UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K/A
Amendment
No. 1
(Mark
One)
|
[X]
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For
the fiscal year ended December 31, 2018
OR
|
[ ]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO
|
Commission
File Number 001-54856
OWC
Pharmaceutical Research Corp.
(Exact
name of Registrant as specified in its Charter)
|
Delaware
|
|
98-0573566
|
(State
or other jurisdiction of
incorporation or organization)
|
|
(I.R.S.
Employer
Identification No.)
|
|
2
Ben Gurion st, Ramat Gan, Israel
|
|
5257334
|
|
(Address
of principal executive offices)
|
|
(Zip
Code)
|
Registrant’s
telephone number, including area code: +972-72-260-8004
Securities
registered pursuant to Section 12(b) of the Act: None.
|
Title
of Each Class
|
|
Name
of Each Exchange on Which Registered
|
Securities
registered pursuant to Section 12(g) of the Act:
Common
Stock, $0.0001 par value
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES [ ]
NO [X]
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES [ ]
NO [X]
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 every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein,
and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated
by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
|
Large
accelerated filer
|
[ ]
|
Accelerated
filer
|
[ ]
|
|
Non-accelerated
filer
|
[X]
|
Smaller
reporting company
|
[X]
|
|
Emerging
growth company
|
[ ]
|
|
|
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES [ ] NO [X]
The
aggregate market value of common stock held by non-affiliates of the registrant as of June 29, 2018, the last business day of
the registrant’s most recently completed second quarter, was $34 million, computed based on the closing price of $0.233
per share on June 29, 2018.
As
of April 1, 2019 there were 176,564,957 shares of the registrant’s common stock, par value $0.001 per share, outstanding.
EXPLANATORY
NOTE
This
Amendment No. 1 on Form 10-K/A, or the Amendment, amends OWC Pharmaceutical Research Corp.’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2018, originally filed on April 1, 2019, or the Original Filing. The purpose of this Amendment
is to include remaining information required by Part III of the Annual Report on Form 10-K. In addition, this Amendment
amends Item 15 of Part IV of the Original Filing to update the exhibit list.
Pursuant
to Rule 12b-15 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, this Amendment also contains new certifications
of the Company’s Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002. Because no financial statements are included in this Amendment and this Amendment does not contain or amend any disclosure
with respect to Items 307 or 308 of Regulation S-K promulgated by the SEC under the Exchange Act, paragraphs 3, 4 and 5 of the
Section 302 certifications have been omitted. In addition, because no financial statements are included in this Amendment, new
certifications of the Company’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 are not required to be included with this Amendment.
Except
as described above, no other changes have been made to the Original Filing. The Original Filing continues to speak as of the dates
described in the Original Filing, and we have not updated the disclosures contained therein to reflect any events that occurred
subsequent to such dates. Accordingly, this Amendment should be read in conjunction with the Company’s filings made with
the Securities and Exchange Commission, or the SEC, subsequent to the filing of the Original Filing, as information in such filings
may update or supersede certain information contained in this Amendment. In this Amendment, unless the context indicates otherwise,
the terms “Company,” “OWC,” “we,” “us,” and “our” refer to OWC Pharmaceutical
Research Corp., a Delaware corporation, and its consolidated subsidiary, One World Cannabis Ltd., a company organized under the
laws of Israel.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
Amendment contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or
the Securities Act, and Section 21E of the Exchange Act that involve substantial risks and uncertainties. In some cases, forward-looking
statements are identified by the words “believe,” “continue,” “estimate,” “expect,”
“future,” “intend,” “likely,” “may,” “ongoing,” “objective,”
“plan,” “potential,” “project,” “should,” “strategy,” “will”
and “would” or the negative of these terms, or other comparable terminology intended to identify statements about
the future. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results,
levels of activity, performance or achievements to be materially different from the information expressed or implied by these
forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement contained in
this Amendment, such statements are based on a combination of facts and factors currently known by us and our expectations of
the future, about which we cannot be certain. Forward-looking statements include , among other things, statements about our ability
to continue as a going concern; our ability to generate revenue or achieve profitability, our ability to obtain additional financing
on acceptable terms or at all, our ability obtain insurance coverage, our dependence on the success of cannabinoid technology,
legal and regulatory developments in the United States and foreign countries, the success and timing of our preclinical and clinical
trials, our ability to secure Israeli licenses to use cannabis for medical research, the rate and degree of market acceptance
of cannabis-based medical products, our dependence on third parties, our ability to protect and defend against litigation and
our ability to attract and retain key personnel. You should refer to the “Risk Factors” section in the Original Filing
and in our other filings with the Securities and Exchange Commission for a discussion of important factors that may cause our
actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors,
we cannot assure you that the forward-looking statements in this Amendment will prove to be accurate. Furthermore, if our forward-looking
statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking
statements, these statements should not be regarded as representations or warranties by us or any other person that we will achieve
our objectives and plans in any specified time frame, or at all. We undertake no obligation to publicly update any forward-looking
statements, whether as a result of new information, future events or otherwise, except as required by law.
TABLE
OF CONTENTS
PART
III
ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The
table below contains information regarding our current directors and executive officers as of April 30, 2019:
|
Name
|
|
Age
|
|
Position
|
|
Non-Employee
Directors
|
|
|
|
|
|
Dr.
Stanley Hirsch
|
|
62
|
|
Chairman
of the Board and Director
|
|
|
|
|
|
|
|
Executive
Officers
|
|
|
|
|
|
Mordechai
Bignitz
|
|
68
|
|
Chief
Executive Officer and Director
|
|
Sigal
Russo
|
|
41
|
|
Chief
Financial Officer
|
|
Dr.
Yehuda Baruch
|
|
62
|
|
Chief
Medical and Regulatory Affairs Officer of One World Cannabis Ltd.
|
|
Alon
Sinai
|
|
52
|
|
Chief
Operating Officer of One World Cannabis Ltd.
|
|
Dr.
Oron Yacoby Zeevi
|
|
58
|
|
Chief
Scientific Officer of One World Cannabis Ltd.
|
Non-Employee
Director
Dr.
Stanley Hirsch
,
Chairman of the Board and Director:
Dr. Hirsch was appointed as Chairman of the Board on July 24, 2017.
He has extensive executive and board level experience for more than the past 25 years in private and publicly listed companies
in biopharmaceutical and agricultural biotech industries, among others, including direct experience in raising capital and leading
M&A activity together with multi-cultural management skills, having managed companies in Israel, Brazil, UK, China and the
United States. From May 2016 to the present, Dr. Hirsch has served as Chairman of the Board of Directors of Foamix Pharmaceuticals
Ltd. (NASDAQ: FOMX), an Israeli-based clinical-stage specialty pharmaceutical company in late-stage clinical development and commercializing
two proprietary products for the treatment of acne, rosacea and other skin conditions. Foamix collaborates with leading global
pharmaceutical companies in the creation and commercialization of its advanced skin treatment products. From August 2007 to the
present, Dr. Hirsch has served as Group CEO of FuturaGene Limited and its predecessor company, FuturaGene Plc, which was listed
on the AIM-London Stock Exchange, prior to acquisition by Suzano Pulp and Paper of Brazil (SUZB, BOVESPA, Sao Paulo) in July 2010.
FuturaGene Limited is a world leader in the development of environmentally friendly solutions that improve and protect crop yields,
engaged in the development and delivery of sustainable genetic solutions for global forestry, biopower, biofuels, and agricultural
markets. Dr. Hirsch’s educational experience includes a D.Phil in Cell Biology and Immunology from Oxford University, UK,
in 1982, a B.Sc. degree with honors in Medical Biochemistry from the University of Capetown, South Africa in 1979, among other
academic honors and awards from Oxford University and University of Capetown. Dr. Hirsch was selected to serve as our Chairman
of the Board and a Director because he has extensive leadership experience with other major corporations.
Executive
Officers
Mordechai
Bignitz, Chief Executive Officer and Director
: Mr. Bignitz was appointed Chief Executive Officer in July 2014 and to the Board
of Directors and Chairman in September 2014. He resigned as Chairman with the appointment of Dr. Stanley Hirsch as Chairman on
July 24, 2017. He has over 30 years of experience in investment banking specializing in all aspects of the planning, negotiation
and execution of both domestic and international transactions. He also has extensive experience in investment management, financial
systems, accounting and taxation. From 2006 to 2015 and from 2017 Mr. Bignitz served as the chairman of the investment committee
of Migdal Capital Trust Ltd. From 2009 to 2011 Mr. Bignitz served as the chief executive officer of Gefen Energies Ltd., a private
Israeli Company. During the past five years, he has served as a director of the following public companies: Arad Investment &
Industrial Development Ltd since February 2014, traded on the Tel-Aviv Stock Exchange (“TASE”); Globe Exploration
Limited Partnership since July 2013, traded on the TASE; Ellomay Capital Limited since 2011, engaged in investments in energy
and infrastructures and traded on the NASDAQ and TASE; Israel Financial Levers Ltd, since 2007 to 2016, engaged in the real estate
business and traded on the TASE; and Ablon Group Ltd from 2010 to 2013, engaged in the real estate business and traded on the
London Stock Exchange. Mr. Bignitz holds a B.A. degree in Economics and Accounting from the Tel Aviv University, Israel in 1982
and received his degree as a Certified Public Accountant in Israel in 1984. The Company believes that Mr. Bignitz’s many
years of experience as a senior executive officer and director of several successful public companies in a variety in industries,
all of which have had greater resources and operating history than the Company, renders him qualified to serve on the Board of
Directors.
Sigal
Russo
,
Chief Financial Officer
: Ms. Russo is a Certified Public Accountant licensed in Israel. Most recently, from
September 2008 to June 2018, Ms. Russo served as Senior Director of Finance of Rosetta Genomics Ltd. (NASDAQ: ROSG), a molecular
diagnostics company, where she was responsible for all aspects of Rosetta Genomics’ finances, and reported to the chief
financial officer. Ms. Russo served in various roles at Rosetta Genomics since 2008. Prior to her tenure at Rosetta Genomics,
Ms. Russo was an audit manager at Ernst & Young in Israel, specializing in audits of companies from various fields, both publicly
traded and privately owned American and Israeli entities, from 2004 to 2008. Ms. Russo holds a BA in Economics and Accounting,
from the Ruppin Academic College.
Dr.
Oron Yacoby Zeevi, Chief Scientific Officer of One World Cannabis Ltd.
: Dr. Yacoby Zeevi has served as our Chief Scientific
Officer since February 2018 and has more than 20 years of extensive scientific experience with both private and publicly listed
companies in the biopharmaceutical industry. In 2008, Dr. Yacoby Zeevi joined Neuroderm Ltd (Nasdaq: NDRM), a clinical-stage pharmaceutical
company developing next-generation treatments for central nervous system (CNS) disorders as the Vice President of Research and
Development. From October 2016 until her recent departure in January 2018, she served as Chief Scientific Officer of Neuroderm,
which was sold to Mitsubishi Tanabe Pharma for US $1.1 billion in July 2017. Dr. Yacoby Zeevi, is the inventor of over 50 issued
patents and patents pending. Her expertise lies in industry-oriented innovation and scientific research, accelerating and orchestrating
the evolution of new ideas through R&D PoC, IP, CMC, early efficacy and safety trials, regulatory affairs and market landscape
mapping in fields of unmet medical needs, towards development of commercially viable pharmaceutical or agricultural products.
Dr. Yacobi Zeevi earned her Ph.D. in micro biology and immunology from the Ben Gurion University of Be’er Sheva, Israel
and also holds a degree of Doctor in Veterinary Medicine from the Hebrew University of Jerusalem.
Alon
Sinai, Chief Operating Officer of One World Cannabis Ltd.
: Mr. Sinai has served with our subsidiary since July 1, 2014 and
has served as our Chief Operating Officer since then. He serves as our liaison with the major Israeli medical institutions in
negotiating our collaboration agreements. He is a retired Lieutenant-Colonel who served in the Medical Corps of IDF from 1987
to 2013. Mr. Sinai successfully completed the NATO School Oberammergau Program, NATO’s individual training and education
facility at the operational level. Mr. Sinai recently served as Head of the Doctrine, Instruction and Training Department of the
IDF, where he was responsible for commanding and developing emergency medical facilities, writing professional doctrine and literature
for the IDF Medical Corps and working with foreign militaries. Mr. Sinai is currently pursuing his Ph.D. in Health Systems Management
at Ben-Gurion University of the Negev, where he previously earned an MA in Health Systems Management and a B.EMS in Emergency
Medicine.
Dr.
Yehuda Baruch, Chief Medical Officer and Regulatory Affairs Officer of One World Cannabis Ltd.
: Dr. Baruch has been employed
with our subsidiary since January 2015 and has served as our Chief Medical Officer and Regulatory Affairs Officer since then.
Dr. Baruch served as Head of the Israeli Ministry of Health’s Medical Marijuana Program from 2001 through 2012, directing
its efforts on regulation, chaired the indication committee, secured Helsinki Approvals for medical research, and managed regulation
of patient licensing and dosage. Dr. Baruch has extensive experience in researching medical cannabis, most notably for its effect
on PTSD. From 2004 until December 2014, Dr. Baruch also served as CEO of Abarbanel Mental Health Center in Bat Yam, Israel,
prior to which, he was the director of Israel’s Ministry of Health medical management division, and director general of
Be’er Yakov Mental Health Center. He has taught at Ben-Gurion University of the Negev and Tel Aviv University’s Sackler
School of Medicine. As Colonel in the Israeli Defense Force’s Medical Corps, Dr. Baruch was the director of the Israeli
field hospital in India following the 2001 earthquake and was the director of the joint USA-Israel Mental Health Team operation
in Sri Lanka following the 2004 tsunami. Dr. Baruch was the director of the Health Administration Division in the Israel Ministry
of Health for five years from 1999 to 2004 and for the past 10 years has been the director of Abarbanel Mental Health Center and
lecturer at Ben Gurion and Bar Ilan Universities. Dr. Yehuda Baruch has a MD and MHA both from Tel Aviv University.
