by attribution owns more than ten percent (10%) of the total combined voting power of all classes of stock of Intiva or of any Parent or Subsidiary (“ Ten Percent Stockholder ”) will be exercisable after the expiration of five (5) years from the date the ISO is granted. The Committee also may provide for Options to become exercisable at one time or from time to time, periodically or otherwise, in such number of Shares or percentage of Shares as the Committee determines.

 

5.4. Exercise Price . The Exercise Price of an Option will be determined by the Committee when the Option is granted; provided that: (a) the Exercise Price of an Option will be not less than one hundred percent (100%) of the Fair Market Value of the Shares on the date of grant and (b) the Exercise Price of any ISO granted to a Ten Percent Stockholder will not be less than one hundred ten percent (110%) of the Fair Market Value of the Shares on the date of grant. Payment for the Shares purchased may be made in accordance with Section 9 and the Award Agreement and in accordance with any procedures established by Intiva.

 

5.5. Method of Exercise . Any Option granted hereunder will be vested and exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Committee and set forth in the Award Agreement. An Option may not be exercised for a fraction of a Share. An Option will be deemed exercised when Intiva receives: (a) notice of exercise (in such form as the Committee may specify from time to time) from the person entitled to exercise the Option (and/or via electronic execution through the authorized third party administrator), and (b) full payment for the Shares with respect to which the Option is exercised (together with applicable withholding taxes). Full payment may consist of any consideration and method of payment authorized by the Committee and permitted by the Award Agreement and the Plan. Shares issued upon exercise of an Option will be issued in the name of the Participant. Until the Shares are issued (as evidenced by the appropriate entry on the books of Intiva or of a duly authorized transfer agent of Intiva), no right to vote or receive dividends or any other rights as a stockholder will exist with respect to the Shares, notwithstanding the exercise of the Option. Intiva will issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 2.6 of the Plan. Exercising an Option in any manner will decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.

 

5.6. Termination of Service . If the Participant’s Service terminates for any reason except for Cause or the Participant’s death or Disability, then the Participant may exercise such Participant’s Options only to the extent that such Options would have been exercisable by the Participant on the date Participant’s Service terminates no later than three (3) months after the date Participant’s Service terminates (or such shorter time period not less than thirty (30) days or longer time period as may be determined by the Committee, with any exercise beyond three (3) months after the date Participant’s Service terminates deemed to be the exercise of an NSO), but in any event no later than the expiration date of the Options.

 

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(a) Death . If the Participant’s Service terminates because of the Participant’s death (or the Participant dies within three (3) months after Participant’s Service terminates other than for Cause or because of the Participant’s Disability), then the Participant’s Options may be exercised only to the extent that such Options would have been exercisable by the Participant on the date Participant’s Service terminates and must be exercised by the Participant’s legal representative, or authorized assignee, no later than eighteen (18) months after the date Participant’s Service terminates (or such shorter time period not less than six (6) months or longer time period as may be determined by the Committee), but in any event no later than the expiration date of the Options.

 

(b) Disability . If the Participant’s Service terminates because of the Participant’s Disability, then the Participant’s Options may be exercised only to the extent that such Options would have been exercisable by the Participant on the date Participant’s Service terminates and must be exercised by the Participant (or the Participant’s legal representative or authorized assignee) no later than twelve (12) months after the date Participant’s Service terminates (or such shorter time period not less than six (6) months or longer time period as may be determined by the Committee, with any exercise beyond (a) three (3) months after the date Participant’s Service terminates when the termination of Service is for a Disability that is not a “permanent and total disability” as defined in Section 22(e)(3) of the Code, or (b) twelve (12) months after the date Participant’s Service terminates when the termination of Service is for a Disability that is a “permanent and total disability” as defined in Section 22(e)(3) of the Code, deemed to be exercise of an NSO), but in any event no later than the expiration date of the Options.

 

(c) Cause . If the Participant’s Service terminates for Cause, then Participant’s Options will expire on such Participant’s date of termination of Service, or at such later time and on such conditions as are determined by the Committee, but in any event no later than the expiration date of the Options. Unless otherwise provided in an employment agreement or Award Agreement, Cause will have the meaning set forth in the Plan.

 

5.7. Limitations on Exercise . The Committee may specify a minimum number of Shares that may be purchased on any exercise of an Option, provided that such minimum number will not prevent any Participant from exercising the Option for the full number of Shares for which it is then exercisable.

 

5.8. Limitations on ISOs . With respect to Awards granted as ISOs, to the extent that the aggregate Fair Market Value of the Shares with respect to which such ISOs are exercisable for the first time by the Participant during any calendar year (under all plans of Intiva and any Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such Options will be treated as NSOs. For purposes of this Section 5.8 , ISOs will be taken into account in the order in which they were granted. The Fair Market Value of the Shares will be determined as of the time the Option with respect to such Shares is granted. In the event that the Code or the regulations promulgated thereunder are amended after the Effective Date to provide for a different limit on the Fair Market Value of Shares permitted to be subject to ISOs, such different limit will be automatically incorporated herein and will apply to any Options granted after the effective date of such amendment.

 

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5.9. Modification, Extension or Renewal . The Committee may modify, extend or renew outstanding Options and authorize the grant of new Options in substitution therefor, provided that any such action may not, without the written consent of a Participant, impair any of such Participant’s rights under any Option previously granted. Any outstanding ISO that is modified, extended, renewed or otherwise altered will be treated in accordance with Section 424(h) of the Code. Subject to Section 16 of this Plan, by written notice to affected Participants, the Committee may reduce the Exercise Price of outstanding Options without the consent of such Participants; provided, however , that the Exercise Price may not be reduced below the Fair Market Value on the date the action is taken to reduce the Exercise Price.

