UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): June 5, 2020

 

ONCBIOMUNE PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

 

Nevada   000-52218   20-2590810
(State or other jurisdiction   (Commission   (I.R.S. Employer
of incorporation)   File Number)   Identification No.)

 

8000 Innovation Park Dr.

Baton Rouge, LA 70820

(Address of principal executive offices)

 

(225) 578-7555

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

[  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

registered pursuant to Section 12(b) of the Act: None

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company [X]

 

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

 

 

 

     
     

 

Item 1.01 Entry into a Material Definitive Agreement

 

Exchange Agreements with Holders of Senior Convertible Notes and Warrants

 

Immediately prior to the closing of the Asset Purchase Agreement (as discussed below in item 2.01), we entered into Securities Exchange Agreements (the “Exchange Agreements”) with the holders of our outstanding senior convertible notes (the “Senior Convertible Notes”) and warrants. The holders of the Senior Convertible Notes and Warrants issued prior to November 1, 2019 were issued, in exchange for their Senior Convertible Notes and Warrants, a total of 2,966.2212 shares of our newly-designated Series C-1 Convertible Preferred Stock. The holders of the Senior Convertible Notes and related Warrants issued after November 1, 2019 were issued, in exchange for their Senior Convertible Notes and related Warrants, a total of 1,320.3806 shares of our newly-designated Series C-2 Convertible Preferred Stock. Our new Series C-1 Convertible Preferred Stock and Series C-2 Convertible Preferred Stock are both convertible to common stock at a ratio of 150,000 shares of common stock for each share of preferred stock held. The convertibility of shares of Series C-1 and C-2 Convertible Preferred Stock is limited such that a holder of Series C-1 and C-2 Convertible Preferred Stock may not convert Series C-1 and C-2 Convertible Preferred Stock to our common stock to the extent that the number of shares of common stock to be issued pursuant to such conversion, when aggregated with all other shares of common stock owned by the holder at such time, would result in the holder beneficially owning (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934) more than 4.99% of all of our common stock outstanding. Series C-1 and C-2 Convertible Preferred Stock does not have an automatic conversion feature. In total, the Series C-1 and C-2 Convertible Preferred Stock issued under the Exchange Agreements will constitute approximately 7.7% of our issued and outstanding share capital on a fully-diluted basis.

 

The foregoing description of the Exchange Agreements, Series C-1 Convertible Preferred Stock and Series C-2 Convertible Preferred Stock does not purport to be complete, and is qualified in its entirety by reference to Exhibits 10.1, 10.2, 3.1 and 3.2 hereto, which are incorporated by reference herein.

 

Exchange Agreement with Dr. Jonathan Head

 

Immediately prior to the closing of the Asset Purchase Agreement, Dr. Jonathan Head, a director, exchanged the shares of Series A Preferred Stock and Series B Preferred Stock he held for 100 shares of Series D-2 Convertible Preferred Stock. Upon the effectiveness of the amendment to our Articles of Incorporation to increase the Company’s authorized common stock, par value $0.0001 per share, from 6,666,667 shares to 12,000,000,000 shares, each share of Series D-2 Convertible Preferred Stock shall automatically convert into 10,000 shares of common stock. The Series D-2 Convertible Preferred Stock vote on an as-converted basis with our shares of common stock prior to their conversion.

 

The foregoing description of the exchange agreement with Dr. Head and the Series D-2 Convertible Preferred Stock does not purport to be complete, and is qualified in its entirety by reference to Exhibit 10.3 and 3.3 hereto, which are incorporated by reference herein.

 

Securities Purchase Agreement for Series C-2 Convertible Preferred Stock and New Warrants to Cavalry Fund I LP and Lincoln Park Capital Fund, LLC

 

In connection with the closing of the Asset Purchase Agreement, we entered into a Securities Purchase Agreement (the “SPA”) with Cavalry Fund I LP (“Cavalry”) and Lincoln Park Capital Fund, LLC (“Lincoln Park”) to purchase an aggregate amount of 3,339.7862 shares of Series C-2 Convertible Preferred Stock and accompanying warrants (the “Warrants”) for an aggregate investment amount of $1,075,000. The C-2 Convertible Preferred Stock issued under the SPA will constitute approximately 6.0% of our issued and outstanding share capital on a fully-diluted basis.

 

     
     

 

Cavalry and Lincoln Park were issued Warrants to purchase an aggregate of 200,000,000 shares of common stock at an exercise price of $0.0025 per share (subject to adjustment as provided therein) which are valid until September 5, 2025. The Warrants are not exercisable until sixty (60) days after the Company effectuates a reverse stock split and the Company achieves and maintains a market capitalization of $50,000,000 for thirty consecutive days, at which point they will be exercisable for cash. If on or after February 15, 2021, there is no effective registration statement registering the resale of the shares of common stock underlying the Warrants, then the warrants will be exercisable on a cashless basis. The Warrants will constitute approximately 2.4% of our issued and outstanding share capital on a fully-diluted basis.

 

The foregoing description of the SPA and Warrants does not purport to be complete, and is qualified in its entirety by reference to Exhibits 10.4 and 4.1 hereto, which are incorporated by reference herein.

 

Resulting Capital Structure

 

Following the transactions described herein, there are no longer any outstanding shares of Series B Preferred Stock, convertible notes, options, or warrants, with the exception of the new Warrants issued to Cavalry and Lincoln Park and the Avant warrant described below in Item 2.01. Following all the transactions described herein, including the agreed upon issuance of options to the newly hired employees and consultants of Avant described in Item 2.01 below, there will be approximately 8.3 billion shares of common stock outstanding on a fully-diluted basis.

 

Item 2.01 Completion of Acquisition or Disposition of Assets.

 

On June 5, 2020, OncBioMune Pharmaceuticals, Inc. (the “Company”) completed the previously announced acquisition of Avant Diagnostics, Inc. (“Avant”) pursuant to an Asset Purchase Agreement dated May 12, 2020 (the “Asset Purchase Agreement”), between the Company and Avant. At the closing, the Company acquired substantially all of the assets of Avant and assumed certain of its liabilities (the “Asset Sale Transaction”). As consideration for the Asset Sale Transaction, Company issued Avant 1,000 shares of a newly created Series D-1 Convertible Preferred Stock of the Company (the “Series D-1 Preferred”) and assumed an existing warrant of Avant held by an Avant investor. Upon the effectiveness of the amendment to our Articles of Incorporation to increase the Company’s authorized common stock, par value $0.0001 per share, from 6,666,667 shares to 12,000,000,000 shares, all such shares of Series D-1 Preferred issued to Avant shall automatically convert into approximately 4,441,400,000 shares of common stock of the Company. The Series D-1 Convertible Preferred Stock vote on an as-converted basis with the common stock prior to their conversion. The Avant warrant was exchanged by the Company for a new warrant of the Company, which was issued to the Avant investor (the “Exchange Warrant”), which shall be exercisable into 656,674,588 shares of common stock upon the effectiveness of the increase in authorized, at a price of $0.00214 per share (subject to adjustment as provided therein).

 

The foregoing description of the Asset Purchase Agreement, Series D-1 Convertible Preferred Stock and the Exchange Warrant does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Asset Purchase Agreement, which was filed as Exhibit 2.1 to the Current Report of the Company on Form 8-K, filed with the Securities and Exchange Commission on May 13, 2018, and Exhibits 3.4 and 4.2 hereto each of which is incorporated by reference herein.

 

In addition, we agreed to issue to the employees and consultants of Avant, whom we hired in connection with the closing of the Asset Sale Transaction, an aggregate of 1,822,382,883 options to purchase shares of the Company’s common stock, with an exercise price of $0.00214 per share within one year of the closing of the Asset Sale Transaction.

 

Avant provides personalized medicine data through its Theralink® assays, initially for breast cancer, to assist the treating physician in a data-driven process for treatment decision support and to help enable predictive biomarker-based patient therapy selection. Avant is the leading developer of phosphoproteomic technologies for measuring the activation state of therapeutic targets and signaling pathways, a key metric for biopharmas, with applications across multiple cancer types, including breast, non-small cell lung, colorectal, gynecologic and pancreatic, among others.

 

Prior to the Asset Sale Transaction, there were no material relationships between us and Avant, or any of their respective affiliates, directors or officers, or any associates of their respective officers or directors.

 

     

 

 

The stockholders of Avant possess majority voting control of the Company immediately following the Asset Sale Transaction and will control our Board of Directors after the termination of the ten day waiting period required by Rule 14f-1 under the Exchange Act. Avant is deemed to be the accounting acquirer in the reverse acquisition. Consequently, the assets and liabilities and the historical operations of Avant prior to the Asset Sale Transaction will be reflected in the financial statements and will be recorded at the historical cost basis of Avant. Our consolidated financial statements after completion of the Asset Sale Transaction will include the assets and liabilities of both companies, the historical operations of Avant, and our operations from the closing date of the Asset Sale Transaction. As a result of the issuance of the shares of Series D-2 Convertible Preferred Stock pursuant to the Asset Purchase agreement, a change in control of the Company occurred on June 5, 2020. Except as described herein, no arrangements or understandings exist among present or former controlling stockholders with respect to the election of members of our Board of Directors and, to our knowledge, no other arrangements exist that might result in a future change of control of the Company. We will continue to be a “smaller reporting company,” as defined under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), following the Asset Sale Transaction.

 

Item 3.02 Unregistered Sales of Equity Securities

 

Information concerning the Company’s issuance of (i) the Series C-1 Convertible Preferred, Series C-2 Convertible Preferred and Series D-2 Convertible Preferred pursuant to the exchange agreements set forth in Item 1.01 above, (ii) the Series C-2 Convertible Preferred and Warrants to Cavalry and Lincoln Park as set forth in Item 1.01 above, (iii) the Series D-1 Convertible Preferred and Exchange Warrant to Avant and its investor as set forth in Item 2.01 above is incorporated herein by reference.

 

Immediately prior to the closing of the Asset Purchase Agreement, we entered into Settlement Agreements (the “Settlement Agreements”) with our unsecured creditors pursuant to which we paid them cash, issued them shares of Series D-2 Convertible Preferred Stock, or a combination of the two. In total we issued 2,915.5 shares of Series D-2 Convertible Preferred to our unsecured creditors for settlement of our debt with them.

 

The C-1 Convertible Preferred, Series C-2 Convertible Preferred, Series D-1 Convertible Preferred, Series D-2 Convertible Preferred, Warrants, Exchange Warrant and the shares issuable upon the conversion of the Convertible Preferred or the exercise of the warrants are not registered under the Securities Act of the 1933, as amended (the “Securities Act”), or any state securities laws. The Company has relied on the exemption from the registration requirements of the Securities Act by virtue of Section 4(a)(2) thereof and/or Rule 506 of Regulation D thereunder. The exchange of the Senior Convertible Notes and warrants for the C-1 Convertible Preferred and Series C-2 Convertible Preferred and the Series A Preferred and Series B Preferred for the Series D-2 Convertible Preferred is also exempt under Section 3(a)(9) of the Securities Act.

 

Item 5.01 Changes in Control of Registrant

 

As a result of the issuance of the shares of Series D-1 Convertible Preferred Stock pursuant to the Asset Purchase Agreement, a change in control of the Company occurred on June 5, 2020. Our controlling shareholder is now Avant. Avant now holds 1,000 shares of our new Series D-1 Convertible Preferred Stock. As a result, it is the beneficial owner of approximately 99% of our voting capital stock. Under the terms of the Asset Purchase Agreement, Avant has appointed three members of the Board of Directors. The appointment of these members is subject to compliance with Rule 14f-1 under the Exchange Act.

 

Other than as set forth in the Asset Purchase Agreement, there are no other arrangements which may, at a subsequent date, result in a change in control of the registrant.

     
     

 

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers

 

Concurrently with the closing of the Asset Purchase Agreement, our Board of Directors appointed the Chief Executive Officer of Avant, Mick Ruxin, M.D., to serve as our new Chief Executive Officer and member of the Board of Directors, the Chairman of Avant, Jeffrey Busch, to serve as our new Chairman and Yvonne Fors, a current member of the Board of Avant as a member of our Board of Directors. Andrew Kucharchuk, who has resigned from his position as Chief Executive Officer, Chief Financial Officer and President, will continue to serve the Company as a member of the Board of Directors. Dr. Jonathan Head resigned from his position as Chief Scientific Officer and from the Board of Directors. Daniel Hoverman, Charles Rice, Jr. and R. Neal Holcomb resigned from the Board of Directors. Further, effective ten (10) days after mailing to shareholders of a Schedule 14f-1 regarding the proposed changes in our Board, the members of the Board of Directors nominated by Avant will be appointed.

 

Severance Agreement

 

Andrew A. Kucharchuk

 

Concurrently with the execution of the Asset Purchase Agreement, our Board of Directors accepted the resignation of Mr. Kucharchuk from his positions of Chief Executive Officer, Chief Financial Officer and President of the Company. In connection with Mr. Kucharchuk’s resignation on June 5, 2020, Mr. Kucharchuk and the Company entered into a Separation Agreement (the “Separation Agreement”) and a Consulting Agreement. Under the Separation Agreement, Mr. Kucharchuk received his accrued and unpaid compensation, was repaid the amounts he loaned to the Company and was paid (i) $2,998.00 in cash and (ii) 241 shares of the Company’s Series D-2 Preferred Stock (items (i) and (ii), the “Separation Pay”). Under the Consulting Agreement, Mr. Kucharchuk will be available as a strategic advisor to the Company’s Chief Executive Officer (the “CEO”) as requested by the CEO, from the date of resignation through December 5, 2020 in exchange for a consulting fee of $15,000 per month.

 

The foregoing summary of the terms of the Separation Agreement and Consulting Agreement does not purport to be complete and is qualified in their respective entirety by reference to the full text of each, copies of which are attached as Exhibits 10.5 and 10.6 hereto.

 

The Employment Agreements

 

Mick Ruxin, M.D.

 

In connection with Dr. Ruxin’s appointment as a director of the Board and as the President & Chief Executive Officer of the Company, the Company and Dr. Ruxin entered into an employment agreement, which became effective as of the closing of the Asset Sale Transaction (the “Ruxin Employment Agreement”).

 

The Ruxin Employment Agreement provides that Dr. Ruxin will be employed for a five-year term commencing on the closing date of the Asset Sale Transaction, automatically extended for one additional year upon the fifth anniversary of the effective date without any affirmative action, unless either party to the agreement provides at least sixty (60) days’ advance written notice to the other party that the employment period will not be extended. Dr. Ruxin will be entitled to receive an annual base salary of $300,000 and will be eligible for an annual discretionary bonus of 150% of such base salary. In the Ruxin Employment Agreement, Dr. Ruxin is also guaranteed (i) a one time grant of Restricted Stock Units (RSUs) for 49,047,059 shares and (ii) a one time grant of options to purchase 420,691,653 shares of common stock of the Company. Dr. Ruxin is entitled to participate in any and all benefit plans, from time to time, in effect for senior management, along with vacation, sick and holiday pay in accordance with the Company’s policies established and in effect from time to time.

 

Dr. Ruxin is an “at-will” employee and his employment may be terminated by the Company at any time, with or without cause. In the event Dr. Ruxin’s termination of employment is the result of termination by the Company without Cause (as defined in the Ruxin Agreement) with Good Reason (as defined in the Ruxin Agreement) or as a result of a non-renewal of the term of employment under the Ruxin Agreement, Dr. Ruxin shall be entitled to receive the sum of (I) the Severance Multiple (as defined below), multiplied by his base salary immediately prior to such termination and (II) a pro-rata portion of his bonus for the year in which such termination occurs equal to (a) his bonus for the most recently completed calendar year (if any), multiplied by (b) a fraction, the numerator of which is the number of days that have elapsed from the beginning of such calendar year through the date of termination and the denominator of which is the total number of days in such calendar year. “Severance Multiple” shall mean 3.0; provided, however, that if the date of termination occurs on or at any time during the twelve (12)-month period following a Change in Control (as defined in the Ruxin Agreement), the Severance Multiple shall mean 4.0. In addition, the Company shall accelerate the vesting of any outstanding, unvested equity awards granted to Dr. Ruxin prior to the date of termination and he shall be entitled to reimbursement of any COBRA payment made during the 18-month period following the date of termination.

 

     
     

 

The Ruxin Agreement also contains covenants (a) restricting the executive from engaging in any activity competitive with our business during the term of the employment agreement and in the event of termination, for a period of one year thereafter, (b) prohibiting the executive from disclosing confidential information regarding us, and (c) soliciting our employees, customers and prospective customers during the term of the employment agreement and for a period of one year thereafter.

 

Jeffrey Busch

 

Concurrently with the execution of the Asset Purchase Agreement, the Company agreed to appoint Mr. Busch as Chairman of the Board. In connection with such appointment, the Company and Mr. Busch entered into an employment agreement, which became effective as of the closing of the Asset Sale Transaction (the “Busch Employment Agreement”).

 

The Busch Employment Agreement provides that Mr. Busch will be employed for a five-year term commencing on the closing date of the Asset Sale Transaction, automatically extended for one additional year upon the fifth anniversary of the effective date without any affirmative action, unless either party to the agreement provides at least sixty (60) days’ advance written notice to the other party that the employment period will not be extended. Mr. Busch will be entitled to receive an annual base salary of $60,000 and will be eligible for an annual discretionary bonus. In the Busch Employment Agreement, Mr. Busch is also guaranteed (i) a one time grant of Restricted Stock Units (RSUs) for 49,047,059 shares and (ii) a one time grant of options to purchase 420,691,653 shares of common stock of the Company. Mr. Busch is entitled to participate in any and all benefit plans, from time to time, in effect for senior management, along with vacation, sick and holiday pay in accordance with the Company’s policies established and in effect from time to time.

 

Mr. Busch is an “at-will” employee and his employment may be terminated by the Company at any time, with or without cause. In the event Mr. Busch’s termination of employment is the result of termination by the Company without Cause (as defined in the Busch Agreement) with Good Reason (as defined in the Busch Agreement) or as a result of a non-renewal of the term of employment under the Busch Agreement, Mr. Busch shall be entitled to receive the sum of (I) the Severance Multiple (as defined below), multiplied by his base salary immediately prior to such termination and (II) a pro-rata portion of his bonus for the year in which such termination occurs equal to (a) his bonus for the most recently completed calendar year (if any), multiplied by (b) a fraction, the numerator of which is the number of days that have elapsed from the beginning of such calendar year through the date of termination and the denominator of which is the total number of days in such calendar year. “Severance Multiple” shall mean 3.0; provided, however, that if the date of termination occurs on or at any time during the twelve (12)-month period following a Change in Control (as defined in the Busch Agreement), the Severance Multiple shall mean 4.0. In addition, the Company shall accelerate the vesting of any outstanding, unvested equity awards granted to Mr. Busch prior to the date of termination and he shall be entitled to reimbursement of any COBRA payment made during the 18-month period following the date of termination.

 

The Busch Agreement also contains covenants (a) restricting the executive from engaging in any activity competitive with our business during the term of the employment agreement and in the event of termination, for a period of one year thereafter, (b) prohibiting the executive from disclosing confidential information regarding us, and (c) soliciting our employees, customers and prospective customers during the term of the employment agreement and for a period of one year thereafter.

 

None of our new officers and directors have had had any material direct or indirect interest in any of our transactions or proposed transactions over the last two years. At this time, we do not have written employment agreements or other formal compensation agreements with Yvonne Fors.

 

     
     

 

Item 5.03 Amendments to Articles of Incorporation or Bylaws

 

As discussed in Items 1.01 and 2.01, above, we have designated four new classes of preferred stock – C-1 Convertible Preferred, Series C-2 Convertible Preferred, Series D-1 Convertible Preferred and Series D-2 Convertible Preferred. The rights and preferences of these new classes of stock are discussed in Items 1.01 and 2.01 above, which is incorporated herein by reference. Further, as a result of the Dr. Head exchange agreement, we no longer have any outstanding shares of Series B Preferred Stock, and the designation for that class has been withdrawn.

 

Item 7.01 Regulation FD Disclosure

 

On June 8, 2020 and June 10, 2020, we released press releases furnished herewith as Exhibits 99.1 and 99.2.

 

Item 8.01 Other Events

 

Simultaneously with the closing of the Asset Sale Transaction and its resulting change in control, the Company cancelled all outstanding stock options of the Company pursuant to the terms of the stock option agreements.

 

As a result of the Asset Sale Transaction, investors in our common stock may face different and/or additional risks than those previously applicable to investors in the Company. Certain risks relating to the business and operations of Avant are as follows:

 

Risks Related to Our Company and Business

 

If we fail to obtain additional financing, we will be unable to complete the development and commercialization of our product candidates or continue our research and development programs.

 

In addition to the funds raised in our recent private placements, we will be required to raise additional capital to complete the development and to begin commercialization of our current and future product candidates. If we are unable to raise additional capital when required or on acceptable terms, we may have to significantly delay, scale back or discontinue one or more of our clinical trials, and the commercialization of our diagnostic tests.

 

If third-party payors, including managed care organizations and Medicare, do not provide reimbursement for our products, their commercial success could be compromised.

 

Physicians and patients may decide not to order the Theralink® assay unless third-party payors, such as managed care organizations as well as government payors such as Medicare and Medicaid, pay a substantial portion or all of the assay’s price. There is significant uncertainty concerning third-party reimbursement of any assay incorporating new technology, including Theralink®, and any of our future diagnostics and therapies. Reimbursement by a third-party payor may depend on a number of factors, including a payor’s determination that tests using our technologies are:

 

  not experimental or investigational,
  medically necessary,
  appropriate for the specific patient,
  cost-effective, and
  supported by peer-reviewed publications.

 

Since each payor makes its own decision as to whether to establish a policy to reimburse, seeking these approvals is a time-consuming and costly process. To date, we have not secured policy-level reimbursement approval from any third-party payors and have no approvals for state Medicaid programs. We cannot be certain that coverage for our products will be provided in the future by any third-party payors.

 

     
     

 

Several entities conduct technology assessments of new medical tests and devices and provide the results of their assessments for informational purposes to other parties. These assessments may be used by third-party payors and health care providers such as Blue Cross and Blue Shield plans, which collectively provide healthcare coverage for nearly one-third of all Americans, as grounds to deny coverage for a test or procedure. These assessments have not yet been carried for our Theralink® assay. We can offer no assurance that these evaluations will ever be conducted, and if conducted, will result in a positive conclusion resulting in any third-party reimbursement to us.

 

Insurers, including managed care organizations as well as government payors such as Medicare, have increased their efforts to control the cost, utilization and delivery of health care services. From time to time, the United States Congress has considered and implemented changes in the Medicare fee schedules in conjunction with budgetary legislation. Further reductions of reimbursement for Medicare services may be implemented from time to time. Reductions in the reimbursement rates of other third-party payors have occurred and may occur in the future. These measures have resulted in reduced prices, added costs and decreased test utilization for the clinical laboratory industry.

 

If we are unable to obtain reimbursement approval from private payors and Medicare and Medicaid programs for our data-generating assays, or if the amount reimbursed is inadequate, our ability to generate revenues could be limited. Even if we are being reimbursed, insurers may withdraw their coverage policies or cancel their contracts with us at any time or stop paying for our assays, which would reduce our revenue.

 

We may experience delays in our clinical trials that could adversely affect our financial position and our commercial prospects.

 

Any delays in completing any potentially necessary clinical trials for Theralink® and our platform of assays may delay our ability to raise additional capital or to generate revenue, and we may have insufficient capital resources to support our operations. Even if we have sufficient capital resources, the ability to become profitable will be delayed if there are problems with the timing or completion of our clinical trials.

 

If our product candidates do not meet safety or efficacy endpoints in clinical evaluations, they will not receive regulatory approval and we will be unable to market them.

 

Although Avant does not need FDA approval to market its data-generating assays, if the Company decides to do so, the regulatory approval process typically is extremely expensive, takes many years and the timing of any approval cannot be accurately predicted. The FDA and other regulatory agencies can delay, limit or deny approval for many reasons, including: (i) a product candidate may not be safe or effective; (ii) the manufacturing processes or facilities we have selected may not meet the applicable requirements; and (iii) changes in FDA’s approval policies or adoption of new regulations may require additional work.

 

Even if we receive regulatory approvals, our product candidates may later exhibit adverse effects that limit or prevent their widespread use or that force us to withdraw those product candidates from the market. In addition, a marketed product continues to be subject to strict regulation after approval. Any unforeseen problems with an approved product or any violation of regulations could result in restrictions on the product, including our withdrawal from the market. Any delay in, or failure to receive or maintain regulatory approval for, any of our products could prevent us from ever generating meaningful revenues or achieving profitability.

 

 

     
     

 

Testing of potential products may be required and there is no assurance of FDA or any other regulatory approval.

 

The FDA and comparable agencies in foreign countries impose substantial requirements upon the introduction of both therapeutic and diagnostic biomedical products, through lengthy and detailed laboratory and clinical testing procedures, sampling activities and other costly and time-consuming procedures. Satisfaction of these requirements typically takes several years or more and varies substantially based upon the type, complexity, and novelty of the product. The effect of government regulation and the need for FDA approval may be to delay marketing of new products for a considerable period of time, to impose costly procedures upon our activities, and to provide an advantage to larger companies that compete with us. There can be no assurance that FDA or other regulatory approval for any products developed by us will be granted on a timely basis or at all. Any such delay in obtaining, or failure to obtain, such approvals would materially and adversely affect the marketing of any contemplated products and the ability to earn product revenue. Further, regulation of manufacturing facilities by state, local, and other authorities is subject to change. Any additional regulation could result in limitations or restrictions on our ability to utilize any of our technologies, thereby adversely affecting our operations. Human diagnostic and pharmaceutical products are subject to rigorous preclinical testing and clinical trials and other approval procedures mandated by the FDA and foreign regulatory authorities. Various federal and foreign statutes and regulations also govern or influence the manufacturing, safety, labeling, storage, record keeping and marketing of pharmaceutical products. The process of obtaining these approvals and the subsequent compliance with appropriate United States and foreign statutes and regulations are time-consuming and require the expenditure of substantial resources. In addition, these requirements and processes vary widely from country to country. Among the uncertainties and risks of the FDA approval process are the following: (i) the possibility that studies and clinical trials will fail to prove the safety and efficacy of the product, or that any demonstrated efficacy will be so limited as to significantly reduce or altogether eliminate the acceptability of the product in the marketplace, (ii) the possibility that the costs of development, which can far exceed the best of estimates, may render commercialization of the drug marginally profitable or altogether unprofitable, and (iii) the possibility that the amount of time required for FDA approval of a product may extend for years beyond that which is originally estimated. In addition, the FDA or similar foreign regulatory authorities may require additional clinical trials, which could result in increased costs and significant development delays. Delays or rejections may also be encountered based upon changes in FDA policy and the establishment of additional regulations during the period of product development and FDA review. Similar delays or rejections may be encountered in other countries.

 

Complying with numerous regulations pertaining to our business is an expensive and time-consuming process, and any failure to comply could result in substantial penalties.

 

We are subject to other regulations by both the federal government and the states in which we conduct our business, including:

 

  Medicare billing and payment regulations applicable to clinical laboratories;
  the federal Medicare and Medicaid Anti-kickback Law and state anti-kickback prohibitions;
  the federal physician self-referral prohibition, commonly known as the Stark Law, and the state equivalents;
  the federal Health Insurance Portability and Accountability Act of 1996;
  the Medicare civil money penalty and exclusion requirements; and
  the federal civil and criminal False Claims Act.

 

We have and will continue to adopt policies and procedures designed to comply with these laws, including policies and procedures relating to financial arrangements between us and physicians who refer patients to us. In the ordinary course of our business, we conduct internal reviews of our compliance with these laws. Our compliance is also subject to governmental review. The growth of our business and sales organization may increase the potential of violating these laws or our internal policies and procedures. The risk of our being found in violation of these laws and regulations is further increased by the fact that many of them have not been fully interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of interpretations. Any action brought against us for violation of these laws or regulations, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. If our operations are found to be in violation of any of these laws and regulations, we may be subject to any applicable penalty associated with the violation, including civil and criminal penalties, damages and fines, we could be required to refund payments received by us, and we could be required to curtail or cease our operations. Any of the foregoing consequences could seriously harm our business and our financial results.

 

     
     

 

Initially, our financial results will depend on sales of the Theralink® assay and other research-oriented biopharma projects, and we will need to generate sufficient revenues from these and our other diagnostics to run our business.

 

We commenced implementation of our sales and marketing strategy at the end of 2019. We plan on doing some research and development for other function-based data-generating assays that we may offer as well as for enhancements to our existing assay. If we are unable to increase sales of the Theralink® assay and other biopharma research projects or to successfully develop and commercialize other data-generating assays, our revenues and our ability to achieve profitability would be impaired, and the market price of our common stock could decline.

 

We may experience limits on our revenues if physicians decide not to order our assays.

 

If medical practitioners do not order Theralink® or any future assays developed by us, we will likely not be able to create demand for our products in sufficient volume for us to become profitable. To generate demand, we will need to continue to make oncologists, surgeons and pathologists aware of the benefits of Theralink® and any products we may develop in the future through published papers, presentations at scientific conferences and one-on-one education by our sales force. Some physicians may decide not to order our test due to its price, part or all of which may be payable directly by the patient if the applicable payor denies reimbursement in full or in part. Even if patients recommend that their physicians use our assay, physicians may still decide not to use Theralink®, either because they have not been made aware of its utility or they wish to pursue a particular course of therapy regardless of test results. If only a small portion of the physician population decides to use our test, we will experience limits on our revenues and our ability to achieve profitability. In addition, we will need to demonstrate our ability to obtain adequate reimbursement coverage from third-party payors.

 

If we are unable to develop products to keep pace with rapid technological, medical and scientific change, our operating results and competitive position would be harmed.

 

In recent years, there have been numerous advances in technologies relating to the diagnosis and treatment of cancer. These advances require us to continuously develop new products and enhance existing products to keep pace with evolving standards of care. Our tests could become obsolete unless we continually innovate and expand our products to demonstrate recurrence and treatment benefit in patients treated with new therapies. New treatment therapies typically have only a few years of clinical data associated with them, which limits our ability to perform clinical studies and correlate sets of genes to a new treatment’s effectiveness. If we are unable to demonstrate the applicability of our test to new treatments, then sales of our test could decline, which would harm our revenues.

 

If we become subject to product liability claims, the damages may exceed insurance coverage levels.

 

We will obtain liability insurance for our product candidates as each is entered into large population validation studies and/or any other studies where such liability insurance is needed. We cannot predict all of the possible harms or side effects that may result from the use of our products and, therefore, the amount of insurance coverage we currently hold, or that we or our collaborators may obtain, may not be adequate to protect us from any claims arising from the use of our products that are beyond the limit of our insurance coverage. If we cannot protect against potential liability claims, we or our collaborators may find it difficult or impossible to commercialize our products, and we may not be able to renew or increase our insurance coverage on reasonable terms, if at all.

 

If we are unable to develop adequate sales, marketing or distribution capabilities or enter into agreements with third parties to perform some of these functions, we will not be able to commercialize our products effectively.

 

We may have a limited infrastructure in sales, marketing and distribution. To directly market and distribute any products, we must effectively build a sales and marketing organization with appropriate technical expertise and distribution capabilities. We may not be able to establish sales, marketing and distribution capabilities of our own or enter into such arrangements with third parties in a timely manner or on acceptable terms.

 

 

 

 

If we do not find development and commercialization collaborators for our product candidates, we may have to reduce or delay our rate of product development and commercialization and increase our expenditures.

 

We may enter into relationships with selected biotechnology companies to help develop and commercialize our product candidates. If we are not able to establish such collaborative arrangements, we may have to reduce or delay further development of some of our programs, increase our planned expenditures and undertake development and commercialization activities at our own expense.

 

If we enter into development or commercialization collaborations with biotechnology companies, these relationships will also be subject to a number of risks, including: (i) collaborators may not pursue further development and commercialization of products resulting from collaborations or may elect not to renew research and development programs; (ii) collaborators may delay clinical trials, underfund a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require the development of a new formulation of a product candidate for clinical testing; (iii) a collaborator with marketing and distribution rights to one or more of our products may not commit enough resources to the marketing and distribution of our products, limiting our potential revenues from the commercialization of these products; and (iv) disputes may arise delaying or terminating the research, development or commercialization of our product candidates, or result in significant legal proceedings.

 

If our laboratory facility should become inoperable, we will be unable to perform our assays and our business will be harmed.

 

For the fiscal year ended September 30, 2018, we acquired a CLIA laboratory from THI. As a result of the cost cutting measures taken during the fiscal year ended September 30, 2018, the Company substantially curtailed the use of the CLIA laboratory. Also, as a result of these cost cutting measures, the Company was unable to timely make certain payments on the terms of the lease. As a result, the Company defaulted on its lease at the location of the Maryland laboratory and the landlord held the equipment located in the facility as collateral for amounts owed under the lease. AVDX Investors Group, LLC (“AVDX”), an entity controlled by Jeff Busch, our Executive Chairman (“Busch”), loaned the Company the capital to purchase the equipment. The note issued to AVDX is a demand promissory note that bears no interest and is secured by the equipment. During the fiscal year ended September 30, 2018, AVDX, Busch and his affiliated entities also loaned and/or paid certain obligations amounts on behalf of the Company.

 

Once the Company reacquired the equipment for the laboratory, management undertook a review of the Company’s current operations and decided to move the CLIA laboratory from Maryland to Golden, Colorado (the “New Lab”) In connection with the relocation to the New Lab, the Company executed a lease, built out the space for the New Lab and moved the equipment from Maryland to Colorado. In connection with this relocation, management, in consultation with scientists from George Mason University, the licensor of the Company’s Theralink® technology (“Licensor”), evaluated the status of the Company’s equipment. It was determined that the equipment was not properly maintained and was left in poor working order by prior management. As a result, the Company had to spend approximately $152,209 during the fiscal year ended September 30, 2018 to have the equipment fixed for the New Lab, so the Licensor could assist management with the set up and validation of the equipment to be used for the technology. The Company continues to build out the lab, which is now operational.

 

The facility may be harmed or rendered inoperable by natural or man-made disasters, including earthquakes, flooding and power outages, which may render it difficult or impossible for us to perform our tests for some period of time. The inability to perform our tests may result in the loss of customers or harm our reputation, and we may be unable to regain those customers in the future.

 

In order to rely on a third party to perform our tests, we could only use another facility with established state licensure and CLIA accreditation under the scope of which Theralink® could be performed following validation and other required procedures. We cannot assure you that we would be able to find another CLIA-certified facility willing to adopt Theralink® and comply with the required procedures, or that this laboratory would be willing to perform the tests for us on commercially reasonable terms. In order to establish a redundant laboratory facility, we would have to spend considerable time and money securing adequate space, constructing the facility, recruiting and training employees, and establishing the additional operational and administrative infrastructure necessary to support a second facility. Additionally, any new clinical laboratory facility opened by us would be subject to certification under CLIA and licensed by several states, including California and New York, which can take a significant amount of time and result in delays in our ability to begin operations.

 

 

 

 

During the fiscal year ended September 30, 2019, the Company focused on executing its business plan by building out the New Lab and validating the equipment in order to meet CLIA and CAP standards. In addition, the Company’s management team has been actively marketing it’s Theralink® assay by attending and having a booth at multiple cancer trade shows such as AACR and ASCO. By the end of the fiscal year ended September 30, 2019, 95% of the leasehold improvements in the New Lab were completed. The New Lab has a Laser Capture Microdissection (LCM) area, with six new LCMs, which will help the Company commercialize its proprietary data-generating technology for biopharmas once the New Lab is opened. The Company has also installed a tissue culture lab in addition to the main lab, which has two RPPA instruments and three auto-stainers which will help the Company commercialize its proprietary data-generating technology for new pharmaceutical clients. Management believes the Company’s New Lab now has all of the instruments necessary to service biopharmas by acquiring customers with oncology-focused preclinical and clinical drug development programs. Arrangements have been made with a cancer institution to obtain the necessary population data (breast cancer tumor samples) to move the Company towards CLIA/CAP certifications.

 

In addition to the build out of the New Lab, the Company has hired an experienced staff to be able to service potential customers once the New Lab receives its necessary certifications. It has done this by hiring (i) two Ph.D’s from the GMU Proteomics Lab (ii) a histologist who is an expert in CLIA/CAP regulations and (iii) two experienced Directors of Business Development who have been instrumental in developing oncology and channel partner networks that the Company believes will be important in developing a strong cancer patient referral base. The Company believes that it will be able to obtain the CLIA/CAP certifications in the second or third quarter of 2020, but the New Lab is currently operational.

 

Our corporate compliance program cannot guarantee that we are in compliance with all potentially applicable regulations.

 

The development, manufacturing, pricing, sales, and reimbursement of our products, together with our general operations, are subject to extensive regulation by federal, state and other authorities within the United States and numerous entities outside of the United States. While we have developed and instituted a corporate compliance program based on what we believe are the current best practices, we cannot assure you that we are or will be in compliance with all potentially applicable regulations. If we fail to comply with any of these regulations, we could be subject to a range of regulatory actions, including suspension or termination of clinical trials, the failure to approve a product candidate, restrictions on our products or manufacturing processes, withdrawal of products from the market, significant fines, or other sanctions or litigation.

 

Our operations may involve hazardous materials, and compliance with environmental laws and regulations is expensive.

 

Our future research and development activities may involve the controlled use of hazardous materials, including chemicals that cause cancer, volatile solvents, radioactive materials and biological materials including human tissue samples that have the potential to transmit diseases. Our operations may also produce hazardous waste products. We are subject to a variety of federal, state and local regulations relating to the use, handling and disposal of these materials. We generally may contract with third parties for the disposal of such substances and may store certain low-level radioactive waste at our facility until the materials are no longer considered radioactive. While we believe that we will comply with then current regulatory requirements, we cannot eliminate the risk of accidental contamination or injury from these materials. We may be required to incur substantial costs to comply with current or future environmental and safety regulations. If an accident or contamination occurred, we would likely incur significant costs associated with civil penalties or criminal fines and in complying with environmental laws and regulations.

 

If we use biological and hazardous materials in a manner that causes injury, we could be liable for damages.

 

Our activities may require the controlled use of potentially harmful biological materials, hazardous materials and chemicals and may in the future require the use of radioactive compounds. We cannot eliminate the risk of accidental contamination or injury to employees or third parties from the use, storage, handling or disposal of these materials. In the event of contamination or injury, we could be held liable for any resulting damages, and any liability could exceed our resources or any applicable insurance coverage we may have. Additionally, we are subject on an ongoing basis to federal, state and local laws and regulations governing the use, storage, handling and disposal of these materials and specified waste products. The cost of compliance with these laws and regulations might be significant and could negatively affect our operating results.

 

     

 

 

If our services fail to achieve and sustain sufficient market acceptance, our revenue will be adversely affected.

 

Our success depends on our ability to develop and market services that are recognized and accepted as reliable, enabling and cost-effective. Most of the potential customers for our services already use expensive research systems in their laboratories that they have used for many years and if our features and benefits of are not understood they may be reluctant to use ours. Market acceptance of our Theralink® technology will depend on many factors, including our ability to convince potential customers that our technology is an attractive alternative to existing technologies. Compared to some competing technologies, our Theralink® technology to date has not been extensively commercialized, and many potential customers have limited knowledge of, or experience with, our services. Prior to adopting our systems, some potential customers may need to devote time and effort to testing and validating the integration of our services to their workflows and systems. Any failure of our services to meet these customer benchmarks could result in potential customers choosing to retain their existing systems or to purchase services other than ours. In addition, it is important that our Theralink® technology continue to be perceived as accurate and reliable by the scientific and medical research community as a whole. If we are unable to motivate leading drug development companies (RUO), reference laboratories, and practitioners of precision health screening including for companion diagnostics to use our Theralink® technology initially for oncology related indications, or if such constituents are unable to achieve or unwilling to publish or present significant experimental results using our services, acceptance and adoption of our services will be slowed and our ability to generate and increase our revenue would be adversely affected.

  

Our future success is dependent upon our ability to develop a nascent dormant customer base and attract new customers.

 

Our target customer base is primarily composed of academic and governmental research institutions, laboratories, biopharmaceutical and contract research companies, diagnostics users, and practitioners of precision health screening. Our success will depend upon our ability to contract with, respond to the evolving needs of, and increase our market share among our nascent dormant customers and additional potential customers, and marketing new services as we develop them. Identifying, engaging and marketing to customers who are unfamiliar with our current services requires substantial time, expertise and expense and involves a number of risks, including:

 

  our ability to attract, retain and manage the sales, marketing and service personnel necessary to expand market acceptance for our Theralink® technology;
  the time and cost of maintaining and growing a specialized sales, marketing and service force; and
  our sales, marketing and service force may be unable to execute successful commercial activities.

 

We may utilize third parties to assist with sales, distribution and customer support in certain regions of the world. There is no guarantee, if and when we enter into such arrangements, that we will be successful in attracting desirable sales and distribution partners. There is also no guarantee that we will be able to enter into such arrangements on favorable terms. Any failure of our sales and marketing efforts, or those of any third-party sales and distribution partners, would adversely affect our business.

 

Some of the reagents used in our services are labeled for “research use only” and will have to undergo additional testing before we could use them in services intended for clinical use.

 

Some of the materials that are used in our consumable services, including certain reagents, are purchased from suppliers with a restriction that they be used for research use only, or RUO. While we have focused initially on the life sciences research market, part of our business strategy is to expand our services line, either alone or in collaboration with third parties, to encompass systems and services that can be used for clinical purposes. Whether or not we continue to use the same RUO materials that we currently use, or obtain similar materials that are not labeled with the RUO restriction, we will be required to demonstrate that the use of our services as a clinical test complies with all applicable requirements. In addition, if we were to change the supplier of any material or component used in a clinical test, we would be required to confirm through additional testing that the change does not adversely affect the reliability of the test. Any such additional testing may be expensive and time-consuming and delay our introduction of new services and systems.

 

 

 

 

In the near term, our business will depend on levels of research and development spending by academic and governmental research institutions and biopharmaceutical companies, a reduction in which could limit demand for our services and adversely affect our business and operating results.

 

In the near term, we expect that our revenue will be derived primarily from sales of our services to biopharmaceutical and contract research companies worldwide for research applications. The demand for our services will depend in part upon the research and development budgets of these customers, which are impacted by factors beyond our control, such as:

 

changes in government programs that provide funding to research institutions and companies;
macroeconomic conditions and the political climate;
changes in the regulatory environment;
differences in budgetary cycles; and
market acceptance of relatively new technologies, such as ours.