Committees
of our Board of Directors
Audit
Committee and Financial Expert
The
audit committee of our Board of Directors was established by our Board of Directors in accordance with Section 3(a)(58)(A) of
the Exchange Act to oversee our corporate accounting and financial reporting processes and audits of our financial statements.
Our audit committee is currently composed of Mr. Stanley Hirsch, who serves as chairman. None of the members of our audit committee
satisfy the current independence standards promulgated by the Securities and Exchange Commission and by The Nasdaq Stock Market,
as such standards apply specifically to members of audit committees. Our Board of Directors has also determined that Mr. Mordechai
Bignitz qualifies as an “audit committee financial expert,” as the Securities and Exchange Commission has defined
that term in Item 407 of Regulation S-K. A copy of the audit committee’s written charter is publicly available on
our website at www.owcpharma.com.
Family
Relationships
There
are no family relationships between any of our directors and our executive officers.
Board
Leadership Structure
The
Board of Directors has responsibility for establishing broad corporate policies and reviewing our overall performance rather than
day-to-day operations. The primary responsibility of our Board of Directors is to oversee the management of our company and, in
doing so, serve the best interests of the company and our stockholders. The Board of Directors selects, evaluates and provides
for the succession of executive officers and, subject to stockholder election, directors. It reviews and approves corporate objectives
and strategies, and evaluates significant policies and proposed major commitments of corporate resources. Our Board of Directors
also participates in decisions that have a potential major economic impact on our company. Management keeps the directors informed
of company activity through regular communication, including written reports and presentations at Board of Directors and committee
meetings.
Although
we have not adopted a formal policy on whether the Chairman and Chief Executive Officer positions should be separate or combined,
we have determined that it is in the best interest of the Company and its shareholders to separate these roles. Mr. Bignitz’s
served as a both the Chairman of our Board of Directors and our Chief Executive Officer until July 24, 2017. Dr. Stanley Hirsch
was appointed as Chairman of the Board on July 24, 2017. He has extensive executive and board level experience for more than the
past 25 years in private and publicly listed companies in biopharmaceutical and agricultural biotech industries, among others,
including direct experience in raising capital and leading M&A activity together with multi-cultural management skills, having
managed companies in Israel, Brazil, UK, China and the United States.
Our
Board of Director’s Role in Risk Oversight
The
Board assesses on an ongoing basis the risks faced by the Company. These risks include financial, technological, competitive,
and operational risks. In addition, effective October 31, 2017, we established an audit committee, which consists of Messrs.
Bignitz and Hirsch.
Director
Independence
Mr.
Hirsch is an independent director and Mr. Bignitz is not “independent” as such term is defined by the applicable listing
standards of The Nasdaq Stock Market LLC.
Code
of Ethics
On
April 15, 2019 we adopted a code of ethics that applies to our directors, officers, and employees, including our principal executive
officer, principal financial officer, principal accounting officer, or persons performing similar functions. If we make any substantive
amendments to, or grant any waivers from, the code of business conduct and ethics for any officer or director, we will disclose
the nature of such amendment or waiver on our website or in a current report on Form 8-K.
Section
16(a) Compliance
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our Directors and named Executive Officers, and anyone who
beneficially owns ten percent (10%) or more of our Common Stock, to file with the SEC initial reports of beneficial ownership
and reports of changes in beneficial ownership of Common Stock. Persons required to file such reports also need to provide us
with copies of all Section 16(a) forms they file.
Our
records reflect that all reports which were required to be filed pursuant to Section 16(a) of the Securities Exchange Act of 1934,
as amended, were filed on a timely basis, except that one report, covering one transaction, was not filed by Ms. Hannah Feuer,
a former director, and a Form 3 has was not filed by Dr. Oron Yacoby Zeevi.
ITEM
11. EXECUTIVE COMPENSATION
The
following table contains information concerning the compensation paid during each of the two years ended December 31, 2018 and
2017 to our principal executive officer for the year ended December 31, 2018, and our two other most highly compensated executive
officers for the year ended December 31, 2018 (the “Named Executive Officers”).
|
Name
and Principal Position
|
|
Year
|
|
|
Salary
|
|
|
Stock
Awards
|
|
|
Option
Awards
(1)
|
|
|
All
Other Compensation
|
|
|
Total
|
|
|
Mordechai
Bignitz,
CEO and Director
|
|
2018
|
|
|
$
|
117,000
|
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
1,000
|
(2)
|
|
$
|
118,000
|
|
|
|
|
2017
|
|
|
$
|
63,000
|
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
63,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yossi
Dagan,
Former
Chief Financial Officer
|
|
2018
|
|
|
$
|
104,000
|
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
34,000
|
(3)
|
|
$
|
138,000
|
|
|
|
|
2017
|
|
|
$
|
48,000
|
|
|
|
-
|
|
|
$
|
510,000
|
|
|
$
|
3,000
|
(4)
|
|
$
|
561,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dr.
Yehuda Baruch,
Chief Medical Officer
|
|
2018
|
|
|
$
|
91,000
|
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
21,000
|
(5)
|
|
$
|
112,000
|
|
|
and Regulatory
Affairs Officer
|
|
2017
|
|
|
$
|
68,000
|
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
16,000
|
(6)
|
|
$
|
84,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alon
Sinai,
Chief Operating Officer
|
|
2018
|
|
|
$
|
89,000
|
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
5,000
|
(7)
|
|
$
|
93,000
|
|
|
|
|
2017
|
|
|
$
|
63,000
|
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
63,000
|
|
|
|
(1)
|
Amounts
shown in this column consist of the aggregate grant date fair value of stock awards or options to purchase common stock that
were granted during the applicable fiscal year, computed in accordance with FASB ASC Topic 718, “Stock Compensation”.
Our methodology, including our underlying estimates and assumptions used in calculating these values, is set forth in “Notes
2L and 5F (2)” to our Financial Statements, included in our Annual Report on Form 10-K for the year ended December 31,
2018.
|
|
|
(2)
|
All
Other Compensation reported for Mr. Bignitz for 2018 represents a pension benefit expense of $1,000, paid by the company.
|
|
|
(3)
|
All
Other Compensation reported for Mr. Dagan for 2018 represents an advanced education fund of $7,000, pension benefit expense
of $13,000 and bonus of $14,000, paid by the company.
|
|
|
(4)
|
All
Other Compensation reported for Mr. Dagan for 2017 represents an advanced education fund of $1,000, pension benefit expense
of $2,000, paid by the company.
|
|
|
(5)
|
All
Other Compensation reported for Mr. Baruch for 2018 represents a pension benefit expense of $11,000 and a car lease expense
of $10,000, paid by the company.
|
|
|
(6)
|
All
Other Compensation reported for Mr. Baruch for 2017 a pension benefit expense of $8,000 and a car lease expense of $8,000,
paid by the company.
|
|
|
(7)
|
All
Other Compensation reported for Mr. Sinai for 2018 represents a pension benefit expense of $5,000, paid by the company.
|
Narrative
Disclosure to Summary Compensation Table
Mordechai
Bignitz
On
July 15, 2014, we entered into a service agreement with Mr. Bignitz pursuant to which Mr. Bignitz agreed to serve as our Chief
Executive Officer. In 2016, Mr. Bignitz’ compensation was approximately $3,000 per month. On June 1, 2017 Mr. Bignitz’s
compensation was increased to approximately $7,000 per month. Mr. Bignitz’s compensation was increased to approximately
$11,000 on May 21, 2018. On August 1, 2018, our board of directors approved changes to Mr. Bignitz’s compensation arrangement,
in which his salary was decreased to approximately $11,000 per month, and he became entitled to certain pension benefits under
Israeli law that amounted to approximately $1,000 in 2018. In addition, On December 15, 2016, the Company granted Mr. Bignitz
options to purchase 10,000,000 shares of our common stock at an exercise price of $0.05 per share. The options vested 1/3 on the
grant date, and 2/3 on a quarterly basis from the grant date for a period of two years. Mr. Bignitz is entitled to a 60-day early
notice period upon termination of his employment agreement.
Dr.
Yehuda Baruch
Dr.
Baruch was appointed Chief Science Officer on November 2, 2016 and effective February 18, 2018 was appointed as Chief Medical
and Regulatory Affairs Officer. Prior to his appointment, Dr. Baruch served as Director of Research and Regulatory Affairs since
July 15, 2014. In 2016, Dr. Baruch’s compensation was initially determined to be approximately $3,000 per month. On June
1, 2017, Dr. Baruch’s compensation was increased to approximately $7,000 per month. Dr. Baruch is entitled to certain pension
benefits under Israeli law that amounted to approximately $11,000 in 2018. In addition, we paid costs of $10,000 in 2018, for
Dr. Baruch’s use of an automobile. On December 15, 2016, the Company granted Dr. Baruch options to purchase 7,000,000 shares
of our common stock at an exercise price of $0.05 per share. The options vested 1/3 on the grant date, and 2/3 on a quarterly
basis from the grant date for a period of two years. Dr. Baruch is entitled to a 60-day early notice period upon termination of
his employment agreement.
Alon
Sinai
Mr.
Sinai was appointed Chief Operating Officer on July 1, 2014. In 2016, Mr. Sinai’s compensation was determined to be approximately
$3,000 per month. On June 1, 2017 Mr. Sinai’s compensation was increased to approximately $7,000 per month. On February
1, 2018 Mr. Sinai signed an employment agreement with the company, with a salary of approximately $7,000 per month. Mr. Sinai
is entitled to certain pension benefits under Israeli law that amounted to approximately $5,000 in 2018. In addition, On December
15, 2016, the Company granted Mr. Sinai options to purchase 7,000,000 shares of our common stock at an exercise price of $0.05
per share. The options vested 1/3 on the grant date, and 2/3 on a quarterly basis from the grant date for a period of two years.
Mr. Sinai is entitled to a 30-day period upon termination of his agreement.
Yossi
Dagan
On
June 24, 2017 we entered into an employment agreement with Yossi Dagan to serve as our Chief Financial Officer. Mr. Dagan was
entitled to a monthly gross base salary of approximately $7,000 and social benefits including (i) certain pension benefits under
Israeli law that amounted to approximately $14,000 in 2018 and $2,000 in 2017, (ii) advanced study fund that amounted to $7,000
in 2018 and $1,000 in 2017. In addition, Mr. Dagan was entitled to expense reimbursement of approximately $100 per month and cellular
phone expense reimbursement. On April 1, 2018, Mr. Dagan’s scope of employment was decreased from full time shift to 60%.
On July 1, 2018, Mr. Dagan’s compensation was increased to approximately $8,000 per month. On May 25, 2018 Mr. Dagan received
a one- time bonus in the amount of $13,000. Mr. Dagan has been granted options to purchase 1,500,000 shares of our common stock
at an exercise price of $0.05 per share. The options vested 1/3 on the first anniversary and the remaining 2/3 on a quarterly
basis. Upon continuance of Mr. Dagan’s employment, all options should become fully vested by the second anniversary of the
commencement date. Mr. Dagan is entitled to a 90-day early notice period upon termination of the employment agreement. On February
1, 2019, Mr. Dagan resigned from his role as our Chief Financial Officer.
Outstanding
Equity Awards at Fiscal Year-End
The
following table shows all outstanding grants of stock options as of December 31, 2018 to each of the executive officers named
in the Summary Compensation Table. There were no grants of unvested stock awards outstanding as of December 31, 2018. Exercise
prices shown are rounded to the nearest whole cent.
|
|
|
Option
Awards
|
|
|
Name
|
|
Number
of Securities Underlying Unexercised Options (#) Exercisable
|
|
|
Number
of Securities Underlying Unexercised Options (#) Unexercisable
|
|
|
Option
Exercise Price ($)
|
|
|
Option
Expiration
Date
|
|
|
Mordechai Bignitz(1)
|
|
|
10,000,000
|
|
|
|
-
|
|
|
|
0.05
|
|
|
|
December
14, 2026
|
|
|
Yehuda Baruch(2)
|
|
|
7,000,000
|
|
|
|
-
|
|
|
|
0.05
|
|
|
|
December
14, 2026
|
|
|
Alon Sinai(3)
|
|
|
7,000,000
|
|
|
|
-
|
|
|
|
0.05
|
|
|
|
December
14, 2026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yossi Dagan(4)
|
|
|
625,000
|
|
|
|
875,000
|
|
|
|
0.05
|
|
|
|
May
1, 2019
|
|
|
(1)
|
Mr.
Bignitz was awarded an option to purchase 10,000,000 shares of common stock on December 15, 2016. The options vested 1/3 on
the grant date, and 2/3 on a quarterly basis from the grant date for a period of two years, provided that at the relevant
vesting dates the executive continues his service to the Company.
|
|
(2)
|
Dr.
Baruch was awarded an option to purchase 7,000,000 shares of common stock on December 15, 2016. The options vested 1/3 on
the grant date, and 2/3 on a quarterly basis from the grant date for a period of two years, provided that at the relevant
vesting dates the executive continues his service to the Company.
|
|
(3)
|
Mr.
Sinai was awarded an option to purchase 7,000,000 shares of common stock on December 15, 2016. The options vested 1/3 on the
grant date, and 2/3 on a quarterly basis from the grant date for a period of two years, provided that at the relevant vesting
dates the executive continues his service to the Company.
|
|
(4)
|
Mr.
Dagan was awarded an option to purchase 1,500,000 shares of common stock on August 1,
2017. The options vested 1/3 on the first anniversary, and 2/3 on a quarterly basis from
the grant date for a period of two years, provided that at the relevant vesting dates
the executive continues his service to the Company. On February 1, 2019, Mr. Dagan resigned
from his role as our Chief Financial Officer.
|
Option
Exercises and Stock Vested in 2018
There
were not any exercises of options to purchase our common stock or vesting of stock awards held by each executive officer named
in the Summary Compensation Table during the fiscal year ended December 31, 2018.