 

5.10. No Disqualification . Notwithstanding any other provision in this Plan, no term of this Plan relating to ISOs will be interpreted, amended or altered, nor will any discretion or authority granted under this Plan be exercised, so as to disqualify this Plan under Section 422 of the Code or, without the consent of the Participant affected, to disqualify any ISO under Section 422 of the Code.

 

6. RESTRICTED STOCK AWARDS . A Restricted Stock Award is an offer by Intiva to sell to an eligible Employee, Consultant, or Director Shares that are subject to restrictions (“ Restricted Stock ”). The Committee will determine to whom an offer will be made, the number of Shares the Participant may purchase, the Purchase Price, the restrictions under which the Shares will be subject and all other terms and conditions of the Restricted Stock Award, subject to the Plan.

 

6.1. Restricted Stock Purchase Agreement . All purchases under a Restricted Stock Award will be evidenced by an Award Agreement. Except as may otherwise be provided in an Award Agreement, a Participant accepts a Restricted Stock Award by signing and delivering to Intiva an Award Agreement with full payment of the Purchase Price, within thirty (30) days from the date the Award Agreement was delivered to the Participant. If the Participant does not accept such Award within thirty (30) days, then the offer of such Restricted Stock Award will terminate, unless the Committee determines otherwise.

 

6.2. Purchase Price . The Purchase Price for a Restricted Stock Award will be determined by the Committee and may be less than Fair Market Value on the date the Restricted Stock Award is granted. Payment of the Purchase Price must be made in accordance with Section 9 of the Plan, and the Award Agreement and in accordance with any procedures established by Intiva.

 

6.3. Terms of Restricted Stock Awards . Restricted Stock Awards will be subject to such restrictions as the Committee may impose or are required by law. These restrictions may be based on completion of a specified number of years of service with Intiva or upon completion of Performance Factors, if any, during any Performance Period as set out in advance in the Participant’s Award Agreement. Prior to the grant of a Restricted Stock Award, the Committee will: (a) determine the nature, length and starting date of any Performance Period for the Restricted Stock Award; (b) select from among the Performance Factors to be used to measure performance goals, if any; and (c) determine the number of Shares that may be awarded to the Participant. Performance Periods may overlap and a Participant may participate simultaneously with respect to Restricted Stock Awards that are subject to different Performance Periods and having different performance goals and other criteria.

 

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6.4. Termination of Service . Except as may be set forth in the Participant’s Award Agreement, vesting ceases on such date Participant’s Service terminates (unless determined otherwise by the Committee).

 

7. STOCK BONUS AWARDS . A Stock Bonus Award is an award to an eligible Employee, Consultant, or Director of Shares for Services to be rendered or for past Services already rendered to Intiva or any Parent, Subsidiary or Affiliate. All Stock Bonus Awards will be made pursuant to an Award Agreement. No payment from the Participant will be required for Shares awarded pursuant to a Stock Bonus Award.

 

7.1. Terms of Stock Bonus Awards . The Committee will determine the number of Shares to be awarded to the Participant under a Stock Bonus Award and any restrictions thereon. These restrictions may be based upon completion of a specified number of years of service with Intiva or upon satisfaction of performance goals based on Performance Factors during any Performance Period as set out in advance in the Participant’s Stock Bonus Agreement. Prior to the grant of any Stock Bonus Award the Committee will: (a) determine the nature, length and starting date of any Performance Period for the Stock Bonus Award; (b) select from among the Performance Factors to be used to measure performance goals; and (c) determine the number of Shares that may be awarded to the Participant. Performance Periods may overlap and a Participant may participate simultaneously with respect to Stock Bonus Awards that are subject to different Performance Periods and different performance goals and other criteria.

 

7.2. Form of Payment to Participant . Payment may be made in the form of cash, whole Shares, or a combination thereof, based on the Fair Market Value of the Shares earned under a Stock Bonus Award on the date of payment, as determined in the sole discretion of the Committee.

 

7.3. Termination of Service . Except as may be set forth in the Participant’s Award Agreement, vesting ceases on such date Participant’s Service terminates (unless determined otherwise by the Committee).

 

8. STOCK APPRECIATION RIGHTS . A Stock Appreciation Right (“ SAR ”) is an award to an eligible Employee, Consultant, or Director that may be settled in cash, or Shares (which may consist of Restricted Stock), having a value equal to (a) the difference between the Fair Market Value on the date of exercise over the Exercise Price multiplied by (b) the number of Shares with respect to which the SAR is being settled (subject to any maximum number of Shares that may be issuable as specified in an Award Agreement). All SARs will be made pursuant to an Award Agreement.

 

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8.1. Terms of SARs . The Committee will determine the terms of each SAR including, without limitation: (a) the number of Shares subject to the SAR; (b) the Exercise Price and the time or times during which the SAR may be settled; (c) the consideration to be distributed on settlement of the SAR; and (d) the effect of the Participant’s termination of Service on each SAR. The Exercise Price of the SAR will be determined by the Committee when the SAR is granted, and may not be less than Fair Market Value of the Shares on the date of grant. A SAR may be awarded upon satisfaction of Performance Factors, if any, during any Performance Period as are set out in advance in the Participant’s individual Award Agreement. If the SAR is being earned upon the satisfaction of Performance Factors, then the Committee will: (x) determine the nature, length and starting date of any Performance Period for each SAR; and (y) select from among the Performance Factors to be used to measure the performance, if any. Performance Periods may overlap and Participants may participate simultaneously with respect to SARs that are subject to different Performance Factors and other criteria.