 

For example, in March 2017, the federal government announced the intent to cut federal biomedical research funding by as much as 18%. While there has been significant opposition to these funding cuts, the uncertainty regarding the availability of research funding for potential customers may adversely affect our operating results. Our operating results may fluctuate substantially due to reductions and delays in research and development expenditures by these customers. Any decrease in customers’ budgets or expenditures, or in the size, scope or frequency of capital or operating expenditures, could materially and adversely affect our business, operating results and financial condition.

 

The sales cycle for our Theralink® services can be lengthy and variable, which makes it difficult for us to forecast revenue and other operating results.

 

The sales process for our Theralink® data-generating assay generally involves numerous interactions with multiple individuals within an organization, and often includes in-depth analysis by potential customers of our technology and services and a lengthy review process. Our customers’ evaluation processes often involve a number of factors, many of which are beyond our control. As a result of these factors, the budget cycles of our customers, the time from initial contact with a customer to our receipt of a purchase order can vary significantly. Given the length and uncertainty of our sales cycle, we have in the past experienced, and expect to in the future experience, fluctuations in our sales on a period-to-period basis. In addition, any failure to meet customer expectations could result in customers choosing not to execute a purchase order, use assays if available from competitors or pursue other alternatives such as setting up or upgrading a diagnostic laboratory.

 

Our long-term results depend upon our ability to improve existing services and introduce and market new services successfully.

 

Our business is dependent on the continued improvement of our existing Theralink® assay and our development of new services utilizing Theralink® or other potential future technology. As we introduce new services or refine, improve or upgrade versions of existing services, we cannot predict the level of market acceptance or the amount of market share these services will achieve, if any. We cannot assure you that we will not experience material delays in the introduction of new services in the future. In addition, introducing new services could result in a decrease in revenues from our existing services. Consistent with our strategy of offering new services and services refinements, we expect to continue to use a substantial amount of capital for services development and refinement. We may need additional capital for services development and refinement than is available on terms favorable to us, if at all, which could adversely affect our business, financial condition or results of operations.

 

 

 

 

We generally sell our services in industries that are characterized by rapid technological changes, frequent new services introductions and changing industry standards. If we do not develop new services and services enhancements based on technological innovation on a timely basis, our services may become obsolete over time and our revenues, cash flow, profitability and competitive position will suffer. Our success will depend on several factors, including our ability to:

 

correctly identify customer needs and preferences and predict future needs and preferences;
allocate our research and development funding to services with higher growth prospects;
anticipate and respond to our competitors’ development of new services and technological innovations;
innovate and develop new technologies and applications, and acquire or obtain rights to third-party technologies that may have valuable applications in the markets we serve;
successfully commercialize new technologies in a timely manner, price them competitively and manufacture and deliver sufficient volumes of new services of appropriate quality on time; and
convince customers to adopt new technologies.

 

In addition, if we fail to accurately predict future customer needs and preferences or fail to produce viable technologies, we may invest heavily in research and development of services that do not lead to significant revenue. Even if we successfully innovate and develop new services and services enhancements, we may incur substantial costs in doing so, and our profitability may suffer.

 

Our ability to develop new services based on innovation can affect our competitive position and often requires the investment of significant resources. Difficulties or delays in research, development or selection of new services or failure to gain market acceptance of new services and technologies may reduce future revenues and adversely affect our competitive position.

 

If we do not successfully develop and introduce new assays for our technology, we may not generate new sources of revenue and may not be able to successfully implement our growth strategy.

 

Our business strategy includes the development of new assays for our Theralink® offering, thereby increasing our services offerings. New assays require significant research and development and a commitment of significant resources prior to their commercialization. Our technology is complex, and we cannot be sure that any assays we may intend to develop will be developed successfully, be proven to be effective, offer improvements over currently available tests, meet applicable standards, be successfully marketed and sold in commercial quantities at acceptable costs. Moreover, development of particular assays may require licenses or access to third party intellectual property which may not be available on commercially reasonable terms, or at all. In addition, we believe that our future success will depend, in part, on our ability to develop and commercialize multiplex assays that can simultaneously measure multiple biomarkers. If we do not successfully develop new assays for our Theralink® offering, including multiplex assays with the ability to detect an increased number of biomarkers in a single sample, we could lose revenue opportunities with existing or future customers.

 

If we do not successfully manage the development and launch of new services, our financial results could be adversely affected.

 

We expect to launch our initial suite of the Theralink® assay in Q3 2020. We face risks associated with launching new services such as the initial suite of Theralink®. If we encounter challenges or discover errors during our laboratory services cycle, the services’ launch dates of new services may be delayed. The expenses or losses associated with unsuccessful services development or launch activities or lack of market acceptance of our new services could adversely affect our business or financial condition.

 

Undetected errors or defects in our services could harm our reputation, decrease market acceptance of our services or expose us to services’ liability claims.

 

Our Theralink® services may contain undetected errors or defects when first introduced or as new versions or new services are released. Disruptions affecting the introduction or release of, or other performance problems with, our services may damage our customers’ businesses and could harm their and our reputation. If that occurs, we may incur significant costs, the attention of our key personnel could be diverted, or other significant customer relations problems may arise. We may also be subject to certain liability claims for damages related to errors or defects in our services. In addition, if we do not meet regulatory, industry or quality standards, if applicable, our services may no longer be commercially available. A material liability claim, recall or other occurrence that harms our reputation or decreases market acceptance of our services could harm our business and operating results.

 

 

 

 

As our customers may integrate and use our services for diagnostic purposes, someone could file a services liability claim alleging that one of our services contained a design or manufacturing defect that resulted in the failure to adequately perform, leading to death or injury. A services liability claim could result in substantial damages and be costly and time consuming to defend, either of which could materially harm our business or financial condition. We cannot assure investors that our services’ liability insurance would adequately protect our assets from the financial impact of defending a services’ liability claim. Any services’ liability claim brought against us, with or without merit, could increase our services’ liability insurance rates or prevent us from securing insurance coverage in the future.

 

We depend on strategic collaborations and licensing arrangements with third parties to develop in vitro data-generating services. We may not be successful in maintaining these collaborations and licensing arrangements and in establishing or maintaining additional collaborations or license agreements.

 

We have established strategic collaborations and licensing agreements with third parties to develop services, based on our Theralink® technology, such as for certain in vitro diagnostic, or IVD, purposes. For example, we have entered into a license agreement with GMU, pursuant to which they have granted us an exclusive license to, among other things, develop and sell certain in vitro diagnostic services used in clinical lab applications based on their Theralink® technology which is a part of our Theralink® services. If we or any of our other partners do not prioritize and commit sufficient resources to develop and sell services based on our Theralink® technology, our ability to generate revenue from sales in respect to in vitro diagnostic services may be limited.

 

We may seek to enter into additional such arrangements; however, there is no assurance that we will be successful in doing so. Moreover, given the exclusive nature of a portion of the license rights granted by GMU to us, our ability to collaborate with others in the areas of in vitro diagnostics used in clinical lab applications and pharmaceutical quality control testing will be limited, in that we may not establish collaborations with others covering these areas while the exclusive license by GMU remains in effect, subject to our right to make and sell services derived from the current versions of the Theralink® technology assays for use in clinical lab applications. Establishing collaborations and licensing arrangements is difficult and time-consuming. Discussions may not lead to collaborations or licenses on favorable terms, if at all. Even if we establish new relationships, they may never result in the successful development or commercialization of services based on our Theralink® technology.

 

Our reliance on distributors for sales of our services outside of the United States could limit or prevent us from selling our services and could impact our revenue.

 

We have not yet established exclusive distribution agreements for Theralink® services. However, we do intend to grow our business internationally, and to do so we must attract additional distributors and retain existing distributors to maximize the commercial opportunity for our services. There is no guarantee that we will be successful in attracting or retaining desirable sales and distribution partners or that we will be able to enter into such arrangements on favorable terms. Distributors may not commit the necessary resources to market and sell our services to the level of our expectations or may choose to favor marketing the services of our competitors. If current or future distributors do not perform adequately, or we are unable to enter into effective arrangements with distributors in particular geographic areas, we may not realize long-term international revenue growth. In addition, if our distributors fail to comply with applicable laws and ethical standards, including anti-bribery laws, this could damage our reputation and could have a significant adverse effect on our business and our revenues.

 

     

 

 

We may generate a substantial portion of our revenues internationally in the future and can become further subject to various risks relating to our international activities, which could adversely affect our business, operating results and financial condition.

 

We believe that a substantial percentage of our future revenue may come from international sources as we may expand overseas and develop opportunities in additional areas. We have limited experience operating internationally and engaging in international business involves a number of difficulties and risks, including:

 

required compliance with existing and changing foreign regulatory requirements and laws;
difficulties and costs of staffing and managing foreign operations;
difficulties protecting or procuring intellectual property rights;
required compliance with anti-bribery laws, such as the U.S. Foreign Corrupt Practices Act, data privacy requirements, labor laws and anti-competition regulations;
laws and business practices favoring local companies;
longer payment cycles and difficulties in enforcing agreements and collecting receivables through certain foreign legal systems;
political and economic instability; and
potentially adverse tax consequences, tariffs, customs charges, bureaucratic requirements and other trade barriers.

 

Historically, most of our revenue has been denominated in U.S. dollars. In the future, we may sell our services in local currency outside of the United States. As our operations in countries outside of the United States grow, our results of operations and cash flows may be subject to fluctuations due to changes in foreign currency exchange rates, which could harm our business in the future. For example, if the value of the U.S. dollar increases relative to foreign currencies, in the absence of a corresponding change in local currency prices, our revenue could be adversely affected as we convert revenue from local currencies to U.S. dollars. If we dedicate significant resources to our international operations and are unable to manage these risks effectively, our business, operating results and financial condition will suffer.

 

Item 9.01 Financial Statements and Exhibits

 

Exhibit No.   Description
3.1   Certificate of Designation for Series C-1 Convertible Preferred Stock
3.2   Certificate of Designation for Series C-2 Convertible Preferred Stock
3.3   Certificate of Designation for Series D-2 Convertible Preferred Stock
3.4   Certificate of Designation for Series D-1 Convertible Preferred Stock
3.5   Certificate of Withdrawal of Certificate of Designation
4.1   Form of Warrant
4.2   Exchange Warrant, dated June 5, 2020
10.1   Exchange Agreement, dated June 5, 2020, by and among OncBioMune Pharmaceuticals, Inc. and the Investors named therein
10.2   Exchange Agreement, dated June 5, 2020, by and among OncBioMune Pharmaceuticals, Inc. and the Investors named therein
10.3   Exchange Agreement, dated June 5, 2020, by and between OncBioMune Pharmaceuticals, Inc. and Jonathan F. Head, Ph.D.
10.4   Securities Purchase Agreement, dated June 5, 2020, by and among OncBioMune Pharmaceuticals, Inc. Cavalry Fund I LP and Lincoln Park Capital Fund, LLC
10.5   Separation Agreement and General Release of Claims between OncBioMune Pharmaceuticals, Inc. and Andrew Kucharchuk dated June 5, 2020
10.6   Consulting Agreement between OncBioMune Pharmaceuticals, Inc. and Andrew Kucharchuk dated June 5, 2020
99.1   Press release dated June 8, 2020
99.2   Press release dated June 10, 2020

 

 

 

 

SIGNATURES

 

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

 

  ONCBIOMUNE PHARMACEUTICALS, INC.
     
  By: /s/ Mick Ruxin
  Name: Mick Ruxin, M.D.
  Title: Chief Executive Officer
     
Date: June 11, 2020    

 

 

 

Exhibit 3.1

 

CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF THE

SERIES C-1 CONVERTIBLE PREFERRED STOCK OF

ONCBIOMUNE PHARMACEUTICALS, INC.

 

The undersigned, Andrew Kucharchuk, President and Chief Executive Officer of OncBioMune Pharmaceuticals, Inc. (the “Corporation”), a corporation organized and existing under Chapter 78 of the Nevada Revised Statues (the “NRS”), hereby does certify:

 

That pursuant to the authority expressly conferred upon the Board of Directors of the Corporation by the Corporation’s Articles of Incorporation, as amended, and Section 78.315 of the NRS, the Board of Directors on April 28, 2020, adopted the following resolution determining it desirable and in the best interests of the Corporation and its shareholders for the Corporation to create a series of Three Thousand (3,000) shares of preferred stock designated as “Series C-1 Convertible Preferred Stock”, none of which shares have been issued.

 

RESOLVED, that the Board of Directors designates the Series C-1 Convertible Preferred Stock and the number of shares constituting such series, and fixes the rights, powers, preferences, privileges and restrictions relating to such series in addition to any set forth in the Articles of Incorporation as follows:

 

TERMS OF SERIES C-1 CONVERTIBLE PREFERRED STOCK

 

1. Certain Defined Terms. For purposes of this Certificate of Designations, the following terms shall have the following meanings:

 

(a) “1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

 

(b) “Additional Amount” means, as of the applicable date of determination, with respect to each share of Series C-1, all dividends, whether declared or not, on such share of Series C-1.

 

(c) “Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person, it being understood for purposes of this definition that “control” of a Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

 

(d) “Authorized Failure Shares” shall have the meaning given to it in Section 12 hereto.

 

(e) “Authorized Share Allocation” shall have the meaning given to it in Section 12 hereto.

 

 

 

 

(f) “Authorized Share Failure” shall have the meaning given to it in Section 12 hereto.

 

(g) “Buy-In Price” shall have the meaning given to it in Section 5 hereto.

 

(h) “Cavalry” shall have the meaning given to it in Section 3 hereto.

 

(i) “Certificate of Designations” means this Certificate Of Designations, Preferences and Rights of the Series C-1 Convertible Preferred Stock of the Corporation.

 

(j) “Closing Sale Price” means, for any security as of any date, (i) the last closing price for such security on the Principal Market, as reported by Bloomberg, or, (2) if the foregoing does not apply, the lowest reported sale price for such date on the Principal Market, or (3) fair market value as determined by the Board of Directors of the Company.

 

(k) “Common Stock” means (i) the Corporation’s shares of common stock, $0.0001 par value per share, and (ii) any capital stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.

 

(l) “Conversion Amount” shall have the meaning given to it in Section 5 hereto.

 

(m) “Conversion Date” shall have the meaning given to it in Section 5 hereto.

 

(n) “Conversion Failure” shall have the meaning given to it in Section 5 hereto.

 

(o) “Conversion Notice” shall have the meaning given to it in Section 5 hereto.

 

(p) “Conversion Price” shall have the meaning given to it in Section 5 hereto.

 

(q) “Conversion Rate” shall have the meaning given to it in Section 5 hereto.

 

(r) “Convertible Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares of Common Stock.

 

(s) “Corporate Event” shall have the meaning given to it in Section 7 hereto.

 

(t) “Corporation” shall have the meaning given to it in the preamble hereto.

 

(u) “Dispute Submission Deadline” shall have the meaning given to it in Section 22 hereto.

 

2

 

 

(v) “Distributions” shall have the meaning given to it in Section 14 hereto.

 

(w) “DTC” shall have the meaning given to it in Section 5 hereto.

 

(x) “Excess Shares” shall have the meaning given to it in Section 5 hereto.

 

(y) “Exchange Agreements” means those certain Exchange Agreements by and among the Corporation and the holders of Series C-1, effective as of the Initial Issuance Date, as may be amended from time in accordance with the terms thereof.

 

(z) “Fundamental Transaction” shall have the meaning given to it in Section 7.

 

(aa) “Holder” or “Holders” means a holder of Series C-1.

 

(bb) “Initial Issuance Date” means the date the first share of Series C-1 is issued to any Holder hereof.

 

(cc) “Junior Stock” shall have the meaning given to it in Section 3 hereto.

 

(dd) “Liquidation Event” means, whether in a single transaction or series of transactions, the voluntary or involuntary liquidation, dissolution or winding up of the Corporation or such Subsidiaries the assets of which constitute all or substantially all of the assets of the business of the Corporation and its Subsidiaries, taken as a whole.

 

(ee) “Liquidation Funds” shall have the meaning given to it in Section 13 hereto.

 

(ff) “Maximum Percentage” shall have the meaning given to it in Section 5 hereto.

 

(gg) “NRS” shall have the meaning given to it in the preamble hereto.

 

(hh) “Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

 

(ii) “Parity Stock” shall have the meaning given to it in Section 3 hereto.

 

(jj) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity or a government or any department or agency thereof.

 

(kk) “Principal Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market, OTCPink, OTCQB, or OTCQX and any successor markets thereto.

 

(ll) “Purchase Rights” shall have the meaning given to it in Section 7 hereto.

 

3

 

 

(mm) “Register” shall have the meaning given to it in Section 5 hereto.

 

(nn) “Registered Series C-1” shall have the meaning given to it in Section 5 hereto.

 

(oo) “Reported Outstanding Share Number” shall have the meaning given to it in Section 5 hereto.

 

(pp) “Required Dispute Documentation” shall have the meaning given to it in Section 22 hereto.

 

(qq) “Required Holder” shall have the meaning given to it in Section 3 hereto.

 

(rr) “Required Reserve Amount” shall have the meaning given to it in Section 12 hereto.

 

(ss) “SEC” means the Securities and Exchange Commission or the successor thereto.

 

(tt) “Senior Preferred Stock” shall have the meaning given to it in Section 3 hereto.

 

(uu) “Series C-1” shall have the meaning given to it in Section 2 hereto.

 

(vv) “Series C-1 Certificates” shall have the meaning given to it in Section 5 hereto.

 

(ww) “Share Delivery Deadline” shall have the meaning given to it in Section 5 hereto.

 

(xx) “Stated Value” shall mean $4,128.42 per share, subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations, subdivisions or other similar events occurring after the Initial Issuance Date with respect to the Series C-1.

 

(yy) “Subsidiary” when used with respect to any Person, means any corporation or other organization, whether incorporated or unincorporated, of which (A) at least a majority of the securities or other interests having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such Person (through ownership of securities, by contract or otherwise) or (B) such Person or any subsidiary of such Person is a general partner of any general partnership or a manager of any limited liability company.

 

4

 

 

(zz) “Trading Day” means any day on which the Common Stock is eligible to be traded on the Principal Market or securities market on which the Common Stock is then traded, provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00 p.m., Eastern time) unless such day is otherwise designated as a Trading Day in writing by the Holder.

 

(aaa) “Transaction Documents” means the Exchange Agreements, this Certificate of Designations, and each of the other agreements and instruments entered into or delivered by the Corporation in connection with the transactions contemplated by the Exchange Agreements, all as may be amended from time to time in accordance with the terms thereof.

 

(bbb) “Transfer Agent” shall have the meaning given to it in Section 5 hereto.

 

(ccc) “Triggering Event” shall have the meaning given to it in Section 6 hereto.

 

(ddd) “Triggering Event Conversion” shall have the meaning given to it in Section 5 hereto.

 

(eee) “Triggering Event Conversion Amount” shall have the meaning given to it in Section 5 hereto.

 

(fff) “Triggering Event Conversion Date” shall have the meaning given to it in Section 5 hereto.

 

(ggg) “Triggering Event Conversion Price” means while a Triggering Event is in effect 80% of the prior Conversion Price.

 

(hhh) “Triggering Event Notice” shall have the meaning given to it in Section 6 hereto.

 

(iii) “Triggering Event Right Commencement Date” shall have the meaning given to it in Section 6 hereto.

 

(jjj) “Triggering Event Right Expiration Date” shall have the meaning given to it in Section 6 hereto.

 

2. Designation and Number of Shares. There shall hereby be created and established a series of preferred stock of the Corporation designated as “Series C-1 Convertible Preferred Stock” (the “Series C-1”). The authorized number of Series C-1 shall be Three Thousand (3,000) shares. Each share of Series C-1 shall have a par value of $0.0001.

 

5

 

 

3. Ranking. Until such time as the holders of at least a majority of the outstanding Series C-1, which shall include Cavalry Fund I LP (“Cavalry”) as long as it owns at least 5% of the Series C-1 (the “Required Holder”), expressly consent to the creation of Parity Stock or Senior Preferred Stock (each as defined below) in accordance with Section 15, the Series C-1 shall rank pari passu with respect to the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Corporation with the Series D-1 Convertible Preferred Stock of the Corporation and the Series D-2 Convertible Preferred Stock of the Corporation (the “Parity Stock”) , and all other shares of capital stock of the Corporation shall be junior in rank to all Series C-1 with respect to the preferences as to dividends (except for the Common Stock, which shall be pari passu as provided in Section 4), distributions and payments upon the liquidation, dissolution and winding up of the Corporation (such junior stock is referred to herein collectively as “Junior Stock”). The rights of all such Junior Stock shall be subject to the rights, powers, preferences and privileges of the Series C-1. Without limiting any other provision of this Certificate of Designations, without the prior express consent of the Required Holder, the Corporation shall not hereafter authorize or issue any additional or other shares of capital stock that is (i) of senior rank to the Series C-1 in respect of the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Corporation (collectively, the “Senior Preferred Stock”), or (ii) Parity Stock. Except as provided for herein, in the event of the merger or consolidation of the Corporation into another corporation, the Series C-1 shall maintain their relative rights, powers, designations, privileges and preferences provided for herein for a period of at least two years following such merger or consolidation and no such merger or consolidation shall cause result inconsistent therewith.

 

4. Dividends and Distributions. Each Holder of Series C-1 shall be entitled to receive dividends or distributions on each share of Series C-1 on an “as converted” into Common Stock basis as provided in Section 5 hereof when and if dividends are declared on the Common Stock by the Board of Directors. Dividends shall be paid in cash or property, as determined by the Board of Directors.

 

5. Conversion. At any time after the Initial Issuance Date, each share of Series C-1 shall be convertible into validly issued, fully paid and non-assessable shares of Common Stock, on the terms and conditions set forth in this Section 5.

 

(a) Holder’s Conversion Right. Subject to the provisions of Section 5(d), at any time or times on or after the Initial Issuance Date, each Holder shall be entitled to convert any portion of the outstanding Series C-1 held by such Holder into validly issued, fully paid and non-assessable shares of Common Stock in accordance with Section 5(c) at the Conversion Rate (as defined below). The Corporation shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance of a fraction of a share of Common Stock, the Corporation shall round such fraction of a share of Common Stock up to the nearest whole share. The Corporation shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including fees and expenses of the Transfer Agent (as defined below)) that may be payable with respect to the issuance and delivery of Common Stock upon conversion of any Conversion Amount (as defined below).

 

(b) Conversion Rate. The number of shares of Common Stock issuable upon conversion of any share of Series C-1 pursuant to Section 5(a) shall be determined by dividing (x) the Conversion Amount of such share of Series C-1 by (y) the Conversion Price (the “Conversion Rate”):

 

6

 

 

(i) “Conversion Amount” means, with respect to each share of Series C-1, as of the applicable date of determination, the sum of (1) the Stated Value thereof plus (2) the Additional Amount thereon.

 

(ii) “Conversion Price” means, with respect to each share of Series C-1, as of any Conversion Date or other date of determination, $0.0275, subject to adjustment as provided herein including by the existence of a Triggering Event Conversion Price.

 

(c) Mechanics of Conversion. The conversion of each share of Series C-1 shall be conducted in the following manner:

 

(i) Optional Conversion. To convert a share of Series C-1 into shares of Common Stock on any date after the Initial Issuance Date (a “Conversion Date”), a Holder shall deliver, via electronic mail or otherwise, for receipt on or prior to 11:59 p.m., Eastern time, on such date, a copy of an executed notice of conversion of the share(s) of Series C-1 subject to such conversion in the form attached hereto as Exhibit I (the “Conversion Notice”) to the Corporation. If required by Section 5(c)(iii), within three Trading Days following a conversion of any such Series C-1 as aforesaid, such Holder shall surrender to a nationally recognized overnight delivery service for delivery to the Corporation the original certificates representing the Series C-1 (the “Series C-1 Certificates”) so converted as aforesaid (or an indemnification undertaking with respect to the Series C-1 in the case of its loss, theft or destruction as contemplated by Section 17). On or before the first Trading Day following the date of receipt of a Conversion Notice, the Corporation shall transmit by electronic mail an acknowledgment of confirmation, in the form attached hereto as Exhibit II, of receipt of such Conversion Notice to such Holder and the Corporation’s transfer agent (the “Transfer Agent”), which confirmation shall constitute an instruction to the Transfer Agent to process such Conversion Notice in accordance with the terms herein. On or before the second Trading Day following the date of receipt of a Conversion Notice (or such earlier date as required pursuant to the 1934 Act or other applicable law, rule, regulation, Trading Market Rule or other customary applicable policy for the settlement of a trade initiated on the applicable Conversion Date of such shares of Common Stock issuable pursuant to such Conversion Notice) (the “Share Delivery Deadline”), the Corporation shall (1) provided that the Transfer Agent is participating in The Depository Trust Corporation’s (“DTC”) Fast Automated Securities Transfer Program, credit such aggregate number of shares of Common Stock to which such Holder shall be entitled to such Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system, or (2) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver (via reputable overnight courier) to the address as specified in such Conversion Notice, a certificate, registered in the name of such Holder or its designee, for the number of shares of Common Stock to which such Holder shall be entitled. If the number of Series C-1 represented by the Series C-1 Certificate(s) submitted for conversion pursuant to Section 5(c)(ii) is greater than the number of Series C-1 being converted, then the Corporation shall, as soon as practicable and in no event later than two Trading Days after receipt of the Series C-1 Certificate(s) and at its own expense, issue and deliver to such Holder (or its designee) a new Series C-1 Certificate (in accordance with Section 17(d)) representing the number of Series C-1 not converted. The Person or Persons entitled to receive the shares of Common Stock issuable upon a conversion of Series C-1 shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion Date.

 

7

 

 

(ii) Corporation’s Failure to Timely Convert. If the Corporation shall fail, for any reason or for no reason, on or prior to the applicable Share Delivery Deadline, to issue to such Holder a certificate for the number of shares of Common Stock to which such Holder is entitled and register such shares of Common Stock on the Corporation’s share register or to credit such Holder’s or its designee’s balance account with DTC for such number of shares of Common Stock to which such Holder is entitled upon such Holder’s conversion of any Conversion Amount (as the case may be) (a “Conversion Failure”), then, in addition to all other remedies available to such Holder, (X) the Corporation shall pay in cash to such Holder on each day after the Share Delivery Deadline and during such Conversion Failure an amount equal to 2% of the product of (A) the sum of the number of shares of Common Stock not issued to such Holder on or prior to the Share Delivery Deadline and to which such Holder is entitled, multiplied by (B) the closing price of the Common Stock on the applicable Conversion Date and ending on the applicable Share Delivery Deadline, and (Y) such Holder, upon written notice to the Corporation, may void its Conversion Notice with respect to, and retain or have returned, as the case may be, all, or any portion, of such Series C-1 that has not been converted pursuant to such Conversion Notice; provided that the voiding of a Conversion Notice shall not affect the Corporation’s obligations to make any payments which have accrued prior to the date of such notice pursuant to this Section 5(c)(i) or otherwise. In addition to the foregoing, if on or prior to the Share Delivery Deadline the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, the Corporation shall fail to issue and deliver to such Holder (or its designee) a certificate and register such shares of Common Stock on the Corporation’s share register or, if the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program, the Transfer Agent shall fail to credit the balance account of such Holder or such Holder’s designee with DTC for the number of shares of Common Stock to which such Holder is entitled upon such Holder’s exercise hereunder or pursuant to the Corporation’s obligation pursuant to clause (II) below and if on or after such Share Delivery Deadline such Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Holder of all or any portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number of shares of Common Stock, issuable upon such conversion that such Holder so is entitled to receive from the Corporation, then, in addition to all other remedies available to such Holder, the Corporation shall, within two Trading Days after receipt of such Holder’s request and in such Holder’s discretion, either: (I) pay cash to such Holder in an amount equal to such Holder’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including by any other Person in respect, or on behalf, of such Holder) (the “Buy-In Price”), at which point the Corporation’s obligation to so issue and deliver such certificate or credit such Holder’s balance account with DTC for the number of shares of Common Stock to which such Holder is entitled upon such Holder’s conversion hereunder (as the case may be) (and to issue such shares of Common Stock) shall terminate, or (II) promptly honor its obligation to so issue and deliver to such Holder a certificate or certificates representing such shares of Common Stock or credit such Holder’s balance account with DTC for the number of shares of Common Stock to which such Holder is entitled upon such Holder’s conversion hereunder (as the case may be) and pay cash to such Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (x) such number of shares of Common Stock to which such Holder is entitled multiplied by (y) the lowest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date of the applicable Conversion Notice and ending on the date of such issuance and payment under this clause (ii).

 

(iii) Registration; Book-Entry. The Corporation shall maintain a register (the “Register”) for the recordation of the names and addresses of the Holders of each share of Series C-1 and the Stated Value of the Series C-1 (the “Registered Series C-1”). The entries in the Register shall be conclusive and binding for all purposes absent manifest error. The Corporation and each Holder of the Series C-1 shall treat each Person whose name is recorded in the Register as the owner of a share of Series C-1 for all purposes (including the right to receive payments and dividends hereunder) notwithstanding notice to the contrary. A registered share of Series C-1 may be assigned, transferred or sold only by registration of such assignment or sale on the Register. Upon its receipt of a written request to assign, transfer or sell one or more Registered Series C-1 by such Holder thereof, the Corporation shall record the information contained therein in the Register and issue one or more new shares of Series C-1 in the same aggregate Stated Value as the Stated Value of the surrendered Series C-1 to the designated assignee or transferee pursuant to Section 17, provided that if the Corporation does not so record an assignment, transfer or sale (as the case may be) of such Series C-1 shares within two Trading Days of such a request, then the Register shall be automatically deemed updated to reflect such assignment, transfer or sale (as the case may be). Notwithstanding anything to the contrary set forth in this Section 5, following conversion of any Series C-1 in accordance with the terms hereof, the applicable Holder shall not be required to physically surrender such Series C-1 to the Corporation unless (A) the full or remaining number of Series C-1 shares represented by the applicable Series C-1 Certificate are being converted (in which event such certificate(s) shall be delivered to the Corporation as contemplated by this Section 5(c)(ii)) or (B) such Holder has provided the Corporation with prior written notice (which notice may be included in a Conversion Notice) requesting reissuance of Series C-1 upon physical surrender of the applicable Series C-1 Certificate. Each Holder and the Corporation shall maintain records showing the Stated Value and dividends converted and/or paid (as the case may be) and the dates of such conversions and/or payments (as the case may be) or shall use such other method, reasonably satisfactory to such Holder and the Corporation, so as not to require physical surrender of a Series C-1 Certificate upon conversion. If the Corporation does not update the Register to record such Stated Value and dividends converted and/or paid (as the case may be) and the dates of such conversions and/or payments (as the case may be) within two Trading Days of such occurrence, then the Register shall be automatically deemed updated to reflect such occurrence. In the event of any dispute or discrepancy, such records of such Holder establishing the number of Series C-1 to which the record holder is entitled shall be controlling and determinative in the absence of manifest error. A Holder and any transferee or assignee, by acceptance of a certificate, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of any Series C-1, the number of Series C-1 represented by such certificate may be less than the number of Series C-1 stated on the face thereof. Each Series C-1 Certificate shall bear the following legend:

 

8

 

 

ANY TRANSFEREE OR ASSIGNEE OF THIS CERTIFICATE SHOULD CAREFULLY REVIEW THE TERMS OF THE CORPORATION’S CERTIFICATE OF DESIGNATIONS RELATING TO THE SHARES OF SERIES C-1 CONVERTIBLE PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE, INCLUDING SECTION 5(c)(ii) THEREOF. THE NUMBER OF SHARES OF SERIES C-1 CONVERTIBLE PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE MAY BE LESS THAN THE NUMBER OF SHARES OF SERIES C-1 CONVERTIBLE PREFERRED STOCK STATED ON THE FACE HEREOF PURSUANT TO SECTION 5(c)(ii) OF THE CERTIFICATE OF DESIGNATIONS RELATING TO THE SHARES OF SERIES C-1 CONVERTIBLE PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE.

 

(iv) Pro Rata Conversion; Disputes. In the event that the Corporation receives a Conversion Notice from more than one Holder for the same Conversion Date and the Corporation can convert some, but not all, of such Series C-1 submitted for conversion, the Corporation shall convert from each Holder electing to have Series C-1 converted on such date a pro rata amount of such Holder’s Series C-1 submitted for conversion on such date based on the number of Series C-1 submitted for conversion on such date by such Holder relative to the aggregate number of Series C-1 submitted for conversion on such date. In the event of a dispute as to the number of shares of Common Stock issuable to a Holder in connection with a conversion of Series C-1, the Corporation shall issue to such Holder the number of shares of Common Stock not in dispute and resolve such dispute in accordance with Section 22.

 

9

 

 

(d) Limitation on Beneficial Ownership. The Corporation shall not effect the conversion of any of the Series C-1 held by a Holder, and such Holder shall not have the right to convert any of the Series C-1 held by such Holder pursuant to the terms and conditions of this Certificate of Designations and any such conversion shall be null and void and treated as if never made, to the extent that after giving effect to such conversion, such Holder would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the shares of Common Stock outstanding immediately after giving effect to such conversion (which provision may be increased to a maximum of 9.9% by such Holder by written notice from such Holder to the Corporation, which notice shall be effective 61 calendar days after the date of such notice). For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by such Holder shall include the number of shares of Common Stock held by such Holder plus the number of shares of Common Stock issuable upon conversion of the Series C-1 with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (A) conversion of the remaining, nonconverted Series C-1 beneficially owned by such Holder and (B) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Corporation (including any convertible notes, convertible preferred stock or warrants) beneficially owned by such Holder subject to a limitation on conversion or exercise analogous to the limitation contained in this Section 5(d). For purposes of this Section 5(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the 1934 Act and the Rules thereunder. For purposes of determining the number of outstanding shares of Common Stock a Holder may acquire upon the conversion of such Series C-1 without exceeding the Maximum Percentage, such Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Corporation’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the SEC, as the case may be, (y) a more recent public announcement by the Corporation or (z) any other written notice by the Corporation or the Transfer Agent, if any, setting forth the number of shares of Common Stock outstanding (the “Reported Outstanding Share Number”). If the Corporation receives a Conversion Notice from a Holder at a time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Corporation shall notify such Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Conversion Notice would otherwise cause such Holder’s beneficial ownership, as determined pursuant to this Section 5(d), to exceed the Maximum Percentage, such Holder must notify the Corporation of a reduced number of shares of Common Stock to be purchased pursuant to such Conversion Notice. For any reason at any time, upon the written or oral request of any Holder, the Corporation shall within one Trading Day confirm orally and in writing or by electronic mail to such Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Corporation, including such Series C-1, by such Holder since the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of shares of Common Stock to a Holder upon conversion of such Series C-1 results in such Holder being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which such Holder’s beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed null and void and shall be cancelled ab initio, and such Holder shall not have the power to vote or to transfer the Excess Shares. For purposes of clarity, the shares of Common Stock issuable to a Holder pursuant to the terms of this Certificate of Designations in excess of the Maximum Percentage shall not be deemed to be beneficially owned by such Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to convert such Series C-1 pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of convertibility. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 5(d) to the extent necessary to correct this paragraph (or any portion of this paragraph) which may be defective or inconsistent with the intended beneficial ownership limitation contained in this Section 5(d) or to make changes or supplements necessary or desirable to properly give effect to such limitation. The provisions of this Section 5(d) shall be of no further force or effect if the Holder participates in a subsequent transaction with the Corporation which results in the Holder beneficially owning in excess of 4.99% of the number of shares of the Common Stock outstanding which shall include securities convertible into Common Stock which do not contain a beneficial ownership limitation.

 

10

 

 

(e) Triggering Event Conversion.

 

(i) General. Subject to Section 5(d), at any time during the period commencing on the date of the occurrence of a Triggering Event (defined below in Section 6(a)) and ending on the date of the cure of such Triggering Event, a Holder may, at such Holder’s option, by delivery of a Conversion Notice to the Corporation (the date of any such Conversion Notice, each an “Triggering Event Conversion Date”), convert all, or any number of Series C-1 (such Conversion Amount of the Series C-1 to be converted pursuant to this Section 5(e), the “Triggering Event Conversion Amount”) into shares of Common Stock at the Triggering Event Conversion Price (each, a “Triggering Event Conversion”).

 

(ii) Mechanics of Triggering Event Conversion. On or after any Triggering Event Conversion Date until the Triggering Event has been cured, a Holder may voluntarily convert any Triggering Event Conversion Amount pursuant to Section 5(b)(ii) (with the “Triggering Event Conversion Price” replacing the “Conversion Price” for all purposes hereunder with respect to such Triggering Event Conversion by designating in the Conversion Notice delivered pursuant to this Section 5(e) of this Certificate of Designations that such Holder is electing to use the Triggering Event Conversion Price for such conversion.

 

6. Triggering Events.

 

(a) Triggering Event. Each of the following events shall constitute a “Triggering Event”:

 

(i) the Corporation does not meet the current public information requirements under Rule 144 in respect of the shares of Common Stock issuable upon conversion of the Series C-1;

 

11

 

 

(ii) the Corporation ceases to be subject to the periodic reporting provisions of the 1934 Act.

 

(iii) the suspension from trading or failure of the Common Stock to be trading or listed (as applicable) on a Principal Market for a period of ten consecutive Trading Days;

 

(iv) the Corporation’s written notice to any holder of Series C-1, including, without limitation, by way of public announcement or through any of its agents, at any time, of its intention not to comply, as required, with a request for conversion of any Series C-1 into shares of Common Stock that is requested in accordance with the provisions of this Certificate of Designations, other than pursuant to Section 5(d) hereof;

 

(v) at any time following the 10th consecutive day that a Holder’s Authorized Share Allocation (as defined in Section 12 below) is less than 125% of the number of shares of Common Stock that such Holder would be entitled to receive upon a conversion, in full, of all of the Series C-1 then held by such Holder (without regard to any limitations on conversion set forth in this Certificate of Designations);

 

(vi) the Corporation’s failure to pay to any Holder any dividend on any dividend date declared by the Board or any other amount when and as due under this Certificate of Designations, the Exchange Agreements or any other Transaction Document (in each case, whether or not permitted pursuant to the NRS), except, in the case of a failure to pay dividends when and as due, in each such case only if such failure remains uncured for a period of at least ten Trading Days;

 

(vii) the Corporation either (A) fails to cure a Conversion Failure by delivery of the required number of shares of Common Stock within two Trading Days after the applicable Conversion Date on two or more occasions or (B) fails to remove any restrictive legend on any certificate or any shares of Common Stock issued to such Holder upon conversion of any Series C-1 or as and when required by this Certificate of Designations unless otherwise then prohibited by applicable federal securities laws, and any such failure to remove the legend remains uncured for at least five Trading Days;

 

(viii) bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted by or against the Corporation or any Subsidiary which shall not be dismissed within thirty days of their initiation;

 

(ix) the commencement by the Corporation or any Subsidiary of a voluntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree, order, judgment or other similar document in respect of the Corporation or any Subsidiary in an involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable federal, state or foreign law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Corporation or any Subsidiary or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the execution of a composition of debts, or the occurrence of any other similar federal, state or foreign proceeding, the taking of corporate action by the Corporation or any Subsidiary in furtherance of any such action or the taking of any action by any Person to commence a Uniform Commercial Code foreclosure sale or any other similar action under federal, state or foreign law;

 

12

 

 

(x) the entry by a court of (i) a decree, order, judgment or other similar document in respect of the Corporation or any Subsidiary of an involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or (ii) a decree, order, judgment or other similar document adjudging the Corporation or any Subsidiary as bankrupt or insolvent, or approving as properly filed a petition seeking liquidation, reorganization, arrangement, adjustment or composition of or in respect of the Corporation or any Subsidiary under any applicable federal, state or foreign law or (iii) a decree, order, judgment or other similar document appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Corporation or any Subsidiary or of any substantial part of its property, or ordering the winding up or liquidation of its affairs;

 

(xi) a final judgment or judgments for the payment of money in excess of $1,000,000 are rendered against the Corporation and/or any of its Subsidiaries and which judgments are not, within ten days after the entry thereof, bonded, discharged, settled or stayed pending appeal, or are not discharged within thirty days after the expiration of such stay; provided, however, any judgment which is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $1,000,000 amount set forth above so long as the Corporation provides each Holder a written statement from such insurer or indemnity provider (which written statement and indemnity provider shall be reasonably satisfactory to each Holder) to the effect that such judgment is covered by insurance or an indemnity and the Corporation or such Subsidiary (as the case may be) will receive the proceeds of such insurance or indemnity within 10 days of the issuance of such judgment provided further that any judgment rendered on the Corporation as a result of successor liability or any other manner which is related to any litigation which was disclosed in writing by Avant Diagnostics, Inc. prior to its acquisition by the Corporation shall not be included in calculating the $1,000,000 amount set forth above;

 

(xii) other than as specifically set forth in another clause of this Section 6(a), the Corporation or any Subsidiary breaches any representation or warranty in any material respect (other than representations or warranties subject to material adverse effect or materiality, which may not be breached in any respect) or any covenant or other term or condition of any Transaction Document, except, in the case of a breach of a covenant or other term or condition that is curable, only if such breach remains uncured for a period of five consecutive Trading Days;

 

13

 

 

(xiii) a false or inaccurate certification (including a false or inaccurate deemed certification) by the Corporation as to whether any Triggering Event has occurred.

 

(b) Notice of a Triggering Event. Upon the occurrence of a Triggering Event with respect to the Series C-1, the Corporation shall within three Trading Days deliver written notice thereof via facsimile or electronic mail and overnight courier (with next day delivery specified) (an “Triggering Event Notice”) to each Holder.

 

7. Rights Upon Issuance of Purchase Rights and Other Corporate Events.

 

(a) Purchase Rights. In addition to any adjustments pursuant to Section 8 and 9 below, if at any time the Corporation grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to all or substantially all of the record holders of any class of Common Stock (the “Purchase Rights”), then each Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of all the Series C-1 (without taking into account any limitations or restrictions on the convertibility of the Series C-1) held by such Holder immediately prior to the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that such Holder’s right to participate in any such Purchase Right would result in such Holder exceeding the Maximum Percentage, then such Holder shall not be entitled to participate in such Purchase Right to the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Purchase Right (and beneficial ownership) to the extent of any such excess) and such Purchase Right to such extent shall be held in abeyance for such Holder until such time or times, if ever, as its right thereto would not result in such Holder exceeding the Maximum Percentage), at which time or times such Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right to be held similarly in abeyance) to the same extent as if there had been no such limitation.