Potential
Payments upon Termination or resignation of employment or Change in Control
Mordechai
Bignitz
Upon
Termination or resignation of employment, Mr. Bignitz will be entitled to get paid for his accrued vacation days, in an amount
of $1,000. Mr. Bignitz is not entitled to any compensation upon a change in control of the Company.
Dr.
Yehuda Baruch
Upon
Termination or resignation of employment, Dr. Baruch will be entitled to get paid for his accrued vacation days, in an amount
of $21,000. Dr. Baruch is not entitled to any compensation upon a change in control of the Company.
Alon
Sinai
Upon
Termination or resignation of employment, Mr. Sinai will be entitled to get paid for his accrued vacation days, in an amount of
$7,000. Mr. Sinai is not entitled to any compensation upon a change in control of the Company.
Yossi
Dagan
Upon
his resignation, Mr. Dagan, was paid $12,000 for his accrued vacation days.
Director
Compensation
The
following table shows the total compensation paid or accrued during the fiscal year ended December 31, 2018 to each of our non-employee
directors. Directors who are employed by us are not compensated for their service on our Board of Directors.
|
Name
|
|
Fees
Earned or Paid in Cash
|
|
|
Stock
Awards
|
|
|
Option
Awards
(1)
|
|
|
All
Other Compensation
|
|
|
Total
|
|
|
Dr. Stanley Hirsch (2)
|
|
$
|
83,000
|
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
83,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ms. Hannah Feuer (3)
|
|
$
|
8,000
|
|
|
|
-
|
|
|
$
|
63,000
|
|
|
|
-
|
|
|
$
|
8,000
|
|
|
(1)
|
These
amounts represent the aggregate grant date fair value of options granted to each director in 2018 computed in accordance with
FASB ASC Topic 718. A discussion of the assumptions used in determining grant date fair value may be found in Note 2L and
5f (2) to our Financial Statements, included in our Annual Report on Form 10-K for the year ended 2018.
|
|
|
|
|
(2)
|
On
July 24, 2017, we entered into a consulting agreement with Dr. Stanley Hirsch, our Chairman of the Board. Pursuant to his
consulting agreement, Mr. Hirsch is entitled to a monthly payment of approximately $7,000. In addition, on July 24, 2017,
Mr. Hirsch was granted options to purchase 1,500,000 shares of our common stock at an exercise price of $0.05 per share, which
options vested 1/3 on the grant date, 1/3 on the first anniversary and the remaining 2/3 on a quarterly basis (8.33% per quarter).
Dr. Hirsch is entitled to an early notice of 60 days upon termination of the consulting agreement.
|
|
|
|
|
(3)
|
On
October 31, 2017, Ms. Hannah Feuer was appointed to serve as our audit committee
Chairperson. Ms. Feuer was entitled to a compensation of $950 for attendance at meetings
of our Board of Directors; (ii) $560 for telephonic participation at meetings of our
Board of Directors; (iii) $470 for execution of resolutions of our Board of Directors.
In addition, on February 12, 2018, Ms. Feuer was granted options to purchase 150,000
shares of our common stock at an exercise price of $0.05 per share. The options vested
1/3 on the first anniversary and the remaining 2/3 on a quarterly basis.
On
August 20, 2018, Ms. Feuer resigned from her position and all the stock options have
therefore been forfeited and no expense was recognized.
|
Equity
Compensation Plan Information
As
of December 31, 2018, we had one equity compensation plan in place under which shares of our common stock were authorized for
issuance:
|
Plan
Category
|
|
Number
of securities to be issued upon exercise of outstanding options, warrants and rights
|
|
|
Weighted
average exercise price of outstanding options, warrants and rights
|
|
|
Number
of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column
(a))
|
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
Equity compensation plans
approved by security holders(1)
|
|
|
27,250,000
|
|
|
$
|
0.05
|
|
|
|
8,456,094
|
|
|
Equity compensation
plans not approved by security holders
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Total
|
|
|
27,250,000
|
|
|
$
|
0.05
|
|
|
|
8,456,094
|
|
|
|
(1)
|
Consists
of the 2016 Amended and Restated Employees Share Option Plan
|
ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The
table below provides information regarding the beneficial ownership of the common stock as of April 15, 2019, of (1) each person
or entity known to us who owns beneficially 5% or more of the shares of our outstanding common stock, (2) each of our directors,
(3) each of the Named Executive Officers, and (4) all of our current directors and officers as a group. Applicable percentages
are based on 187,020,957 shares outstanding on April 15, 2019, adjusted as required by rules promulgated by the SEC. Beneficial
ownership is determined under SEC rules and includes sole or shared power to vote or dispose of shares of our common stock. The
number and percentage of shares beneficially owned by a person or entity also include shares of common stock subject to stock
options that are currently exercisable or become exercisable within 60 days of April 15, 2019. However, these shares are not deemed
to be outstanding for the purpose of computing the percentage of shares beneficially owned of any other person or entity. Except
as indicated in footnotes to the table below or, where applicable, to the extent authority is shared by spouses under community
property laws, the beneficial owners named in the table have, to our knowledge, sole voting and dispositive power with respect
to all shares of common stock shown to be beneficially owned by them based on information provided to us by such stockholders
Unless otherwise indicated below, the address for each beneficial owner listed is c/o OWC Pharmaceutical Research Corp., at 2
Ben Gurion Street, P.O. Box 73, Ramat Gan, 5257334, Israel.
|
|
|
Shares
Beneficially Owned
|
|
|
|
|
Number
|
|
|
Percent
|
|
|
Name and Address of Beneficial Owner**
|
|
|
|
|
|
|
|
Directors and Named Executive Officers:
|
|
|
|
|
|
|
|
|
|
Mordechai Bignitz
(2)
|
|
|
10,000,000
|
|
|
|
5.1
|
%
|
|
Dr. Stanley Hirsch
(3)
|
|
|
1,250,000
|
|
|
|
*
|
|
|
Alon Sinai
(4)
|
|
|
7,000,000
|
|
|
|
3.6
|
%
|
|
Dr. Yehuda Baruch
(5)
|
|
|
9,120,000
|
|
|
|
4.7
|
%
|
|
Yossi
Dagan
(6)
|
|
|
750,000
|
|
|
|
*
|
|
|
All directors and current executive officers
as a group (7 persons)
(7)
|
|
|
28,620,000
|
|
|
|
13.48
|
%
|
*
Less than one percent
(1)
Includes shares of common stock that may be acquired upon exercise of options, warrants and other rights exercisable within 60
days of April 15, 2019.
(2)
Consists of 10,000,000 shares of our common stock issuable upon the exercise of options to purchase our common stock within 60
days of April 15, 2019.
(3)
Consists of 1,250,000 shares of our common stock issuable upon the exercise of options to purchase our common stock within 60
days of April 15, 2019.
(4)
Consists of 7,000,000 shares of our common stock issuable upon the exercise of options to purchase our common stock within 60
days of April 15, 2019.
(5)
Includes 2,120,000 shares of our common stock, 7,000,000 shares of our common stock issuable upon the exercise of options to purchase
our common stock within 60 days of April 15, 2019.
(6)
Consist of 750,000 shares of our common stock issuable upon the exercise of options to purchase our common stock within 60 days
of April 15, 2019.
(7)
See footnotes (2) to (5).
ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTORS INDEPENDENCE
Other
than the compensation paid to our executive officers or as disclosed below, since January 1, 2017, there have been no transactions,
or proposed transactions, which have materially affected or will materially affect us in which any director, executive officer
of the Company or executive officer of our subsidiary, or beneficial holder of more than 5% of the outstanding common stock, or
any of their respective relatives, spouses, associates or affiliates, has had or will have any direct or material indirect interest.
We have no policy regarding entering into transactions with affiliated parties.
ITEM
14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Current
Independent Registered Public Accounting Firm Fees
The
following table presents fees for professional audit services rendered by Fahn Kanne & Co Grant Thornton Israel for
the audit of the Company’s annual financial statements for the years ended December 31, 2018 and 2017
and
fees billed for other services rendered by
Fahn Kanne
during those periods
.
|
|
|
Year Ended
|
|
|
Year Ended
|
|
|
|
|
December
31, 2018
|
|
|
December
31, 2017
|
|
|
Audit Fees (1)
|
|
$
|
55,000
|
|
|
$
|
16,649
|
|
|
Audit Related Fees (2)
|
|
|
-
|
|
|
|
-
|
|
|
Tax Fees (3)
|
|
|
-
|
|
|
|
-
|
|
|
All Other Fees (4)
|
|
|
58,320
|
|
|
|
-
|
|
|
Total
|
|
$
|
113,320
|
|
|
$
|
16,649
|
|
(1)
Audit fees consist of fees for professional services rendered for the audit of our financial statements, review of interim financial
statements and assistance with our periodic reports on Form 10-K and 10-Q filed with the SEC.
(2)
Audit related fees consisted principally of fees related to the annual audit and the quarterly reviews, but outside the scope
of the audit committee approved audit and agreed upon procedures.
(3)
Tax fees consist principally of assistance with matters related to tax compliance and reporting, tax advice, and tax planning.
(4)
All other fees consisted principally of costs related to SEC investigation.
As
of December 31, 2018, we did not have a formal, documented pre-approval policy for the fees of the principal accountant. Following
the establishment of our audit committee on October 31, 2017, our audit committee reviews and approves all fees
to our principal accountant.
PART
IV
ITEM
15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The
following documents were filed as part of the Original Report:
Item
15(a). The documents listed below are filed as part of this Amendment.
Item
15(a)(1) and (2). See Item 8, “Financial Statements and Supplementary Data” in the Original Filing. Other financial
statement schedules have not been included because they are not applicable, or the information is included in the financial statements
or notes thereto.
Item
15(a)(3). The following exhibits are filed as part of, or incorporated by reference into, this Amendment.
|
Exhibit
|
|
Description
|
|
3.1
|
|
Articles
of Incorporation, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Form 10-K on April 1, 2019).
|
|
3.2
|
|
Bylaws
(incorporated by reference to Exhibit 3.2 to the Company’s Form 10 filed on November 21, 2012).
|
|
10.1
|
|
Patent
Transfer and Sale Agreement with Appelfeld Zer Fisher (incorporated by reference to Exhibit 10.1 to the Company’s Form
10-12G/A on April 10, 2014).
|
|
10.2.1
|
|
Convertible
Note, as amended, between the Company and Shefer Trust (incorporated by reference to Exhibit10.2(a) to the Company’s
Form 10-12G filed on February 28, 2013).
|
|
10.2.2
|
|
Convertible
Note, as amended, between the Company and Mediouni, (incorporated by reference to Exhibit 10.2(b)(a)1 to the Company’s
Form 10 filed on May 13, 2013).
|
|
10.2.3
|
|
Convertible
Note, as amended, between the Company and Shonfeld (incorporated by reference to Exhibit 10.2(c)(a) to the Company’s
Form 10 filed on May 13, 2013).
|
|
10.2.4
|
|
Convertible
Note, as amended, between the Company and Silverman (incorporated by reference to Exhibit 10.2(d)(a)1 to the Company’s
Form 10 filed on May 13, 2013).
|
|
10.2.5
|
|
Convertible
Note, as amended, between the Company and Oofliam LLC (incorporated by reference to Exhibit 10.2(e)(a) to the Company’s
Form 10 filed on May 13, 2013).
|
|
10.2.6
|
|
Convertible
Note, as amended, between the Company and Mediouni (incorporated by reference to Exhibit 10.2(f)(a)2 to the Company’s
Form 10 filed on May 13, 2013)
|
|
10.2.7
|
|
Convertible
Note, as amended, between the Company and Silverman (incorporated by reference to Exhibit 10.2(g)(a)2 to the Company’s
Form 10 filed on May 13, 2013).
|
|
10.3
|
|
Agreement
between the Company and Nickelshpur and CV (incorporated by reference to Exhibit 10.3 to the Company’s Form 10-12G filed
on February 28, 2013).
|
|
10.4
|
|
Agreement
between the Company and Sensoil Ltd, dated April 17, 2013 (incorporated by reference to Exhibit 10.4 to the Company’s
Form 10-12G/A filed on April 10, 2014).
|
|
10.5
|
|
Services
Agreement between the Company and Mr. Bignitz, dated October 2, 2014 (incorporated by reference to Exhibit 10.5 to the Company’s
Form S-1 filed on April 23, 2015).
|
|
10.6
|
|
Services
Agreement between the Company and Mr. De-Saban, dated October 2, 2014 (incorporated by reference to Exhibit 10.6 to the Company’s
Form S-1 as filed on April 23, 2015).
|
|
10.7
|
|
Service
Agreement between the Company and Sheba Academic Medical Center, dated October 22, 2014 (incorporated by reference to Exhibit
10.7 to the Company’s S-1/A filed on June 9, 2015).
|
|
10.8
|
|
Service
Agreement between the Company and Sheba Academic Medical Center, dated October 22, 2014, (incorporated by reference to Exhibit
10.8 to the Company’s S-1/A filed on August 13, 2015).
|
|
10.9
|
|
Loan
Agreement between the Company and Medmar LLC, dated September 28, 2016 (incorporated by reference to Exhibit 10.9 to the Company’s
Form 8-K filed on September 30, 2016).
|
|
10.10
|
|
Termination
Agreement and Mutual General Release between the Company and GUMI Tel Aviv Ltd dated February 3, 2016 (incorporated by reference
to Exhibit 10.12 to the Company’s S-1 filed on June 16, 2016).
|
|
10.11
|
|
Services
Agreement between the Company and Shmuel De-Saban dated January 31, 2016, (incorporated by reference to Exhibit 10.14 to the
Company’s S-1 filed on June 16, 2016).
|
|
10.12
|
|
Securities
Purchase Agreement between the Company and Vis Vires Group, Inc. dated February 2, 2016, (incorporated by reference to Exhibit
10.15 to the Company’s S-1 filed on June 16, 2016).