 

8.2. Exercise Period and Expiration Date . A SAR will be exercisable within the times or upon the occurrence of events determined by the Committee and set forth in the Award Agreement governing such SAR. The SAR Agreement will set forth the expiration date; provided that no SAR will be exercisable after the expiration of ten (10) years from the date the SAR is granted. The Committee may also provide for SARs to become exercisable at one time or from time to time, periodically or otherwise (including, without limitation, upon the attainment during a Performance Period of performance goals based on Performance Factors), in such number of Shares or percentage of the Shares subject to the SAR as the Committee determines. Except as may be set forth in the Participant’s Award Agreement, vesting ceases on the date Participant’s Service terminates (unless determined otherwise by the Committee). Notwithstanding the foregoing, the rules of Section 5.6 also will apply to SARs.

 

8.3. Form of Settlement . Upon exercise of a SAR, a Participant will be entitled to receive payment from Intiva in an amount determined by multiplying (a) the difference between the Fair Market Value of a Share on the date of exercise over the Exercise Price; times (b) the number of Shares with respect to which the SAR is exercised. At the discretion of the Committee, the payment from Intiva for the SAR exercise may be in cash, in Shares of equivalent value, or in some combination thereof. The portion of a SAR being settled may be paid currently or on a deferred basis with such interest or Dividend Equivalent Right, if any, as the Committee determines, provided that the terms of the SAR and any deferral satisfy the requirements of Section 409A of the Code.

 

8.4. Termination of Service . Except as may be set forth in the Participant’s Award Agreement, vesting ceases on such date Participant’s Service terminates (unless determined otherwise by the Committee).

 

9. PAYMENT FOR SHARE PURCHASES . Payment from a Participant for Shares purchased pursuant to this Plan may be made in cash or by check or, where expressly approved for the Participant by the Committee and where permitted by law (and to the extent not otherwise set forth in the applicable Award Agreement):

 

(a) by cancellation of indebtedness of Intiva to the Participant;

 

(b) by surrender of shares of Intiva held by the Participant that have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Award will be exercised or settled;

 

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(c) by waiver of compensation due or accrued to the Participant for services rendered or to be rendered to Intiva or a Parent or Subsidiary;

 

(d) by consideration received by Intiva pursuant to a broker-assisted or other form of cashless exercise program implemented by Intiva in connection with the Plan;

 

(e) by any combination of the foregoing; or

 

(f) by any other method of payment as is permitted by applicable law.

 

10. GRANTS TO NON-EMPLOYEE DIRECTORS . [RESERVED]

 

11. WITHHOLDING TAXES .

 

11.1. Withholding Generally . Whenever Shares are to be issued in satisfaction of Awards granted under this Plan or a tax event occurs, Intiva may require the Participant to remit to Intiva, or to the Parent, Subsidiary or Affiliate, as applicable, employing the Participant, an amount sufficient to satisfy applicable U.S. federal, state, local and international tax or any other tax or social insurance liability (the “ Tax-Related Items ”) legally due from the Participant prior to the delivery of Shares pursuant to exercise or settlement of any Award. Whenever payments in satisfaction of Awards granted under this Plan are to be made in cash, such payment will be net of an amount sufficient to satisfy applicable withholding obligations for Tax-Related Items. Unless otherwise determined by the Committee, the Fair Market Value of the Shares will be determined as of the date that the taxes are required to be withheld and such Shares will be valued based on the value of the actual trade or, if there is none, the Fair Market Value of the Shares as of the previous trading day.

 

11.2. Stock Withholding . The Committee, or its delegate(s), as permitted by applicable law, in its sole discretion and pursuant to such procedures as it may specify from time to time and to limitations of local law, may require or permit a Participant to satisfy such Tax Related Items legally due from the Participant, in whole or in part by (without limitation) (a) paying cash, (b) having Intiva withhold otherwise deliverable cash or Shares having a Fair Market Value equal to the Tax-Related Items to be withheld, (c) delivering to Intiva already-owned shares having a Fair Market Value equal to the Tax-Related Items to be withheld or (d) withholding from the proceeds of the sale of otherwise deliverable Shares acquired pursuant to an Award either through a voluntary sale or through a mandatory sale arranged by Intiva. Intiva may withhold or account for these Tax-Related Items by considering applicable statutory withholding rates or other applicable withholding rates, including up to the maximum permissible statutory tax rate for the applicable tax jurisdiction, to the extent consistent with applicable laws.

 

12. TRANSFERABILITY .

 

12.1. Transfer Generally . Unless determined otherwise by the Committee or pursuant to Section 12.2 , an Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution. If the Committee makes an Award transferable, including, without limitation, by instrument to an inter vivos or testamentary trust in which the Awards are to be passed to beneficiaries upon the death of the trustor (settlor) or by gift or by domestic relations order to a Permitted Transferee, such Award will contain such additional terms and conditions as the Committee deems appropriate. All Awards will be exercisable: (a) during the Participant’s lifetime only by (i) the Participant, or (ii) the Participant’s guardian or legal representative; (b) after the Participant’s death, by the legal representative of the Participant’s heirs or legatees; and (c) in the case of all awards except ISOs, by a Permitted Transferee.

