UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2019
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________to ___________
Commission File No. 000-55144
NUTRALIFE BIOSCIENCES, INC.
(Name of registrant as specified in its charter)
Florida | 46-1482900 | |
(State or other jurisdiction of | (IRS Employer | |
incorporation or organization) | Identification No.) |
6601 Lyons Road, Suite L-6
Coconut Creek, FL 33073
(Address, of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: 888-509-8901
Securities registered under Section 12(b) of the Act:
Title of Each Class | Trading Symbol | Name of each exchange on which registered | ||
N/A | N/A | N/A |
Securities registered under Section 12(g) of the Act:
Common Stock, $.0001 par value
(Title of class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | [ ] | Accelerated filer | [ ] | ||
Non-accelerated filer | [X] | Smaller reporting company | [X] | ||
Emerging growth company | [ ] |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [ ] No [X]
The aggregate market value of the registrant’s voting and non-voting common equity held by non-affiliates June 30, 2020 (the last business day of the registrant’s most recently completed second fiscal quarter) was $3,459,905.10 computed by reference to the closing sales price of the shares of common stock on June 30, 2020, which was $0.0450.
The number of shares outstanding of the registrant’s common stock as of March 19, 2021, was 160,740,190 shares.
DOCUMENTS INCORPORATED BY REFERENCE — NONE
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Information contained in this annual report on Form 10-K contains “forward-looking statements.” These forward-looking statements are contained principally in the sections titled “Business,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project” or the negative of these words or other variations on these words or comparable terminology. The forward-looking statements herein represent our expectations, beliefs, plans, intentions or strategies concerning future events, our future financial performance, the continuation of historical trends; the sufficiency of our resources in funding our operations; our intention to engage in mergers and acquisitions; and our liquidity and capital needs. Our forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that any projections or other expectations included in any forward-looking statements will come to pass. Moreover, our forward-looking statements are subject to various known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. These risks, uncertainties and other factors include but are not limited to: the risks of limited management, labor and financial resources; our ability to establish and maintain adequate internal controls; our ability to develop and maintain a market in our securities; and our ability obtain financing, if and when needed, on terms that are acceptable. Except as required by applicable laws, we undertake no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.
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Overview
NutraLife BioSciences, Inc., a Florida corporation (“us,” “we,” “our” or the “Company”) was founded in 2010 by Edgar Ward, the Company’s Chief Executive Officer, President & sole Director to engage in the development, manufacturing and distribution of nutritional and dietary oral spray products. Since then the Company has evolved into a branded and private label developer, manufacturer and distributor of a wide range of nutraceutical, wellness, and CBD products.
Amid the COVID-19 global pandemic, in 2020, the Company made a strategic pivot from our then-current nutraceutical manufacturing business by adding the manufacture of consumer sanitizer products utilizing the Company’s existing manufacturing capabilities and the Company’s ability to retrofit its operations and accommodate production due to the shortage of supply and increased demand for sanitizer products.
The Company’s manufacturing facility has been registered with the Food and Drug Administration and its manufacturing facility has operated in accordance with the Good Manufacturing Processes Standard (GMP) for more than five years. Our products adhere to high manufacturing standards throughout every step of the manufacturing and extraction process. Our products are formulated, developed, manufactured and produced under the supervision of Edgar Ward, our Chief Executive Officer, President and sole Director. Once produced, our products are tested by our in-house laboratory chemists. We believe that our nutraceutical and industrial CBD products are of the highest-quality and are laboratory tested for strength, purity and contaminants such as heavy metals, pesticides, and solvents.
We offer 13 different core formulations which we modify to meet the specifications of our private label customers. We provide approximately 50 different variations of our core formulations. Our private label products include CBD-infused oral sprays, tinctures, pet drops, pain balms, and face creams, and nutraceutical oral spray products for sleep support and weight loss packaged under the customer’s brand names.
Our spray products and tinctures are available in various formulations and strengths and are available for purchase online directly from the Company through its website at www.nutralifebiosciences.com, as well as through numerous other private label distributors, online retailers and retail outlets. Information available on, or accessible through the foregoing website is not a part of this Annual Report on Form 10-K and is not incorporated herein by reference.
Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. We sustained a net loss of approximately $4.0 and $2.0 million for the years ended December 31, 2019 and 2018, respectively, and have an accumulated deficit of approximately $38.8 million at December 31, 2019. These conditions raise substantial doubt about our ability to continue as a going concern. The independent auditors’ reports on our financial statements for the years ended December 31, 2019 and 2018 contain explanatory paragraphs expressing substantial doubt as to our ability to continue as a going concern.
In December 2019, a novel strain of coronavirus was reported to have surfaced in China. The spread of this virus caused various business disruptions including temporary closures to the Company’s offices and facilities. While these disruptions are currently expected to be temporary, there is considerable uncertainty around the duration. Therefore, the Company expects this matter to negatively impact its operating results. The related financial impact and duration cannot be reasonably estimated at this time.
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The Company is currently in the process of raising capital to complete and finalize the build-out of its facility in Deerfield Beach for the purpose of consolidating its operations. The structure of the capital raise is currently in-development. The Company is seeking to continue its path to profitability through increased business development, marketing and sales of the Company’s multiple lines of topical, ingestible and skincare health and wellness products. The Company is also focused on completing an efficacy clinical study on its patented mosquito bug patch with plans upon a successful conclusion to launch globally in the very near future, adding to the Company’s suite of wellness products. However, there can be no assurance that the foregoing can occur as planned, or at all.
Failure to successfully continue to grow operational revenues could harm our profitability and adversely affect our financial condition and results of operations. We face all of the risks inherent in a new business, including the need for significant additional capital, management’s potential underestimation of initial and ongoing costs, and potential delays and other problems in connection with establishing sales channels.
We are continuing our plan to further grow and expand operations and seek sources of capital to pay our contractual obligations as they come due. Management believes that its current operating strategy will provide the opportunity for us to continue as a going concern as long as we are able to obtain additional financing; however, there is no assurance this will occur. The accompanying consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
Corporate History
NutraLife BioSciences, Inc, was formed as a limited liability company in the state of Florida on April 1, 2010. On December 3, 2012, we converted from a limited liability company to a Florida corporation.
We have four wholly owned subsidiaries:
● | Precision Analytic Testing, LLC, a Florida limited liability company (“PAT”) formed on May 11, 2017; | |
● | NutraDerma Technologies, Inc., (“NutraDerma”) a Florida corporation formed on January 28, 2019; | |
● | PhytoChem Technologies, Inc., a Florida corporation (“PhytoChem”) formed on February 4, 2019; and | |
● | TransDermalRX, Inc., a Florida corporation (“TransDermal”) formed on February 8, 2019. |
Smaller Reporting Company
The Company is a “smaller reporting company” as defined in Rule 12b-2 under the Exchange Act. There are certain exemptions available to us as a smaller reporting company, including: (1) not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes Oxley Act; (2) scaled executive compensation disclosures; and (3) the requirement to provide only two years of audited financial statements, instead of three years. As long as we maintain our status as a “smaller reporting company,” these exemptions will continue to be available to us.
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Bankruptcy, Receivership or Similar Proceedings
We have not been involved in a bankruptcy receivership or similar proceeding. Additionally, we have not been involved in a reclassification, merger, consolidation, or purchase or sale of a significant amount of assets not in the ordinary course of business.
Our Business
We are a manufacturer and distributor of nutraceutical, dietary, wellness and other products, such as sanitizer products. Our products are sold to private label distributors who sell the products we manufacture under their own brand names as well as under our own brand names. We generate revenues from the sales of our products.
For the years ending on December 31, of 2018 and 2019, we generated revenues of approximately $3,700,000 and $2,100,000, respectively from the sale of our products.
In March of 2017, we began selling CBD products. Since that time, revenues from sales of our CBD products decreased from $2,400,000 for the year ended December 31, 2018 to $1,800,000 for the year ended December 31, 2019 representing 78% and 100% of our revenues for such periods.
Our Products and Services
We manufacture and distribute private label and branded products. In the years ended December 31, 2018 and 2019, private label sales represented 99% and 99% of our revenue, respectively.
Our Products
Our CBD products are derived from the seeds and mature stalks of the Cannabis Sativa plant which includes all parts and varieties of the cannabis sativa plant also known as hemp, which contain a tetrahydrocannabinol concentration (“THC”) that does not exceed 0.3 percent on a dry-weight basis. In December of 2018, the U.S. Food and Drug Administration completed an evaluation of three generally recognized as safe (GRAS) notices for hemp seed-derived food ingredients. The FDA stated that hulled hemp seed (GRN765), hemp seed protein powder (GRN771), and hemp seed oil (GRN778) are GRAS under their intended conditions of use.
Our CBD products are made from seeds and mature stalks of hemp and contain only trace amounts of THC which are far below 0.3 percent, and we believe they qualify as GRAS products.
Our CBD products include:
● | Cannabinoid-rich hemp oil derived from industrial hemp; | |
● | Tinctures; | |
● | Topical lotions and oils applied directly to the skin designed to treat pain or inflammation; | |
● | Face creams; | |
● | Massage oils; | |
● | Nutraceutical Sprays with CBD as an added ingredient; and | |
● | Pet products taken internally. |
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Our other products include:
● | Eddie’s Clean Hands | |
● | Eddie’s Immune Boost | |
● | InvisiPatch | |
● | PCR- Pure |
Recent Developments
In November of 2018, our wholly owned subsidiary PAT began providing bulk material analytical, identity, potency and purity testing of raw industrial hemp.
In January of 2019, our wholly owned subsidiary, NutraDerma acquired the patent for a natural dermal skin patch that is designed to prevent mosquito and other insect bites.
In February of 2019, our wholly owned subsidiary Phytochem entered into an agreement with Owen Morgan, an individual, whereby Mr. Morgan agreed to provide certain know how and services to Phytochem for the commercialization of certain technologies to separate and/or process the components of hemp to remove and/or modify, purify, dilute and extract bioactive ingredients and/or remove unwanted substances to produce finished products for a variety of applications. This agreement is further described under the heading “Material Agreements” below.
In March of 2019, we licensed our technology for a unique system for pharmaceutical grade delivery of testosterone into the human body to licensed pharmacist, Orlando Pharmacy, as further described under the heading “Material Agreements” below.
In March of 2019, we entered into an agreement with NewLeaf Assets, LLC, a Delaware Limited Liability Company (“NewLeaf”) as amended, (the “Agreement”) whereby NewLeaf invested an aggregate of $1,380,000 (the “Investment”) in our securities. This Agreement is further described under the heading “Material Agreements” below.
On June 7, 2019, the Company granted a bonus to its Chief Executive Officer and President, Edgar Ward, of ten percent (10%) of the future gross revenue generated by the Company’s wholly owned subsidiary, PhytoChem for a period of seven (7) years from the date that PhytoChem receives its first revenue.
In June 2019, and as amended in November 2019 we entered into an investment agreement, note, Security Agreement, Purchase Royalty Agreement, Pledge Agreement, Pledgor Royalty Agreement with the Company, Phytochem Technologies, Inc., Kahn Family Limited PT II., and Brenda Hamilton as the pledgor, which were subsequently amended in November of 2019. The foregoing agreements are further described under the heading “Material Agreements” below.
Amid the COVID-19 global pandemic, in 2020, the Company made a strategic pivot from our then-current nutraceutical manufacturing business by adding the manufacture of consumer sanitizer products utilizing the Company’s existing manufacturing capabilities and the Company’s ability to retrofit its operations and accommodate production due to the shortage of supply and demand for sanitizer products. To do so, consistent with Food and Drug Administration (FDA) requirements, the Company registered and obtained a labeler code as an over-the-counter (OTC) manufacturing facility and began manufacturing and distributing a line of liquid-based multi-use sanitizer spray products under the Company’s in-house brand, “Eddie’s Clean Hands,” packaged as a multi-use sanitizer spray, formulated per the CDC’s recommendation of containing at least 60-95% ethanol or isopropanol alcohol to be effective.
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In May 2020, we secured a supplier agreement with Grainger, and began drop-shipping its sanitizer products that include a 10-pack of Eddie’s Clean Hands 2 oz. sanitizer spray along with a larger 8 oz. sanitizer spray directly to Grainger and its customers. Grainger is a broad line, business-to-business distributor of maintenance, repair, and operating (MRO) products and services with operations primarily in North America, Japan, and Europe.
On September 30, 2020, the Company filed Articles of Amendment (the “Amendment”) to its Articles of Incorporation with the Florida Department of State that contained a Certificate of Designations to designate one hundred and ten (110) shares of the preferred stock of the Company, par value $0.0001 as Series B Convertible Preferred Stock (the “Series B Preferred Stock”). The Amendment was effective on September 30, 2020.
On November 2, 2020, the Company entered into a Stock Purchase Agreement with Lord Global Corporation and its wholly owned subsidiary, 27 Health Inc., and also entered into a Manufacturing, Distribution and Sales Agreement (the “MDS”) with 27 Health Inc. The MDS is a multi-year production, fulfillment, and distribution agreement with 27 Health Inc. to launch its patent-pending Oral Sanitizer mouth spray which we hope will provide some protection from viruses by reducing viral transmission. The foregoing agreements are further described under the heading “Material Agreements” below.
On December 18, 2020, the Company received its product registration number from the Food and Drug Administration (FDA) and completed its first production run of Oral Shield antiseptic protection mouth spray. The Company along with its partners plans to market and distribute the product on a global scale and seeks to provide a convenient, travel-size, quality, multi-functioning antiseptic mouth spray for consumers to use throughout the day. We believe that mouthwash products can be effective at killing viruses, reducing the viral load within the mouth essentially supporting the reduction of virus transmissions.
Our Operating Strategy
As noted above, in 2020, the Company made a strategic pivot from our then-current nutraceutical manufacturing business by adding the manufacture of consumer sanitizer products utilizing the Company’s existing manufacturing capabilities and the Company’s ability to retrofit its operations and accommodate production due to the shortage of supply and demand for sanitizer products. To do so, consistent with Food and Drug Administration (FDA) requirements, the Company registered and obtained a labeler code as an over-the-counter (OTC) manufacturing facility and began manufacturing and distributing a line of liquid-based multi-use sanitizer spray products under the Company’s in-house brand, “Eddie’s Clean Hands,” packaged as a multi-use sanitizer spray, formulated per the CDC’s recommendation of containing at least 60-95% ethanol or isopropanol alcohol to be effective. We plan to continue manufacturing and distributing liquid-based multi-use sanitizer spray products under the Company’s in-house brand, “Eddie’s Clean Hands.”
Also, as discussed above, on December 18, 2020, the Company received its product registration number from the Food and Drug Administration (FDA) and completed its first production run of Oral Shield antiseptic protection mouth spray. The Company along with its partners plans to market and distribute the product on a global scale and seeks to provide a convenient, travel-size, quality, multi-functioning antiseptic mouth spray for consumers to use throughout the day. We believe that mouthwash products can be effective at killing viruses, reducing the viral load within the mouth essentially supporting the reduction of virus transmissions.
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We also plan to continue the development, manufacturing and distribution of nutritional and dietary oral spray products and we believe a number of current industry trends will increase demand for private label products particularly in the industrial hemp CBD market. Our operating strategy for such products consists of the following key elements:
● | We purchase raw materials and produce goods only upon receipt of a firm commitment from our private label customers and we require payment in full prior to shipping. Once a product is shipped to a customer, we generally do not accept returns unless the product is defective or delivered late. These practices minimize our need to carry unsold inventories. | |
● | We regularly update our product line to keep up with consumer trends and industry developments. | |
● | We provide superior customer service by controlling the entire production process of our products. By controlling the production process, we have the ability to tailor products to a customer’s specific needs, offer customers rapid order turnaround time, maintain flexible scheduling and maintain higher standards of quality control. | |
● | We seek to add value to customers’ overall merchandising effort. We work closely with our customers to develop distinctive product lines at their particular price points. We believe that this process allows our customers to achieve a degree of differentiation from their retail competitors. We believe our ability to develop, manufacture and offer high quality, all-natural products is a competitive advantage and will lead to increased orders. | |
● | We emphasize the development of long-term relationships with our customers by providing a high level of customer service through our sales force. We seek to capitalize on our knowledgeable and experienced sales force by maintaining regular interaction with our customers which provides us with an understanding of which products will meet their particular needs. |
Our Growth Strategy
We intend to grow our business by pursuing the following strategies:
● | We plan to continue to expand our manufacture of consumer sanitizer products. | |
● | We plan to continue manufacturing and distributing liquid-based multi-use sanitizer spray products under the Company’s in-house brand, “Eddie’s Clean Hands”. | |
● | We also plan to continue to brand ourselves as a High Quality GMP Compliant manufacturer of industrial hemp CBD products. Many manufacturers of CBD based products do not operate in compliance with GMP standards. All of our CBD products are tested at multiple stages of the production process to ensure product quality and a THC content of less than 0.3%. | |
● | We will seek to increase sales to our existing customers by expanding sales of additional products. Certain of our customers began their relationship with us by purchasing only one of our products. Since these initial purchases, we have been able to expand our sales to such customers to multiple products. This strategy has enabled us to expand our product sales to our existing customers over time. We aggressively pursue these cross-selling opportunities. Our range of products enables us to pursue many of these cross-selling opportunities. | |
● | We seek to increase sales to customers by offering products in categories outside of our traditional product offerings. | |
● | We plan to leverage our sales, reputation for quality all-natural products to expand our customer base to other private label customers within the industrial hemp CBD and Nutraceutical markets. |
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Our Customers
Our customers for our consumer sanitizer products include Grainger, Riverhead Chamber of Commerce and ecommerce direct to consumer consumers.
Our private label sales represent 7 different brands of products manufactured by us. Sales to private label customers represented approximately 99% and 99% of our revenues for the years ended December 31, 2018 and 2019, respectively. Our industrial hemp CBD products represented 78% and 100% of private label sales in the year ended December 31, 2018 and 2019.
We do not enter into long term contracts with our private label distributors and all sales are made by purchase order. Our private label customers are not obligated to order a minimum amount of product from us and can discontinue purchasing our product at any time.
We believe our private label products offer numerous benefits to our customers:
● | Our private label products as less expensive than brand name products, but of equal or better quality. | |
● | Our private label products offer the opportunity for higher profit margins than brand name products. | |
● | Distributing private label products builds brand recognition for the retail as well as the wholesale customer. | |
● | We are registered with the FDA and follow GMP in the manufacturing process ensuring high quality products and consistent standards for our private label customers. | |
● | Businesses using our private label products avoid the additional expense of manufacturing and creating the finished product. | |
● | Our private label customers are able to focus their attention and resources on their business and not on manufacturing a final product. | |
● | We believe that we offer high quality unique products with enhanced delivery systems that are effective and appealing to consumers. | |
● | We offer a wide range of private label products providing our customers with a variety of options. | |
● | Private label customers have the convenience of ordering our products online. |
Manufacturing
As noted above, in 2020, the Company made a strategic pivot from our then-current nutraceutical manufacturing business by adding the manufacture of consumer sanitizer products utilizing the Company’s existing manufacturing capabilities and the Company’s ability to retrofit its operations and accommodate production due to the shortage of supply and demand for sanitizer products. To do so, consistent with Food and Drug Administration (FDA) requirements, the Company registered and obtained a labeler code as an over-the-counter (OTC) manufacturing facility and began manufacturing and distributing a line of liquid-based multi-use sanitizer spray products under the Company’s in-house brand, “Eddie’s Clean Hands,” packaged as a multi-use sanitizer spray, formulated per the CDC’s recommendation of containing at least 60-95% ethanol or isopropanol alcohol to be effective. We plan to continue manufacturing and distributing liquid-based multi-use sanitizer spray products under the Company’s in-house brand, “Eddie’s Clean Hands”.
Also, as discussed above, on December 18, 2020, the Company received its product registration number from the Food and Drug Administration (FDA) and completed its first production run of Oral Shield antiseptic protection mouth spray. The Company along with its partners plans to market and distribute the product on a global scale and seeks to provide a convenient, travel-size, quality, multi-functioning antiseptic mouth spray for consumers to use throughout the day. We believe that mouthwash products can be effective at killing viruses, reducing the viral load within the mouth essentially supporting the reduction of virus transmissions.
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Once developed, our products are manufactured at our facility in Coconut Creek, Florida. We obtain all raw materials and ingredients for our products from third party suppliers. For all orders we receive, we manufacture, package, label and ship the product to the customer. We lease an aggregate of six thousand four hundred (6,400) square feet of office and warehouse space at 6601 Lyons Rd, Suites L-6&7, Coconut Creek, Florida 33073. Approximately five thousand eight hundred (5,800) square feet at this location is used for manufacturing, storage and distribution of our products.
On June 6, 2017, we entered into an agreement to lease nineteen thousand eight hundred and thirty-one (19,831) square feet in Deerfield Beach, FL 33441. We plan to use seventeen thousand eight hundred (17,800) square feet of the new Deerfield Beach location for manufacturing, storage and distribution of our products. We expect to begin manufacturing at this location in August of 2021.
By manufacturing our own products, we believe that we maintain better control over product quality and availability while also reducing production costs. Our manufacturing process generally consists of the following operations: (a) sourcing ingredients for products, (b) warehousing raw ingredients, (c) efficacy testing and measuring ingredients for inclusion in products, and (d) blending using automatic equipment. The next step, bottling and packaging, involves filling, capping, coding, labeling and placing the product in packaging with appropriate tamper-evident features then sending the packaged product to our customers.
The Food and Drug Administration (“FDA”) requires companies manufacturing homeopathic medicines to have their facilities certified as Good Manufacturing Practices (“GMPs”). Our manufacturing facility is registered with the FDA and is compliant with its GMP certification. Our quality control program seeks to ensure the superior quality of our products and that they are manufactured in accordance with current GMP. Our processing methods are monitored closely to ensure that only quality ingredients are used and to ensure product purity. Periodically, we retain the services of outside GMP audit firms to assist us in our efforts to comply with GMPs.
Sources and Availability of Raw Materials
The raw materials for our industrial hemp CBD products consist of Cannabidiol rich oil and isolate. We obtain the raw materials for our industrial hemp CBD products from state licensed suppliers. We obtain the raw materials for our other non-CBD based products from several ingredient suppliers located in the U.S. These raw materials consist of naturally derived vitamins and nutrients. The raw materials used by us are available from a variety of suppliers. We maintain a good relationship with our suppliers and do not anticipate that any of our suppliers will terminate their relationship with us in the near term. We have ongoing relationships with secondary and tertiary suppliers. In the event, we are unable to obtain any of our raw materials from our suppliers; we believe that we could obtain alternative sources of any raw materials from other suppliers. We do not have contracts with our suppliers and we order our raw materials on an as needed basis. We have not experienced any material adverse effects on our business as a result of shortages of raw materials or packaging materials used in the manufacturing of our products. An unexpected interruption or a shortage in supply of raw materials could adversely affect our business derived from these products.
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Shipping and Delivery of Finished Products
Upon completion of the manufacturing process, our products are shipped directly to customers. Private label products are packaged by us in the packaging provided by each customer. All shipping, bills of lading and invoices are generated by us from our Coconut Creek, Florida facility.
We ship the product ordered within forty-five (45) days to our private label distributors, thirty (30) days to retail customers and within thirty (30) days to wholesale and third party (non-private label) distributors. All orders are shipped by freight delivery at the cost of the customer. We require a deposit of fifty percent (50%) upon an order being placed from our private label customers and the balance prior to shipping. Our retail customers must pay for their order at the time that the order is placed.
Product Development & Quality
We have in place comprehensive quality control procedures seeking to ensure that raw materials and finished goods meet our exacting quality standards. Each product we offer is based upon the research of Edgar Ward, our Chief Executive Officer, President, and sole Director, with the assistance of our in-house chemists. Our products are and, in the future, will continue to be identified by Mr. Ward based upon suggestions from our customers, and from industry and market research he conducts on an ongoing basis. We do not employ medical professionals and our management does not have experience in the healthcare industry or in the treatment of disease. Our products have not been confirmed in any respect by the U.S. Food and Drug Administration or any other governmental agency and may not produce the results intended. In developing products, we require:
● | ingredients that are supported with a certificate of analysis, publicly available scientific research and references which our Chief Executive Officer reviews with our in-house chemists who assist in developing our final products; | |
● | ingredients that are combined so that their effectiveness is not impaired; | |
● | the CBD contained in our products is less than 0.3% and all other ingredients are in dosage levels that fall within tolerable upper intake levels established for healthy people by the Institute of Medicine of the National Academies and products with hemp; | |
● | our products do not contain adulterated ingredients such as ephedra, androstenedione, aspartame, steroids, or human growth hormones; and | |
● | our formulations have a minimum of one-year shelf life. |
Sales and Marketing
Our Chief Executive Officer, President and sole Director, Edgar Ward actively participates in the planning of our marketing and selling efforts. We employ 1 in house sales representative and use the services independent sales representatives on a commission basis. We believe that this sales structure enables us to effectively control our costs and sales efforts.
We believe that our marketing mix of social media promotions and search engine optimization is an optimal strategy to increase sales for both our private label and branded products. We use web based marketing to promote our brands and products including social media and promotion of our website at www.nutralifebiosciences.com. The information available on or accessible through our website is not a part of, and is not incorporated by reference into this Annual Report. Our website provides useful information about our industry, new developments and our products and allows visitors to order our retail and wholesale wellness, nutraceutical and CBD products. We use Search Engine Optimization (SEO) on an ongoing basis to drive traffic to our website and social media pages and enhance our presence on major search engines such as Google, Bing and Yahoo.
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We aim to emphasize the development of long-term relationships with our customers. We believe that we have established strong relationships with individual buyers at each of our private label customers, and more importantly we have also established relationships with senior management of our key private label customers.
A key component of our ability to achieve long-term relationships is the high level of services that we provide to our customers. Each salesperson is responsible for all aspects of a customer’s needs, including product samples, obtaining orders, coordinating product selection, monitoring production and delivering finished products. During the production process, such salesperson is responsible for informing the customer about the progress of an order, including any difficulties that might affect delivery time. In this way, we and our customer can make appropriate arrangements regarding any delay or other change in the order. Further, we seek to ensure that multiple salespersons are familiar with each customer account so that they can work cooperatively to assist one another on a reciprocal basis. We believe that this sales management technique provides an advantage over our competitors because it ensures that our customers always have a knowledgeable salesperson available to discuss product orders and related issues.
Our sales force is in constant contact with our customers to develop an understanding of the customers’ retail strategies and production requirements. We use this information to provide our customers with products that meet their particular requirements efficiently. We require that our sales force be knowledgeable about all aspects of our products. We believe our knowledgeable sales force enables it to provide our customers immediate feedback as to the various costs and availability of various raw materials, and production times.
Employees
As of the date hereof, we have approximately 14 full-time and part-time employees. 1 employee is a chemist engaged in product development and testing, 4 are engaged in executive or administrative capacities, 10 employees are engaged in manufacturing, packaging, or distribution and 1is engaged in sales.
From time to time, we employ temporary employees which provides us with flexibility to adjust staffing levels in response to demand.
None of our employees are employed under a collective bargaining agreement. We believe we have an excellent relationship with our employees and independent contractors.
Return and Refund Policy
We will exchange any product found to be defective. A written exchange request must be submitted when a customer returns defective or damaged products. Purchasers can apply for a refund in the full amount of purchased products within ten (10) days of purchase. All shipping fees for product exchanges or returns must be paid by the purchaser. Historically, product returns as a percentage of our net sales have been nominal.
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Patents and Trademarks
We received federal trademark registration for the expression “Spray your way to a healthier day!” that we use, or intend to use, to distinguish ourselves from others. All trademark registrations are protected for an initial period of five (5) years and then are renewable after five (5) years, if still in use, and every ten (10) years thereafter. We hold the following trade names from the U.S. Patent and Trademark office:
● | OralPro NutraSpray | |
● | NutraSpray | |
● | NRG X Spray | |
● | Micro Blast Body Slim | |
● | Micro Blast | |
● | Body Slim | |
● | NutraHemp CBD | |
● | Spray your way to a healthier day! |
Our wholly owned subsidiary, NutraDerma holds patent number 7,754,237 from the U.S. Patent and Trademark office, for an all natural dermal patch designed to prevent mosquito and other insect bites. We plan to test, manufacture and distribute this product in 2021.
Backlog of Orders
We have no backlog of orders.
Seasonal Aspect of our Business
None of our products are affected by seasonal factors.