|
|
10.13
|
|
Convertible
Promissory Note issuable to Vis Vires Group, Inc. dated February 2, 2016 (incorporated by reference to Exhibit 10.16 to the
Company’s S-1 filed on June 16, 2016).
|
|
10.14
|
|
Unit
Subscription Agreement dated November 3, 2016 (incorporated by reference to Exhibit 10.17 to the Company’s Form 8-K
filed on November 4, 2016).
|
|
10.15
|
|
Memorandum
of Understanding between the Company and Michepro Holding Ltd. dated November 3, 2016 (incorporated by reference to Exhibit
10.18 to the Company’s Form 8-K filed on November 4, 2016).
|
|
10.16
|
|
License
Agreement between the Company and Emilia Cosmetics Ltd dated November 27, 2016 (incorporated by reference to Exhibit 10.19
to the Company’s Form 8-K filed on November 28, 2016).
|
|
10.17
|
|
Research
Agreement between One World Cannabis Ltd and Medical Research Infrastructure Development and Health Services Fund by Chaim
Sheba Medical Center dated December 29, 2016 (incorporated by reference to Exhibit 10.21 to the Company’s Current Report
on Form 8-K filed on January 12, 2017).
|
|
10.18+
|
|
Executive
Employment Agreement by and between the Company and Alon Sinai, dated February 1, 2018 (incorporated by reference to Exhibit
10.18 to the Company’s Form 10-K on April 16, 2018).
|
|
10.19+
|
|
Letter
of Resignation of Mr. Shmuel De-Saban dated June 12, 2017 (incorporated by reference to Exhibit 17.5 to the Company’s
Current Report on Form 8-K filed on June 15, 2017).
|
|
10.20+
|
|
Executive
Employment Agreement by and between the Company and Yossi Dagan, dated June 4, 2017 (incorporated by reference to Exhibit
10.20 to the Company’s Form 10-K on April 16, 2018).
|
|
10.21+
|
|
Executive
Employment Agreement by and between the Company and Dr. Oron Yacoby Zeevi, dated February 18, 2018 (incorporated by reference
to Exhibit 10.21 to the Company’s Form 10-K on April 16, 2018).
|
|
10.22+
|
|
Executive
Consulting Agreement by and between the Company and Dr. Stanley Hirsch, dated July 24, 2017 (incorporated by reference to
Exhibit 10.22 to the Company’s Form 10-K on April 16, 2018).
|
|
10.23+
|
|
2016
Employees Stock Option Plan (incorporated by reference to Exhibit 10.24 to the Company’s Form 10-K on April 16, 2018).
|
|
10.24+
|
|
Employee’s
Option Grant Form (incorporated by reference to Exhibit 10.25 to the Company’s Form 10-K on April 16, 2018).
|
|
10.25+*
|
|
Amendment
to executive employment agreement by and between the Company and Alon Sinai, dated February 2, 2018
|
|
10.26+*
|
|
Amendment
to executive employment agreement by and between the Company and Yossi Dagan, dated April 10, 2018
|
|
10.27+*
|
|
Amendment
to executive employment agreement by and between the Company and Yossi Dagan, dated July 1, 2018
|
|
10.28+*
|
|
Amendment
to service agreement between Mr. Bignitz and the Company, dated May 21, 2018
|
|
10.29+*
|
|
Service
agreement by and between the Company and Dr. Oron Yacoby Zeevi, dated October 1, 2018
|
|
14.1*
|
|
Code
of Business Conduct and Ethics, dated April 15, 2019.
|
|
21.1
|
|
Subsidiaries
of the Company (incorporated by reference to Exhibit 21.1 to the Company’s Form 10-K on April 16, 2018).
|
|
31.1*
|
|
Certification
of Principal Executive Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities and Exchange Act of 1934, as
amended, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2*
|
|
Certification
of Principal Financial Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities and Exchange Act of 1934, as
amended, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32**
|
|
Certification
of Principal Executive Officer and Principal Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes Oxley Act of 2002.
|
|
101.INS
|
|
XBRL
Instance Document (incorporated by reference to Exhibit 101.INS to the Company’s Form 10-K on April 1, 2019).
|
|
101.SCH
|
|
XBRL
Taxonomy Extension Schema Document (incorporated by reference to Exhibit 101.SCH to the Company’s Form 10-K on April
1, 2019).
|
|
101.CAL
|
|
XBRL
Taxonomy Extension Calculation Linkbase Document (incorporated by reference to Exhibit 101.CAL to the Company’s Form
10-K on April 1, 2019).
|
|
101.DEF
|
|
XBRL
Taxonomy Extension Definition Linkbase Document (incorporated by reference to Exhibit 101.DEF to the Company’s Form
10-K on April 1, 2019).
|
|
101.LAB
|
|
XBRL
Taxonomy Extension Labels Linkbase Document (incorporated by reference to Exhibit 101.LAB to the Company’s Form 10-K
on April 1, 2019).
|
|
101.PRE
|
|
XBRL
Taxonomy Extension Presentation Linkbase Document (incorporated by reference to Exhibit 101.PRE to the Company’s Form
10-K on April 1, 2019).
|
*
Filed herewith.
**
Previously furnished.
+
Indicates a management contract or compensatory plan or arrangement.
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report
to be signed on its behalf by the undersigned, thereunto duly authorized
.
|
|
OWC
PHARMACEUTICAL RESEARCH CORP
|
|
|
|
|
|
Date:
April 30, 2019
|
By:
|
/s/
Mordechi Bignitz
|
|
|
|
Mordechi
Bignitz
|
|
|
|
Chief
Executive Officer and Director
|
|
|
|
(Principal
Executive Officer)
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf
of the registrant in the capacities indicated below and on the dates indicated.
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/
Mordechi Bignitz
|
|
Chief
Executive Officer and Director
|
|
April
30, 2019
|
|
Mordechi
Bignitz
|
|
(Principal
Executive Officer)
|
|
|
|
|
|
|
|
|
|
/s/
Sigal Russo
|
|
Chief
Financial Officer
|
|
April
30, 2019
|
|
Sigal
Russo
|
|
(Principal
Financial Officer and Principal Accounting Officer)
|
|
|
|
|
|
|
|
|
|
/s/
Stanley Hirsch
|
|
|
|
|
|
Stanley
Hirsch
|
|
Chairman
of the Board
|
|
April
30, 2019
|
PERSONAL
EMPLOYMENT AGREEMENT
THIS
PERSONAL EMPLOYMENT AGREEMENT (the
“Agreement”)
is made and entered into as of February 1, 2018 by and between
One World Cannabis Ltd. (the
“Company”),
and Alon Sinai (the
“Employee”).
WHEREAS,
the Company and the Employee have entered into a consulting agreement, dated July 1, 2014 as amended on November 8, 2015 and
on July 30, 2017 (the
“Consulting Agreement”)
pursuant to which the Employee has provided consulting services
to the Company; and
WHEREAS,
the Company and the Employee wish to replace the Consulting Agreement as of the Start Date (as such term is defined hereunder)
in its entirety with this Agreement, such that as of the Start Date the Employee shall only serve the Company in the capacity
of an employee under this agreement; and
WHEREAS,
the Company wishes to employ the Employee,edgar and the Employee wishes to be employed by the Company, as of the Start Date;
and
WHEREAS,
the parties desire to state the terms and conditions of the Employee’s employment by the Company, as set forth below.
NOW,
THEREFORE,
in consideration of the mutual premises, covenants and other agreements contained herein, the parties hereby agree
as follows:
General
|
|
1.
|
Position
.
The Employee will serve in the position described in
Exhibit A
and shall
be under the direction of the person stated in
Exhibit A
,
or such other
person as shall be decided by the Company from time to time. The Employee undertakes
to perform his duties diligently, conscientiously and in furtherance of the Company’s
best interests
|
|
|
|
|
|
|
2.
|
Scope
of Employment.
The Employee is employed on a part time basis in a scope of 60% of
a full time position. The Employee may engage in other paid or unpaid employment, occupation
or other business activities which are not in the field of medical and pharmaceutical
formulations derived from and or utilizing cannabis and its CBD and or THC components,
either natural or synthetic, and delivery systems specifically developed for the administration
of the above. For the avoidance of doubt, this also incorporates formulations or carries
developed in the course of the work of the Company, which have medical effect, even if
such formulations or carriers do not contain the above-mentioned cannabis components
(the
“Field of Business”),
all subject to and without derogating from
Employee’s undertakings hereunder, including (without limitation ) pursuant to
Section 6 and Exhibit B hereunder. Any engagement in the Field of Business shall be subject
to the Company’s prior written approval which shall be in its sole discretion.
|
|
|
|
|
|
|
3.
|
Employee’s
Representations and Undertakings
. The Employee represents that the execution and
delivery of this Agreement and the fulfillment of its terms: (i) will not constitute
a default under or conflict with any agreement or other instrument to which the Employee
is a party or by which the Employee is bound, including, without limitation, any confidentiality
or non-competition agreement; and (ii) will not require the consent of any person or
entity. The Employee undertakes to inform the Company immediately after becoming aware
of any matter that may in any way raise a conflict of interest between the Employee and
the Company. The Employee shall not receive any payment, compensation or benefit from
any third party in connection, directly or indirectly, with the Employee’s position
in the Company. The Employee further acknowledges and agrees (i) to the transfer of any
information concerning the Employee and held by the Company to a database (including
a database located abroad) and to third parties in general, as is reasonable for business
purposes or in pursuit of the Company’s business interests; (ii) to travel abroad
from time to time if and as may be required pursuant to his position; (iii) to adhere
to any applicable law or provision, pertaining to his employment; (iv) to protect the
good name of the Company and not to perform any act that may bring the Company into disrepute;
(v) to use any equipment (such as laptop) and access to systems (such as email system)
provided to the Employee by the Company for purposes related to the Employee’s
employment.
|
|
|
4.
|
The
Employee
further acknowledges and agress that all information, content and data on the Company’s computers and telephones, including
electronic mail transmissions, Internet usage, messages and data whether sent from, received by, or stored in or upon the
Company’s computers or communications systems are the property of the Company, regardless of the form and/or content
of these messages and data, and the Company shall have the right to conduct inspections of such property. The Employee should
not consider messages and data sent from, received by, or stored in or upon the Company’s computer, telephones and communications
systems to be private and should not send, receive, or store sensitive personal or private information using these systems.
The Employee is deemed to have consented to any reasonable use, transfer and disclosure of all messages and data contained
or sent via the Company’s computer, telephones and communications systems, including electronic mail.
|
|
|
|
|
|
|
5.
|
Term and Termination
.
The Employee’s employment with the Company began, or will begin, on the date set forth in
Exhibit
A
(the
“Start
Date”).
Either party may terminate this Agreement and the employment relationship hereunder at any time
by giving the other party prior written notice of termination of such number of days as set forth in
Exhibit
A
(the
“Notice Period”).
Notwithstanding the aforesaid, the Company is entitled
to terminate this Agreement and the employment relationship with immediate effect or at any time during the
Notice Period upon a written notice to the Employee and payment to the Employee of a one-time amount equal
to the Salary the Employee would have been entitled to receive in respect of the portion of the Notice Period
which was forfeited, in lieu of such prior notice period.
|
|
|
|
|
|
|
|
Notwithstanding
the aforesaid, in the event of a Cause (as defined
below),
the Company will be entitled to terminate this Agreement immediately and this
Agreement and the employment relationship will be deemed effectively terminated as of
the time of delivery of such notice (subject to any minimal mandatory notice requirement
under applicable
law)
and the Company shall
have no obligation to pay any compensation during or in lieu of the notice period. The
term
“Cause”
means: (i) the Employee engages in any act of dishonesty,
fraud,
misrepresentation, or intentional
illegal conduct; (ii) the
Emplo
yee’s
violation of any law or regulation applicable to the Company’s business; (iii)
any unauthorized use or disclosure by the Employee of the Company’s confidential
information or trade secrets or any other breach of the Proprietary Information, Assignment
of Inventions and Non-Competition Agreement attached as
Exhibit B
hereto;
(iv) a material breach by the Employee of any agreement between the Employee and the
Company; (v) a failure by the Employee to comply with the Company’s written policies
or rules; or (vi) any circumstances which allow for termination without severance payment
under applicable law.
|
|
|
|
During
the Notice Period, this Agreement will remain in full force and effect and there will
be no change in Employee’s position with the Company or any obligations hereunder,
unless otherwise determined by the Company in a written notice to Employee, and the Employee
will cooperate with the Company and use the Employee ’s best efforts to assist
the integration into the Company’s organization of the person or persons who will
assume the Employee’s responsibilities.
Upon
termination of the employment for any reason or
caus
e
whatsoever, Employee shall immediately surrender to the Company all property, equipment,
documents and information in his possession or
dis
posal,
as such may have been delivered to him during or due to his employment with the
Company, and Employee shall have no rights of lien or possession in respect thereof.
|
|
|
|
|
|
|
6.
|
Proprietary
Information; Confidentiality and Non-Competition
. The Employee
shall,
simultaneously herewith, execute and
deli
ver,
and hereby agrees to be bound by the provisions of, the Proprietary Information,
Assignment of Inventions and Non-Competition Agreement attached in
Exhibit B
hereto, the terms of which will survive termination of this Agreement.
|
|
|
|
|
|
|
7.
|
Salary
. The
Company will pay the
Employee
a gross monthly salary in the amount
set forth in
Exhibit A
(the
“Salary”).
Except as specifically set forth herein,
the Salary includes any and all payments to which Employee is entitled hereunder and under any applicable
laws, regulations or agreements. Payment of the Salary will be made no later than the 9
th
day of
each calendar month after the month for which the Salary is
paid,
after
deduction of applicable taxes and any amounts deductible under this Agreement.
|
|
|
|
|
|
|
8.
|
Social
Benefits
. The Company shall, on a monthly basis, pay to a pension scheme for the benefit of the Employee and shall deduct
from the Employee’s Salary a respective payment towards such pension scheme (the
“Pension Scheme”).