 

14

 

 

(b) Other Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”), the Corporation shall make appropriate provision to insure that each Holder will thereafter have the right to receive upon a conversion of all the Series C-1 held by such Holder (i) in addition to the shares of Common Stock receivable upon such conversion, such securities or other assets to which such Holder would have been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by such Holder upon the consummation of such Corporate Event (without taking into account any limitations or restrictions on the convertibility of the Series C-1 contained in this Certificate of Designations) or (ii) in lieu of the shares of Common Stock otherwise receivable upon such conversion, such securities or other assets received by the holders of shares of Common Stock in connection with the consummation of such Corporate Event in such amounts as such Holder would have been entitled to receive had the Series C-1 held by such Holder initially been issued with conversion rights for the form of such consideration (as opposed to shares of Common Stock) at a conversion rate for such consideration commensurate with the Conversion Rate. The provision made pursuant to the preceding sentence shall be in a form and substance satisfactory to the Holder. The provisions of this Section 7 shall apply similarly and equally to successive Corporate Events and shall be applied without regard to any limitations on the conversion of the Series C-1 contained in this Certificate of Designations. “Fundamental Transaction” means the occurrence of the Corporation (i) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, (A) consolidating or merging with or into (whether or not the Corporation is the surviving corporation) another Person, (B) selling, assigning, transferring, conveying or otherwise disposing of all or substantially all of the properties or assets of the Corporation or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X) to one or more Persons, (C) making, or allowing one or more Persons to make, or allowing the Corporation to be subject to or have its Common Stock be subject to or party to one or more Persons making, a purchase, tender or exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Persons making or party to, or affiliated with any Persons making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Persons making or party to, or affiliated with any Person making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, (D) consummating a stock or share purchase agreement or other business combination (including a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Persons whereby all such Persons, individually or in the aggregate, acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all the Persons making or party to, or affiliated with any Persons making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock such that the Persons become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (E) reorganize, recapitalize or reclassify its Common Stock.

 

15

 

 

8. Price Protection. In the event the Corporation issues or sells any securities including Options or Convertible Securities, except for any Exempt Issuance (as hereinafter defined), at a price of or with an exercise or conversion price of less than the Conversion Price, then upon such issuance or sale, the Conversion Price shall be reduced to the sale price or the exercise or conversion price of the securities issued or sold. “Exempt Issuance” shall mean any sale or issuance by the Company of its Common Stock or securities convertible into, exercisable for or exchangeable for Common Stock in connection with (i) full or partial consideration in connection with a strategic merger, acquisition, consolidation or purchase of the securities or assets of a corporation or other entity (or any division or business unit thereof), (ii) the Company’s issuance of securities in connection with strategic supply, sale or license agreements and other partnering arrangements so long as such issuances are not for the purpose of raising capital, (iii) the Company’s issuance of Common stock, restricted stock units or the issuances or grants of Options to purchase Common Stock to employees, officers or directors, under an equity incentive plan adopted by a majority of the non employee members of the Board of Directors of the Corporation; (iv) securities issued upon the exercise or exchange of or conversion of any Convertible Securities issued and outstanding on the date of the issuance of Series C-1 to securities holders of the Corporation in exchange for other securities existing as of the date this Certificate of Designations is filed with the Nevada Secretary of State, (v) the conversion of any Series C-1, Series D-1 Convertible Preferred Stock of the Corporation or any Series D-2 Convertible Preferred Stock of the Corporation and (vi) any private or public offering of the Corporation’s equity, debt, debt-linked or equity-linked securities that occurs within 12 months of the Initial Issuance Date provided the price per share in any such offering is above the Conversion Price then in effect.

 

9. Adjustment of Conversion Price upon Subdivision or Combination of Common Stock. Without limiting any provision of Section 8(a), if the Corporation at any time on or after the Initial Issuance Date subdivides (by any stock split, stock dividend, recapitalization or other similar transaction) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced. Without limiting any provision of Section 8(a), if the Corporation at any time on or after the Initial Issuance Date combines (by any reverse split, recapitalization or other similar transaction) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased. Any adjustment pursuant to this Section 9 shall become effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this Section 9 occurs during the period that a Conversion Price is calculated hereunder, then the calculation of such Conversion Price shall be adjusted appropriately to reflect such event.

 

10. Participation in Future Financing.

 

(a) From the date hereof until the date that is the twenty-four (24) month anniversary of the Closing Date (or until 100% of the Series C-1 issued on the Initial Issuance Date is converted into Common Stock, if earlier), upon any issuance by the Company of Common Stock or Common Stock Equivalents for cash consideration, Indebtedness or a combination of units hereof in a transaction exempt from registration under the Securities Act (a “Subsequent Financing”), each Holder shall have the right to participate in up to an amount of the Subsequent Financing equal to 25% of the Subsequent Financing (the “Participation Maximum”) on the same terms, conditions and price provided for in the Subsequent Financing. At least five (5) Trading Days prior to the closing of the Subsequent Financing, the Company shall deliver to each Holder a written notice of its intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask such Holder if it wants to review the details of such financing (such additional notice, a “Subsequent Financing Notice”). Upon the request of a Holder, for a Subsequent Financing Notice, the Company shall promptly, but no later than two (2) Trading Days after such request, deliver a Subsequent Financing Notice to such Holder. The Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder and the Person or Persons through or with whom such Subsequent Financing is proposed to be effected and shall include a term sheet or similar document relating thereto as an attachment.

 

16

 

 

(b) Any Holder desiring to participate in such Subsequent Financing must provide written notice to the Company by not later than 5:30 p.m. (New York City time) on the fifth (5th) Trading Day after such Holders have received the Subsequent Financing Notice that such Holder is willing to participate in the Subsequent Financing, the amount of such Holder’s participation, and representing and warranting that such Holder has such funds ready, willing, and available for investment on the terms set forth in the Subsequent Financing Notice. If the Company receives no such notice from a Holder as of such fifth (5th) Trading Day, such Holder shall be deemed to have notified the Company that it does not elect to participate.

 

(c) If by 5:30 p.m. (New York City time) on the fifth (5th) Trading Day after all of the Holders have received the Pre-Notice, the Company receives responses to a Subsequent Financing Notice from Holders seeking to purchase more than the aggregate amount of the Participation Maximum, each such Holder shall have the right to purchase its Pro Rata Portion (as defined below) of the Participation Maximum. “Pro Rata Portion” means the ratio of (x) the amount of Series C-1 issued on the Initial Issuance Date to the Holder participating under this Section 10 and (y) the sum of the aggregate amount of Series C-1 issued on the Initial Issuance Date to all Holders participating under this Section 10.

 

(d) The Company must provide the Holders with a second Subsequent Financing Notice, and the Holders will again have the right of participation set forth above in this Section 10, if the Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within thirty (30) Trading Days after the date of the initial Subsequent Financing Notice.

 

(e) The Company and each Holder agree that if any Holder elects to participate in the Subsequent Financing, the transaction documents related to the Subsequent Financing shall not include any term or provision whereby such Holder shall be required to agree to any restrictions on trading as to any of the Securities purchased hereunder or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, this Agreement, without the prior written consent of such Holder.

 

(f) Notwithstanding anything to the contrary in this Section 10 and unless otherwise agreed to by such Holder, the Company shall either confirm in writing to such Holder that the transaction with respect to the Subsequent Financing has been abandoned or shall publicly disclose its intention to issue the securities in the Subsequent Financing, in either case in such a manner such that such Holder will not be in possession of any material, non-public information, by the tenth (10th) Business Day following delivery of the Subsequent Financing Notice. If by such tenth (10th) Business Day, no public disclosure regarding a transaction with respect to the Subsequent Financing has been made, and no notice regarding the abandonment of such transaction has been received by such Holder, such transaction shall be deemed to have been abandoned and such Holder shall not be deemed to be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries.

 

17

 

 

(g) Notwithstanding the foregoing, this Section 10 shall not apply in respect of (i) an Exempt Issuance, or (ii) a public offering registered with the SEC.

 

11. Noncircumvention. The Corporation hereby covenants and agrees that the Corporation will not, by amendment of its Articles of Incorporation, Bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Certificate of Designations, and will at all times in good faith carry out all the provisions of this Certificate of Designations and take all action as may be required to protect the rights of the Holders. Without limiting the generality of the foregoing or any other provision of this Certificate of Designations, the Corporation (a) shall not increase the par value of any shares of Common Stock receivable upon the conversion of any Series C-1 above the Conversion Price then in effect, (b) shall take all such actions as may be necessary or appropriate in order that the Corporation may validly and legally issue fully paid and non-assessable shares of Common Stock upon the conversion of Series C-1 and (c) shall, so long as any Series C-1 are outstanding, and upon the filing of an amendment to the Corporation’s Articles of Incorporation to increase the number of shares of the Corporation’s Common Stock that the Corporation is authorized to issue with the Secretary of State of the State of Nevada, take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the conversion of the Series C-1, the maximum number of shares of Common Stock as shall from time to time be necessary to effect the conversion of the Series C-1 then outstanding (without regard to any limitations on conversion contained herein).

 

12. Authorized Shares.

 

(a) Reservation. So long as any Series C-1 remain outstanding, and upon the filing of an amendment to the Corporation’s Articles of Incorporation to increase the number of shares of the Corporation’s Common Stock that the Corporation is authorized to issue with the Secretary of State of the State of Nevada, the Corporation shall at all times reserve at least 125% times the number of shares of Common Stock as shall from time to time be necessary to effect the conversion of all of the Series C-1 then outstanding (without regard to any limitations on conversions) (the “Required Reserve Amount”). The Required Reserve Amount (including each increase in the number of shares so reserved) shall be allocated pro rata among the Holders based on the number of the Series C-1 held by each Holder (the “Authorized Share Allocation”). In the event that a Holder shall sell or otherwise transfer any of such Holder’s Series C-1, each transferee shall be allocated a pro rata portion of such Holder’s Authorized Share Allocation. If the Required Reserve Amount is not met at such time, any shares of Common Stock reserved and allocated to any Person which ceases to hold any Series C-1 shall be allocated to the remaining Holders of Series C-1, pro rata based on the number of the Series C-1 then held by the Holders.

 

18

 

 

(b) Insufficient Authorized Shares. If, notwithstanding Section 12(a) and not in limitation thereof, while any of the Series C-1 remain outstanding the Corporation does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon conversion of the Series C-1 at least a number of shares of Common Stock equal to the Required Reserve Amount (an “Authorized Share Failure”), then the Corporation shall immediately take all action necessary to increase the Corporation’s authorized shares of Common Stock to an amount sufficient to allow the Corporation to reserve the Required Reserve Amount for the Series C-1 then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than ninety days after the occurrence of such Authorized Share Failure, the Corporation shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Corporation shall provide each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common Stock and to cause its Board of Directors to recommend to the stockholders that they approve such proposal. In lieu of a meeting of stockholders, the Corporation may effect such action by written consent in accordance with Section 14(c) of the 1934 Act. Except as provided in the first sentence of Section 12(a), in the event that the Corporation is prohibited from issuing shares of Common Stock to a Holder upon any conversion due to the failure by the Corporation to have sufficient shares of Common Stock available out of the authorized but unissued shares of Common Stock (such unavailable number of shares of Common Stock, the “Authorized Failure Shares”), in lieu of delivering such Authorized Failure Shares to such Holder, the Corporation shall pay cash in exchange for the redemption of such portion of the Conversion Amount convertible into such Authorized Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorized Failure Shares and (y) the average Closing Sale Prices of the Common Stock on the Trading Days during the period commencing on the date such Holder delivers the applicable Conversion Notice with respect to such Authorized Failure Shares to the Corporation and ending on the date of such issuance under this Section 12(b). Nothing contained in this Section shall limit any obligations of the Corporation under any provision of the Exchange Agreements.

 

13. Liquidation, Dissolution, Winding-Up. In the event of a Liquidation Event, the Holders shall be entitled to receive in cash out of the assets of the Corporation, whether from capital or from earnings available for distribution to its stockholders (the “Liquidation Funds”), before any amount shall be paid to the holders of any of shares of Junior Stock, but pari passu with any Parity Stock then outstanding, an amount per share of Series C-1 equal to the greater of (A) the Conversion Amount thereof on the date of such payment or (B) the amount per share such Holder would receive if such Holder converted such Series C-1 into Common Stock immediately prior to the date of such payment, provided that if the Liquidation Funds are insufficient to pay the full amount due to the Holders and holders of shares of Parity Stock, then each Holder and each holder of Parity Stock shall receive a percentage of the Liquidation Funds equal to the full amount of Liquidation Funds payable to such Holder and such holder of Parity Stock as a liquidation preference, in accordance with their respective certificate of designations (or equivalent), as a percentage of the full amount of Liquidation Funds payable to all holders of Series C-1 and all holders of shares of Parity Stock. To the extent necessary, the Corporation shall cause such actions to be taken by each of its Subsidiaries so as to enable, to the maximum extent permitted by law, the proceeds of a Liquidation Event to be distributed to the Holders in accordance with this Section 13. All the preferential amounts to be paid to the Holders under this Section shall be paid or set apart for payment before the payment or setting apart for payment of any amount for, or the distribution of any Liquidation Funds of the Corporation to the holders of shares of Junior Stock in connection with a Liquidation Event as to which this Section 13 applies.

 

19

 

 

14. Distribution of Assets. In addition to any adjustments pursuant to Section 8 and 9, if the Corporation shall declare or make any dividend or other distributions of its assets (or rights to acquire its assets) to any or all holders of shares of Common Stock, by way of return of capital or otherwise (including any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (the “Distributions”), then each Holder, as holders of Series C-1, will be entitled to such Distributions as if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of the Series C-1 (without taking into account any limitations or restrictions on the convertibility of the Series C-1) immediately prior to the date on which a record is taken for such Distribution or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for such Distributions (provided, however, that to the extent that such Holder’s right to participate in any such Distribution would result in such Holder exceeding the Maximum Percentage, then such Holder shall not be entitled to participate in such Distribution to the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to the extent of any such excess) and the portion of such Distribution shall be held in abeyance for such Holder until such time or times as its right thereto would not result in such Holder exceeding the Maximum Percentage, at which time or times, if any, such Holder shall be granted such rights (and any rights under this Section 14 on such initial rights or on any subsequent such rights to be held similarly in abeyance) to the same extent as if there had been no such limitation).

 

15. Vote to Change the Terms of or Issue Series C-1. In addition to any other rights provided by law, except where the vote or written consent of the holders of a greater number of shares is required by law, without first obtaining the affirmative vote at a meeting duly called for such purpose, or the written consent without a meeting, of a majority of the outstanding Series C-1, including the Required Holder, voting together as a single class, the Corporation shall not: (a) amend or repeal any provision of, or add any provision to, its Articles of Incorporation or Bylaws, or file any certificate of designations or articles of amendment of any series of shares of preferred stock, if such action would adversely alter or change in any respect the preferences, rights, privileges or powers, or restrictions provided for the benefit, of the Series C-1, regardless of whether any such action shall be by means of amendment to the Articles of Incorporation or by merger, consolidation or otherwise; (b) increase or decrease (other than by conversion) the authorized number of Series C-1; (c) without limiting any provision of Section 2, create or authorize (by reclassification or otherwise) any new class or series of shares that has a preference over or is on a parity with the Series C-1 with respect to dividends or the distribution of assets on the liquidation, dissolution or winding up of the Corporation; (d) without limiting any provision of Section 2, pay dividends or make any other distribution on any shares of any capital stock of the Corporation junior in rank to the Series C-1, other than a per annum dividend payment in the maximum amount of up to of 8%, in cash or capital stock; (e) issue any Series C-1 other than as provided in Section 2; or (f) without limiting any provision of Section 8 and 9, whether or not prohibited by the terms of the Series C-1, circumvent a right of the Series C-1.

 

20

 

 

16. Transfer of Series C-1. A Holder may transfer some or all of its Series C-1 without the consent of the Corporation in accordance with an exemption from Section 5 of the Securities Act of 1933.

 

17. Reissuance of Preferred Certificates.

 

(a) Transfer. If any Series C-1 are to be transferred, the applicable Holder shall surrender the applicable Series C-1 Certificate to the Corporation, whereupon the Corporation will forthwith issue and deliver upon the order of such Holder a new Series C-1 Certificate (in accordance with Section 17(d)), registered as such Holder may request, representing the outstanding number of Series C-1 being transferred by such Holder and, if less than the entire outstanding number of Series C-1 is being transferred, a new Series C-1 Certificate (in accordance with Section 17(d)) to such Holder representing the outstanding number of Series C-1 not being transferred. Such Holder and any assignee, by acceptance of the Series C-1 Certificate, acknowledge and agree that, by reason of the provisions of Section 5(c)(i) following conversion of any of the Series C-1, the outstanding number of Series C-1 represented by the Series C-1 may be less than the number of Series C-1 stated on the face of the Series C-1.

 

(b) Lost, Stolen or Mutilated Series C-1 Certificate. Upon receipt by the Corporation of evidence reasonably satisfactory to the Corporation of the loss, theft, destruction or mutilation of a Series C-1 Certificate (as to which a written certification and the indemnification contemplated below shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the applicable Holder to the Corporation in customary and reasonable form without the requirement to post a bond or other security and, in the case of mutilation, upon surrender and cancellation of such Series C-1 Certificate, the Corporation shall execute and deliver to such Holder a new Series C-1 Certificate (in accordance with Section 17(d)) representing the applicable outstanding number of Series C-1.

 

(c) Series C-1 Certificate Exchangeable for Different Denominations. Each Series C-1 Certificate is exchangeable, upon the surrender hereof by the applicable Holder at the principal office of the Corporation, for a new Series C-1 Certificate or Series C-1 Certificate(s) (in accordance with Section 17(d)) representing in the aggregate the outstanding number of the Series C-1 in the original Series C-1 Certificate, and each such new certificate will represent such portion of such outstanding number of Series C-1 from the original Series C-1 Certificate as is designated by such Holder at the time of such surrender.

 

21

 

 

(d) Issuance of New Series C-1 Certificate. Whenever the Corporation is required to issue a new Series C-1 Certificate pursuant to the terms of this Certificate of Designations, such new Series C-1 Certificate (i) shall represent, as indicated on the face of such Series C-1 Certificate, the number of Series C-1 remaining outstanding (or in the case of a new Series C-1 Certificate being issued pursuant to Section 17(a) or Section 17(c), the number of Series C-1 designated by such Holder which, when added to the number of Series C-1 represented by the other new Series C-1 Certificates issued in connection with such issuance, does not exceed the number of Series C-1 remaining outstanding under the original Series C-1 Certificate immediately prior to such issuance of new Series C-1 Certificate), and (ii) shall have an issuance date, as indicated on the face of such new Series C-1 Certificate, which is the same as the issuance date of the original Series C-1 Certificate.

 

(e) Book Entry. If the Corporation’s Transfer Agent issues the Series C-1 in book entry format, all provisions of this Certificate of Designations as to delivery of Series C-1 certificates shall be disregarded, and the Transfer Agent shall make entries in the stock transfer records in connection with conversions and transfers, as appropriate.

 

18. Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Certificate of Designations shall be cumulative and in addition to all other remedies available under this Certificate of Designations and any of the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit any Holder’s right to pursue actual and consequential damages for any failure by the Corporation to comply with the terms of this Certificate of Designations. The Corporation covenants to each Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by a Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Corporation (or the performance thereof). The Corporation acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holders and that the remedy at law for any such breach may be inadequate. The Corporation therefore agrees that, in the event of any such breach or threatened breach, each Holder shall be entitled, in addition to all other available remedies, to specific performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and without posting a bond or other security. The Corporation shall provide all information and documentation to a Holder that is requested by such Holder to enable such Holder to confirm the Corporation’s compliance with the terms and conditions of this Certificate of Designations.

 

22

 

 

19. Attorneys Fees.

 

(a) If (i) any shares of Series C-1 are placed in the hands of an attorney to enforce the provisions of this Certificate of Designations or (ii) there occurs any bankruptcy, reorganization, receivership of the Corporation or other proceedings affecting Corporation creditors’ rights and involving a claim under this Certificate of Designations, then the Corporation shall pay the costs incurred by such Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including attorneys’ fees and disbursements.

 

(b) In addition to the obligations under Section 19(a), in connection with the removal of restrictive legends from shares of Series C-1, the Corporation shall pay the reasonable attorney’s fees of counsel to any Holder in any amount not to exceed $750 per opinion of counsel. Such payment(s) shall be made within one Trading Day after receipt of a Conversion Notice or other notice from a Holder.

 

20. Construction; Headings. This Certificate of Designations shall be deemed to be jointly drafted by the Corporation and the Holders and shall not be construed against any such Person as the drafter hereof. The headings of this Certificate of Designations are for convenience of reference and shall not form part of, or affect the interpretation of, this Certificate of Designations. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include” and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,” “hereunder,” “hereof” and words of like import refer to this entire Certificate of Designations instead of just the provision in which they are found. Unless expressly indicated otherwise, all section references are to sections of this Certificate of Designations.

 

21. Failure or Indulgence Not Waiver. No failure or delay on the part of a Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party. This Certificate of Designations shall be deemed to be jointly drafted by the Corporation and all Holders and shall not be construed against any Person as the drafter hereof. Notwithstanding the foregoing, nothing contained in this Section 21 shall permit any waiver of any provision of Section 19.

 

22. Dispute Resolution.

 

(a) In the case of a dispute relating to the Closing Sale Price, a Conversion Price or a fair market value or the arithmetic calculation of a Conversion Rate, (including a dispute relating to the determination of any of the foregoing), the Corporation or the applicable Holder (as the case may be) shall submit the dispute to the other party via electronic mail (A) if by the Corporation, within two Trading Days after the occurrence of the circumstances giving rise to such dispute or (B) if by such Holder at any time after such Holder learned of the circumstances giving rise to such dispute. If such Holder and the Corporation are unable to promptly resolve such dispute relating to such closing bid price, such Closing Sale Price, such Conversion Price or such fair market value, or the arithmetic calculation of such Conversion Rate, at any time after the second Trading Day following such initial notice by the Corporation or such Holder (as the case may be) of such dispute to the Corporation or such Holder (as the case may be), then such Holder may, at its sole option, select an independent, reputable investment bank to resolve such dispute.

 

23

 

 

(b) Such Holder and the Corporation shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in accordance with the first sentence of this Section 22(a) and (B) written documentation supporting its position with respect to such dispute, in each case, no later than 5:00 p.m. (Eastern time) by the fifth Trading Day immediately following the date on which such Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents referred to in the immediately preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”) (it being understood and agreed that if either such Holder or the Corporation fails to so deliver all of the Required Dispute Documentation by the Dispute Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled to (and hereby waives its right to) deliver or submit any written documentation or other support to such investment bank with respect to such dispute and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to such investment bank prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Corporation and such Holder or otherwise requested by such investment bank, neither the Corporation nor such Holder shall be entitled to deliver or submit any written documentation or other support to such investment bank in connection with such dispute (other than the Required Dispute Documentation).

 

(c) The Corporation and such Holder shall cause such investment bank to determine the resolution of such dispute and notify the Corporation and such Holder of such resolution no later than 10 Trading Days immediately following the Dispute Submission Deadline. The fees and expenses of such investment bank shall be borne solely by the Corporation, and such investment bank’s resolution of such dispute shall be final and binding upon all parties absent manifest error.

 

23. Notices. The Corporation shall provide each Holder of Series C-1 with prompt written notice of all actions taken pursuant to the terms of this Certificate of Designations, including in reasonable detail a description of such action and the reason therefor. Whenever notice is required to be given under this Certificate of Designations, unless otherwise provided herein, such notice must be in writing and shall be given in accordance with Section 9(f) of the Exchange Agreements or in accordance with any other instructions provided by the Holder to the Corporation. The Corporation shall provide each Holder with prompt written notice of all actions taken pursuant to this Certificate of Designations, including in reasonable detail a description of such action and the reason therefore. Without limiting the generality of the foregoing, the Corporation shall give written notice to each Holder (i) immediately upon any adjustment of the Conversion Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least fifteen days prior to the date on which the Corporation closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock, (B) with respect to any grant, issuances, or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to such Holder. All notices shall be by email or recognized overnight delivery service, next Trading Day delivery using the addresses of the Corporation as provided to the Holders and the addresses of any Holder as provided by such Holder to the Corporation. The Corporation and the Holders may change their addresses by notice by the Corporation to all Holders or any Holder to the Corporation.

 

24

 

 

24. Governing Law; Exclusive Jurisdiction. This Certificate of Designations shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Certificate of Designations shall be governed by, the internal laws of the State of Nevada, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Nevada or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Nevada. Except as otherwise required by this Certificate of Designations, the Corporation hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in New York County, New York, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein (i) shall be deemed or operate to preclude any Holder from bringing suit or taking other legal action against the Corporation in any other jurisdiction to collect on the Corporation’s obligations to such Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of such Holder or (ii) shall limit, or shall be deemed or construed to limit, any provision of Section 22. The Corporation hereby irrevocably waives any right it may have to, and agrees not to request, a jury trial for the adjudication of any dispute hereunder or in connection with or arising out of this Certificate of Designations or any transaction contemplated hereby.

 

25. Severability. If any provision of this Certificate of Designations is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Certificate of Designations so long as this Certificate of Designations as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

25

 

 

26. Stockholder Matters; Amendment.

 

(a) Stockholder Matters. Any stockholder action, approval or consent required, desired or otherwise sought by the Corporation pursuant to the NRS, the Articles of Incorporation, this Certificate of Designations or otherwise with respect to the issuance of Series C-1 may be effected by written consent of the Corporation’s stockholders or at a duly called meeting of the Corporation’s stockholders, all in accordance with the applicable rules and regulations of the NRS. This provision is intended to comply with the applicable sections of the NRS permitting stockholder action, approval and consent affected by written consent in lieu of a meeting.

 

(b) Amendment. This Certificate of Designations or any provision hereof (other than Section 5(d)) may be modified or amended or the provisions hereof waived with the written consent of the Corporation and the Holders of a majority of the Series C-1 currently outstanding, which must include Cavalry as long as Cavalry (or any of its Affiliates) owns at least 5% of the Series C-1 issued on the Initial Issuance Date. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party.

 

27. Disclosure. Upon receipt or delivery by the Corporation of any notice in accordance with the terms of this Certificate of Designations, unless the Corporation has in good faith determined that the matters relating to such notice do not constitute material, non-public information relating to the Corporation or any of its Subsidiaries, the Corporation shall within one Trading Day after any such receipt or delivery publicly disclose such material, non-public information on a Current Report on Form 8-K or otherwise. In the event that the Corporation believes that a notice contains material, non-public information relating to the Corporation or any of its Subsidiaries, the Corporation so shall indicate to such Holder contemporaneously with delivery of such notice, and in the absence of any such indication, such Holder shall be allowed to presume that all matters relating to such notice do not constitute material, non-public information relating to the Corporation or any of its Subsidiaries. If the Corporation or any of its Subsidiaries provides material non-public information to a Holder that is not simultaneously filed in a Current Report on Form 8-K and such Holder has not agreed to receive such material non-public information, the Corporation hereby covenants and agrees that such Holder shall not have any duty of confidentiality to the Corporation, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents with respect to, or a duty to any of the foregoing not to trade on the basis of, such material non-public information. Nothing contained in this Section 27 shall limit any obligations of the Corporation, or any rights of any Holder, under the Exchange Agreement.

 

* * * * *

 

26

 

 

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designations of Series C-1 Convertible Preferred Stock of OncBioMune Pharmaceuticals, Inc. to be signed by its Chief Executive Officer on this 18th day of May, 2020.

 

  ONCBIOMUNE PHARMACEUTICALS, INC.
     
  By: /s/ Andrew Kucharchuk
    Andrew Kucharchuk, Chief Executive Officer

 

27

 

 

EXHIBIT I

 

ONCBIOMUNE PHARMACEUTICALS, INC.

CONVERSION NOTICE

 

Reference is made to the Certificate of Designations, Preferences and Rights of the Series C-1 Convertible Preferred Stock of OncBioMune Pharmaceuticals, Inc. (the “Certificate of Designations”). In accordance with and pursuant to the Certificate of Designations, the undersigned hereby elects to convert the number of shares of Series C-1 Convertible Preferred Stock, $0.0001 par value per share (the “Series C-1”), of OncBioMune Pharmaceuticals, Inc., a Nevada corporation (the “Corporation”), indicated below into shares of common stock, $0.0001 par value per share (the “Common Stock”), of the Corporation, as of the date specified below.

 

 

Date of

Conversion:

 

 

 

Aggregate number of Series C-1 to

be converted

     
 

Aggregate Stated Value of such

Series C-1 to be converted:

 
     
 

Aggregate accrued and unpaid

dividends and accrued with respect

to such Series C-1 and such

aggregate dividends to be converted:

 

 

 

AGGREGATE CONVERSION

AMOUNT TO BE CONVERTED:

 

 

Please confirm the following information:

 

  Conversion Price:
     

Number of shares of Common

Stock to be issued:

 

Please issue the Common Stock into which the applicable Series C-1 are being converted to Holder, or for its benefit, as follows:

 

  [  ] Check here if requesting delivery as a certificate to the following name and to the following address:

 

  Issue to:  
     
     

 

  [  ] Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows:

 

  DTC Participant:  
  DTC Number:  
 

Account

Number:

 

 

Date: _____________ __, __________

 

________________________________

Name of Registered Holder

 

By:    
Name:    
Title:    

 

Tax ID:  
Facsimile:    

E-mail Address:

 

 

 

 

EXHIBIT II

 

ACKNOWLEDGMENT

 

The Corporation hereby acknowledges this Conversion Notice and hereby directs _________________ to issue the above indicated number of shares of Common Stock in accordance with the Transfer Agent Instructions dated _____________, 20__ from the Corporation and acknowledged and agreed to by ________________________.

 

  ONCBIOMUNE PHARMACEUTICALS, INC.
     
  By:                      
Name:  
  Title:  

 

 

 

 

Exhibit 3.2

 

CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF THE

SERIES C-2 CONVERTIBLE PREFERRED STOCK OF

ONCBIOMUNE PHARMACEUTICALS, INC.

 

The undersigned, Andrew Kucharchuk, President and Chief Executive Officer of OncBioMune Pharmaceuticals, Inc. (the “Corporation”), a corporation organized and existing under Chapter 78 of the Nevada Revised Statues (the “NRS”), hereby does certify:

 

That pursuant to the authority expressly conferred upon the Board of Directors of the Corporation by the Corporation’s Articles of Incorporation, as amended, and Section 78.315 of the NRS, the Board of Directors on April 28, 2020, adopted the following resolution determining it desirable and in the best interests of the Corporation and its shareholders for the Corporation to create a series of Six Thousand (6,000) shares of preferred stock designated as “Series C-2 Convertible Preferred Stock”, none of which shares have been issued.

 

RESOLVED, that the Board of Directors designates the Series C-2 Convertible Preferred Stock and the number of shares constituting such series, and fixes the rights, powers, preferences, privileges and restrictions relating to such series in addition to any set forth in the Articles of Incorporation as follows:

 

TERMS OF SERIES C-2 CONVERTIBLE PREFERRED STOCK

 

1. Certain Defined Terms. For purposes of this Certificate of Designations, the following terms shall have the following meanings:

 

(a) “1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

 

(b) “Additional Amount” means, as of the applicable date of determination, with respect to each share of Series C-2, all dividends, whether declared or not, on such share of Series C-2.

 

(c) “Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person, it being understood for purposes of this definition that “control” of a Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

 

(d) “Authorized Failure Shares” shall have the meaning given to it in Section 12 hereto.

 

(e) “Authorized Share Allocation” shall have the meaning given to it in Section 12 hereto.

 

 

 

 

(f) “Authorized Share Failure” shall have the meaning given to it in Section 12 hereto.

 

(g) “Buy-In Price” shall have the meaning given to it in Section 5 hereto.

 

(h) “Cavalry” shall have the meaning given to it in Section 3 hereto.

 

(i) “Certificate of Designations” means this Certificate Of Designations, Preferences and Rights of the Series C-2 Convertible Preferred Stock of the Corporation.

 

(j) “Closing Sale Price” means, for any security as of any date, (i) the last closing price for such security on the Principal Market, as reported by Bloomberg, or, (2) if the foregoing does not apply, the lowest reported sale price for such date on the Principal Market, or (3) fair market value as determined by the Board of Directors of the Company.

 

(k) “Common Stock” means (i) the Corporation’s shares of common stock, $0.0001 par value per share, and (ii) any capital stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.

 

(l) “Conversion Amount” shall have the meaning given to it in Section 5 hereto.

 

(m) “Conversion Date” shall have the meaning given to it in Section 5 hereto.

 

(n) “Conversion Failure” shall have the meaning given to it in Section 5 hereto.

 

(o) “Conversion Notice” shall have the meaning given to it in Section 5 hereto.

 

(p) “Conversion Price” shall have the meaning given to it in Section 5 hereto.

 

(q) “Conversion Rate” shall have the meaning given to it in Section 5 hereto.

 

(r) “Convertible Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares of Common Stock.

 

(s) “Corporate Event” shall have the meaning given to it in Section 7 hereto.

 

(t) “Corporation” shall have the meaning given to it in the preamble hereto.

 

(u) “Dispute Submission Deadline” shall have the meaning given to it in Section 22 hereto.

 

2

 

 

(v) “Distributions” shall have the meaning given to it in Section 14 hereto.

 

(w) “DTC” shall have the meaning given to it in Section 5 hereto.

 

(x) “Excess Shares” shall have the meaning given to it in Section 5 hereto.

 

(y) “Exchange Agreements” means those certain Exchange Agreements by and among the Corporation and the holders of Series C-2, effective as of the Initial Issuance Date, as may be amended from time in accordance with the terms thereof.

 

(z) “Fundamental Transaction” shall have the meaning given to it in Section 7.

 

(aa) “Holder” or “Holders” means a holder of Series C-2.

 

(bb) “Initial Issuance Date” means the date the first share of Series C-2 is issued to any Holder hereof.

 

(cc) “Junior Stock” shall have the meaning given to it in Section 3 hereto.

 

(dd) “Liquidation Event” means, whether in a single transaction or series of transactions, the voluntary or involuntary liquidation, dissolution or winding up of the Corporation or such Subsidiaries the assets of which constitute all or substantially all of the assets of the business of the Corporation and its Subsidiaries, taken as a whole.

 

(ee) “Liquidation Funds” shall have the meaning given to it in Section 13 hereto.

 

(ff) “Maximum Percentage” shall have the meaning given to it in Section 5 hereto.

 

(gg) “NRS” shall have the meaning given to it in the preamble hereto.

 

(hh) “Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

 

(ii) “Parity Stock” shall have the meaning given to it in Section 3 hereto.

 

(jj) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity or a government or any department or agency thereof.

 

(kk) “Principal Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market, OTCPink, OTCQB, or OTCQX and any successor markets thereto.

 

(ll) “Purchase Rights” shall have the meaning given to it in Section 7 hereto.

 

3

 

 

(mm) “Register” shall have the meaning given to it in Section 5 hereto.

 

(nn) “Registered Series C-2” shall have the meaning given to it in Section 5 hereto.

 

(oo) “Reported Outstanding Share Number” shall have the meaning given to it in Section 5 hereto.

 

(pp) “Required Dispute Documentation” shall have the meaning given to it in Section 22 hereto.

 

(qq) “Required Holder” shall have the meaning given to it in Section 3 hereto.

 

(rr) “Required Reserve Amount” shall have the meaning given to it in Section 12 hereto.

 

(ss) “SEC” means the Securities and Exchange Commission or the successor thereto.

 

(tt) “Senior Preferred Stock” shall have the meaning given to it in Section 3 hereto.

 

(uu) “Series C-2” shall have the meaning given to it in Section 2 hereto.

 

(vv) “Series C-2 Certificates” shall have the meaning given to it in Section 5 hereto.

 

(ww) “Share Delivery Deadline” shall have the meaning given to it in Section 5 hereto.

 

(xx) “Stated Value” shall mean $410.27 per share, subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations, subdivisions or other similar events occurring after the Initial Issuance Date with respect to the Series C-2.

 

(yy) “Subsidiary” when used with respect to any Person, means any corporation or other organization, whether incorporated or unincorporated, of which (A) at least a majority of the securities or other interests having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such Person (through ownership of securities, by contract or otherwise) or (B) such Person or any subsidiary of such Person is a general partner of any general partnership or a manager of any limited liability company.

 

(zz) “Trading Day” means any day on which the Common Stock is eligible to be traded on the Principal Market or securities market on which the Common Stock is then traded, provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00 p.m., Eastern time) unless such day is otherwise designated as a Trading Day in writing by the Holder.

 

4

 

 

(aaa) “Transaction Documents” means the Exchange Agreements, this Certificate of Designations, and each of the other agreements and instruments entered into or delivered by the Corporation in connection with the transactions contemplated by the Exchange Agreements, all as may be amended from time to time in accordance with the terms thereof.

 

(bbb) “Transfer Agent” shall have the meaning given to it in Section 5 hereto.

 

(ccc) “Triggering Event” shall have the meaning given to it in Section 6 hereto.

 

(ddd) “Triggering Event Conversion” shall have the meaning given to it in Section 5 hereto.

 

(eee) “Triggering Event Conversion Amount” shall have the meaning given to it in Section 5 hereto.

 

(fff) “Triggering Event Conversion Date” shall have the meaning given to it in Section 5 hereto.

 

(ggg) “Triggering Event Conversion Price” means while a Triggering Event is in effect 80% of the prior Conversion Price.

 

(hhh) “Triggering Event Notice” shall have the meaning given to it in Section 6 hereto.

 

(iii) “Triggering Event Right Commencement Date” shall have the meaning given to it in Section 6 hereto.

 

(jjj) “Triggering Event Right Expiration Date” shall have the meaning given to it in Section 6 hereto.

 

2. Designation and Number of Shares. There shall hereby be created and established a series of preferred stock of the Corporation designated as “Series C-2 Convertible Preferred Stock” (the “Series C-2”). The authorized number of Series C-2 shall be Six Thousand (6,000) shares. Each share of Series C-2 shall have a par value of $0.0001.

 

5

 

 

3. Ranking. Until such time as the holders of at least a majority of the outstanding Series C-2, which shall include Cavalry Fund I LP (“Cavalry”) as long as it owns at least 5% of the Series C-2 (the “Required Holder”), expressly consent to the creation of Parity Stock or Senior Preferred Stock (each as defined below) in accordance with Section 15, the Series C-2 shall rank pari passu with respect to the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Corporation with the Series D-1 Convertible Preferred Stock of the Corporation and the Series D-2 Convertible Preferred Stock of the Corporation (the “Parity Stock”) , and all other shares of capital stock of the Corporation shall be junior in rank to all Series C-2 with respect to the preferences as to dividends (except for the Common Stock, which shall be pari passu as provided in Section 4), distributions and payments upon the liquidation, dissolution and winding up of the Corporation (such junior stock is referred to herein collectively as “Junior Stock”). The rights of all such Junior Stock shall be subject to the rights, powers, preferences and privileges of the Series C-2. Without limiting any other provision of this Certificate of Designations, without the prior express consent of the Required Holder, the Corporation shall not hereafter authorize or issue any additional or other shares of capital stock that is (i) of senior rank to the Series C-2 in respect of the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Corporation (collectively, the “Senior Preferred Stock”), or (ii) Parity Stock. Except as provided for herein, in the event of the merger or consolidation of the Corporation into another corporation, the Series C-2 shall maintain their relative rights, powers, designations, privileges and preferences provided for herein for a period of at least two years following such merger or consolidation and no such merger or consolidation shall cause result inconsistent therewith.

 

4. Dividends and Distributions. Each Holder of Series C-2 shall be entitled to receive dividends or distributions on each share of Series C-2 on an “as converted” into Common Stock basis as provided in Section 5 hereof when and if dividends are declared on the Common Stock by the Board of Directors. Dividends shall be paid in cash or property, as determined by the Board of Directors.

 

5. Conversion. At any time after the Initial Issuance Date, each share of Series C-2 shall be convertible into validly issued, fully paid and non-assessable shares of Common Stock, on the terms and conditions set forth in this Section 5.

 

(a) Holder’s Conversion Right. Subject to the provisions of Section 5(d), at any time or times on or after the Initial Issuance Date, each Holder shall be entitled to convert any portion of the outstanding Series C-2 held by such Holder into validly issued, fully paid and non-assessable shares of Common Stock in accordance with Section 5(c) at the Conversion Rate (as defined below). The Corporation shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance of a fraction of a share of Common Stock, the Corporation shall round such fraction of a share of Common Stock up to the nearest whole share. The Corporation shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including fees and expenses of the Transfer Agent (as defined below)) that may be payable with respect to the issuance and delivery of Common Stock upon conversion of any Conversion Amount (as defined below).

 

(b) Conversion Rate. The number of shares of Common Stock issuable upon conversion of any share of Series C-2 pursuant to Section 5(a) shall be determined by dividing (x) the Conversion Amount of such share of Series C-2 by (y) the Conversion Price (the “Conversion Rate”):

 

6

 

 

(i) “Conversion Amount” means, with respect to each share of Series C-2, as of the applicable date of determination, the sum of (1) the Stated Value thereof plus (2) the Additional Amount thereon.

 

(ii) “Conversion Price” means, with respect to each share of Series C-2, as of any Conversion Date or other date of determination, $0.00275, subject to adjustment as provided herein including by the existence of a Triggering Event Conversion Price.