 

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12.2. Award Transfer Program . Notwithstanding any contrary provision of the Plan, the Committee will have all discretion and authority to determine and implement the terms and conditions of any Award Transfer Program instituted pursuant to this Section 12.2 and will have the authority to amend the terms of any Award participating, or otherwise eligible to participate in, the Award Transfer Program, including (but not limited to) the authority to (a) amend (including to extend) the expiration date, post-termination exercise period and/or forfeiture conditions of any such Award, (b) amend or remove any provisions of the Award relating to the Award holder’s continued Service to Intiva or any Parent, Subsidiary or Affiliate, (c) amend the permissible payment methods with respect to the exercise or purchase of any such Award, (d) amend the adjustments to be implemented in the event of changes in the capitalization and other similar events with respect to such Award, and (e) make such other changes to the terms of such Award as the Committee deems necessary or appropriate in its sole discretion.

 

13. PRIVILEGES OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES .

 

13.1. Voting and Dividends . No Participant will have any of the rights of a stockholder with respect to any Shares until the Shares are issued to the Participant, except for any Dividend Equivalent Rights permitted by an applicable Award Agreement. Any Dividend Equivalent Rights will be subject to the same vesting or performance conditions as the underlying Award. In addition, the Committee may provide that any Dividend Equivalent Rights permitted by an applicable Award Agreement will be deemed to have been reinvested in additional Shares or otherwise reinvested. After Shares are issued to the Participant, the Participant will be a stockholder and have all the rights of a stockholder with respect to such Shares, including the right to vote and receive all dividends or other distributions made or paid with respect to such Shares; provided , that if such Shares are Restricted Stock, then any new, additional or different securities the Participant may become entitled to receive with respect to such Shares by virtue of a stock dividend, stock split or any other change in the corporate or capital structure of Intiva will be subject to the same restrictions as the Restricted Stock; provided, further , that the Participant will have no right to such stock dividends or stock distributions with respect to Unvested Shares, and any such dividends or stock distributions will be accrued and paid only at such time, if any, as such Unvested Shares become vested Shares. The Committee, in its discretion, may provide in the Award Agreement evidencing any Award that the Participant will be entitled to Dividend Equivalent Rights with respect to the payment of cash dividends on Shares underlying an Award during the period beginning on the date the Award is granted and ending, with respect to each Share subject to the Award, on the earlier of the date on which the Award is exercised or settled or the date on which it is forfeited provided , that no Dividend Equivalent Right will be paid with respect to the Unvested Shares, and such dividends or stock distributions will be accrued and paid only at such time, if any, as such Unvested Shares become vested Shares. Such Dividend Equivalent Rights, if any, will be credited to the Participant in the form of additional whole Shares as of the date of payment of such cash dividends on Shares.

 

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13.2. Restrictions on Shares . At the discretion of the Committee, Intiva may reserve to itself and/or its assignee(s) a right to repurchase (a “ Right of Repurchase ”) a portion of any or all Unvested Shares held by a Participant following such Participant’s termination of Service at any time within ninety (90) days (or such longer or shorter time determined by the Committee) after the later of the date Participant’s Service terminates and the date the Participant purchases Shares under this Plan, for cash and/or cancellation of purchase money indebtedness, at the Participant’s Purchase Price or Exercise Price, as the case may be.

 

14. CERTIFICATES . All Shares or other securities whether or not certificated, delivered under this Plan will be subject to such stock transfer orders, legends and other restrictions as the Committee may deem necessary or advisable, including restrictions under any applicable U.S. federal, state or foreign securities law, or any rules, regulations and other requirements of the SEC or any stock exchange or automated quotation system upon which the Shares may be listed or quoted and any non-U.S. exchange controls or securities law restrictions to which the Shares are subject.

 

15. ESCROW; PLEDGE OF SHARES . To enforce any restrictions on a Participant’s Shares, the Committee may require the Participant to deposit all certificates representing Shares, together with stock powers or other instruments of transfer approved by the Committee, appropriately endorsed in blank, with Intiva or an agent designated by Intiva to hold in escrow until such restrictions have lapsed or terminated, and the Committee may cause a legend or legends referencing such restrictions to be placed on the certificates. Any Participant who is permitted to execute a promissory note as partial or full consideration for the purchase of Shares under this Plan will be required to pledge and deposit with Intiva all or part of the Shares so purchased as collateral to secure the payment of the Participant’s obligation to Intiva under the promissory note; provided , however , that the Committee may require or accept other or additional forms of collateral to secure the payment of such obligation and, in any event, Intiva will have full recourse against the Participant under the promissory note notwithstanding any pledge of the Participant’s Shares or other collateral. In connection with any pledge of the Shares, the Participant will be required to execute and deliver a written pledge agreement in such form as the Committee will from time to time approve. The Shares purchased with the promissory note may be released from the pledge on a pro rata basis as the promissory note is paid.

 

16. REPRICING; EXCHANGE AND BUYOUT OF AWARDS . Without prior stockholder approval the Committee may (a) reprice Options or SARs (and where such repricing is a reduction in the Exercise Price of outstanding Options or SARs, the consent of the affected Participants is not required provided written notice is provided to them, notwithstanding any adverse tax consequences to them arising from the repricing), and (b) with the consent of the respective Participants (unless not required pursuant to Section 5.9 of the Plan), pay cash or issue new Awards in exchange for the surrender and cancellation of any, or all, outstanding Awards.