The
contributions to the Pension Scheme will be as follows:
|
|
|
(i)
|
The Company will
pay an amount equal to 8
1/3%
(eight percent and one third of a percent) of the
Salary as a severance pay component;
|
|
|
|
|
|
|
(ii)
|
In case of a Pension
Scheme of a managers insurance type (and not a pension
fund
), the Company shall
pay
for
a disability insurance in an amount
of
2.5% of the Salary or a lower amount as required to insure 75% of the Salary (the
“Disability Insurance Component”);
|
|
|
|
|
|
|
(iii)
|
The Company will
pay towards a savings component (A) an amount equal to 6.5% of the Salary in case the Pension Scheme is through a pension
fund or (B) an amount equal to 6.5% of the Salary less the Disability Insurance Component, but in no event less than 5%, in
case of a managers insurance type Pension Scheme; and
|
|
|
|
|
|
|
(iv)
|
The Company shall
deduct from the net Salary an amount equal to 6% of the Salary which amount shall be allocated to a savings component.
|
|
|
All
payments to the Pension Scheme will be made in compliance with Section 14 of the Severance Compensation
Law, 1963
(“Section 14),
and in accordance with the general approval of the Labor Minister dated June 9, 1998,
promulgated under said Section 14, a copy of which is attached hereby as
Exhibit C
,
and the terms of Section
14 and said general approval will apply to the relationship hereunder. Therefore, the ownership of the Pension Scheme will
be transferred to the Employee following termination of employment and the Company will not be entitled to retrieve any of
the funds it transferred to the Pension Scheme, other than in accordance with Section 14 and said general approval, and the
transfer of the Pension Scheme to the ownership of the Employee will be the full and only compensation to be paid by the Company
to the Employee in such circumstances in respect of severance pay.
|
|
|
9.
|
Vacation
.
The Employee will be entitled to that number of vacation days per year set forth in
Exhibit A
.
The Company will
be entitled to direct the use of the vacation days, at its discretion. Right to accumulate unused vacation days shall be as
decided by the Company from time to time and the Company shall be entitled to change its policy in that respect without any
liability to the Employee. It is the Company’s current policy to allow the Employee to accumulate any unused vacation
days up to the number of vacation days specified in
Exhibit A
and once the Employee has reached such accumulation
no additional vacation days will be accumulated, but rather be forfeited. The Employee will not be entitled to redemption
of accumulated and unused vacation days, except in the event of termination of employment and then only in accordance with
applicable law.
|
|
|
|
|
|
|
10.
|
Recreation
Pay
. The Employee will be entitled to recreation pay (Dmei Havra’a) in accordance with applicable law.
|
|
|
|
|
|
|
11
.
|
Additional
Benefits
. The Employee may be entitled to additional benefits if and only to the extent set forth in
Exhibit A
.
|
|
|
|
|
|
|
12.
|
Policies
and Guidelines
. The Employee undertakes to abide by and at all times be in compliance with the policies, guidelines and
regulations which are and shall be established by the Company.
|
|
|
|
|
|
|
13.
|
General
.
Headings in this Agreement are included for reference purposes only and are not to be used in interpreting this Agreement.
The exhibits to this Agreement constitute an integral part thereof. Subject to applicable law, no collective bargaining agreement
will apply to the relationship between the parties, whether such agreement was signed among the government, the General Federation
of Labor and Employers organizations, or any of such parties, or whether signed by others, in relation to the field or fields
of the business of the Company or in relation to the position held by or the profession of the Employee. No failure, delay
of forbearance of either party in exercising any power or right hereunder will in any way restrict or diminish such party’s
rights and powers under this Agreement, or operate as a waiver of any breach or nonperformance by either party of any terms
or conditions hereof. In the event it is determined under any applicable law that a certain provision set forth in this Agreement
is invalid or unenforceable, such determination will not affect the remaining provisions of this Agreement unless the business
purpose of this Agreement is substantially frustrated thereby.
|
|
|
|
|
|
|
|
This
Agreement
constitutes the entire understanding and agreement
between the parties, supersedes any and all prior discussions, agreements and correspondence
with regard to the subject matter hereof, including without limitation the termination
of the Consulting Agreement (provided that Sections 4-6, together with Exhibit C of the
Consulting Agreement shall survive in full force and effect), and may not be amended,
modified or supplemented in any respect, except by a subsequent writing executed by both
parties.
|
|
|
|
|
|
|
|
The
Emplo
yee
acknowledges
and confirms that all terms of Employee’s employment are personal and confidentia
l,
and undertakes to keep such terms in confidence and refrain from disclosing such
terms to any third party.
|
IN
WITNESS WHEREOF
the parties have signed this Agreement as of the date first hereinabove set forth.
Exhibit
A
To
the Personal Employment Agreement by and between
One
World Cannabis Ltd. and the Employee whose name is set forth herein
|
1.
|
Name
of Employee:
|
|
|
Alon
Sinai
|
|
2.
|
ID
No. of Employee:
|
|
|
022996797
|
|
3.
|
Address
of Employee:
|
|
|
69
Bait Nehemia, Israel
|
|
4.
|
Position
in the Company:
|
|
|
COO
- Chief Operating Officer
|
|
5.
|
Under
the Direction
|
|
|
CEO
|
|
6.
|
Start
Date:
|
|
|
February
1, 2018
|
|
7.
|
Work
Week and Hours of Work; Rest Day
|
|
|
As
shall be coordinated between the Company and the Employee from time to time, based on the scope of engagement.
|
|
8.
|
Notice
Period:
|
|
|
30
days
|
|
9.
|
Salary:
|
|
a)
|
As
of February 1, 2018 and until March 31, 2018 - the Employee shall be entitled to a gross
monthly salary of NIS 17,500 (the
“Base Salary”).
In addition, In
consideration for overtime hours that the Employee may work during the month the Employee
shall receive a global payment of NIS 7,500 per month (the
“Global Overtime
Compensation”,
and together with the Base Salary, the
“Salary”).
|
|
|
|
|
|
|
|
|
|
|
b)
|
As
of April 1, 2018 - the Employee shall be entitled to a Base Salary of NIS 3,710. In addition, the Employee shall receive a
Global Overtime Compensation of NIS 1,590, such that the total Salary shall be NJS 5,300.
|
|
|
|
|
|
|
|
|
|
|
The
Global Overtime Compensation has been determined based on Company’ s estimation of the average of overtime hours per
month that the Employee’s position may require.
|
|
|
|
|
|
|
10.
|
Vacation
Days Per Year:
|
|
12
annual vacation days for a full time position, as shall be adjusted for the actual scope of employment. Employee may accumulate
at any time unused vacation days in the aggregate number equal to no more than twice the number of the annual vacation days
he is entitled to receive.
|
|
11.
|
Transportation
|
|
The
employee will be entitled to payment for transportation from and to work, pursuant to
applicable law.
|
Exhibit
B to Personal Employment Agreement
Proprietary
Information, Confidentiality and Non-Competition Agreement
between
the Employee and One World Cannabis Ltd.
|
Emp
loyee’
s
Name
|
Alon
Sinai
|
|
1.
|
Capitalized
terms herein will have the meanings given to them in the Personal Employment Agreement to which this Exhibit is attached (the
“Agreement”).
The term Company will include also all subsidiaries and affiliates of the Company, as applicable,
including its parent company, OWC Pharmaceutical Research Corp. (the
“Parent Company”),
which are deemed
third party beneficiaries of this Agreement. The Employee’s obligations and the Company’s rights under this Exhibit
will apply as of the beginning of the engagement between the Company and the Emplo
yee,
regardless of the Start Date or the date of execution of the Agreement or this Exhibit.
|
Confidentiality;
Proprietary Information
|
2.
|
The Employee acknowledges
and agrees that Employee may have access to confidential and proprietary information concerning the business and financial
activities of the Company, including without limitation information relating to the Company’s research and development
activities,
investments,
properties,
employees,
marketing pla
ns,
customers, suppliers, trade secrets, test results, processes,
data, know-how, improvements, inventions, techn
ique
s, intellectual property and
products (actual or planned). Such
information
, whether documentary,
written,
oral or computer generated, will be referred to as
“Proprietary Information”.
However, Proprietary
Information will exclude information that Employee can demonstrate
(i)
was known
to Employee prior to Employee’s association with the Company (except if related in any way to the Company, including
without limitation to the Company’s current
and/or
contemplated
business
,
services, products and/or activities); or (ii) is or will become part of the public knowledge except as a result of the breach
of the Agreement or this Exhibit by the Employee.
|
|
|
|
|
3.
|
The Employee recognizes
that the Company may receive confidential or proprietary information from third parties, subject to a duty on the Company’s
part to maintain the confidentiality of such information and to use it only for certain limited purposes. In connection with
such duties, such information will be deemed Proprietary Information
hereunder
,
mutatis mutandis.
The
Emp
loyee will not, during his employment with the
Company, improperly use or disclose any proprietary information or trade secrets of any former or concurrent employer or other
person or entity and will not bring onto the premises of the Company any unpublished document or proprietary information belonging
to any such
employer,
person or entity unless consented to in writing by such
employer,
person or
entity.
|
|
|
|
|
4.
|
The Employee agrees
that all Proprietary Information and any
patents,
trademarks, copyri
ghts
and other intellectual property and ownership rights in connection therewith are and will
be
the
sole property of the Company and its assigns. At all times, during
Emp
loyee’
s engagement by the Company and thereafter, the Employee will keep
in confidence and trust all Proprietary Information and will not use or disclose Proprietary Information or anything relating
to it without the written consent of the Company, except as may be necessary in the ordinary course of performing
Employee’
s
duties under the Agreement.
|
|
5.
|
Upon
termination of the Employee’s employment
with the Company, the
Employee
will promptly deliver to the Company all documents
and materials of any nature pertaining to Employee’s work with the Company, and will not retain any documents or materials
or copies thereof containing any Proprietary Information.
|
|
|
|
|
|
For the avoidance
of doubt, Emp
loyee’
s undertakings set forth in Sections 2-5 shall remain
in full force and effect after termination of the Agreement (for any reason whatsoever) or any renewal thereof.
|
Disclosure
and Assignment of Inventions
|
6.
|
From and after the
date the Employee first became employed by the Company, the Employee undertakes and covenants that the Employee will promptly
disclose in confidence to the Company all inventio
ns, improvements,
developments,
original works of authorship, designs, concepts, techniques, methods, systems, processes, know how, computer software programs,
databases, mask works, trade secrets, discoveries and any other intellectual creations of any nature whatsoever
(“Inventions”),
whether or not patenta
ble,
copyrightable or protectable as trade secrets,
that are made or conceived or first reduced to practice or created by Employee, either alone or jointly with others during
the course of or in connection with Employees employment with the Company. The Employee undertakes not to disclose to the
Company any confidential information of any third party and not to make any use of any intellectual property rights of any
third party in the framework of the Employee’s employment by the Company.
|
|
|
|
|
7.
|
Without derogating
from applicable law, the Employee agrees that all Inventions, whether or not patentable, copyrightable or protectable as trade
secrets, that are made or conceived or first reduced to practice or created by Employee, either alone or jointly with
others,
during the course of or in connection with Employee’s employment with the Company that (a) are developed in whole
or in part on Company’s time or using equipment,
sup
plies, facilities, resources
or Proprietary Information of the Company, (b) result from or are suggested by any task assigned to Employee or any work performed
by the Employee for or on behalf of the Company or by the scope of
Employee’
s
duties and responsibilities with Company, or (c) relate to the Company’s business, activities, services, products or
research and development (whether current or anticipated) will be the sole and exclusive property of the Company and the
Employee
will have no rights in or thereto
(“Company Inventions”).
|
|
|
|
|
8.
|
The Employee has
listed below in this Section 8 a complete list of all inventions to which he claims ownerships (the
“Prior Inventions”)
and that the Employee desires to remove from the operation of this Exhibit, and acknowledges and agrees that such list
is complete. If no such list is attached to this Exhibit, the
Employee
represents
that he has no such Inventions at the time of signing this Agreement. The Prior Inventions, if any, patented or unpatented,
are excluded from the scope of this Exhibit. If, in the course of employment with the Com
pany,
the Employee incorporates a Prior Invention into a Company
product,
process
or machine, the Company is hereby granted and shall have a nonex
clusive,
royalty-
free, irrevocable, perpetual, worldwide license (with rights to sublicense through multiple tiers of sublicensees) to make,
have made, modi
fy,
use and sell such Prior Invention. Notwithstanding the foregoi
ng,
the Employee agrees that the Employee will not incorporate, or permit to be incorporated, Prior Inventions in any Company
Inventions without the Company’s prior written consent. The Employee hereby represents and undertakes that none of his
previous employers or
any
entity with whom the Employee was engaged, has any rights
in the Inventions or Prior Inventions and such employment with the Company will not grant any of them any right in the results
of the
Emp
loyee’s work.
|
Prior
Inventions:
[fill-in, if any.]
None.
|
9.
|
The Employee hereby
irrevocably transfers and assigns to the Company, without further compensation, all worldwide patents, patent app
licat
ions,
copyr
ights,
mask works, trade secrets and other intellectual property rights in
any Company Invention, and waives any and all moral rights that Employee may have in or with respect to any Company Invention.