 

(c) Mechanics of Conversion. The conversion of each share of Series C-2 shall be conducted in the following manner:

 

(i) Optional Conversion. To convert a share of Series C-2 into shares of Common Stock on any date after the Initial Issuance Date (a “Conversion Date”), a Holder shall deliver, via electronic mail or otherwise, for receipt on or prior to 11:59 p.m., Eastern time, on such date, a copy of an executed notice of conversion of the share(s) of Series C-2 subject to such conversion in the form attached hereto as Exhibit I (the “Conversion Notice”) to the Corporation. If required by Section 5(c)(iii), within three Trading Days following a conversion of any such Series C-2 as aforesaid, such Holder shall surrender to a nationally recognized overnight delivery service for delivery to the Corporation the original certificates representing the Series C-2 (the “Series C-2 Certificates”) so converted as aforesaid (or an indemnification undertaking with respect to the Series C-2 in the case of its loss, theft or destruction as contemplated by Section 17). On or before the first Trading Day following the date of receipt of a Conversion Notice, the Corporation shall transmit by electronic mail an acknowledgment of confirmation, in the form attached hereto as Exhibit II, of receipt of such Conversion Notice to such Holder and the Corporation’s transfer agent (the “Transfer Agent”), which confirmation shall constitute an instruction to the Transfer Agent to process such Conversion Notice in accordance with the terms herein. On or before the second Trading Day following the date of receipt of a Conversion Notice (or such earlier date as required pursuant to the 1934 Act or other applicable law, rule, regulation, Trading Market Rule or other customary applicable policy for the settlement of a trade initiated on the applicable Conversion Date of such shares of Common Stock issuable pursuant to such Conversion Notice) (the “Share Delivery Deadline”), the Corporation shall (1) provided that the Transfer Agent is participating in The Depository Trust Corporation’s (“DTC”) Fast Automated Securities Transfer Program, credit such aggregate number of shares of Common Stock to which such Holder shall be entitled to such Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system, or (2) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver (via reputable overnight courier) to the address as specified in such Conversion Notice, a certificate, registered in the name of such Holder or its designee, for the number of shares of Common Stock to which such Holder shall be entitled. If the number of Series C-2 represented by the Series C-2 Certificate(s) submitted for conversion pursuant to Section 5(c)(ii) is greater than the number of Series C-2 being converted, then the Corporation shall, as soon as practicable and in no event later than two Trading Days after receipt of the Series C-2 Certificate(s) and at its own expense, issue and deliver to such Holder (or its designee) a new Series C-2 Certificate (in accordance with Section 17(d)) representing the number of Series C-2 not converted. The Person or Persons entitled to receive the shares of Common Stock issuable upon a conversion of Series C-2 shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion Date.

 

7

 

 

(ii) Corporation’s Failure to Timely Convert. If the Corporation shall fail, for any reason or for no reason, on or prior to the applicable Share Delivery Deadline, to issue to such Holder a certificate for the number of shares of Common Stock to which such Holder is entitled and register such shares of Common Stock on the Corporation’s share register or to credit such Holder’s or its designee’s balance account with DTC for such number of shares of Common Stock to which such Holder is entitled upon such Holder’s conversion of any Conversion Amount (as the case may be) (a “Conversion Failure”), then, in addition to all other remedies available to such Holder, (X) the Corporation shall pay in cash to such Holder on each day after the Share Delivery Deadline and during such Conversion Failure an amount equal to 2% of the product of (A) the sum of the number of shares of Common Stock not issued to such Holder on or prior to the Share Delivery Deadline and to which such Holder is entitled, multiplied by (B) the closing price of the Common Stock on the applicable Conversion Date and ending on the applicable Share Delivery Deadline, and (Y) such Holder, upon written notice to the Corporation, may void its Conversion Notice with respect to, and retain or have returned, as the case may be, all, or any portion, of such Series C-2 that has not been converted pursuant to such Conversion Notice; provided that the voiding of a Conversion Notice shall not affect the Corporation’s obligations to make any payments which have accrued prior to the date of such notice pursuant to this Section 5(c)(i) or otherwise. In addition to the foregoing, if on or prior to the Share Delivery Deadline the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, the Corporation shall fail to issue and deliver to such Holder (or its designee) a certificate and register such shares of Common Stock on the Corporation’s share register or, if the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program, the Transfer Agent shall fail to credit the balance account of such Holder or such Holder’s designee with DTC for the number of shares of Common Stock to which such Holder is entitled upon such Holder’s exercise hereunder or pursuant to the Corporation’s obligation pursuant to clause (II) below and if on or after such Share Delivery Deadline such Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Holder of all or any portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number of shares of Common Stock, issuable upon such conversion that such Holder so is entitled to receive from the Corporation, then, in addition to all other remedies available to such Holder, the Corporation shall, within two Trading Days after receipt of such Holder’s request and in such Holder’s discretion, either: (I) pay cash to such Holder in an amount equal to such Holder’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including by any other Person in respect, or on behalf, of such Holder) (the “Buy-In Price”), at which point the Corporation’s obligation to so issue and deliver such certificate or credit such Holder’s balance account with DTC for the number of shares of Common Stock to which such Holder is entitled upon such Holder’s conversion hereunder (as the case may be) (and to issue such shares of Common Stock) shall terminate, or (II) promptly honor its obligation to so issue and deliver to such Holder a certificate or certificates representing such shares of Common Stock or credit such Holder’s balance account with DTC for the number of shares of Common Stock to which such Holder is entitled upon such Holder’s conversion hereunder (as the case may be) and pay cash to such Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (x) such number of shares of Common Stock to which such Holder is entitled multiplied by (y) the lowest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date of the applicable Conversion Notice and ending on the date of such issuance and payment under this clause (ii).

 

8

 

 

(iii) Registration; Book-Entry. The Corporation shall maintain a register (the “Register”) for the recordation of the names and addresses of the Holders of each share of Series C-2 and the Stated Value of the Series C-2 (the “Registered Series C-2”). The entries in the Register shall be conclusive and binding for all purposes absent manifest error. The Corporation and each Holder of the Series C-2 shall treat each Person whose name is recorded in the Register as the owner of a share of Series C-2 for all purposes (including the right to receive payments and dividends hereunder) notwithstanding notice to the contrary. A registered share of Series C-2 may be assigned, transferred or sold only by registration of such assignment or sale on the Register. Upon its receipt of a written request to assign, transfer or sell one or more Registered Series C-2 by such Holder thereof, the Corporation shall record the information contained therein in the Register and issue one or more new shares of Series C-2 in the same aggregate Stated Value as the Stated Value of the surrendered Series C-2 to the designated assignee or transferee pursuant to Section 17, provided that if the Corporation does not so record an assignment, transfer or sale (as the case may be) of such Series C-2 shares within two Trading Days of such a request, then the Register shall be automatically deemed updated to reflect such assignment, transfer or sale (as the case may be). Notwithstanding anything to the contrary set forth in this Section 5, following conversion of any Series C-2 in accordance with the terms hereof, the applicable Holder shall not be required to physically surrender such Series C-2 to the Corporation unless (A) the full or remaining number of Series C-2 shares represented by the applicable Series C-2 Certificate are being converted (in which event such certificate(s) shall be delivered to the Corporation as contemplated by this Section 5(c)(ii)) or (B) such Holder has provided the Corporation with prior written notice (which notice may be included in a Conversion Notice) requesting reissuance of Series C-2 upon physical surrender of the applicable Series C-2 Certificate. Each Holder and the Corporation shall maintain records showing the Stated Value and dividends converted and/or paid (as the case may be) and the dates of such conversions and/or payments (as the case may be) or shall use such other method, reasonably satisfactory to such Holder and the Corporation, so as not to require physical surrender of a Series C-2 Certificate upon conversion. If the Corporation does not update the Register to record such Stated Value and dividends converted and/or paid (as the case may be) and the dates of such conversions and/or payments (as the case may be) within two Trading Days of such occurrence, then the Register shall be automatically deemed updated to reflect such occurrence. In the event of any dispute or discrepancy, such records of such Holder establishing the number of Series C-2 to which the record holder is entitled shall be controlling and determinative in the absence of manifest error. A Holder and any transferee or assignee, by acceptance of a certificate, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of any Series C-2, the number of Series C-2 represented by such certificate may be less than the number of Series C-2 stated on the face thereof. Each Series C-2 Certificate shall bear the following legend:

 

9

 

 

ANY TRANSFEREE OR ASSIGNEE OF THIS CERTIFICATE SHOULD CAREFULLY REVIEW THE TERMS OF THE CORPORATION’S CERTIFICATE OF DESIGNATIONS RELATING TO THE SHARES OF SERIES C-2 CONVERTIBLE PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE, INCLUDING SECTION 5(c)(ii) THEREOF. THE NUMBER OF SHARES OF SERIES C-2 CONVERTIBLE PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE MAY BE LESS THAN THE NUMBER OF SHARES OF SERIES C-2 CONVERTIBLE PREFERRED STOCK STATED ON THE FACE HEREOF PURSUANT TO SECTION 5(c)(ii) OF THE CERTIFICATE OF DESIGNATIONS RELATING TO THE SHARES OF SERIES C-2 CONVERTIBLE PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE.

 

(iv) Pro Rata Conversion; Disputes. In the event that the Corporation receives a Conversion Notice from more than one Holder for the same Conversion Date and the Corporation can convert some, but not all, of such Series C-2 submitted for conversion, the Corporation shall convert from each Holder electing to have Series C-2 converted on such date a pro rata amount of such Holder’s Series C-2 submitted for conversion on such date based on the number of Series C-2 submitted for conversion on such date by such Holder relative to the aggregate number of Series C-2 submitted for conversion on such date. In the event of a dispute as to the number of shares of Common Stock issuable to a Holder in connection with a conversion of Series C-2, the Corporation shall issue to such Holder the number of shares of Common Stock not in dispute and resolve such dispute in accordance with Section 22.

 

(d) Limitation on Beneficial Ownership. The Corporation shall not effect the conversion of any of the Series C-2 held by a Holder, and such Holder shall not have the right to convert any of the Series C-2 held by such Holder pursuant to the terms and conditions of this Certificate of Designations and any such conversion shall be null and void and treated as if never made, to the extent that after giving effect to such conversion, such Holder would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the shares of Common Stock outstanding immediately after giving effect to such conversion (which provision may be increased to a maximum of 9.9% by such Holder by written notice from such Holder to the Corporation, which notice shall be effective 61 calendar days after the date of such notice). For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by such Holder shall include the number of shares of Common Stock held by such Holder plus the number of shares of Common Stock issuable upon conversion of the Series C-2 with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (A) conversion of the remaining, nonconverted Series C-2 beneficially owned by such Holder and (B) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Corporation (including any convertible notes, convertible preferred stock or warrants) beneficially owned by such Holder subject to a limitation on conversion or exercise analogous to the limitation contained in this Section 5(d). For purposes of this Section 5(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the 1934 Act and the Rules thereunder. For purposes of determining the number of outstanding shares of Common Stock a Holder may acquire upon the conversion of such Series C-2 without exceeding the Maximum Percentage, such Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Corporation’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the SEC, as the case may be, (y) a more recent public announcement by the Corporation or (z) any other written notice by the Corporation or the Transfer Agent, if any, setting forth the number of shares of Common Stock outstanding (the “Reported Outstanding Share Number”). If the Corporation receives a Conversion Notice from a Holder at a time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Corporation shall notify such Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Conversion Notice would otherwise cause such Holder’s beneficial ownership, as determined pursuant to this Section 5(d), to exceed the Maximum Percentage, such Holder must notify the Corporation of a reduced number of shares of Common Stock to be purchased pursuant to such Conversion Notice. For any reason at any time, upon the written or oral request of any Holder, the Corporation shall within one Trading Day confirm orally and in writing or by electronic mail to such Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Corporation, including such Series C-2, by such Holder since the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of shares of Common Stock to a Holder upon conversion of such Series C-2 results in such Holder being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which such Holder’s beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed null and void and shall be cancelled ab initio, and such Holder shall not have the power to vote or to transfer the Excess Shares. For purposes of clarity, the shares of Common Stock issuable to a Holder pursuant to the terms of this Certificate of Designations in excess of the Maximum Percentage shall not be deemed to be beneficially owned by such Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to convert such Series C-2 pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of convertibility. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 5(d) to the extent necessary to correct this paragraph (or any portion of this paragraph) which may be defective or inconsistent with the intended beneficial ownership limitation contained in this Section 5(d) or to make changes or supplements necessary or desirable to properly give effect to such limitation. The provisions of this Section 5(d) shall be of no further force or effect if the Holder participates in a subsequent transaction with the Corporation which results in the Holder beneficially owning in excess of 4.99% of the number of shares of the Common Stock outstanding which shall include securities convertible into Common Stock which do not contain a beneficial ownership limitation.

 

10

 

 

(e) Triggering Event Conversion.

 

(i) General. Subject to Section 5(d), at any time during the period commencing on the date of the occurrence of a Triggering Event (defined below in Section 6(a)) and ending on the date of the cure of such Triggering Event, a Holder may, at such Holder’s option, by delivery of a Conversion Notice to the Corporation (the date of any such Conversion Notice, each an “Triggering Event Conversion Date”), convert all, or any number of Series C-2 (such Conversion Amount of the Series C-2 to be converted pursuant to this Section 5(e), the “Triggering Event Conversion Amount”) into shares of Common Stock at the Triggering Event Conversion Price (each, a “Triggering Event Conversion”).

 

(ii) Mechanics of Triggering Event Conversion. On or after any Triggering Event Conversion Date until the Triggering Event has been cured, a Holder may voluntarily convert any Triggering Event Conversion Amount pursuant to Section 5(b)(ii) (with the “Triggering Event Conversion Price” replacing the “Conversion Price” for all purposes hereunder with respect to such Triggering Event Conversion by designating in the Conversion Notice delivered pursuant to this Section 5(e) of this Certificate of Designations that such Holder is electing to use the Triggering Event Conversion Price for such conversion.

 

6. Triggering Events.

 

(a) Triggering Event. Each of the following events shall constitute a “Triggering Event”:

 

(i) the Corporation does not meet the current public information requirements under Rule 144 in respect of the shares of Common Stock issuable upon conversion of the Series C-2;

 

11

 

 

(ii) the Corporation ceases to be subject to the periodic reporting provisions of the 1934 Act.

 

(iii) the suspension from trading or failure of the Common Stock to be trading or listed (as applicable) on a Principal Market for a period of ten consecutive Trading Days;

 

(iv) the Corporation’s written notice to any holder of Series C-2, including, without limitation, by way of public announcement or through any of its agents, at any time, of its intention not to comply, as required, with a request for conversion of any Series C-2 into shares of Common Stock that is requested in accordance with the provisions of this Certificate of Designations, other than pursuant to Section 5(d) hereof;

 

(v) at any time following the 10th consecutive day that a Holder’s Authorized Share Allocation (as defined in Section 12 below) is less than 125% of the number of shares of Common Stock that such Holder would be entitled to receive upon a conversion, in full, of all of the Series C-2 then held by such Holder (without regard to any limitations on conversion set forth in this Certificate of Designations);

 

(vi) the Corporation’s failure to pay to any Holder any dividend on any dividend date declared by the Board or any other amount when and as due under this Certificate of Designations, the Exchange Agreements or any other Transaction Document (in each case, whether or not permitted pursuant to the NRS), except, in the case of a failure to pay dividends when and as due, in each such case only if such failure remains uncured for a period of at least ten Trading Days;

 

(vii) the Corporation either (A) fails to cure a Conversion Failure by delivery of the required number of shares of Common Stock within two Trading Days after the applicable Conversion Date on two or more occasions or (B) fails to remove any restrictive legend on any certificate or any shares of Common Stock issued to such Holder upon conversion of any Series C-2 or as and when required by this Certificate of Designations unless otherwise then prohibited by applicable federal securities laws, and any such failure to remove the legend remains uncured for at least five Trading Days;

 

(viii) bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted by or against the Corporation or any Subsidiary which shall not be dismissed within thirty days of their initiation;

 

(ix) the commencement by the Corporation or any Subsidiary of a voluntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree, order, judgment or other similar document in respect of the Corporation or any Subsidiary in an involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable federal, state or foreign law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Corporation or any Subsidiary or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the execution of a composition of debts, or the occurrence of any other similar federal, state or foreign proceeding, the taking of corporate action by the Corporation or any Subsidiary in furtherance of any such action or the taking of any action by any Person to commence a Uniform Commercial Code foreclosure sale or any other similar action under federal, state or foreign law;

 

12

 

 

(x) the entry by a court of (i) a decree, order, judgment or other similar document in respect of the Corporation or any Subsidiary of an involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or (ii) a decree, order, judgment or other similar document adjudging the Corporation or any Subsidiary as bankrupt or insolvent, or approving as properly filed a petition seeking liquidation, reorganization, arrangement, adjustment or composition of or in respect of the Corporation or any Subsidiary under any applicable federal, state or foreign law or (iii) a decree, order, judgment or other similar document appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Corporation or any Subsidiary or of any substantial part of its property, or ordering the winding up or liquidation of its affairs;

 

(xi) a final judgment or judgments for the payment of money in excess of $1,000,000 are rendered against the Corporation and/or any of its Subsidiaries and which judgments are not, within ten days after the entry thereof, bonded, discharged, settled or stayed pending appeal, or are not discharged within thirty days after the expiration of such stay; provided, however, any judgment which is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $1,000,000 amount set forth above so long as the Corporation provides each Holder a written statement from such insurer or indemnity provider (which written statement and indemnity provider shall be reasonably satisfactory to each Holder) to the effect that such judgment is covered by insurance or an indemnity and the Corporation or such Subsidiary (as the case may be) will receive the proceeds of such insurance or indemnity within 10 days of the issuance of such judgment provided further that any judgment rendered on the Corporation as a result of successor liability or any other manner which is related to any litigation which was disclosed in writing by Avant Diagnostics, Inc. prior to its acquisition by the Corporation shall not be included in calculating the $1,000,000 amount set forth above;

 

(xii) other than as specifically set forth in another clause of this Section 6(a), the Corporation or any Subsidiary breaches any representation or warranty in any material respect (other than representations or warranties subject to material adverse effect or materiality, which may not be breached in any respect) or any covenant or other term or condition of any Transaction Document, except, in the case of a breach of a covenant or other term or condition that is curable, only if such breach remains uncured for a period of five consecutive Trading Days;

 

13

 

 

(xiii) a false or inaccurate certification (including a false or inaccurate deemed certification) by the Corporation as to whether any Triggering Event has occurred.

 

(b) Notice of a Triggering Event. Upon the occurrence of a Triggering Event with respect to the Series C-2, the Corporation shall within three Trading Days deliver written notice thereof via facsimile or electronic mail and overnight courier (with next day delivery specified) (an “Triggering Event Notice”) to each Holder.

 

7. Rights Upon Issuance of Purchase Rights and Other Corporate Events.

 

(a) Purchase Rights. In addition to any adjustments pursuant to Section 8 and 9 below, if at any time the Corporation grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to all or substantially all of the record holders of any class of Common Stock (the “Purchase Rights”), then each Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of all the Series C-2 (without taking into account any limitations or restrictions on the convertibility of the Series C-2) held by such Holder immediately prior to the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that such Holder’s right to participate in any such Purchase Right would result in such Holder exceeding the Maximum Percentage, then such Holder shall not be entitled to participate in such Purchase Right to the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Purchase Right (and beneficial ownership) to the extent of any such excess) and such Purchase Right to such extent shall be held in abeyance for such Holder until such time or times, if ever, as its right thereto would not result in such Holder exceeding the Maximum Percentage), at which time or times such Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right to be held similarly in abeyance) to the same extent as if there had been no such limitation.

 

(b) Other Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”), the Corporation shall make appropriate provision to insure that each Holder will thereafter have the right to receive upon a conversion of all the Series C-2 held by such Holder (i) in addition to the shares of Common Stock receivable upon such conversion, such securities or other assets to which such Holder would have been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by such Holder upon the consummation of such Corporate Event (without taking into account any limitations or restrictions on the convertibility of the Series C-2 contained in this Certificate of Designations) or (ii) in lieu of the shares of Common Stock otherwise receivable upon such conversion, such securities or other assets received by the holders of shares of Common Stock in connection with the consummation of such Corporate Event in such amounts as such Holder would have been entitled to receive had the Series C-2 held by such Holder initially been issued with conversion rights for the form of such consideration (as opposed to shares of Common Stock) at a conversion rate for such consideration commensurate with the Conversion Rate. The provision made pursuant to the preceding sentence shall be in a form and substance satisfactory to the Holder. The provisions of this Section 7 shall apply similarly and equally to successive Corporate Events and shall be applied without regard to any limitations on the conversion of the Series C-2 contained in this Certificate of Designations. “Fundamental Transaction” means the occurrence of the Corporation (i) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, (A) consolidating or merging with or into (whether or not the Corporation is the surviving corporation) another Person, (B) selling, assigning, transferring, conveying or otherwise disposing of all or substantially all of the properties or assets of the Corporation or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X) to one or more Persons, (C) making, or allowing one or more Persons to make, or allowing the Corporation to be subject to or have its Common Stock be subject to or party to one or more Persons making, a purchase, tender or exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Persons making or party to, or affiliated with any Persons making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Persons making or party to, or affiliated with any Person making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, (D) consummating a stock or share purchase agreement or other business combination (including a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Persons whereby all such Persons, individually or in the aggregate, acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all the Persons making or party to, or affiliated with any Persons making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock such that the Persons become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (E) reorganize, recapitalize or reclassify its Common Stock.

 

14

 

 

8. Price Protection. In the event the Corporation issues or sells any securities including Options or Convertible Securities, except for any Exempt Issuance (as hereinafter defined), at a price of or with an exercise or conversion price of less than the Conversion Price, then upon such issuance or sale, the Conversion Price shall be reduced to the sale price or the exercise or conversion price of the securities issued or sold. “Exempt Issuance” shall mean any sale or issuance by the Company of its Common Stock or securities convertible into, exercisable for or exchangeable for Common Stock in connection with (i) full or partial consideration in connection with a strategic merger, acquisition, consolidation or purchase of the securities or assets of a corporation or other entity (or any division or business unit thereof), (ii) the Company’s issuance of securities in connection with strategic supply, sale or license agreements and other partnering arrangements so long as such issuances are not for the purpose of raising capital, (iii) the Company’s issuance of Common stock, restricted stock units or the issuances or grants of Options to purchase Common Stock to employees, officers or directors, under an equity incentive plan adopted by a majority of the non employee members of the Board of Directors of the Corporation; (iv) securities issued upon the exercise or exchange of or conversion of any Convertible Securities issued and outstanding on the date of the issuance of Series C-2 to securities holders of the Corporation in exchange for other securities existing as of the date this Certificate of Designations is filed with the Nevada Secretary of State, (v) the conversion of any Series C-2, Series D-1 Convertible Preferred Stock of the Corporation or any Series D-2 Convertible Preferred Stock of the Corporation and (vi) any private or public offering of the Corporation’s equity, debt, debt-linked or equity-linked securities that occurs within 12 months of the Initial Issuance Date provided the price per share in any such offering is above the Conversion Price then in effect.

 

9. Adjustment of Conversion Price upon Subdivision or Combination of Common Stock. Without limiting any provision of Section 8(a), if the Corporation at any time on or after the Initial Issuance Date subdivides (by any stock split, stock dividend, recapitalization or other similar transaction) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced. Without limiting any provision of Section 8(a), if the Corporation at any time on or after the Initial Issuance Date combines (by any reverse split, recapitalization or other similar transaction) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased. Any adjustment pursuant to this Section 9 shall become effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this Section 9 occurs during the period that a Conversion Price is calculated hereunder, then the calculation of such Conversion Price shall be adjusted appropriately to reflect such event.

 

10. Participation in Future Financing.

 

(a) From the date hereof until the date that is the twenty-four (24) month anniversary of the Closing Date (or until 100% of the Series C-2 issued on the Initial Issuance Date is converted into Common Stock, if earlier), upon any issuance by the Company of Common Stock or Common Stock Equivalents for cash consideration, Indebtedness or a combination of units hereof in a transaction exempt from registration under the Securities Act (a “Subsequent Financing”), each Holder shall have the right to participate in up to an amount of the Subsequent Financing equal to 25% of the Subsequent Financing (the “Participation Maximum”) on the same terms, conditions and price provided for in the Subsequent Financing. At least five (5) Trading Days prior to the closing of the Subsequent Financing, the Company shall deliver to each Holder a written notice of its intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask such Holder if it wants to review the details of such financing (such additional notice, a “Subsequent Financing Notice”). Upon the request of a Holder, for a Subsequent Financing Notice, the Company shall promptly, but no later than two (2) Trading Days after such request, deliver a Subsequent Financing Notice to such Holder. The Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder and the Person or Persons through or with whom such Subsequent Financing is proposed to be effected and shall include a term sheet or similar document relating thereto as an attachment.

 

15

 

 

(b) Any Holder desiring to participate in such Subsequent Financing must provide written notice to the Company by not later than 5:30 p.m. (New York City time) on the fifth (5th) Trading Day after such Holders have received the Subsequent Financing Notice that such Holder is willing to participate in the Subsequent Financing, the amount of such Holder’s participation, and representing and warranting that such Holder has such funds ready, willing, and available for investment on the terms set forth in the Subsequent Financing Notice. If the Company receives no such notice from a Holder as of such fifth (5th) Trading Day, such Holder shall be deemed to have notified the Company that it does not elect to participate.

 

(c) If by 5:30 p.m. (New York City time) on the fifth (5th) Trading Day after all of the Holders have received the Pre-Notice, the Company receives responses to a Subsequent Financing Notice from Holders seeking to purchase more than the aggregate amount of the Participation Maximum, each such Holder shall have the right to purchase its Pro Rata Portion (as defined below) of the Participation Maximum. “Pro Rata Portion” means the ratio of (x) the amount of Series C-2 issued on the Initial Issuance Date to the Holder participating under this Section 10 and (y) the sum of the aggregate amount of Series C-2 issued on the Initial Issuance Date to all Holders participating under this Section 10.

 

(d) The Company must provide the Holders with a second Subsequent Financing Notice, and the Holders will again have the right of participation set forth above in this Section 10, if the Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within thirty (30) Trading Days after the date of the initial Subsequent Financing Notice.

 

(e) The Company and each Holder agree that if any Holder elects to participate in the Subsequent Financing, the transaction documents related to the Subsequent Financing shall not include any term or provision whereby such Holder shall be required to agree to any restrictions on trading as to any of the Securities purchased hereunder or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, this Agreement, without the prior written consent of such Holder.

 

(f) Notwithstanding anything to the contrary in this Section 10 and unless otherwise agreed to by such Holder, the Company shall either confirm in writing to such Holder that the transaction with respect to the Subsequent Financing has been abandoned or shall publicly disclose its intention to issue the securities in the Subsequent Financing, in either case in such a manner such that such Holder will not be in possession of any material, non-public information, by the tenth (10th) Business Day following delivery of the Subsequent Financing Notice. If by such tenth (10th) Business Day, no public disclosure regarding a transaction with respect to the Subsequent Financing has been made, and no notice regarding the abandonment of such transaction has been received by such Holder, such transaction shall be deemed to have been abandoned and such Holder shall not be deemed to be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries.

 

16

 

 

(g) Notwithstanding the foregoing, this Section 10 shall not apply in respect of (i) an Exempt Issuance, or (ii) a public offering registered with the SEC.

 

11. Noncircumvention. The Corporation hereby covenants and agrees that the Corporation will not, by amendment of its Articles of Incorporation, Bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Certificate of Designations, and will at all times in good faith carry out all the provisions of this Certificate of Designations and take all action as may be required to protect the rights of the Holders. Without limiting the generality of the foregoing or any other provision of this Certificate of Designations, the Corporation (a) shall not increase the par value of any shares of Common Stock receivable upon the conversion of any Series C-2 above the Conversion Price then in effect, (b) shall take all such actions as may be necessary or appropriate in order that the Corporation may validly and legally issue fully paid and non-assessable shares of Common Stock upon the conversion of Series C-2 and (c) shall, so long as any Series C-2 are outstanding, and upon the filing of an amendment to the Corporation’s Articles of Incorporation to increase the number of shares of the Corporation’s Common Stock that the Corporation is authorized to issue with the Secretary of State of the State of Nevada, take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the conversion of the Series C-2, the maximum number of shares of Common Stock as shall from time to time be necessary to effect the conversion of the Series C-2 then outstanding (without regard to any limitations on conversion contained herein).

 

12. Authorized Shares.

 

(a) Reservation. So long as any Series C-2 remain outstanding, and upon the filing of an amendment to the Corporation’s Articles of Incorporation to increase the number of shares of the Corporation’s Common Stock that the Corporation is authorized to issue with the Secretary of State of the State of Nevada, the Corporation shall at all times reserve at least 125% times the number of shares of Common Stock as shall from time to time be necessary to effect the conversion of all of the Series C-2 then outstanding (without regard to any limitations on conversions) (the “Required Reserve Amount”). The Required Reserve Amount (including each increase in the number of shares so reserved) shall be allocated pro rata among the Holders based on the number of the Series C-2 held by each Holder (the “Authorized Share Allocation”). In the event that a Holder shall sell or otherwise transfer any of such Holder’s Series C-2, each transferee shall be allocated a pro rata portion of such Holder’s Authorized Share Allocation. If the Required Reserve Amount is not met at such time, any shares of Common Stock reserved and allocated to any Person which ceases to hold any Series C-2 shall be allocated to the remaining Holders of Series C-2, pro rata based on the number of the Series C-2 then held by the Holders.

 

17

 

 

(b) Insufficient Authorized Shares. If, notwithstanding Section 12(a) and not in limitation thereof, while any of the Series C-2 remain outstanding the Corporation does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon conversion of the Series C-2 at least a number of shares of Common Stock equal to the Required Reserve Amount (an “Authorized Share Failure”), then the Corporation shall immediately take all action necessary to increase the Corporation’s authorized shares of Common Stock to an amount sufficient to allow the Corporation to reserve the Required Reserve Amount for the Series C-2 then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than ninety days after the occurrence of such Authorized Share Failure, the Corporation shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Corporation shall provide each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common Stock and to cause its Board of Directors to recommend to the stockholders that they approve such proposal. In lieu of a meeting of stockholders, the Corporation may effect such action by written consent in accordance with Section 14(c) of the 1934 Act. Except as provided in the first sentence of Section 12(a), in the event that the Corporation is prohibited from issuing shares of Common Stock to a Holder upon any conversion due to the failure by the Corporation to have sufficient shares of Common Stock available out of the authorized but unissued shares of Common Stock (such unavailable number of shares of Common Stock, the “Authorized Failure Shares”), in lieu of delivering such Authorized Failure Shares to such Holder, the Corporation shall pay cash in exchange for the redemption of such portion of the Conversion Amount convertible into such Authorized Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorized Failure Shares and (y) the average Closing Sale Prices of the Common Stock on the Trading Days during the period commencing on the date such Holder delivers the applicable Conversion Notice with respect to such Authorized Failure Shares to the Corporation and ending on the date of such issuance under this Section 12(b). Nothing contained in this Section shall limit any obligations of the Corporation under any provision of the Exchange Agreements.

 

13. Liquidation, Dissolution, Winding-Up. In the event of a Liquidation Event, the Holders shall be entitled to receive in cash out of the assets of the Corporation, whether from capital or from earnings available for distribution to its stockholders (the “Liquidation Funds”), before any amount shall be paid to the holders of any of shares of Junior Stock, but pari passu with any Parity Stock then outstanding, an amount per share of Series C-2 equal to the greater of (A) the Conversion Amount thereof on the date of such payment or (B) the amount per share such Holder would receive if such Holder converted such Series C-2 into Common Stock immediately prior to the date of such payment, provided that if the Liquidation Funds are insufficient to pay the full amount due to the Holders and holders of shares of Parity Stock, then each Holder and each holder of Parity Stock shall receive a percentage of the Liquidation Funds equal to the full amount of Liquidation Funds payable to such Holder and such holder of Parity Stock as a liquidation preference, in accordance with their respective certificate of designations (or equivalent), as a percentage of the full amount of Liquidation Funds payable to all holders of Series C-2 and all holders of shares of Parity Stock. To the extent necessary, the Corporation shall cause such actions to be taken by each of its Subsidiaries so as to enable, to the maximum extent permitted by law, the proceeds of a Liquidation Event to be distributed to the Holders in accordance with this Section 13. All the preferential amounts to be paid to the Holders under this Section shall be paid or set apart for payment before the payment or setting apart for payment of any amount for, or the distribution of any Liquidation Funds of the Corporation to the holders of shares of Junior Stock in connection with a Liquidation Event as to which this Section 13 applies.

 

18

 

 

14. Distribution of Assets. In addition to any adjustments pursuant to Section 8 and 9, if the Corporation shall declare or make any dividend or other distributions of its assets (or rights to acquire its assets) to any or all holders of shares of Common Stock, by way of return of capital or otherwise (including any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (the “Distributions”), then each Holder, as holders of Series C-2, will be entitled to such Distributions as if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of the Series C-2 (without taking into account any limitations or restrictions on the convertibility of the Series C-2) immediately prior to the date on which a record is taken for such Distribution or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for such Distributions (provided, however, that to the extent that such Holder’s right to participate in any such Distribution would result in such Holder exceeding the Maximum Percentage, then such Holder shall not be entitled to participate in such Distribution to the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to the extent of any such excess) and the portion of such Distribution shall be held in abeyance for such Holder until such time or times as its right thereto would not result in such Holder exceeding the Maximum Percentage, at which time or times, if any, such Holder shall be granted such rights (and any rights under this Section 14 on such initial rights or on any subsequent such rights to be held similarly in abeyance) to the same extent as if there had been no such limitation).

 

15. Vote to Change the Terms of or Issue Series C-2. In addition to any other rights provided by law, except where the vote or written consent of the holders of a greater number of shares is required by law, without first obtaining the affirmative vote at a meeting duly called for such purpose, or the written consent without a meeting, of a majority of the outstanding Series C-2, including the Required Holder, voting together as a single class, the Corporation shall not: (a) amend or repeal any provision of, or add any provision to, its Articles of Incorporation or Bylaws, or file any certificate of designations or articles of amendment of any series of shares of preferred stock, if such action would adversely alter or change in any respect the preferences, rights, privileges or powers, or restrictions provided for the benefit, of the Series C-2, regardless of whether any such action shall be by means of amendment to the Articles of Incorporation or by merger, consolidation or otherwise; (b) increase or decrease (other than by conversion) the authorized number of Series C-2; (c) without limiting any provision of Section 2, create or authorize (by reclassification or otherwise) any new class or series of shares that has a preference over or is on a parity with the Series C-2 with respect to dividends or the distribution of assets on the liquidation, dissolution or winding up of the Corporation; (d) without limiting any provision of Section 2, pay dividends or make any other distribution on any shares of any capital stock of the Corporation junior in rank to the Series C-2, other than a per annum dividend payment in the maximum amount of up to of 8%, in cash or capital stock; (e) issue any Series C-2 other than as provided in Section 2; or (f) without limiting any provision of Section 8 and 9, whether or not prohibited by the terms of the Series C-2, circumvent a right of the Series C-2.

 

19

 

 

16. Transfer of Series C-2. A Holder may transfer some or all of its Series C-2 without the consent of the Corporation in accordance with an exemption from Section 5 of the Securities Act of 1933.

 

17. Reissuance of Preferred Certificates.

 

(a) Transfer. If any Series C-2 are to be transferred, the applicable Holder shall surrender the applicable Series C-2 Certificate to the Corporation, whereupon the Corporation will forthwith issue and deliver upon the order of such Holder a new Series C-2 Certificate (in accordance with Section 17(d)), registered as such Holder may request, representing the outstanding number of Series C-2 being transferred by such Holder and, if less than the entire outstanding number of Series C-2 is being transferred, a new Series C-2 Certificate (in accordance with Section 17(d)) to such Holder representing the outstanding number of Series C-2 not being transferred. Such Holder and any assignee, by acceptance of the Series C-2 Certificate, acknowledge and agree that, by reason of the provisions of Section 5(c)(i) following conversion of any of the Series C-2, the outstanding number of Series C-2 represented by the Series C-2 may be less than the number of Series C-2 stated on the face of the Series C-2.

 

(b) Lost, Stolen or Mutilated Series C-2 Certificate. Upon receipt by the Corporation of evidence reasonably satisfactory to the Corporation of the loss, theft, destruction or mutilation of a Series C-2 Certificate (as to which a written certification and the indemnification contemplated below shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the applicable Holder to the Corporation in customary and reasonable form without the requirement to post a bond or other security and, in the case of mutilation, upon surrender and cancellation of such Series C-2 Certificate, the Corporation shall execute and deliver to such Holder a new Series C-2 Certificate (in accordance with Section 17(d)) representing the applicable outstanding number of Series C-2.

 

(c) Series C-2 Certificate Exchangeable for Different Denominations. Each Series C-2 Certificate is exchangeable, upon the surrender hereof by the applicable Holder at the principal office of the Corporation, for a new Series C-2 Certificate or Series C-2 Certificate(s) (in accordance with Section 17(d)) representing in the aggregate the outstanding number of the Series C-2 in the original Series C-2 Certificate, and each such new certificate will represent such portion of such outstanding number of Series C-2 from the original Series C-2 Certificate as is designated by such Holder at the time of such surrender.

 

20

 

 

(d) Issuance of New Series C-2 Certificate. Whenever the Corporation is required to issue a new Series C-2 Certificate pursuant to the terms of this Certificate of Designations, such new Series C-2 Certificate (i) shall represent, as indicated on the face of such Series C-2 Certificate, the number of Series C-2 remaining outstanding (or in the case of a new Series C-2 Certificate being issued pursuant to Section 17(a) or Section 17(c), the number of Series C-2 designated by such Holder which, when added to the number of Series C-2 represented by the other new Series C-2 Certificates issued in connection with such issuance, does not exceed the number of Series C-2 remaining outstanding under the original Series C-2 Certificate immediately prior to such issuance of new Series C-2 Certificate), and (ii) shall have an issuance date, as indicated on the face of such new Series C-2 Certificate, which is the same as the issuance date of the original Series C-2 Certificate.

 

(e) Book Entry. If the Corporation’s Transfer Agent issues the Series C-2 in book entry format, all provisions of this Certificate of Designations as to delivery of Series C-2 certificates shall be disregarded, and the Transfer Agent shall make entries in the stock transfer records in connection with conversions and transfers, as appropriate.

 

18. Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Certificate of Designations shall be cumulative and in addition to all other remedies available under this Certificate of Designations and any of the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit any Holder’s right to pursue actual and consequential damages for any failure by the Corporation to comply with the terms of this Certificate of Designations. The Corporation covenants to each Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by a Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Corporation (or the performance thereof). The Corporation acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holders and that the remedy at law for any such breach may be inadequate. The Corporation therefore agrees that, in the event of any such breach or threatened breach, each Holder shall be entitled, in addition to all other available remedies, to specific performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and without posting a bond or other security. The Corporation shall provide all information and documentation to a Holder that is requested by such Holder to enable such Holder to confirm the Corporation’s compliance with the terms and conditions of this Certificate of Designations.

 

19. Attorneys Fees.

 

(a) If (i) any shares of Series C-2 are placed in the hands of an attorney to enforce the provisions of this Certificate of Designations or (ii) there occurs any bankruptcy, reorganization, receivership of the Corporation or other proceedings affecting Corporation creditors’ rights and involving a claim under this Certificate of Designations, then the Corporation shall pay the costs incurred by such Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including attorneys’ fees and disbursements.

 

21

 

 

(b) In addition to the obligations under Section 19(a), in connection with the removal of restrictive legends from shares of Series C-2, the Corporation shall pay the reasonable attorney’s fees of counsel to any Holder in any amount not to exceed $750 per opinion of counsel. Such payment(s) shall be made within one Trading Day after receipt of a Conversion Notice or other notice from a Holder.

 

20. Construction; Headings. This Certificate of Designations shall be deemed to be jointly drafted by the Corporation and the Holders and shall not be construed against any such Person as the drafter hereof. The headings of this Certificate of Designations are for convenience of reference and shall not form part of, or affect the interpretation of, this Certificate of Designations. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include” and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,” “hereunder,” “hereof” and words of like import refer to this entire Certificate of Designations instead of just the provision in which they are found. Unless expressly indicated otherwise, all section references are to sections of this Certificate of Designations.

 

21. Failure or Indulgence Not Waiver. No failure or delay on the part of a Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party. This Certificate of Designations shall be deemed to be jointly drafted by the Corporation and all Holders and shall not be construed against any Person as the drafter hereof. Notwithstanding the foregoing, nothing contained in this Section 21 shall permit any waiver of any provision of Section 19.

 

22. Dispute Resolution.

 

(a) In the case of a dispute relating to the Closing Sale Price, a Conversion Price or a fair market value or the arithmetic calculation of a Conversion Rate, (including a dispute relating to the determination of any of the foregoing), the Corporation or the applicable Holder (as the case may be) shall submit the dispute to the other party via electronic mail (A) if by the Corporation, within two Trading Days after the occurrence of the circumstances giving rise to such dispute or (B) if by such Holder at any time after such Holder learned of the circumstances giving rise to such dispute. If such Holder and the Corporation are unable to promptly resolve such dispute relating to such closing bid price, such Closing Sale Price, such Conversion Price or such fair market value, or the arithmetic calculation of such Conversion Rate, at any time after the second Trading Day following such initial notice by the Corporation or such Holder (as the case may be) of such dispute to the Corporation or such Holder (as the case may be), then such Holder may, at its sole option, select an independent, reputable investment bank to resolve such dispute.

 

22

 

 

(b) Such Holder and the Corporation shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in accordance with the first sentence of this Section 22(a) and (B) written documentation supporting its position with respect to such dispute, in each case, no later than 5:00 p.m. (Eastern time) by the fifth Trading Day immediately following the date on which such Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents referred to in the immediately preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”) (it being understood and agreed that if either such Holder or the Corporation fails to so deliver all of the Required Dispute Documentation by the Dispute Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled to (and hereby waives its right to) deliver or submit any written documentation or other support to such investment bank with respect to such dispute and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to such investment bank prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Corporation and such Holder or otherwise requested by such investment bank, neither the Corporation nor such Holder shall be entitled to deliver or submit any written documentation or other support to such investment bank in connection with such dispute (other than the Required Dispute Documentation).

 

(c) The Corporation and such Holder shall cause such investment bank to determine the resolution of such dispute and notify the Corporation and such Holder of such resolution no later than 10 Trading Days immediately following the Dispute Submission Deadline. The fees and expenses of such investment bank shall be borne solely by the Corporation, and such investment bank’s resolution of such dispute shall be final and binding upon all parties absent manifest error.

 

23. Notices. The Corporation shall provide each Holder of Series C-2 with prompt written notice of all actions taken pursuant to the terms of this Certificate of Designations, including in reasonable detail a description of such action and the reason therefor. Whenever notice is required to be given under this Certificate of Designations, unless otherwise provided herein, such notice must be in writing and shall be given in accordance with Section 9(f) of the Exchange Agreements or in accordance with any other instructions provided by the Holder to the Corporation. The Corporation shall provide each Holder with prompt written notice of all actions taken pursuant to this Certificate of Designations, including in reasonable detail a description of such action and the reason therefore. Without limiting the generality of the foregoing, the Corporation shall give written notice to each Holder (i) immediately upon any adjustment of the Conversion Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least fifteen days prior to the date on which the Corporation closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock, (B) with respect to any grant, issuances, or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to such Holder. All notices shall be by email or recognized overnight delivery service, next Trading Day delivery using the addresses of the Corporation as provided to the Holders and the addresses of any Holder as provided by such Holder to the Corporation. The Corporation and the Holders may change their addresses by notice by the Corporation to all Holders or any Holder to the Corporation.