 

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17. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE . An Award will not be effective unless such Award is in compliance with all applicable U.S. and foreign federal and state securities, exchange control or other laws, rules and regulations of any governmental body, and the requirements of any stock exchange or automated quotation system upon which the Shares may then be listed or quoted, as they are in effect on the date of grant of the Award and also on the date of exercise or other issuance. Notwithstanding any other provision in this Plan, Intiva will have no obligation to issue or deliver certificates for Shares under this Plan prior to: (a) obtaining any approvals from governmental agencies that Intiva determines are necessary or advisable; and/or (b) completion of any registration or other qualification of such Shares under any state or federal or foreign law or ruling of any governmental body that Intiva determines to be necessary or advisable. Intiva will be under no obligation to register the Shares with the SEC or to effect compliance with the registration, qualification or listing requirements of any foreign or state securities laws, exchange control laws, stock exchange or automated quotation system, and Intiva will have no liability for any inability or failure to do so.

 

18. NO OBLIGATION TO EMPLOY . Nothing in this Plan or any Award granted under this Plan will confer or be deemed to confer on any Participant any right to continue in the employ of, or to continue any other relationship with, Intiva or any Parent, Subsidiary or Affiliate or limit in any way the right of Intiva or any Parent, Subsidiary or Affiliate to terminate Participant’s employment or other relationship at any time.

 

19. CORPORATE TRANSACTIONS .

 

19.1. Assumption or Replacement of Awards by Successor . In the event of a Corporate Transaction any or all outstanding Awards may be assumed or replaced by the successor corporation, which assumption or replacement will be binding on all Participants. In the alternative, the successor corporation may substitute equivalent Awards or provide substantially similar consideration to Participants as was provided to stockholders (after taking into account the existing provisions of the Awards). The successor corporation may also issue, in place of outstanding Shares of Intiva held by the Participant, substantially similar shares or other property subject to repurchase restrictions no less favorable to the Participant. In the event such successor or acquiring corporation (if any) refuses to assume, convert, replace or substitute Awards, as provided above, pursuant to a Corporate Transaction, then notwithstanding any other provision in this Plan to the contrary, such Awards will have their vesting accelerate as to all shares subject to such Award (and any applicable right of repurchase fully lapse) immediately prior to the Corporate Transaction. In addition, in the event such successor or acquiring corporation (if any) refuses to assume, convert, replace or substitute Awards, as provided above, pursuant to a Corporate Transaction, the Committee will notify the Participant in writing or electronically that such Award will be exercisable for a period of time determined by the Committee in its sole discretion, and such Award will terminate upon the expiration of such period. Awards need not be treated similarly in a Corporate Transaction.

 

19.2. Assumption of Awards by Intiva . Intiva, from time to time, also may substitute or assume outstanding awards granted by another company, whether in connection with an acquisition of such other company or otherwise, by either; (a) granting an Award under this Plan in substitution of such other company’s award; or (b) assuming such award as if it had been granted under this Plan if the terms of such assumed award could be applied to an Award granted under this Plan. Such substitution or assumption will be permissible if the holder of the substituted or assumed award would have been eligible to be granted an Award under this Plan if the other company had applied the rules of this Plan to such grant. In the event Intiva assumes an award granted by another company, the terms and conditions of such award will remain unchanged ( except that the Purchase Price or the Exercise Price, as the case may be, and the number and nature of Shares issuable upon exercise or settlement of any such Award will be adjusted appropriately pursuant to Section 424(a) of the Code). In the event Intiva elects to grant a new Option in substitution rather than assuming an existing option, such new Option may be granted with a similarly adjusted Exercise Price. Substitute Awards will not reduce the number of Shares authorized for grant under the Plan or authorized for grant to a Participant in a calendar year.

 

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19.3. Non-Employee Directors’ Awards . Notwithstanding any provision to the contrary herein, in the event of a Corporate Transaction, the vesting of all Awards granted to Non-Employee Directors will accelerate and such Awards will become exercisable (as applicable) in full prior to the consummation of such event at such times and on such conditions as the Committee determines.

 

20. ADOPTION AND STOCKHOLDER APPROVAL . This Plan will be submitted for the approval of Intiva’s stockholders, consistent with applicable laws, within twelve (12) months before or after the date this Plan is adopted by the Board.

 

21. TERM OF PLAN/GOVERNING LAW . Unless earlier terminated as provided herein, this Plan will become effective on the Effective Date and will terminate ten (10) years from the date this Plan is adopted by the Board. This Plan and all Awards granted hereunder will be governed by and construed in accordance with the laws of the State of Delaware (excluding its conflict of laws rules).

 

22. AMENDMENT OR TERMINATION OF PLAN . The Board may at any time terminate or amend this Plan in any respect, including, without limitation, amendment of any form of Award Agreement or instrument to be executed pursuant to this Plan; provided, however , that the Board will not, without the approval of the stockholders of Intiva, amend this Plan in any manner that requires such stockholder approval; provided further , that a Participant’s Award will be governed by the version of this Plan then in effect at the time such Award was granted. No termination or amendment of the Plan will affect any then-outstanding Award unless expressly provided by the Committee. In any event, no termination or amendment of the Plan or any outstanding Award may adversely affect any then outstanding Award without the consent of the Participant, unless such termination or amendment is necessary to comply with applicable law, regulation or rule.