The Employee hereby irrevocably, uncon
ditionally
and expressly waives any right
and/or
claim to any consideration or compensation whatsoever with regard to the
Company Inventions and the assignment, use or commercialization thereof, including without limitation any royalty payment
and other payment with respect thereto (and including without limitation under Section 134 of the Israeli Patent
Law,
1967). The Employee agrees and understands that the Salary (set forth in Exhibit A) includes adequate compensation
for any transfer or assignment made by the Employee, if any, pursuant to this Section 9.
|
|
|
|
|
|
The Employee agrees
to assist the Company, at the Company’s expense, in every proper way to obtain for the Company and enforce patents,
copyrights, mask work rights, and other legal protections for the Company’s Inventions in any and all countries. The
Employee will execute any documents that the Company may reasonably request for use in obtaining or enforcing such patents,
copyrights, mask work
rights,
trade secrets and other legal protections. Such obligation
will continue beyond the termination of the Employee’s employment with the Company. The Employee hereby irrevocably
designates and appoints the Company and its officers and agents as the Employee’s agent and attorney in fact, coupled
with an interest to act for and on Employee’s behalf and in Employee’s stead to execute and file any document
needed to apply for or prosecute any
patent,
copyright, trademark, trade secret,
any applications regarding same or any other right or protection relating to any Proprietary Information (including Company
Inventions), and to do all other lawfully permitted acts to further the prosecution and issuance of patents, copyrights, trademarks,
trade secrets or any other right or protection relating to
any
Proprietary Information
(including Company Inventions), with the same legal force and effect as if executed by the Employee.
|
|
|
|
|
|
Non-Competition;
Non-Solicitation
|
|
|
|
|
10.
|
Emp
loyee
agrees and understands that the Employee’s
Salary (set forth in Exhibit A) includes adequate compensation for his undertakings under this Section 10.
Therefore,
in order to enable the Company to effect
ively
protect its Proprietary Informat
ion,
the Employee undertakes that, so long as Employee is employed by the Company and for a period of twelve (12) months
thereafter, the Employee will not, directly or indirect
ly,
as owner, emplo
yee,
agent, or in any capacity whatsoever engage in, become financially interested in, be employed by, render services or
assists to, or have any connection with, any person,
corporation,
business or venture
that is engaged in any activities involving services, products, information, processes, technology or equipment that are competitive
to those of the Company; provided, however, that Employee may own securities of any publicly traded corporation in an amount
not to exceed three percent of any class of stock or securities of such company, and so long as
Emp
loyee
has no active role in such corporation in any capacity.
|
|
|
|
|
11.
|
The Employee agrees
and undertakes that during the period of Emp
loyee’
s employment and for a
period of twelve (12) months thereafter, the Employee will
not,
directly or indir
ectly,
including personally or in any business in which Employee is an officer, director or shareholder, for any purpose or
in any place solicit (i) for employment any person employed by the Company (or retained by the Company as a consultant, if
such consultant is prevented thereby from continuing to render its services to the Company in the manner provided immediately
before) on the date of such termination or during the preceding twelve
(
12) months,
and
(ii)
the business of any customer
of the Company for the purpose of offering services or products which compete with the services or products supplied to such
customer by the Company.
|
Reasonableness
of Protective Covenants; Remedies for Breach
|
12.
|
Insofar as the protective
covenants set forth in this Exhibit are concerned, the
Emplo
yee specifically acknowledges,
stipulates and agrees as follows: (i) the protective covenants are reasonable and necessary to protect the goodwill, property
and Proprietary Information of the Company, and the operations and business of the Company; and (ii) the time duration of
the protective covenants is reasonable and necessary to protect the goodwill and the operations and business of Company, and
does not impose a greater restrain than is necessary to protect the goodwill or other business interests of the Company. Nevertheless,
if any term contained in this Exhibit B will for any reason be held to be excessively broad with regard to time, geographic
scope or activity, such term will be construed in a manner to enable it to be
enforced
to the extent compatible with applicable law.
|
|
|
|
|
13.
|
The Employee acknowledges
that the legal remedies for breach of the provisi
ons
of this Exhibit may be found
inadequate and therefore agrees
that,
in addition to all of the remedies available
to the Company in the event of a breach or a threatened breach of any of such provisions, the Company may also, in addition
to any other remedies which may be available under applicable law, obtain temporary, preliminary and permanent injunctions
against any and all
such
actions.
|
|
|
|
|
14.
|
The
Employee recognizes and agrees:
(i)
that this Exhib
it
is necessary and essential to protect the
busi
ness
of the Company and to realize and derive all the benefits, rights and expectations of conducting the Company’s business;
(ii) that the area and duration of the protective covenants contained herein are in all things reasonable; and (iii) that
good and valu
able
consideration exists under the Agreement, for the Employee’s
agreement to be bound by the provisions of this
Exhibit.
|
|
15.
|
The Employee acknowledges
that the Parent Company is a publicly traded company. As such, it agrees not to use any Proprietary Information in connection
with the purchase or sale of the securities of the Parent Company in
viola
tion
of the U.S. Securities and Exchange Commission regulation or any other applicable securities laws.
|
IN
WITNESS WHEREOF
the Employee has signed this Proprietary Information, Confidentiality and Non-Competition
Agreement as of the date first hereinabove set forth.
|
|
|
|
Alon Sinai
|
|
April
10, 2018
To:
Yossi
Dagan
Re:
Change to Scope of Employment
Dear
Yossi,
Reference
is made herein to the Personal Employment Agreement between you and One World Cannabis Ltd. (the “
Company
”)
dated June 4, 2017 (the “
Agreement
”; all capitalized undefined terms herein shall have the meaning ascribed
to them in the Agreement).
This
letter is to document our agreement that as of April 1, 2018, your scope of employment with Company under the Agreement shall
be reduced to a part time basis of 60% out of a full time position. Following reduction in your scope of employment: (i) work
hours shall be coordinated between you and the Company from time to time; and (ii) all employment related benefits based on employment
scope other than the Salary (such as, without limitation, vacation entitlement) shall be reduced accordingly to the reduced lower
scope of employment.
All
terms of the Agreement not amended herein shall remain in full force and effect.
I
hereby acknowledge and agree to the above.
|
|
|
Yossi
Dagan
|
|
July
1
,
2018
To:
Yossi
Dagan
Re:
Amendment to Employment Agreement
Dear
Yossi,
Reference
is made to your employment agreement with One World Cannabis Ltd. (the
“Company”)
dated June 4, 2017, as
amended (the
“Agreement”;
All capitalized terms not otherwise defined herein shall have the meaning
ascribed to such terms in the Agreement). This letter documents the agreed amendments to the Agreement, effective as of July
1, 2018 (the
“Effective Date”):
|
|
1.
|
Increase
of Gross Salary
. In Schedule A of the Agreement, the paragraph set forth opposite to the title “Salary (NIS)”
shall be deleted in its entirety and replaced by the following:
|
|
|
|
|
|
|
|
“The
Employee shall be entitled to a gross monthly salary of NIS 21,000 (the
“Base Salary”).
In addition, in
consideration for overtime hours that the Employee may work during the month, the Employee shall receive a global payment
of NIS 9,000 (the
“Global Overtime Compensation”,
and together with the Base Salary, the
“Salary”).
The Global Overtime Compensation has been determined based on the Company’s estimation of the average of overtime
hours per month that the Employee’s position may require.”
|
|
|
|
|
|
|
2.
|
This
letter constitutes a notice of change in employment terms that is required under the Notice to an Employee (Terms of Employment)
Law, 5762 - 2002.
|
|
|
|
|
|
|
3.
|
The
provisions of Section 12 of the Agreement are incorporated herein by reference and shall apply to the terms herein. Other
than specifically stated herein the Agreement shall stay in force and effect. In the event of any conflict between the provisions
of this agreement and the provisions of the Agreement, the provisions of this letter shall prevail and govern.
|
|
Sincerely,
|
|
|
|
21.5.2018
To:
MB&B
Business Creation Ltd.
Re:
Amendment to Consulting Agreement
Dear
Sirs,
Reference
is made to the Consulting Agreement between you and One World Cannabis Ltd. (the “
Company
”), dated
August 1, 2017 as amended (the “
Agreement
”; capitalized terms not defined herein shall have the
meaning given to them in the Agreement). This letter hereby documents the agreement reached between us with respect to
certain amendments to the Agreement, effective as of May 1, 2018, as follows:
In
Exhibit A
to the Agreement, the paragraph set forth opposite to the words “Fee” shall be deleted in its entirety
and replaced by the following:
“
Fee
:
The Consultant shall be entitled to consideration, with respect to his Services to the Company within the above specified
scope, in the amount of NIS 40,000 per month, plus VAT, at the standard rate, if applicable.”
Please
countersign this letter to indicate your agreement to the terms set forth. Note that this letter will only come into effect upon
receipt of your signature by the Company.
The
provisions of Section 9 of the Agreement are incorporated herein by reference and shall apply to the terms herein. In the event
of any conflict between the provisions of this letter and the provisions of the Agreement, the provisions of this letter shall
prevail and govern. Except as specifically amended herein, all other terms and conditions of the Agreement remain and shall
continue in full force and effect.
|
Agreed
and accepted:
|
|
|
|
|
|
|
|
|
MB&B
Business Creation Ltd.
|
|
|
|
|
|
|
By:
|
Mordechai
Bignitz
|
|
|
Date:
|
21.5.18
|
|
I
hereby acknowledge and agree to the Agreement as amended pursuant to this letter.
One
World Cannabis Ltd.
Consulting
Agreement
This
Agreement (“
Agreement
”) is entered into as of October 1, 2018 (the “
Effective Date
”), by
and between One World Cannabis Ltd., an Israeli company with offices at 30 Shaham St., Petach-Tikva, Israel (the “
Company
”)
and Kinarti Ltd., an Israeli Company No. 515530731 with its principal place of business at 204 Hanarkissim St., Bitsaron,
Israel (the “
Consultant
”).
Whereas
the Consultant wishes to provide services to the Company, and the Company wishes to receive such services, all pursuant to
the Specific Terms of Engagement and the General Terms of Engagement as set forth in this Agreement.
NOW,
THEREFORE, it is hereby agreed as follows:
Specific
Terms of Engagement
The
specific terms of engagement of the Consultant (the “
Specific Terms
”) are as follows, in addition to the General
Terms of Engagement set forth below:
|
Consultant’s
Name
and
Contact Details
|
Company
Name:
Company
No:
Address:
|
Kinarti
Ltd.
515530731
204
Hanarkissim St., Bitsaron, Israel
|
|
Description of Services
|
The Consultant shall provide pharmaceutical
and operational management consulting services to the Company, and other related services as may be requested by the Company from
time to time.
Services shall be provided
by Consultant solely through Oron Yacoby Zeevi (the “
Representative
”), unless otherwise agreed by the
Company in advance and in writing.
The Consultant may also provide such
services to the Parent Company (as defined below), upon request of the Company (provided that the Company shall be required to
pay all Fees).
|
|
|
|
|
Scope of Services;
Additional Engagement
|
The Consultant shall provide the Services
in a scope of 2 days a week, on such days and times as shall be coordinated from time-to-time between the Consultant and the CEO
of the Company. For the avoidance of doubt, it is hereby agreed that the Consultant shall not be entitled to any additional compensation
with respect to additional hours in which services were provided, unless such additional work hours were prior approved in writing
by the Company, at its sole discretion.
The Consultant may engage in
other paid or unpaid engagement, occupation or other business activities which are not in the field of medical and pharmaceutical
formulations derived from and or utilizing cannabis and its CBD and or THC components, either natural or synthetic, and
delivery systems specifically developed for the administration of the above (the “
Field of Business
”).
The term Field of Business shall also include Formulations or carriers developed in the course of the work of the Company,
which have medical effect, even if such formulations or carriers do not contain the above-mentioned cannabis components.
If the Consultant and/or the Representative has or develops ideas or inventions, not in the Field of Business, which the
Consultant believes may be of interest to the Company, the Consultant may offer these to the Company (the “
Offer
”),
at the Consultant’s full discretion. The Company may choose to negotiate the terms of such Offer with the Consultant
for a period of 6 months from the time of the Offer. If the Company declines the Offer, it shall issue a formal release
to the Consultant declaring that such Offer is the sole property of the Consultant. The Consultant shall ensure that during
the Term of Agreement, any engagement of the Consultant and/or the Representative in the Field of Business shall be subject
to the Company’s prior written approval which shall be in its sole discretion.
|
|
|
|
|
Start
Date
|
,
2018
|
|
|
|
|
Term
of Agreement
|
The
terms of this Agreement are effective as of the Start Date and shall continue until terminated in accordance with Section
2 of the General Terms of Employment hereunder.
|
|
|
|
|
Prior
Notice for Termination
|
30
days by either party.
|
|
|
|
|
Fees
|
A
gross amount of NIS 31.000 per month, payable by no later than the 9th day following the end of the calendar month with respect
to which the Fees are paid, subject to the receipt of a valid invoice and plus VAT, if applicable (the “
Fees
”).
The Fees constitutes the full and final consideration for the Services, and neither Consultant nor Representative shall be
entitled to any additional consideration, of any form, for the provided services.
|
|
|
|
|
Expenses
|
Consultant
shall be entitled to reimbursement of expenses, based on the Company’s reimbursement policy, as shall be amended from
time to time, and in addition, to any expenses which have been approved in advance and in writing by the CEO of the Company.
|
General
Terms of Engagement
|
|
1.
|
Services.
The Consultant will provide the Company with such services as described in the Specific
Terms (the “
Services
”). The Consultant shall, and procure that the
Representative shall, perform the Services diligently and in the Company’s best
interests. All duties and obligations imposed upon Consultant in this Agreement shall
be binding upon the Representative, and Consultant shall be liable for any breach of
the terms of this Agreement by the Representative. In performance of the Services and
this Agreement, Consultant and Representative shall comply with all applicable laws,
ordinances, rules, regulations, orders, licenses, permits and other governmental requirements
(including, but not limited to, any such requirements imposed upon the Company with respect
to the Services).
|
|
|
|
|
|
|
2.
|
Term
and Termination.
The Consultant’s engagement with the Company under this Agreement has begun or shall begin on the
Start Date and shall continue for the term specified in the Specific Terms, unless earlier terminated by a party by a prior
written notice of such number of days as specified in the Specific Terms. In addition, either party may by notice in writing
immediately terminate this Agreement for in the event of a material breach by either party of its obligations under this Agreement,
which has not been cured (if curable) within 7 days of receipt of written notice of such breach. For the avoidance of doubt,
the undertakings in Sections 4-7 shall remain in full force and effect after termination of the Agreement (for any reason
whatsoever).
|
|
|
|
|
|
|
3.
|
Fees.