 

23

 

 

24. Governing Law; Exclusive Jurisdiction. This Certificate of Designations shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Certificate of Designations shall be governed by, the internal laws of the State of Nevada, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Nevada or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Nevada. Except as otherwise required by this Certificate of Designations, the Corporation hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in New York County, New York, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein (i) shall be deemed or operate to preclude any Holder from bringing suit or taking other legal action against the Corporation in any other jurisdiction to collect on the Corporation’s obligations to such Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of such Holder or (ii) shall limit, or shall be deemed or construed to limit, any provision of Section 22. The Corporation hereby irrevocably waives any right it may have to, and agrees not to request, a jury trial for the adjudication of any dispute hereunder or in connection with or arising out of this Certificate of Designations or any transaction contemplated hereby.

 

25. Severability. If any provision of this Certificate of Designations is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Certificate of Designations so long as this Certificate of Designations as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

24

 

 

26. Stockholder Matters; Amendment.

 

(a) Stockholder Matters. Any stockholder action, approval or consent required, desired or otherwise sought by the Corporation pursuant to the NRS, the Articles of Incorporation, this Certificate of Designations or otherwise with respect to the issuance of Series C-2 may be effected by written consent of the Corporation’s stockholders or at a duly called meeting of the Corporation’s stockholders, all in accordance with the applicable rules and regulations of the NRS. This provision is intended to comply with the applicable sections of the NRS permitting stockholder action, approval and consent affected by written consent in lieu of a meeting.

 

(b) Amendment. This Certificate of Designations or any provision hereof (other than Section 5(d)) may be modified or amended or the provisions hereof waived with the written consent of the Corporation and the Holders of a majority of the Series C-2 currently outstanding, which must include Cavalry as long as Cavalry (or any of its Affiliates) owns at least 5% of the Series C-2 issued on the Initial Issuance Date. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party.

 

27. Disclosure. Upon receipt or delivery by the Corporation of any notice in accordance with the terms of this Certificate of Designations, unless the Corporation has in good faith determined that the matters relating to such notice do not constitute material, non-public information relating to the Corporation or any of its Subsidiaries, the Corporation shall within one Trading Day after any such receipt or delivery publicly disclose such material, non-public information on a Current Report on Form 8-K or otherwise. In the event that the Corporation believes that a notice contains material, non-public information relating to the Corporation or any of its Subsidiaries, the Corporation so shall indicate to such Holder contemporaneously with delivery of such notice, and in the absence of any such indication, such Holder shall be allowed to presume that all matters relating to such notice do not constitute material, non-public information relating to the Corporation or any of its Subsidiaries. If the Corporation or any of its Subsidiaries provides material non-public information to a Holder that is not simultaneously filed in a Current Report on Form 8-K and such Holder has not agreed to receive such material non-public information, the Corporation hereby covenants and agrees that such Holder shall not have any duty of confidentiality to the Corporation, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents with respect to, or a duty to any of the foregoing not to trade on the basis of, such material non-public information. Nothing contained in this Section 27 shall limit any obligations of the Corporation, or any rights of any Holder, under the Exchange Agreement.

 

* * * * *

 

25

 

 

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designations of Series C-2 Convertible Preferred Stock of OncBioMune Pharmaceuticals, Inc. to be signed by its Chief Executive Officer on this 18th day of May, 2020.

 

  ONCBIOMUNE PHARMACEUTICALS, INC.
     
  By:  /s/ Andrew Kucharchuk
    Andrew Kucharchuk, Chief Executive Officer

 

 

 

 

EXHIBIT I

 

ONCBIOMUNE PHARMACEUTICALS, INC.

CONVERSION NOTICE

 

Reference is made to the Certificate of Designations, Preferences and Rights of the Series C-2 Convertible Preferred Stock of OncBioMune Pharmaceuticals, Inc. (the “Certificate of Designations”). In accordance with and pursuant to the Certificate of Designations, the undersigned hereby elects to convert the number of shares of Series C-2 Convertible Preferred Stock, $0.0001 par value per share (the “Series C-2”), of OncBioMune Pharmaceuticals, Inc., a Nevada corporation (the “Corporation”), indicated below into shares of common stock, $0.0001 par value per share (the “Common Stock”), of the Corporation, as of the date specified below.

 

 

Date of

Conversion:

 

 

 

Aggregate number of Series C-2 to be

converted

 
 

 

Aggregate Stated Value of

such Series C-2 to be converted:

 
 

 

Aggregate accrued and unpaid

dividends and accrued with respect

to such Series C-2 and such

aggregate dividends to be converted:

 

 

 

AGGREGATE CONVERSION

AMOUNT TO BE CONVERTED:

 

 

Please confirm the following information:

 

  Conversion Price:  
 

 

Number of shares of Common Stock to be issued:

 

 

Please issue the Common Stock into which the applicable Series C-2 are being converted to Holder, or for its benefit, as follows:  

 

  [  ]

Check here if requesting delivery as a certificate to the following name and to the following address:

 

  Issue to:  
     
     

 

  [  ] Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows:

 

  DTC Participant:  
  DTC Number:  
  Account
Number:
 

 

Date: _____________ __, ______

 

Name of Registered Holder

 

By:    
Name:    
Title:    
     
Tax ID:    
Facsimile:    
E-mail Address:  

 

 

 

 

EXHIBIT II

 

ACKNOWLEDGMENT

 

The Corporation hereby acknowledges this Conversion Notice and hereby directs _________________ to issue the above indicated number of shares of Common Stock in accordance with the Transfer Agent Instructions dated _____________, 20__ from the Corporation and acknowledged and agreed to by ________________________.

 

  ONCBIOMUNE PHARMACEUTICALS, INC.
                                     
  By:  
  Name:  
  Title:  

 

 

 

 

Exhibit 3.3

 

CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF THE

SERIES D-2 CONVERTIBLE PREFERRED STOCK OF

ONCBIOMUNE PHARMACEUTICALS, INC.

 

The undersigned, Andrew Kucharchuk, President and Chief Executive Officer of OncBioMune Pharmaceuticals, Inc. (the “Corporation”), a corporation organized and existing under Chapter 78 of the Nevada Revised Statues (the “NRS”), hereby does certify:

 

That pursuant to the authority expressly conferred upon the Board of Directors of the Corporation by the Corporation’s Articles of Incorporation, as amended, and Section 78.315 of the NRS, the Board of Directors on April 28, 2020, adopted the following resolution determining it desirable and in the best interests of the Corporation and its shareholders for the Corporation to create a series of Four Thousand Three Hundred Sixty (4,360) shares of preferred stock designated as “Series D-2 Convertible Preferred Stock”, none of which shares have been issued.

 

RESOLVED, that the Board of Directors designates the Series D-2 Convertible Preferred Stock and the number of shares constituting such series, and fixes the rights, powers, preferences, privileges and restrictions relating to such series in addition to any set forth in the Articles of Incorporation as follows:

 

TERMS OF SERIES D-2 CONVERTIBLE PREFERRED STOCK

 

1. Certain Defined Terms. For purposes of this Certificate of Designations, the following terms shall have the following meanings:

 

(a) “1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

 

(b) “Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person, it being understood for purposes of this definition that “control” of a Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

 

(c) “Approval Date” means the first Trading Day following the receipt of Shareholder Approval.

 

(d) “Certificate of Designations” means this Certificate Of Designations, Preferences and Rights of the Series D-2 Convertible Preferred Stock of the Corporation.

 

(e) “Common Stock” means (i) the Corporation’s shares of common stock, $0.0001 par value per share, and (ii) any capital stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.

 

 

 

 

(f) “Conversion Date” shall have the meaning given to it in Section 5 hereto.

 

(g) “Conversion Notice” shall have the meaning given to it in Section 5 hereto.

 

(h) “Conversion Rate” shall equal 10,000 shares of Common Stock to each share of Series D-2.

 

(i) “Convertible Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares of Common Stock

 

(j) “Conversion Shares” shall have the meaning given to it in Section 5 hereto.

 

(k) “Corporate Event” shall have the meaning given to it in Section 6 hereto.

 

(l) “Corporation” shall have the meaning given to it in the preamble hereto.

 

(m) “Delivery Notice” shall have the meaning given to it in Section 5 hereto.

 

(n) “Distributions” shall have the meaning given to it in Section 10 hereto.

 

(o) “DTC” shall have the meaning given to it in Section 5 hereto.

 

(p) “Fundamental Transaction” shall have the meaning given to it in Section 6.

 

(q) “Holder” or “Holders” means a holder of Series D-2.

 

(r) “Junior Stock” shall have the meaning given to it in Section 3 hereto.

 

(s) “Liquidation Event” means, whether in a single transaction or series of transactions, the voluntary or involuntary liquidation, dissolution or winding up of the Corporation or such Subsidiaries the assets of which constitute all or substantially all of the assets of the business of the Corporation and its Subsidiaries, taken as a whole.

 

(t) “Liquidation Funds” shall have the meaning given to it in Section 9 hereto.

 

(u) “NRS” shall have the meaning given to it in the preamble hereto.

 

(v) “Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

 

(w) “Parity Stock” shall have the meaning given to it in Section 3 hereto.

 

  2  
     

 

(x) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity or a government or any department or agency thereof.

 

(y) “Principal Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market, OTCPink, OTCQB, or OTCQX and any successor markets thereto.

 

(z) “Restricted Shares” means shares of the Corporation’s Common Stock which are restricted from being transferred by the Holder thereof unless the transfer is effected in compliance with the Securities Act and applicable state securities laws (including investment suitability standards, which shares shall bear the following restrictive legend (or one substantially similar)): “The securities represented by this certificate have not been registered under the Securities Act of 1933 or any state securities act. The securities have been acquired for investment and may not be sold, transferred, pledged or hypothecated unless (i) they shall have been registered under the Securities Act of 1933 and any applicable state securities act, or (ii) the corporation shall have been furnished with an opinion of counsel, satisfactory to counsel for the corporation, that registration is not required under any such acts.

 

(aa) “SEC” means the Securities and Exchange Commission or the successor thereto.

 

(bb) “Senior Preferred Stock” shall have the meaning given to it in Section 3 hereto.

 

(cc) “Series D-2” shall have the meaning given to it in Section 2 hereto.

 

(dd) “Series D-2 Certificates” shall have the meaning given to it in Section 5 hereto.

 

(ee) “Share Delivery Deadline” shall have the meaning given to it in Section 5 hereto.

 

(ff) “Shareholder Approval” shall mean the approval of an amendment to the Corporation’s Amended and Restated Articles of Incorporation to increase the number of shares of Common Stock authorized thereunder from 6,666,667 to 12,000,000,000 by a majority of the votes entitled to be cast thereon, whether presented at a special or annual meeting of shareholders of the Corporation and the subsequent filing of such amendment with the Secretary of State of the State of Nevada.

 

(gg) “Stated Value” shall mean $500.00 per share, subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations, subdivisions or other similar events occurring after the date which the Series D-2 are issued.

 

  3  
     

 

(hh) “Subsidiary” when used with respect to any Person, means any corporation or other organization, whether incorporated or unincorporated, of which (A) at least a majority of the securities or other interests having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such Person (through ownership of securities, by contract or otherwise) or (B) such Person or any subsidiary of such Person is a general partner of any general partnership or a manager of any limited liability company.

 

(ii) “Trading Day” means any day on which the Common Stock is eligible to be traded on the Principal Market or securities market on which the Common Stock is then traded, provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00 p.m., Eastern time) unless such day is otherwise designated as a Trading Day in writing by the Holder.

 

(jj) “Transfer Agent” shall have the meaning given to it in Section 5 hereto.

 

2. Designation and Number of Shares. There shall hereby be created and established a series of preferred stock of the Corporation designated as “Series D-2 Convertible Preferred Stock” (the “Series D-2”). The authorized number of Series D-2 shall be Four Thousand Three Hundred Sixty (4,360) shares. Each share of Series D-2 shall have a par value of $0.0001.

 

3. Ranking. Until such time as the holders of at least a majority of the outstanding Series D-2, expressly consent to the creation of Parity Stock or Senior Preferred Stock (each as defined below) in accordance with Section 15, the Series D-2 shall rank pari passu with respect to the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Corporation with the Series C Convertible Preferred Stock and the Series D-1 Convertible Preferred Stock of the Corporation (the “Parity Stock”), and all other shares of capital stock of the Corporation shall be junior in rank to all Series D-2 with respect to the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Corporation (such junior stock is referred to herein collectively as “Junior Stock”). The rights of all such Junior Stock shall be subject to the rights, powers, preferences and privileges of the Series D-2. Without limiting any other provision of this Certificate of Designations, the Corporation shall not hereafter authorize or issue any additional or other shares of capital stock that is (i) of senior rank to the Series D-2 in respect of the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Corporation (collectively, the “Senior Preferred Stock”), (ii) Parity Stock other than the Series C Convertible Preferred Stock or (iii) any Junior Stock having a maturity date (or any other date requiring redemption or repayment of such shares of Junior Stock) that is prior to the date no Series D-2 remain outstanding.

 

4. Dividends and Distributions. Each Holder of Series D-2 shall be entitled to receive dividends or distributions on each share of Series D-2 on an “as converted” into Common Stock basis as provided in Section 5 hereof when and if dividends are declared on the Common Stock by the Board of Directors. Dividends shall be paid in cash or property, as determined by the Board of Directors.

 

  4  
     

 

5. Conversion.

 

(a) Upon the terms and in the manner set forth in this Section 5, each outstanding share of the Series D-2 Preferred Stock will automatically convert on the Approval Date (such date, the “Conversion Date”) into a number of fully-paid and non-assessable shares of Common Stock determined by multiplying such share of Series D-2 Preferred Stock by the Conversion Rate (such shares of Common Stock issuable upon Conversion, the “Conversion Shares”).

 

(b) As promptly as practicable after the Conversion Date, the Corporation shall provide notice of the conversion (the “Conversion Notice”) to each Holder stating the Conversion Date, the number of shares of Common Stock to be issued upon conversion of each share of Series D-2 held of record by such Holder and subject to conversion and the place or places where certificates representing shares of Series D-2 Preferred Stock are to be surrendered for issuance of shares of Common Stock if such shares are not held in book-entry. As promptly as practicable after receipt of the Conversion Notice from the Corporation, (i) if any Holder holds its shares of Series D-2 in certificated form, then such the Holder shall surrender to a nationally recognized overnight delivery service for delivery to the Corporation the original certificates representing the Series D-2 (the “Series D-2 Certificates”) so converted as aforesaid (or an indemnification undertaking with respect to the Series D-2 in the case of its loss, theft or destruction as contemplated by Section 12) and (ii) all Holders must send a copy of the executed delivery notice in the form attached hereto as Exhibit I (the “Delivery Notice”). On or before the first Trading Day following the date of receipt of a Series D-2 Certificate, if any, and Delivery Notice from a Holder, the Corporation shall transmit by electronic mail an acknowledgment of confirmation, in the form attached hereto as Exhibit II, of receipt of such Series D-2 Certificate, if any, and Delivery Notice to such Holder and the Corporation’s transfer agent (the “Transfer Agent”), which confirmation shall constitute an instruction to the Transfer Agent to issue the Conversion Shares such Holder is entitled. On or before the third Trading Day following the date of receipt of a Delivery Notice (or such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade initiated on the applicable Conversion Date of such Conversion Shares) (the “Share Delivery Deadline”), the Corporation shall (1) provided that the Transfer Agent is participating in The Depository Trust Corporation’s (“DTC”) Fast Automated Securities Transfer Program, credit such aggregate number of shares of Common Stock to which such Holder shall be entitled to such Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system, or (2) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver (via reputable overnight courier) to the address as specified in such Conversion Notice, a certificate, registered in the name of such Holder or its designee, for the number of shares of Common Stock to which such Holder shall be entitled. Unless the Conversion Shares are covered by a valid and effective registration under the Securities Act, such shares shall be issued as Restricted Shares. Notwithstanding the above, if requested by the Holder, the Corporation shall cause its counsel at the Corporation’s expense to issue any necessary legal opinion (to the extent lawful) in order to permit sales of the Common Stock pursuant to Rule 144 under the Securities Act or under another applicable exemption from the registration requirements; provided that (i) an exemption under Rule 144 under the Securities Act or another applicable exemption from the registration requirements is available with respect to such shares, and (ii) the Holder provides the Corporation and the legal counsel providing the necessary opinion with such representations and other related information reasonably requested in order for such legal counsel to issue the legal opinion.

 

  5  
     

 

(c) The Holder shall be deemed to have become a shareholder of record on the Conversion Date. Immediately upon conversion, the rights of the Holders as such with respect to the Series D-2 so converted shall cease and the persons entitled to receive the shares of Common Stock upon the conversion of such shares of Series D-2 shall be treated for all purposes as having become the record and beneficial owners of such shares of Common Stock.

 

(d) If any Conversion of Series D-2 would result in the issuance of a fractional share of Common Stock to any Holder, such fractional share shall be payable in cash based upon the market value of the Common Stock on the Principal Market prior to the date of Conversion and the number of shares of Common Stock issuable upon Conversion of the Series D-2 Preferred Stock shall be the next lower whole number of shares. If the Corporation elects not to, or is unable to, make such a cash payment, the Holder shall be entitled to receive, in lieu of the final fraction of a share, one whole share of Common Stock.

 

(e) The issuance of certificates for shares of Common Stock upon Conversion of the Series pursuant to Section 5 shall be made without payment of additional consideration by, or other charge, cost or tax to, the Holder in respect thereof.

 

  6  
     

 

6. Rights Upon Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”), the Corporation shall make appropriate provision to insure that each Holder will thereafter have the right to receive upon a conversion of all the Series D-2 held by such Holder (i) in addition to the shares of Common Stock receivable upon such conversion, such securities or other assets to which such Holder would have been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by such Holder upon the consummation of such Corporate Event (without taking into account any limitations or restrictions on the convertibility of the Series D-2 contained in this Certificate of Designations) or (ii) in lieu of the shares of Common Stock otherwise receivable upon such conversion, such securities or other assets received by the holders of shares of Common Stock in connection with the consummation of such Corporate Event in such amounts as such Holder would have been entitled to receive had the Series D-2 held by such Holder initially been issued with conversion rights for the form of such consideration (as opposed to shares of Common Stock) at a conversion rate for such consideration commensurate with the Conversion Rate. The provision made pursuant to the preceding sentence shall be in a form and substance satisfactory to the Holder. The provisions of this Section 6 shall apply similarly and equally to successive Corporate Events and shall be applied without regard to any limitations on the conversion of the Series D-2 contained in this Certificate of Designations. “Fundamental Transaction” means the occurrence of the Corporation (i) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, (A) consolidating or merging with or into (whether or not the Corporation is the surviving corporation) another Person, (B) selling, assigning, transferring, conveying or otherwise disposing of all or substantially all of the properties or assets of the Corporation or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X) to one or more Persons, (C) making, or allowing one or more Persons to make, or allowing the Corporation to be subject to or have its Common Stock be subject to or party to one or more Persons making, a purchase, tender or exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Persons making or party to, or Affiliated with any Persons making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Persons making or party to, or Affiliated with any Person making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, (D) consummating a stock or share purchase agreement or other business combination (including a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Persons whereby all such Persons, individually or in the aggregate, acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all the Persons making or party to, or Affiliated with any Persons making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock such that the Persons become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (E) reorganize, recapitalize or reclassify its Common Stock.

 

  7  
     

 

7. Noncircumvention. The Corporation hereby covenants and agrees that the Corporation will not, by amendment of its Articles of Incorporation, Bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Certificate of Designations, and will at all times in good faith carry out all the provisions of this Certificate of Designations and take all action as may be required to protect the rights of the Holders. Without limiting the generality of the foregoing or any other provision of this Certificate of Designations, the Corporation (a) shall not increase the par value of any shares of Common Stock receivable upon the conversion of any Series D-2 above the Conversion Rate then in effect and (b) shall take all such actions as may be necessary or appropriate in order that the Corporation may validly and legally issue fully paid and non-assessable shares of Common Stock upon the conversion of Series D-2.

 

8. Voting Rights. Each Holder shall be entitled to the whole number of votes equal to the number of shares of Common Stock into which such holder’s Series D-2 would be convertible on the record date for the vote or consent of stockholders, and shall otherwise have voting rights and powers equal to the voting rights and powers of the Common Stock. To the extent that under the NRS the vote of the holders of the Series D-2, voting separately as a class or series as applicable, is required to authorize a given action of the Corporation, the affirmative vote or consent of the holders of a majority of the shares of the outstanding Series D-2, shall constitute the approval of such action by both the class or the series, as applicable (except as otherwise may be required under the NRS). Holders of the Series D-2 shall be entitled to written notice of all stockholder meetings or written consents (and copies of proxy materials and other information sent to stockholders) with respect to which they would be entitled by vote, which notice would be provided pursuant to the Corporation’s Bylaws and the NRS.

 

  8  
     

 

9. Liquidation, Dissolution, Winding-Up. In the event of a Liquidation Event, the Holders shall be entitled to receive in cash out of the assets of the Corporation, whether from capital or from earnings available for distribution to its stockholders (the “Liquidation Funds”), before any amount shall be paid to the holders of any of shares of Junior Stock, but pari passu with any Parity Stock then outstanding, an amount per share of Series D-2 equal to the greater of (A) the Stated Value of such Series D-2 on the date of such payment or (B) the amount per share such Holder would receive if such Holder converted such Series D-2 into Common Stock immediately prior to the date of such payment, provided that if the Liquidation Funds are insufficient to pay the full amount due to the Holders and holders of shares of Parity Stock, then each Holder and each holder of Parity Stock shall receive a percentage of the Liquidation Funds equal to the full amount of Liquidation Funds payable to such Holder and such holder of Parity Stock as a liquidation preference, in accordance with their respective certificate of designations (or equivalent), as a percentage of the full amount of Liquidation Funds payable to all holders of Series D-2 and all holders of shares of Parity Stock. To the extent necessary, the Corporation shall cause such actions to be taken by each of its Subsidiaries so as to enable, to the maximum extent permitted by law, the proceeds of a Liquidation Event to be distributed to the Holders in accordance with this Section 9. All the preferential amounts to be paid to the Holders under this Section shall be paid or set apart for payment before the payment or setting apart for payment of any amount for, or the distribution of any Liquidation Funds of the Corporation to the holders of shares of Junior Stock in connection with a Liquidation Event as to which this Section 11 applies.

 

10. Distribution of Assets. If the Corporation shall declare or make any dividend or other distributions of its assets (or rights to acquire its assets) to any or all holders of shares of Common Stock, by way of return of capital or otherwise (including any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (the “Distributions”), then each Holder, as holders of Series D-2, will be entitled to such Distributions as if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of the Series D-2 immediately prior to the date on which a record is taken for such Distribution or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for such Distributions.

 

11. Transfer of Series D-2. A Holder may transfer some or all of its Series D-2 without the consent of the Corporation, subject to compliance with Section 5 of the Securities Act of 1933.

 

12. Form of Security. The Series D-2 shall be issued as book-entry securities directly registered in the stockholder’s name on the Corporation’s books and records or, if requested by any holder of the Series D-2, such holder’s shares may be issued in certificated form.

 

  9  
     

 

13. Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Certificate of Designations shall be cumulative and in addition to all other remedies available under this Certificate of Designations, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit any Holder’s right to pursue actual and consequential damages for any failure by the Corporation to comply with the terms of this Certificate of Designations. The Corporation covenants to each Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by a Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Corporation (or the performance thereof). The Corporation acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holders and that the remedy at law for any such breach may be inadequate. The Corporation therefore agrees that, in the event of any such breach or threatened breach, each Holder shall be entitled, in addition to all other available remedies, to specific performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and without posting a bond or other security. The Corporation shall provide all information and documentation to a Holder that is requested by such Holder to enable such Holder to confirm the Corporation’s compliance with the terms and conditions of this Certificate of Designations.

 

14. Attorneys Fees. If (i) any shares of Series D-2 are placed in the hands of an attorney to enforce the provisions of this Certificate of Designations or (ii) there occurs any bankruptcy, reorganization, receivership of the Corporation or other proceedings affecting Corporation creditors’ rights and involving a claim under this Certificate of Designations, then the Corporation shall pay the costs incurred by such Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including attorneys’ fees and disbursements.

 

15. Construction; Headings. This Certificate of Designations shall be deemed to be jointly drafted by the Corporation and the Holders and shall not be construed against any such Person as the drafter hereof. The headings of this Certificate of Designations are for convenience of reference and shall not form part of, or affect the interpretation of, this Certificate of Designations. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include” and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,” “hereunder,” “hereof” and words of like import refer to this entire Certificate of Designations instead of just the provision in which they are found. Unless expressly indicated otherwise, all section references are to sections of this Certificate of Designations.

 

16. Failure or Indulgence Not Waiver. No failure or delay on the part of a Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party. This Certificate of Designations shall be deemed to be jointly drafted by the Corporation and all Holders and shall not be construed against any Person as the drafter hereof.

 

  10  
     

 

17. Governing Law; Exclusive Jurisdiction. This Certificate of Designations shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Certificate of Designations shall be governed by, the internal laws of the State of Nevada, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Nevada or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Nevada. Except as otherwise required by this Certificate of Designations, the Corporation hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in New York County, New York, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude any Holder from bringing suit or taking other legal action against the Corporation in any other jurisdiction to collect on the Corporation’s obligations to such Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of such Holder. The Corporation hereby irrevocably waives any right it may have to, and agrees not to request, a jury trial for the adjudication of any dispute hereunder or in connection with or arising out of this Certificate of Designations or any transaction contemplated hereby.

 

18. Severability. If any provision of this Certificate of Designations is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Certificate of Designations so long as this Certificate of Designations as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

  11  
     

 

19. Stockholder Matters; Amendment.

 

(a) Stockholder Matters. Any stockholder action, approval or consent required, desired or otherwise sought by the Corporation pursuant to the NRS, the Articles of Incorporation, this Certificate of Designations or otherwise with respect to the issuance of Series D-2 may be effected by written consent of the Corporation’s stockholders or at a duly called meeting of the Corporation’s stockholders, all in accordance with the applicable rules and regulations of the NRS. This provision is intended to comply with the applicable sections of the NRS permitting stockholder action, approval and consent affected by written consent in lieu of a meeting.

 

(b) Amendment. This Certificate of Designations or any provision hereof (other than Section 5(d)) may be modified or amended or the provisions hereof waived with the written consent of the Corporation and the Holders of a majority of the Series D-2 currently outstanding. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party.

 

* * * * *

 

  12  
     

 

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designations of Series D-2 Convertible Preferred Stock of OncBioMune Pharmaceuticals, Inc. to be signed by its Chief Executive Officer on this 18th day of May, 2020.

 

  ONCBIOMUNE PHARMACEUTICALS, INC.
     
  By: /s/ Andrew Kucharchuk
    Andrew Kucharchuk, Chief Executive Officer

 

 

 

 

EXHIBIT I

 

ONCBIOMUNE PHARMACEUTICALS, INC.

DELIVERY NOTICE

 

Reference is made to the Certificate of Designations, Preferences and Rights of the Series D-2 Convertible Preferred Stock of OncBioMune Pharmaceuticals, Inc. (the “Certificate of Designations”). In accordance with and pursuant to the Conversion Notice the Holder received from the Corporation, the Holder hereby directs the Corporation to:

 

Please issue the Common Stock into which the applicable Series D-2 are being converted to Holder, or for its benefit, as follows:

 

  [  ] Check here if requesting delivery as a certificate to the following name and to the following address:

 

  Issue to:  
     
     

 

  [  ] Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows:

 

  DTC Participant:  
  DTC Number:  
 

Account Number:

 

 

Date: _____________ __, 2020  
   
   
Name of Registered Holder  

 

By:    
Name:    
Title:    

 

  Tax ID:    
  Facsimile:    
  E-mail Address:  

 

 

 

 

EXHIBIT II

 

ACKNOWLEDGMENT

 

The Corporation hereby acknowledges this Delivery Notice and hereby directs West Coast Stock Transfer to issue _________________ shares of Common Stock in accordance with the Transfer Agent Instructions dated _____________, 20__ from the Corporation and acknowledged and agreed to by West Coast Stock Transfer.

 

  ONCBIOMUNE PHARMACEUTICALS, INC.
     
  By:                            
  Name:  
  Title:  

 

 

 

 

 

Exhibit 3.4

 

CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF THE
SERIES D-1 CONVERTIBLE PREFERRED STOCK OF
ONCBIOMUNE PHARMACEUTICALS, INC.

 

The undersigned, Andrew Kucharchuk, President and Chief Executive Officer of OncBioMune Pharmaceuticals, Inc. (the “Corporation”), a corporation organized and existing under Chapter 78 of the Nevada Revised Statues (the “NRS”), hereby does certify:

 

That pursuant to the authority expressly conferred upon the Board of Directors of the Corporation by the Corporation’s Articles of Incorporation, as amended, and Section 78.315 of the NRS, the Board of Directors on April 28, 2020, adopted the following resolution determining it desirable and in the best interests of the Corporation and its shareholders for the Corporation to create a series of One Thousand (1,000) shares of preferred stock designated as “Series D-1 Convertible Preferred Stock”, none of which shares have been issued.

 

RESOLVED, that the Board of Directors designates the Series D-1 Convertible Preferred Stock and the number of shares constituting such series, and fixes the rights, powers, preferences, privileges and restrictions relating to such series in addition to any set forth in the Articles of Incorporation as follows:

 

TERMS OF SERIES D-1 CONVERTIBLE PREFERRED STOCK

 

1. Certain Defined Terms. For purposes of this Certificate of Designations, the following terms shall have the following meanings:

 

(a) “1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

 

(b) “Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person, it being understood for purposes of this definition that “control” of a Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

 

(c) “Approval Date” means the first Trading Day following the receipt of Shareholder Approval.

 

(d) “Certificate of Designations” means this Certificate Of Designations, Preferences and Rights of the Series D-1 Convertible Preferred Stock of the Corporation.

 

(e) “Common Stock” means (i) the Corporation’s shares of common stock, $0.0001 par value per share, and (ii) any capital stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.

 

 
 

 

(f) “Conversion Date” shall have the meaning given to it in Section 5 hereto.

 

(g) “Conversion Notice” shall have the meaning given to it in Section 5 hereto.

 

(h) “Conversion Rate” shall equal (i) (a) 54.55%, multiplied by, (b) the Fully-Diluted Shares as of the Approval Date, divided by (ii) the total number of shares of Series D-1, (iii) rounded to the nearest thousandths place. The total number of Fully-Diluted Shares shall be set as of, and shall not change after, the Approval Date.

 

(i) “Convertible Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares of Common Stock; provided, however, such term shall not include the common stock purchase warrants for an aggregate amount of 200,000,000 shares of Common Stock to be issued to Cavalry Fund I LLP and Lincoln Park Capital Fund, LLC to be issued prior to the Approval Date.

 

(j) “Conversion Shares” shall have the meaning given to it in Section 5 hereto.

 

(k) “Corporate Event” shall have the meaning given to it in Section 6 hereto.

 

(l) “Corporation” shall have the meaning given to it in the preamble hereto.

 

(m) “Delivery Notice” shall have the meaning given to it in Section 5 hereto.

 

(n) “Distributions” shall have the meaning given to it in Section 10 hereto.

 

(o) “DTC” shall have the meaning given to it in Section 5 hereto.

 

(p) “Fundamental Transaction” shall have the meaning given to it in Section 6.

 

(q) “Fully-Diluted Shares” means, with respect to any date of determination, the aggregate of (A) the total number of shares of Common Stock outstanding as of such date (including for the avoidance of doubt the total number of Common Stock equivalents as of such date to which any stock appreciation rights, phantom stock rights or other rights with equity or profit participation features relates), (B) the number of shares of Common Stock (including all such Common Stock equivalents) into which all Convertible Securities outstanding as of such date could be converted or exercised, and (C) the number of shares of Common Stock (including all such Common Stock equivalents) issuable upon exercise of all Options outstanding as of such date of exercise, divided by 0.4545.

 

(r) “Holder” or “Holders” means a holder of Series D-1.

 

(s) “Junior Stock” shall have the meaning given to it in Section 3 hereto.

 

2
 

 

(t) “Liquidation Event” means, whether in a single transaction or series of transactions, the voluntary or involuntary liquidation, dissolution or winding up of the Corporation or such Subsidiaries the assets of which constitute all or substantially all of the assets of the business of the Corporation and its Subsidiaries, taken as a whole.

 

(u) “Liquidation Funds” shall have the meaning given to it in Section 9 hereto.

 

(v) “NRS” shall have the meaning given to it in the preamble hereto.

 

(w) “Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

 

(x) “Parity Stock” shall have the meaning given to it in Section 3 hereto.

 

(y) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity or a government or any department or agency thereof.

 

(z) “Principal Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market, OTCPink, OTCQB, or OTCQX and any successor markets thereto.

 

(aa) “Restricted Shares” means shares of the Corporation’s Common Stock which are restricted from being transferred by the Holder thereof unless the transfer is effected in compliance with the Securities Act and applicable state securities laws (including investment suitability standards, which shares shall bear the following restrictive legend (or one substantially similar)): “The securities represented by this certificate have not been registered under the Securities Act of 1933 or any state securities act. The securities have been acquired for investment and may not be sold, transferred, pledged or hypothecated unless (i) they shall have been registered under the Securities Act of 1933 and any applicable state securities act, or (ii) the corporation shall have been furnished with an opinion of counsel, satisfactory to counsel for the corporation, that registration is not required under any such acts.

 

(bb) “SEC” means the Securities and Exchange Commission or the successor thereto.

 

(cc) “Senior Preferred Stock” shall have the meaning given to it in Section 3 hereto.

 

(dd) “Series D-1” shall have the meaning given to it in Section 2 hereto.

 

(ee) “Series D-1 Certificates” shall have the meaning given to it in Section 5 hereto.

 

3
 

 

(ff) “Share Delivery Deadline” shall have the meaning given to it in Section 5 hereto.

 

(gg) “Shareholder Approval” shall mean the approval of an amendment to the Corporation’s Amended and Restated Articles of Incorporation to increase the number of shares of Common Stock authorized thereunder from 6,666,667 to 12,000,000,000 by a majority of the votes entitled to be cast thereon, whether presented at a special or annual meeting of shareholders of the Corporation and the subsequent filing of such amendment with the Secretary of State of the State of Nevada.

 

(hh) “Stated Value” shall mean $9,104.89 per share, subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations, subdivisions or other similar events occurring after the date which the Series D-1 are issued.

 

(ii) “Subsidiary” when used with respect to any Person, means any corporation or other organization, whether incorporated or unincorporated, of which (A) at least a majority of the securities or other interests having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such Person (through ownership of securities, by contract or otherwise) or (B) such Person or any subsidiary of such Person is a general partner of any general partnership or a manager of any limited liability company.

 

(jj) “Trading Day” means any day on which the Common Stock is eligible to be traded on the Principal Market or securities market on which the Common Stock is then traded, provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00 p.m., Eastern time) unless such day is otherwise designated as a Trading Day in writing by the Holder.

 

(kk) “Transfer Agent” shall have the meaning given to it in Section 5 hereto.

 

2. Designation and Number of Shares. There shall hereby be created and established a series of preferred stock of the Corporation designated as “Series D-1 Convertible Preferred Stock” (the “Series D-1”). The authorized number of Series D-1 shall be One Thousand (1,000) shares. Each share of Series D-1 shall have a par value of $0.0001.

 

3. Ranking. Until such time as the holders of at least a majority of the outstanding Series D-1, expressly consent to the creation of Parity Stock or Senior Preferred Stock (each as defined below) in accordance with Section 15, the Series D-1 shall rank pari passu with respect to the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Corporation with the Series C Convertible Preferred Stock of the Corporation and the Series D-2 Convertible Preferred Stock of the Corporation (the “Parity Stock”), and all other shares of capital stock of the Corporation shall be junior in rank to all Series D-1 with respect to the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Corporation (such junior stock is referred to herein collectively as “Junior Stock”). The rights of all such Junior Stock shall be subject to the rights, powers, preferences and privileges of the Series D-1. Without limiting any other provision of this Certificate of Designations, the Corporation shall not hereafter authorize or issue any additional or other shares of capital stock that is (i) of senior rank to the Series D-1 in respect of the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Corporation (collectively, the “Senior Preferred Stock”), (ii) Parity Stock other than the Series C Convertible Preferred Stock and Series D-2 Convertible Preferred Stock or (iii) any Junior Stock having a maturity date (or any other date requiring redemption or repayment of such shares of Junior Stock) that is prior to the date no Series D-1 remain outstanding.

 

4
 

 

4. Dividends and Distributions. Each Holder of Series D-1 shall be entitled to receive dividends or distributions on each share of Series D-1 on an “as converted” into Common Stock basis as provided in Section 5 hereof when and if dividends are declared on the Common Stock by the Board of Directors. Dividends shall be paid in cash or property, as determined by the Board of Directors.

 

5. Conversion.

 

(a) Upon the terms and in the manner set forth in this Section 5, each share of the Series D-1 Preferred Stock will automatically convert on the Approval Date (such date, the “Conversion Date”) into a number of fully-paid and non-assessable shares of Common Stock determined by multiplying all the of Series D-1 Preferred Stock outstanding by the Conversion Rate in effect on the Conversion Date (such shares of Common Stock issuable upon Conversion, the “Conversion Shares”).

 

(b) As promptly as practicable after the Conversion Date, the Corporation shall provide notice of the conversion (the “Conversion Notice”) to each Holder stating the Conversion Date, the number of shares of Common Stock to be issued upon conversion of each share of Series D-1 held of record by such Holder and subject to conversion and the place or places where certificates representing shares of Series D-1 Preferred Stock are to be surrendered for issuance of shares of Common Stock if such shares are not held in book-entry. As promptly as practicable after receipt of the Conversion Notice from the Corporation, (i) if any Holder holds its shares of Series D-1 in certificated form, then such Holder shall surrender to a nationally recognized overnight delivery service for delivery to the Corporation the original certificates representing the Series D-1 (the “Series D-1 Certificates”) so converted as aforesaid (or an indemnification undertaking with respect to the Series D-1 in the case of its loss, theft or destruction as contemplated by Section 12) and (ii) all Holders must send a copy of the executed delivery notice in the form attached hereto as Exhibit I (the “Delivery Notice”). On or before the first Trading Day following the date of receipt of a Series D-1 Certificate, if any, and Delivery Notice from a Holder, the Corporation shall transmit by electronic mail an acknowledgment of confirmation, in the form attached hereto as Exhibit II, of receipt of such Series D-1 Certificate, if any, and Delivery Notice to such Holder and the Corporation’s transfer agent (the “Transfer Agent”), which confirmation shall constitute an instruction to the Transfer Agent to issue the Conversion Shares such Holder is entitled. On or before the third Trading Day following the date of receipt of a Delivery Notice (or such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade initiated on the applicable Conversion Date of such Conversion Shares) (the “Share Delivery Deadline”), the Corporation shall (1) provided that the Transfer Agent is participating in The Depository Trust Corporation’s (“DTC”) Fast Automated Securities Transfer Program, credit such aggregate number of shares of Common Stock to which such Holder shall be entitled to such Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system, or (2) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver (via reputable overnight courier) to the address as specified in such Conversion Notice, a certificate, registered in the name of such Holder or its designee, for the number of shares of Common Stock to which such Holder shall be entitled. Unless the Conversion Shares are covered by a valid and effective registration under the Securities Act, such shares shall be issued as Restricted Shares. Notwithstanding the above, if requested by the Holder, the Corporation shall cause its counsel at the Corporation’s expense to issue any necessary legal opinion (to the extent lawful) in order to permit sales of the Common Stock pursuant to Rule 144 under the Securities Act or under another applicable exemption from the registration requirements; provided that (i) an exemption under Rule 144 under the Securities Act or another applicable exemption from the registration requirements is available with respect to such shares, and (ii) the Holder provides the Corporation and the legal counsel providing the necessary opinion with such representations and other related information reasonably requested in order for such legal counsel to issue the legal opinion.

 

5
 

 

(c) The Holder shall be deemed to have become a shareholder of record on the Conversion Date. Immediately upon conversion, the rights of the Holders as such with respect to the Series D-1 so converted shall cease and the persons entitled to receive the shares of Common Stock upon the conversion of such shares of Series D-1 shall be treated for all purposes as having become the record and beneficial owners of such shares of Common Stock. If any shares of Series D-1 shall be reacquired by the Corporation, such shares shall resume the status of authorized but unissued shares of preferred stock and shall no longer be designated as Series D-1.

 

(d) If any Conversion of Series D-1 would result in the issuance of a fractional share of Common Stock to any Holder, such fractional share shall be payable in cash based upon the market value of the Common Stock on the Principal Market prior to the date of Conversion and the number of shares of Common Stock issuable upon Conversion of the Series D-1 Preferred Stock shall be the next lower whole number of shares. If the Corporation elects not to, or is unable to, make such a cash payment, the Holder shall be entitled to receive, in lieu of the final fraction of a share, one whole share of Common Stock.

 

(e) The issuance of certificates for shares of Common Stock upon Conversion of the Series pursuant to Section 5 shall be made without payment of additional consideration by, or other charge, cost or tax to, the Holder in respect thereof.

 

6
 

 

6. Rights Upon Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”), the Corporation shall make appropriate provision to insure that each Holder will thereafter have the right to receive upon a conversion of all the Series D-1 held by such Holder (i) in addition to the shares of Common Stock receivable upon such conversion, such securities or other assets to which such Holder would have been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by such Holder upon the consummation of such Corporate Event (without taking into account any limitations or restrictions on the convertibility of the Series D-1 contained in this Certificate of Designations) or (ii) in lieu of the shares of Common Stock otherwise receivable upon such conversion, such securities or other assets received by the holders of shares of Common Stock in connection with the consummation of such Corporate Event in such amounts as such Holder would have been entitled to receive had the Series D-1 held by such Holder initially been issued with conversion rights for the form of such consideration (as opposed to shares of Common Stock) at a conversion rate for such consideration commensurate with the Conversion Rate. The provision made pursuant to the preceding sentence shall be in a form and substance satisfactory to the Holder. The provisions of this Section 6 shall apply similarly and equally to successive Corporate Events and shall be applied without regard to any limitations on the conversion of the Series D-1 contained in this Certificate of Designations. “Fundamental Transaction” means the occurrence of the Corporation (i) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, (A) consolidating or merging with or into (whether or not the Corporation is the surviving corporation) another Person, (B) selling, assigning, transferring, conveying or otherwise disposing of all or substantially all of the properties or assets of the Corporation or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X) to one or more Persons, (C) making, or allowing one or more Persons to make, or allowing the Corporation to be subject to or have its Common Stock be subject to or party to one or more Persons making, a purchase, tender or exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Persons making or party to, or Affiliated with any Persons making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Persons making or party to, or Affiliated with any Person making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, (D) consummating a stock or share purchase agreement or other business combination (including a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Persons whereby all such Persons, individually or in the aggregate, acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all the Persons making or party to, or Affiliated with any Persons making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock such that the Persons become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (E) reorganize, recapitalize or reclassify its Common Stock.