Status of any Publicly Announced New Product or Service
As noted above, in 2020, the Company made a strategic pivot from our then-current nutraceutical manufacturing business by adding the manufacture of consumer sanitizer products utilizing the Company’s existing manufacturing capabilities and the Company’s ability to retrofit its operations and accommodate production due to the shortage of supply and demand for sanitizer products. To do so, consistent with Food and Drug Administration (FDA) requirements, the Company registered and obtained a labeler code as an over-the-counter (OTC) manufacturing facility and began manufacturing and distributing a line of liquid-based multi-use sanitizer spray products under the Company’s in-house brand, “Eddie’s Clean Hands,” packaged as a multi-use sanitizer spray, formulated per the CDC’s recommendation of containing at least 60-95% ethanol or isopropanol alcohol to be effective. We plan to continue manufacturing and distributing liquid-based multi-use sanitizer spray products under the Company’s in-house brand, “Eddie’s Clean Hands”.
Also, as discussed above, on December 18, 2020, the Company received its product registration number from the Food and Drug Administration (FDA) and completed its first production run of Oral Shield antiseptic protection mouth spray. The Company along with its partners plans to market and distribute the product on a global scale and seeks to provide a convenient, travel-size, quality, multi-functioning antiseptic mouth spray for consumers to use throughout the day. We believe that mouthwash products can be effective at killing viruses, reducing the viral load within the mouth essentially supporting the reduction of virus transmissions.
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Material Agreements
Owen Morgan
On February 4, 2019, our wholly owned subsidiary known as Phytochem Technologies, Inc. (“Phytochem) entered into an agreement (the “Agreement”) with Owen Morgan, an individual, whereby Mr. Morgan agreed to provide certain know how and services to Phytochem for the commercialization of certain technologies (the “Technology”) to separate and/or process the components of hemp to remove and/or modify, purify, dilute and extract bioactive ingredients and/or remove unwanted substances to produce finished products for a variety of applications.
Mr. Morgan agreed to provide services to Phytochem for a period of one (1) year. In exchange for his services, Mr. Morgan received $65,520 upon execution of the Agreement and agreed to be compensated $15,000 monthly. Mr. Morgan’s services include overseeing all aspects of the manufacturing which shall be done in the United Kingdom. Phytochem is obligated to pay up to $10,000 to manufacture a demo unit (“Demo Unit”) using the Technology and $400,000 plus enhancement costs, shipping and installation to manufacture one commercial units using the Technology.
Phytochem was obligated to pay Mr. Morgan 40% of net revenues derived from the commercialization of the Technology. In addition, Mr. Morgan was to receive shares of the Company’s Common Stock upon certain milestones. Upon receipt of the Demo Unit and Commercial Unit, Mr. Morgan shall receive 500,000 and 1,500,000 shares, respectively. If the commercialization of the Technology results in revenues of $1,000,000, $5,000,000 and $10,000,000, Mr. Morgan was to receive 2,000,000 shares upon each milestone. If the commercialization of the Technology results in revenues of $25,000,000, $50,000,000, and $100,000,000, Mr. Morgan shall receive 4,000,000, 5,000,000 and 5,000,000 shares, respectively, upon each milestone.
This agreement is in default since Mr. Morgan failed to deliver the commercial units.
Orlando Pharmacy
On March 10, 2019, we entered into an agreement (the “Agreement”) with Orlando Pharmacy Inc., a Florida corporation (the “Pharmacy”) whereby we granted a limited exclusive license to the Pharmacy for a unique process for a delivery system to deliver testosterone into the human body using an oral spray. Under the terms of the Agreement, the Pharmacy was obligated to pay royalties to us of sixty-six and two thirds percent (66 2/3%) of its net sales of the “Product” within fifteen (15) days after the close of each calendar month. The Agreement had a term of five (5) years unless earlier terminated. The Agreement l automatically terminates upon:
(a) | Upon the Pharmacy’s failure to use best efforts to market the product; |
(b) | Within three (3) months after execution, if the Pharmacy fails to have net revenues of at least $10,000 from the sale of the Product; |
(c) | Within one year after execution, if the Pharmacy fails to have net revenues of at least $500,000 from the sale of the Product; |
(d) | Within two years after execution, if the Pharmacy fails to have net revenues of at least $2,000,000 from the sale of the Product; |
(e) | Within three years after execution, if the Pharmacy fails to have net revenues of at least $3,000,000 from the sale of the Product; |
(f) | Within four years after execution, if the Pharmacy fails to have net revenues of at least $4,000,000 from the sale of the Product; or |
(g) | Within five years after execution, if the Pharmacy fails to have net revenues of at least $5,000,000 from the sale of the Product. |
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This Agreement was terminated pursuant to clause (b) above upon three (3) months after execution, as the Pharmacy failed to have net revenues of at least $10,000 from the sale of the Product.
NewLeaf Assets LLC
On March 10, 2019, we entered into an agreement with NewLeaf Assets, LLC, a Delaware Limited Liability Company (“NewLeaf”) as amended, (the “Agreement”) whereby NewLeaf invested an aggregate of $1,380,000 (the “Investment”) in our securities (the “Securities”) as follows:
(a) | NewLeaf invested the sums of $250,000, $130,000 and $1,000,000 on July 31, 2018, August 31, 2018 and March 15, 2019, respectively; |
(b) | On July 31, 2018 NewLeaf was granted 2,000,0000 shares of our common stock and warrants to purchase 625,000 shares at the price of $.20 per share at any time for a period of three (3) years; |
(c) | On August 31, 2018 NewLeaf received warrants to purchase 325,000 shares of our common stock at the price of $.20 per share at any time for a period of three (3) years; |
(d) | On March 15, 2019, NewLeaf invested the sum of $1,000,000; and |
(e) | On March 15, 2019, we issued 13,764,705 common shares, warrants to purchase an additional 10 million common shares at the price of $.20 per share at anytime until March 4, 2022 and an option to purchase an aggregate of 7,647,058 common shares at the aggregate price of $650,000 at any time prior to April 8, 2019. This option was not exercised prior to such date. |
As a result of the Investment, NewLeaf holds an aggregate of 15,764,705 of our common shares, warrants to purchase an additional 10,950,000 common shares for an aggregate price of $2,190,000 and an had an option to purchase an additional 7,647,058 common shares for an aggregate price of $650,000 at any time prior to April 8, 2019, which was not exercised prior to such date.
The Company paid a finder’s fee of 10% in connection with the Investment to Mitchell Pasin. Under the terms of the Agreement, if NewLeaf sells, assigns, gifts or otherwise transfers any portion of the Securities to any other person or entity (the “Transferees”), the aggregate amount of the Securities that may be sold by all NewLeaf and the Transferees in the aggregate shall be 1% of the Company’s then outstanding common shares every ninety (90) days.
June 2019 Investment Agreement, Note, Security Agreement, Purchase Royalty Agreement, Pledge Agreement, Pledgor Royalty Agreement and November 2019 Amendments Thereto
June 2019 Investment Agreement
On June 6, 2019, the Company entered into that and Investment Agreement (the “June 2019 Investment Agreement” and collectively with the June 2019 Note, the June 2019 Purchaser Royalty Agreement, the June 2019 Security Agreement, the June 2019 Pledgor Royalty Agreement and the June 2019 Mortgage, each as hereinafter defined, the “Transaction Documents”) by and among the Company, PhytoChem a wholly owned subsidiary of the Company “PhytoChem” and together with NutraLife, the “Company”) and Kahn Family Limited PT II (the “Purchaser”). Pursuant to the terms of the June 2019 Investment Agreement, the Company agreed to issue and sell, and the Purchaser agreed to purchase, a full recourse secured convertible promissory note bearing interest at the rate of 8.5% per annum in the principal amount (the “Principal Amount”) of $1,000,000 (the “June 2019 Note”). In addition to repayment of the June 2019 Note and the payment of interest as set forth in the June 2019 Note, the Company agreed to pay the following consideration to the Purchaser: (i) 500,000 shares of the Company’s common stock, and (ii) 8.5% of the revenue generated from the first four of the Ennea Processors monetized and/or commercialized by the Company pursuant to an agreement by and between Owen J. Morgan and the Company dated February 4, 2019 (the “Collateral Processors”) while the Principal Amount of the June 2019 Note is outstanding and 5.0% thereafter as set forth in that certain Royalty Participation Agreement dated June 6, 2019 by and among the Company, PhytoChem and the Purchaser (the “June 2019 Purchaser Royalty Agreement”).
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Pursuant to the terms of the June 2019 Investment Agreement, the Principal Amount of the June 2019 Note is secured by the Collateral Processors in accordance with the terms of the June 2019 Note and that certain Security Agreement (the “June 2019 Security Agreement”) dated June 6, 2019 by and among the Company, PhytoChem and the Purchaser. The Principal Amount of the June 2019 Note is also secured by certain real property (the “Real Property”) owned by Brenda Hamilton (the “Pledgor”) pursuant to the terms of that certain Pledge Agreement (the “June 2019 Pledge Agreement”) dated June 6, 2019 by and among NutraLife, PhytoChem, the Pledgor and the Purchaser. Pursuant to the terms of the June 2019 Investment Agreement and the mortgage on the Real Property (the “June 2019 Mortgage”), the June 2019 Mortgage will be reduced by any and all consideration of any nature that is paid to the Purchaser by the Company under the Transaction Documents.
The June 2019 Investment Agreement provides that any controversy or claim arising out of or relating to the June 2019 Investment Agreement will be settled by binding arbitration and judgment on the award entered in any court having jurisdiction.
The Agreement contains customary representations, warranties and conditions.
June 2019 Note
On June 6, 2019, the Company issued the June 2019 Note in the Principal Amount of $1,000,000. Pursuant to the terms of the June 2019 Note, the entire outstanding principal balance of the June 2019 Note matures on December 7, 2020. The June 2019 Note provides that until such time as the Principal Amount of the June 2019 Note has been paid in full, interest will accrue at the fixed rate of 8.5% per annum. Beginning July 7, 2019 and through December 7, 2019, the Company agreed to make interest only payments at a fixed rate of 8.5% per annum on the Principal Amount of the June 2019 Note. Beginning on January 7, 2020 and continuing until the maturity date, the Company agreed to make equal monthly installment payments of principal and interest at the fixed rate of 8.5% per annum in an amount sufficient to fully amortize the Principal Amount of the June 2019 Note and all accrued interest over an amortization period of 12 months, until the amounts due under the June 2019 Note are paid in full.
Pursuant to the terms of the June 2019 Note, all payments made by the Company to the Purchaser under the Transaction Documents, including but not limited to the June 2019 Note, will be first applied to the Principal Amount then to accrued interest outstanding. Any and all consideration paid by the Company to the Purchaser under the Transaction Documents will reduce the amounts secured by the June 2019 Mortgage without affecting the amounts owed by the Company to the Purchaser under the Transaction Documents. The June 2019 Note is secured by the Collateral Processors pursuant to the terms of the June 2019 Investment Agreement and the June 2019 Security Agreement. The Company agreed to deliver a pledge of the Real Property to secure the Principal Amount pursuant to the terms of the June 2019 Pledge Agreement and June 2019 Mortgage, and the June 2019 Mortgage will be reduced from time to time by the consideration paid by the Company to the Purchaser. Simultaneously with the payment of consideration equal to the Principal Amount of the June 2019 Note, the Purchaser will record with the Palm Beach County Property Appraiser’s Officer a Satisfaction of the Mortgage releasing the Purchaser’s June 2019 Mortgage on the Real Property.
In the event of a default of the June 2019 Note, Purchaser has full recourse to all the assets of the Company and the Purchaser will be required to proceed against or exhaust all remedies against both the Company and PhytoChem’s assets prior to proceeding against the June 2019 Mortgage and/or commencing an action to foreclose the June 2019 Mortgage.
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At any time while the June 2019 Note is outstanding, the Purchaser will have the option of converting the Principal Amount and accrued interest due on the June 2019 Note into common stock of the Company at a price of $1.00 per share. Upon conversion of the Principal Amount and/or interest, the Company will be forever released from all of its obligations and liabilities under the June 2019 Note. In the event Purchaser converts less than all principal and interest outstanding, the amount converted under the June 2019 Note will be first applied to reduce the principal until it is paid in full. Additionally, upon conversion of all outstanding principal at the time of conversion, the June 2019 Mortgage will be released as security for the obligations and liabilities under the June 2019 Note.
For purposes of the June 2019 Note, an event of default means that the Company has failed to make any payment required under the June 2019 Note within 15 days after the date the payment is due. If the Company is in default under the June 2019 Note, the unpaid principal and accrued interests and any other unpaid amounts and costs due will bear interest at the rate of 10% (the “Default Rate”) until the event of default is cured. From and after the Maturity Date any unpaid principal and interest and any other unpaid amounts and costs under the June 2019 Note will bear interest at the Default Rate. Additionally, and without limitation, all amounts owed under any judgment obtained by Purchaser against the Company with respect to the June 2019 Note will bear interest at the Default Rate. The June 2019 Note provides that any controversy or claim arising out of or relating to the June 2019 Note will be settled by binding arbitration and judgment on the award entered in any court having jurisdiction.
June 2019 Security Agreement
Pursuant to the terms of the June 2019 Security Agreement, the Company assigned and granted to the Purchaser a continuing lien on and security interest in the Collateral. The Company agreed that it would not sell or offer to sell or otherwise transfer or grant or allow the imposition of a lien or security interest upon the Collateral or use any portion thereof in any manner inconsistent with the June 2019 Security Agreement or with the terms and conditions of any policy of insurance thereon. The Company also irrevocably authorized Purchaser at any time and from time to time to file in any Uniform Commercial Code (“UCC”) jurisdiction any initial financing statements and amendments thereto relating to the Collateral as provided in the June 2019 Security Agreement.
The Company will, at the Purchaser’s option, be in default under the June 2019 Security Agreement upon the happening of any of the following events or conditions (each, a “June 2019 Security Agreement Event of Default”): (a) a failure to pay any amount due under the June 2019 Note or the June 2019 Security Agreement within 15 days after the due date; (b) failure by the Company to perform any of its other obligations under the June 2019 Security Agreement within 30 days of notice from Purchaser of the same; (c) falsity, inaccuracy or material breach by the Company or any written warranty, representation or statement made or furnished to the Purchaser by or on behalf of the Company; (d) an uninsured material loss, theft, damage, or destruction to any of the Collateral, or the entry of any judgment against the Company or any lien against or making of any levy, seizure or attachment of or on the Collateral; or (e) the failure of the Purchaser to have a perfected first priority security interest in the Collateral.
Upon the occurrence of any June 2019 Security Agreement Event of Default and at any time thereafter, the Purchaser may declare all obligations secured by the June 2019 Security Agreement immediately due and payable and will have, in addition to any remedies provided in the June 2019 Security Agreement or by any applicable law or in equity, all the remedies of a secured party under the UCC. The June 2019 Security Agreement provides that any controversy or claim arising out of or relating to the June 2019 Security Agreement will be settled by binding arbitration and judgment on the award entered in any court having jurisdiction.
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If the Company is in default under the June 2019 Note, the unpaid principal and accrued interests and any other unpaid amounts and costs due will bear interest at the rate of 10% (the “Default Rate”) until the event of default is cured. From and after the Maturity Date any unpaid principal and interest and any other unpaid amounts and costs under the June 2019 Note will bear interest at the Default Rate. Additionally, and without limitation, all amounts owed under any judgment obtained by Purchaser against the Company with respect to the June 2019 Note will bear interest at the Default Rate.
June 2019 Purchaser Royalty Agreement
Pursuant to the terms of the June 2019 Purchaser Royalty Agreement, which has a 10-year term, commencing upon the fiscal quarter in which revenue is derived directly or indirectly from any of the Collateral Processors, the Company will pay to the Purchaser non-refundable royalty payments consisting of 8.5% of all Net Revenue (as defined in the June 2019 Purchaser Royalty Agreement) received by the Company as a result of the commercialization and/or monetization of the Collateral Processors until such time as the Principal Amount has been paid. At such time as the Principal Amount has been paid to the Purchaser, Purchaser will receive non-refundable royalty payments consisting of 5.0% of Net Revenue received by the Company as a result of the commercialization and/or monetization of the first two processors of the Collateral Processors. The royalty payments will be paid by the Company to the Purchaser within 15 days after the end of the quarter in which the Company receives payment for any Net Revenue from the Collateral Processors. The June 2019 Purchaser Royalty Agreement provides that any controversy or claim arising out of or relating to the June 2019 Purchaser Royalty Agreement will be settled by binding arbitration and judgment on the award entered in any court having jurisdiction.
June 2019 Pledge Agreement
Pursuant to the terms of the Pledge Agreement, to induce Brenda Hamilton (the “Pledgor”) to enter into the June 2019 Pledge Agreement and the Mortgage, the Company represented and warranted to the Pledgor and the Purchaser that the Company will timely pay all amounts owing to the Purchaser, and that it will deliver full and timely payment of all and any amounts due and/or which may become due to the Purchaser from the Company from time to time in connection with the Transaction Documents without limitation. Purchaser agreed that it understood that all consideration delivered to the Purchaser by the Company pursuant to the Transaction Documents will be applied to the Principal Amount and as a result, the Mortgage will be reduced by any and all payments of consideration of any type made by the Company to the Purchaser under the Transaction Documents.
In addition, under the terms of the June 2019 Pledge Agreement, based upon the representations of the Company and the Purchaser that they will perform and comply with their obligations and duties under the Transaction Documents, the Pledgor agreed to provide the Purchaser with the June 2019 Mortgage which will secure the Company’s payment of the Principal Amount pursuant to the Transaction Document. The June 2019 Mortgage will be reduced from time to time by any and all payments made by the Company to the Purchaser under the Transaction Documents. In exchange for providing the Real Property collateral, the Pledgor agreed to receive:
(i) | 500,000 shares of the Company’s common stock, | |
(ii) | Commencing on December 5, 2019, monthly payments equal to the interest paid by the Company to the borrower under the June 2019 Note accruing from time of the Purchaser’s delivery of the Principal Amount to the Company until the June 2019 Note is paid in full, and |
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(iii) | 8.5% of the Net Revenue while the Principal Amount is outstanding and 5.0% thereafter on the first two processors of the Collateral Processors as set forth in that certain Royalty Participation Agreement dated as of June 6, 2019 by and among the Company, PhytoChem and the Pledgor (the “June 2019 Pledgor Royalty Agreement”). |
As set forth in the June 2019 Pledge Agreement, the terms including payment due dates and maturity dates of the June 2019 Note may not be extended by the Purchaser and the Company without the express written consent of the Pledgor. In the event that the June 2019 Note is amended or modified including to extend a payment due date or the maturity date of the June 2019 Note, without the Pledgor’s written consent, then Pledgor’s obligation to provide security under the June 2019 Pledge Agreement will automatically cease, and the June 2019 Mortgage will be deemed satisfied and released in full as security for the Principal Amount of the Amended Note, and (iii) the Purchaser will immediately record with the Palm Beach County Property Appraiser’s Officer a Satisfaction of Mortgage releasing the Purchaser’s lien on the Real Property.
Pursuant to the terms of the June 2019 Pledge Agreement, a default means that the Company has failed to make any payment required under the June 2019 Note, within 15 days after the date the payment is due. If after exhaustion of all other remedies, including enforcement of the lien against the Collateral and collection of all amounts due from the Company, there remains a default, then the Purchaser will provide written notice to the Pledgor of the default and the Pledgor will have the option but not the obligation to cure the default. In such event, the amounts paid by the Pledgor will bear interest at the highest rate allowed under Florida law. So long as the Company is in default of its obligations under the June 2019 Note, then the Company will pay the Pledgor interest on the amounts outstanding under the June 2019 Note at a rate of 10%.
If the Company defaults on its obligations under the June 2019 Note, the June 2019 Pledge Agreement or any of the other Transaction Agreements, the Company will reimburse the Pledgor on demand for (i) payments made by the Pledgor to Purchaser to cure a default by the Company under the June 2019 Investment Agreement and/or the June 2019 Note, and (ii) all costs and expenses, including attorneys’ fees and disbursements that the Pledgor incurs in exercising any right, power, or remedy provided by the June 2019 Note, the June 2019 Purchaser Royalty Agreement, the June 2019 Security Agreement, the June 2019 Pledgor Royalty Agreement, the June 2019 Mortgage or by law or defending any action arising out of the June 2019 Note, the June 2019 Purchaser Royalty Agreement, the June 2019 Security Agreement, the June 2019 Pledgor Royalty Agreement or the June 2019 Mortgage. Additionally, in the event of a default by the Company, all costs incurred and paid by the Pledgor will bear interest at the highest rate allowed under Florida law. The June 2019 Pledge Agreement provides that any controversy or claim arising out of or relating to the June 2019 Pledge Agreement will be settled by binding arbitration and judgment on the award entered in any court having jurisdiction.
June 2019 Pledgor Royalty Agreement
Pursuant to the terms of the June 2019 Pledgor Royalty Agreement, which has a 10-year term, commencing upon the fiscal quarter in which revenue is derived directly or indirectly from any of the Collateral Processors, the Company will pay to the Pledgor non-refundable royalty payments consisting of 8.5% of all Net Revenue received by the Company as a result of the commercialization and/or monetization of the Collateral Processors until such time as the Principal Amount has been paid. At such time as the Principal Amount has been paid to the Purchaser, the Pledgor will receive non-refundable royalty payments consisting of 5.0% of Net Revenue received by the Company as a result of the commercialization and/or monetization of the first two processors of the Collateral Processors. The royalty payments will be paid by the Company to the Pledgor within 15 days after the end of the quarter in which the Company receives payment for any Net Revenue from the Collateral Processors. The June 2019 Pledgor Royalty Agreement provides that any controversy or claim arising out of or relating to the June 2019 Pledgor Royalty Agreement will be settled by binding arbitration and judgment on the award entered in any court having jurisdiction.
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Amended Investment Agreement
On November 13, 2019, the Company entered into an amended Investment Agreement (the “Amended Investment Agreement” and collectively with the Amended Note, the Amended Purchaser Royalty Agreement, the Amended Security Agreement, the Amended Pledgor Royalty Agreement and the Amended Mortgage, each as hereinafter defined, the “Amended Transaction Documents”) by and among the Company and the Purchaser. Pursuant to the terms of the Amended Investment Agreement, the Principal Amount of the Amended Note is secured by the current assets and future assets of the Company and its subsidiaries (the “Collateral”), including the Collateral Processors in accordance with the terms of provisions of the Amended Note and the Amended Security Agreement. Except as set forth herein, the terms of the Amended Investment Agreement are substantially similar to the terms of the June 2019 Investment Agreement.
Amended Note
Pursuant to the terms of the Amended Note dated November 13, 2019 from the Company to the Purchaser (the “Amended Note”), the entire outstanding principal balance of the Amended Note matured on December 7, 2020. The Amended Note provides that the Company make the first interest only payment on December 7, 2019 at the fixed rate of 5.75% per annum. Beginning January 7, 2020 and continuing until the maturity date, the Company agreed to make equal monthly installment payments of principal and interest at the fixed rate of 5.75% per annum in an amount sufficient to fully amortize the Principal Amount of the Amended Note and all accrued interest over an amortization period of 18 months, until all amounts due under the Amended Note are paid in full. Interest will accrue from June 6, 2019 at the rate of 5.75% per annum until the maturity date of the Amended Note.
Pursuant to the terms of the Amended Note, all payments made by the Company to the Purchaser under the Transaction Documents, including but not limited to the Amended Note, will be first applied to the Principal Amount then to accrued interest outstanding. Any and all consideration paid by the Company to the Purchaser under the Transaction Documents will reduce the amounts secured by the Amended Mortgage without affecting the amounts owed by the Company to the Purchaser under the Transaction Documents.
The Amended Note is secured by the Collateral Processors, including the Collateral Processors. A pledge of the Real Property secures the Principal Amount pursuant to the terms of the Amended Pledge Agreement and Amended Mortgage, and the Amended Mortgage will be reduced from time to time by the consideration paid by the Company to the Purchaser. Simultaneously with the payment of consideration (whether interest, royalty and/or securities, as provided in the Amended Note and the Amended Investment Agreement) equal to the Principal Amount of the Amended Note, the Purchaser will record with the Palm Beach County Property Appraiser’s Officer a Satisfaction of the Mortgage releasing the Purchaser’s Amended Mortgage on the Real Property.
Pursuant to the terms of the Amended Note, Purchaser has full recourse to the Collateral and the Purchaser will be required to proceed against and exhaust all remedies against the Collateral prior to proceeding against the Amended Mortgage and/or commencing an action to foreclose the Amended Mortgage. Except as set forth herein, the terms of the Amended Note are substantially similar to the terms of the June 2019 Note.
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Amended Security Agreement
Pursuant to the terms of an amended security agreement dated November 13, 2019 by and between the Company and the Purchaser (the “Amended Security Agreement”), the Company assigned and granted to the Purchaser a continuing lien on and security interest in the Collateral, including the Collateral Processors. Except as set forth herein, the terms of the Amended Security Agreement are substantially similar to the terms of the June 2019 Security Agreement.
Amended Purchaser Royalty Agreement
On November 13, 2019, the Company entered into that certain purchaser royalty agreement dated November 13, 2019 by and between the Company and the Purchaser (the “Amended Purchaser Royalty Agreement”). Aside from certain conforming changes, the terms of the Amended Purchaser Royalty Agreement are substantially similar to the terms of the June 2019 Purchaser Royalty Agreement.
Amended Pledge Agreement
On November 13, 2019, the Company entered into an amended pledge agreement by and among the Company, the Pledgor and the Purchaser (the “Amended Pledge Agreement”). Pursuant to the terms of the Amended Pledge Agreement, to induce Pledgor to enter into the Amended Pledge Agreement and the Mortgage, the Company and the Purchaser represented and warranted to the Pledgor that each of the Company and the Pledgor will timely comply with all requirements and obligations under the Transaction Documents and the Company will pay all amounts owing to the Purchaser, and that it will deliver full and timely payment of all and any amounts due and/or which may become due to the Purchaser from the Company from time to time in connection with the Transaction Documents without limitation. Purchaser agreed that it understood that all consideration delivered to the Purchaser by the Company pursuant to the Transaction Documents will be applied to reduce the Principal Amount secured by the Amended Mortgage and as a result, the Amended Mortgage will be reduced by any and all payments of consideration of any type (including cash or securities) made by the Company to the Purchaser under the Transaction Documents and the June 2019 Investment Agreement and June 2019 Note.
Pursuant to the terms of the Amended Pledge Agreement, based upon the representations of the Company and the Purchaser that they will perform and comply with their obligations and duties under the Transaction Documents, the Pledgor agreed to provide the Purchaser with the Amended Mortgage which will secure the Company’s payment of the Principal Amount pursuant to the Transaction Document. The Amended Mortgage will be reduced from time to time by any and all payments of any nature (including cash or securities) made by the Company to the Purchaser under the Transaction Documents. In exchange for providing the Real Property collateral, the Company agreed to pay to Pledgor:
(i) | 500,000 shares of the Company’s common stock, which were issued upon execution of the June 2019 Pledge Agreement, | |
(ii) | Commencing on December 7, 2019 and ending on the maturing date of the Amended Note, monthly payments equal to 5% interest on the Principal Amount accruing on the Principal Amount and accrued interest from June 6, 2019 until the maturity date of the Amended Note, and | |
(iii) | 8.5% of the Net Revenue so long as any portion of the Principal Amount is outstanding and 5.0% thereafter on the first two processors of the Collateral Processors as set forth in that certain Amended Royalty Participation Agreement dated as of November 13, 2019 by and among NutraLife, PhytoChem and the Pledgor (the “Amended Pledgor Royalty Agreement”). |
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As set forth in the Amended Pledge Agreement, the terms set forth in the Transaction Documents may not be extended by the Purchaser and the Company without the express written consent of the Pledgor so long as any portion of the Principal Amount is outstanding. In the event that any of the Transaction Documents is amended and/or modified in any respect without the Pledgor’s written consent while any portion of the Principal Amount is outstanding then (i) Pledgor’s obligation to provide security under the Amended Pledge Agreement will automatically cease, (ii) the Amended Mortgage will be deemed satisfied and released in full as security for the Principal Amount of the Amended Note, and (iii) the Purchaser will immediately record with the Palm Beach County Property Appraiser’s Officer a Satisfaction of Mortgage releasing the Purchaser’s lien on the Real Property at the cost of the Company.