The Company will pay the Consultant as compensation for the Services and for its undertakings in this Agreement the Fees
set forth in the Specific Terms. Except as specifically set forth herein, the Fees includes any and all payments to which
Consultant is entitled hereunder and under any applicable laws, regulations or agreements. All tax consequences related to
any consideration or benefit provided to the Consultant pursuant to this Agreement shall be borne by the Consultant and
shall be subject to any tax withholding deemed required by the Company under applicable law.
|
|
|
4.
|
No
Employment Relationship.
The Consultant acknowledges that neither it nor the Representative is not an employee of the
Company, but rather a service provider, that the Representative was offered the opportunity to serve as an employee of the
Company and has expressly insisted not to be so employed, but rather enter into this Agreement with the Company as an independent
Consultant and the terms of this Agreement, including the Fees, reflect such agreement between the parties. The Consultant
hereby undertakes to indemnify and hold harmless the Company for any liability, damage, cost or expense (including, without
limitation, legal and other reasonable expenses) caused to the Company, in connection with or as a result of a competent authority’s
decision that the Consultant is or was, in fact, in spite of the aforesaid, an employee of the Company. Without derogating
from the above, the parties hereby further agree that in the event that any competent court of law and/or other authority
shall rule, in spite of the explicit agreement between the parties as aforesaid in the preamble and in this Section 4, that
the relations between the parties hereto are employer-employee relations (a “
Ruling
”), then the following
terms shall be in effect:
|
|
|
4.1.
|
The
Consultant shall not be entitled to the consideration due and/or paid to it under this Agreement, retroactive to the date
upon which the Consultant commenced the provision of Services to the Company. The Consultant shall instead be entitled to
receive a gross salary equal to 70% of the Fees (the “
Reduced Consideration
”). It is hereby agreed by the
parties that the Reduced Consideration shall constitute fair and reasonable wages in the event of a Ruling.
|
|
|
|
|
|
|
4.2
.
|
The
parties shall settle their account, and the Consultant shall immediately repay the Company any amounts paid to it beyond the
amounts in Section 4.1 above, together with interest and linkage differentials from the date of actual payment to the Consultant
to the date of repayment to the Company.
|
|
|
|
|
|
|
4.3
.
|
In
the event that the Company shall be required to pay any amount or grant any right to any third party due to a Ruling, the
Consultant shall indemnify and hold the Company harmless against any amount that it shall be required to pay to any such third
party and/or against any other liability which the Company shall be required to bear due to such Ruling. For the purposes
of this Section 4.3, the term “required” shall include without limitation any amounts paid for the settlement
of a claim against the Company in this context, whether or not such claim has reached the courts.
|
|
|
|
|
|
|
4.4
.
|
The
Company shall be entitled to deduct any amounts due to the Company from the Consultant hereunder from any amount which it
is required to pay to the Consultant or any third party, in accordance with or as a result of a Ruling, if any, or to set
off such amounts from any debt. Nothing in this Section 4.4 shall be construed as releasing the Consultant from its obligation
to repay any debts to the Company, if Company does not so deduct, or if the amounts so deducted shall be insufficient to cover
the full amount due to the Company from the Consultant.
|
Each
reference to the Consultant in this Section (4) shall also be construed as reference to the Representative,
mutatis mutandis
.
|
|
5.
|
Confidentiality;
Proprietary Information.
|
|
|
5.1.
|
The
Consultant acknowledges that it may have access to confidential and proprietary information concerning the business and financial
activities of the Company, including without limitation information relating to the Company’s research and development
activities, investments, properties, Consultants, marketing plans, customers, suppliers, trade secrets, test results, processes,
data, know-how, improvements, inventions, techniques, intellectual property and products (actual or planned). Such information,
whether documentary, written, oral or computer generated, will be referred to as “
Proprietary Information
”.
|
|
|
5.2.
|
The
Consultant recognizes that the Company may receive confidential or proprietary information from third parties, subject to
a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited
purposes. In connection with such duties, such information will be deemed Proprietary Information hereunder. The Consultant
will not, during its engagement with the Company, improperly use or disclose any proprietary information or trade secrets
of any former or concurrent employer or other person or entity and will not bring onto the premises of the Company any unpublished
document or proprietary information belonging to any such employer, person or entity unless consented to in writing by such
employer, person or entity.
|
|
|
|
|
|
|
5.3
.
|
The
Consultant agrees that all Proprietary Information and any patents, trademarks, copyrights and other intellectual property
and ownership rights in connection therewith are and will be the sole property of the Company and its assigns. During Consultant’s
engagement by the Company and thereafter, the Consultant will keep in confidence and trust all Proprietary Information as
well as the terms of the Consultant’s engagement, and will not use or disclose Proprietary Information without the written
consent of the Company, except as may be necessary in the ordinary course of performing Consultant’s duties under the
Agreement.
|
|
|
|
|
|
|
5.4
.
|
Upon
the Company’s demand, Consultant shall return to the Company all documents or materials or copies thereof containing
any Proprietary Information and shall erase any electronic record thereof.
|
|
|
|
|
|
|
5.5
.
|
For
the purposes this Agreement, Confidential Information shall also include any information as detailed above with respect to
the Company’s Parent Company, OWC Pharmaceutical Research Corp. (the “
Parent Company
”). The Consultant
hereby acknowledges that the Parent Company is a publicly traded company. As such, it agrees not to use any Confidential Information
or other information of the Company or the Parent Company in connection with the purchase or sale of the securities of the
Parent Company in violation of United States or other applicable securities laws.
|
|
|
|
|
|
|
5.6.
|
Each
reference to the Consultant in this Section (5) shall also be construed as reference to the Representative,
mutatis mutandis.
|
|
|
6.
|
Disclosure
and Assignment of Inventions.
|
|
|
6.1.
|
The
Consultant undertakes to promptly disclose in confidence to the Company all inventions, improvements, designs, concepts, techniques,
methods, systems, processes, know how, computer software programs, databases, mask works and trade secrets and other intellectual
property whatsoever whether or not patentable, copyrightable or protectable as trade secrets (the “
Inventions
”),
that are made or conceived or first reduced to practice or created by the Consultant, either alone or jointly with others
during the course of and in connection with the Consultant’s engagement with the Company.
|
|
|
|
|
|
|
6.2.
|
The
Consultant agrees that all Inventions that (a) are or were developed using equipment, supplies, facilities or trade secrets
of the Company, (b) resulted or result from work performed by the Consultant for the Company, or (c) relate to the Company’s
business, activities, services, products or research and development (whether current or anticipated) will be the sole and
exclusive property of the Company and the Consultant will have no rights in or thereto (“
Company Inventions
”).
|
|
|
|
|
|
|
6.3.
|
The
Consultant agrees that the Consultant will not incorporate, or permit to be incorporated, any Inventions which are not Company
Inventions in any Company Inventions without the Company’s prior written consent. If however, despite the prohibition
in the preceding sentence, the Consultant incorporates an Invention that is not a Company Invention into a Company product,
process or machine, then without derogating from any remedies available to the Company in such case, the Company shall be
deemed to have been granted by the Consultant a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license (with
rights to sublicense through multiple tiers of sublicensees) to make, have made, modify, use and sell such Invention.
|
|
|
6.4.
|
The
Consultant hereby irrevocably transfers and assigns to the Company, without further compensation, all worldwide patents, patent
applications, copyrights, mask works, trade secrets and other intellectual property rights in any Company Invention, and waives
any and all moral rights that Consultant may have in or with respect to any Company Invention. The Consultant expressly waives
any right to any consideration or compensation whatsoever with regard to the Company Inventions and the assignment, use or
commercialization thereof, including without limitation any royalty payment and other payment with respect thereto (and including
without limitation under Section 134 of the Israeli Patent Law - 1967, to the extent applicable).
|
|
|
|
|
|
|
6.5.
|
The
Consultant undertakes to make its best efforts to assist the Company, at the Company’s expense, in every proper way
to obtain for the Company and enforce patents, copyrights, mask work rights, and other legal protections for the Company’s
Inventions in any and all countries. The Consultant will execute any documents that the Company may reasonably request for
use in obtaining or enforcing such patents, copyrights, mask work rights, trade secrets and other legal protections. Such
obligation will continue beyond the termination of the Consultant’s engagement with the Company. The Consultant hereby
irrevocably designates and appoint s the Company and its officers and agents as the Consultant’s agent and attorney
in fact, coupled with an interest to act for and on Consultant’s behalf and in Consultant’s stead to execute and
file any document needed to apply for or prosecute any patent, copyright, trademark, trade secret, any applications regarding
same or any other right or protection relating to any Proprietary Information (including Company Inventions), and to do all
other lawfully permitted acts to further the prosecution and issuance of patents, copyrights, trademarks, trade secrets or
any other right or protection relating to any Proprietary Information (including Company Inventions), with the same legal
force and effect as if executed by the Consultant.
|
|
|
|
|
|
|
6.6.
|
Each
reference to the Consultant in this Section (6) shall also be construed as reference to the Representative,
mutatis mutandis.
|
|
|
7.
|
Non-Competition;
Non-Solicitation
.
|
|
|
7.1
.
|
In
order to enable the Company to effectively protect its Proprietary Information, the Consultant undertakes that, so long as
the Consultant is engaged by the Company and for a period of twelve (12) months thereafter, the Consultant will not, directly
or indirectly, as owner, employee, agent, or in any capacity whatsoever engage in, become financially interested in, be employed
by, render services to, or have any connection with any business or venture that is engaged in any activities involving products,
information, processes, technology or equipment that are competitive to those of the Company.
|
|
|
|
|
|
|
|
The
Company knows and approves that the Consultant is a founder and a director in a company that in the future intends “to
provide certain services to growing and flowering companies of medical cannabis, including marketing services, professional
services and the development of ancillary products relating to cannabis”. Notwithstanding the above, the Consultant
will be required to obtain approval for any services to be given for such ancillary product development on a case-by-case
basis from the Company.
|
|
|
|
|
|
|
7.2.
|
The
Consultant agrees and undertakes that during the period of the Consultant’s engagement with the Company and for a period
of twelve months thereafter, the Consultant will not, directly or indirectly, including personally or in any business in which
Consultant is an officer, director or shareholder, for any purpose or in any place solicit (i) for employment any person employed
by the Company (or retained by the Company as a consultant or service provider) on the date of such termination or during
the preceding twelve months, and (ii) the business of any customer of the Company for the purpose of offering services or
products which compete with the services or products supplied to such customer by the Company.
|
|
|
|
|
|
|
7.3.
|
Each
reference to the Consultant in this Section (7) shall also be construed as reference to the Representative,
mutatis mutandis.
|
|
|
8
.
|
Representations
and Warranties by Consultant
. Consultant represents and warrants to Company that the execution and delivery of this Agreement
and the fulfillment of the terms hereof by Consultant (i) will not constitute a default under or conflict with any agreement
or other instrument to which Consultant is a party or by which Consultant is bound; (ii) will not result in a breach of any
confidentiality undertaking to any third party, and (iii) do not require the consent of any person or entity.
|
|
|
|
|
|
|
|
The
Consultant further acknowledges and agrees (i) to the transfer of any information concerning the Consultant and held by the
Company to a database (including a database located abroad) and to third parties in general, as is reasonable for business
purposes or in pursuit of the Company’s business interests; (ii) to protect the good name of the Company and not to
perform any act that may bring the Company into disrepute; (iii) to use any equipment (such as laptop) and access to systems
(such as email system) provided to the Consultant by the Company for purposes related to the Consultant’s engagement;
(iv) that all information, content and data on the Company’s computers and telephones, including electronic mail transmissions,
Internet usage, messages and data whether sent from, received by, or stored in or upon the Company’s computers or communications
systems are the property of the Company, regardless of the form and/or content of these messages and data, and the Company
shall have the right to conduct inspections of such property. The Consultant should not consider messages and data sent from,
received by, or stored in or upon the Company’s computer, telephones and communications systems to be private and should
not send, receive, or store sensitive personal or private information using these systems. The Consultant is deemed to have
consented to any reasonable use, transfer and disclosure of all messages and data contained or sent by the Consultant (if
any) via the Company’s computer, telephones and communications systems, including electronic mail.
|
|
|
|
|
|
|
|
Each
reference to the Consultant in this Section (8) shall also be construed as reference to the Representative,
mutatis mutandis.
|
|
|
|
|
|
|
9.
|
Policies
and Guidelines
. Each of the Consultant and the Representative undertake to abide by and at all times be in compliance
with the policies, guidelines and regulations which are and shall be established by the Company.
|
|
|
|
|
|
|
10.
|
General
.
Words and expressions herein importing the masculine gender shall include the feminine gender and words and expressions importing
persons shall include bodies corporate, and vice versa. This Agreement constitutes the entire understanding between the parties
supersedes any and all prior discussions, agreements and correspondence with respect to the matters referred to herein. This
Agreement shall be governed by the laws of the State of Israel, excluding its conflict of law rules, and the courts of Tel-Aviv-Jaffa
shall have exclusive jurisdiction over the parties. This Agreement may not be assigned by Consultant and the performance of
the Services may not be sub-contracted by Consultant, without the prior written consent of the Company. The Company may freely
assign its rights and obligations herein. This Agreement may not be amended or modified, except by the written consent of
both parties hereto. No failure or delay on the part of any party hereto in exercising any right, power or remedy hereunder
shall operate as a waiver thereof. Headings to Sections herein are for the convenience of the parties only and are not intended
to be or to affect the meaning or interpretation of this Agreement. In the event that any covenant, condition or other provision
contained in this Agreement is held to be invalid, void or illegal by any court of competent jurisdiction, the same shall
be deemed severable from the remainder thereof, and shall in no way affect, impair or invalidate any other covenant, condition
or other provision therein contained.
|
[Signature
Page Follows]
IN
WITNESS WHEREOF,
the parties have executed this Agreement as of the date first above written.
|
One
World Cannabis Ltd.
|
|
Kinarti
Ltd.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
By:
|
|
The
undersigned agrees to be bound by the terms of Sections 4-9 of the General Terms of Engagement, as if she was the Consultant.
|
|
|
Oron
Yacoby Zeevi
|
|
OWC
PHARMACEUTICAL RESEARCH CORP.