 

7
 

 

7. Noncircumvention. The Corporation hereby covenants and agrees that the Corporation will not, by amendment of its Articles of Incorporation, Bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Certificate of Designations, and will at all times in good faith carry out all the provisions of this Certificate of Designations and take all action as may be required to protect the rights of the Holders. Without limiting the generality of the foregoing or any other provision of this Certificate of Designations, the Corporation (a) shall not increase the par value of any shares of Common Stock receivable upon the conversion of any Series D-1 above the Conversion Rate then in effect and (b) shall take all such actions as may be necessary or appropriate in order that the Corporation may validly and legally issue fully paid and non-assessable shares of Common Stock upon the conversion of Series D-1.

 

8. Voting Rights. Each Holder shall be entitled to the whole number of votes equal to the number of shares of Common Stock into which such holder’s Series D-1 would be convertible on the record date for the vote or consent of stockholders, and shall otherwise have voting rights and powers equal to the voting rights and powers of the Common Stock. To the extent that under the NRS the vote of the holders of the Series D-1, voting separately as a class or series as applicable, is required to authorize a given action of the Corporation, the affirmative vote or consent of the holders of a majority of the shares of the outstanding Series D-1, shall constitute the approval of such action by both the class or the series, as applicable (except as otherwise may be required under the NRS). To the extent that under the NRS holders of the Series D-1 are entitled to vote on a matter with holders of shares of Common Stock, voting together as one class, each share of Series D-1 shall entitle the holder thereof to cast that number of votes per share as is equal to the number of shares of Common Stock into which it is then convertible using the record date for determining the stockholders of the Corporation eligible to vote on such matters as the date as of which the Conversion Rate is calculated. Holders of the Series D-1 shall be entitled to written notice of all stockholder meetings or written consents (and copies of proxy materials and other information sent to stockholders) with respect to which they would be entitled by vote, which notice would be provided pursuant to the Corporation’s Bylaws and the NRS. As long as any shares of Series D-1 are outstanding, the Corporation shall not, without the affirmative vote of the Holders of all the then outstanding shares of Series D-1, (a) alter or change adversely the powers, preferences or rights given to the Series D-1 or alter or amend this Certificate of Designations, (b) amend its articles of incorporation or other charter documents in any manner that adversely affects any rights of the Holder, or (c) enter into any agreement with respect to any of the foregoing.

 

9. Liquidation, Dissolution, Winding-Up. In the event of a Liquidation Event, the Holders shall be entitled to receive in cash out of the assets of the Corporation, whether from capital or from earnings available for distribution to its stockholders (the “Liquidation Funds”), before any amount shall be paid to the holders of any of shares of Junior Stock, but pari passu with any Parity Stock then outstanding, an amount per share of Series D-1 equal to the greater of (A) the Stated Value of such Series D-1 on the date of such payment and (B) the amount per share such Holder would receive if such Holder converted such Series D-1 into Common Stock immediately prior to the date of such payment, provided that if the Liquidation Funds are insufficient to pay the full amount due to the Holders and holders of shares of Parity Stock, then each Holder and each holder of Parity Stock shall receive a percentage of the Liquidation Funds equal to the full amount of Liquidation Funds payable to such Holder and such holder of Parity Stock as a liquidation preference, in accordance with their respective certificate of designations (or equivalent), as a percentage of the full amount of Liquidation Funds payable to all holders of Series D-1 and all holders of shares of Parity Stock. To the extent necessary, the Corporation shall cause such actions to be taken by each of its Subsidiaries so as to enable, to the maximum extent permitted by law, the proceeds of a Liquidation Event to be distributed to the Holders in accordance with this Section 9. All the preferential amounts to be paid to the Holders under this Section shall be paid or set apart for payment before the payment or setting apart for payment of any amount for, or the distribution of any Liquidation Funds of the Corporation to the holders of shares of Junior Stock in connection with a Liquidation Event as to which this Section 11 applies.

 

8
 

 

10. Distribution of Assets. If the Corporation shall declare or make any dividend or other distributions of its assets (or rights to acquire its assets) to any or all holders of shares of Common Stock, by way of return of capital or otherwise (including any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (the “Distributions”), then each Holder, as holders of Series D-1, will be entitled to such Distributions as if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of the Series D-1 immediately prior to the date on which a record is taken for such Distribution or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for such Distributions.

 

11. Transfer of Series D-1. A Holder may transfer some or all of its Series D-1 without the consent of the Corporation, subject to compliance with Section 5 of the Securities Act of 1933.

 

12. Form of Security. The Series D-1 shall be issued as book-entry securities directly registered in the Holder’s name on the Corporation’s books and records or, if requested by any Holder of the Series D-1, such holder’s shares may be issued in certificated form.

 

13. Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Certificate of Designations shall be cumulative and in addition to all other remedies available under this Certificate of Designations, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit any Holder’s right to pursue actual and consequential damages for any failure by the Corporation to comply with the terms of this Certificate of Designations. The Corporation covenants to each Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by a Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Corporation (or the performance thereof). The Corporation acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holders and that the remedy at law for any such breach may be inadequate. The Corporation therefore agrees that, in the event of any such breach or threatened breach, each Holder shall be entitled, in addition to all other available remedies, to specific performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and without posting a bond or other security. The Corporation shall provide all information and documentation to a Holder that is requested by such Holder to enable such Holder to confirm the Corporation’s compliance with the terms and conditions of this Certificate of Designations.

 

9
 

 

14. Attorneys Fees. If (i) any shares of Series D-1 are placed in the hands of an attorney to enforce the provisions of this Certificate of Designations or (ii) there occurs any bankruptcy, reorganization, receivership of the Corporation or other proceedings affecting Corporation creditors’ rights and involving a claim under this Certificate of Designations, then the Corporation shall pay the costs incurred by such Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including attorneys’ fees and disbursements.

 

15. Construction; Headings. This Certificate of Designations shall be deemed to be jointly drafted by the Corporation and the Holders and shall not be construed against any such Person as the drafter hereof. The headings of this Certificate of Designations are for convenience of reference and shall not form part of, or affect the interpretation of, this Certificate of Designations. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include” and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,” “hereunder,” “hereof” and words of like import refer to this entire Certificate of Designations instead of just the provision in which they are found. Unless expressly indicated otherwise, all section references are to sections of this Certificate of Designations.

 

16. Failure or Indulgence Not Waiver. No failure or delay on the part of a Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party. This Certificate of Designations shall be deemed to be jointly drafted by the Corporation and all Holders and shall not be construed against any Person as the drafter hereof.

 

17. Governing Law; Exclusive Jurisdiction. This Certificate of Designations shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Certificate of Designations shall be governed by, the internal laws of the State of Nevada, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Nevada or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Nevada. Except as otherwise required by this Certificate of Designations, the Corporation hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in New York County, New York, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude any Holder from bringing suit or taking other legal action against the Corporation in any other jurisdiction to collect on the Corporation’s obligations to such Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of such Holder. The Corporation hereby irrevocably waives any right it may have to, and agrees not to request, a jury trial for the adjudication of any dispute hereunder or in connection with or arising out of this Certificate of Designations or any transaction contemplated hereby.

 

10
 

 

18. Severability. If any provision of this Certificate of Designations is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Certificate of Designations so long as this Certificate of Designations as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

19. Stockholder Matters; Amendment.

 

(a) Stockholder Matters. Any stockholder action, approval or consent required, desired or otherwise sought by the Corporation pursuant to the NRS, the Articles of Incorporation, this Certificate of Designations or otherwise with respect to the issuance of Series D-1 may be effected by written consent of the Corporation’s stockholders or at a duly called meeting of the Corporation’s stockholders, all in accordance with the applicable rules and regulations of the NRS. This provision is intended to comply with the applicable sections of the NRS permitting stockholder action, approval and consent affected by written consent in lieu of a meeting.

 

(b) Amendment. This Certificate of Designations or any provision hereof (other than Section 5(d)) may be modified or amended or the provisions hereof waived with the written consent of the Corporation and the Holders of a majority of the Series D-1 currently outstanding. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party.

 

* * * * *

 

11
 

 

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designations of Series D-1 Convertible Preferred Stock of OncBioMune Pharmaceuticals, Inc. to be signed by its Chief Executive Officer on this 18th day of May, 2020.

 

  ONCBIOMUNE PHARMACEUTICALS, INC.
   
  By:  /s/ Andrew Kucharchuk
    Andrew Kucharchuk, Chief Executive Officer

 

 
 

 

EXHIBIT I

 

ONCBIOMUNE PHARMACEUTICALS, INC.

DELIVERY NOTICE

 

Reference is made to the Certificate of Designations, Preferences and Rights of the Series D-1 Convertible Preferred Stock of OncBioMune Pharmaceuticals, Inc. (the “Certificate of Designations”). In accordance with and pursuant to the Conversion Notice the Holder received from the Corporation, the Holder hereby directs the Corporation to:

 

Please issue the Common Stock into which the applicable Series D-1 are being converted to Holder, or for its benefit, as follows:

 

  [  ] Check here if requesting delivery as a certificate to the following name and to the following address:

 

  Issue to:  
     
     

 

  [  ] Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows:

 

  DTC Participant:  
  DTC Number:  
  Account Number:  

 

Date: _____________ __, 2020  
   
   
Name of Registered Holder  

 

By:    
Name:    
Title:    

 

  Tax ID:    
  Facsimile:    
  E-mail Address:  

 

 
 

 

EXHIBIT II

 

ACKNOWLEDGMENT

 

The Corporation hereby acknowledges this Delivery Notice and hereby directs West Coast Stock Transfer to issue _________________ shares of Common Stock in accordance with the Transfer Agent Instructions dated _____________, 20__ from the Corporation and acknowledged and agreed to by West Coast Stock Transfer.

 

  ONCBIOMUNE PHARMACEUTICALS, INC.
                               
  By:  
  Name:  
  Title:  

 

 

 

 

Exhibit 3.5

 

 

 
 

 

 

 

 

 

Exhibit 4.1

 

NEITHER THIS SECURITY NOR THE SECURITIES AS TO WHICH THIS SECURITY MAY BE EXERCISED (THE “SECURITIES”) HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A CUSTOMARY FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

 

COMMON STOCK PURCHASE WARRANT

ONCBIOMUNE PHARMACEUTICALS, INC.

 

Warrant Shares: Issue Date: June 5, 2020

Initial Exercise Date: September 5, 2020

 

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _________, an                    or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after September 5, 2020 (the “Initial Exercise Date”) and on or prior to the close of business on September 5, 2025, (the “Termination Date”, provided, however, that if such date is not a Trading Day, the Termination Date shall be the immediately following Trading Day (as defined below)) but not thereafter, to subscribe for and purchase from ONCBIOMUNE PHARMACEUTICALS, INC., a Nevada corporation (the “Company”), up to                       shares (as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

 

Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Securities Purchase Agreement”), dated May 12, 2020, by and among the Company and the other parties thereto signatory thereto.

 

Section 2. Exercise.

 

a) Exercise of Warrant. This Warrant is not exercisable until sixty (60) days after the Company effectuates a reverse stock split and the Company achieves and maintains a Market Capitalization of $50,000,000 for thirty (30) consecutive days, at which it will become exercisable until the Termination Date; provided, however, this requirement may be waived by the Executive Chairman or the Chief Executive Officer of the Company at any time. For purposes of this Section, “Market Capitalization” means the product equal to (a) the closing stock price of the Common Stock, multiplied by (b) the aggregate number of outstanding shares of Common Stock as reported on Company’s most recently filed Form 10-Q or Form 10-K plus the number of shares of common stock all currently convertible and outstanding common share equivalent securities are convertible into. Subject to the forgoing, exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company or the Transfer Agent (or such other office or agency that the Company may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company), as applicable, of a duly executed facsimile copy or PDF copy submitted by electronic (or e-mail attachment) of the Notice of Exercise in the form annexed hereto. Within the earlier of (i) three (3) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder, by acceptance of this Warrant, acknowledges and agrees that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

 

  -1-  
     

 

b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $0.0025, subject to adjustment hereunder (the “Exercise Price”).

 

c) Cashless Exercise. If on or after February 15, 2021, there is no effective registration statement registering, or no current prospectus available for, the resale of the Warrant Shares by the Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

  (A) = as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal market for the common stock as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Exercise Notice if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;
  (B) = the Exercise Price of this Warrant, as adjusted hereunder; and
  (X) = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

 

If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position contrary to this Section 2(c).

 

Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed on the Nasdaq Capital Market or another national securities exchange, the bid price of the Common Stock for the time in question (or the nearest preceding Trading Day) on such exchange on which the Common Stock is then listed as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Stock is then quoted on the OTCQB or OTCQX, the volume weighted average price of the Common Stock for such date (or the nearest preceding Trading Day) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on a national securities exchange or OTCQB or OTCQX, and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

  -2-  
     

 

Trading Day” means, as applicable, (x) with respect to all price or trading volume determinations relating to the Common Stock, any day on which the Common Stock is traded on the principal securities exchange or securities market on which the Common Stock is then traded, provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the Holder or (y) with respect to all determinations other than price determinations relating to the Common Stock, any day on which The Nasdaq Capital Market (or any successor thereto) is open for trading of securities.

 

VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed on the Nasdaq Capital Market or another national securities exchange, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding Trading Day) on the Trading Market on which the Common Stock is then listed as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Stock is then quoted on the OTCQB or OTCQX, the volume weighted average price of the Common Stock for such date (or the nearest preceding Trading Day) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on a national securities exchange or OTCQB or OTCQX, and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent Bid Price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Investor and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

d) Mechanics of Exercise.

 

i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder either, at the option of the Holder, (A) crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (1) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (2) this Warrant being exercised via cashless exercise and Rule 144 (as defined in the Securities Purchase Agreement) is available, or (B) otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is three (3) Trading Days after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) three Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date in the manner set forth in this Section 2(d)(i), the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise; provided that such penalty shall be tolled upon payment by the Company of the concurrent penalty set forth in Section 5(e) of the Securities Purchase Agreement. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered by 12:00 p.m. (New York City time) on the Initial Exercise Date, the Company agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date.

 

  -3-  
     

 

ii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

 

iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

iv. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

 

v. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.

 

vi. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

 

e) Holder’s Exercise Limitations. A Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act. The Holder acknowledges and agrees that it is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation. Notwithstanding anything to the contrary, the Company shall have no obligation to verify or confirm the accuracy of the Holder’s determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within three Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

 

  -4-  
     

 

Section 3. Certain Adjustments.

 

a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged, subject to the limitation on fractional shares in Section 2(d)(v). Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

b) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (other than dividends or distributions subject to Section 3(a) herein) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

  -5-  
     

 

c) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(c) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.

 

  -6-  
     

 

f) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

g) Notice to Holder.

 

i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

 

Section 4. Transfer of Warrant.

 

a) Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) is not transferable, in whole or in part, except to the Holder’s affiliates upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

  -7-  
     

 

b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Issue Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

 

c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

Section 5. Miscellaneous.

 

a) No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3(d).

 

b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

 

c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.

 

d) Authorized Shares. The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

 

e) No Frustration. Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

 

  -8-  
     

 

f) Authorizations. Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

 

g) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Securities Purchase Agreement.

 

f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

 

g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that all rights hereunder terminate on the Termination Date. If the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

h) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Securities Purchase Agreement.

 

i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

 

l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

 

m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

 

n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

 

********************

 

  -9-  
     

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

  ONCBIOMUNE PHARMACEUTICALS, INC.  
     
  By:  
  Name: Andrew Kucharchuk
  Title: Chief Executive Officer

 

  -10-  
     

 

EXHIBIT A

 

NOTICE OF EXERCISE

 

To: oncbiomune pharmaceuticals, INC.

 

(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

 

(2) Payment shall take the form of (check applicable box):

 

[  ] in lawful money of the United States; or

 

[  ] if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

 

(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

____________________________________

 

The Warrant Shares shall be delivered to the following DWAC Account Number:

____________________________________

____________________________________

____________________________________

 

[SIGNATURE OF HOLDER]

 

Name of Investing Entity: ___________________________________________________________________________

 

Signature of Authorized Signatory of Investing Entity:_____________________________________________________

 

Name of Authorized Signatory:_______________________________________________________________________

 

Title of Authorized Signatory:________________________________________________________________________

 

Date:___________________________________________________________________________________________

 

  -11-  
     

 

EXHIBIT B

ASSIGNMENT FORM

 

(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

 

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

Name:  
  (Please Print)
   
Address:  
  (Please Print)
   
Phone Number:  
   
Email Address:  
   
Dated: _______________ __, ______  
   
Holder’s Signature:  
   
Holder’s Address:  

 

  -12-  

 

 

Exhibit 4.2

 

NEITHER THIS WARRANT NOR THE SECURITIES FOR WHICH THIS WARRANT IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE, IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

 

COMMON STOCK PURCHASE WARRANT

 

ONCBIOMUNE PHARMACEUTICALS, inc.

 

Warrant Shares: 656,674,588   Issue Date: June 5, 2020

 

THIS COMMON STOCK PURCHASE WARRANT (this “Warrant”) certifies that, for value received, Doug Mergenthaler (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time after the Issue Date and on or after the filing of an amendment to the Company’s Articles of Incorporation to increase the number of shares of the Company’s Common Stock that the Company is authorized to issue with the Secretary of State of the State of Nevada (the “Initial Exercise Date”) and on or prior to the close of business on the Termination Date (as defined below) but not thereafter, to subscribe for and purchase from OncBioMune Pharmaceuticals, Inc., a Nevada corporation (the “Company”), of up to 656,674,588 shares (subject to adjustment hereunder, the “Warrant Shares”) of the Company’s Common Stock, par value $0.0001 per share (“Common Stock”). This Warrant is being issued in connection with the Asset Purchase Agreement, dated May 12, 2020 by and between the Company and Avant Diagnostics, Inc. (“Avant”) pursuant to which the Company is acquiring substantially all of the assets of Avant. This Warrant is being issued in exchange for and replaces the Common Stock Purchase Warrant, dated November 27, 2019, issued by Avant to the Holder to purchase 275,500 shares of common stock of Avant (the “Original Warrant”), after which the Original Warrant will be cancelled and be of no further force and effect.

 

Section 1. Exercise; Termination Date.

 

a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed facsimile copy of the Notice of Exercise Form annexed hereto as Annex A; and, within three (3) Business Days of the date said Notice of Exercise is delivered to the Company, the Company shall have received payment of the aggregate Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Business Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise Form within two (2) Business Days of receipt of such notice. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof. As used herein, “Business Day” means any day except Saturday, Sunday or any other day on which commercial banks located in the State of Nevada are authorized or required by law to be closed for business.

 

1

 

 

b) Exercise Price. The exercise price (the “Exercise Price”) of this Warrant shall be $0.00214 per Warrant Share, subject to adjustment hereunder.

 

c) Mechanics of Exercise.

 

i. Delivery of Certificates Upon Exercise. Certificates for the Warrant Shares purchased or exercised hereunder shall be transmitted by the Company’s transfer agent to the Holder by crediting the account of the Holder’s broker with the Depository Trust Company through its Deposit Withdrawal Agent Commission (“DWAC”) system if the Company is then a participant in such system and there is an effective registration statement permitting the resale of the Warrant Shares and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise within three (3) Business Days from the delivery to the Company of the Notice of Exercise Form, surrender of this Warrant (if required), and payment of the aggregate Exercise Price (unless cashless exercise is utilize) as set forth above (the “Warrant Share Delivery Date”). This Warrant shall be deemed to have been exercised on the date the Exercise Price is received by the Company (or notice of cashless exercise is received). The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised by payment to the Company of the Exercise Price and all taxes required to be paid by the Holder, if any, pursuant to Section 1(c)(v) prior to the issuance of such shares, have been paid.

 

ii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

 

iii. Rescission Rights. If the Company fails to cause the Company’s transfer agent to transmit to the Holder a certificate or the certificates representing the Warrant Shares pursuant to Section 1(c)(i) by the Warrant Share Delivery Date, then, the Holder will have the right to rescind such exercise.

 

iv. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

 

v. Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder, and such other documentation as the Company may require regarding the investor status of the assignee, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.

 

2

 

 

vi. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

 

d) Termination Date. This Warrant shall be exercisable from the Initial Exercise Date until November 27, 2024.

 

Section 2. Certain Adjustments.

 

a) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another person or group of persons whereby such other person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other person or other persons making or party to, or associated or affiliated with the other persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder, the number, class, and series of shares of stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction. For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 2(a) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.

 

3

 

 

b) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged, subject to the limitation on fractional shares in Section 2(d)(iv). Any adjustment made pursuant to this Section 2(b) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

c) Calculations. All calculations under this Section 2 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.

 

d) Notice to Holder.

 

i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 2, the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

 

ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number of email address as it shall appear upon the Warrant Register of the Company, at least five (5) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. The Holder is entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice.

 

4

 

 

Section 3. Transfer of Warrant.

 

a) Transferability. Subject to compliance with any applicable securities laws and the reasonable conditions and documentation required by the Company, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto as Annex B (the “Assignment Form”), duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. The Warrant, if properly assigned, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 3(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Initial Exercise Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

 

c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

Section 4. Miscellaneous.

 

a) No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 1(a).

 

b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

 

c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.

 

d) Authorized Shares. The Company covenants that, during the period the Warrant is outstanding, it will reserve, from its authorized and unissued Common Stock, a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the business market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

 

5

 

 

e) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined by applying the laws of the State of Nevada, without regard to its conflicts of laws provisions.

 

f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant will have restrictions upon resale imposed by state and federal securities laws unless (i) such Warrant Shares are registered; or (ii) the resale of the Warrant Shares satisfies an exemption from registration under the Securities Act.

 

g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies, notwithstanding the fact that all rights hereunder terminate on the Termination Date. If the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

h) Notices. All notices and other communications from the Company to the Holder of this Warrant shall be sent by electronic transmission or overnight courier or shall be mailed by first class registered or certified mail, postage prepaid, at such address as may have been furnished to the Company in writing by such Holder. All such notices and communications shall, when mailed, be effective when deposited in the mails and, when sent by electronic transmission or overnight courier, delivered, be effective when received.

 

i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

j) Successors and Assigns. Subject to applicable federal and state securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

 

k) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

 

m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

 

n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

 

[SIGNATURE PAGE FOLLOWS]

 

6

 

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

  ONCBIOMUNE PHARMACEUTICALS, INC.
   
  By

/s/ Andrew Kucharchuk

  Name: Andrew Kucharchuk
  Title: President and Chief Executive Officer

 

 

 

 

ANNEX A

 

NOTICE OF EXERCISE

 

To: ONCBIOMUNE PHARMACEUTICALS, INC.

 

(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and

 

(2) Payment shall take the form of lawful money of the United States:

 

(3) Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

_______________________________

 

 

The Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to:

 

_______________________________

 

_______________________________

 

_______________________________

 

(4) Accredited Investor. The undersigned is an “accredited investor” as defined in Rule 501(a) of Regulation D, promulgated under the Securities Act of 1933, as amended.

 

[SIGNATURE OF HOLDER]

 

Name of Investing Entity: ___________________________________________________________________________

Signature of Authorized Signatory of Investing Entity: _____________________________________________________

Name of Authorized Signatory: _______________________________________________________________________

Title of Authorized Signatory: ________________________________________________________________________

Date: ___________________________________________________________________________________________

 

 

 

 

ANNEX B

 

ASSIGNMENT FORM

 

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the Warrant.)

 

FOR VALUE RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

_______________________________________________ whose address is

 

_______________________________________________________________.

 

_______________________________________________________________

 

    Dated: ______________, ___________
     
  Holder’s Signature: _______________________________
     
  Holder’s Address: _______________________________

 

Signature Guaranteed: ___________________________________________

 

NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.

 

 

 

 

Exhibit 10.1

 

EXCHANGE AGREEMENT

 

THIS EXCHANGE AGREEMENT (the “Agreement”) is made as of the 5th day of June 2020, by and between, OncBioMune Pharmaceuticals, Inc., a Nevada corporation (the “Company”), and such persons listed on Schedule I who have executed a signature page to this Agreement (each, an “Investor”).

 

WHEREAS, the Investor has previously acquired various securities from the Company in the form of promissory notes and/or warrants issued by the Company, as set forth on Schedule I (the “Securities”).

 

WHEREAS, the Company has authorized a new series of Convertible Preferred Stock of the Company designated as Series C-1 Convertible Preferred Stock, $0.0001 par value (the “Series C-1”), the terms of which are set forth in the Certificate of Designations for such series of Series C-1 Preferred Stock (the “Certificate of Designations”) in the form attached hereto as Exhibit A.

 

WHEREAS, subject to the satisfaction of the conditions set forth herein, the Company and each Investor desire to enter into a transaction wherein the Company shall issue such aggregate number of shares of Series C-1 in exchange for each of the Securities as set forth on Schedule I.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1. Exchange. The closing of the Exchange (the “Closing”) will occur on or before May 31, 2020 (or such later date as the parties hereto may agree) following the satisfaction or waiver of the conditions set forth herein (such date, the “Closing Date”). On the Closing Date, subject to the terms and conditions of this Agreement, each Investor shall, and the Company shall, pursuant to Section 3(a)(9) of the Securities Act of 1933 (the “Securities Act”), exchange the Securities for (i) shares of the Series C-1 and (ii) Options (as defined below) to purchase shares of the Company’s wholly-owned subsidiary, OncBioMune Sub, Inc., a Nevada corporation (“Sub”) (in the amounts and pursuant to the terms set forth in Section 1.8 below). At the Closing, the following transactions shall occur (such transactions in this Section 1, the “Exchange”):

 

1.1. Delivery of Securities. On the Closing Date, the Company shall issue the Series C-1 and Options to each Investor (or its designees); provided that each Investor has complied with its obligations in this Section 1. Promptly after the Closing Date, the Company shall deliver a certificate evidencing the Series C-1 to the Investor. On the Closing Date, the Investor shall be deemed for all corporate purposes to have become the holder of record of the Series C-1 and shall have the right to convert the Series C-1, irrespective of the date the Company delivers the certificate evidencing the Series C-1 to each Investor.

 

1.2. No Rights Following Exchange. Upon receipt of the Series C-1 and Options in accordance with Section 1.1, each Investor’s rights under the Securities shall be extinguished (including, without limitation, the rights to receive, as applicable, any principal, premium, make-whole amount, accrued and unpaid interest, dividends or other payment thereon or any other shares of common stock, $0.0001 par value (“Common Stock”) with respect thereto (whether upon in connection with a fundamental transaction, event of default or otherwise)). In consideration for the issuance of the Series C-1 and the Options, each Investor hereby irrevocably waives any obligations of the Company under the Securities or any purchase agreement, security agreement, pledge agreement, warrant, guarantee or any other document executed in connection with the issuance of the Securities.

 

     
     

 

1.3. Further Assurances. The Company and each Investor shall execute and/or deliver such other documents and agreements as are customary and reasonably necessary to effectuate the Exchange.

 

1.4. Termination Before Closing. If the Closing has not occurred on or prior to April 30, 2020, any Investor shall have the right, by delivery of written notice to the Company to terminate this Agreement (such date, the “Termination Date”). From the date hereof until the earlier of (x) the Closing Date and (y) the Termination Date, each Investor shall forbear from taking any actions with respect to the Securities not explicitly set forth herein, including, without limitation, conversions, exercises, redemptions, exchanges or delivery of written notice to the Company to require the conversion, exercise, redemption or exchange of any of the Securities.

 

1.5. Representations and Warranties True at Closing. It shall be a condition to the obligation of the Investor on the one hand and Company on the other hand, to consummate the Exchange contemplated hereunder that the other party’s representations and warranties contained herein are true and correct on the Closing Date with the same effect as though made on such date, unless waived in writing by the party to whom such representations and warranties are made.

 

1.6. Deliveries. At or before the Closing, each Investor shall deliver or cause to be delivered to K&L Gates, LLP, as counsel to the Company, (i) the Securities held by such Investor free and clear of all liens, encumbrances, security interests, options or other purchase rights, equities, charges, claims, pledges, defects of title or other restrictions of any kind (other than federal and state securities laws) (ii) the executed Agreement and (iii) other items required to effectuate the Exchange.

 

1.7. Senior Securities. The Closing and the obligation of the Investor to exchange its securities are subject to the cancellation of the Company’s outstanding Series B Preferred Stock and the filing of a Certificate of Withdrawal eliminating the rights and preferences thereunder. The capitalization of the Company immediately after the effectiveness of this Exchange and the exchanges of the other outstanding securities will be as set forth on Exhibit B hereto.

 

1.8. Options.

 

1.8.1. The Company shall issue to each Investor an exclusive option to acquire shares of common stock of the Sub in the amounts set forth on Schedule II hereto for a payment of $0.10 per share (the “Options”).

 

  2  
     

 

1.8.2. Each Investor may deliver notice to the Company of its desire to exercise (“Exercise Notice”) its Options at any time during the period from the Closing Date through April 30, 2021. Within ten (10) days of receipt by the Company of Exercise Notices from Investors holding Options covering a majority of the shares of the Sub (the “Majority”), the Company shall deliver a written notice to all Investors (the “Company Notice”) notifying them that the Company has received such Exercise Notices from the Majority and the date of the closing of the purchase of the shares of Sub by such Majority (the “Sub Closing”), which date will be not less than sixteen (16) days from the date of such notice. Such Company Notice shall also include a notification to any Investor who wishes to exercise its Options but has not delivered an Exercise Notice, that it must do so within fifteen (15) days following the date of the Company Notice in order to participate in the Sub Closing. In the event the Company does not receive an Exercise Notice from any Investor, then such Investor’s Options shall be automatically cancelled (the “Cancelled Options”) on the sixteenth (16th) day following the date of the Company Notice and such Investors will have no rights and the Company no additional obligations under such Cancelled Options.

 

1.8.3. The shares of the Sub underlying the Cancelled Options shall be divided pro rata among the Investors who timely deliver Exercise Notices (“Participating Investors”). Each Participating Investor’s pro rata share shall be equal to the product obtained by multiplying: (i) the aggregate number of shares underlying the Cancelled Options, by (ii) a fraction, the numerator of which is the number of Options owned by such Investor on the date the Company Notice is delivered and the denominator of which is the total number of Options granted on the Closing Date. On the date of the Sub Closing, each Participating Investor shall deliver the exercise price for its Options to the Company in cash, and the Company shall issue to each Investor the number of shares of the Sub underlying their Options plus any shares underlying Cancelled Options, if any, to which they are entitled.

 

2. Representations and Warranties of the Company. The Company hereby represents and warrants to each Investor that:

 

2.1. Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a Material Adverse Effect (as defined below) on its business or properties. As used in this Agreement, “Material Adverse Effect” means any material adverse effect on the business, properties, assets, liabilities, operations, results of operations, condition (financial or otherwise) or prospects of the Company and its Subsidiaries, if any, individually or taken as a whole, or on the transactions contemplated hereby or on the Exchange (as defined below) or by the agreements and instruments to be entered into (or entered into) in connection herewith or therewith, or on the authority or ability of the Company to perform its obligations under this Agreement or the Exchange.

 

2.2. Authorization. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement and the other Exchange and the performance of all obligations of the Company hereunder and thereunder, and the authorization of the Exchange, the issuance (and reservation for issuance) of the Series C-1 have been taken on or prior to the date hereof. The Certificate of Designations has been validly filed with the Secretary of State of Nevada and, as of the date hereof and the Closing Date, remains in full force and effect.

 

  3  
     

 

2.3. Valid Issuance of the Series C-1. The Series C-1 shares when issued and delivered in accordance with the terms of this Agreement, for the consideration expressed herein, and the Common Stock when issued in accordance with the terms of the Certificate of Designations, for the consideration expressed therein, will be duly and validly issued, fully paid and non-assessable. Upon conversion of the Series C-1, the Common Stock shall be freely tradable and may be sold under Rule 144 promulgated under the Securities Act (“Rule 144”) subject to the requirements of Rule 144(i). If on the Closing Date, any Investor does not already have such amount of shares reserved, the Company shall, within two business days after the Company files an amendment of its Articles of Incorporation to increase the number of shares of Common Stock it is authorized to issue with the Secretary of State of the State of Nevada, the Company shall reserve from its duly authorized capital stock not less than 125% of the maximum number of shares of Common Stock issuable upon conversion of such Investor’s Series C-1 (assuming for purposes hereof that such Series C-1 are convertible at the initial Conversion Price and any such reservation shall not take into account any limitations on the conversion of the Series C-1 set forth herein).

 

2.4. Compliance With Laws. The Company has not violated any law or any governmental regulation or requirement which violation has had or would reasonably be expected to have a Material Adverse Effect, and the Company has not received written notice of any such violation.

 

2.5. Consents; Waivers. No consent, waiver, approval or authority of any nature, or other formal action, by any individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof (each, a “Person”), not already obtained, is required in connection with the execution and delivery of this Agreement by the Company or the consummation by the Company of the transactions provided for herein and therein.

 

2.6. Acknowledgment Regarding Investor’s Purchase of Series C-1. The Company acknowledges and agrees that each Investor is acting solely for itself and not any other Investor in the capacity of arm’s length purchaser with respect to this Agreement and the Exchange and the transactions contemplated hereby and thereby and that each Investor is not (i) an officer or director of the Company, (ii) an “affiliate” of the Company (as defined in Rule 144 promulgated under the Securities Act), or (iii) to the knowledge of the Company, a “beneficial owner” of more than 9.9% of the shares of Common Stock (as defined for purposes of Rule 13d-3 under the Exchange Act). The Company further acknowledges that each Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Exchange and the transactions contemplated hereby and thereby, and any advice given by the Investor or any of its representatives or agents in connection with the Exchange and the transactions contemplated hereby and thereby is merely incidental to the Investor’s acceptance of the Series C-1. The Company further represents to the Investor that the Company’s decision to enter into the Exchange has been based solely on the independent evaluation by the Company and its representatives. The Company has not (i) received any consideration from each Investor for the Series C-1 received in the Exchange, other than the Securities, (ii) paid any commission or remuneration for the solicitation of the Exchange or (iii) offered any shares of the Series C-1 to any Person other than each Investor.

 

  4  
     

 

2.7. Absence of Litigation. To the knowledge of the Company, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company, threatened against or affecting the Company, the Common Stock, the Securities or any of the Company’s officers or directors in their capacities as such.

 

2.8. Validity; Enforcement; No Conflicts. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Company and shall constitute the legal, valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies. The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of the Company or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company is a party or by which it is bound, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities or “Blue Sky” laws) applicable to the Company, except in the case of clause (ii) above, for such conflicts, defaults or rights which would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

2.9. Equal Treatment. None of the terms offered to any of the holders of the Company’s Securities listed on Schedule I with respect to the Exchange, including, without limitation with respect to any consent, release, amendment, settlement, or waiver relating to the Exchange (each an “Exchange Document”), is or will be more favorable to any other holder of the Company’s Securities listed on Schedule I than those of each other Investor and this Agreement.

 

3. Representations and Warranties of the Investor. Each Investor hereby represents, warrants and covenants that:

 

3.1. Authorization. The Investor has full power and authority to enter into this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby and has taken all action necessary to authorize the execution and delivery of this Agreement, the performance of its obligations hereunder and the consummation of the transactions contemplated hereby.

 

3.2. Exchange Only. The Investor is a current holder of Securities and has not provided any consideration to the Company for the Series C-1 received in the Exchange other than the Securities. Each Investor understands that: (i) the Securities have not been and are not being registered under the Securities Act or any state securities laws, and the Series C-1 issued in the Exchange may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) pursuant to Rule 144, or (C) pursuant to another exemption from registration under the Securities Act, including but not limited to Section 3(a)(9) thereunder.

 

  5  
     

 

3.3. No Governmental Review. The Investor understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Series C-1 or the fairness or suitability of the investment in the Series C-1 nor have such authorities passed upon or endorsed the merits of the offering of the Series C-1.

 

3.4. Validity; Enforcement; No Conflicts. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Investor and shall constitute the legal, valid and binding obligations of the Investor enforceable against the Investor in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

 

3.5. Ownership of Securities. The Investor owns and holds, beneficially and of record, the entire right, title, and interest in and to the Securities free and clear of all rights and liens (other than pledges or security interests (x) arising by operation of applicable securities laws and (y) that the Investor may have created in favor of a prime broker under and in accordance with its prime brokerage agreement with such broker). The Investor has full power and authority to transfer and dispose of the Securities to the Company free and clear of any right or lien. Other than the transactions contemplated by this Agreement, there is no outstanding, plan, pending proposal, or other right of any Person to acquire all or any part of the Securities or any shares of Common Stock issuable upon conversion of the Securities.

 

3.6. Release of Reserve. If prior to the date hereof, the Investor had a share reserve with West Coast Stock Transfer, the Company’s transfer agent, it has instructed such transfer agent to release the amount shares of Common Stock the Investor has reserved in excess of 125% of the maximum number of shares of Common Stock issuable upon conversion of the Series C-1 (assuming for purposes hereof that such Series C-1 are convertible at the initial Conversion Price and any such reservation shall not take into account any limitations on the conversion of the Series C-1 set forth herein).

 

4. Additional Covenants.

 

4.1. Disclosure. The Company shall, on or before 8:30 a.m., Eastern time, on the fourth business day after the date of this Agreement, file with the Securities and Exchange Commission a Current Report on Form 8-K disclosing all material terms of the transactions contemplated hereby and attaching the form of this Agreement and the Certificate of Designations as exhibits thereto (collectively with all exhibits attached thereto, the “8-K Filing”). From and after the issuance of the 8-K Filing, no Investor shall be in possession of any material, nonpublic information received from the Company or any of its subsidiaries or any of their respective officers, directors, employees, affiliates or agents, that is not disclosed in the 8-K Filing. The Company shall not, and shall cause its officers, directors, employees, affiliates and agents, not to, provide any Investor with any material, nonpublic information regarding the Company from and after the filing of the 8-K Filing without the express written consent of such Investor. To the extent that the Company delivers any material, non-public information to an Investor without such Investor’s express prior written consent, the Company hereby covenants and agrees that such Investor shall not have any duty of confidentiality to the Company, any of its subsidiaries or any of their respective officers, directors, employees, affiliates or agents with respect to, or a duty to the Company, any of its subsidiaries or any of their respective officers, directors, employees, affiliates or agents or not to trade on the basis of, such material, non-public information. The Company shall not disclose the name of any Investor in any filing, announcement, release or otherwise, unless such disclosure is required by law or regulation. In addition, effective upon the filing of the 8-K Filing, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its subsidiaries or any of their respective officers, directors, affiliates, employees or agents, on the one hand, and the Investor or any of its affiliates, on the other hand, shall terminate and be of no further force or effect. The Company understands and confirms that each Investor will rely on the foregoing representations in effecting transactions in securities of the Company.

 

  6  
     

 

4.2. Holding Period. For the purposes of Rule 144 of the Securities Act, the Company acknowledges that (i) the holding period of the Securities may be tacked onto the holding period of the Series C-1 as long as no payment is made in connection with any conversion, and (ii) the holding period of the Series C-1 may be tacked onto the holding period of the Common Stock, and the Company agrees not to take a position contrary to this Section 4.2.

 

4.3. Blue Sky. The Company shall make all filings and reports relating to the Exchange required under applicable securities or “Blue Sky” laws of the states of the United States following the date hereof, if any.

 

4.4. Fees and Expenses. Except as otherwise set forth above, each party to this Agreement shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.

 

4.5. Equal Treatment. Each Investor hereby acknowledge and agree that, in accordance with the terms of existing agreements with the Company relating to the Securities, the Company is obligated to present the terms of this Exchange to each holder of the Company’s Securities on Schedule I; provided that each agreement shall be separately agreed with each holder of the Company’s Securities and shall not in any way be construed as the Investor or any other holder of the Company’s Securities acting in concert or as a group with respect to the purchase, disposition or voting of securities of the Company or otherwise. If, and whenever on or after the date hereof, the Company enters into an Exchange Document other than in compliance with Section 2.9, then (i) the Company shall provide notice thereof to each Investor immediately following the occurrence thereof and (ii) the terms and conditions of this Agreement shall be, without any further action by each Investor or the Company, automatically amended and modified such that the Investor shall receive the benefit of the more favorable terms and/or conditions (as the case may be) set forth in such Exchange Document, provided that upon written notice to the Company at any time any Investor may elect not to accept the benefit of any such amended or modified term or condition, in which event the term or condition contained in this Agreement shall apply to such Investor as it was in effect immediately prior to such amendment or modification as if such amendment or modification never occurred with respect to such Investor. The provisions of this Section 4.5 shall apply similarly and equally to each Exchange Document.

 

  7  
     

 

4.6. Issuance of Unrestricted Common Stock. The Company agrees to take all actions, including, without limitation, the issuance by its legal counsel, or any legal counsel reasonably acceptable to the Company, of any legal opinions, to issue unrestricted Common Stock pursuant to Rule 144 in the connection of any sale of Common Stock issued upon conversion of Series C-1 by any Investor; provided that each such investor provides customary representation letters and all other such documentation as required by counsel to the Company to issue a legal opinion.

 

5. Miscellaneous

 

5.1. Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the parties hereto and the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto or their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

5.2. Governing Law; Exclusive Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state or federal courts sitting in New York County, New York, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

5.3. Notices. All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing, and shall be sufficiently given if delivered to the addressees in person, by FedEx or similar overnight next business day delivery, or by email followed by overnight next business day delivery, to the address as provided for on the signature page to this Agreement.

 

  8  
     

 

5.4. Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Investor.

 

5.5. Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

5.6. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

5.7. Survival. Sections 4 and 5 of this Agreement shall survive the Closing and delivery of the Series C-1.

 

[SIGNATURES ON THE FOLLOWING PAGE]

 

  9  
     

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date provided above.

 

  OncBioMune Pharmaceuticals, INC.
     
  By:

/s/ Andrew Kucharchuk               

  Name: Andrew Kucharchuk
  Title: Chief Executive Officer
   
  Address for Notices:
   
 

11441 Industriplex Blvd, Suite 190

Baton Rouge, LA 70809

Email: akucha1.obmp@gmail.com

 

     
     

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date provided above.