Pursuant to the terms of the Amended Pledge Agreement, a default means that the Company has failed to make any payment required under the Amended Note, within 15 days after the date the payment is due. If after exhaustion of all other remedies, including enforcement of the lien against the Collateral and collection of all amounts due from the Company, there remains a default owed to the Purchaser, then the Purchaser will provide written notice to the Pledgor of the default and the Pledgor will have the option but not the obligation to cure the default. In such event, the amounts paid by the Pledgor to enforce its rights under the Amended Pledge Agreement will bear interest at the highest rate allowed under Florida law. So long as the Company is in default of its obligations under the Transaction Documents, then the Company will pay the Pledgor interest on the Principal and accrued interest outstanding under the Amended Note at the highest rate allowed under Florida law.
If the Company defaults on its obligations under the Amended Note, the Amended Pledge Agreement or any of the other Transaction Agreements, the Company will reimburse the Pledgor on demand for (i) payments made by the Pledgor to Purchaser to cure a default by the Company under the Amended Investment Agreement and/or the Amended Note, and (ii) all costs and expenses, including attorneys’ fees and disbursements that the Pledgor incurs in exercising any right, power, or remedy provided by the Amended Note, the Amended Purchaser Royalty Agreement, the Amended Security Agreement, the Amended Pledgor Royalty Agreement, the Amended Mortgage or by law or defending any action arising out of the Amended Note, the Amended Purchaser Royalty Agreement, the Amended Security Agreement, the Amended Pledgor Royalty Agreement or the Amended Mortgage. Additionally, in the event of a default by the Company, all costs incurred and paid by the Pledgor including but not limited to attorney fees and any amounts Pledgor pays to cure a default by the Company of the Amended Note will bear interest at the highest rate allowed under Florida law. Except as set forth herein, the terms of the Amended Pledge Agreement are substantially similar to the terms of the June 2019 Pledge Agreement.
Amended Pledgor Royalty Agreement
On November 13, 2019, the Company entered into the Amended Pledgor Royalty Agreement. Aside from certain conforming changes, the terms of the Amended Pledgor Royalty Agreement are substantially similar to the terms of the June 2019 Pledgor Royalty Agreement.
Company Default
The Company has not made the principal and interest payments on the Amended Note as of the date of this Annual Report. The Company now believes that it may have defenses to the enforcement of the Transaction Documents as written, however this may not be the case. Additionally, the Purchaser has not indicated to the Company that it will seek to enforce its rights under the Transaction Documents or that it will proceed against the Collateral.
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Stock Purchase Agreement
On November 2, 2020 (the “Closing Date”), the Company entered into a Stock Purchase Agreement (the “SPA”) by and between the Company, Lord Global Corporation, a Nevada corporation (the “Lord Global”) and 27 Health, Inc., a wholly-owned subsidiary of Lord Global (“27 Health”). Pursuant to the SPA, the Company acquired from Lord Global 250 shares of Series X Convertible Preferred Stock of Lord Global (the “Series X Stock”) in exchange for the issuance by the Company to 27 Health of 12,500,000 shares of common stock, par value $0.0001 per share, of the Company (the “NutraLife Common Stock”). The transactions pursuant to the SPA closed on the Closing Date.
Each share of Series X Stock is convertible into shares of common stock, par value $0.001 per share, of Lord Global (the “Lord Global Common Stock”) at the rate of 1,000 shares of Lord Global Common Stock per share of Series X Stock, subject to customary adjustments for stock splits, stock dividend, stock combinations, recapitalizations or other similar transactions. The conversion of the Series X Stock is subject to a customary beneficial limitation such that the Company may not convert the Series X Stock into Lord Global Common Stock if such conversion would result in the Company and its affiliates having beneficial ownership of in excess of 4.99% of the outstanding shares of Lord Global Common Stock, provided that the Company may elect to waive this limitation on 61 days’ notice to Lord Global.
In addition to the Series X Stock issued to the Company, in the event that, on the first business day following the 180-day anniversary of the Closing Date, the average volume weighted average price of the Lord Global Common Stock for the 10 trading day period prior to that date is less than $4.00 (subject to customary adjustments), then Lord Global will issue to the Company, for no additional consideration payable by the Company, a number of shares of Lord Global Common Stock equal to (i) $1,000,000, divided by (ii) the share price as of such date, minus 250,000 (the “First Adjustment Shares”). A second such adjustment shall be completed on the first business day following the one-year anniversary of the Closing Date, provided that at this adjustment the number of First Adjustment Shares will also be deducted from any additional shares to be issued to the Company.
Manufacturing, Distribution and Sales Agreement
In connection with the SPA and the transactions as set forth therein, on the Closing Date the Company also entered into a Manufacturing, Distribution and Sales Agreement (the “MDS Agreement”) by and between the Company and 27 Health. 27 Health, together with Lord Global (referred to in this section jointly as “27 Health”) has developed and currently manufactures and markets certain products related to the testing and treatment of COVID-19 (the “Coviguard Products”).
Pursuant to the MDS Agreement, 27 Health engaged the Company to manufacture the Coviguard Products and granted the Company the right, on a non-exclusive basis, to sell and distribute the Coviguard Products manufactured by the Company though all channels of distribution on a worldwide basis and to undertake advertising and marketing as determined to be necessary by the Company, with written notice, in connection therewith.
During the term of the Agreement, the Company has the exclusive right to manufacture the Coviguard Products, subject to the Company’s continued ability to meet in all material respects the production requirements of 27 Health for the Coviguard Products. In the event that the Company is unable, in the sole determination of 27 Health, to meet the production requirements, 27 Health may seek other sources for the manufacturing of the Coviguard Products or may terminate the MDS Agreement.
Pursuant to the MDS Agreement, the Company may elect to market the Coviguard Products directly, without any requirement of an order for the manufacturing of the products being supplied by 27 Health or accepted by the Company. All such direct sales will be made by the Company to the recipient of the products, and the Company will pay to 27 Health a set distributor price for the products, and retain the balance paid by the buyer.
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In the event that the Company identifies a potential third-party customer for the Coviguard Products, but does not elect to sell the Coviguard Products directly to the customer as set forth above, the Company may refer such potential customer to 27 Health. If the customer is a not a current customer of 27 Health, then for any and all sales of Coviguard Products to such new customers, 27 Health will pay to the Company 15% commissions on these sales. No commissions would be paid for sales to customers who were already customers of 27 Health at the time.
The MDS Agreement has an initial term of 5 years, with automatic extensions of 1 year each, subject to earlier expiration or termination as set forth therein.
Competitive Business Conditions
The nutritional, dietary supplement and industrial hemp CBD industries, as well as the sanitizer products industry, are highly competitive. Numerous manufacturers and distributors compete with us for customers throughout the United States selling products to private label customers and retailers such as mass merchandisers, drug store chains, independent pharmacies and health food stores. We are also vulnerable to competition from companies that can manufacture similar products to our products and compete for private label customers. The markets for our products are highly competitive. We seek to compete on the basis of customer service, product quality, pricing and marketing support.
We compete with major private label and broadline brand manufacturers many of which are larger and have access to greater resources than us. Among other factors, competition among private label manufacturers is based upon price. If one or more private label or broadline brand manufacturers significantly reduce their prices in an effort to gain market share, our results of operations or market position could be adversely affected. We also compete with manufacturers of nationally advertised brand name products which are larger and have resources substantially greater than us. In the future, one or more of these companies could seek to compete more directly with us by manufacturing private label products or by significantly lowering the prices of their national brand products.
Many of our indirect competitors are substantially larger, have more experience than us, have longer operating histories, and have materially greater financial and other resources than us.
Costs and Effects of Compliance with Environmental Laws
We are in a business that involves the use of raw materials in a manufacturing process, however, we believe that it is unlikely that such materials are likely to result in the violation of any existing environmental rules and/or regulations. Further, we do not own any real property that could lead to liability as a landowner. Therefore, we do not anticipate that there will be any material costs associated with compliance with environmental laws and regulations.
Product Liability Insurance
We maintain commercial liability, including product liability coverage, and property insurance. Our policy provides for a general liability of five million dollars ($5,000,000) per occurrence, and five million dollars ($5,000,000) annual aggregate coverage which includes our main corporate facility. We carry property coverage on our main office facility to cover our legal liability, tenant’s improvements, business property, and inventory.
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Regulation of our Hemp Finished Products
The sale of our Hemp Finished Products is potentially subject to a complex web of federal and state regulations that are evolving at a rapid rate. The formulation, manufacturing, packaging, labeling, advertising, and distribution of our products are subject to regulation by one or more federal agencies, principally the Food and Drug Administration (“FDA”), the Federal Trade Commission (“FTC”), and, to a lesser extent, the Consumer Product Safety Commission (“CPSC”), the United States Department of Agriculture (“USDA”), Drug Enforcement Agency (“DEA”) and the Environmental Protection Agency (“EPA”). Our activities are also regulated by various governmental agencies for the states and localities in which our products are sold, as well as by governmental agencies in certain countries outside the United States in which our products are sold. These agencies can change their rules at any time. Should we become subject to FDA, DEA or other enforcement proceedings we would have to cease operations.
The FDA under the Federal Food, Drug, and Cosmetic Act regulates the formulation, manufacturing, packaging, labeling, distribution and sale of drugs, food, including dietary supplements, and over-the-counter drugs.
Until 2014, when 7 U.S. Code §5940 became federal law as part of the Agricultural Act of 2014 (the “2014 Farm Act”), products containing oils derived from hemp, notwithstanding a minimal or non-existing THC content, were classified as Schedule I illegal drugs. The 2014 Farm Act expired on September 30, 2018, and was thereafter replaced by the Agricultural Improvement Act of 2018 on December 20, 2018 (the “2018 Farm Act”), which amended various sections of the U.S. Code, thereby removing hemp, defined as cannabis with less than 0.3% of THC, from Schedule 1 status under the Controlled Substances Act (“CSA”), and legalizing the cultivation and sale of hemp at the federal level, subject to compliance with certain federal requirements and state law, amongst other things. THC is the psychoactive component of plants in the cannabis family generally identified as marihuana or marijuana. We believe that our hemp products are and will continue to be federally legal in the United States in that they contain and will continue to contain less than 0.3% of THC in compliance with the 2018 Farm Bill guidelines and will have no psychoactive effects on our customers’ bodies. Notwithstanding, there is no assurance that the 2018 Farm Act will not be repealed or amended such that our products containing hemp-derived CBD would once again be deemed illegal under federal law.
The 2018 Farm Bill also shifted regulatory authority from the Drug Enforcement Administration to the Department of Agriculture. The 2018 Farm Bill did not change the United States Food and Drug Administration’s (“FDA”) oversight authority over hemp products. The 2018 Farm Act delegated the authority to the states to regulate and limit the production of hemp and hemp derived products within their territories. Although many states have adopted laws and regulations that allow for the production and sale of hemp and hemp derived products under certain circumstances, no assurance can be given that such state laws may not be repealed or amended such that our hemp products would once again be deemed illegal under the laws of one or more states now permitting such products, which in turn would render such products illegal in those states under federal law even if the federal law is unchanged. In the event of either repeal of federal or of state laws and regulations, or of amendments thereto that are adverse to our hemp products, we may be restricted or limited with respect to those products that we may sell or distribute, which could adversely impact our operations with respect to such products.
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Additionally, the FDA has indicated its view that certain types of hemp products may not be permissible under the United States Federal Food, Drug and Cosmetic Act (“FDCA”). The FDA’s position is related to its approval of Epidiolex, a marijuana-derived prescription medicine to be available in the United States. The active ingredient in Epidiolex is CBD. On December 20, 2018, after the passage of the 2018 Farm Bill, FDA Commissioner Scott Gottlieb issued a statement in which he reiterated the FDA’s position that, among other things, the FDA requires a cannabis product (hemp-derived or otherwise) that is marketed with a claim of therapeutic benefit, or with any other disease claim, to be approved by the FDA for its intended use before it may be introduced into interstate commerce and that the FDCA prohibits introducing into interstate commerce food products containing added hemp, and marketing products containing hemp as a dietary supplement, regardless of whether the substances are hemp-derived. Although we believe our hemp product offerings comply with applicable federal and state laws and regulations, legal proceedings alleging violations of such laws could have a material adverse effect on our business, financial condition and results of operations.
We do not intend to offer and do not compete with companies that offer cannabis products containing high levels of psychoactive THC in the United States. Although legal in some states in the United States, we are not in, and do not intend to enter into this market. We offer hemp-based products to customers in the United States but do not compete with any medical or recreational marijuana sellers of products for high THC content sales due to legal and regulatory restrictions and uncertainty in the United States.
The FDA under the Federal Food, Drug, and Cosmetic Act regulates the formulation, manufacturing, packaging, labeling, distribution and sale of drugs, food, including dietary supplements, and over-the-counter drugs and any inclusion of cannabis or cannabis-derived compounds, like CBD, in such products would be regulated by the FDA regardless of the source of the cannabis substance, be it hemp or marijuana.
Our CBD products are derived from the seeds and mature stalks of the Cannabis Sativa plant which includes all parts and varieties of the cannabis sativa plant also known as hemp, which contain a tetrahydrocannabinol concentration (“THC”) that does not exceed 0.3 percent on a dry-weight basis. In December of 2018, the U.S. Food and Drug Administration completed an evaluation of three generally recognized as safe (GRAS) notices for hemp seed-derived food ingredients. The FDA stated that hulled hemp seed (GRN765), hemp seed protein powder (GRN771), and hemp seed oil (GRN778) are GRAS under their intended conditions of use. Some of the intended uses for these ingredients include adding them as source of protein, carbohydrates, oil, and other nutrients to beverages (juices, smoothies, protein drinks, plant-based alternatives to dairy products), soups, dips, spreads, sauces, dressings, plant-based alternatives to meat products, desserts, baked goods, cereals, snacks and nutrition bars. Our CBD products are made from seeds and mature stalks of hemp and contain only trace amounts of THC, we believe they qualify as GRAS products.
We have not obtained and do not plan to obtain FDA approval of our CBD products. As a result, we could be subject to enforcement proceedings by the FDA. We do not believe that FDA enforcement proceedings are likely since our products only contain trace elements of THC and do not cause the “high” associated with the THC in marijuana. Additionally, Hemp Finished Products like those sold by us are sold by large retailers online including Whole Foods, Publix, Wal-Mart and others. Despite the foregoing, should we become subject to FDA or other enforcement proceedings we could have to cease operations.
Other Regulations Impacting our Hemp Finished - CBD Products
Some states are considering various taxation of marijuana-related products including hemp finished products. These considerations seem to range from routine sales taxes to taxes similar to those imposed on tobacco products. Though, for the reasons described above, we do not believe the Hemp Finished Products to be subject to any marijuana-related taxation schemes, it is unclear whether Hemp Finished Products would fall under these tax plans if and when they are imposed.
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IRS section 280(E) prevents cannabis companies from deducting expenses from their income, except for those considered cost of goods sold. No deduction or credit is allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by federal law or the law of any State in which such trade or business is conducted. Though, for the reasons described above, we do not believe the Hemp Finished Products to be appropriately treated as a controlled substance, if IRC 280(E) is enforced against us relating to deductions concerning our Hemp Finished Products, such tax treatment could create operating and cash flow problems in the future.
Cannabis versus Hemp
While hemp and cannabis are both derived from the same species (Cannabis sativa), there are major differences in the characteristics of the respective plant strains that produce industrial hemp on the one hand, and cannabis products on the other. In short, hemp is a strain of the Cannabis sativa plant that has been grown primarily for use in industrial applications and has been specifically cultivated to produce a low tetrahydrocannabinol (“THC”) content and a high cannabidiol (“CBD”) content. THC is the psychoactive constituent of cannabis and is responsible for producing the psychoactive effects of the drug. CBD is another active ingredient present in Cannabis sativa plants, and it largely acts to neutralize the psychoactive effects of THC and is not associated with psychoactive effects. Since hemp strains have very little THC and a lot of CBD, they do not produce psychoactive effects when ingested.
Regulation of our Products not Containing CBD
The formulation, manufacturing, packaging, labeling, advertising, and distribution of our non-hemp based products are subject to regulation by one or more federal agencies, principally the FDA, the Federal Trade Commission (“FTC”), and, to a lesser extent, the Consumer Product Safety Commission (“CPSC”), the United States Department of Agriculture (“USDA”), and the Environmental Protection Agency (“EPA”). Our activities are also regulated by various governmental agencies for the states and localities in which our products are sold, as well as by governmental agencies in certain countries outside the United States in which our products are sold. Among other matters, regulation by the FDA and FTC are concerned with product safety and claims made with respect to a product’s ability to provide health-related benefits. Specifically, the FDA, under the Federal Food, Drug, and Cosmetic Act, (“FDCA”), regulates the formulation, manufacturing, packaging, labeling, distribution and sale of food, including dietary supplements, and over-the-counter drugs. The FTC regulates the advertising of these products. The National Advertising Division (“NAD”) of the Council of Better Business Bureaus oversees an industry sponsored, self-regulatory system that permits competitors to resolve disputes over advertising claims. The NAD has no enforcement authority of its own, but may refer matters that appear to violate the Federal Trade Commission Act or the FDCA to the FTC or the FDA for further action, as appropriate.
Federal agencies, primarily the FDA and the FTC, have a variety of procedures and enforcement remedies available to them including initiating investigations, issuing warning letters and cease and desist orders, requiring corrective labeling or advertising, requiring consumer redress (for example, requiring that a company offer to repurchase products previously sold to consumers), seeking injunctive relief or product seizures, imposing civil penalties, or commencing criminal prosecution. In addition, certain state agencies have similar authority. These federal and state agencies have in the past used these remedies in regulating participants in the food, dietary supplement and over-the-counter drug industries, including the imposition of civil penalties in the millions of dollars against a few industry participants.
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The Dietary Supplement Health and Education Act (“DSHEA”) was enacted in 1994, amending the FDCA. We believe DSHEA is generally favorable to consumers and to the dietary supplement industry. DSHEA establishes a statutory class of “dietary supplements”, which includes vitamins, minerals, herbs, amino acids and other dietary ingredients for human use to supplement the diet. Dietary ingredients marketed in the United States before October 15, 1994 may be marketed without the submission of a “new dietary ingredient” (“NDI”) premarket notification to the FDA. Dietary ingredients not marketed in the United States before October 15, 1994 may require the submission, at least seventy-five (75) days before marketing of an NDI notification containing information establishing that the ingredient is reasonably expected to be safe for its intended use. Among other things, DSHEA prevents the FDA from regulating dietary ingredients in dietary supplements as “food additives” and allows the use of statements of nutritional support on product labels and in labeling. The FDA has issued final regulations under DSHEA and has issued draft guidance on NDI notification requirements. Further guidance and regulations are expected. Several bills to amend DSHEA in ways that would make this law less favorable to consumers and industry have been proposed in Congress.
The Nutrition Labeling and Education Act of 1990 (“NLEA”) amended the FDCA to establish additional requirements for ingredient and nutrition labeling and labeling claims for foods. If the NLEA labeling requirements change at a future time, we may need to revise our product labeling. Our non-CBD products are classified as dietary supplements. The FDA has concluded that THC and CBD products are excluded from the definition of a dietary supplement. The FDA issued a Final Rule on GMPs for dietary supplements on June 22, 2007. The GMPs cover manufacturers and holders of finished dietary supplement products, including dietary supplement products manufactured outside the United States that are imported for sale into the United States. Among other things, the new GMPs: (a) require identity testing on all incoming dietary ingredients, call for a “scientifically valid system” for ensuring finished products meet all specifications, (b) include requirements related to process controls, including statistical sampling of finished batches for testing and requirements for written procedures, and (c) require extensive recordkeeping.
We have reviewed the GMPs and have taken steps to ensure compliance. While we believe we are in compliance, there can be no assurance that our operations or those of our suppliers will be in compliance in all respects at all times. Additionally, there is a potential risk of increased audits as the FDA and other regulators seek to ensure compliance with the GMP’s.
On December 22, 2006, Congress passed the Dietary Supplement and Nonprescription Drug Consumer Protection Act, which went into effect on December 22, 2007. The law requires, among other things, that companies that manufacture or distribute nonprescription drugs or dietary supplements report serious adverse events allegedly associated with their products to the FDA and institute recordkeeping requirements for all adverse events (serious and non-serious). There is a risk that consumers, the press and government regulators could misinterpret reported serious adverse events as evidence of causation by the ingredient or product complained of, which could lead to additional regulations, banned ingredients or products, increased insurance costs and a potential increase in product liability litigation, among other things.
The Consumer Product Safety Improvement Act of 2008 (“CPSIA”) primarily addresses children’s product safety but also improves the administrative process of the CPSC. Among other things, the CPSIA requires testing and certification of certain products and enhances the CPSC’s authority to order recalls.
The FDA Food Safety Modernization Act (“FSMA”), enacted January 4, 2011, amended the FDCA to significantly enhance the FDA’s authority over various aspects of food regulation. The FSMA granted the FDA mandatory recall authority when the FDA determines if there is reasonable probability that a food is adulterated or misbranded and that the use of, or exposure to, the food will cause serious adverse health consequences or death to humans or animals. Other changes include the FDA’s expanded access to records; the authority to suspend food facility registrations and require high risk imported food to be accompanied by a certification; stronger authority to administratively detain food; the authority to refuse admission of an imported food if it is from a foreign establishment to which a U.S. inspector is refused entry for an inspection; and the requirement that importers verify that the foods they import meet domestic standards.
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One of the FSMA’s more significant changes is the requirement of hazard analysis and risk-based preventive controls (“HARBPC”) for all food facilities required to register with the FDA, except dietary supplement facilities in compliance with both GMPs and the serious adverse event reporting requirements. Although dietary supplement facilities are exempt from the HARBPC requirements, dietary ingredient facilities might not qualify for the exemption. The HARBPC requirements, which the FDA has yet to propose, are expected to be onerous because facilities will have to develop and implement preventive controls to assure that identified hazards are significantly minimized or prevented, monitor the effectiveness of the preventive controls and maintain numerous records related to the HARBPC. The HARBPC requirements may increase the costs of dietary ingredients and/or affect our ability to obtain dietary ingredients.
As required by Section 113(b) of the FSMA, the FDA published in July 2011, a draft guidance document clarifying when the FDA believes a dietary ingredient is an NDI, when a manufacturer or distributor must submit an NDI premarket notification to the FDA, the evidence necessary to document the safety of an NDI and the methods for establishing the identity of an NDI. The draft guidance, if implemented as proposed, could have a material impact on our operations. Although our industry has strongly objected to several aspects of the draft guidance, it is unclear whether the FDA will make changes to the final guidance. In addition, it is possible that the FDA will begin taking enforcement actions consistent with the interpretations in the draft guidance before issuing a final version. The new FSMA requirements, as well as the FDA enforcement of the NDI guidance as written, could require us to incur additional expenses, which could be significant, and negatively impact our business in several ways, including, but not limited to, the detention and refusal of admission of imported products, the injunction of manufacturing of any dietary ingredients or dietary supplements until the FDA determines that such ingredients or products are in compliance and the potential imposition of fees for re-inspection of noncompliant facilities. Each of these events would increase our liability and could have a material adverse effect on our financial condition, results of operations or cash flows.
The FTC and the FDA have pursued a coordinated effort to challenge what they consider to be unsubstantiated and unsafe weight-loss products, and have also coordinated enforcement against dietary supplement claims in other areas, including children’s products. Their efforts to date have focused on manufacturers and marketers as well as media outlets, and have resulted in a significant number of investigations and enforcement actions, some resulting in civil penalties of several million dollars under the Federal Trade Commission Act. We expect that the FTC and the FDA will continue to focus on health-related claims for dietary supplements and foods which could cause our non-CBD products to be the subject of an FTC/FDA inquiry.
YOU SHOULD CAREFULLY CONSIDER THE RISKS AND UNCERTAINTIES DESCRIBED BELOW AND THE OTHER INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS ANNUAL REPORT ON FORM 10-K BEFORE DECIDING WHETHER TO INVEST IN THE COMPANY’S COMMON STOCK. ADDITIONAL RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN TO THE COMPANY OR THAT THE COMPANY CURRENTLY DEEMS IMMATERIAL MAY ALSO IMPAIR THE COMPANY’S BUSINESS OPERATIONS. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, THE COMPANY’S BUSINESS, FINANCIAL CONDITION OR OPERATING RESULTS COULD BE MATERIALLY ADVERSELY AFFECTED. IN SUCH CASE, THE TRADING PRICE OR THE COMPANY’S COMMON STOCK COULD DECLINE AND YOU MAY LOSE PART OR ALL OF YOUR INVESTMENT. THIS ANNUAL REPORT ON FORM 10-K ALSO CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. PLEASE SEE “CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS”.
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Risks Related to our Financial Condition
We are dependent on the sale of our securities to fund our operations.
During the years ended December 31, 2018 and, December 31, 2019, we received $618,000 and $2,800,000, from the sale of our securities. For the years ended December 31, 2018 and December 31, 2019, our revenues were approximately $3,700,000 and $2,100,000, respectively from the sale of our products. Our operating expenses are presently approximately $330,000 per month or $3,960,000 annually which consist of rent, advertising, salaries and other general and administrative expenses. Our cash on hand as of the date of this Annual Report on Form 10-K is $590,000 which is sufficient to pay our operating expenses for approximately 2 months. We do not have any arrangements for future financing. We are dependent on the sale of our securities to help fund our operations. There is no assurance we will be able to obtain future funding for our operations from the sale of our securities. The future issuance of our securities will result in substantial dilution in the percentage of our common stock held by our then existing stockholders, and would likely have an adverse effect on any trading market for our common stock. Obtaining financing would be subject to a number of factors, including investor acceptance. These factors may adversely affect the timing, amount, terms, or conditions of any financing that we may obtain or make any additional financing unavailable to us. If we do not obtain additional financing to fund our future operations, our business could fail and you could lose your investment.
There is substantial doubt about our ability to continue as a going concern as a result of our limited operating history and financial resources, and if we are unable to generate significant revenue or secure financing we may be required to cease or curtail our operations.
For the years ended December 31, 2018 and December 31, 2019, we incurred net losses of approximately $2,100,000 and $4,000,000 As a result, our auditor has rendered an opinion that we may be unable to continue as a going concern. Our limited operating history and financial resources raises substantial doubt about our ability to continue as a going concern and our financial statements contain a going concern qualification. Our financial statements do not include adjustments that might result from the outcome of this uncertainty and if we are unable to generate significant revenue or secure financing we may be required to cease or curtail or completely suspend our operations.
We will need additional capital to fund our operations, which, if obtained, could result in substantial dilution or significant debt service obligations. Our inability to procure additional financing, if required, may have a material adverse effect on us. We may not be able to obtain additional capital on commercially reasonable terms, which could adversely affect our liquidity and financial position.
We require additional equity and/or debt financing to continue our operations. There can be no assurance that we will be able to obtain funds on commercially acceptable terms, if at all. We expect to have ongoing needs for working capital in order to fund operations and to continue to expand our operations. To that end, we may be required to raise additional funds through equity or debt financing. In order to continue operating, we may need to obtain additional financing, either through borrowings, private offerings, public offerings, or some type of business combination, such as a merger, or buyout, and there can be no assurance that we will be successful in such pursuits. We may be unable to acquire the additional funding necessary to continue operating. However, there can be no assurance that we will be successful in securing additional capital. If we are unsuccessful, we may need to (a) initiate cost reductions; (b) forego business development opportunities; (c) seek extensions of time to fund liabilities, or (d) seek protection from creditors. Our inability to obtain any additional financing could have a material adverse effect upon us. We may not be able to secure any additional financing we may need on terms favorable to us, or at all. These conditions raise substantial doubt about our ability to continue as a going concern for at least one year from the date of this filing.
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In addition, if we are unable to generate adequate cash from operations, and if we are unable to find sources of funding, it may be necessary for us to sell one or more lines of business or all or a portion of our assets, enter into a business combination, or reduce or eliminate operations. These possibilities, to the extent available, may be on terms that result in significant dilution to our investors or that result in our investors losing all of their investment in our Company.
If we are able to raise additional capital, we do not know what the terms of any such capital raising would be. In addition, any future sale of our equity securities could be at prices substantially below prices at which our shares are currently valued. To the extent we require additional financing and cannot raise it, we may have to limit our then-current operations, curtail all or certain portions of our business objectives and plans or terminate our operations. We may seek to increase our cash reserves through the sale of additional equity or debt securities. The sale of convertible debt securities or additional equity securities could result in additional and potentially substantial dilution to our investors. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations and liquidity. In addition, our ability to obtain additional capital on acceptable terms is subject to a variety of uncertainties. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all. Any failure to raise additional funds on favorable terms could have a material adverse effect on our liquidity and financial condition.
If we are unable to generate sufficient revenues for our operating expenses we will need financing, which we may be unable to obtain; should we fail to obtain sufficient financing, our potential revenues will be negatively impacted.