 

23. NONEXCLUSIVITY OF THE PLAN . Neither the adoption of this Plan by the Board, the submission of this Plan to the stockholders of Intiva for approval, nor any provision of this Plan will be construed as creating any limitations on the power of the Board to adopt such additional compensation arrangements as it may deem desirable, including, without limitation, the granting of stock awards and bonuses otherwise than under this Plan, and such arrangements may be either generally applicable or applicable only in specific cases.

 

24. INSIDER TRADING POLICY . Each Participant who receives an Award will comply with any policy adopted by Intiva from time to time covering transactions in Intiva’s securities by Employees, officers and/or directors of Intiva, as well as with any applicable insider trading or market abuse laws to which the Participant may be subject.

 

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25. ALL AWARDS SUBJECT TO COMPANY CLAWBACK OR RECOUPMENT POLICY . All Awards, subject to applicable law, will be subject to clawback or recoupment pursuant to any compensation clawback or recoupment policy adopted by the Board or required by law during the term of Participant’s employment or other service with Intiva that is applicable to executive officers, employees, directors or other service providers of Intiva, and in addition to any other remedies available under such policy and applicable law, may require the cancellation of outstanding Awards and the recoupment of any gains realized with respect to Awards.

 

26. DEFINITIONS . As used in this Plan, and except as elsewhere defined herein, the following terms will have the following meanings:

 

26.1. Affiliate ” means (i) any entity that, directly or indirectly, is controlled by, controls or is under common control with, Intiva and (ii) any entity in which Intiva has a significant equity interest, in either case as determined by the Committee, whether now or hereafter existing.

 

26.2. Award ” means any award under the Plan, including any Option, Restricted Stock, Stock Bonus, or Stock Appreciation Right.

 

26.3. Award Agreement ” means, with respect to each Award, the written or electronic agreement between Intiva and the Participant setting forth the terms and conditions of the Award, and country-specific appendix thereto for grants to non-U.S. Participants, which will be in substantially a form (which need not be the same for each Participant) that the Committee (or in the case of Award agreements that are not used for Insiders, the Committee’s delegate(s)) has from time to time approved, and will comply with and be subject to the terms and conditions of this Plan.

 

26.4. Award Transfer Program ” means any program instituted by the Committee which would permit Participants the opportunity to transfer any outstanding Awards to a financial institution or other person or entity approved by the Committee.

 

26.5. Board ” means the Board of Directors of Intiva.

 

26.6. Cause ” means a determination by Intiva that the Participant has committed an act or acts constituting any of the following: (i) dishonesty, fraud, misconduct or negligence in connection with Intiva duties, (ii) unauthorized disclosure or use of Intiva’s confidential or proprietary information, (iii) misappropriation of a business opportunity of Intiva, (iv) materially aiding a Intiva competitor, (v) a felony conviction; or (vi) failure or refusal to attend to the duties or obligations of the Participant’s position, or to comply with Intiva’s rules, policies or procedures. The determination as to whether a Participant is being terminated for Cause will be made in good faith by Intiva and will be final and binding on the Participant. The foregoing definition does not in any way limit Intiva’s ability to terminate a Participant’s employment or consulting relationship at any time as provided in Section 18 above, and the term “Intiva” will be interpreted to include any Subsidiary or Parent, as appropriate. Notwithstanding the foregoing, the foregoing definition of “Cause” may, in part or in whole, be modified or replaced in each individual employment agreement, Award Agreement or other applicable agreement with any Participant, provided that such document supersedes the definition provided in this Section 26.6 .

 

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26.7. Code ” means the United States Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.

 

26.8. Committee ” means the Compensation Committee of the Board or those persons to whom administration of the Plan, or part of the Plan, has been delegated as permitted by law.

 

26.9. Common Stock ” means the common stock of Intiva.

 

26.10. Consultant ” means any natural person, including an advisor or independent contractor, engaged by Intiva or a Parent, Subsidiary or Affiliate to render services to such entity.

 

26.11. Corporate Transaction ” means the occurrence of any of the following events: (a) any “Person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of Intiva representing more than fifty percent (50%) of the total voting power represented by Intiva’s then-outstanding voting securities; provided, however , that for purposes of this subclause (a) the acquisition of additional securities by any one Person who is considered to own more than fifty percent (50%) of the total voting power of the securities of Intiva will not be considered a Corporate Transaction; (b) the consummation of the sale or disposition by Intiva of all or substantially all of Intiva’s assets; (c) the consummation of a merger or consolidation of Intiva with any other corporation, other than a merger or consolidation which would result in the voting securities of Intiva outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of Intiva or such surviving entity or its parent outstanding immediately after such merger or consolidation; (d) any other transaction which qualifies as a “corporate transaction” under Section 424(a) of the Code wherein the stockholders of Intiva give up all of their equity interest in Intiva (except for the acquisition, sale or transfer of all or substantially all of the outstanding shares of capital stock of Intiva) or (e) a change in the effective control of Intiva that occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by members of the Board whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. For purpose of this subclause (e), if any Person is considered to be in effective control of Intiva, the acquisition of additional control of Intiva by the same Person will not be considered a Corporate Transaction. For purposes of this definition, Persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with Intiva. Notwithstanding the foregoing, to the extent that any amount constituting deferred compensation (as defined in Section 409A of the Code) would become payable under this Plan by reason of a Corporate Transaction, such amount will become payable only if the event constituting a Corporate Transaction would also qualify as a change in ownership or effective control of Intiva or a change in the ownership of a substantial portion of the assets of Intiva, each as defined within the meaning of Code Section 409A, as it has been and may be amended from time to time, and any proposed or final Treasury Regulations and IRS guidance that has been promulgated or may be promulgated thereunder from time to time.