 

  INVESTORS:
   
  _______________________________
   
  By: _______________________________
  Name: _______________________________
  Title: ________________________________
   
  Address for Notices:
   
                                                           
   
                                                          
   
                                                          
   
  Email:                                           
   
  EIN#: ___________________

 

     

 

 

Exhibit 10.2

 

EXCHANGE AGREEMENT

 

THIS EXCHANGE AGREEMENT (the “Agreement”) is made as of the 5th day of June 2020, by and between, OncBioMune Pharmaceuticals, Inc., a Nevada corporation (the “Company”), and such persons listed on Schedule I who have executed a signature page to this Agreement (each, an “Investor”).

 

WHEREAS, the Investor has previously acquired various securities from the Company in the form of promissory notes and/or warrants issued by the Company, as set forth on Schedule I (the “Securities”).

 

WHEREAS, the Company has authorized a new series of Convertible Preferred Stock of the Company designated as Series C-2 Convertible Preferred Stock, $0.0001 par value (the “Series C-2”), the terms of which are set forth in the Certificate of Designations for such series of Series C-2 Preferred Stock (the “Certificate of Designations”) in the form attached hereto as Exhibit A.

 

WHEREAS, subject to the satisfaction of the conditions set forth herein, the Company and each Investor desire to enter into a transaction wherein the Company shall issue such aggregate number of shares of Series C-2 in exchange for each of the Securities as set forth on Schedule I.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1. Exchange. The closing of the Exchange (the “Closing”) will occur on or before May 31, 2020 (or such later date as the parties hereto may agree) following the satisfaction or waiver of the conditions set forth herein (such date, the “Closing Date”). On the Closing Date, subject to the terms and conditions of this Agreement, each Investor shall, and the Company shall, pursuant to Section 3(a)(9) of the Securities Act of 1933 (the “Securities Act”), exchange the Securities for shares of the Series C-2. At the Closing, the following transactions shall occur (such transactions in this Section 1, the “Exchange”):

 

1.1. Delivery of Securities. On the Closing Date, the Company shall issue the Series C-2 to each Investor (or its designees); provided that each Investor has complied with its obligations in this Section 1. Promptly after the Closing Date, the Company shall deliver a certificate evidencing the Series C-2 to the Investor. On the Closing Date, the Investor shall be deemed for all corporate purposes to have become the holder of record of the Series C-2 and shall have the right to convert the Series C-2, irrespective of the date the Company delivers the certificate evidencing the Series C-2 to each Investor.

 

1.2. No Rights Following Exchange. Upon receipt of the Series C-2 in accordance with Section 1.1, each Investor’s rights under the Securities shall be extinguished (including, without limitation, the rights to receive, as applicable, any principal, premium, make-whole amount, accrued and unpaid interest, dividends or other payment thereon or any other shares of common stock, $0.0001 par value (“Common Stock”) with respect thereto (whether upon in connection with a fundamental transaction, event of default or otherwise)). In consideration for the issuance of the Series C-2, each Investor hereby irrevocably waives any obligations of the Company under the Securities or any purchase agreement, security agreement, pledge agreement, warrant, guarantee or any other document executed in connection with the issuance of the Securities.

 

 

 

 

1.3. Further Assurances. The Company and each Investor shall execute and/or deliver such other documents and agreements as are customary and reasonably necessary to effectuate the Exchange.

 

1.4. Termination Before Closing. If the Closing has not occurred on or prior to May 31, 2020, any Investor shall have the right, by delivery of written notice to the Company to terminate this Agreement (such date, the “Termination Date”). From the date hereof until the earlier of (x) the Closing Date and (y) the Termination Date, each Investor shall forbear from taking any actions with respect to the Securities not explicitly set forth herein, including, without limitation, conversions, exercises, redemptions, exchanges or delivery of written notice to the Company to require the conversion, exercise, redemption or exchange of any of the Securities.

 

1.5. Representations and Warranties True at Closing. It shall be a condition to the obligation of the Investor on the one hand and Company on the other hand, to consummate the Exchange contemplated hereunder that the other party’s representations and warranties contained herein are true and correct on the Closing Date with the same effect as though made on such date, unless waived in writing by the party to whom such representations and warranties are made.

 

1.6. Deliveries. At or before the Closing, each Investor shall deliver or cause to be delivered to K&L Gates, LLP, as counsel to the Company, (i) the Securities held by such Investor free and clear of all liens, encumbrances, security interests, options or other purchase rights, equities, charges, claims, pledges, defects of title or other restrictions of any kind (other than federal and state securities laws) (ii) the executed Agreement and (iii) other items required to effectuate the Exchange.

 

1.7. Senior Securities. The Closing and the obligation of the Investor to exchange its securities are subject to the cancellation of the Company’s outstanding Series B Preferred Stock and the filing of a Certificate of Withdrawal eliminating the rights and preferences thereunder. The capitalization of the Company immediately after the effectiveness of this Exchange and the exchanges of the other outstanding securities will be as set forth on Exhibit B hereto.

 

2. Representations and Warranties of the Company. The Company hereby represents and warrants to each Investor that:

 

2.1. Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a Material Adverse Effect (as defined below) on its business or properties. As used in this Agreement, “Material Adverse Effect” means any material adverse effect on the business, properties, assets, liabilities, operations, results of operations, condition (financial or otherwise) or prospects of the Company and its Subsidiaries, if any, individually or taken as a whole, or on the transactions contemplated hereby or on the Exchange (as defined below) or by the agreements and instruments to be entered into (or entered into) in connection herewith or therewith, or on the authority or ability of the Company to perform its obligations under this Agreement or the Exchange.

 

2

 

 

2.2. Authorization. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement and the other Exchange and the performance of all obligations of the Company hereunder and thereunder, and the authorization of the Exchange, the issuance (and reservation for issuance) of the Series C-2 have been taken on or prior to the date hereof. The Certificate of Designations has been validly filed with the Secretary of State of Nevada and, as of the date hereof and the Closing Date, remains in full force and effect.

 

2.3. Valid Issuance of the Series C-2. The Series C-2 shares when issued and delivered in accordance with the terms of this Agreement, for the consideration expressed herein, and the Common Stock when issued in accordance with the terms of the Certificate of Designations, for the consideration expressed therein, will be duly and validly issued, fully paid and non-assessable. Upon conversion of the Series C-2, the Common Stock shall be freely tradable and may be sold under Rule 144 promulgated under the Securities Act (“Rule 144”) subject to the requirements of Rule 144(i). If on the Closing Date, any Investor does not already have such amount of shares reserved, the Company shall, within two business days after the Company files an amendment of its Articles of Incorporation to increase the number of shares of Common Stock it is authorized to issue with the Secretary of State of the State of Nevada, the Company shall reserve from its duly authorized capital stock not less than 125% of the maximum number of shares of Common Stock issuable upon conversion of such Investor’s Series C-2 (assuming for purposes hereof that such Series C-2 are convertible at the initial Conversion Price and any such reservation shall not take into account any limitations on the conversion of the Series C-2 set forth herein).

 

2.4. Compliance With Laws. The Company has not violated any law or any governmental regulation or requirement which violation has had or would reasonably be expected to have a Material Adverse Effect, and the Company has not received written notice of any such violation.

 

2.5. Consents; Waivers. No consent, waiver, approval or authority of any nature, or other formal action, by any individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof (each, a “Person”), not already obtained, is required in connection with the execution and delivery of this Agreement by the Company or the consummation by the Company of the transactions provided for herein and therein.

 

3

 

 

2.6. Acknowledgment Regarding Investor’s Purchase of Series C-2. The Company acknowledges and agrees that each Investor is acting solely for itself and not any other Investor in the capacity of arm’s length purchaser with respect to this Agreement and the Exchange and the transactions contemplated hereby and thereby and that each Investor is not (i) an officer or director of the Company, (ii) an “affiliate” of the Company (as defined in Rule 144 promulgated under the Securities Act), or (iii) to the knowledge of the Company, a “beneficial owner” of more than 9.9% of the shares of Common Stock (as defined for purposes of Rule 13d-3 under the Exchange Act). The Company further acknowledges that each Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Exchange and the transactions contemplated hereby and thereby, and any advice given by the Investor or any of its representatives or agents in connection with the Exchange and the transactions contemplated hereby and thereby is merely incidental to the Investor’s acceptance of the Series C-2. The Company further represents to the Investor that the Company’s decision to enter into the Exchange has been based solely on the independent evaluation by the Company and its representatives. The Company has not (i) received any consideration from each Investor for the Series C-2 received in the Exchange, other than the Securities, (ii) paid any commission or remuneration for the solicitation of the Exchange or (iii) offered any shares of the Series C-2 to any Person other than each Investor.

 

2.7. Absence of Litigation. To the knowledge of the Company, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company, threatened against or affecting the Company, the Common Stock, the Securities or any of the Company’s officers or directors in their capacities as such.

 

2.8. Validity; Enforcement; No Conflicts. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Company and shall constitute the legal, valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies. The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of the Company or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company is a party or by which it is bound, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities or “Blue Sky” laws) applicable to the Company, except in the case of clause (ii) above, for such conflicts, defaults or rights which would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

2.9. Equal Treatment. None of the terms offered to any of the holders of the Company’s Securities listed on Schedule I with respect to the Exchange, including, without limitation with respect to any consent, release, amendment, settlement, or waiver relating to the Exchange (each an “Exchange Document”), is or will be more favorable to any other holder of the Company’s Securities listed on Schedule I than those of each other Investor and this Agreement.

 

3. Representations and Warranties of the Investor. Each Investor hereby represents, warrants and covenants that:

 

4

 

 

3.1. Authorization. The Investor has full power and authority to enter into this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby and has taken all action necessary to authorize the execution and delivery of this Agreement, the performance of its obligations hereunder and the consummation of the transactions contemplated hereby.

 

3.2. Exchange Only. The Investor is a current holder of Securities and has not provided any consideration to the Company for the Series C-2 received in the Exchange other than the Securities. Each Investor understands that: (i) the Securities have not been and are not being registered under the Securities Act or any state securities laws, and the Series C-2 issued in the Exchange may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) pursuant to Rule 144, or (C) pursuant to another exemption from registration under the Securities Act, including but not limited to Section 3(a)(9) thereunder.

 

3.3. No Governmental Review. The Investor understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Series C-2 or the fairness or suitability of the investment in the Series C-2 nor have such authorities passed upon or endorsed the merits of the offering of the Series C-2.

 

3.4. Validity; Enforcement; No Conflicts. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Investor and shall constitute the legal, valid and binding obligations of the Investor enforceable against the Investor in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

 

3.5. Ownership of Securities. The Investor owns and holds, beneficially and of record, the entire right, title, and interest in and to the Securities free and clear of all rights and liens (other than pledges or security interests (x) arising by operation of applicable securities laws and (y) that the Investor may have created in favor of a prime broker under and in accordance with its prime brokerage agreement with such broker). The Investor has full power and authority to transfer and dispose of the Securities to the Company free and clear of any right or lien. Other than the transactions contemplated by this Agreement, there is no outstanding, plan, pending proposal, or other right of any Person to acquire all or any part of the Securities or any shares of Common Stock issuable upon conversion of the Securities.

 

3.6. Release of Reserve. If prior to the date hereof, the Investor had a share reserve with West Coast Stock Transfer, the Company’s transfer agent, it has instructed such transfer agent to release the amount shares of Common Stock the Investor has reserved in excess of 125% of the maximum number of shares of Common Stock issuable upon conversion of the Series C-2 (assuming for purposes hereof that such Series C-2 are convertible at the initial Conversion Price and any such reservation shall not take into account any limitations on the conversion of the Series C-2 set forth herein).

 

5

 

 

4. Additional Covenants.

 

4.1. Disclosure. The Company shall, on or before 8:30 a.m., Eastern time, on the fourth business day after the date of this Agreement, file with the Securities and Exchange Commission a Current Report on Form 8-K disclosing all material terms of the transactions contemplated hereby and attaching the form of this Agreement and the Certificate of Designations as exhibits thereto (collectively with all exhibits attached thereto, the “8-K Filing”). From and after the issuance of the 8-K Filing, no Investor shall be in possession of any material, nonpublic information received from the Company or any of its subsidiaries or any of their respective officers, directors, employees, affiliates or agents, that is not disclosed in the 8-K Filing. The Company shall not, and shall cause its officers, directors, employees, affiliates and agents, not to, provide any Investor with any material, nonpublic information regarding the Company from and after the filing of the 8-K Filing without the express written consent of such Investor. To the extent that the Company delivers any material, non-public information to an Investor without such Investor’s express prior written consent, the Company hereby covenants and agrees that such Investor shall not have any duty of confidentiality to the Company, any of its subsidiaries or any of their respective officers, directors, employees, affiliates or agents with respect to, or a duty to the Company, any of its subsidiaries or any of their respective officers, directors, employees, affiliates or agents or not to trade on the basis of, such material, non-public information. The Company shall not disclose the name of any Investor in any filing, announcement, release or otherwise, unless such disclosure is required by law or regulation. In addition, effective upon the filing of the 8-K Filing, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its subsidiaries or any of their respective officers, directors, affiliates, employees or agents, on the one hand, and the Investor or any of its affiliates, on the other hand, shall terminate and be of no further force or effect. The Company understands and confirms that each Investor will rely on the foregoing representations in effecting transactions in securities of the Company.

 

4.2. Holding Period. For the purposes of Rule 144 of the Securities Act, the Company acknowledges that (i) the holding period of the Securities may be tacked onto the holding period of the Series C-2 as long as no payment is made in connection with any conversion, and (ii) the holding period of the Series C-2 may be tacked onto the holding period of the Common Stock, and the Company agrees not to take a position contrary to this Section 4.2.

 

4.3. Blue Sky. The Company shall make all filings and reports relating to the Exchange required under applicable securities or “Blue Sky” laws of the states of the United States following the date hereof, if any.

 

4.4. Fees and Expenses. Except as otherwise set forth above, each party to this Agreement shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.

 

6

 

 

4.5. Equal Treatment. Each Investor hereby acknowledge and agree that, in accordance with the terms of existing agreements with the Company relating to the Securities, the Company is obligated to present the terms of this Exchange to each holder of the Company’s Securities on Schedule I; provided that each agreement shall be separately agreed with each holder of the Company’s Securities and shall not in any way be construed as the Investor or any other holder of the Company’s Securities acting in concert or as a group with respect to the purchase, disposition or voting of securities of the Company or otherwise. If, and whenever on or after the date hereof, the Company enters into an Exchange Document other than in compliance with Section 2.9, then (i) the Company shall provide notice thereof to each Investor immediately following the occurrence thereof and (ii) the terms and conditions of this Agreement shall be, without any further action by each Investor or the Company, automatically amended and modified such that the Investor shall receive the benefit of the more favorable terms and/or conditions (as the case may be) set forth in such Exchange Document, provided that upon written notice to the Company at any time any Investor may elect not to accept the benefit of any such amended or modified term or condition, in which event the term or condition contained in this Agreement shall apply to such Investor as it was in effect immediately prior to such amendment or modification as if such amendment or modification never occurred with respect to such Investor. The provisions of this Section 4.5 shall apply similarly and equally to each Exchange Document.

 

4.6. Issuance of Unrestricted Common Stock. The Company agrees to take all actions, including, without limitation, the issuance by its legal counsel, or any legal counsel reasonably acceptable to the Company, of any legal opinions, to issue unrestricted Common Stock pursuant to Rule 144 in the connection of any sale of Common Stock issued upon conversion of Series C-2 by any Investor; provided that each such investor provides customary representation letters and all other such documentation as required by counsel to the Company to issue a legal opinion.

 

5. Miscellaneous

 

5.1. Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the parties hereto and the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto or their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

5.2. Governing Law; Exclusive Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state or federal courts sitting in New York County, New York, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

7

 

 

5.3. Notices. All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing, and shall be sufficiently given if delivered to the addressees in person, by FedEx or similar overnight next business day delivery, or by email followed by overnight next business day delivery, to the address as provided for on the signature page to this Agreement.

 

5.4. Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Investor.

 

5.5. Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

5.6. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

5.7. Survival. Sections 4 and 5 of this Agreement shall survive the Closing and delivery of the Series C-2.

 

[SIGNATURES ON THE FOLLOWING PAGE]

 

8

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date provided above.

 

  OncBioMune Pharmaceuticals, INC.
   
  By:

/s/ Andrew Kucharchuk                

  Name: Andrew Kucharchuk
  Title: Chief Executive Officer
     
  Address for Notices:
     
  11441 Industriplex Blvd, Suite 190
  Baton Rouge, LA 70809
  Email: akucha1.obmp@gmail.com

 

 

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date provided above.

 

  INVESTORS:
   
 

CAVALRY FUND I LP

   
  By:

/s/Thomas Walsh

  Name:

Thomas Walsh

  Title:

Manager

 

  Address for Notices:
   
   
   
   
   
   
     
  Email:  
     
  EIN#:  
   
  INVESTORS:
   
  LINCOLN PARK CAPITAL FUND, LLC
   
   By: Lincoln Park Capital, LLC
   By: Rockledge Capital Corporation
   
   By:  /s/ Joshua Scheinfeld
   Name:  Joshua Scheinfeld
   Title:  President
   
  Address for Notices:
   
   
   
   
   
   
   
  Email:  
     
  EIN#:

 

 

 

 

Exhibit 10.3

 

EXCHANGE AGREEMENT

 

THIS EXCHANGE AGREEMENT (the “Agreement”) is made as of the 5th day of June 2020, by and between, OncBioMune Pharmaceuticals, Inc., a Nevada corporation (the “Company”), and Jonathan F. Head, Ph.D., a natural person residing in Louisiana (the “Holder”).

 

WHEREAS, the Holder has previously acquired 667 shares of Series A Preferred Stock of the Company and 3,856 shares of Series B Preferred Stock of the Company (collectively, the “Securities”).

 

WHEREAS, the Company has authorized a new series of Convertible Preferred Stock of the Company designated as Series D-2 Convertible Preferred Stock, $0.0001 par value (the “Series D-2”), the terms of which are set forth in the Certificate of Designations for such series of Series D-2 Preferred Stock (the “Certificate of Designations”) in the form attached hereto as Exhibit A.

 

WHEREAS, subject to the satisfaction of the conditions set forth herein, the Company and the Holder desire to enter into a transaction wherein the Company shall issue the Holder 100 shares of Series D-2 Convertible Preferred Stock of the Company, par value $0.0001 per share (the “Preferred Stock”) in exchange for the Securities.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1. Exchange. The closing of the Exchange (the “Closing”) will occur on or before May 31, 2020 (or such later date as the parties hereto may agree) following the satisfaction or waiver of the conditions set forth herein (such date, the “Closing Date”). On the Closing Date, subject to the terms and conditions of this Agreement, the Holder shall, and the Company shall, pursuant to Section 3(a)(9) of the Securities Act of 1933 (the “Securities Act”), exchange the Securities for the Preferred Stock. At the Closing, the following transactions shall occur (such transactions in this Section 1, the “Exchange”):

 

1.1. Delivery of Securities. On the Closing Date, the Company shall issue the Preferred Stock to the Holder (or its designees); provided that the Holder has complied with its obligations in this Section 1. Promptly after the Closing Date, the Company shall deliver a certificate evidencing the Preferred Stock to the Holder. On the Closing Date, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Preferred Stock and shall have the right to convert the Preferred Stock, irrespective of the date the Company delivers the certificate evidencing the Preferred Stock to the Holder.

 

1.2. No Rights Following Exchange. Upon receipt of the Preferred Stock in accordance with Section 1.1, the Holder’s rights under the Securities shall be extinguished. In consideration for the issuance of the Preferred Stock, the Holder hereby irrevocably waives any obligations of the Company under the Securities or any purchase agreement or any other document executed in connection with the issuance of the Securities.

 

     
     

 

1.3. Further Assurances. The Company and the Holder shall execute and/or deliver such other documents and agreements as are customary and reasonably necessary to effectuate the Exchange.

 

1.4. Termination Before Closing. If the Closing has not occurred on or prior to ________ __, 2020, the Holder shall have the right, by delivery of written notice to the Company to terminate this Agreement (such date, the “Termination Date”).

 

1.5. Representations and Warranties True at Closing. It shall be a condition to the obligation of the Holder on the one hand and Company on the other hand, to consummate the Exchange contemplated hereunder that the other party’s representations and warranties contained herein are true and correct on the Closing Date with the same effect as though made on such date, unless waived in writing by the party to whom such representations and warranties are made.

 

1.6. Deliveries. At or before the Closing, the Holder shall deliver or cause to be delivered to K&L Gates, LLP, as counsel to the Company, (i) the Securities held by such Holder free and clear of all liens, encumbrances, security interests, options or other purchase rights, equities, charges, claims, pledges, defects of title or other restrictions of any kind (other than federal and state securities laws) (ii) the executed Agreement and (iii) other items required to effectuate the Exchange.

 

2. Representations and Warranties of the Company. The Company hereby represents and warrants to the Holder that:

 

2.1. Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a Material Adverse Effect (as defined below) on its business or properties. As used in this Agreement, “Material Adverse Effect” means any material adverse effect on the business, properties, assets, liabilities, operations, results of operations, condition (financial or otherwise) or prospects of the Company and its Subsidiaries, if any, individually or taken as a whole, or on the transactions contemplated hereby or on the Exchange (as defined below) or by the agreements and instruments to be entered into (or entered into) in connection herewith or therewith, or on the authority or ability of the Company to perform its obligations under this Agreement or the Exchange.

 

2.2. Authorization. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement and the other Exchange and the performance of all obligations of the Company hereunder and thereunder, and the authorization of the Exchange, the issuance of the Preferred Stock have been taken on or prior to the date hereof. The Certificate of Designations has been validly filed with the Secretary of State of Nevada and, as of the date hereof and the Closing Date, remains in full force and effect.

 

  2  
     

 

2.3. Valid Issuance of the Preferred Stock. The Series D-2 shares when issued and delivered in accordance with the terms of this Agreement, for the consideration expressed herein, and the Common Stock when issued in accordance with the terms of the Certificate of Designations, for the consideration expressed herein, will be duly and validly issued, fully paid and non-assessable.

 

2.4. Validity; Enforcement; No Conflicts. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Company and shall constitute the legal, valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies. The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of the Company or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company is a party or by which it is bound, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities or “Blue Sky” laws) applicable to the Company, except in the case of clause (ii) above, for such conflicts, defaults or rights which would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

3. Representations and Warranties of the Holder. The Holder hereby represents, warrants and covenants that:

 

3.1. Authorization. The Holder has full power and authority to enter into this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby and has taken all action necessary to authorize the execution and delivery of this Agreement, the performance of its obligations hereunder and the consummation of the transactions contemplated hereby.

 

3.2. Exchange Only. The Holder is a current holder of Securities and has not provided any consideration to the Company for the Preferred Stock received in the Exchange other than the Securities. The Holder understands that: (i) the Securities have not been and are not being registered under the Securities Act or any state securities laws, and the Preferred Stock issued in the Exchange may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) pursuant to Rule 144, or (C) pursuant to another exemption from registration under the Securities Act, including but not limited to Section 3(a)(9) thereunder.

 

3.3. No Governmental Review. The Holder understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Preferred Stock or the fairness or suitability of the investment in the Preferred Stock nor have such authorities passed upon or endorsed the merits of the offering of the Preferred Stock.

 

  3  
     

 

3.4. Validity; Enforcement; No Conflicts. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Holder and shall constitute the legal, valid and binding obligations of the Holder enforceable against the Holder in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

 

3.5. Ownership of Securities. The Holder owns and holds, beneficially and of record, the entire right, title, and interest in and to the Securities free and clear of all rights and liens (other than pledges or security interests (x) arising by operation of applicable securities laws and (y) that the Holder may have created in favor of a prime broker under and in accordance with its prime brokerage agreement with such broker). The Holder has full power and authority to transfer and dispose of the Securities to the Company free and clear of any right or lien. Other than the transactions contemplated by this Agreement, there is no outstanding, plan, pending proposal, or other right of any Person to acquire all or any part of the Securities.

 

4. Additional Covenants.

 

4.1. Holding Period. For the purposes of Rule 144 of the Securities Act, the Company acknowledges that (i) the holding period of the Securities may be tacked onto the holding period of the Preferred Stock as long as no payment is made in connection with any conversion, and (ii) the holding period of the Preferred Stock may be tacked onto the holding period of the Common Stock, and the Company agrees not to take a position contrary to this Section 4.1.

 

4.2. Blue Sky. The Company shall make all filings and reports relating to the Exchange required under applicable securities or “Blue Sky” laws of the states of the United States following the date hereof, if any.

 

4.3. Issuance of Unrestricted Common Stock. The Company agrees to take all actions, including, without limitation, the issuance by its legal counsel, or any legal counsel reasonably acceptable to the Company, of any legal opinions, to issue unrestricted Common Stock in accordance with Rule 144 in the connection of any sale of Common Stock issued upon conversion of Preferred by the Holder; provided that the Holder provides customary representation letters and all other such documentation as required by counsel to the Company to issue a legal opinion.

 

5. Miscellaneous

 

5.1. Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the parties hereto and the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto or their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

  4  
     

 

5.2. Governing Law; Exclusive Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state or federal courts sitting in New York County, New York, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

5.3. Notices. All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing, and shall be sufficiently given if delivered to the addressees in person, by FedEx or similar overnight next business day delivery, or by email followed by overnight next business day delivery, to the address as provided for on the signature page to this Agreement.

 

5.4. Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Holder.

 

5.5. Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

5.6. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

5.7. Survival. Section 4 and 5 of this Agreement shall survive the Closing and delivery of the Preferred Stock.

 

[SIGNATURES ON THE FOLLOWING PAGE]

 

  5  
     

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date provided above.

 

  OncBioMune Pharmaceuticals, INC.
     
  By:

/s/ Andrew Kucharchuk                

  Name: Andrew Kucharchuk
  Title: Chief Executive Officer
   
  Address for Notices:
   
 

11441 Industriplex Blvd, Suite 190

Baton Rouge, LA 70809

Email: akucha1.obmp@gmail.com

 

     
     

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date provided above.

 

  HOLDER:
     
  JONATHAN F. HEAD, PH.D.
   
    /s/ Jonathan Head
     
  Address for Notices:
     
 
     
 
     
 
   
  Email:  
       
  SSN#:    

 

     

 

 

Exhibit 10.4

 

SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE AGREEMENT (the “Agreement”) is effective as of the 5th day of June 2020 (the “Closing Date”), by and between, OncBioMune Pharmaceuticals, Inc., a Nevada corporation (the “Company”), and each investor identified on the signature pages to this Agreement (each, an “Investor”).

 

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to an exemption from the registration requirements of Section 5 of the Securities Act contained in Section 4(a)(2) thereof and/or Rule 506(b) thereunder, the Company desires to issue and sell to each Investor, and each Investor, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement;

 

WHEREAS, the Company has authorized a new series of Convertible Preferred Stock of the Company designated as Series C-2 Convertible Preferred Stock, $0.0001 par value (the “Series C-2”), the terms of which are set forth in the Certificate of Designations for such series of Series C-2 Preferred Stock (the “Certificate of Designations”) in the form attached hereto as Exhibit A;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1. Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Investors agree to purchase an aggregate of 3,523.7533 shares of Series C-2. The Investors shall deliver to the Company, via wire transfer of immediately available funds equal to the Purchaser’s subscription amount (the “Subscription Amount”) as set forth on the signature pages hereto executed by the Investors, and the Company shall deliver to the Investors the shares of Series C-2. Upon satisfaction of the covenants and conditions set forth herein, the Closing shall occur at the offices of K&L Gates LLP, Company counsel or such other location as the parties shall mutually agree. At the closing of the sale of the Series C-2 (the “Closing”):

 

1.1. Delivery of Securities. On the Closing Date, the Company shall issue the Series C-2 to each Investor (or its designees); provided that each Investor has complied with its obligations in this Section 1. Promptly after the Closing Date, the Company shall deliver a certificate evidencing the Series C-2 to each Investor. On the Closing Date, each Investor shall be deemed for all corporate purposes to have become the holder of record of the Series C-2 and shall have the right to convert the Series C-2, irrespective of the date the Company delivers the certificate evidencing the Series C-2 to each Investor.

 

1.2. Further Assurances. The Company and each Investor shall execute and/or deliver such other documents and agreements as are customary and reasonably necessary to effectuate the Closing.

 

     
     

 

1.3. Representations and Warranties True at Closing. It shall be a condition to the obligation of the Investor on the one hand and Company on the other hand, to consummate the transactions contemplated hereunder that the other party’s representations and warranties contained herein are true and correct on the Closing Date with the same effect as though made on such date, unless waived in writing by the party to whom such representations and warranties are made.

 

1.4. Deliveries. At or before the Closing, each Investor shall deliver or cause to be delivered to the Company, (i) the Investor’s Subscription Amount by wire transfer to the Company and (ii) the executed Agreement.

 

2. Representations and Warranties of the Company. The Company hereby represents and warrants to each Investor that:

 

2.1. Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a Material Adverse Effect (as defined below) on its business or properties. As used in this Agreement, “Material Adverse Effect” means any material adverse effect on the business, properties, assets, liabilities, operations, results of operations, condition (financial or otherwise) or prospects of the Company and its Subsidiaries, individually or taken as a whole, or on the transactions contemplated hereby or by the agreements and instruments to be entered into in connection herewith, or on the authority or ability of the Company to perform its obligations under this Agreement.

 

2.2. Authorization. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement and the performance of all obligations of the Company hereunder and thereunder, and the authorization of the issuance of the Series C-2, have been taken on or prior to the date hereof. The Certificate of Designations has been validly filed with the Secretary of State of Nevada and, as of the date hereof and the Closing Date, remains in full force and effect.

 

2.3. Valid Issuance of the Series C-2. The Series C-2 shares when issued and delivered in accordance with the terms of this Agreement, for the consideration expressed herein, and the Common Stock when issued in accordance with the terms of the Certificate of Designations, for the consideration expressed therein, will be duly and validly issued, fully paid and non-assessable. Upon conversion of the Series C-2, the Common Stock shall be freely tradable and may be sold under Rule 144 promulgated under the Securities Act (“Rule 144”) subject to the requirements of Rule 144(i). If on the Closing Date, any Investor does not already have such amount of shares reserved, the Company shall, within two business days after the Company files an amendment of its Articles of Incorporation to increase the number of shares of Common Stock it is authorized to issue with the Secretary of State of the State of Nevada, the Company shall reserve from its duly authorized capital stock not less than 125% of the maximum number of shares of Common Stock issuable upon conversion of such Investor’s Series C-2 (assuming for purposes hereof that such Series C-2 are convertible at the initial Conversion Price and any such reservation shall not take into account any limitations on the conversion of the Series C-2 set forth herein).

 

  2  
     

 

2.4. Compliance With Laws. The Company has not violated any law or any governmental regulation or requirement which violation has had or would reasonably be expected to have a Material Adverse Effect, and the Company has not received written notice of any such violation.

 

2.5. Consents; Waivers. No consent, waiver, approval or authority of any nature, or other formal action, by any individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof (each, a “Person”), not already obtained, is required in connection with the execution and delivery of this Agreement by the Company or the consummation by the Company of the transactions provided for herein and therein.

 

2.6. Acknowledgment Regarding Investor’s Purchase of Series C-2. The Company acknowledges and agrees that each Investor is acting solely for itself and not any other Investor in the capacity of arm’s length purchaser with respect to this Agreement and the transactions contemplated hereby and that each Investor is not (i) an officer or director of the Company, (ii) an “affiliate” of the Company (as defined in Rule 144 promulgated under the Securities Act), or (iii) to the knowledge of the Company, a “beneficial owner” of more than 9.9% of the shares of Common Stock (as defined for purposes of Rule 13d-3 under the Exchange Act). The Company further acknowledges that each Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby, and any advice given by the Investor or any of its representatives or agents in connection with this Agreement and the transactions contemplated hereby and thereby is merely incidental to the Investor’s acceptance of the Series C-2. The Company further represents to the Investor that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation by the Company and its representatives.

 

2.7. Absence of Litigation. To the knowledge of the Company, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company, threatened against or affecting the Company, the Common Stock, the Series C-2 or any of the Company’s officers or directors in their capacities as such.

 

2.8. Validity; Enforcement; No Conflicts. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Company and shall constitute the legal, valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies. The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of the Company or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company is a party or by which it is bound, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities or “Blue Sky” laws) applicable to the Company, except in the case of clause (ii) above, for such conflicts, defaults or rights which would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

  3  
     

 

2.9. No General Solicitation. Neither the Company, nor any of its Subsidiaries or affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Series C-2.

 

2.10. Private Placement. Assuming the accuracy of the Purchaser’s representations and warranties set forth in Section 3, no registration under the Securities Act is required for the offer and sale of the Notes, the Shares upon conversion thereof, the Warrants or the Warrant Shares issuable upon exercise thereof by the Company to the Purchaser as contemplated hereby.

 

3. Representations and Warranties of the Investor. Each Investor hereby represents, warrants and covenants that:

 

3.1. Authorization. The Investor has full power and authority to enter into this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby and has taken all action necessary to authorize the execution and delivery of this Agreement, the performance of its obligations hereunder and the consummation of the transactions contemplated hereby.

 

3.2. No Public Sale or Distribution. The Investor is acquiring the Series C-2 in the ordinary course of its business, for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof in violation of applicable securities laws; provided, however, by making the representations herein, the Investor does not agree, or make any representation or warranty, to hold any of the Series C-2 for any minimum or other specific term and reserves the right to dispose of the Series C-2 at any time in accordance with or pursuant to a registration statement or an exemption under the 1933 Act. The Investor does not presently have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Series C-2.

 

3.3. Accredited Investor Status. At the time the Investor was offered the Series C-2, it was, and as of the date hereof it is, and at Closing it will be, an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the 1933 Act.

 

3.4. Experience of Investor. The Investor, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the investment in the Series C-2, and has so evaluated the merits and risks of such investment. The Investor is able to bear the economic risk of an investment in the Series C-2 and is able to afford a complete loss of such investment. The Investor acknowledges and agrees that the Company has not made any representations or warranties with respect to the Series C-2 or the transactions contemplated hereby other than those specifically set forth in Section 2, and the Investor acknowledges and agrees that it has relied solely upon the representations and warranties contained in Section 2 in determining whether to enter into this Agreement and to consummate the transactions contemplated hereby and thereby.

 

  4  
     

 

3.5. Reliance on Exemptions. The Investor understands that the Series C-2 are being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and the Investor’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Investor set forth herein in order to determine the availability of such exemptions and the eligibility of the Investor to acquire the Series C-2.

 

3.6. Information. The Investor and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Series C-2 which have been requested by the Investor. The Investor and its advisors, if any, have been afforded the opportunity to ask questions of the Company and has received answers, satisfactory in all respect to the Investor, to all such questions. The Investor understands that its investment in the Series C-2 involves a high degree of risk. The Investor has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Series C-2, and the Investor acknowledges and agrees that the Company has not provided to the Investor any accounting, legal, tax or other advice in respect of the transactions contemplated by the this Agreement, including the offer, purchase and sale of the Series C-2.

 

3.7. No Governmental Review. The Investor understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Series C-2 or the fairness or suitability of the investment in the Series C-2 nor have such authorities passed upon or endorsed the merits of the offering of the Series C-2.

 

3.8. Transfer or Resale. The Investor understands that: (i) the Series C-2 have not been and are not being registered under the 1933 Act or any state or other securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, or (B) the Investor shall have delivered to the Company (if requested by the Company) an opinion of counsel to the Investor, in a form and substance reasonably acceptable to the Company, to the effect that such Series C-2 to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) the Investor provides the Company with reasonable assurance that, at the time of any sale of such sale of transfer, such Series C-2 may be legally sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act (or a successor rule thereto); (ii) any sale of the Series C-2 made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144, and further, if Rule 144 is not applicable, any resale of the Series C-2 under circumstances in which the seller (or the Person (as defined below) through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC promulgated thereunder; and (iii) neither the Company nor any other Person is under any obligation to register the Series C-2 under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.

 

  5  
     

 

3.9. Validity; Enforcement; No Conflicts. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Investor and shall constitute the legal, valid and binding obligations of the Investor enforceable against the Investor in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

 

3.10. General Solicitation. The Investor is not purchasing the Series C-2 as a result of any advertisement, article, notice or other communication regarding the Series C-2 published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar.

 

4. Additional Covenants.

 

4.1. Disclosure. The Company shall, on or before 8:30 a.m., Eastern time, on the fourth business day after the date of this Agreement, file with the Securities and Exchange Commission a Current Report on Form 8-K disclosing all material terms of the transactions contemplated hereby and attaching the form of this Agreement and the Certificate of Designations as exhibits thereto (collectively with all exhibits attached thereto, the “8-K Filing”). From and after the issuance of the 8-K Filing, no Investor shall be in possession of any material, nonpublic information received from the Company or any of its subsidiaries or any of their respective officers, directors, employees, affiliates or agents, that is not disclosed in the 8-K Filing. The Company shall not, and shall cause its officers, directors, employees, affiliates and agents, not to, provide any Investor with any material, nonpublic information regarding the Company from and after the filing of the 8-K Filing without the express written consent of such Investor. To the extent that the Company delivers any material, non-public information to an Investor without such Investor’s express prior written consent, the Company hereby covenants and agrees that such Investor shall not have any duty of confidentiality to the Company, any of its subsidiaries or any of their respective officers, directors, employees, affiliates or agents with respect to, or a duty to the Company, any of its subsidiaries or any of their respective officers, directors, employees, affiliates or agents or not to trade on the basis of, such material, non-public information. The Company shall not disclose the name of any Investor in any filing, announcement, release or otherwise, unless such disclosure is required by law or regulation. In addition, effective upon the filing of the 8-K Filing, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its subsidiaries or any of their respective officers, directors, affiliates, employees or agents, on the one hand, and the Investor or any of its affiliates, on the other hand, shall terminate and be of no further force or effect. The Company understands and confirms that each Investor will rely on the foregoing representations in effecting transactions in securities of the Company.

 

  6  
     

 

4.2. Blue Sky. The Company shall make all filings and reports relating to the offer and sale of Series C-2 hereby required under applicable securities or “Blue Sky” laws of the states of the United States following the date hereof, if any.

 

4.3. Fees and Expenses. Except as otherwise set forth above, each party to this Agreement shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.

 

4.4. Issuance of Unrestricted Common Stock. The Company agrees to take all actions, including, without limitation, the issuance by its legal counsel, or any legal counsel reasonably acceptable to the Company, of any legal opinions, to issue unrestricted Common Stock pursuant to Rule 144 in the connection of any sale of Common Stock issued upon conversion of Series C-2 by any Investor in compliance with Rule 144; provided that each such investor provides customary representation letters and all other such documentation as required by counsel to the Company to issue a legal opinion.

 

4.5. Commitment Fee. In consideration for Cavalry Fund’s and Lincoln Park Capital’s coordination and arrangement of this Agreement and the other transactions contemplated to take place on the Closing Date, the Company shall issue each a warrant, in the form set forth as Exhibit B hereto, in the amount of 133,333,333 shares to Cavalry Fund and 66,666,667 shares to Lincoln Park.

 

5. Miscellaneous

 

5.1. Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the parties hereto and the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto or their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

5.2. Governing Law; Exclusive Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state or federal courts sitting in New York County, New York, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

  7  
     

 

5.3. Notices. All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing, and shall be sufficiently given if delivered to the addressees in person, by FedEx or similar overnight next business day delivery, or by email followed by overnight next business day delivery, to the address as provided for on the signature page to this Agreement.

 

5.4. Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Investor.

 

5.5. Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

5.6. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

5.7. Survival. Sections 4 and 5 of this Agreement shall survive the Closing and delivery of the Series C-2.

 

[SIGNATURES ON THE FOLLOWING PAGE]

 

  8  
     

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date provided above.

 

  OncBioMune Pharmaceuticals, INC.
     
  By:

/s/ Andrew Kucharchuk                   

  Name: Andrew Kucharchuk
  Title: Chief Executive Officer
   
  Address for Notices:
   
 

11441 Industriplex Blvd, Suite 190

Baton Rouge, LA 70809

Email: akucha1.obmp@gmail.com

 

     
     

 

INVESTOR SIGNATURE PAGES TO OBMP SECURITIES PURCHASE AGREEMENT

 

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

Name of Investor: Cavalry Fund I LP

 

Signature of Authorized Signatory of Investor    /s/ Thomas Walsh                                               

 

Name of Authorized Signatory:    Thomas Walsh                                                

 

Title of Authorized Signatory:       Manager                                             

 

Email Address of Authorized Signatory:                                                    

 

Facsimile Number of Authorized Signatory:                                                    

 

Address for Notice to Investor: 61 Kinderkamack Rd., Woodcliff Lake, NJ 07677

 

Address for Delivery of Securities to Investor (if not same as address for notice):

Subscription Amount: $262,500

 

Number of Shares to be Issued: 860.4514 shares of Series C-2

 

     
     

 

INVESTOR SIGNATURE PAGES TO OBMP SECURITIES PURCHASE AGREEMENT

 

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

 

Name of Investor: Lincoln Park Capital Fund, LLC

By: Lincoln Park Capital, LLC

By: Rockledge Capital Corporation

 

Signature of Authorized Signatory of Investor    /s/ Joshua Scheinfeld                                               

 

Name of Authorized Signatory:          Joshua Scheinfeld                                           

 

Title of Authorized Signatory:         President                                           

 

Email Address of Authorized Signatory:                                                    

 

Facsimile Number of Authorized Signatory:                                                    

 

Address for Notice to Investor: 440 N. Wells St., Suite 410, Chicago, IL 60654

 

Address for Delivery of Securities to Investor (if not same as address for notice):

Subscription Amount: $812,500

 

Number of Shares to be Issued: 2,663.3019 shares of Series C-2

 

     

 

 

Exhibit 10.5

 

SEPARATION AGREEMENT

AND GENERAL RELEASE OF CLAIMS

 

This Separation Agreement and General Release of Claims (“Agreement”) is entered into by Andrew Kucharchuk (hereinafter referred to as “you” or “your”) and OncBioMune Pharmaceuticals, Inc., a Nevada corporation (the “Company”). In consideration of the mutual promises set forth below, the parties agree as follows:

 

1. Separation of Employment. In accordance with your February 2, 2016 employment agreement (the “Employment Agreement”), you tendered your resignation as Chief Executive Officer, President and Chief Financial Officer (“CEO/CFO”) pursuant to Section 7(a)(iv), and the Company agreed to waive the contractual notice period and make the resignation effective June 5, 2020 (“Separation Date”). The Company will pay you all wages earned in accordance with the Company’s policies and applicable law, through your Separation Date, including your $59,990 in back pay. The Company will also repay you the $22,012 you advanced to the Company to pay Company operating expenses. Any unused paid time off (“PTO”) earned and accrued up to the Separation Date shall be forfeited. You will receive the amounts referenced in this Section 1 regardless of whether you sign this Agreement.