For the years ended December 31, 2018 and December 31, 2019, our revenues were $3,700,000 and $2,130,000, respectively, from the sale of our products. For the years ended December 31, 2018 and December 31, 2019, we incurred net losses of $2,100,000 and $4,000,000.
Because we lack historical financial data, including revenue data, our future revenues are unpredictable.
Our operating expenses are presently approximately $330,000 per month or $3,960,000 annually which consist of rent, advertising, salaries and other general and administrative expenses. Our cash on hand as of the date of this Form 10-K is $590,000 which is sufficient to pay our operating expenses for approximately 2 months. In the future, we may require additional debt or equity funding to continue our operations. We intend to raise additional funds from an offering of our stock in the future; however, this offering may never occur, or if it occurs, we may be unable to raise the required funding. Further new offerings of our common shares will dilute our existing shareholders and your investment in our common shares. We do not have any plans or specific agreements for new sources of funding and we have no agreements for financing in place.
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Our liabilities could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry and prevent us from meeting our obligations under our indebtedness.
As of December 31, 2019, our total liabilities were approximately $2,900,000. Our liabilities could have important consequences for our investors, including: making it more difficult for us to make payments on indebtedness; increasing our vulnerability to general economic and industry conditions; requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on indebtedness when our indebtedness become due. This reduces our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities; limiting our ability and the ability of our subsidiaries to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions and general corporate or other purposes; and limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors which have fewer liabilities. We may incur substantial additional indebtedness in the future. If new indebtedness is added to our current debt levels, the related risks that we face could increase.
We are currently in default on certain secured debt obligations which could negatively affect our financial condition and may cause us to curtail or cease our operations.
As discussed above, the Company has not made the principal and interest payments on the Amended Note as of the date of this Annual Report. Accordingly, the Company is currently in default on these secured debt obligations. The Company now believes that it may have defenses to the enforcement of the Transaction Documents as written, however this may not be the case. Additionally, the Purchaser has not indicated to the Company that it will seek to enforce its rights under the Transaction Documents or that it will proceed against the Collateral. However, if the Purchaser does seek to proceed against the Collateral, the Company’s financial condition will be negatively affected and we may have to curtail our cease our operations altogether.
We are subject to the periodic reporting requirements of the Exchange Act that require us to perform accounting and reporting obligations with limited resources.
We are subject to the reporting requirements of the Exchange Act and are required to file periodic reports with the Securities and Exchange Commission (the “SEC”) pursuant to the Exchange Act and the rules and regulations promulgated thereunder. The reporting obligations require additional staff or consulting expenses. In addition, we have limited resources to allocate to such compliance functions, which increase the possibility of non-compliance.
Risks Related to Our Business
We have been growing rapidly and expect to continue to invest in our growth for the foreseeable future. If we are unable to manage our growth effectively, our revenue and profits could be adversely affected.
We have experienced rapid growth in a relatively short period of time. Our revenues were approximately $1,800,000, $3,700,000 and $2,100,000 for the years ended December 31, 2017, 2018 and 2019, respectively.
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We plan to continue to expand our operations, and we anticipate that further significant expansion will place additional demands on our resources and operations. We presently operate our manufacturing and distribution from a 6,400 square foot facility. We plan to begin manufacturing at a second facility consisting of 20,000 square feet in addition to our existing facility. Our future operating results depend to a large extent on our ability to manage this expansion and growth successfully. Sustaining our growth will place significant demands on our management as well as on our administrative, operational, and financial resources. To manage our growth, we must continue to improve our sales and manage our operational systems. If we are unable to manage our growth successfully, our revenue and profits could be harmed. Risks that we face in undertaking future expansion include but are not limited to:
● | effectively recruiting, integrating, training, and motivating new employees, including our sales force, while retaining existing private label distributors and effectively executing our new business plan focusing on the processing, extraction and sale of CBD products; | |
● | satisfying existing customers and attracting new customers of our products and services; | |
● | introducing new products and services; | |
● | increasing our private label customers; | |
● | controlling expenses and investments in expanded operations including our new manufacturing facility; | |
● | implementing and enhancing our administrative, operational, and financial infrastructure, systems, and processes; and | |
● | addressing new products to meet consumer preferences. |
A failure to manage our growth effectively could harm our business, operating results and/or financial condition. Further, due to our recent rapid growth, we have limited experience operating at our current scale and potentially at a larger scale, and as a result, it may be difficult for us to fully evaluate future prospects and risks. Our recent and historical growth should not be considered indicative of our future performance. We have encountered in the past, and will encounter in the future, risks and uncertainties frequently experienced by growing companies in rapidly changing industries. If our assumptions regarding these risks and uncertainties, which we use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our financial condition and operating results could differ materially from our expectations, our growth rates may slow and our business would by adversely impacted.
Our revenues are highly dependent upon four private label distributors, which represented 25%, 22%, 16%, and 10%, of our revenues for the year December 31, 2019 and should these distributors reduce their orders from us or should we lose these distributors; our revenues and results of operations would be negatively affected which could cause you to lose your investment.
Our revenues are concentrated and highly dependent on four (4) private label customers which represented 25%, 22%, 16%, and 10%, of our revenues for the year ended December 31, 2019. All sales made under a private label relationship are made on a purchase order basis and there are no long-term contracts with respect to any private label relationships. There can be no assurance that existing private label relationships will continue in the future or that we will be able to obtain new private label relationships on an ongoing basis, if at all. Our private label customers can reduce the products they order from us or cease ordering products from us at any time without notice. There can be no assurance that these private label customers will continue to place orders with us, that orders by such customers will continue at their previous levels or that we can replace any such lost business. Should this occur, our revenues and results of operations will be negatively affected which could cause you to lose your investment in our common shares.
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As a result of our evolving business model, we have a limited operating history in our lines of business and, therefore, we may not be able to correctly estimate our future operating expenses, which could lead to cash shortfalls.
Since our inception, our business model has evolved significantly. In 2017, we began selling CBD products and as a result our revenues increased from approximately $1,800,000 in 2017 to approximately $3,700,000 in 2018, and $2,130,000 in 2019. CBD became our main source of income, and we focused on generating revenue through private label manufacturers. As a result of the change in our business model, our revenues have significantly increased from prior periods. We have a limited operating history for our CBD products from which to evaluate our business. Additionally, amid the COVID-19 global pandemic, in 2020, the Company made a strategic pivot from our then-current nutraceutical manufacturing business by adding the manufacture of consumer sanitizer products utilizing the Company’s existing manufacturing capabilities and the Company’s ability to retrofit its operations and accommodate production due to the shortage of supply and demand for sanitizer products. We also have a limited operating history for our sanitized products from which to evaluate our business. Our failure to successfully execute our business plan would have a material adverse effect on our ability to continue operating. Accordingly, our prospects must be considered in light of the risks, expenses, and difficulties frequently encountered by companies in an early stage of development. We may not be successful in addressing such risks, and the failure to do so could have a material adverse effect on our business, operating results and financial condition.
Our quarterly and annual expenses are likely to increase substantially over the next several years depending upon the level of capital spending required to grow our revenues. Our operating results in future quarters may fall below expectations. Any of these events could adversely impact our business prospects and make it more difficult to raise additional equity capital at an acceptable price per share.
We do not have many written contracts with our customers. This allows such customers to use other companies instead of us which may negatively impact on our sales.
Because we do not have many written contracts with our customers who are free to purchase products from other suppliers, our customers can choose to use other companies instead. If a significant number of our customers began to use competing companies instead of us, our sales would decrease significantly.
An unexpected interruption or shortage in the supply or significant increase in the cost of components could limit our ability to manufacture any products, which could reduce our sales and margins.
An unexpected interruption of supply or a significant increase in the cost of components, for any reason, such as regulatory requirements, import restrictions, loss of certifications, disruption of distribution channels as a result of weather, terrorism or acts of war, fire, earthquake, or other national disaster, a work stoppage or other labor-related disruption, failure in supply or other logistical channels, electrical outages, or other events, could result in significant cost increases and/or shortages of our products. Our inability to obtain a sufficient amount of products or to pass through higher cost of products we offer could have a material adverse effect on our business, financial condition or results of operations.
The COVID-19 pandemic has already begun to adversely affect the Company’s business and the ultimate effect of the COVID-19 pandemic on the Company’s operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted.
The effects of the COVID-19 pandemic, including actions taken by businesses and governments, have adversely affected the global economy, disrupted global supply chains and created significant volatility in the financial markets. As a result, the Company’s business operations have been limited due to government actions or other restrictions in connection with the COVID-19 pandemic and may also be effected if Company’s personnel is unable to work effectively due to illness, quarantines, or other restrictions in connection with the COVID-19 pandemic. The COVID-19 pandemic has also already hindered the Company’s ability to raise capital and stay current in its reporting obligations with the SEC. If the COVID-19 pandemic continues for a prolonged period, the Company’s business, financial condition, results of operation and liquidity may be materially and adversely affected. The extent of the ultimate impact of the pandemic on the Company’s operational and financial performance will depend on various developments, including the duration and spread of the outbreak, and its impact on potential customers, employees, and vendors, all of which cannot be reasonably predicted at this time. These future developments will also include, but are not limited to, the actions taken by governmental authorities and other third parties in response to the pandemic. Disruptions and/or uncertainties related to the COVID-19 pandemic for a sustained period of time could result in delays or modifications to the Company’s strategic plans and initiatives and hinder the Company’s ability to achieve its goals.
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Possible yet unanticipated changes in federal and state law in the U.S. could cause our products containing hemp to be illegal, or could otherwise prohibit, limit or restrict any of our products containing hemp.
Until 2014, when 7 U.S. Code §5940 became federal law as part of the Agricultural Act of 2014 (the “2014 Farm Act”), products containing hemp, notwithstanding a minimal or non-existing THC content, were classified as Schedule I illegal drugs. The 2014 Farm Act expired on September 30, 2018, and was thereafter replaced by the Agricultural Improvement Act of 2018 on December 20, 2018 (the “2018 Farm Act”), which amended various sections of the U.S. Code, thereby removing hemp, defined as cannabis with less than 0.3% of THC, from Schedule 1 status under the Controlled Substances Act (“CSA”), and legalizing the cultivation and sale of hemp at the federal level, subject to compliance with certain federal requirements and state law, amongst other things. THC is the psychoactive component of plants in the cannabis family generally identified as marihuana or marijuana. We anticipate that our hemp-based products are and will continue to be federally legal in the United States in that they do, and will contain less than 0.3% of THC in compliance with the 2018 Farm Bill guidelines and will have no psychoactive effects on our customers’ bodies. Notwithstanding, there is no assurance that the 2018 Farm Act will not be repealed or amended such that our products containing hemp would once again be deemed illegal under federal law.
The 2018 Farm Bill also shifted regulatory authority from the Drug Enforcement Administration to the Department of Agriculture. The 2018 Farm Bill did not change the United States Food and Drug Administration’s (“FDA”) oversight authority over hemp-based products. The 2018 Farm Act delegated the authority to the states to regulate and limit the production of hemp and hemp derived products within their territories. Although many states have adopted laws and regulations that allow for the production and sale of hemp and hemp derived products under certain circumstances, no assurance can be given that such state laws may not be repealed or amended such that our products containing hemp would once again be deemed illegal under the laws of one or more states now permitting such products, which in turn would render such products illegal in those states under federal law even if the federal law is unchanged. In the event of either repeal of federal or of state laws and regulations, or of amendments thereto that are adverse to our hemp-based products, we may be restricted or limited with respect to those products that we may sell or distribute, which could adversely impact our business operations with respect to such products.
Additionally, the FDA has indicated its view that certain types of products containing hemp may not be permissible under the United States Federal Food, Drug and Cosmetic Act (“FDCA”). The FDA’s position is related to its approval of Epidiolex, a marijuana-derived prescription medicine to be available in the United States. The active ingredient in Epidiolex is hemp-derived CBD. On December 20, 2018, after the passage of the 2018 Farm Bill, FDA Commissioner Scott Gottlieb issued a statement in which he reiterated the FDA’s position that, among other things, the FDA requires a cannabis product (hemp-derived or otherwise) that is marketed with a claim of therapeutic benefit, or with any other disease claim, to be approved by the FDA for its intended use before it may be introduced into interstate commerce and that the FDCA prohibits introducing into interstate commerce food products containing added hemp, and marketing products containing hemp-derived ingredients, including, but not limited to CBD, as a dietary supplement, regardless of whether the substances are hemp-derived. Although we believe our planned hemp-based product offerings do and will continue to comply with applicable federal and state laws and regulations, legal proceedings alleging violations of such laws could have a material adverse effect on our business, financial condition and results of operations.
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FDA regulation could negatively affect the hemp industry, which would directly affect our financial condition.
The FDA may seek expanded regulation of hemp under the FDCA. Additionally, the FDA may issue rules and regulations, including certified good manufacturing practices, or cGMPs, related to the growth, cultivation, harvesting and processing of hemp. Clinical trials may be needed to verify efficacy and safety. It is also possible that the FDA would require that facilities where hemp is grown register with the FDA and comply with certain federally prescribed regulations. In the event that some or all of these regulations are imposed, we do not know what the impact would be on the hemp industry, including what costs, requirements and possible prohibitions may be enforced. If we or our partners are unable to comply with the regulations or registration as prescribed by the FDA, we and or our partners may be unable to continue to operate our and their business in its current or planned form or at all.
Confusion between legal hemp and illegal cannabis.
There is risk that confusion or uncertainty surrounding our products with regulated cannabis could occur on the state or federal level and impact us. We may have difficulty with establishing banking relationships, working with investment banks and brokers who would be willing to offer and sell our securities or accept deposits from stockholders, and auditors willing to certify our financial statements if we are confused with businesses that are in the cannabis business. Any of these additional factors, should they occur, could also affect our business, prospects, assets or results of operation could have a material adverse effect on the business, prospects, results of operations or financial condition of the Company.
Because we are subject to numerous laws and regulations we could incur substantial costs.
The manufacture, labeling and distribution of our products is regulated by various federal, state and local agencies. These governmental authorities may commence regulatory or legal proceedings, which could restrict the permissible scope of our product claims or the ability to sell our products in the future. The FDA regulates our nutraceutical and wellness products to ensure that the products are not adulterated or misbranded.
We are subject to additional regulation as a result of our CBD products. The shifting compliance environment and the need to build and maintain robust systems to comply with different compliance in multiple jurisdictions increase the possibility that we may violate one or more of the requirements. If our operations are found to be in violation of any of such laws or any other governmental regulations that apply to us, we may be subject to penalties, including, without limitation, civil and criminal penalties, damages, fines, the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our financial results.
Failure to comply with FDA requirements may result in, among other things, injunctions, product withdrawals, recalls, product seizures, fines and criminal prosecutions. Our advertising is subject to regulation by the FTC under the FTCA. In recent years, the FTC has initiated numerous investigations of dietary and nutrition supplement products and companies. Additionally, some states also permit advertising and labeling laws to be enforced by private attorney generals, who may seek relief for consumers, seek class action certifications, seek class wide damages and product recalls of products sold by us. Any actions against us by governmental authorities or private litigants could have a material adverse effect on our business, financial condition and results of operations.
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Adverse publicity or consumer perception of our products and any similar products distributed by others could harm our reputation and adversely affect our sales and revenues.
We are highly dependent upon positive consumer perceptions of the safety and quality of our products as well as similar products distributed by other wellness, nutraceutical and CBD companies. Consumer perception of nutrition supplements and our products, in particular, can be substantially influenced by scientific research or findings, national media attention and other publicity about product use. Adverse publicity from these sources regarding the safety, quality or efficacy of nutritional supplements and our products could harm our reputation and results of operations. The mere publication of news articles or reports asserting that such products may be harmful or questioning their efficacy could have a material adverse effect on our business, financial condition and results of operations, regardless of whether such news articles or reports are scientifically supported or whether the claimed harmful effects would be present at the dosages recommended for such products.
If the products we sell do not have the healthful effects intended, our business may suffer.
In general, our products contain food, nutritional supplements which do not currently require approval from the FDA or other regulatory agencies prior to sale. Many of our products contain innovative ingredients or combinations of ingredients. There is little long term experience with human or other animal consumption of certain of these ingredients or combinations thereof in concentrated form. Our products could have certain side effects if not taken as directed or if taken by a consumer that has certain medical conditions. Furthermore, there can be no assurance that any of the products, even when used as directed, will have the effects intended or will not have harmful side effects. Should our products cause unwanted side effects or not have the results intended, it could have a material adverse effect on our business, financial condition and results of operations.
We could suffer reputational and financial damage in the event of injury from our products or product recalls.
As a manufacturer and distributor of products intended for human consumption, we are subject to product liability claims if the use of our products for others is alleged to have resulted in injury. Our products consist of vitamins, minerals, herbs, lotions and other ingredients that are not subject to pre-market regulatory approval in the United States or internationally. Previously unknown adverse reactions resulting from human consumption of these ingredients could occur which would likely result in product liability claims against us which would increase our costs and adversely affect our reputation and harm our business. We may be held liable if any illness or injury caused by any product we develop, manufacture or distribute, if any such product is found to be unsuitable for use. In addition to any reputational damage we would suffer, we cannot guarantee that our product liability insurance or that of any of our suppliers would fully cover potential liabilities. In the event of litigation, any adverse judgments against us would have a material adverse effect on our financial condition, including our cash balances, and results of operations.
Our insurance coverage may not be sufficient to cover our legal claims or other losses that we may incur in the future.
We maintain insurance, including property, general and product liability, and workers’ compensation to protect ourselves against potential loss exposures. There is no assurance that our insurance will be sufficient to cover any claims that are asserted against us. In the future, insurance coverage may not be available at adequate levels or on adequate terms to cover potential losses, including on terms that meet our customer’s requirements. If insurance coverage is inadequate or unavailable, we may face claims that exceed coverage limits or that are not covered, which could increase our costs and adversely affect our operating results.
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Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our products and brand.
We manufacture products primarily for third parties who sell the products under their own brand names. We also sell products under our own brand names. Our product formulations are not patented and there are numerous companies selling similar products. As such, third parties could copy our products or sell similar products to our distributors and/or customers.
Our competitors may have or develop equivalent or superior manufacturing and design skills, and may develop an enhancement to our formulations that will be patentable or otherwise protected from duplication by others. Further, we may be unable or unwilling to strictly enforce our intellectual property rights, including our trademarks, from infringement. Our inability to obtain and/or failure to enforce our intellectual property rights could diminish the value of our product offerings and have a material adverse effect on our business, prospects, results of operations, and financial condition.
If we are unable to obtain and maintain protection of our intellectual property, the value of our products may be adversely affected.
Our business is dependent in part upon our ability to use intellectual property rights to protect our products from competition. To protect our products, we rely on a combination of patent and other intellectual property laws, employment, confidentiality and invention assignment agreements with our employees and contractors, and confidentiality agreements and protective contractual provisions with our partners, licensors and other third parties. These methods, however, afford us only limited protection against competition from other products.
We attempt to protect our intellectual property position, in part, by filing patent applications related to our proprietary technology, inventions and improvements that are important to our business. However, our patent position is not likely by itself to prevent others from commercializing products that compete directly with our products. In addition, the patent owned by us or issued to us could be challenged, invalidated, or held to be unenforceable. We also note that any patent granted may not provide a competitive advantage to us. Our competitors may independently develop technologies that are substantially similar or superior to our technologies. Further, third parties may design around our patented or proprietary products and technologies.
We rely on certain trade secrets and we may not be able to adequately protect our trade secrets even with contracts with our personnel and third parties. Also, any third party could independently develop and have the right to use, our trade secret, know-how and other proprietary information. If we are unable to protect our intellectual property rights, our business, prospects, financial condition and results of operations could suffer materially.
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We may be involved in lawsuits or proceedings to protect or enforce our intellectual property rights or to defend against infringement claims, which could be expensive and time consuming.
Our success depends in part on our products not infringing on the patents and proprietary rights of other parties. For instance, in the United States, patent applications filed in recent years are confidential for 18 months, while older applications are not published until the patent issues. As a result, there may be patents and patent applications of which we are unaware, and avoiding patent infringement may be difficult. Litigation may be necessary to enforce our intellectual property rights, protect our trade secrets or determine the validity and scope of the proprietary rights of others. Interference proceedings conducted by a patent and trademark office may be necessary to determine the priority of inventions with respect to our patent applications. Litigation or interference proceedings could result in substantial costs and diversion of resources and management attention. In addition, in an infringement proceeding, a court may decide that a patent of ours is not valid or is unenforceable or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology. An adverse determination of any litigation or defense proceedings could put one or more of our patents at risk of being invalidated or interpreted narrowly and could put our patent applications at risk of not issuing. In addition, we may be enjoined from marketing one or more of our products if a court finds that such products infringe the intellectual property rights of a third party. During litigation, we may not be able to prevent the confidentiality of certain of our proprietary rights because of the substantial amount of discovery required in connection with intellectual property litigation. In addition, during the course of litigation, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If investors or customers perceive these results to be negative, it could have a material adverse effect on our business, prospects, financial condition and results of operations.
Our business is highly competitive, and our failure to compete effectively could adversely affect our market share, financial condition and future growth.
The nutritional supplement, wellness and CBD industries are highly competitive with respect to price, brand and product recognition and new product introductions. Many of our competitors are larger, more established and possess greater financial, personnel, distribution and other resources. We face competition (a) in the health food channel from a limited number of large nationally known manufacturers, private label brands and many smaller manufacturers of dietary and nutrition supplements; and (b) in the mass-market distribution channel from manufacturers, major private label manufacturers and others. Private label brands at mass-market chains represent substantial sources of income for these merchants and the mass-market merchants often support their own labels at the expense of other brands. As such, the growth of our brands within food, drug, and general mass-market merchants are highly competitive and uncertain. If we cannot compete effectively, we may not be profitable.
We may experience greater than expected product returns, which might adversely affect our sales and results of operations.
In the year ended December 31, 2019, product returns represented 1% of our sales. Products may be returned for various reasons, including expiration dates or lack of sufficient sales volume. Any increase in product returns could reduce our results of operations.
The purchase of many of our products is discretionary and may be negatively impacted by adverse trends in the general economy and make it more difficult for us to generate revenues.
Our business is affected by general economic conditions since our products are discretionary and we depend, to a significant extent, upon a number of factors relating to discretionary consumer spending. These factors include economic conditions and perceptions of such conditions by consumers, employment rates, the level of consumers’ disposable income, business conditions, interest rates, consumer debt levels and availability of credit. Consumer spending on our products may be adversely affected by changes in general economic conditions.
We may not be able to anticipate consumer preferences and trends within the diet and nutritional industry, which could negatively affect acceptance of our products by retailers and consumers and result in a significant decrease in our revenues.
Our products must appeal to a broad range of consumers, whose preferences cannot be predicted with certainty and are subject to rapid change. Our products will need to successfully meet constantly changing consumer demands. If our products are not successfully received by our private label distributors and their customers, our business, financial condition, results of operations and prospects may be harmed.
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Risks Related to Our Management
Should we lose the services of Edgar Ward, our founder, Chief Executive Officer, President and sole Director, our financial condition and proposed expansion may be negatively impacted.
Our future depends on the continued contributions of Edgar Ward, our founder, Chief Executive Officer, President and sole Director who would be difficult to replace. The services of Mr. Ward are critical to the management of our business and operations. Additionally, we do not maintain key man life insurance on Mr. Ward. Should we lose the services of Mr. Ward, and be unable to replace his services with equally competent and experienced personnel, our operational goals and strategies would likely be adversely affected, which will negatively affect our revenues.
Edgar Ward, our founder, Chief Executive Officer, President and sole Director has voting control of the Company.
Edgar Ward, our founder, Chief Executive Officer, President and sole Director holds voting and dispositive control over 15.23% of our issued and outstanding common stock shares. Further he holds 100% of our issued and outstanding Series A Preferred stock. Each share of Series A Preferred Stock is entitled to 500,000 votes per share or an aggregate of 500,000,000 votes. Therefore, Edgar Ward effectively has voting control over the Company, which could lead to a conflict of interest where Mr. Wards interests do not align with those of ordinary shareholders of the Company.
Because we do not have an audit or compensation committee, shareholders will have to rely on the one member of our board of directors who is not independent to perform these functions.
We do not have an audit or compensation committee or board of directors as a whole, that is composed of independent directors. These functions are performed by our sole director. Because our sole Director is not independent, there is a potential conflict between their or our interests and our shareholders’ interests since Edgar Ward, our sole Board Member, is also our Chief Executive Officer and President who will participate in discussions concerning management compensation and audit issues that may affect management decisions. Until we have an audit committee or independent directors, there may less oversight of management decisions and activities and little ability for minority shareholders to challenge or reverse those activities and decisions, even if they are not in the best interests of minority shareholders.
Our Vice-President devotes limited time to our business, which may negatively impact our plan of operations, implementation of our business plan and our potential profitability.
Neil Catania, our Vice-President currently devotes only ten (10) hours to our business each month. Our Chief Executive Officer and President, Edgar Ward, devotes full time to our business however, there is no assurance he will be able to do so in the future. Management time devoted to our business activities in the future may be inadequate to implement our plan of operations and develop a profitable business.
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Risks Related to Our Common Stock
The Company is currently delinquent in its Reporting Obligations with the SEC and accordingly the Company currently has a “Pink No Information” Stop Sign Symbol on OTC Markets.
Our common stock is quoted on the OTC Pink No Information Tier of OTC Markets under the symbol, “NLBS” We are currently labeled as “Delinquent SEC Reporting” and have a red stop sign next to our name on OTC Markets because the Company has not filed all of its required periodic reports since we filed our Quarterly Report for the Quarter ended September 30, 2019, which was filed with the SEC on November 14, 2019. We plan to make up all of our required periodic reports and become current with our reporting obligations with the SEC so that our profile on OTC Markets can be updated accordingly to reflect Current Information and remove the stop sign as well as the “Delinquent SEC Reporting” label. However, there can be no assurance that we’ll be able to accomplish the foregoing as planned or at all.
Our Chief Executive Officer, President and sole Director has voting control over all matters submitted to a vote of our common stockholders, which will prevent our minority shareholders from having the ability to control any of our corporate actions.
As of March 19, 2021, we had 160,740,190 shares of our common stock outstanding, each entitled to one vote per common share. Our Chief Executive Officer, President and sole Director, Edgar Ward, held 15.23% of our issued and outstanding common stock and 1,000 Series A Preferred which provide 500,000 votes per share or an aggregate of 500,000,000 votes on all matters submitted to our stockholders. As a result, Mr. Ward has voting control of the Company and has the ability to determine the outcome of all matters submitted to our stockholders for approval, including the election of directors. Mr. Ward’s control of our voting securities may make it impossible to complete some corporate transactions without his support and may prevent a change in our control. In addition, this ownership could discourage the acquisition of our common stock by potential investors and could have an anti-takeover effect, possibly depressing the trading price of our common stock.
We will, in the future, issue additional securities which would reduce investors’ percent of ownership and will cause dilution to our existing shareholders.
Our Articles of Incorporation authorize us to issue 499,990,000 shares of common stock. As of March 19, 2021, we had 160,740,190 shares of common stock outstanding. Accordingly, we may issue additional shares of common stock. The future issuance of common stock may result in substantial dilution in the percentage of our common stock held by our then existing shareholders. We may value any common stock issued in the future on an arbitrary basis including for services or acquisitions or other corporate actions that may have the effect of diluting the value of the shares held by our stockholders, and might have an adverse effect on any trading market for our common stock. Additionally, we are authorized to issue 10,000 shares of preferred stock, of which we currently have 1,000 shares of our Series A Preferred stock issued and outstanding and 20 shares of Series B Preferred stock issued and outstanding. Further, our board of directors may designate the rights, terms and preferences of our authorized but unissued preferred shares at our discretion including conversion and voting preferences without notice to our shareholders.
The sale of the additional shares of common stock could cause dilution as well as the value of our common stock to decline.
The sale of a substantial number of shares of our common stock, or anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish. Further, if we do sell or issue more common stock, any investors’ investment in the Company will be diluted. Dilution is the difference between what you pay for your stock and the net tangible book value per share immediately after the additional shares are sold by us. If dilution occurs, any investment in the Company’s common stock could seriously decline in value.
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Our common stock is subject to the application of the “penny stock” rules which could adversely affect the market price of our common stock and increase transaction costs to sell those shares.