CODE
OF BUSINESS CONDUCT AND ETHICS
Adopted
as of April 2019
This
Code of Business Conduct and Ethics (this
“
Code
”
) covers a wide range of business practices and procedures.
It does not cover every issue that may arise, but it sets out basic principles to guide all employees of OWC Pharmaceutical Research
Corp. and its subsidiaries and affiliates (collectively the
“
Company
”
). All of our employees (including,
but not limited to, supervisors and managers) must conduct themselves accordingly and should seek to avoid even the appearance
of improper behavior. This Code should be followed by the Board of Directors of the Company as well as all agents and representatives,
including consultants, of the Company. This Code has been adopted by the Board of Directors and is reviewed on a regular basis.
If
a law conflicts with a policy in this Code, you must comply with the law; however, if a local custom or policy conflicts with
this Code, you must comply with the Code. If you have any questions about these conflicts, you should ask your supervisor or manager
how to handle the situation.
Those
who violate the standards set forth in this Code will be subject to disciplinary action.
If you are in a situation that you
believe may violate or lead to a violation of this Code, follow the guidelines described in Section XIV below.
|
I.
|
COMPLIANCE
WITH LAWS, RULES AND REGULATIONS
|
All
employees must respect and obey the laws of the cities, states and countries in which the Company operates, including the rules
and regulations of the Securities and Exchange Commission. Not all employees are expected to know the details of these laws, but
it is important to know enough to determine when to seek advice from supervisors, managers or other appropriate personnel.
|
II.
|
CONFLICTS
OF INTEREST
|
Conflicts
of interest are prohibited as a matter of Company policy. A “conflict of interest” exists when someone’s personal
interest interferes in any way with the interests of the Company. Conflict situations may arise when an employee, officer or director
takes action or has interests that may make it difficult to perform his or her work for the Company objectively and effectively.
Conflicts of interest may also arise when a director, officer or employee, or a member of his or her family, receives improper
personal benefits, including loans, as a result of his or her position in the Company
1
.
It
is almost always a conflict of interest for a Company employee to work simultaneously for a competitor, customer or supplier.
Company employees are not allowed to work for a competitor as a consultant or board member. The best policy is to avoid any direct
or indirect business connection with our customers, suppliers or competitors, except on behalf of the Company.
1
Loans to directors and executive officer may also be forbidden under applicable law.
Conflicts
of interest may not always be clear-cut. If you have a question, you should consult with higher levels of management. Any director,
officer or employee who becomes aware of a conflict or potential conflict should bring it to the attention of a supervisor, manager
or other appropriate personnel or should consult the procedures described in Section XIV below.
Employees
who have access to confidential information are not permitted to use or share that information for stock trading purposes or for
any other purpose except the conduct of the business of the Company. All nonpublic information about the Company should be considered
confidential. To use nonpublic information for personal financial benefit or to “tip” others who might make an investment
decision on the basis of this information is not only unethical but also illegal. If you have any questions, please consult Ms.
Sigal Russo, Chief Financial Officer, at info@owcpharma.com.
|
IV.
|
CORPORATE
OPPORTUNITIES
|
Employees,
officers and directors are prohibited, without the express consent of the Board of Directors, from taking for themselves personally
opportunities that are discovered through the use of Company property, information or position. No employee may use Company property,
information or position for improper personal gain and no employee may compete with the Company directly or indirectly. Directors,
officers and employees owe a duty to the Company to advance the legitimate interests of the Company when the opportunity to do
so arises.
|
V.
|
COMPETITION
AND FAIR DEALING
|
We
seek to outperform our competition fairly and honestly. We seek competitive advantages through superior performance, never through
unethical or illegal business practices. Stealing proprietary information, possessing trade secret information obtained without
the owner’s consent or inducing the disclosures of proprietary information or trade secrets by past or present employees
of other companies is prohibited. Each employee should endeavor to respect the rights of and deal fairly with the customers, suppliers,
competitors and employees of the Company. No employee should take unfair advantage of anyone through manipulation, concealment,
abuse of privileged information, misrepresentation of material facts or any other intentional practice that may constitute unfair
dealing.
To
maintain the valuable reputation of the Company, compliance with our quality processes and safety requirements is essential. In
the context of ethics, quality requires that our products and services be designed and manufactured to meet our obligations to
customers.
The
purpose of business entertainment and gifts in a commercial setting is to create goodwill and sound working relationships, not
to gain unfair advantage with customers. No gift or entertainment should ever be offered, given, provided or accepted by any director,
officer or employee of the Company, or by any family member of a director, officer, employee or agent, unless it (1) is not a
cash gift, (2) is consistent with customary business practices, (3) is not excessive in value, (4) cannot be construed as a bribe
or payoff and (5) does not violate any laws or regulations. Please discuss with your supervisor or manager any gifts or proposed
gifts if you are uncertain whether they are appropriate.
|
VI.
|
DISCRIMINATION
AND HARASSMENT
|
The
diversity of our employees is a tremendous asset. We are firmly committed to providing equal opportunity in all aspects of employment
and will not tolerate any illegal discrimination or harassment of any kind. Examples include derogatory comments based on racial
or ethnic characteristics and unwelcome sexual advances. If you have any questions, please consult the Chief Financial Officer,
Ms. Sigal Russo at info@owcpharma.com.
The
Company strives to provide each employee with a safe and healthy work environment. Each employee is responsible for maintaining
a safe and healthy workplace for all employees by following safety and health rules and practices and reporting accidents, injuries
and unsafe equipment, practices or conditions.
Violence
and threatening behavior are not permitted. Employees should report to work in condition to perform their duties, free from the
influence of alcohol or illegal drugs. The use of alcohol or illegal drugs in the workplace will not be tolerated.
The
Company requires honest and accurate recording and reporting of information in order to make responsible business decisions. For
example, only the true and actual number of hours worked by an employee should be reported.
Many
employees regularly use business expense accounts. These accounts must be documented and recorded accurately. If you are not sure
whether a certain expense is legitimate, ask your supervisor or manager.
All
Company books, records, accounts and financial statements must be maintained in reasonable detail, must appropriately reflect
Company transactions and must conform to both applicable legal requirements and the system of internal controls of the Company.
Unrecorded or “off the books” funds or assets should not be maintained unless permitted by applicable law or regulation.
Business
records and communications often become public, and we should avoid exaggeration, derogatory remarks, guesswork or inappropriate
characterizations of people and companies that may be misunderstood. This principle applies equally to e-mail, internal memoranda
and formal reports.
Records
should be retained or destroyed in accordance with Company policy, as in effect from time to time. If you have any questions,
please consult the Chief Financial Officer, Ms. Sigal Russo at info@owcpharma.com.
Each
employee must maintain the confidentiality of confidential information entrusted to him or her by the Company or its customers,
except when disclosure is authorized by your supervisor, or required by law or regulations. Confidential information includes
all nonpublic information that, if disclosed, might be useful to competitors or harmful to the Company or its customers. It also
includes information that suppliers and customers have entrusted to us.
Employees
are required to execute a standard form confidentiality agreement upon employment and from time to time during the course of employment.
The obligation to preserve confidential information continues even after employment ends.
|
X.
|
PROTECTION
AND PROPER USE OF COMPANY ASSETS
|
All
employees should endeavor to protect Company assets and to ensure their efficient use. Theft, carelessness and waste have a direct
impact on profitability. Any suspected incident of fraud or theft should be immediately reported for investigation. Except for
incidental personal use, Company equipment should not be used for purposes that do not relate to Company business.
The
obligation of employees to protect Company assets includes its proprietary information. Proprietary information includes intellectual
property, such as trade secrets, patents, trademarks and copyrights, as well as business, marketing and service plans, engineering
and manufacturing ideas, designs, databases, records, salary information and any unpublished financial data and reports. Unauthorized
use or distribution of this information is a violation of Company policy. It may also be illegal, may result in civil and criminal
penalties and may subject a director, officer or employee to discipline, up to and including termination for cause.
|
XI.
|
PAYMENTS
TO GOVERNMENTAL PERSONNEL
|
The
Foreign Corrupt Practices Act prohibits giving anything of value, directly or indirectly, to officials of foreign governments
or foreign political candidates in order to obtain or retain business. The Company strictly prohibits the making of illegal payments
to government officials of any country. If you have any questions, please consult the Chief Financial Officer, Ms. Sigal Russo,
at
info@owcpharma.com
.
The
United States government has a number of laws and regulations regarding business gratuities that may be accepted by US government
personnel. The promise, offer or delivery to an official or employee of the US government of a gift, favor or other gratuity in
violation of these rules violates Company policy and may be a criminal offense. State and local governments may have similar rules.
If you have any questions, please consult the Chief Financial Officer, Ms. Sigal Russo at info@owcpharma.com.
|
XII.
|
WAIVERS
OF THIS CODE OF BUSINESS CONDUCT AND ETHICS
|
Any
waiver of this Code with respect to a director or executive officer of the Company may be made only by the Board of Directors
or a committee of the Board of Directors. Any such waiver will be promptly disclosed to the extent required by law or regulation.
|
XIII.
|
REPORTING
ILLEGAL OR UNETHICAL BEHAVIOR
|
Employees
are encouraged to talk to supervisors, managers or other appropriate personnel about observed illegal or unethical behavior and
about the best course of action in a particular situation. The Company will not retaliate or condone retaliation against employees
who report possible misconduct by others in good faith. Employees are expected to cooperate in internal investigations of misconduct.
|
XIV.
|
COMPLIANCE
PROCEDURES
|
We
must all work to ensure prompt and consistent action against violations of this Code.
In
some situations it is difficult to determine the proper course of action. Since we cannot anticipate every situation that may
arise, it is important for the Company to set forth a general way to approach a new question or problem. These are the steps to
keep in mind:
|
|
|
●
|
Make
sure you have all of the facts.
In order to reach the right solutions, you must be as fully informed as possible.
|
|
|
|
|
|
|
|
|
●
|
Ask
yourself what you are specifically being asked to do.
This analysis will enable you to focus on the specific issues that
are raised and the available alternatives. Use your judgment and common sense. If something seems unethical or improper, it
may well be.
|
|
|
|
|
|
|
|
|
●
|
Clarify
your responsibility and role.
In most situations, there is shared responsibility. Are your colleagues informed? It may
help to get others involved and to discuss the problem.
|
|
|
|
|
|
|
|
|
●
|
Discuss
the problem with your supervisor or manager.
This approach is best in most if not all situations. Your supervisor or manager
may be more knowledgeable about the issue and will appreciate being brought into the process. It is a supervisor’s or
manager’s responsibility to help you to solve problems.
|
|
|
|
●
|
Seek
help from Company resources.
In the rare instance in which it may not be appropriate to discuss an issue with your supervisor
or manager, or in which you feel uncomfortable approaching your supervisor or manager, discuss the problem with the CFO, Ms.
Sigal Russo at info@owcpharma.com.
|
|
|
|
|
|
|
|
|
●
|
You
may report ethical violations in confidence and without fear of retaliation.
If your situation requires that your identity
be kept secret, the Company will protect your anonymity. The Company does not permit retaliation of any kind against employees
for good faith reports of ethical violations.
Ask first.
If you are unsure of the proper course of action, seek guidance
before you act.
|
|
|
B.
|
Company
Supervisors and Managers
|
|
|
|
●
|
Compliance
certification.
All Company supervisors and managers, which includes any Company employee, agent or representative (including
consultants) who oversees at least one employee, agent or representative (including consultants), shall be responsible for
the enforcement of and compliance with this Code, including necessary distribution (if requested) to ensure employee, agent
and representative knowledge and compliance. Appropriate management may periodically be required to certify compliance with
this Code. Any false certification, without exception, will be dealt with severely.
|
|
|
|
|
|
|
|
|
●
|
Advise
employees
. Supervisors and managers should advise employees of their reporting obligation and encourage employees to report
any prohibited or unlawful activities of which they are aware. Supervisors and managers should advise employees that the Company
does not permit retaliation of any kind against employees for good faith reports of ethical violations.
|
|
|
|
|
|
|
|
|
●
|
You
may report ethical violations in confidence and without fear of retaliation.
If your situation requires that your identity
be kept secret, the Company will protect your anonymity. The Company does not permit retaliation of any kind against supervisors
and managers for good faith reports of ethical violations.
|
|
|
|
|
|
|
|
|
●
|
Management
reporting requirements
. Any supervisor or manager having knowledge of any prohibited or unlawful acts or any allegations
of fraud or improper behavior must promptly report such matters to the Chief Financial Officer, Ms. Sigal Russo at
info@owcpharma.com
.
Supervisors and managers should never assume that someone else has reported a prohibited or unlawful act or any allegation
of fraud or improper behavior.
|
Exhibit
31.1
CERTIFICATION
PURSUANT TO
RULES
13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS
ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I,
Mordechi Bignitz, certify that:
|
1.
|
I
have reviewed this Annual Report on Form 10-K/A of OWC Pharmaceutical Research Corp.; and
|
|
|
|
|
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.
|
|
Date:
April 30, 2019
|
By:
|
/s/
Mordechi Bignitz
|
|
|
|
Mordechi
Bignitz
|
|
|
|
Chief
Executive Officer
|
Exhibit
31.2
CERTIFICATION
PURSUANT TO
RULES
13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS
ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I,
Sigal Russo, certify that:
|
1.
|
I
have reviewed this Annual Report on Form 10-K/A of OWC Pharmaceutical Research Corp.; and
|
|
|
|
|
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.
|
|
Date:
April 30, 2019
|
By:
|
/s/
Sigal Russo
|
|
|
|
Sigal
Russo
|
|
|
|
Chief
Financial Officer
|