 

2. As provided in Section 3 below, the Company will provide you with financial benefits and other consideration in return for your execution of this Agreement, which will fully and finally resolve any and all matters between Employer and Employee. By entering into this Agreement, the Company does not admit any underlying liability to you. The Company is not entering into this Agreement because of any wrongful acts of any kind.

 

3. Severance Pay. As consideration for your execution of this Agreement, including the release of claims, the Company will (i) pay you Two Thousand Nine Hundred and Ninety-Eight Dollars ($2,998.00) in cash and (ii) issue you on the Separation Date Two Hundred Forty-One (241) shares of the Company’s Series D-2 Preferred Stock (collectively, the “Severance”). You acknowledge and agree that (a) the Company is not obligated to provide you with the consideration provided in this Section 3, except under this Agreement, (b) the Company’s obligations set forth in this Section 3 provide adequate consideration for your covenants, waiver, and release in this Agreement, and (c) your entitlement to earn and retain the Severance Pay is conditioned on your full compliance with this Agreement and any other obligations you have to the Company. You further acknowledge and agree that, upon receipt of the Severance and all other payments referred to in Section 1 above, you will have received all compensation you earned while employed by the Company and that no additional compensation is owed whatsoever.

 

4. Benefits. Upon separation, you will be provided, as required by law, notification as to your right to continue health, vision, and dental insurance coverage under the provisions of the Consolidated Budget Reconciliation Act of 1985 (“COBRA”) for you and any eligible dependents, if applicable. Except as specifically set forth in this Agreement, your right to, and participation in, all employee benefit plans of the Company terminated as of the Separation Date in accordance with the specific terms of each plan. If you timely elect continued coverage under the provisions of the Consolidated Budget Reconciliation Act of 1985 (“COBRA”), the Company will pay your COBRA premiums necessary to continue your medical, dental and vision coverage (including coverage for eligible dependents, if applicable) (“COBRA Premiums”) through the period (“COBRA Premium Period”) starting on June 1, 2020 and ending on the earliest to occur: (i) November 30, 2020; (ii) the date you and your eligible dependents, if applicable, become eligible for group health insurance coverage through a new employer; or (iii) the date you cease to be eligible for COBRA continuation coverage for any reason, including plan termination. In the event you become covered under another employer’s health plan or otherwise ceases to be eligible for COBRA during the COBRA Premium Period, you agree that you must notify the Company of such event. No COBRA Premiums shall be made if you revoke this Agreement.

 

     
 

 

5. Confidentiality, Non-Solicitation and Non-Compete. Section 10 of your Employment Agreement shall survive termination of your Employment Agreement and this Agreement, and your obligation to fully comply with the terms and conditions contained therein shall remain in full force and effect through Separation Date, and for a period of one year thereafter.

 

6. General Release. On behalf of yourself, your marital community, heirs, representatives, executors, administrators, successors, assigns, and any person claiming any interest in your employment or employment related compensation or benefits, you hereby waive, release, acquit, and forever discharge the Company and the other Released Parties (as defined below) from any and all claims, charges, complaints and causes of action, of whatever nature, that exist or may exist on your behalf against the Released Parties up to and including the date you sign this Agreement (collectively “Released Claims”). This release is comprehensive and Released Claims include all claims (including claims to costs or attorneys’ fees), damages, causes of action, and disputes of any kind whatsoever, whether known or unknown, anticipated or unanticipated, contingent, or otherwise, occurring or that could be alleged to have occurred before the execution of this Agreement. The Released Claims include, but are not limited to, any and all claims based on contract, wages, hours, wrongful termination, wrongful termination in violation of public policy, discrimination, harassment, retaliation, defamation, fraud, and any other tort or personal injury claims, and any and all claims arising under any federal, state, local, foreign or other governmental statute, law or regulation relating to employment or otherwise, including but not limited to the following: (a) the Employee Retirement Income Security Act; (b) Title VII of the Civil Rights Act of 1964; (c) Sections 1981 and 1983 of the Civil Rights Act of 1866; (d) Sections 1981 through 1988 of Title 42 of the United States Code; (e) the Age Discrimination in Employment Act; (f) the Equal Pay Act; (g) the Worker Adjustment Retraining and Notification Act; (h) the Immigration Reform and Control Act; (i) the Americans with Disabilities Act, and Sections 503 and 504 of the Rehabilitation Act of 1973; (j) the Family and Medical Leave Act; (k) the Consolidated Omnibus Reconciliation Act; (l) the Occupational Safety and Health Act; (m) the Fair Credit Reporting Act; (n) the Vietnam Era Veterans Readjustment Assistance Act; (o) the Sarbanes-Oxley Act of 2002; (p) the Dodd-Frank Wall Street Reform and Consumer Protection Act; (q) the Genetic Information Nondiscrimination Act; (r) claims under Louisiana’s Worker’s Compensation Anti-Retaliation Provision, La. Rev. Stat § 23:1361; (s) any foreign, federal, state and/or local whistleblower statute, regulation, ordinance or law; (t) any foreign, federal, state and/or local law, statute, regulation or ordinance prohibiting discrimination, retaliation and/or harassment or governing wage or commission payment claims; (u) all amendments to such laws; and (v) any other basis for legal or equitable relief whether based on express or implied contract, tort, statute or other legal or equitable ground.

 

 - 2 -

 

 

However, Released Claims do not include or affect (a) your rights to health and dental insurance continuation coverage under COBRA and conversion rights under group life and disability plans, (b) claims for breach or enforcement of this Agreement, (c) claims that arise after execution of this Agreement, (d) entitlement claims under ERISA for vested benefits arising under any applicable ERISA plan, (e) workers’ compensation claims, or (f) any other claims that may not be released under this Agreement in accordance with applicable law.

 

By signing below, you acknowledge and agree that you have been paid for all salary, wages, and compensation earned through your last day worked, and that you are not entitled to receive, and shall not claim from the Company, any compensation, payments or benefits except for those payments and benefits that are expressly set forth in this Agreement.

 

For the purpose of this Agreement, the term “Released Parties” means the Company, its affiliates, parents, subsidiaries, joint ventures, and related companies and its and their present, former, and future successors and assigns, and all of its and their present, former, and future owners, directors, officers, shareholders, employees, agents, representatives, assigns, insurers, trustees, employee benefit programs (and the trustees, administrators, fiduciaries, and insurers of such programs), attorneys, and all persons acting by, through, under or in concert with any of them, both individually and in their representative capacities.

 

7. Return of Company Property. You represent and warrant that you have returned to the Company: (a) all originals and copies of all proprietary or confidential information and trade secrets of the Company; (b) all originals and copies of customer files; (c) all identification cards, keys, or other means of access to the Company or its facilities; and (d) any other property of the Company in your possession, custody or control. All Company property must be returned no later than the date that you sign this Agreement.

 

8. Nondisparagement. You agree that you will not make, and that you will not instruct any other party to make, in any manner (including oral, print, social media, electronic or other forms of communication), false, disparaging or derogatory remarks about the Released Parties or refer negatively to your association with the Company or the other Released Parties. If you materially breach this paragraph, you will return any previously provided Separation to the Company. This Section 8 is not intended to restrict you from making disclosures as may be required or permitted by law or legal process (including in connection with a government investigation). You understand and agree that your commitment not to defame, disparage, or impugn the Company’s reputation constitutes a willing and voluntary waiver of your rights under the First Amendment of the United States Constitution and other laws. However, these non-disparagement obligations, do not limit your ability to truthfully communicate with any administrative agency including the Equal Employment Opportunity Commission (“EEOC”), Department of Labor (“DOL”), National Labor Relations Board (“NLRB”), the Financial Industry Regulatory Authority (“FINRA”), or the U.S. Securities and Exchange Commission (“SEC”) and comparable state or local agencies or departments whether such communication is initiated by you or in response to the government.

 

 - 3 -

 

 

9. Notice of Immunity Under the Defend Trade Secrets Act of 2016 (“DTSA”). Notwithstanding any other provision of this Agreement or in your Employment Agreement: You will not be held criminally or civilly liable under any federal or state trade secret law for any disclosure of a trade secret that is made: (a) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (b) in a complaint or other document that is filed under seal in a lawsuit or other proceeding. If you file a lawsuit for retaliation by Company for reporting a suspected violation of law, you may disclose Company’s trade secrets to your attorney and use the trade secret information in the court proceeding if you: (a) file any document containing the trade secret under seal; and (b) do not disclose the trade secret, except pursuant to court order.

 

10. Non-Filing of Complaint or Charges. You represent and warrant that you have not filed any lawsuits, complaints, or charges based on any Released Claims, except as listed below your signature. If no lawsuits, complaints, or charges are shown below your signature, none have been filed. You understand that nothing in this Agreement prevents you from filing or prosecuting a charge with any administrative agency (such as EEOC, NLRB, DOL, SEC or FINRA) with respect to any such claim or from participating in an investigation or proceeding conducted by the EEOC, DOL, NLRB, SEC, FINRA or another administrative agency. You further understand and agree that you will not seek and are hereby waiving any claim for personal damages and/or other personal relief. You agree to cause the withdrawal or dismissal with prejudice of any claim you have purported to waive in this Agreement. If you are ever awarded or recover any amount as to a claim you have purported to waive in this Agreement (other than under the Age Discrimination in Employment Act if you are lawfully allowed to pursue such a claim), you agree that the amount of any award or recovery will be reduced by ninety percent of the amounts you were paid under this Agreement, with the setoff being appropriately adjusted for your return of any such amounts. To the extent such a setoff is not effected, you promise to pay, or assign your right to receive, the amount that should have been set-off to the Company. You represent and warrant that you are the sole owner of any and all Released Claims that you may have, and that you have not assigned or otherwise transferred your right or interest in any Released Claim. To the extent permitted by law, you hereby assign to the Company any claims you may have against the Company that cannot be legally waived here.

 

11. Notice and Right to Consider and Revoke. You are advised to consult and review this Agreement with an attorney before executing this Agreement. In any event, you should thoroughly review and understand the effect of this Agreement, including the release of claims, before taking action upon it. You have twenty-one (21) days from the date you receive this Agreement to complete your review and return the signed Agreement to the Company. You acknowledge that, if you sign this Agreement prior to the expiration of the 21-day period, you did so voluntarily and of your own free will and choice. To accept, you must execute and deliver the Agreement to Company’s Board of Directors, either by certified U.S. Mail to OncBioMune Pharmaceuticals, Inc., 8000 Innovation Park Dr., Baton Rouge, LA 70820, or by email to corporate@oncbiomune.com with the signed original to follow immediately via certified or regular U.S. Mail. You have a period of seven (7) days following your execution of this Agreement to revoke it. If you wish to revoke the Agreement, you must do so in writing, addressed to the individual in the manner noted in the preceding sentence, and such revocation must be received by the Company prior to the expiration of the seven-day revocation period. This Agreement will become effective upon the eighth day after your delivery of this executed Agreement to the Company, provided that you have not timely revoked this Agreement.

 

 - 4 -

 

 

12. Confidentiality. You understand and agree that this Agreement and all of its terms are entirely confidential and that you shall not disclose, reveal, discuss, publish, or in any way communicate any of the terms, amount or fact of this Agreement to any other person or entity, including especially the amount of the severance payment. As an exception to this provision, you may disclose information relating to this Agreement only as necessary (i) to your immediate family members and professional representatives (including attorneys, accountants and/or tax advisors), who shall be informed of and bound by this confidentiality clause; (ii) to the extent necessary to enforce or challenge the terms of this Agreement; or (iii) in connection with any charge or complaint filed by you with the EEOC, NLRB, DOL, SEC, FINRA or any similar federal, state, or local department or agency. You shall promptly provide written notice of any such order to an authorized officer of the Company.

 

13. Tax Liability. You agree that you are solely and exclusively liable for any taxable event resulting from the payment of the sums set out in Section 2 above by the Company to you. You agree to hold harmless and indemnify the Company for any tax liability, interest, and/or penalties arising out of your failure to pay any taxes the Company is obligated to pay.

 

14. Acknowledgements. You further agree that each of the following statements is truthful and accurate:

 

(a) You are of sound mind and body.

 

(b) You have sufficient education and experience to make choices for yourself that may affect your legal rights.

 

(c) You are aware that this Agreement has significant legal consequences, and agree that this Agreement is written in a manner that you can understand.

 

(d) You have been advised to consult with an attorney of your choice prior to signing this Agreement.

 

(e) You have decided to sign this Agreement of your own free will, and your decision to sign this Agreement and to resign your employment has not been unduly influenced or controlled by any mental or emotional impairment or condition or by duress.

 

15. Miscellaneous.

 

(a) This Agreement constitutes the full understanding and entire Agreement between you and the Company and supersedes any other agreements of any kind, whether oral or written, formal or informal, as relates to the subject matter of this Agreement, provided however, that you remain bound by any continuing obligations to preserve the Company’s business interests, confidential information and trade secrets, and you remain bound by Section 10 of your Employment Agreement.

 

(b) In the event your testimony or court appearance is required concerning any litigation the Company is now or may be involved in, or if in the Company’s opinion, your appearance or testimony would be beneficial to the Company’s position, you agree to make yourself available to the Company and their counsel, and you agree to use your best efforts to support the Company’s litigation strategy.

 

 - 5 -

 

 

16. This Agreement is expressly conditioned upon your full and continued compliance with all terms of Section 10 of your Employment Agreement. To the extent that you violate such agreements, you will not earn or be entitled to the Severance and will return any previously provided Severance.

 

(a) You represent and acknowledge that in signing this Agreement, you have not relied upon any representation or statement not set forth in this Agreement. This Agreement may not be amended or modified except by a written instrument signed by the parties.

 

(b) The failure of a party at any time to require performance of any provision of this Agreement will not affect in any way the party’s full right to require performance of the same or any other provisions of this Agreement at any time thereafter.

 

(c) This Agreement will be construed in accordance with and governed by the laws of the State of Louisiana, without giving effect to the conflict of laws principles of Louisiana law. The parties expressly consent to the exclusive jurisdiction and venue of any court of competent jurisdiction in Louisiana. The parties expressly waive any claims or defenses of forum non conveniens to jurisdiction and venue in Louisiana.

 

(d) Section 5 of this Agreement is integral to its purpose and may not be severed from this Agreement. If any other provision of the Agreement or compliance by any of the parties with any other provision of this Agreement is found to be unlawful or unenforceable, such provision will be deemed narrowed to the extent required to make it lawful and enforceable. If such modification is not possible, such provision will be severed from the Agreement and the remaining provisions will remain fully valid and enforceable to the maximum extent consistent with applicable law. To the extent any terms of this Agreement are put into question, all provisions will be interpreted in a manner that would make them consistent with current law.

 

(e) The headings of the paragraphs of this Agreement are for convenience only and are not binding on any interpretation of this Agreement.

 

(f) In the event of litigation arising out of this Agreement, the prevailing party will be entitled to an award of its costs and reasonable attorneys’ fees.

 

(g) To the extent applicable, it is intended that this Agreement comply with the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (herein referred to as “Section 409A”). This Agreement will be administered in a manner consistent with this intent, and any provision that would cause the Agreement to fail to satisfy Section 409A will have no force and effect until amended to comply with Section 409A. Each separate payment in the series of separate payments will be analyzed separately for purposes of determining whether such payment is subject to, or exempt from compliance with, the requirements of Section 409A.

 

(h) This Agreement may be executed in counterparts, and each counterpart, when executed, shall have the effect of a signed original.

 

 - 6 -

 

 

EMPLOYEE   ONCBIOMUNE PHARMACEUTICALS, INC.
     

 /s/ Andrew Kucharchuk

  /s/ Andrew Kucharchuk
(Signature)   (Signature)

 

Andrew Kucharchuk   By Andrew Kucharchuk
(Print Name)      
       
    Its

Chief Executive Officer

 

6/5/20   6/5/20
Date   Date

 

Lawsuits, complaints, or charges (Section 11) are [include name, cause number and court or agency]:

 

 

 

 

 

 - 7 -

 

 

Exhibit 10.6

 

Consulting Agreement

 

This consulting agreement (the “Agreement”), effective 5th day of June, 2020 (“Effective Date”) by and between Andrew Kucharchuk (“Consultant”), an individual whose address is 549 Millgate Place, Baton Rouge, LA 70808 and OncBioMune Pharmaceuticals, Inc., a Nevada corporation with its principal office located at 8000 Innovation Park Dr., Baton Rouge, LA 70820 together with its affiliates and subsidiaries (“OncBioMune” or the “Company”).

 

RECITALS

 

WHEREAS, OncBioMune is a commercial-stage molecular data-generating company, and

 

WHEREAS, Consultant is a finance executive and professional with expertise and many years of experience providing strategic, financial and accounting advisory services to the Company; and

 

WHEREAS, Consultant is willing to provide the professional expertise and experience in those areas required or desired by OncBioMune; and

 

WHEREAS, OncBioMune desires to contract with Consultant for the rendition and performance of such professional services, as more fully described in this Agreement, and Consultant agrees to render and perform such services on an independent contractor basis to OncBioMune, on the terms and conditions set forth in this Agreement; and

 

NOW, THEREFORE, in consideration of the foregoing recitals, which are hereby incorporated into this Agreement as an integral part hereof, and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, OncBioMune and Consultant, intending to be legally bound, hereby agree as follows:

 

1. Term of Engagement. The Agreement shall be effective for a period of six (6) months, commencing on the Effective Date of this Agreement (the “Initial Term”). Thereafter, the Agreement shall only renew on a month-to-month basis by mutual agreement of the parties, subject to the right of OncBioMune and/or the Consultant to terminate this Agreement pursuant to paragraph 6 hereof. The Initial Term plus any monthly renewals up to the time of Termination shall hereinafter be referred to as the “Term” or the “Term of the Engagement.”

 

2. Services. During the Term, Consultant will be responsible for providing professional strategic, financial and accounting advisory consulting services (collectively, the “Services”), as more fully described in Exhibit A attached hereto.

 

3. Agreements of OncBioMune. Pursuant to this Agreement, OncBioMune agrees to the following:

 

  a) Provide such information that may be necessary for the provision of the Services by Consultant; and

 

  b) Provide such other support as Consultant may reasonably request in order for Consultant to perform his duties as outlined in paragraph 2 of the Agreement and Exhibit A attached hereto.

 

  1  
 

 

4. Compensation and Expenses. In consideration for the Services rendered by Consultant to OncBioMune throughout the Term of Engagement, the Company shall compensate Consultant in accordance with the terms set forth in Exhibit B attached hereto.

 

5. Arm’s-length Compensation. The parties hereto agree that the compensation provided herein has been determined in arm’s-length bargaining and is consistent with fair market value in arm’s-length transactions. Furthermore, the compensation is not and has not been determined in a manner that takes into account the volume or value of any referrals or business otherwise generated between the parties for which payment may be made in whole or in part under Medicare or any other federal or state health care program or any other third party payor program.

 

6. Termination. Consultant shall each have the right to terminate this Agreement at any time by giving written notice to the Company at least thirty (30) days prior to the effective termination date (“Termination Date”). After the Initial Term, the Company shall have the right to terminate the Agreement by giving written notice to Consultant at least thirty (30) days prior to the effective Termination Date. Upon such a Termination, Consultant agrees to cease all representation on behalf of the Company, including, but not limited to representations to the Company’s clients that Consultant is acting on behalf of the Company in any capacity; provided, however the Consultant agrees to answer any reasonable follow-up inquiries from clients or the Company for matters on which she has previously reported or been involved.

 

7. Confidentiality and Non-Disclosure Agreement.

 

a) The term “Confidential Information” as used herein shall include all testing recipes, formulas, business practices, methods, techniques, or processes that: (i) derives independent economic value, actual or potential, from not being generally known to or not available to the public, and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use; and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. Confidential Information also includes, but is not limited to, Marketing Information, Marketing Strategy, Pricing Information, Product Plans, Business Plans, Financial Plans, Compliance Plans, Forms, Customer Lists, Salary and Other Personnel Information, Training Manuals, Training Tapes, Third Party Contract Terms and other business information of a similar nature, including information about the Company itself, which Consultant acknowledges and agrees has been compiled by the Company’s expenditure of a great amount of time, money and effort, and that contains detailed information that could not be created independently from public sources. Further, all data, spreadsheets, reports, records, know-how, verbal communication, proprietary and technical information and/or other confidential materials of similar kind transmitted by the Company to Consultant are expressly included within the definition of “Confidential Information.” The parties further agree that the fact the Company may be seeking to complete a business transaction is “Confidential Information” within the meaning of this Agreement, as well as all notes, analysis, work product or other material derived from Confidential Information. The parties agree that the following information is not “Confidential Information” as that term is used herein: (i) information that was or becomes generally available to the public, (ii) technical and scientific information and know-how available in published literature or that can be obtained by hire or purchase from another business entity, or (iii) information that was or becomes available to Consultant on a non-confidential basis from an independent source.

 

  2  
 

 

b) In the event that Consultant is requested or required (by oral questions, interrogatories, requests for information or documents, subpoenas, civil investigative demands or similar processes) to disclose or produce any Confidential Information furnished in the course of its dealings with the other party or its affiliates, advisors or Representatives, it is agreed that the Consultant will (i) provide the Company with prompt notice thereof and copies, if possible, and, if not, a description, of the Confidential Information requested or required to be disclosed or produced so that the Company may seek an appropriate protective order or waive compliance with the provisions of this Agreement and (ii) consult with the Company as to the advisability of the Consultant taking of legally available steps to resist or narrow such request. In the event the Company seeks an appropriate protective order, or decides to challenge any request for Confidential Information, the Company agrees to pay for all costs associated with the actions of the Company, including, but not limited to court costs, attorney’s fees and any other expense related thereto. It is further agreed that, if in the absence of a protective order or the receipt of a waiver hereunder the Consultant is nonetheless, in the written opinion of its legal counsel, compelled to disclose or produce Confidential Information concerning the Company to any tribunal or to stand liable for contempt or suffer other censure or penalty, the Consultant may disclose or produce such Confidential Information, at the expense of the Company, to such tribunal without liability hereunder; provided, however, that the Consultant shall give the Company written notice of the Confidential Information to be so disclosed or produced as far in advance of its disclosure or production as is practicable and shall use its best efforts to obtain, to the greatest extent practicable, an order or other reliable assurance that confidential treatment will be accorded to such Confidential Information so required to be disclosed or produced.

 

c) Consultant acknowledge(s) that this “Confidential Information” is of value to the Company by providing it with a competitive advantage over its competitors, is not generally known to competitors of the Company, is not information easily available to the public, and is not intended by the Company for general dissemination. Consultant acknowledges that this “Confidential Information” derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and is the subject of reasonable efforts to maintain its secrecy. Therefore, the parties agree that all “Confidential Information” under this Agreement constitutes “Trade Secrets” under the law of any state in which the Consultant provides services to the Company or, in the absence of any such definition, as defined in the Uniform Trade Secrets Act.

 

d) Duty of Confidentiality. All Confidential Information is considered highly sensitive and strictly confidential. Accordingly, upon receiving any Confidential Information, Consultant agrees that he/she shall maintain and preserve such Confidential Information and prevent its disclosure to any third party unless otherwise expressly authorized by the Company. Consultant shall not use or disclose, directly or indirectly, as an individual or as a partner, joint venturer, employee, agent, salesman, contractor, officer, director or otherwise, for the benefit of himself or herself or any other person, partnership, firm, corporation, association or other legal entity, any Confidential Information, unless expressly permitted by this Agreement.

 

  3  
 

 

8. Agreement Not To Solicit. Consultant agrees and acknowledges that for a period of twelve (12) months after the effective Termination Date (see section 6 for definition of the Termination Date), he will not, directly or indirectly, in one or a series of transactions, as an individual or as a partner, joint venturer, employee, agent, salesman, contractor, officer, director or otherwise, for the benefit of himself or any other person, partnership, firm, corporation, association or other legal entity: (a) recruit, solicit or otherwise induce or influence any proprietor, partner, stockholder, lender, director, officer, employee, sales agent, joint venturer, investor, lessor, supplier, customer, agent, representative or any other person which has a business relationship with the Company to discontinue, reduce or modify such employment, agency or business relationship with the Company, or (b) employ or seek to employ any person or agent who is then (or was at any time within twelve (12) months prior to the date Consultant or such entity employs or seeks to employ such person) employed or retained by the Company. Any such solicitation shall constitute a material breach of this Agreement and will cause irreparable harm and loss to the Company for which monetary damages will be an insufficient remedy. Therefore, the parties agree that in addition to any other remedy available, the Company will be entitled to temporary and permanent injunctive relief, without the necessity of posting bond, restraining Consultant from any actual or threatened unauthorized solicitation by Consultant. The spirit of this non-solicit section is to prevent Consultant from leaving the Company and taking any Company personnel or customers of the Company for a period of two years after the date of Termination.

 

9. Return of Property. Upon the termination of this Agreement, regardless of why the Agreement terminates, Consultant shall return to the Company and/or certify that it has been deleted from Consultant’s computer all property owned by the Company and all Confidential Information indicated by the Company as well as any other Confidential Information that Consultant is aware that he has, in whatever form it exists, including all copies thereof. The Company agrees that so long as Consultant has made a good faith effort to return all such property and Confidential Information, Consultant shall be deemed to have complied with these provisions. The Company may at anytime call to Consultant’s attention that it has not yet received certain additional Confidential Information and Consultant shall promptly search for such additional Confidential Information and return it to the Company. The Company agrees that Consultant may delete any information that is proprietary to Consultant that may be contained within the Company’s Confidential Information prior to Consultant returning it to the Company.

 

10. Miscellaneous.

 

  a) This Agreement supersedes all prior agreements and understandings between the parties and may not be modified or terminated orally. The Consultant hereby waives any claims that it might have under any previous oral or other contract. No modification or attempted waiver of this Agreement will be valid unless in writing and signed by the party against whom the same is sought to be enforced.

 

  b) The provisions of this Agreement are separate and severable, and if any of them is declared invalid and/or unenforceable by a court of competent jurisdiction or an arbitrator, the remaining provisions shall not be affected.

 

  4  
 

 

  c) If a court of competent jurisdiction determines that any of the restrictions against disclosure of Confidential Information, and/or solicitation contained in this Agreement are invalid in whole or in part due to over breadth, whether geographically, temporally, or otherwise, such court is specifically authorized and requested to reform such provision by modifying it to the smallest extent necessary to render it valid and enforceable, and to enforce the provision as modified.

 

  d) This Agreement is the joint product of the Company and the Consultant and each provision hereof has been subject to the mutual consultation, negotiation and agreement of the Company and the Consultant and shall not be construed for or against either party hereto.

 

  e) This Agreement will be governed by, and construed in accordance with the provisions of the law of the State of Colorado, without reference to provisions that refer a matter to the law of any other jurisdiction. Each party hereto hereby irrevocably submits itself to the exclusive personal jurisdiction of the federal and state courts sitting in Colorado; accordingly, any matters involving the Company and the Consultant with respect to this Agreement may be adjudicated only in a federal or state court sitting in Colorado.

 

  f) All notices and other communications required or permitted under this Agreement shall be in writing, and shall be deemed properly given if delivered personally, mailed by registered or certified mail in the United States mail, postage prepaid, return receipt requested, sent by facsimile, or sent by Express Mail, Federal Express or nationally recognized express delivery service, as follows:

 

(i) If to the Company, at the address listed at the preamble to this Agreement or its then primary executive offices to the attention of the Chief Executive Officer; and

 

(ii) If to the Consultant, at the address listed at the preamble to this Agreement or the Consultant’s primary legal residence which is listed at the signature block of this agreement. Should this address change, the Consultant agrees to promptly notify the Company of such change.

 

Notice given by hand, certified or registered mail, or by Express Mail, Federal Express or other such express delivery service, shall be effective upon actual receipt. Notice given by facsimile transmission shall be effective upon telephonic confirmation of receipt by the party to whom it is addressed. All notices by facsimile transmission shall be followed up promptly after transmission by delivering an original copy by hand, certified or registered mail, or by Express Mail, Federal Express or other such delivery service. Any party may change any address to which notice is to be given to it by giving notice as provided above of such change of address.

 

  g) The parties agree that the Consultant is acting as an independent contract under current Internal Revenue Service guidelines in the provision of services under this Agreement and that the Consultant shall be solely responsible for paying all taxes due on any Compensation hereunder. The Consultant understands and acknowledges that all Compensation hereunder is taxable to the Consultant and the Company has an affirmative obligation to report such amounts of Compensation on Form 1099 to the Internal Revenue Service each year. The Consultant agrees to provide its tax identification number in the signature block below.

 

  h) This Agreement may be signed in counterparts, and by fax or Adobe Acrobat PDF file, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

 

  5  
 

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first set forth above.

 

ONCBIOMUNE PHARMACEUTICALS, INC.:   CONSULTANT:
         
By:

/s/ Mick Ruxin                            

By:

/s/ Andrew Kucharchuk

  Mick Ruxin, M.D.     Andrew Kucharchuk
  Chief Executive Officer      

 

  Legal Residence:
     
  Phone:           

 

  6  
 

 

EXHIBIT A

 

DESCRIPTION OF DUTIES AND SERVICES

 

In accordance with the terms and conditions of the Consulting Agreement between Andrew Kucharchuk (“Consultant”) and OncBioMune Pharmaceuticals, Inc. and its affiliates (“Company”) and Section 2 therein, this Exhibit A describes the duties and services (the “Services”) the Consultant shall perform under the Agreement.

 

  1. Provide professional strategic, financial and accounting advisory consulting services to the Company under the direction of the Company’s Chief Executive Officer (“CEO”).

 

  2. Participate in meetings and telephone conferences, as needed, with the CEO other Company personnel to facilitate the provision of Services.

 

  3. Such other activities as may be needed by the CEO at the expense of the Company. The spirit of this section is to try and account for other activities or issues that have not been addressed or identified in paragraphs (1) through (2) above.

 

  7  
 

 

EXHIBIT B

 

COMPENSATION FOR SERVICES

 

In accordance with the terms and conditions of the Consulting Agreement between Andrew Kucharchuk (“Consultant”) and OncBioMune Pharmaceuticas, Inc. and its affiliates (“Company”) and Section 4 therein, this Exhibit B sets forth the compensation to be by the Company to the Consultant for the provision of the Services described in Exhibit A and Section 2 of the Agreement.

 

  1. The Company agrees to pay Consultant $15,000 per month for the provision of Services set forth in Section 2 of the Agreement and Exhibit A attached hereto. Such payments will be made monthly on the 15th of each month, so long as the Consultant provides an invoice for the prior month’s services on the 1st of such month. Consultant agrees to prepare an invoice periodically, no more frequently than monthly, for all Services rendered on behalf of the Company during any given month of providing such Services.

 

  2. In addition to any compensation payable hereunder, the Company shall also reimburse Consultant for all expenses reasonably incurred by him in connection with the Services performed on behalf of the Company under the Agreement including, but not limited to, airfare, hotel, rental car, food, and associated expenses, upon providing the original receipts and an expense report for such expenses in accordance with the Company’s standard expense reimbursement policy then in effect. Consultant agrees to seek prior written approval from OncBioMune before incurring expenses in excess of $500.00 in any given month.

 

  3. Except as may be set forth in this Exhibit B and the Agreement, each party shall be responsible for its own costs and expenses incurred in connection with this Agreement. Each party shall also bear and be responsible for paying any sales, use, or other federal, state, or local taxes it incurs as a direct or indirect result of entering into this Agreement.

 

  8  

 

 

Exhibit 99.1

 

OncBioMune Announces Closing of Asset Purchase Agreement with Avant Diagnostics

 

Avant Diagnostics provides personalized medicine data for physicians and measures the activation state of key drug targets and signaling pathways for Biopharmas through its Theralink® assays

 

The stock will continue to be listed on OTC markets under the symbol “OBMP”

 

Golden, Colorado - June 8, 2020 - OncBioMune Pharmaceuticals, Inc. (OTC: OBMP) (“OncBioMune”) today announced the successful completion of its purchase of all the assets of Avant Diagnostics, Inc. (“Avant”), a commercial-stage, molecular profiling company. OncBioMune is currently trading on the OTC Markets under the symbol ‘OBMP’, but intends to file the necessary applications to change the stock symbol to ‘THER’ and its name to Theralink® Technologies, Inc. in the near future.

 

Avant Diagnostics provides personalized medicine data through its Theralink® assays, initially for breast cancer, to assist the treating physician in a data-driven process for treatment decision support and to help enable predictive biomarker-based patient therapy selection.  Avant is the leading developer of phosphoproteomic technologies for measuring the activation state of therapeutic targets and signaling pathways, a key metric for biopharmas, with applications across multiple cancer types, including breast, non-small cell lung, colorectal, gynecologic and pancreatic, among others.

 

Theralink® was developed to empower physicians with potentially actionable information to help them make time-sensitive treatment decisions for their patients.  Theralink® is designed to provide new predictive biomarkers for biopharmas through the direct measurement of drug target activation mapping, making Theralink® instrumental in the development of molecular targeted therapies.  The information gathered through the measurement of developed biomarkers has the potential to help physicians make molecularly rationalized treatment decisions that might improve treatment outcomes and may reduce side effects by foregoing ineffective therapy.

 

As consideration for the assets of Avant, OncBioMune issued to Avant shares of its Series D-1 Convertible Preferred Stock. Upon the filing of an amendment to OncBioMune’s Articles of Incorporation to increase its authorized common stock, which is expected to occur within 45 days, the shares of preferred stock issued to Avant shall automatically convert into approximately 4.4 billion shares of OncBioMune’s common stock. As a condition of the closing of the acquisition, the Company raised $1,075,000 in a private placement of its Series C-2 Convertible Preferred Stock from two institutional investors, the Cavalry Fund and Lincoln Park Capital. The Company does not have institutional debt and no longer has convertible debt or variable rate warrants.

 

About Avant Diagnostics, Inc.

 

Avant Diagnostics, Inc. is a molecular profiling company, located in Golden, Colorado, that specializes in biomarker assay services that target multiple areas of oncology. Avant provides precision oncology data through its Theralink® assays to assist the biopharmaceutical industry and clinical oncologists in identifying likely responders, initially for breast cancer, to over 70 FDA-approved drug treatments. This technology is instrumental in the development of Companion Diagnostics for molecular-targeted therapies. Theralink® empowers community physicians and clinical trial investigators with actionable information to make time-sensitive treatment decisions for their patients. Theralink® is designed to inform physicians which treatments are likely to be effective for their patients at any given moment in time, and to also identify which treatments are likely to be ineffective. These data insights have the potential to improve treatment efficacy and reduce side effects by foregoing ineffective therapy. For further information please visit http://www.avantdiagnostics.com.

 

1

 

 

About OncBioMune Pharmaceuticals, Inc.

 

OncBioMune Pharmaceuticals was a clinical-stage biopharmaceutical company engaged in the development of novel cancer immunotherapy products, based on its proprietary therapeutic cancer vaccine technology designed to stimulate the immune system to attack tumor cells without damaging healthy tissue.

 

OncBioMune now brings industry-transforming proteomic technology to precision medicine, through its lab that is located in Golden, Colorado.  We intend to improve cancer outcomes for patients, reveal therapeutic options for oncologists, and support biopharmaceutical drug development by using a beyond-genomic approach to molecular profiling. For further information, please contact Andrew “Al” Kucharchuk, OncBioMune’s acting CFO, at akucha1.obmp@gmail.com.

 

Forward-Looking Statements

 

Certain statements contained in this press release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, anything relating or referring to future financial results and plans for future business development activities, and are thus prospective. Forward-looking statements are inherently subject to risks and uncertainties some of which cannot be predicted or quantified based on current expectations. Such risks and uncertainties include, without limitation, the risks and uncertainties set forth from time to time in reports filed by OncBioMune Pharmaceuticals with the Securities and Exchange Commission. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business and although the company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Consequently, future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward the forward-looking statements contained herein. The company undertakes no obligation to publicly release statements made to reflect events or circumstances after the date hereof.

 

2

 

 

Exhibit 99.2

 

OncBioMune Appoints Dr. Mick Ruxin as President & CEO and

Jeffrey Busch as Chairman of the Board

 

Golden, Colorado - June 10, 2020 - OncBioMune Pharmaceuticals, Inc. (OTC: OBMP) (“OncBioMune”) today announced the appointment of Mick Ruxin, M.D. as President & CEO and Mr. Jeffrey Busch as Chairman of the Board upon closing of its previously announced asset purchase agreement (Link: https://www.accesswire.com/593012/OncBioMune-Announces-Closing-of-Asset-Purchase-Agreement-with-Avant-Diagnostics).

 

“The closing of this transaction and appointment of Jeff and myself to the Company is a significant change in our corporate structure, which will allow us to deliver on the next stage of our growth plan–to provide our Patented, Proteomic-based, Theralink® assay initially to breast cancer patients, and eventually to other cancers.  We have assembled an outstanding team of dedicated professionals to execute our business plan. OncBioMune’s new team has the potential to substantially reduce the morbidity and mortality of cancer patients,” said Mick Ruxin, M.D., OncBioMune’s newly appointed President and CEO. “Our Theralink® assay is the next generation of testing for cancer patients, going well beyond genomic testing. Theralink provides an entirely new and powerful source of precision medicine that may assist the physician and biopharmas in data-driven insights for treatment decision support and may enable new Companion Diagnostics and predictive protein biomarker-based therapy selection for biopharmas and physicians.”

 

Dr. Ruxin was previously Chairman, CEO, and Founder of Global Med Technologies, Inc. (GLOB) where he grew GLOB from a foundational concept to an international medical software company, specializing in FDA approved software, with specific diagnostic capabilities, and serving over 30 countries on 4 continents. Under his leadership, GLOB had its initial financing, its public offering and subsequent follow-on financings.

 

Dr. Ruxin also founded PeopleMed, Inc., a validation and chronic disease management software subsidiary of GLOB. In addition, he conceived and executed the acquisition and financing of Inlog, a French software company serving the EU, becoming the Directeur General and responsible for European Operations, and eDonor, a US based regulated software company serving domestic and international blood donor centers. Prior to Dr. Ruxin engineering the sale of GLOB to a NYSE company, Haemonetics Corp. (HAE), he led his team to national prominence by being awarded the #1 position in quality of product and customer service against billion dollar software companies, rated by an industry-respected, independent software rating service.

 

Before founding Global Med Technologies, Dr. Ruxin founded and was President and CEO of DataMed International, Inc. (DMI), a private, international drugs of abuse management company (from 1989-1997). DMI’s clients included FedEx, International Multi-Foods, Los Alamos National Laboratories, Chevron, ConAgra, Nestles and AT&T, among over 500 other companies. Dr. Ruxin was one of the first 10 certified Medical Review Officers in the country, and he participated in writing the Federal legislation for drugs of abuse testing. 

 

Mr. Jeffrey Busch, newly appointed Chairman of the Board commented, “I am pleased to join Mick and the rest of the team as together we strive to deliver to market next generation technology for cancer testing. Leveraging my experience in the healthcare space, I look forward to guiding management as we implement our business model.”

 

Mr. Jeffrey Busch is the current Chairman and CEO of Global Medical REIT, a NYSE listed (NYSE:GMRE) and publicly traded company, which acquires licensed medical facilities. Mr. Busch has been a Presidential Appointee, entrepreneur and active investor in various asset classes, including medical and pharmaceutical since 1985.

 

Mr. Busch has had a distinguished career in public service, which included serving as a Chief of Staff to a United States Congressman and serving in senior positions in two U.S. Presidential Administrations. Mr. Busch oversaw hundreds of millions of dollars in economic development programs. Mr. Busch represented the United States before the United Nations in Geneva, Switzerland. Mr. Busch has served as a top advisor to several publicly traded medical companies and has worked in the medical, blood supply and management field.

 

 
 

 

Mr. Busch also served as President of Safe Blood International Foundation, where he oversaw the establishment of medical facilities in 35 developing nations, including China, funded by the U.S. Center for Disease Control, USAID, Chinese government and corporate and private entities.

 

About Avant Diagnostics, Inc.

 

Avant Diagnostics, Inc. is a molecular profiling company, located in Golden, Colorado, that specializes in biomarker assay services that target multiple areas of oncology. Avant provides precision oncology data through its Theralink® assays to assist the biopharmaceutical industry and clinical oncologists in identifying likely responders, initially for breast cancer, to over 70 FDA-approved drug treatments. This technology is instrumental in the development of Companion Diagnostics for molecular-targeted therapies. Theralink® empowers community physicians and clinical trial investigators with actionable information to make time-sensitive treatment decisions for their patients. Theralink® is designed to inform physicians which treatments are likely to be effective for their patients at any given moment in time, and to also identify which treatments are likely to be ineffective. These data insights have the potential to improve treatment efficacy and reduce side effects by foregoing ineffective therapy. For further information please visit http://www.avantdiagnostics.com.

 

About OncBioMune Pharmaceuticals, Inc.

 

OncBioMune Pharmaceuticals was a clinical-stage biopharmaceutical company engaged in the development of novel cancer immunotherapy products, based on its proprietary therapeutic cancer vaccine technology designed to stimulate the immune system to attack tumor cells without damaging healthy tissue.

 

OncBioMune now brings industry-transforming proteomic technology to precision medicine, in its Golden, Colorado laboratory.  We intend to improve cancer outcomes for patients, reveal therapeutic options for oncologists, and support biopharmaceutical drug development by using a beyond-genomic approach to molecular profiling, in our Golden, Colorado laboratory. For further information, please contact Andrew “Al” Kucharchuk, OncBioMune’s acting CFO, at akucha1.obmp@gmail.com.

 

Forward-Looking Statements

 

Certain statements contained in this press release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, anything relating or referring to future financial results and plans for future business development activities, and are thus prospective. Forward-looking statements are inherently subject to risks and uncertainties some of which cannot be predicted or quantified based on current expectations. Such risks and uncertainties include, without limitation, the risks and uncertainties set forth from time to time in reports filed by OncBioMune Pharmaceuticals with the Securities and Exchange Commission. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business and although the company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Consequently, future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward the forward-looking statements contained herein. The company undertakes no obligation to publicly release statements made to reflect events or circumstances after the date hereof.