The SEC has adopted rule 3a51-1 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, Rule 15g-9 requires:
● | that a broker or dealer approve a person’s account for transactions in penny stocks, and | |
● | the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. | |
In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: | ||
● | obtain financial information and investment experience objectives of the person, and | |
● | make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. |
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form:
● | sets forth the basis on which the broker or dealer made the suitability determination and | |
● | that the broker or dealer received a signed, written agreement from the investor prior to the transaction. |
Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.
The market price for our common stock is particularly volatile which could lead to wide fluctuations in our share price. You may be unable to sell your common stock shares at or above your purchase price, or at all, which may result in substantial losses to you.
The market for our common stock is characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a seasoned issuer. Many of these factors are beyond our control and may decrease the market price of our common stock regardless of our operating performance. We cannot make any predictions or projections as to what the prevailing market price for our common stock shares will be at any time, or as to what effect the sale of shares or the availability of common stock shares for sale at any time will have on the prevailing market price.
FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.
In addition to the “penny stock” rules described above, FINRA has adopted FINRA Rule 2111 that requires a broker-dealer to have reasonable grounds for believing that an investment is suitable for a customer before recommending the investment. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.
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We do not intend to pay dividends for the foreseeable future.
We have never declared or paid any cash dividends on our stock and do not intend to pay any cash dividends in the foreseeable future. We anticipate that we will retain all of our future earnings for use in the development of our business and for general corporate purposes. Any determination to pay dividends in the future will be at the discretion of our Board of Directors.
If we are unable to comply with the financial reporting requirements mandated by the SEC’s regulations, investors may lose confidence in our financial reporting and the price of our common stock, if a market ever does develop for it, could decline.
If we fail to maintain effective internal controls over financial reporting, our ability to produce timely, accurate and reliable periodic financial statements could be impaired. If we do not maintain adequate internal control over financial reporting, investors could lose confidence in the accuracy of our periodic reports filed under the Exchange Act. Additionally, our ability to obtain additional financing could be impaired or a lack of investor confidence in the reliability and accuracy of our public reporting could cause our stock price to decline.
Item 1B. Unresolved Staff Comments
Not Applicable.
We lease an aggregate of 6,400 square feet of office and warehouse space at 6601 Lyons Rd, Suites L-6&7, Coconut Creek, FL 33073, with base rent at $6,100 per month from Lyons Corporate Park for our executive offices. Approximately 5,800 square feet is used for manufacturing, storage and distribution. The lease term expires on January 1, 2022.
On June 6, 2017, we entered into an agreement with Hillsboro Technology Center, LLC to lease an aggregate of 19,831 square feet at 448 Hillsboro Technology Drive, Deerfield Beach, FL 33441, with base rent at $14,447 per month plus 7.65% of common area and 13% of building operating expenses. We plan to use this location as a manufacturing, storage and distribution facility commencing in August 2021. The lease term commenced on January 1, 2018 and terminates eighty-six (86) months thereafter.
From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. Litigations applicable to the Company are discussed as follows.
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Hamilton v. the Company: Hamilton & Associates Law Group, P.A. v. Nutralife Biosciences, Inc. f/k/a Nutrafuels, Inc., Case No. 50-2020-CA-008435, was filed in the Circuit Court of the Fifteenth Judicial Circuit in and for Palm Beach County, Florida on August 9, 2020. In the suit, Hamilton & Associates Law Group, P.A. sets forth purported claims for breach of contract, and in the alternative, account stated, open account, unjust enrichment, and quantum meruit. Plaintiff requests a judgment for damages in the principal sum of $150,004.85, plus an award of attorneys’ fees and costs pursuant to a legal services agreement dated January 7, 2019, as well as pre-judgment interest and post-judgment interest. The Hamilton matter filed directly against the Corporation initially included a claim against Edgar Ward, but the individual claim has been dropped. The prior engagement agreement between the Hamilton law firm and the Company (for 2018) was in the nature of a flat fee engagement, in which shares were provided in lieu of cash payments. The Company maintains that the change in the engagement of the law firm (from 2018 to 2019) in terms of the nature of payment was not disclosed or explained adequately, and the Company was unaware of any claim that sums remained unpaid, as all fees were understood to be paid as a result of the shares of stock provided. The claim was filed on August 9, 2020, and is not set for trial, and only documentary discovery has been conducted to date.
Native American Partners v. the Company: Native American Partners LLC, including NAVF Holdings and NAVF-Pharma, subsidiary companies, and Best Darn Brands, LLC, and its subsidiaries v. Nutralife Biosciences Inc., Case No. CACE-20-009352, was filed in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida. This action was filed on June 5, 2020, against both the entity and Mr. Edgar Ward. However, the claim against Mr. Ward was later dropped. In the Amended Complaint filed on July 9, 2020, Plaintiffs demanded injunctive relief and damages for conversion, fraudulent misrepresentation, fraud in the inducement, equitable accounting, unjust enrichment, quantum meruit, breach of contract, and negligent misrepresentation. However, please note that we obtained a dismissal of this Amended Complaint on February 8, 2021, based on the arbitration provision included in the written contract at issue between the parties. At this time, the Plaintiffs have not filed another court action that we are aware of. We are also not yet aware of any arbitration initiated by the Plaintiff. The claim asserted that the Company failed to comply with the confidentiality imposed by a non-disclosure agreement signed by Plaintiff and Defendant. Plaintiff claims that Defendant proceeded with the development of a hand sanitizer product that was first revealed to Defendant by the Plaintiff, however, Defendant asserts that the product produced was different (gel vs. spray) and that Defendant had contemplated developing the product (the Covid 19 pandemic was already underway) well in advance of the signing of the NDA. The claim was dismissed in February 2021.
Ortiz v. the Company: Jose Ortiz v. Nutralife Biosciences, Inc. f/k/a Nutrafuels, Inc., Case No. CACE-29-017957, was filed in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida, on October 28, 2020. In this matter, Mr. Ortiz is seeking a judgment for damages, attorneys’ fees, and other costs relating to Defendant’s purported breach of an employment agreement dated March 18, 2015. We do not believe that this claim is valued at greater than $5,000. Ortiz’ claim was filed on October 28, 2020, asserting improper discharge from employment, and failure to pay wages and benefits, however, we believe (and have filed summary judgment asserting) that the claim was filed too late, in contravention of the applicable statute of limitations.
Item 4. Mine Safety Disclosures
Not applicable.
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Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market for Common Stock
Our common stock, par value $0.0001 per share is quoted with the symbol “NLBS” on the Pink No Information Tier of OTC Markets. We are currently labeled as “Delinquent SEC Reporting” and have a red stop sign next to our name on OTC Markets because the Company has not filed all of its required periodic reports since we filed our Form 10-Q for the quarter ended September 30, 2019 on November 14, 2019. We plan to make up all of our required periodic reports and become current with our reporting obligations with the SEC so that our profile on OTC Markets can be updated accordingly to reflect Current Information and remove the stop sign as well as the “Delinquent SEC Reporting” label. However, there can be no assurance that we’ll be able to accomplish the foregoing as planned or at all.
Our common stock shares were quoted with the symbol “NTFU” on the OTC Markets from May 19, 2014 until March 5, 2019. Trading in stocks quoted on the OTC Markets is often thin and is characterized by wide fluctuations in trading prices due to many factors that may have little to do with a company’s operations or business prospects. On March 16, 2021, the closing price of our common stock on the OTC Pink was $0.14 per share.
OTC Markets securities are not listed or traded on the floor of an organized national or regional stock exchange. Instead, OTC Markets securities transactions are conducted through a telephone and computer network connecting dealers in stocks. OTC Markets issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.
Set forth below are the range of high and low prices for our common stock from the OTC Markets Pink Tier for the periods indicated. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not necessarily represent actual transactions:
PERIOD | HIGH | LOW | ||||||
YEAR 2019 | ||||||||
First Quarter 03/31/19 | $ | 0.225 | $ | 0.10 | ||||
Second Quarter 06/30/19 | $ | 0.29 | $ | 0.15 | ||||
Third Quarter 09/30/19 | $ | 0.215 | $ | 0.117 | ||||
Fourth Quarter 12/31/19 | $ | 0.18 | $ | 0.071 | ||||
YEAR 2018 | ||||||||
First Quarter 03/31/18 | $ | 0.67 | $ | 0.20 | ||||
Second Quarter 06/30/18 | $ | 0.28 | $ | 0.16 | ||||
Third Quarter 09/30/18 | $ | 0.34 | $ | 0.15 | ||||
Fourth Quarter 12/31/18 | $ | 0.278 | $ | 0.15 |
Transfer Agent
Our transfer agent is VStock Transfer LLC located at 18 Lafayette Place, Woodmere, NY 11598. Its telephone number is 212-828-8436 and its website is located at http://www.vstocktransfer.com. VStock Transfer is registered as a transfer agent with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended.
Holders
As of March 19, 2021, we had 160,740,190 shares of common stock issued and outstanding. As of March 19, 2021, we had 141 record holders of our common stock. The number of record holders does not include beneficial owners of common stock whose shares are held in the names of banks, brokers, nominees or other fiduciaries.
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Dividends
We have not paid any dividends to the holders of our common stock and we do not expect to pay any such dividends in the foreseeable future as we expect to retain our future earnings for use in the operation and expansion of our business.
Equity Compensation Plans
None.
Registration Rights
There are no agreements that require us to register securities under the Securities Act.
Stock Re-Purchases
We have not, and none of our affiliates have made re-purchases of shares of our common stock since our inception and we do not currently have any publicly-announced repurchase plans in effect.
Unregistered Securities
From January 1, 2018 to present, we offered and sold the securities below which were not registered under the Securities Act of 1933, as amended. None of the issuances involved underwriters, underwriting discounts or commissions. We relied upon Sections 4(2) of the Securities Act, and Rule 506(b) of the Securities Act of 1933, as amended for the offer and sale of the securities.
We believed these exemptions were available because:
● | We are not a blank check company; | |
● | We filed a Form D, Notice of Sales, with the SEC; | |
● | Sales were not made by general solicitation or advertising; | |
● | All certificates had restrictive legends; | |
● | Sales were made to persons with a pre-existing relationship to our Chief Executive Officer and Sole Director, Edgar Ward; and | |
● | Sales were made to investors who represented that they were accredited investors. |
On January 5, 2018, February 26, 2018, April 11, 2018, April 20, 2018 and June 2, 2018, we issued 43,759, 125,400, 51,700, 147,600 and 700,000 shares of our common stock to Hamilton & Associates Law Group, P.A. for services rendered which we valued these shares at $.30, $.29, $.18, $.245 and $.20 per share, respectively.
On January 23, 2018, we issued 200,000 common shares to Randy Avon for services rendered to us. We valued these shares at $.21 per share or an aggregate of $41,446.
On January 23, 2018, we issued 150,000 common shares to Daniel Slane for services rendered to us. We valued these shares at $.21 per share or an aggregate of $31,085.
On January 23, 2018, we issued 100,000 common shares to Michael Lohan for services rendered to us. We valued these shares at $.4762 per share or an aggregate of $47,618.
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On January 23, 2018, we issued 350,000 shares David Zirulnikoff for services rendered to us. We valued these shares at $.26 per share or an aggregate of $89,374.
On January 23, 2018, we issued 200,000 common shares to Ronald Silver for services rendered to us. We valued these shares at $.21per share or an aggregate of $41,446.
On February 15, 2018, we issued 2,000,000 shares to Hall Global LLC, a limited liability controlled by Michael Anderson for equipment provided to us. We valued these shares at $.2846 per share or an aggregate of $569,200. Hall Global LLC returned the 2,000,000 shares to us for cancellation on November 1, 2018 pursuant to a settlement agreement dated September 7, 2018.
On February 15, 2018, we issued 500,000 common shares to Hongxiang Hui for services rendered to us. We valued these shares at $.28 per share or an aggregate of $140,000.
On May 11, 2018, we issued 250,000 common shares to Tony Hunter for services rendered to us. We valued these shares at $.19 per share or an aggregate of $54,750.
On June 1, 2018, we issued 500,000 common shares to Lyons Capital for services rendered to us. We valued these shares at $.20 per share or an aggregate of $100,000.
On July 25, 2018, we issued 62,500 common shares to Mary Ellen Mahon for services rendered to us. We valued these shares at $.16 per share or an aggregate of $10,000.
On July 25, 2018, we issued 62,500 common shares to Anthony Centorani for services rendered to us. We valued these shares at $.16 per share or an aggregate of $10,000.
On July 25, 2018, we issued 250,000 common shares to Michael P. Dulak for services rendered to us. We valued these shares at $.16 per share or an aggregate of $40,000.
On July 25, 2018, we issued 62,500 common shares to Robert Patrick Scott for services rendered to us. We valued these shares at $.16 per share or an aggregate of $10,000.
On July 25, 2018, we entered into an agreement with Breadfruit Tree DBA NFSkin, a Florida corporation whereby we agreed to pay them 15% of their net sales of our product. The 15% is payable in up to 3,000,000 shares of our common stock which the number of shares will be calculated based on a value of $.20 per share. On September 10, 2018, we issued 514,549 of the shares issuable under the agreement.
On July 31, 2018, we entered into an agreement as amended March 10, 2019, with New Leaf Assets, LLC, a Delaware limited liability company, wherein NewLeaf invested the sums of $250,000, $130,000 and $1,000,000 in our securities on July 31, 2018, August 31, 2018 and March 15, 2019, respectively. On July 31, 2018, NewLeaf was granted 2,000,0000 shares on the Company’s common stock and warrants to purchase 625,000 shares of the Company’s common stock at the price of $.20 per share at any time for a period of three (3) years. On August 31, 2018 NewLeaf received warrants to purchase 325,000 shares of the Company’s common stock at the price of $.20 per share at any time for a period of three (3) years. On March 15, 2019, NewLeaf was issued 13,764,705 common shares, granted warrants to purchase an additional 10 million common shares at the price of $.20 per share at anytime until March 4, 2022 and an option to purchase an aggregate of 7,647,058 common shares at the aggregate price of $650,000 at any time prior to April 8, 2019. As a result, NewLeaf holds an aggregate of 15,764,705 of the Company’s common shares at an average price of $.0726 per share, warrants to purchase an additional 10,950,000 common shares and an option to purchase an additional 7,647,058 common shares for an aggregate price of $650,000 at any time prior to April 8, 2019. This option was not exercised and therefore expired.
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On August 24, 2018, we issued 200,000 shares of our common stock to Barrington Jenoure for an aggregate price of $33,332 or the per share price of $.167 per share.
On August 28, 2018, we issued 60,000 shares of our common stock to Barrington Jenoure for an aggregate price of $10,000 or the per share price of $.167 per share.
On September 20, 2018, we issued 62,000 common shares to John Gross for services rendered to us. We valued these shares at $.20 per share or an aggregate of $12,400.
On September 20, 2018, we issued 26,000 common shares to Ann Mahfood for services rendered to us. We valued these shares at $.20 per share or an aggregate of $5,200.
On October 11, 2018, we issued 250,000 common shares to Nicholas Ward, the son of our Chief Executive Officer, President and Director for services rendered to us. We valued these shares at $.196 per share or an aggregate of $49,000.
On October 11, 2018, we entered into a convertible note agreement in the principal amount of $37,500 with FMG Holding LLC, a Florida limited liability company controlled by Michael Farr. The note bears interest at the rate of 10% and has a maturity date of November 30, 2018. The principal and interest due under the note are convertible into our common shares at the rate of $.20 in whole or in part at any time until maturity. Mr. Farr received warrants to purchase 1,000,000 of our common shares at the price of $.21 per share at any time until October 31, 2021 as additional consideration for the note.
On October 11, 2018, we entered into a convertible note agreement in the principal amount of $37,500 with Forage Complete, LLC, a Florida limited liability company controlled by Michael Farr,. The note bears interest at the rate of 10% and has a maturity date of November 30, 2018. The principal and interest due under the note are convertible into our common shares at the rate of $.20 in whole or in part at any time until maturity. Mr. Farr received warrants to purchase 1,000,000 of our common shares at the price of $.21 per share at any time until October 31, 2021 as additional consideration for the note.
On October 17, 2018, we issued 100,000 common shares to Michael P. Dulak for services rendered to us. We valued these shares at $ .19 per share or an aggregate of $19,000.
On October 17, 2018, we issued 62,500 common shares to Mary Ellen Mahon for services rendered to us. We valued these shares at $.19 per share or an aggregate of $11,875.
On October 17, 2018, we issued 62,500 common shares to Robert Patrick Scott for services rendered to us. We valued these shares at $.19 per share or an aggregate of $11,875.
On October 17, 2018, we issued 62,500 common shares to Anthony Centorani for services rendered to us. We valued these shares at $ .19 per share or an aggregate of $11,875.
On November 7, 2018, we entered into a convertible note agreement, as amended, on March 20, 2019 with Paul R. Botts, in the principal amount of $25,000. The note bears interest at the rate of 10% and has a maturity date of April 22, 2019. The principal and interest due under the note are convertible into our common shares at the rate of $.20 in whole or in part at any time until maturity. On March 19, 2019, we issued 100,000 common shares to Mr. Botts as additional consideration for the amended note.
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On December 21, 2018, we issued 848,484 common shares to FMG Holdings, LLC a Florida limited liability company controlled by Michael Farr, for services rendered to us. We valued these shares at $ .19 per share or an aggregate of $161,127.11.
On December 21, 2018, we issued 848,484 common shares to Forage Complete, LLC, a Florida limited liability company controlled by Michael Farr, for services rendered to us. We valued these shares at $.19 per share or an aggregate of $161,127.11.
On December 21, 2018, we issued 5,294,117 common shares to Kahn Family Limited PT II for a price of $.085 per share or an aggregate of $449,479.50.
On December 21, 2018, we issued 1,176,470 common shares to Dennis Poland for a price of $.085 per share or an aggregate of $99,882.35.
On December 21, 2018, we issued 294,117 common shares to Barrington Jenoure for a price of $.085 per share or an aggregate of $24,970.59.
On December 24, 2018, we issued 250,000 common shares to SunX Analytical, LLC, a Maryland limited liability company controlled by Barry Pritchard, for services rendered to us. We valued these shares at $.170 per share or an aggregate of $42,475.
On January 23, 2019, we issued 120,004 common shares to Joshua J. Gooden for a price of $.167 per share or an aggregate of $20,000.
On January 29, 2019, we issued 62,500 common shares to Robert Patrick Scott for services rendered to us. We valued these shares at $.16 per share or an aggregate of $10,000.
On January 29, 2019, we issued 62,500 common shares to Anthony Centorani for services rendered to us. We valued these shares at $.16 per share or an aggregate of $10,000.
On January 29, 2019, we issued 62,500 common shares to Liska Rodriguez for services rendered to us. We valued these shares at $ .16 per share or an aggregate of $10,000.
On January 29, 2019, we issued 62,500 common shares to John Gross for services rendered to us. We valued these shares at $ .16 per share or an aggregate of $10,000.
On January 29, 2019, we issued 62,500 common shares to Esco Bell for services rendered to us. We valued these shares at $.16 per share or an aggregate of $10,000.
On January 29, 2019, we issued 62,500 common shares to Mary Ellen Mahon for services rendered to us. We valued these shares at $.16 per share or an aggregate of $10,000.
On January 30, 2019, we issued 62,500 common shares to Lawrence Muchnick for services rendered to us. We valued these shares at $ .16 per share or an aggregate of $10,000.
On January 30, 2019, we issued 62,500 common shares to Michael John Deblasis for services rendered to us. We valued these shares at $.16 per share or an aggregate of $10,000.
On January 31, 2019, we issued 321,281 common shares to Hamilton & Associates Law Group for services rendered to us. We valued these shares at $.18 per share or an aggregate of $57,830.58.
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On February 1, 2019, we issued 7,647,059 common shares to Kahn Family Limited PT II for a price of $.085 per share or an aggregate of $650,000. On February 8, 2019, we issued 2,941,176 common shares to Kahn Family Limited PT II for a price of $.085 per share or an aggregate of $250,000. On March 12, 2019, we issued 300,000 common shares to Kahn Family Limited PT II for the purchase of certain assets. We value these shares at a price of $.177 per share or an aggregate of $53,100.
On February 4, 2019, we issued 62,500 common shares to Karina Rodriguez for services rendered to us. We valued these shares at $.194 per share or an aggregate of $12,125.
On February 14, 2019, we issued 117,647 common shares to Herbert & Rosalind Chasman Family Trust for a price of $.085 per share or an aggregate of $10,000.
On February 14, 2019, we issued 235,294 common shares to Deborah Axelrod for a price of $.085 per share or an aggregate of $20,000.
On February 21, 2019, we issued 117,647 common shares to Stephan Golding for services rendered to us. We valued these shares at $.085 per share or an aggregate of $10,000.
On March 7, 2019, we issued 62,500 common shares to Austin Hunter for services rendered to us. We valued these shares at $.170 per share or an aggregate of $10,625.
On March 12, 2019, we issued 1,200,000 common shares to Bruce Burley for the purchase of certain assets. We value these shares at a price of $.177 per share or an aggregate of $212,760.
On March 12, 2019, we issued 300,000 common shares to Robert E. Borland Jr for the purchase of certain assets. We value these shares at a price of $.177 per share or an aggregate of $53,190.
On March 15, 2019, we issued 2,499,765 common shares to Orange Pumpkin Trust for a price of $.085 per share or an aggregate of $212,480.
On March 19, 2019, we issued 176,470 common shares to Antonio Morgado for services rendered to us. We valued these shares at $.085 per share or an aggregate of $15,000.
On March 22, 2019, we issued 117,647 common shares to Scott Mast for a price of $.085 per share or an aggregate of $10,000.
On March 22, 2019, we issued 117,647 common shares to Charles Mast for a price of $.085 per share or an aggregate of $10,000.
On April 2, 2019, we issued 2,352,941 common shares to Kahn Family Limited PT II in exchange for the aggregate principal and interest of $200,000 outstanding under a promissory note.
On April 2, 2019, we issued 200,000 common shares to Carmen Cortes for a price of $.085 per share or an aggregate of $17,000.
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On April 9, 2019, we issued 117,647 common shares to Gerald Hersey for services rendered to us. We valued these shares at $.085 per share or an aggregate of $10,000.
On April 16, 2019, we issued 117,647 common shares to Gloria G. Ruiz for services rendered to us. We valued these shares at $.19 per share or an aggregate of $10,000.
On May 15, 2019, we issued 62,500 common shares to Sebastian Zagami for services rendered to us. We valued these shares at $.235 per share or an aggregate of $14,687.
On May 30, 2019, we issued 500,000 common shares to Owen Morgan for services rendered to us. We valued these shares at $.225 per share or an aggregate of $112,500.
On June 7, 2019, we issued 250,000 common shares to Nicholas Ward for services rendered to us. We valued these shares at $.195 per share or an aggregate of $48,750.
On June 7, 2019, we issued 62,500 common shares to Anthony Centorani for services rendered to us. We valued these shares at $.195 per share or an aggregate of $12,187.
On June 7, 2019, we issued 62,500 common shares to Robert Patrick Scott for services rendered to us. We valued these shares at $.195 per share or an aggregate of $12,187.
On June 7, 2019, we issued 62,500 common shares to Mary Ellen Mahon for services rendered to us. We valued these shares at $.195 per share or an aggregate of $12,187.
On June 7, 2019, we issued 62,500 common shares to John Gross for services rendered to us. We valued these shares at $.195 per share or an aggregate of $12,187.
On June 7, 2019, we issued 62,500 common shares to Esco Bell for services rendered to us. We valued these shares at $.195 per share or an aggregate of $12,187.
On June 7, 2019, we issued 62,500 common shares to Austin Hunter for services rendered to us. We valued these shares at $.195 per share or an aggregate of $12,187.
On June 7, 2019, we issued 62,500 common shares to Cooper Dodd for services rendered to us. We valued these shares at $.195 per share or an aggregate of $12,187.
On June 7, 2019, we issued 62,500 common shares to Karina Rodriguez for services rendered to us. We valued these shares at $.195 per share or an aggregate of $12,187.
On June 7, 2019, we issued 62,500 common shares to Liska Rodriguez for services rendered to us. We valued these shares at $.195 per share or an aggregate of $12,187.
On June 7, 2019, we issued 434,000 common shares to Sidnak Solutions Inc. for payment of the balance of invoices outstanding. We valued these shares at $.10 per share or an aggregate of $43,400.
On June 18, 2019, we issued 500,000 common shares to Brenda Hamilton for providing a pledge as collateral for a loan in the amount of $1,000,000 to us. We valued these shares at $.191 per share or an aggregate of $95,500.
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On June 18, 2019, we issued 500,000 common shares to Kahn Family Limited PT II as additional consideration for a loan provided to us in the amount of $1,000,000 to us. We valued these shares at $.191 per share or an aggregate of $95,500.
On July 16, 2019, we issued 50,000 common shares to Milena Castaneda for services rendered to us We valued these shares at $.187 per share or an aggregate of $9,345.
On July 16, 2019, we issued 70,203 common shares to Paul R. Hermes in exchange for services rendered to us. We valued these shares at $.18 or an aggregate of $12,637.
On August 6, 2019, we issued 500,000 common shares to Sidnak Solutions, Inc. for the purchase raw materials. We valued these shares at $.10 per share or an aggregate of $50,000.
On August 28, 2019, we issued 470,588 shares of common shares to Barbara Ludwig for a price of $.085 per share or an aggregate of $40,000.
On September 6, 2019, we issued 248,948 shares of our common stock to Hamilton & Associates Law Group, P.A. for services rendered which we valued these shares at $.19 per share or an aggregate of $47,300.
On September 12, 2019, we issued 588,235 shares of our common stock to Gregory Ross for a price of $.085 per share or an aggregate of $50,000.
On September 13, 2019, we issued 588,240 shares of our common stock to Eileen Miller for a price of $.085 per share or an aggregate of $50,000.
On September 27, 2019, we issued 352,941 shares of our common stock to Rudolph Mass for a price of $.085 per share or an aggregate of $30,000.
On October 9, 2019, we issued 1,764,705 shares of our common stock to Randall Oostra for a price of $.085 per share or an aggregate of $150,000.
On October 9, 2019, we issued 1,764,705 shares of our common stock to Simon Guo for a price of $.085 per share or an aggregate of $150,000.
On December 3, 2019, we issued 218,800 shares of our common stock to EW STRATEGIES LLC for a price of $0.10 per share or aggregate of $21,880 as part of a promissory note agreement.
On December 3, 2019, we issued 200,000 shares of our common stock to Stephen O’Shaughnessy for a price of $0.10 per share or aggregate of $20,000 as part of a promissory note agreement.
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On January 14, 2020, we issued 1,000,000 shares of our common stock to Walter Lundon for a price of $0.10 per share or aggregate of $100,000 as part of a promissory note agreement.
On February 20, 2020, we issued 500,000 shares of our common stock to Paul Botts for a price of $0.09 per share or aggregate of $45,000 as part of a promissory note agreement.
On March 13, 2020, we issued 1,538,461 shares of our common stock to Gary Dailey for a price of $.065 per share or an aggregate of $100,000.
On April 7, 2020, we issued 384,615 shares of our common stock to Mark Muller for a price of $.065 per share or an aggregate of $25,000.
On April 27, 2020, we issued 350,000 shares of our common stock to Barbara Ludwig for a price of $0.083 per share or aggregate of $29,050 as part of a promissory note agreement.
On August 21, 2020, we issued 80,000 shares of our common stock to Mohamad Hassan Ossiani for a price of $0.035 per share or aggregate of $2,800 as part of a promissory note agreement.
On September 8, 2020, we issued 100,000 shares of our common stock to James R. Stuart for a price of $0.045 per share or aggregate of $4,500 as part of a promissory note agreement.
On September 15, 2020, we issued 200,000 shares of our common stock to Nicholas Cirignano III for a price of $0.037 per share or aggregate of $7,400 as part of a promissory note agreement.
On September 15, 2020, we issued 400,000 shares of our common stock to Thomas Cirignano for a price of $0.037 per share or aggregate of $14,800 as part of a promissory note agreement.
On October 16, 2020, we issued 100,000 shares of our common stock to Pinnacle Medical Consulting LLC. for a price of $0.059 per share or aggregate of $5,900 as part of a promissory note agreement.
On October 23, 2020, we issued 120,000 shares of our common stock to Frank Cannarozzo for a price of $0.09 per share or aggregate of $10,800 as part of a promissory note agreement.
On November 3, 2020, we issued 200,000 shares of our common stock to Kenneth Klimas for a price of $0.10 per share or aggregate of $20,000 as part of a promissory note agreement.
On November 17, 2020, we issued 100,000 shares of our common stock to Larraine Cullam for a price of $0.09 per share or aggregate of $9,000 as part of a promissory note agreement.