 

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26.12. Director ” means a member of the Board.

 

26.13. Disability ” means in the case of incentive stock options, total and permanent disability as defined in Section 22(e)(3) of the Code and in the case of other Awards, that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.

 

26.14. Dividend Equivalent Right” means the right of a Participant, granted at the discretion of the Committee or as otherwise provided by the Plan, to receive a credit for the account of such Participant in an amount equal to the cash, stock or other property dividends in amounts equal equivalent to cash, stock or other property dividends for each Share represented by an Award held by such Participant.

 

26.15. Effective Date ” means March __ , 2018.

 

26.16. Employee ” means any person, including Officers and Directors, providing services as an employee to Intiva or any Parent, Subsidiary or Affiliate. Neither service as a Director nor payment of a director’s fee by Intiva will be sufficient to constitute “employment” by Intiva.

 

26.17. Exchange Act ” means the United States Securities Exchange Act of 1934, as amended.

 

26.18. Exchange Program ” means a program pursuant to which (a) outstanding Awards are surrendered, cancelled or exchanged for cash, the same type of Award or a different Award (or combination thereof) or (b) the exercise price of an outstanding Award is increased or reduced.

 

26.19. Exercise Price ” means, with respect to an Option, the price at which a holder may purchase the Shares issuable upon exercise of an Option and with respect to a SAR, the price at which the SAR is granted to the holder thereof.

 

26.20. Fair Market Value ” means, as of any date, the value of a share of Intiva’s Common Stock determined as follows:

 

(a) if such Common Stock is publicly traded and is then listed on a national securities exchange, its closing price on the date of determination on the principal national securities exchange on which the Common Stock is listed or admitted to trading as reported in The Wall Street Journal or such other source as the Committee deems reliable;

 

(b) if such Common Stock is publicly traded but is neither listed nor admitted to trading on a national securities exchange, the average of the closing bid and asked prices on the date of determination as reported in The Wall Street Journal or such other source as the Committee deems reliable; or

 

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(c) if none of the foregoing is applicable, by the Board or the Committee in good faith.

 

26.21. Insider ” means an officer or director of Intiva or any other person whose transactions in Intiva’s Common Stock are subject to Section 16 of the Exchange Act.

 

26.22. Intiva ” means Intiva BioPharma Inc., a Delaware corporation, or any successor corporation.

 

26.23. IRS ” means the United States Internal Revenue Service.

 

26.24. Non-Employee Director ” means a Director who is not an Employee of Intiva or any Parent, Subsidiary or Affiliate.

 

26.25. Option ” means an award of an option to purchase Shares pursuant to Section 5 .

 

26.26. Parent ” means any corporation (other than Intiva) in an unbroken chain of corporations ending with Intiva if each of such corporations other than Intiva owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

 

26.27. Participant ” means a person who holds an Award under this Plan.

 

26.28. “Performance Factors” means any of the factors selected by the Committee and specified in an Award Agreement, from among the following objective measures, either individually, alternatively or in any combination, applied to Intiva as a whole or any business unit or Subsidiary, either individually, alternatively, or in any combination, on a GAAP or non-GAAP basis, and measured, to the extent applicable on an absolute basis or relative to a pre-established target, to determine whether the performance goals established by the Committee with respect to applicable Awards have been satisfied:

 

(a) Profit Before Tax;

 

(b) Billings;

 

(c) Revenue;

 

(d) Net revenue;

 

(e) Earnings (which may include earnings before interest and taxes, earnings before taxes, net earnings, stock-based compensation expenses, depreciation and amortization);

 

(f) Operating income;

 

(g) Operating margin;

 

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(h) Operating profit;

 

(i) Controllable operating profit, or net operating profit;

 

(j) Net Profit;

 

(k) Gross margin;

 

(l) Operating expenses or operating expenses as a percentage of revenue;

 

(m) Net income;

 

(n) Earnings per share;

 

(o) Total stockholder return;

 

(p) Market share;

 

(q) Return on assets or net assets;

 

(r) Intiva’s stock price;

 

(s) Growth in stockholder value relative to a pre-determined index;

 

(t) Return on equity;

 

(u) Return on invested capital;

 

(v) Cash Flow (including free cash flow or operating cash flows);

 

(w) Cash conversion cycle;

 

(x) Economic value added;

 

(y) Individual confidential business objectives;

 

(z) Contract awards or backlog;

 

(aa) Overhead or other expense reduction;

 

(bb) Credit rating;

 

(cc) Strategic plan development and implementation;

 

(dd) Succession plan development and implementation;

 

(ee) Customer indicators and/or satisfaction;

 

(ff) New product invention or innovation;

 

(gg) Attainment of research and development milestones;

 

(hh) Improvements in productivity;

 

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(jj) Attainment of objective operating goals and employee metrics;

 

(jj) Sales;

 

(kk) Expenses;

 

(ll) Balance of cash, cash equivalents and marketable securities;

 

(mm) Completion of an identified special project;

 

(nn) Completion of a joint venture or other corporate transaction;

 

(oo) Employee satisfaction and/or retention;

 

(pp) Research and development expenses;

 

(qq) Working capital targets and changes in working capital; and

 

(rr) Any other metric that is capable of measurement as determined by the Committee.