On December 28, 2020, we issued 12,500,000 shares of our common stock to 27 Health for a price of $0.08 per share in exchange for 250 shares of Series X Convertible Preferred stock of Lord Global Corporation in connection with a stock purchase agreement.
On November 4th 2020, the Company issued 2 shares of its Series B Preferred stock to John Boldis for a price of $0.0001.
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On November 4th 2020, the Company issued 2 shares of its Series B Preferred stock to Thomas Reid for a price of $0.0001.
On Nov 4th 2020, the Company issued 16 shares of its Series B Preferred stock to Draper Inc. for a price of $0.0001.
On March 1, 2021, we issued 400,000 shares of our common stock to Joseph Corso for a price of $0.106 per share or aggregate of $42,400 as part of a promissory note agreement dated March 16, 2020.
On March 1, 2021, we issued 1,000,000 shares of our common stock to Gregory Ross for a price of $0.106 per share or aggregate of $106,000 as part of a promissory note agreement dated January 8, 2020.
Our Securities
General
Our authorized capital stock consists of 499,990,000 shares of common stock, par value $0.0001 per share and 10,000,000 shares of preferred stock, $0.0001 par value per share, of which 160,740,190 shares of common stock are currently outstanding; and 1,000 shares of Series A Preferred stock and 20 shares of Series B Preferred stock are currently outstanding.
Common Stock
Each holder of our common stock is entitled to one vote for each share owned of record on all matters voted upon by shareholders, and a majority vote is required for actions to be taken by shareholders. The common stock has no preemptive rights, no cumulative voting rights and no redemption, sinking fund or conversion provisions.
Preferred Stock
The Company is authorized to issue 10,000,000 shares of preferred stock, $0.0001 par value per share and the Company’s Board of Directors is authorized to establish, from the authorized shares of preferred stock, one or more classes or series of shares, to designate each such class and series, and fix the rights and preferences of each such class of preferred stock, which shall have voting powers, preferences, participating, optional or other special rights, qualifications and limitations or restrictions as adopted by the Board of Directors prior to the issuance of any such preferred shares. We have designated 1,000 shares of Series A Preferred and 110 shares of Series B Preferred.
There are currently 1,000 shares of Series A Preferred stock and 20 shares of Series B Preferred stock issued and outstanding.
Series A Preferred
The Series A Shares have the following rights and preferences:
● | Each one (1) share is entitled to 500,000 votes per share on all matters submitted to our common stockholders. | |
● | The Series A Shares are not convertible into common shares; |
55 |
● | The holders of the Series A Shares are not entitled to receive dividends or any distribution upon our liquidation or dissolution; | |
● | The holders of the Series A Shares cannot assign or sell the shares; and | |
● | The Series A Shares are redeemable in whole by us for the price of $1,000 at the option of the holder. |
So long as any of the Series A Shares are outstanding, we cannot take the following actions without the consent of the holders of 100% of the Series A Shares: amend, alter, waive or repeal, whether by merger consolidation, combination, reclassification or otherwise, the Articles of Incorporation or Bylaws; or create, authorize or issue any class, series or shares of any class of capital stock. The rights and preferences of the Series A Share cannot be amended without the consent of 100% of the holders of the Series A Shares.
Series B Preferred
We have designated one hundred and ten (110) shares of the preferred stock of the Company, par value $0.0001 as Series B Convertible Preferred Stock (the “Series B Preferred Stock”).
The shares of Series B Preferred Stock are convertible at a rate of 1 share of Series B Preferred Stock to 149,567 shares of common stock, par value $0.0001 per share of the Company (the “Common Stock”). Holders of Series B Preferred Stock of the Company may convert their shares of Series B Preferred Stock into Common Stock at any time following January 1, 2021 (the “Permitted Conversion Date”). The Series B Preferred Stock is subject to an ownership limitation, pursuant to which no holder of Series B Preferred Stock will be entitled to convert such investor’s shares of Series B Preferred Stock into shares of Common Stock if such conversion would result in ownership of more than 4.99% of the outstanding shares of Common Stock of the Company. Each share of Series B Preferred Stock will vote together with the holders of the Common Stock on any matter submitted to the shareholders of the Company. Each share of Series B Preferred Stock shall be entitled to a number of votes equal to the number of shares of Common Stock into which the Series B Preferred Stock may convert at the time such vote is made. The Series B Preferred Stock will participate in any dividends, distributions or payments to the holders of the Common Stock on an as-converted basis. The Series B Preferred Stock does not have any liquidation preference over the holders of Common Stock of the Company. Once issued, certain shares of the Series B Preferred Stock are redeemable at the election of the Company at any time prior to the Permitted Conversion Date pursuant to a separate written agreement between the holders of the Series B Preferred Stock and the Company.
Warrants
There are currently 47,960,598 outstanding warrants of the Company.
Options
There are currently 0 options outstanding.
Item 6. Selected Financial Data
Not required for smaller reporting companies.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The financial data discussed below is derived from our audited consolidated financial statements for the fiscal years ended December 31, 2019 and 2020, which are found elsewhere in this Annual Report on Form 10-K. Our consolidated financial statements are prepared and presented in accordance with generally accepted accounting principles in the United States. The financial data discussed below is only a summary and investors should read the following discussion and analysis of our financial condition and results of our operations in conjunction with our consolidated financial statements and the related notes to those statements included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. Our actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in the section entitled “Risk Factors,” and elsewhere in this Annual Report on Form 10-K.
Accomplishments during 2019 & Subsequent Accomplishments
Our branded products include NutraHemp CBD products including oral sprays, tinctures, pet drops, pain balms, and face creams and NutraSpray oral spray products for sleep support and an appetite suppressant.
In November of 2018, our wholly owned subsidiary PAT began providing bulk material analytical, identity, potency and purity testing of raw industrial hemp.
In February of 2019, our wholly owned subsidiary, NutraDerma acquired the patent for a natural dermal skin patch that is designed to prevent mosquito and other insect bites.
In March of 2019, we licensed our technology for a unique system for pharmaceutical grade delivery of testosterone into the human body to licensed pharmacist, Orlando Pharmacy.
Results of Operations
NutraLife BioSciences, Inc. (“us”, “we” or the “Company”) was founded in 2010 by Edgar Ward, the Company’s Chief Executive Officer, President & Director to engage in the development, manufacturing and distribution of nutritional and dietary oral spray products. Since then, the Company has evolved into a branded and private label developer, manufacturer and distributor of a wide range of nutraceutical, wellness, and CBD products. The Company’s revenues decreased from approximately $3,711,327 in 2018 to $2,133,624 in 2019.
The Company’s manufacturing facility has been registered with the Food and Drug Administration and its manufacturing facility has operated in accordance with the Good Manufacturing Processes Standard (GMP) for more than five years. Our products adhere to high manufacturing standards throughout every step of the manufacturing and extraction process. Our products are formulated, developed, manufactured and produced under the supervision of Edgar Ward, our Chief Executive Officer, President and Director. Once produced our products are tested our in-house laboratory chemists. Our nutraceutical and industrial CBD products are of the highest-quality and laboratory tested for strength, purity and contaminants such as heavy metals, pesticides, and solvents.
We offer 13 different core formulations which we modify to meet the specifications of our private label customers. We provide approximately 50 different variations of our core formulations. Our private label products include CBD-infused oral sprays, tinctures, pet drops, pain balms, and face creams, and nutraceutical oral spray products for sleep support and weight loss packaged under the customer’s brand names.
Our spray products and tinctures are available in various formulations and strengths and are available for purchase online directly from the Company through its website at www.nutralifebiosciences.com, as well as through numerous other private label distributors, online retailers and retail outlets.
We are a manufacturer and distributor of nutraceutical, dietary, wellness and other products. Our products are sold to private label distributors who sell the products we manufacture under their own brand names as well as under our own brand names.
For the years ended on December 31, of 2019 and 2018, we generated revenues of approximately $2,133,624 and $3,711,327, respectively from the sale of our products.
In March of 2017, we began selling CBD products. Since that time, revenues from sales of our CBD products increased from $1,380,000 for the year ended December 31, 2017 to $2,400,000 for the year ended December 31, 2018 representing 77% and 78% of our revenues for such periods. During the year ended December 31, 2019, CBD products did not represent a significant portion of the Company’s revenue.
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Comparison of Years Ended December 31, 2019 and 2018
We had sales of $2,133,624 and $3,711,327 for the years ended December 31, 2019 and 2018, respectively, or a forty-two-point five percent -42.50% decrease which was a direct impact from the temporary closures caused by the business disruptions from the coronavirus.
Cost of sales was $1,535,490 compared to $2,211,039 for the years ended December 31, 2019 and 2018, respectively, or a twenty-eight-point three percent -28.30% decrease. This decrease is directly related to our decrease in sales and the temporary closures of our business.
Gross margin was $598,134 and $1,500,288 for the years ended December 31, 2019 and 2018, respectively, or a sixty three-point five percent -63.50% decrease.
General and administrative expenses were $3,109,887 compared to $2,070,714 for the years ended December 31, 2019 and 2018, respectively, or a fifty-point two percent 50.20% increase. The increase was caused by the constant disruptions in the business and inefficiencies encountered.
Stock based compensation was $610,987 and $1,070,050 for the years ended December 31, 2019 and 2018, respectively, or a forty-two-point nine percent -42.9% decrease.
Our interest expense was $7,925 and $2,987 for the years ended December 31, 2019 and 2018, respectively, or a eight hundred-thirty-six point two percent 165.3% increase.
We recorded a net loss of approximately $4,000,000 and $2,000,000 for the years ended December 31, 2019 and 2018, respectively.
Liquidity and Capital Resources
Cash Flow Activities
Our cash flow resulted in a decrease of our cash balance to $14,828 for the year ended December 31, 2019.
Operating Activities
We used $2,934,441 of cash in operating activities during the year. For the year ended December 31, 2018, we used $234,673 of cash in operating activities during the year.
Investing Activities
The Company acquired intellectual property totaling $130,000 and property and equipment totaling $1,464,494 in 2019 and placed security deposits totaling $35,000 and acquired property and equipment totaling $581,632 in 2018.
Financing Activities
During the year ended December 31,2019 and 2018, we funded $2,781,659 and $618,322 of our working capital requirements through the proceeds from the sale of our equity securities. Additionally, we raised $1,455,000 and $480,000 from proceeds from convertible debt primarily from related parties in 2019 and 2018, respectively.
We have sustained a net loss of approximately $4.0 and $2.1 million for the years ended December 31, 2019 and 2018, respectively. We have an accumulated deficit of approximately $38.8 million at December 31, 2019. These conditions raise substantial doubt about our ability to continue as a going concern. Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.
The independent auditors’ reports on our financial statements for the years ended December 31, 2019 and 2018 contain explanatory paragraphs expressing substantial doubt as to our ability to continue as a going concern.
Failure to successfully continue to grow operational revenues could harm our profitability and adversely affect our financial condition and results of operations. We face risks inherent in a new business, including the need for significant additional capital, management’s potential underestimation of initial and ongoing costs, and potential delays and other problems in connection with establishing sales channels.
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We are continuing our plan to further grow and expand operations and seek sources of capital to pay our contractual obligations as they come due. Management believes that its current operating strategy will provide the opportunity for us to continue as a going concern as long as we are able to obtain additional financing; however, there is no assurance this will occur. The accompanying consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
Uncertainties and Trends
Our operations and possible revenues are dependent now and in the future upon the following factors:
● | Whether we successfully develop and commercialize products from our research and development activities. | |
● | If we fail to compete effectively in the intensely competitive biotechnology area, our operations and market position will be negatively impacted. | |
● | If we fail to successfully execute our planned partnering and out-licensing of products or technologies, our future performance will be adversely affected. | |
● | The recent economic downturn and related credit and financial market crisis may adversely affect our ability to obtain financing, conduct our operations and realize opportunities to successfully bring our technologies to market. | |
● | Biotechnology industry related litigation is substantial and may continue to rise, leading to greater costs and unpredictable litigation. | |
● | If we fail to comply with extensive legal/regulatory requirements affecting the healthcare industry, we will face increased costs, and possibly penalties and business losses. |
Critical Accounting Policies and Estimates
In preparing the financial statements in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), we have adopted various accounting policies. Our most significant accounting policies are disclosed in Note 2 to the financial statements.
The preparation of the financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Our estimates and assumptions, including those related to the ability to continue as going concern, legal proceedings, the recoverability of inventory, long-lived assets, the fair value of stock-based compensation and the fair value of warrant liabilities are updated as appropriate, which in most cases is at least quarterly. We base our estimates on historical experience, or various assumptions that are believed to be reasonable under the circumstances and the results form the basis for making judgments about the reported values of assets, liabilities, revenues and expenses. Actual results may materially differ from these estimates.
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Estimates are considered to be critical if they meet both of the following criteria: (1) the estimate requires assumptions about material matters that are uncertain at the time the accounting estimates are made, and (2) other materially different estimates could have been reasonably made or material changes in the estimates are reasonably likely to occur from period to period. Our critical accounting estimates include the following:
Revenue Recognition: In general, we record revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. Provision for sales returns will be estimated based on the Company’s historical return experience. The Company adopted ASU 2014-09, “Revenue from Contracts with Customers” (Topic 606) and other associated standards on January 1, 2018, using the modified retrospective method, which did not have a material impact on the timing and amount of product revenues.
Accounts Receivable and Allowance for Doubtful Accounts: Our accounts receivable are stated at estimated net realizable value. Accounts receivable are comprised of balances due from customers net of estimated allowances for uncollectible accounts. In determining collectability, historical trends are evaluated and specific customer issues are reviewed to arrive at appropriate allowances.
Long-Lived Assets: The carrying value of long-lived assets is reviewed annually and on a regular basis for the existence of facts and circumstances that may suggest impairment. If indicators of impairment are present, we determine whether the sum of the estimated undiscounted future cash flows attributable to the long-lived asset in question is less than its carrying amount. If less, we measure the amount of the impairment based on the amount that the carrying value of the impaired asset exceeds the discounted cash flows expected to result from the use and eventual disposal of the impaired assets.
Share-Based Compensation: We record share-based compensation in accordance with FASB ASC 718, Stock Compensation. FASB ASC 718 requires that the cost resulting from all share-based transactions are recorded in the financial statements over the respective service periods. It establishes fair value as the measurement objective in accounting for share-based payment arrangements and requires all entities to apply a fair-value-based measurement in accounting for share-based payment transactions with employees. FASB ASC 718 also establishes fair value as the measurement objective for transactions in which an entity acquires goods or services from non-employees in share-based payment transactions.
Off-Balance Sheet Arrangements
We have not entered into any transaction, agreement or other contractual arrangement with an entity unconsolidated with us under whom we have:
● | An obligation under a guarantee contract. | |
● | A retained or contingent interest in assets transferred to the unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to such entity for such assets. | |
● | Any obligation, including a contingent obligation, under a contract that would be accounted for as a derivative instrument. | |
● | Any obligation, including a contingent obligation, arising out of a variable interest in an unconsolidated entity that is held by us and material to us where such entity provides financing, liquidity, market risk or credit risk support to, or engages in leasing, hedging or research and development services with us. |
We do not have any off-balance sheet arrangements or commitments that have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material, other than those which may be disclosed in this Management’s Discussion and Analysis of Financial Condition and the audited Consolidated Financial Statements and related notes.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Not required for smaller reporting companies.
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Item 8. Financial Statements and Supplementary Data
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
61 |
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of
NutraLife Biosciences, Inc.
Coconut Creek, Florida
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of NutraLife Biosciences, Inc. (formerly known as NutraFuels, Inc.) and Subsidiaries (the “Company”) as of December 31, 2019, and the related consolidated statements of operations, stockholders’ equity and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As disclosed in the financial statements, the Company has incurred substantial net losses in recent years, has negative working capital, has an accumulated deficit at December 31, 2019 and is dependent on debt and equity financing to fund its operations, all of which raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding these matters are disclosed in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Change in Accounting Principles
As discussed in Note 2 and Note 10 to the financial statements, the Company adopted ASC 842, Leases as of January 1, 2019 using the modified retrospective approach. ASC 842 had a significant effect on the balance sheet resulting in increased non-current operating lease right-of-use assets and increased current and non-current operating lease liabilities, required by the new standard.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ ROTENBERG MERIL SOLOMON BERTIGER & GUTTILLA, P.C. | |
ROTENBERG MERIL SOLOMON BERTIGER & GUTTILLA, P.C. | |
We have served as the Company’s auditors since 2020. | |
Saddle Brook, New Jersey | |
March 19, 2021 |
F-1 |
Report of Independent Registered Public Accounting Firm
To the Board of Directors and
Stockholders of NutraLife BioSciences, Inc. F/K/A NutraFuels, Inc.
Coconut Creek, Florida
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of NutraLife BioSciences, Inc (formerly known as NutraFuels, Inc.) (the “Company”) at December 31, 2018, and the related consolidated statements of operations, changes in stockholders’ equity (deficit), and cash flows for the year ended December 31, 2018, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2018, and the results of its operations and its cash flows for the year ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.
Going Concern Uncertainty
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 3 to the consolidated financial statements, the Company has experienced net losses and has accumulated and working capital deficits, which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Daszkal Bolton LLP | |
Daszkal Bolton LLP | |
April 1, 2019 | |
Fort Lauderdale, Florida |
We have served as the Company’s auditor from 2015 through 2020.
F-2 |
NUTRALIFE BIOSCIENCES, INC., F/K/A NUTRAFUELS, INC.
Consolidated Balance Sheets
December 31, 2019 | December 31, 2018 | |||||||
Assets | ||||||||
Current Assets: | ||||||||
Cash | $ | 14,828 | $ | 419,975 | ||||
Accounts receivable, net of allowance for doubtful accounts in the amount of $1,500 and $31,000 | 11,799 | 43,503 | ||||||
Inventories | 490,173 | 291,040 | ||||||
Prepaid and other current assets | 87,627 | 115,003 | ||||||
Total current assets | 604,427 | 869,521 | ||||||
Property and equipment, net | 2,376,647 | 925,808 | ||||||
Operating lease right-of-use assets | 794,531 | - | ||||||
Intangible asset | 655,086 | - | ||||||
Other assets | 35,000 | 35,000 | ||||||
Total Assets | $ | 4,465,691 | $ | 1,830,329 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 172,987 | $ | 243,502 | ||||
Accrued expenses | 413,194 | 468,838 | ||||||
Customer deposits | 9,350 | 84,686 | ||||||
Liability for stock to be issued | 265,500 | - | ||||||
Current portion of finance leases | 20,000 | 3,836 | ||||||
Current portion of operating lease liability | 141,674 | - | ||||||
Convertible notes, related parties, net of unamortized discount of $290,961 and $280,400 | 1,164,039 | 199,600 | ||||||
Total current liabilities | 2,186,744 | 1,000,462 | ||||||
Liabilities: | ||||||||
Operating lease liability, net of current portion | 653,057 | - | ||||||
Finance leases, net of current portion | 36,773 | 14,614 | ||||||
Total liabilities | 2,876,574 | 1,015,076 | ||||||
Stockholders’ Equity | ||||||||
Preferred stock; $0.001 par value, 10,000 shares authorized: 1,000 shares Series A issued and outstanding | 1 | 1 | ||||||
Common stock; $0.0001 par value, 499,990,000 authorized shares; 140,976,183 and 97,315,941 shares issued and outstanding | 14,092 | 9,732 | ||||||
Additional paid-in-capital | 40,415,885 | 35,638,978 | ||||||
Accumulated deficit | (38,840,861 | ) | (34,833,458 | ) | ||||
Total stockholders’ equity | 1,589,117 | 815,254 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 4,465,691 | $ | 1,830,329 |
The accompanying notes are an integral part of these consolidated financial statements.
F-3 |
NUTRALIFE BIOSCIENCES, INC., F/K/A NUTRAFUELS, INC.
Consolidated Statements of Operations
Years Ended December 31,
2019 | 2018 | |||||||
Sales | $ | 2,133,624 | $ | 3,711,327 | ||||
Cost of Sales | 1,535,490 | 2,211,039 | ||||||
Gross Profit | 598,134 | 1,500,288 | ||||||
OPERATING EXPENSES | ||||||||
Advertising and promotion | 272,634 | 265,568 | ||||||
Stock-based compensation | 610,987 | 1,070,050 | ||||||
General and administrative | 3,109,887 | 2,070,714 | ||||||
Total operating expenses | 3,993,508 | 3,406,332 | ||||||
LOSS FROM OPERATIONS | (3,395,374 | ) | (1,906,044 | ) | ||||
OTHER INCOME (EXPENSE) | ||||||||
Other income (expense) | 58,020 | (16,739 | ) | |||||
Loss on stock settlement of accounts payable | - | (18,004 | ) | |||||
Finance costs-related parties | (662,124 | ) | (130,763 | ) | ||||
Interest expense | (7,925 | ) | (2,987 | ) | ||||
Total other income (expense) | (612,029 | ) | (168,493 | ) | ||||
Loss before income taxes | (4,007,403 | ) | (2,074,537 | ) | ||||
Income tax expense | - | - | ||||||
NET LOSS | $ | (4,007,403 | ) | $ | (2,074,537 | ) | ||
Net loss per weighted average common share - basic and diluted | $ | (0.04 | ) | $ | (0.02 | ) | ||
Number of weighted average common shares outstanding - basic and diluted | 113,275,262 | 87,323,469 |
The accompanying notes are an integral part of these consolidated financial statements.
F-4 |
NUTRALIFE BIOSCIENCES, INC., F/K/A NUTRAFUELS, INC.
Consolidated Statements of Changes in Stockholders’ Equity
Number | Par | Number | Par | Additional | Total | |||||||||||||||||||||||
Shares | Amount | Shares | Amount | Paid-in | Accumulated | Stockholders’ | ||||||||||||||||||||||
Preferred | Preferred | Common | Common | Capital | Deficit | Equity | ||||||||||||||||||||||
Beginning Balance January 1, 2018 | 1,000 | 1 | 81,448,561 | 8,144 | 33,411,300 | (32,758,921 | ) | 660,524 | ||||||||||||||||||||
Shares issued for cash | - | - | 7,024,704 | 703 | 617,629 | - | 618,332 | |||||||||||||||||||||
Shares issued to settle accounts payable | - | - | 169,159 | 17 | 49,477 | - | 49,494 | |||||||||||||||||||||
Shares issued for services | - | - | 4,976,849 | 498 | 1,069,552 | - | 1,070,050 | |||||||||||||||||||||
Shares issued for equipment | - | - | 1,696,668 | 170 | 105,059 | - | 105,229 | |||||||||||||||||||||
Shares issued in connection with convertible debt | - | - | 2,000,000 | 200 | 190,276 | - | 190,476 | |||||||||||||||||||||
Warrants issued in connection with convertible debt | - | - | - | - | 176,798 | - | 176,798 | |||||||||||||||||||||
- | ||||||||||||||||||||||||||||
Beneficial conversion feature | - | - | - | - | 18,888 | - | 18,888 | |||||||||||||||||||||
Net loss | - | - | - | - | - | (2,074,537 | ) | (2,074,537 | ) | |||||||||||||||||||
Ending Balance, December 31, 2018 | 1,000 | $ | 1 | 97,315,941 | $ | 9,732 | $ | 35,638,979 | $ | (34,833,458 | ) | $ | 815,254 | |||||||||||||||
Shares issued for cash | - | - | 36,172,710 | 3,617 | 2,778,042 | - | 2,781,659 | |||||||||||||||||||||
Shares issued to settle accounts payable | - | - | 934,000 | 93 | 93,307 | - | 93,400 | |||||||||||||||||||||
Shares issued for services | - | - | 3,190,432 | 319 | 610,668 | - | 610,987 | |||||||||||||||||||||
Shares issued in connection with the purchase of intangible assets | - | - | 1,800,000 | 180 | 318,960 | - | 319,140 | |||||||||||||||||||||
Shares issued in connection with convertible debt | - | - | 1,563,100 | 151 | 220,229 | - | 220,380 | |||||||||||||||||||||
Debt converted to equity | - | - | - | - | 380,000 | - | 380,000 | |||||||||||||||||||||
Warrants issued in connection with convertible debt | - | - | - | - | 247,800 | - | 247,800 | |||||||||||||||||||||
Beneficial conversion feature | - | - | - | - | 127,900 | - | 127,900 | |||||||||||||||||||||
Net loss | - | - | - | - | - | (4,007,403 | ) | (4,007,403 | ) | |||||||||||||||||||
Ending Balance, December 31, 2019 | 1,000 | $ | 1 | 140,976,183 | $ | 14,092 | $ | 40,415,885 | $ | (38,840,861 | ) | $ | 1,589,117 |
The accompanying notes are an integral part of these consolidated financial statements.
F-5 |
NUTRALIFE BIOSCIENCES, INC., F/K/A NUTRAFUELS, INC.
Consolidated Statements of Cash Flows
Years Ended December 31,
2019 | 2018 | |||||||
OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (4,007,403 | ) | $ | (2,074,537 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Stock based compensation | 610,987 | 1,070,050 | ||||||
Depreciation | 64,849 | 66,033 | ||||||
Amortization of debt discount | 585,519 | 105,763 | ||||||
Amortization of right of use asset | 106,056 | - | ||||||
Amortization of intangible asset | 59,554 | - | ||||||
Bad debts (recoveries) | (29,500 | ) | 84,183 | |||||
Loss on the settlement of accounts payable | - | 18,004 | ||||||
Changes in operating assets and liabilities: | ||||||||
Decrease (increase) in accounts receivable | 61,205 | (127,686 | ) | |||||
Increase in inventory | (199,133 | ) | (128,846 | ) | ||||
Decrease in prepaid expenses | 27,376 | 217,457 | ||||||
Increase in accounts payable | 22,885 | 187,487 | ||||||
(Decrease) increase in accrued expenses | (55,644 | ) | 262,733 | |||||
(Decrease) increase in customer deposits | (75,336 | ) | 84,686 | |||||
Decrease in operating lease liabilities | (105,856 | ) | - | |||||
Net Cash Used in Operating Activities | (2,934,441 | ) | (234,673 | ) | ||||
INVESTING ACTIVITIES: | ||||||||
Security deposits | - | (35,000 | ) | |||||
Acquisition of intellectual property | (130,000 | ) | - | |||||
Purchases of property and equipment | (1,464,494 | ) | (581,632 | ) | ||||
Net Cash Used in Investing Activities | (1,594,494 | ) | (616,632 | ) | ||||
FINANCING ACTIVITIES: | ||||||||
Common shares issued for cash | 2,781,659 | 618,332 | ||||||
Payments on finance leases | (12,871 | ) | ||||||
Proceeds from convertible debt | 1,455,000 | - | ||||||
Cash proceeds from debt issuance | - | 480,000 | ||||||
Repayment of debt - related party | (100,000 | ) | - | |||||
Net Cash Provided by Financing Activities | 4,123,788 | 1,098,332 | ||||||
Net increase (decrease) in cash | (405,147 | ) | 247,027 | |||||
CASH, beginning of year | 419,975 | 172,948 | ||||||
CASH, end of year | $ | 14,828 | $ | 419,975 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||||||
Cash paid for interest | $ | 3,376 | $ | 2,987 | ||||
Non-Cash Investing and Financing Activities: | ||||||||
Acquisition of equipment under finance leases | $ | 51,194 | $ | 19,179 | ||||
Shares issued for the issuance of debt | $ | - | $ | 190,476 | ||||
Warrants issued for the issuance of debt | $ | 247,800 | $ | 176,798 | ||||
Beneficial conversion feature | $ | 127,900 | ||||||
Shares issued to acquire fixed assets | $ | - | $ | 105,229 | ||||
Shares issued to settle accounts payable | $ | 93,400 | $ | 49,494 | ||||
Shares issued and issuable for the acquisition of intellectual property | $ | 584,640 | $ | - | ||||
Debt converted to equity | $ | 380,000 | $ | - | ||||
Shares issued in connection with convertible debt | $ | 220,380 | $ | - | ||||
Right of use asset additions under ASC 842 | $ | 885,194 | $ | - | ||||
Operating lease liabilities under ASC 842 | $ | 900,587 | $ | - |
The accompany notes are an integral part of these consolidated financial statements.
F-6 |
NUTRALIFE BIOSCIENCES, INC. F/K/A NUTRAFUELS, INC.
Notes to Consolidated Financial Statements
NOTE 1 - NATURE OF OPERATIONS
NutraLife BioSciences, Inc. F/K/A NutraFuels, Inc. (We, or the Company) is the producer and distributor of nutritional supplements that uses micro molecular formulae and a utilization of an oral spray to provide faster and more efficient absorption. Our products are sold to private label distributors who sell the products we manufacture under their own brand name as well as under our own brand names.
In February of 2019, NutraFuels, Inc. approved an amendment to its Articles of Incorporation to change its name to Nutralife Biosciences, Inc. The name change was made effective on March 6, 2019.
NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) | Basis of Presentation |
The accompanying financial statements have been prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America (“U.S.”) as promulgated by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and with the rules and regulations of the U.S Securities and Exchange Commission (“SEC”). | ||
b) | Reclassifications | |
Reclassifications occurred to certain prior year amounts in order to conform to the current year presentation. The reclassifications have no effect on the reported net loss. | ||
c) | Principles of Consolidation | |
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Precision Analytic Testing, LLC, NutraDerma Technologies, Inc., PhytoChem Technologies, Inc. and TransDermalRX, Inc. We operate as one reportable segment. All material intercompany transactions and balances have been eliminated in consolidation. | ||
d) | Use of Estimates | |
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. | ||
e) | Inventories | |
Inventories are stated at the lower of cost or net realizable value utilizing the weighted average method of valuation and consist of raw materials and finished goods. As of December 31, inventory consists of the following: |
2019 | 2018 | |||||||
Raw Materials | $ | 206,238 | $ | 219,638 | ||||
Finished Goods | 283,935 | 71,402 | ||||||
$ | 490,173 | $ | 291,040 |
f) | Allowance for Doubtful Accounts |
We establish the existence of bad debts through a review of several factors including historical collection experience, current aging status of the customer accounts, and financial condition of our customers. The allowance for doubtful accounts is $1,500 and $31,000 as of December 31, 2019 and 2018, respectively.
F-7 |
NUTRALIFE BIOSCIENCES, INC. F/K/A NUTRAFUELS, INC.
Notes to Consolidated Financial Statements
The activity for the allowance for doubtful accounts for the years ended December 31, 2019 and 2018 is as follows:
Balance at Beginning of Year | Charged to expense | Deductions from Reserve |
Balance at End of Year |
|||||||||||||
Year ended December 31, 2019 | $ | 31,000 | - | 29,500 | $ | 1,500 | ||||||||||
Year ended December 31, 2018 | $ | - | 31,000 | - | $ | 31,000 |
g) | Property and Equipment |
All property and equipment are recorded at cost and depreciated over their estimated useful lives, generally three, seven and twelve years, using the straight-line method. Leasehold improvements are depreciated over the shorter of their estimated useful lives, which is generally three years, or the related lease term. Upon sale or retirement, the cost and related accumulated depreciation are eliminated from their respective accounts, and the resulting gain or loss is included in the results of operations. Repairs and maintenance charges, which do not increase the useful lives of the assets, are charged to operations as incurred.
h) | Revenue Recognition |
The Company adopted ASU 2014-09, “Revenue from Contracts with Customers” (Topic 606) and other associated standards on January 1, 2018, using the modified retrospective method, which did not have a material impact on the timing and amount of product revenues.
The new revenue recognition standard prescribes a five-step model that focuses on transfer of control and entitlement to payment when determining the amount of revenue to be recognized. Under the new guidance, an entity is required to perform the following five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation.
The Company generates revenues from the sale of products. The product is invoiced, and the revenue is recognized upon shipment or once transfer of risk has passed to the customer, which is the point at which the Company has satisfied its performance obligation.
Payments received in advance from customers are recorded as customer deposits until earned, at which time revenue is recognized.
We recognize certain revenues under bill and hold arrangements with two customers when the Company has fulfilled all of its performance obligations, the units are segregated for the specific customer only, and the goods are ready for physical transfer to the customer in accordance with their defined contract delivery schedule. For any requested bill and hold arrangement, we make an evaluation as to whether the bill and hold arrangement qualifies for revenue recognition. The customer must initiate the request for the bill and hold arrangement. The customer must make a fixed commitment to purchase the items. The risk of ownership is passed to the customer, and payment terms are not modified.
The Company’s revenues accounted for under ASC 606 do not require significant estimates or judgments based on the nature of the Company’s revenue. The Company’s contracts do not include multiple performance obligations or variable consideration. All of the Company’s sales resulted from contracts with customers for the years ended December 31, 2019 and 2018.
F-8 |
NUTRALIFE BIOSCIENCES, INC. F/K/A NUTRAFUELS, INC.
Notes to Consolidated Financial Statements
i) | Shipping and Handling Costs |
Shipping and handling costs are expensed as incurred and included in cost of sales. Billings for shipping and handling are reflected within sales in the accompanying consolidated statements of operations.
j) | Income Taxes |
The Company follows the provisions of ASC 740-10, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination.
The tax years 2017-2019 for the Company remain open for IRS audit. The Company has received no notice of audit or any notifications from the IRS for any of the open tax years.
k) | Net Loss Per Share |
Basic loss per share excludes dilution and is computed by dividing the loss attributable to stockholders by the weighted-average number of shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in the earnings of the Company. Diluted loss per share is computed by dividing the loss available to stockholders by the weighted average number of shares outstanding for the year and dilutive potential shares outstanding unless consideration of such dilutive potential shares would result in anti-dilution.
For the years ended December 31, 2019 and 2018, respectively, the following warrants and convertible notes were excluded from the computation of net loss per share:
2019
(Shares) |
2018
(Shares) |
|||||||
Warrants | 21,819,858 | 18,210,402 | ||||||
Convertible Notes payable and accrued interest | 3,900,727 | 1,325,000 | ||||||
25,720,585 | 19,535,402 |
l) | Financial Instruments and Fair Value Measurements |
The carrying value of the Company’s current consolidated financial instruments, which include cash, accounts receivable, accounts payable and accrued liabilities approximate their fair values because of the short-term maturities of these instruments. The carrying value of the Company’s indebtedness approximates their fair values because of the short-term maturities and rates of interest of these instruments.
F-9 |
NUTRALIFE BIOSCIENCES, INC. F/K/A NUTRAFUELS, INC.
Notes to Consolidated Financial Statements
m) | Impairment of Long-Lived Assets |
A long-lived asset is tested for impairment whenever events or changes in circumstances indicate that its carrying value amount may not be recoverable. An impairment loss is recognized when the carrying amount of the asset exceeds the sum of the undiscounted cash flows resulting from its use and eventual disposition. The impairment loss is measured as the amount by which the carrying amount of the long-lived assets exceeds its fair value. There were no impairments recognized during the years ended December 31, 2019 and 2018.
n) | Advertising |
Advertising costs are charged to operations as incurred and are included in operating expenses. The Advertising expenses are approximately $272,600 and $265,500 for the years ended December 31, 2019 and 2018, respectively.
o) | Intangible Asset |
Intangible asset represents the value assigned to intellectual property and is amortized based on the economic benefit expected to be realized.
p) | Leases |
On January 1, 2019, the Company adopted FASB ASU 2016-02, Leases (ASC 842) and other associated standards, which defines a lease as any contract that conveys the right to use a specific asset for a period of time in exchange for consideration. ASC 842 requires the recognition of the right-of-use assets and related operating and finance lease liabilities on the balance sheet and the disclosure of key information about certain leasing arrangements. As permitted by ASC 842, the Company elected the adoption date of January 1, 2019, which is the initial date of application. As a result, the consolidated balance sheet prior to January 1, 2019 was not restated, continues to be reported under ASC Topic 840, Leases, or ASC 840, which did not require the recognition of operating lease liabilities on the balance sheet, and is not comparative. Under ASC 842, all leases are required to be recorded on the balance sheet and are classified as either operating leases or finance leases (formerly called capital leases). The lease classification affects the expense recognition in the income statement. Operating lease charges are recorded entirely in operating expenses. Finance lease charges are split, where amortization of the right-of-use asset is recorded in operating expenses and an implied interest component is recorded in interest expense. The expense recognition for operating leases and finance leases under ASC 842 is substantially consistent with ASC 840. As a result, there is no significant difference in the Company’s results of operations presented in the consolidated statement of operations for each period presented.
F-10 |
NUTRALIFE BIOSCIENCES, INC. F/K/A NUTRAFUELS, INC.
Notes to Consolidated Financial Statements
Leases are classified as a finance lease if any of the following criteria are met:
1. | The lease transfers ownership of the underlying asset to the lessee by the end of the lease term. | |
2. | The lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise. | |
3. | The lease term is for the major part of the remaining economic life of the underlying asset. | |
4. | The present value of the sum of lease payments and any residual value guaranteed by the lessee equals or exceeds substantially all of the fair value of the underlying asset. | |
5. | The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. |
For any leases that do not meet the criteria identified above for finance leases, the Company treats such leases as operating leases. As of December 31, 2019, the Company has two finance leases and three operating leases.
Under the new guidance, both finance and operating leases are reflected on the balance sheet as lease or “right-of -use” assets and lease liabilities. There are some exceptions, which the Company has elected in its accounting policies. For leases with terms of twelve months or less, or below the Company’s general capitalization policy threshold, the Company elects an accounting policy to not recognize lease assets and lease liabilities for all asset classes. The Company recognizes lease expense for such leases generally on a straight-line basis over the lease term.
The Company determines if a contract is a lease at the inception of the arrangement. The Company reviews all options to extend, terminate, or purchase its right-of-use assets at the inception of the lease and accounts for these options when they are reasonably certain to be exercised. Certain leases contain non-lease components, such as common area maintenance, which are generally accounted for separately. In general, the Company will assess if non-lease components are fixed and determinable, or variable, when determining if the component should be included in the lease liability. For purposes of calculating the present value of the lease obligations, the Company utilizes the implicit interest rate within the lease agreement when known and/or determinable, and otherwise utilizes its incremental borrowing rate at the time of the lease agreement. The related right-of-use asset is initially measured at cost, which primarily comprises of the initial amount of the lease liability.
Lease expense for operating leases consists of the lease payments plus any initial direct costs and is recognized on a straight-line basis over the lease term. Included in lease expense are any variable lease payments incurred in the period that were not included in the initial lease liability. Lease expense for finance leases consists of the amortization of the right-of-use asset on a straight-line basis over the lease term and interest expense determined on an amortized cost basis. The lease payments are allocated between a reduction of the lease liability and interest expense.
As permitted under ASU 2018-11, the Company elected the modified retrospective approach to adopt the new lease standard. Under this approach, the Company initially applied the new leases standard at the adoption date of January 1, 2019 and would have recognized a cumulative-effect adjustment, if appropriate, to the opening balance of retained earnings in the period of adoption. No cumulative-effect adjustment was recognized. The Company’s reporting for the comparative periods prior to 2019 in the financial statements will be presented in accordance with the existing U.S. GAAP in effect for 2018 and earlier (ASC Topic 840, Leases).
F-11 |
NUTRALIFE BIOSCIENCES, INC. F/K/A NUTRAFUELS, INC.
Notes to Consolidated Financial Statements
The impact of the adoption of ASC 842 on the balance sheet as of December 31, 2018 was:
As Reported December 31, 2018 | Adoption of ASC 842 Increase (Decrease) | Balance, January 1, 2019 | ||||||||||
Operating Lease Right-of-Use-Asset | $ | - | $ | 781,030 | $ | 781,030 | ||||||
Total Assets | $ | 1,830,329 | $ | 781,030 | $ | 2,611,359 | ||||||
Operating Lease Liabilities-Current Portion | $ | - | $ | 88,121 | $ | 88,121 | ||||||
Total Current Liabilities | $ | 1,000,461 | $ | 88,121 | $ | 1,088,582 | ||||||
Operating Lease Liabilities-Net of Current Portion | $ | - | $ | 707,524 | $ | 707,524 | ||||||
Deferred Rent | $ | 14,614 | $ | (14,614 | ) | $ | - | |||||
Total Liabilities | $ | 1,015,075 | $ | 781,030 | $ | 1,796,105 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 1,830,329 | $ | 781,030 | $ | 2,611,359 |
q) | Recent Accounting Pronouncements |
In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15th, 2020, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.
In August 2020, the FASB issued ASU 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity,” which simplifies and clarifies certain calculation and presentation matters related to convertible and equity and debt instruments. Specifically, ASU-2020-06 removes requirements to separately account for conversion features as a derivative under ASC Topic 815 and removing the requirement to account for beneficial conversion features on such instruments. Accounting Standards Update 2020-06 also provides clearer guidance surrounding disclosure of such instruments and provides specific guidance for how such instruments are to be incorporated in the calculation of Diluted EPS. The guidance under ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The Company will adopt this standard using a modified retrospective approach effective January 1, 2021. The Company is currently evaluation the effects of adoption on its consolidated financial statements.
Management does not believe that any other recently issued, but not yet effective, accounting standard if currently adopted would have a material effect on the accompanying consolidated financial statements.
F-12 |
NUTRALIFE BIOSCIENCES, INC. F/K/A NUTRAFUELS, INC.
Notes to Consolidated Financial Statements
NOTE 3 - LIQUIDITY AND GOING CONCERN CONSIDERATIONS
Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. We sustained a net loss of approximately $4.0 and $2.1 million for the years ended December 31, 2019 and 2018, respectively, and have an accumulated deficit of approximately $38.8 million at December 31, 2019. These conditions raise substantial doubt about our ability to continue as a going concern.
In December 2019, a novel strain of coronavirus was reported to have surfaced in China. The spread of this virus caused various business disruptions including temporary closures to the Company’s offices and facilities. While these disruptions are currently expected to be temporary, there is considerable uncertainty around the duration. Therefore, the Company expects this matter to negatively impact its operating results. The related financial impact and duration cannot be reasonably estimated at this time.
The Company is currently in the process of raising capital to complete and finalize the build-out of its facility in Deerfield Beach for the purpose of consolidating its operations. The structure of the capital raise is currently in development. The Company is continuing its path to profitability through increased business development, marketing and sales of the Company’s multiple lines of topical, ingestible and skincare health and wellness products. The Company is also focused on completing an efficacy clinical study on its patented mosquito bug patch with plans upon a successful conclusion to launch globally in the very near future, adding to the Company’s suite of wellness products.
The independent auditors’ reports on our financial statements for the years ended December 31, 2019 and 2018 contain explanatory paragraphs expressing substantial doubt as to our ability to continue as a going concern.
Failure to successfully continue to grow operational revenues could harm our profitability and adversely affect our financial condition and results of operations. We face all of the risks inherent in a new business, including the need for significant additional capital, management’s potential underestimation of initial and ongoing costs, and potential delays and other problems in connection with establishing sales channels.
We are continuing our plan to further grow and expand operations and seek sources of capital to pay our contractual obligations as they come due. Management believes that its current operating strategy will provide the opportunity for us to continue as a going concern as long as we are able to obtain additional financing; however, there is no assurance this will occur. The accompanying consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
F-13 |
NUTRALIFE BIOSCIENCES, INC. F/K/A NUTRAFUELS, INC.
Notes to Consolidated Financial Statements
NOTE 4 – PROPERTY AND EQUIPMENT, NET
A summary of property and equipment at December 31, is as follows:
2019 | 2018 | |||||||
Furniture and equipment | $ | 1,959,694 | $ | 910,224 | ||||
Leasehold improvements | 840,728 | 374,934 | ||||||
Property and equipment, at cost | 2,800,422 | 1,285,158 | ||||||
Less: accumulated depreciation | (423,775 | ) | (359,350 | ) | ||||
$ | 2,376,647 | $ | 925,808 |
Depreciation expense for the years ended December 31, 2019 and 2018 totaled $64,849 and $66,033 respectively.
NOTE 5 – INTANGIBLE ASSET
In February 2019, the Company acquired certain intellectual property consisting of patent rights. The aggregate purchase price paid in connection with the patent purchase was $714,640, consisting of $130,000 cash, and 3,300,000 shares of the Company’s common stock valued at $0.177 per share or an aggregate of $584,640. Of the 3,300,000 shares, 1,800,000 shares were provided at closing and 1,500,000 were to be provided one year thereafter. These shares have not been issued and the Company is in negotiations with the seller to extend the issuance of the shares. The acquired patent is amortized over its remaining estimated useful life of approximately 11 years. Amortization for the year ended December 31, 2019 totaled approximately $59,000. The estimated annual amortization expense for the next five years and thereafter is as follows:
2020 | $ | 65,000 | ||
2021 | 65,000 | |||
2022 | 65,000 | |||
2023 | 65,000 | |||
2024 | 65,000 | |||
Thereafter | 330,086 | |||
$ | 655,086 |
NOTE 6 – ACCRUED EXPENSES
A summary of accrued expenses at December 31, is as follows:
Name | 2019 | 2018 | ||||||
Officer – Bonus | $ | 300,000 | $ | 200,000 | ||||
Deferred rent | - | 15,393 | ||||||
Interest payable | 42,059 | - | ||||||
Miscellaneous Accrual | 9,561 | 24,771 | ||||||
Royalty Fees | - | 85,000 | ||||||
Other current liabilities | 61,574 | - | ||||||
Accrued rent | - | 143,674 | ||||||
$ | 413,194 | $ | 468,838 |
F-14 |
NUTRALIFE BIOSCIENCES, INC. F/K/A NUTRAFUELS, INC.
Notes to Consolidated Financial Statements
NOTE 7 – NOTES PAYABLE
In the fourth quarter of 2019, the Company received proceeds aggregating $455,000 in connection with multiple short-term convertible promissory notes that were amended to be due in November and December of 2020. The notes bear interest at 10% - 12% for the term of the note. Each noteholder has the right to convert all the outstanding principal and accrued unpaid interest to the Company’s common stock at a price ranging from $.085 to $0.10 per share. Additionally, an aggregate of 3,222,800 warrants were issued to the noteholders. 722,800 of these warrants are exercisable at $0.30 per share and expire one year from the date of each respective note and may be extended for an additional year if the underlying stock price at the time of expiration is at or below the exercise price of $0.10 per share. 2,500,000 of these warrants are exercisable at $0.10 per share. These warrants have expired, however, are expected to be extended an additional year. These notes are currently in default.
Additionally, 418,800 shares were issued to certain note holders as additional consideration.
The common stock and warrants issued to the noteholders are treated as debt discounts. The gross proceeds of the notes were allocated to debt, warrants and common shares issued on a relative fair value basis. The notes also included a beneficial conversion feature (BCF).
The debt discounts associated with the warrants, BCF and common stock issuances are amortized through the earlier of the conversion of the notes into common stock, or the maturity date of the notes, on a straight-line basis which approximates the effective interest method due to the short-term nature of the notes. Amortization of the debt discount is reported as finance costs – related parties in the Statement of Operations.
Three of the convertible notes issued in 2019 included issuances of common shares to the investors as inducements for the loans. The Company allocated $106,280 of the gross proceeds to the stock issuances, on a relative fair value basis, which has been recorded as a debt discount. Total amortization associated with the stock issuances related debt discount was $72,166 for the year ended December 31, 2019.
The Company allocated $247,800 of the gross proceeds to the warrants, on a relative fair value basis. In addition, because the effective conversion prices of the 2019 notes were less than the fair value of the underlying common stock on the issuance date, the Company allocated $127,900, the intrinsic value of that beneficial conversion feature, to additional paid-in capital. Total amortization associated with the warrants debt discount was $97,785 for the year ended December 31, 2019. Total amortization associated with the beneficial conversion feature debt discount was $134,054 for the year ended December, 31, 2019.
The warrants’ relative fair value was calculated using the Black-Scholes Merton valuation model with the following inputs: an expected and contractual life of twelve months, an assumed volatility of 154.8%, zero dividend rate, and a risk free rate of 2.50%. The 2019 warrants are classified in equity as additional paid-in capital.
In October 2018, we entered into two short term 10% notes for $75,000 cash, which included the issuance of 2,000,000 warrants to purchase common stock. These notes were repaid in January 2019.
In November 2018 we entered into a short term 10% promissory note for $25,000 due in December of 2018. The note provided for a stock grant of 50,000 shares which were not issued and was convertible at $.20 per share. The note was amended in March 2019 and was paid with accrued interest. The amendment also provided for a stock grant totaling 100,000 shares which were issued in March 2019.
F-15 |
NUTRALIFE BIOSCIENCES, INC. F/K/A NUTRAFUELS, INC.
Notes to Consolidated Financial Statements
NOTE 8 - CONVERTIBLE NOTES PAYABLE TO SHAREHOLDER
In March 2019, the Company received proceeds of $200,000 from a shareholder, pursuant to a short-term promissory note payable, bearing interest at an annual rate of 3%, due April 20, 2019. On April 1, 2019, the note and accrued interest were satisfied by converting to 2,352,941 shares common stock at $0.085 per share.
In June 2019, the Company entered into an Investment Agreement that included a secured convertible 5.75% promissory note payable for $1,000,000 with a shareholder. The note is subject to a security agreement whereby the first four Ennea Processors the Company has committed to commercialize and monetize will be secured as collateral for the note as well as current and future assets of the Company and its subsidiaries. The payment terms of the note are interest only payments from July 7, 2019 through December 7, 2019 and commencing January 7, 2020, the Company was to make equal monthly installment payments that include principal and interest through the Maturity Date of December 7, 2020.
Included in the Investment Agreement is a royalty agreement whereby the investor received 500,000 shares of the Company’s common stock and will be entitled to a royalty of 8.5% from the revenue generated from the “collateral processors” while the principal is outstanding and 5% thereafter on the first two collateral processors for a period of 10 years.
These 500,000 shares of common stock were valued at $95,500 using the trading price on the date of the agreement and was treated as a debt discount, amortized over the term of the note on a straight-line basis. Amortization associated with this debt discount was $31,836 for the year ended December 31, 2019.
In addition to the collateral, the note is secured by a Pledge Agreement from a related-party that included a mortgage lien on certain real property as additional collateral. As compensation for providing the additional collateral, the pledgor received 500,000 shares of the Company’s common stock. Pursuant to the agreement, the Company will also make monthly payments equal to the interest paid on the note commencing on December 5, 2019, and 8.5% of the revenue generated from the collateral processors while the principal is outstanding and 5% thereafter on the first two machines commercialized or monetized by the company.
Collateral processors are not yet in service. Therefore, revenue generated from them and the related royalties due cannot be estimated at this time and will be expensed as incurred in the future.
The 500,000 shares of common stock issued as compensation for providing additional collateral were also valued at $95,000 using the trading price on the date of the agreement and was treated as a prepaid expense, amortized over the term of the note on a straight-line basis. Amortization associated with this consideration was $31,836 for the year ended December 31, 2019, and is included in stock based compensation of the Statement of Operations.
The Company is currently in default of its note, however, the parties to this agreement are in negotiation to reach settlement terms.
NOTE 9 - STOCKHOLDERS’ EQUITY
Series A Preferred Stock
The Company has 10,000 shares of Preferred Stock authorized. 1,000 shares has been designated as Series A Preferred Stock and is not entitled to dividends or liquidation preferences. Each share has voting rights equal to 500,000 shares of the Company’s common stock. In 2012, Edgar Ward was granted 1,000 shares of Series A voting stock for $1,000.
F-16 |
NUTRALIFE BIOSCIENCES, INC. F/K/A NUTRAFUELS, INC.
Notes to Consolidated Financial Statements
Series B Preferred Stock
On September 30, 2020, we designated one hundred and ten (110) shares of the preferred stock of the Company, par value $0.0001 as Series B Convertible Preferred Stock (the “Series B Preferred Stock”).
The shares of Series B Preferred Stock are convertible at a rate of 1 share of Series B Preferred Stock to 149,567 shares of common stock, par value $0.0001 per share of the Company (the “Common Stock”). Holders of Series B Preferred Stock of the Company may convert their shares of Series B Preferred Stock into Common Stock at any time following January 1, 2021 (the “Permitted Conversion Date”). The Series B Preferred Stock is subject to an ownership limitation, pursuant to which no holder of Series B Preferred Stock will be entitled to convert such investor’s shares of Series B Preferred Stock into shares of Common Stock if such conversion would result in ownership of more than 4.99% of the outstanding shares of Common Stock of the Company. Each share of Series B Preferred Stock will vote together with the holders of the Common Stock on any matter submitted to the shareholders of the Company. Each share of Series B Preferred Stock shall be entitled to a number of votes equal to the number of shares of Common Stock into which the Series B Preferred Stock may convert at the time such vote is made. The Series B Preferred Stock will participate in any dividends, distributions or payments to the holders of the Common Stock on an as-converted basis. The Series B Preferred Stock does not have any liquidation preference over the holders of Common Stock of the Company. Once issued, certain shares of the Series B Preferred Stock are redeemable at the election of the Company at any time prior to the Permitted Conversion Date pursuant to a separate written agreement between the holders of the Series B Preferred Stock and the Company.
Settlement Agreement
In March 2019, the Company reached an agreement with its third-party lender in connection with their $2,000,000 2018 “Investment Agreement” whereby the Company received only two payments from this lender aggregating $380,000 during 2018. The lender was in default of this agreement and thereby settled by agreeing to fund an additional $1,000,000 for 13,764,705 restricted shares of common stock, a warrant to purchase an additional 10 million common shares at price of $0.20 per share or an aggregate of $2 million under the terms set forth in the agreement, expiring on March 4, 2022, and an option to purchase an additional 7,647,058 common shares at the purchase price of $0.085 per share or an aggregate of $650,000 at any time prior to April 8, 2019. This option was never exercised and therefore expired. In connection with this agreement, the $380,000 previously funded was reclassified to additional paid-in capital.
Other
The Company issued 934,000 shares to settle accounts payable aggregating $93,400 during 2019.
The Company issued an aggregate of 3,190,432 shares for services aggregating $610,987 during 2019.
During 2019, the Company has recorded an aggregate of $375,700 to Additional Paid-in Capital resulting from Beneficial Conversion features and warrants issued in connection with convertible debt.
The Company issued an aggregate of 4,976,849 shares for services aggregating $1,070,050 during 2018.
In February 2018, the Company issued 169,159 shares of common stock valued at $49,494 to settle accounts payable of $31,490. The Company recorded a loss on settlement of $18,004 in connection with this settlement.
In February 2018, the Company issued 2,000,000 shares of common stock valued at $569,200 for the acquisition of production equipment. The holder returned the 2,000,000 shares to the Company for cancellation on November 1, 2018 pursuant to a settlement agreement dated September 7, 2018.
In December 2018 the Company issued 1,696,968 shares of common stock valued at $105,229 in exchange for production equipment from an unrelated third party.
Subsequent issuances
In 2020, the Company issued an aggregate of 1,932,076 shares of common stock for $0.065 per share for cash.
During 2020, the Company issued 3,150,000 shares of common stock in connection with convertible notes payable.
In November 2020, the Company issued 12,500,000 shares of common stock in exchange for 250 shares of Series X Convertible Preferred Stock of Lord Global Corporation in connection with a Stock Purchase Agreement.
During 2020, we designated 110 shares of the preferred stock of the Company, par value $0.0001, as Series B Convertible Preferred Stock, and issued 20 shares.
F-17 |
NUTRALIFE BIOSCIENCES, INC. F/K/A NUTRAFUELS, INC.
Notes to Consolidated Financial Statements
NOTE 10 – LEASES
In conjunction with the new guidance for leases, as defined by the FASB with ASU 2016-02, Leases (Topic 842), the Company has described the existing leases as operating as further described below:
The Company leases its office and warehouse facilities located in Coconut Creek, Florida under a non-cancelable operating lease agreement that expires in February 2022.
In June 2017, the Company entered into a lease for an additional facility located in Deerfield Beach, Florida under a non-cancelable operating lease. The term of the lease is for 86 months beginning on January 1, 2018 and calls for yearly 3% increases to base rent, with monthly payments that commenced in March 2018.
In July and September of 2019, the Company’s wholly owned subsidiary, Phytochem, entered into two separate lease agreements for office and warehouse space located in Onalaska, Wisconsin, that commenced on August 1 and October 1, respectively. Each lease is for six-month terms with four (4) renewal options to extend for six additional months. The Company expects to occupy these facilities for the full term of these leases totaling 30 months and the leases call for annual 3% increases to base rent.
In addition to rent, the Company pays certain insurance, maintenance, and other costs related to the rented spaces.
In the December 31, 2019 consolidated balance sheet, the Company has recorded an aggregate right-of-use asset of approximately $795,000 and a lease liability of $795,000, of which $141,674 is reported as a current liability.
The weighted average remaining lease term is 54 months and the weighted average discount rate used in 10%.