 

The Committee may, in recognition of unusual or non-recurring items such as acquisition-related activities or changes in applicable accounting rules, provide for one or more equitable adjustments (based on objective standards) to the Performance Factors to preserve the Committee’s original intent regarding the Performance Factors at the time of the initial award grant. It is within the sole discretion of the Committee to make or not make any such equitable adjustments.

 

26.29. Performance Period ” means one or more periods of time, which may be of varying and overlapping durations, as the Committee may select, over which the attainment of one or more Performance Factors will be measured for the purpose of determining a Participant’s right to, and the payment of, a Performance Award.

 

26.30. Permitted Transferee ” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law (including adoptive relationships) of the Employee, any person sharing the Employee’s household (other than a tenant or employee), a trust in which these persons (or the Employee) have more than 50% of the beneficial interest, a foundation in which these persons (or the Employee) control the management of assets, and any other entity in which these persons (or the Employee) own more than 50% of the voting interests.

 

26.31. Plan ” means this Intiva BioPharma Inc. 2018 Equity Incentive Plan.

 

26.32. Purchase Price ” means the price to be paid for Shares acquired under the Plan, other than Shares acquired upon exercise of an Option or SAR.

 

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26.33. Restricted Stock Award ” means an award of Shares pursuant to Section 6 or Section 10 of the Plan, or issued pursuant to the early exercise of an Option.

 

26.34. SEC ” means the United States Securities and Exchange Commission.

 

26.35. Securities Act ” means the United States Securities Act of 1933, as amended.

 

26.36. Service ” will mean service as an Employee, Consultant, Director or Non-Employee Director, to Intiva or a Parent, Subsidiary or Affiliate, subject to such further limitations as may be set forth in the Plan or the applicable Award Agreement. An Employee will not be deemed to have ceased to provide Service in the case of (a) sick leave, (b) military leave, or (c) any other leave of absence approved by Intiva; provided , that such leave is for a period of not more than 90 days unless reemployment upon the expiration of such leave is guaranteed by contract or statute. Notwithstanding anything to the contrary, an Employee will not be deemed to have ceased to provide Service if a formal policy adopted from time to time by Intiva and issued and promulgated to employees in writing provides otherwise. In the case of any Employee on an approved leave of absence or a reduction in hours worked (for illustrative purposes only, a change in schedule from that of full-time to part-time), the Committee may make such provisions respecting suspension or modification of vesting of the Award while on leave from the employ of Intiva or a Parent, Subsidiary or Affiliate or during such change in working hours as it may deem appropriate, except that in no event may an Award be exercised after the expiration of the term set forth in the applicable Award Agreement. In the event of military or other protected leave, if required by applicable laws, vesting will continue for the longest period that vesting continues under any other statutory or Intiva-approved leave of absence and, upon a Participant’s returning from military leave, he or she will be given vesting credit with respect to Awards to the same extent as would have applied had the Participant continued to provide Service to Intiva throughout the leave on the same terms as he or she was providing Service immediately prior to such leave. An Employee will have terminated employment as of the date he or she ceases to provide Service (regardless of whether the termination is in breach of local employment laws or is later found to be invalid) and employment will not be extended by any notice period or garden leave mandated by local law, provided however , that a change in status from an Employee to a Consultant or a Non-Employee Director (or vice versa) will not terminate a Participant’s Service, unless determined by the Committee, in its discretion. The Committee will have sole discretion to determine whether a Participant has ceased to provide Service and the effective date on which the Participant ceased to provide Service.

 

26.37. Shares ” means shares of Intiva’s Common Stock and the common stock of any successor entity.

 

26.38. Stock Appreciation Right ” means an Award granted pursuant to Section 8 or Section 10 of the Plan.

 

26.39. Stock Bonus ” means an Award granted pursuant to Section 7 or Section 10 of the Plan.

 

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26.40. Subsidiary ” means any corporation (other than Intiva) in an unbroken chain of corporations beginning with Intiva if each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

 

26.41. Treasury Regulations ” means regulations promulgated by the United States Treasury Department.

 

26.42. Unvested Shares ” means Shares that have not yet vested or are subject to a right of repurchase in favor of Intiva (or any successor thereto).

 

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Exhibit 31.1

 

RULE 13a-14(a) CERTIFICATION

 

I, Alain Bankier, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of Intiva BioPharma Inc.;
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;
     
  b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

 

  a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Dated: May 15, 2018 /s/ Alain Bankier
  Alain Bankier
  Chief Executive Officer
  (principal executive officer)

 

     
 

 

 

Exhibit 31.2

 

RULE 13a-14(a) CERTIFICATION

 

I, Evan L. Wasoff, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of Intiva BioPharma Inc.;
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;
     
  b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

 

  a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Dated: May 15, 2018 /s/ Evan L. Wasoff
  Evan L. Wasoff
  Chief Financial Officer
  (principal financial officer)

 

     
 

 

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Intiva BioPharma Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Alain Bankier, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
   
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Dated: May 15, 2018 /s/ Alain Bankier
  Alain Bankier
  Chief Executive Officer
  (principal executive officer)

 

     
 

 

 

Exhibit 32.2

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Intiva BioPharma Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Evan L. Wasoff, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
   
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

Dated: May 15, 2018 /s/ Evan L. Wasoff
  Evan L. Wasoff
  Chief Financial Officer
  (principal financial officer)