The following table presents a reconciliation of the undiscounted future minimum lease payments remaining under the operating leases reported as operating lease liability on the consolidated balance sheet as of December 31, 2019:
Undiscounted future minimum lease payments:
2020 | $ | 215,000 | ||
2021 | 221,000 | |||
2022 | 182,000 | |||
2023 | 184,000 | |||
2024 | 190,000 | |||
Thereafter | 16,000 | |||
Total undiscounted future minimum lease payments | 1,008,000 | |||
Less: amount representing imputed interest | (213,000 | ) | ||
Operating lease liability | $ | 795,000 |
Lease expense for the operating leases was approximately $297,000 and $256,000 for the years ended December 31, 2019 and 2018, respectively.
F-18 |
NUTRALIFE BIOSCIENCES, INC. F/K/A NUTRAFUELS, INC.
Notes to Consolidated Financial Statements
Finance Leases:
The Company has acquired certain equipment under agreements that are classified as finance leases. The cost of the equipment under finance leases is included in the balance sheet as property and equipment. The finance lease equipment was approximately $110,372 and $19,179 as of December 31, 2019 and 2018, respectively and is not yet in service, accordingly there has been no depreciation expense on this equipment.
Minimum lease payments required by these finance leases are as follows:
Undiscounted future minimum lease payments:
2020 | $ | 24,000 | ||
2021 | 24,000 | |||
2022 | 17,000 | |||
2023 | 2,100 | |||
Total undiscounted future minimum lease payments | 67,100 | |||
Less: amount representing interest | (10,300 | ) | ||
Less: current portion | (20,000 | ) | ||
Present value of minimum lease payments, net of current portion | $ | 36,800 |
NOTE 11 – EQUITY WARRANTS
At December 31, our warrants outstanding are as follows:
By Exercise Price: | 2019 | 2018 | ||||||
Warrants - $0.10 | 2,500,000 | - | ||||||
Warrants - $0.20 | 13,302,941 | 2,950,000 | ||||||
Warrants - $0.30 | 722,800 | - | ||||||
Warrants - $0.35 | 5,294,117 | 7,144,117 | ||||||
Warrants - $0.50 | - | 7,877,000 | ||||||
Warrants - $0.75 | - | 114,286 | ||||||
Warrants - $1.00 | - | 124,999 | ||||||
Total outstanding | 21,819,858 | 18,210,402 |
Warrants | ||||
Balance, January 1, 2018 | 16,431,285 | |||
Warrants Issued | 8,244,117 | |||
Warrants Exercised | - | |||
Warrants Expired | (6,465,000 | ) | ||
Balance, December 31, 2018 | 18,210,402 | |||
Warrants Issued | 13,575,741 | |||
Warrants Exercised | - | |||
Warrants Expired | (9,966,285 | ) | ||
Balance, December 31, 2019 | 21,819,858 |
F-19 |
NUTRALIFE BIOSCIENCES, INC. F/K/A NUTRAFUELS, INC.
Notes to Consolidated Financial Statements
NOTE 12 - INCOME TAXES
We recognize deferred tax assets and liabilities for the tax effects of differences between the financial statements and tax basis of assets and liabilities. A valuation allowance is established to reduce the deferred tax assets if it is more likely than not that a deferred tax asset will not be realized.
The components of income tax provision (benefit) related to continuing operations are as follows at December 31, 2019 and 2018:
2019 | 2018 | |||||||
Current | - | - | ||||||
Deferred | - | - | ||||||
Total tax provision | - | - |
The following is a reconciliation of the effective income tax rate with the statutory income tax rate at December 31, 2019 and 2018:
2019 | 2018 | |||||||
U.S. Federal statutory income tax rate | (21.0 | )% | (21.0 | )% | ||||
State income tax, net of federal benefit | (3.5 | )% | (1.9 | )% | ||||
Temporary differences, net | 0.0 | % | 0.0 | % | ||||
Valuation allowance | 24.5 | % | 22.9 | % | ||||
Effective tax rate | 0.0 | % | 0.0 | % |
The net deferred tax assets and liabilities included in the financial statements consist of the following amounts at December 31, 2019 and 2018:
Deferred tax assets | 2019 | 2018 | ||||||
Net operating loss carry forwards | $ | 9,324,000 | $ | 8,985,000 | ||||
Accrued wages | $ |
74,000 |
||||||
Other: | ||||||||
Less: valuation allowance | (9,398,000 | ) | (8,985,000 | ) | ||||
Total | - | - | ||||||
Deferred tax liabilities | ||||||||
Stock based compensation | - | - | ||||||
Depreciation | - | - | ||||||
Net deferred tax asset | $ | - | $ | - |
The change in valuation allowance was $413,000 and $407,612 for the years ended December 31, 2019 and 2018, respectively. We recorded a 100% valuation allowance related to the deferred tax asset for the loss from operations. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which temporary differences become deductible. The Company has net operating loss carryforwards of approximately $38.0 million as of December 31, 2019, of which $32.6 million were incurred prior to 2018 that begin to expire in the year 2032 through 2036.
F-20 |
NUTRALIFE BIOSCIENCES, INC. F/K/A NUTRAFUELS, INC.
Notes to Consolidated Financial Statements
In accordance with the provisions of ASC 740: Income Taxes, we record a liability for uncertain tax positions when it is probable that a loss has been incurred and the amount can be reasonably estimated. At December 31, 2019 and 2018, we have no liabilities for uncertain tax positions. We continually evaluate expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings.
NOTE 13 - COMMITMENTS AND CONTINGENCIES
The Company is subject to asserted claims and liabilities that arise in the ordinary course of business. The Company maintains insurance policies to mitigate potential losses from these actions. In the opinion of management, the amount of the ultimate liability with respect to those actions will not materially affect the Company’s financial position or results of operations.
As of December 31, 2019, the Company is not aware of any asserted claims.
NOTE 14 - CONCENTRATIONS OF CREDIT RISK
a) | Cash | |
The Company maintains its cash in bank deposit accounts, which may, at times, may exceed federally insured limits. The Company had no cash balances in excess of FDIC insured limits at December 31, 2019 and $244,501 at 2018. | ||
b) | Revenue | |
Our principal customers are comprised of four (4) separate independent private label resellers that represent approximately 73% of the Company’s revenue. One of these customers represent 89% of accounts receivable. Should we lose one or more of these resellers our revenue would decline significantly. |
NOTE 15 - SUBSEQUENT EVENTS
In December 2019, a novel strain of coronavirus (COVID-19) was reported to have surfaced in China, and began to spread around the world in early 2020. In reaction to decreased supply of and increased demand for sanitizer products, the Company shifted its manufacturing to produce sanitizer products. The Company’s other business operations have been impacted negatively by COVID-19 due to government restrictions and the overall adverse effect on the global economy. The Company expects COVID-19 to continue to negatively impact its operating results and its ability to obtain financing.
During 2020, the Company issued warrants totaling 5,540,740 in exchange for cash proceeds of $125,000. The exercise prices range from $0.08 - $0.10 and expire 2 - 3 years after issuance.
In January 2021, the Company issued 15,000,000 warrants to its Chief Executive Officer, President, and sole Director as compensation. The warrants have an exercise price of $0.1025 and expire 3 years after issuance.
During January and February 2021, the Company issued warrants in connection with common stock issuances totaling 5,600,000. The warrants have an exercise price of $0.08 and expire 3 years after issuance.
Litigation:
In 2020, a claim has been filed against the Company by its former attorney. The claim involves allegations that fees approximating $150,000 charged for the calendar year 2019 were unpaid. The Company is vigorously contesting these claims and the outcome cannot be determined at this time.
In 2020, a claim was filed against the Company for a breach of confidentiality imposed by a non-disclosure agreement signed by both the Company and plaintiff. The claim was dismissed in February 2021.
F-21 |
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Resignation of Independent Registered Public Accounting Firm
On September 11, 2020, Daszkal Bolton LLP (“Daszkal”) resigned its position as the independent registered public accounting firm of the Company.
Daszkal did not issue a report on the Company’s financial statements for the fiscal year ended December 31, 2019. Except as set forth herein, Daszkal’s report on the Company’s financial statements for the fiscal year ended December 31, 2018 did not contain an adverse opinion or a disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope or accounting principles, except that such report expressed substantial doubt regarding our ability to continue as a going concern.
Furthermore, during the Company’s two most recent fiscal years and through September 11, 2020, there have been no disagreements with Daszkal on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to Daszkal’s satisfaction, would have caused Daszkal to make reference to the subject matter of the disagreement in connection with its reports on the Company’s financial statements for such periods.
For the fiscal years ended December 31, 2019 and 2018 and through September 11, 2020, there were no “reportable events” as that term is described in Item 304(a)(1)(v) of Regulation S-K.
Engagement of New Independent Registered Accounting Firm
On September 16, 2020, the Company’s Board of Directors appointed Rotenberg Meril Solomon Bertiger & Guttilla, P.C. (“Rotenberg”) as the Company’s new independent registered accounting firm. During the Company’s two most recent fiscal years and through September 16, 2020, neither the Company nor anyone acting on the Company’s behalf consulted Rotenberg with respect to any of the matters or reportable events set forth in Item 304(a)(2)(i) and (ii) of Regulation S-K.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), we carried out an evaluation, with the participation of our management, including our CEO and sole Director, of the effectiveness of our disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, our CEO concluded that our disclosure controls and procedures were not effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our CEO as appropriate, to allow timely decisions regarding required disclosure for the reasons discussed below.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Our internal control system was designed to, in general, provide reasonable assurance to our management and board regarding the preparation and fair presentation of published financial statements, but because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2019. The framework used by management in making that assessment was the criteria set forth in the document entitled “Internal Control – Integrated Framework” issued by the 2013 Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, our President and Chief Financial Officer have determined and concluded that, as of December 31, 2019, our internal controls over financial reporting were not effective. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. In our assessment of the effectiveness of internal control our financial reporting as of December 31, 2019, we determined that the following items constituted a material weakness:
● | We do not have an independent audit committee in place, which would provide oversight of our officers, operations and financial reporting function; |
62 |
● | We do not have anyone currently serving as our Chief Financial Officer; | |
● | Our accounting department, which consists of a limited number of personnel, does not provide adequate segregation of duties; and | |
● | We do not have effective controls over period end financial disclosure and reporting processes. |
Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board. Management plans to take action and implementing improvements to our controls and procedures when our financial position permits.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to the permanent exemption of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.
Changes in Internal Control over Financial Reporting
No change in our system of internal control over financial reporting occurred during the period covered by this report, fourth quarter of the fiscal year ended December 31, 2019, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
None.
Item 10. Directors, Executive Officers and Corporate Governance
The board of directors elect our executive officers annually. A majority vote of the directors who are in office are required to fill vacancies. Each director shall be elected for the term of one year, and until his successor is elected and qualified, or until his earlier resignation or removal. Our directors and executive officers are as follows:
Name | Age | Position | ||
Edgar Ward | 49 | Chief Executive Officer, President, Director | ||
Neil Catania | 58 | Vice President |
Edgar Ward, Chief Executive Officer, President and Director
From April 1, 2010 to present, Edgar Ward has served as our Chief Executive Officer, President, and Director. Mr. Ward’s services to us include day to day operations of our manufacturing facility and management of our company.
63 |
As our chief executive officer, president and director Mr. Ward brings his experience in managing our day to day operations.
Neil Catania, Vice President
Neil Catania became our Vice-President on November 20, 2012. From May 2004 until present, Neil Catania has been the chief executive officer of MND LLC, a financial services company located in New York.
Mr. Catania’s services to us include assisting Mr. Ward with our day to day operations. Neil Catania holds Series 7, Series 63, Series 24 and Series 55 licenses from the Financial Industry Regulatory Authority (“FINRA”).
As our Vice-President Mr. Catania brings his experience in the financial services industry and executive management to our day to day operations.
Involvement in Certain Legal Proceedings
No executive officer, member of the board of directors or control person of our Company has been involved in any legal proceeding listed in Item 401(f) of Regulation S-K in the past 10 years.
Committees
We do not have a standing nominating, compensation or audit committee. Rather, our sole director performs the functions of these committees. Additionally, because our common stock is not listed for trading or quotation on a national securities exchange, we are not required to have such committees.
Other Directorships
None of our other officers and directors are directors of other Securities and Exchange Commission reporting companies.
64 |
Conflicts of Interest
Our Chief Executive Officer, President, and sole Director, Edgar Ward devotes his full time to our business under the terms of his employment contract. Our only other executive officer, Neal Catania is not obligated to commit his full time and attention to our business; accordingly, he may encounter a conflict of interest in allocating his time between our operations and those of other businesses. Neal Catania spends on an average ten (10) hours each month to our business and is not contractually required to devote full time services to us. In the future, our officers and directors may engage in other business activities, investments and business opportunities that may be appropriate for presentation to us as well as other entities to which they owe a fiduciary duty. As a result, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. Our officers and directors may also in the future become affiliated with entities, engaged in business activities similar to those we intend to conduct. In general, officers and directors of a corporation are required to present business opportunities to a corporation if:
● | the corporation could financially undertake the opportunity; | |
● | the opportunity is within the corporation’s line of business; and | |
● | it would be unfair to the corporation and its stockholders not to bring the opportunity to the attention of the corporation. |
Code of Ethics
We have not yet adopted a code of ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting. We plan to adopt a Code of Ethics in the future, at the latest prior to our stock being listed on an exchange that requires us to have a formal Code of Ethics.
Director Independence
We do not have any independent directors, as such term is defined in the listing standards of The NASDAQ Stock Market, at this time. The Company is not quoted on any exchange that requires director independence requirements. For purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 4200(a)(15). See “Directors, Executive Officers and Corporate Governance”— “Director Independence.”
Family Relationships
None.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Exchange Act requires the Company’s directors and officers, and persons who beneficially own more than 10% of a registered class of the Company’s equity securities, to file reports of beneficial ownership and changes in beneficial ownership of the Company’s securities with the SEC on Forms 3, 4 and 5. Officers, directors and greater than 10% stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.
Based solely on the Company’s review of the copies of the forms received by it during the fiscal year ended December 31, 2019, the Company believes that all person who, at any time during such fiscal year, was a director, officer or beneficial owner of more than 10% of the Company’s common stock failed to comply with all Section 16(a) filing requirements during such fiscal years.
65 |
Item 11. Executive Compensation
2019 Summary Compensation Table
The table below summarizes all compensation awarded to, earned by, or paid to our Principal Executive Officer, our two (2) most highly compensated executive officers who occupied such position at the end of our latest fiscal year that they were not executive officers at the end of our latest fiscal year, by us, or by any third party where the purpose of a transaction was to furnish compensation, for all services rendered in all capacities to us for the years ended December 31, 2019 and 2018.
Name | Position | Year | Salary |
Bonus/
Stock Awards |
Options | Non-Equity Incentive Plan Compensation | Non-qualified deferred compensation | All other compensation | Total | |||||||||||||||||||||||
Edgar Ward (1) | Chief Executive Officer, | 2019 | $ | 197,500 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 10,819,142.4 | (1) | |||||||||||||||
President,
Director |
2018 | $176,070.93 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $176,070.93 | (1) | ||||||||||||||||||
Neil Catania (2) |
Vice | 2019 | $ | 0 | $ | 0 | $ | 0 | _ | $ | 0 | $ | 0 | $ | 0 | $ | 52,500 | (2) | ||||||||||||||
President | 2018 | $ | 25,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 25,000 | (2) |
(1) | Under the terms of his employment agreement, Mr., Ward receives an annual salary of $250,000 and an annual cash bonus of $100,000. For the years ended December 31, 2018 and 2019, Edgar Ward received $176,070.93 and $197,500, of the annual compensation of $350,000 due him, respectively. |
(2) | For the years ended December 31, 2018 and 2019 Neil Catania received cash compensation of $25,000 and $0, respectively. |
Edgar Ward is the sole member of our board of Directors. Mr. Ward is not compensated for his service as a director.
Our board of directors determines the compensation paid to our executive officers based upon the years of service to us, whether services are provided on a full-time basis and the experience and level of skill required. Because Mr. Ward is our sole director, he determines his own compensation for his services as our Chief Executive Officer and President.
We may award our officers and directors shares of common stock as non-cash compensation as determined by the board of directors from time to time. The board will base its decision to grant common stock as compensation on the level of skill required to perform the services rendered and time committed to providing services to us.
Outstanding Equity Awards at Fiscal Year-End
There were no outstanding equity awards at the 2019 fiscal year-end.
Compensation Plans
We have not adopted any compensation plan to provide for future compensation of any of our directors or executive officers.
66 |
Employment Agreements
On January 13, 2017 we entered into an employment agreement with our President and CEO, Edgar Ward. The term of this agreement began on January 13, 2017 and ends on January 1, 2022. Pursuant to this agreement, we agreed to compensate Mr. Ward for his services as an executive officer with a base salary of $250,000 per year and a bonus of $100,000 per year.
The Company is not currently party to any other employment agreements.
Item 12. Security Ownership of Certain Beneficial Owners and Management
At March 19, 2021, we had 160,740,190 shares of our common stock issued and outstanding, 1,000 shares of our Series A Preferred stock issued and outstanding, and 20 shares of our Series B Preferred issued and outstanding. The following table sets forth information regarding the beneficial ownership of our common stock, Series A Preferred stock and Series B Preferred stock as of March 19, 2021 by:
● | each person known by us to be the beneficial owner of more than 5% of our common stock; | |
● | each of our directors; | |
● | each of our named executive officers; and | |
● | our executive officers and directors as a group. |
Unless otherwise indicated, the business address of each person listed is in care of the Company, 6601 Lyons Road, Suite L-6, Coconut Creek Florida 33037. The amounts and percentages of our common stock beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,” which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has the right to acquire beneficial ownership within 60 days. Under these rules more than one person may be deemed a beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest.
Unless otherwise indicated below, to the best of our knowledge each beneficial owner named in the table has sole voting and sole investment power with respect to all shares beneficially owned, subject to community property laws where applicable.
Common Stock | Direct | Indirect | Total | Percentage of Class(1) | ||||||||||||
Name & Address of Beneficial Owner | ||||||||||||||||
Edgar Ward, Founder, Chief Executive Officer, President & Sole Director(3) | 38,274,792 | (3) | 1,000,000 | 39,274,792 | 24.43 | % | ||||||||||
Neil Catania Vice President(9) | 16,270,571 | – | 16,270,571 | 10.12 | % | |||||||||||
All Executive Officers & Directors as a Group (2) Persons | 33,045,363 | 1,000,000 | 55,545,363 | 34.56 | % | |||||||||||
5% Holders | – | – | – | – | ||||||||||||
Kahn Family Limited PT II(4) | 25,136,439 | – | 25,136,439 | 15.64 | % | |||||||||||
NewLeaf Assets, LLC (5) | 26,714,705 | 26,714,705 | 16.62 | % | ||||||||||||
27 Health Inc. (6) | 12,500,000 | - | 12,500,000 | 7.78 | % |
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Series A Preferred Stock | Direct | Indirect | Total | Percentage of Class(2) | ||||||||||||
Name & Address of Beneficial Owner | – | – | – | – | ||||||||||||
Edgar Ward, Founder, Chief Executive Officer, President & Sole Director | 1,000 | 0 | 1,000 | 100 | % | |||||||||||
Neil Catania, Vice President | 0 | 0 | 0 | 0 | ||||||||||||
All Executive Officers & Directors as a Group (2) Persons | 1,000 | 0 | 1,000 | 100 | % | |||||||||||
5% Holders | ||||||||||||||||
None. |
Series B Preferred Stock | Direct | Indirect | Total | Percentage of Class(7) | ||||||||||||
Name & Address of Beneficial Owner | – | – | – | – | ||||||||||||
Edgar Ward, Founder, Chief Executive Officer, President & Sole Director | 0 | 0 | 0 | 0 | ||||||||||||
Neil Catania, Vice President | 0 | 0 | 0 | 0 | ||||||||||||
All Executive Officers & Directors as a Group (2) Persons | 0 | 0 | 0 | 0 | ||||||||||||
5% Holders | ||||||||||||||||
John Boldis | 2 | 0 | 2 | 10.00 | % | |||||||||||
Draper Inc.(8) | 16 | 0 | 16 | 80.00 | % | |||||||||||
Thomas Reid | 2 | 0 | 2 | 10.00 | % |
(1) | Based upon 160,740,190 shares of common stock issued and outstanding as of March 19, 2021. |
(2) | Based upon 1,000 shares of Series A Preferred Stock issued and outstanding as of March 19, 2021. Each share of Series A Preferred Stock is entitled to 500,000 votes per share or an aggregate of 500,000,000 votes. |
(3) | Our Founder, Chief Executive Officer, President and Director, Edgar Ward, holds all 1,000 shares of our Series A Preferred Stock which entitled him to an aggregate of 500,000,000 votes. Mr. Ward also holds 23,274,792 common shares directly and 1,000,000 shares indirectly which are held by Nicole Archon who is Mr. Ward’s fiancé. Mr. Ward also holds warrants for 15,000,000 common shares which are exercisable within 60 days of the date hereof. |
(4) | Kahn Family Limited PT II is a trust controlled by Harvey Kahn who has dispositive and voting power over the shares held by Kahn Family Limited PT II. Kahn Family Limited PT II also holds warrants to purchase 5,294,117 common shares which are exercisable within 60 days of the date hereof. |
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(5) | NewLeaf Assets, LLC also holds warrants to purchase 10,950,000 common shares which are exercisable within 60 days of the date hereof. NewLeaf Assets, LLC is owned and controlled by Mitchell Pasin, who has dipositive and voting power over the shares held by NewLeaf Assets, LLC. |
(6) | 27 Health Inc. is owned and controlled by Joseph Frontiere, who has dispositive and voting power over the shares held by 27 Health Inc. |
(7) | Based upon 20 shares of our Series B Preferred issued and outstanding as of March 19, 2021. Each share of Series B Preferred Stock will vote together with the holders of the Common Stock on any matter submitted to the shareholders of the Company. |
(8) | Draper Inc. is owned and controlled by Denise Aversano, who has dispositive and voting control over the shares held by Draper Inc. |
(9) | Neil Catania holds warrants for 7,500,000 common shares which are exercisable within 60 days of the date hereof. |
Item 13. Certain Relationships and Related Transactions, and Director Independence.
We do not have a written policy for the review, approval or ratification of transactions with related parties or conflicted transactions.
During the fiscal years ended December 31, 2018 and 2019, we had the following transactions with related persons.
On July 25, 2018, we entered into an agreement with Breadfruit Tree DBA NFSkin, a Florida corporation whereby we agreed to pay them 15% of their net sales of our product. The 15% is payable in up to 3,000,000 shares of our common stock which the number of shares will be calculated based on a value of $.20 per share. On September 10, 2018, we issued 514,549 of the shares issuable under the agreement.
On July 31, 2018, we entered into an agreement as amended March 10, 2019, with New Leaf Assets, LLC, a Delaware limited liability company, wherein NewLeaf invested the sums of $250,000, $130,000 and $1,000,000 in our securities on July 31, 2018, August 31, 2018 and March 15, 2019, respectively. On July 31, 2018, NewLeaf was granted 2,000,0000 shares on the Company’s common stock and warrants to purchase 625,000 shares of the Company’s common stock at the price of $.20 per share at any time for a period of three (3) years. On August 31, 2018 NewLeaf received warrants to purchase 325,000 shares of the Company’s common stock at the price of $.20 per share at any time for a period of three (3) years. On March 15, 2019, NewLeaf was issued 13,764,705 common shares, granted warrants to purchase an additional 10 million common shares at the price of $.20 per share at anytime until March 4, 2022 and an option to purchase an aggregate of 7,647,058 common shares at the aggregate price of $650,000 at any time prior to April 8, 2019. As a result, NewLeaf holds an aggregate of 15,764,705 of the Company’s common shares at an average price of $.0726 per share, warrants to purchase an additional 10,950,000 common shares and an option to purchase an additional 7,647,058 common shares for an aggregate price of $650,000 at any time prior to April 8, 2019. This option was never exercised and therefore expired.
On December 21, 2018, we issued 5,294,117 common shares to Kahn Family Limited PT II for a price of $.085 per share or an aggregate of $449,479.50 On February 1, 2019, we issued 7,647,059 common shares to Kahn Family Limited PT II for a price of $.085 per share or an aggregate of $650,000. On February 8, 2019, we issued 2,941,176 common shares to Kahn Family Limited PT II for a price of $.085 per share or an aggregate of $650,000. On March 12, 2019, we issued 300,000 common shares to Kahn Family Limited PT II for services rendered for a price of $.0001 per share or an aggregate of $30.
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Director Independence
We do not have any independent directors, as such term is defined in the listing standards of The NASDAQ Stock Market, at this time. The Company is not quoted on any exchange that requires director independence requirements. For purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 4200(a)(15). See “Directors, Executive Officers and Corporate Governance”— “Director Independence.”
Item 14. Principal Accounting Fees and Services
The following table sets forth the fees billed or to be billed to our company for the years ended December 31, 2018 and 2019 for professional services rendered by our current independent registered public accounting firm Rotenberg Meril Solomon Bertiger & Guttilla, P.C. (“Rotenberg”) which was engaged by us effective as of September 16, 2020.
ACCOUNTING FEES AND SERVICES | 2019 | 2018 | ||||||
Audit fees | $ | 30,000 | $ |
- |
||||
Audit-related fees | - | - | ||||||
Tax fees | - | - | ||||||
All other fees | - | - | ||||||
Total | $ | 30,000 | $ | - |
Audit Fees
Audit fees to Rotenberg were for professional services rendered for the audit of our annual financial statements for the year ended December 31, 2019.
Audit-Related Fees
We did not incur any audit related fees, other than the fees discussed in Audit Fees, above, for services related to our audit for the fiscal years ended December 31, 2019.
Tax Fees
None.
All Other Fees
None.
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The following table sets forth the fees billed or to be billed to our company for the years December 31, 2018 and 2019, for professional services rendered by Daszkal Bolton LLP (“Daszkal”) our former independent registered public accounting firm which resigned as our independent registered accounting firm on September 11, 2020.
Fees | 2019 | 2018 | ||||||
Audit Fees | $ |
32,500 |
$ |
62,920 |
||||
Audit-Related Fees | - | - | ||||||
Tax Fees | - | - | ||||||
Other Fees | - | - | ||||||
Total Fees | $ |
32,500 |
$ |
62,920 |
Audit Fees
For our fiscal years ended December 31, 2018 and December 31, 2019, we were billed approximately $62,920 and $32,500 respectively, for professional services rendered for the audit and reviews of our financial statements by Daszkal.
Audit Related Fees
We did not incur any audit related fees, other than the fees discussed in Audit Fees, above, for services related to our audit for the fiscal years ended December 31, 2019 and December 31, 2018.
Tax Fees
None
All Other Fees
None
Pre-Approval of Services
We do not have an audit committee. As a result, our Board of Directors performs the duties of an audit committee. Our Board of Directors evaluates and approves in advance the scope and cost of the engagement of an auditor before the auditor renders the audit and non-audit services. We do not rely on pre-approval policies and procedures.
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Item 15. Exhibits and Financial Statement Schedules
EXHIBITS
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73 |
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101.INS* | XBRL INSTANCE |
101.SCH* | XBRL TAXONOMY EXTENSION SCHEMA |
101.CAL* | XBRL TAXONOMY EXTENSION CALCULATION |
101.DEF* | XBRL TAXONOMY EXTENSION DEFINITION |
101.LAB* | XBRL TAXONOMY EXTENSION LABELS |
101.PRE* | XBRL TAXONOMY EXTENSION PRESENTATION |
*Filed herewith.
None.
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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
NutraLife BioSciences, Inc. | ||
Dated: March 19, 2021 | By: | /s/ Edgar Ward |
Edgar Ward | ||
Chief Executive Officer (principal executive, accounting, and financial officer) |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature | Title | Date | ||
/s/ Edgar Ward | Chief Executive Officer and Sole Director | March 19, 2021 | ||
Edgar Ward | (principal executive officer and principal financials and accounting officer) |
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Exhibit 4.1
NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY 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 UNDER 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. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
COMMON STOCK PURCHASE WARRANT
NutraLife BioSciences, Inc.
Warrant Shares: 2,800,000 | Issue Date: 12/04/2020 |
THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, $70,000.00 (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 the Issue Date as set forth above (the “Issue Date”) and on or prior to 5:00 p.m. (New York City time) on the third anniversary of the Issue Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from NutraLife BioSciences, Inc., a Florida corporation (the “Company”), up to the number shares set forth above (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), subject to adjustment as set forth herein.
Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Subscription Agreement (the “Agreement”), dated December 4th, 2020, among the Company and the Holder. This Warrant is subject to the terms and conditions of the Agreement and, in the event of a conflict between the Agreement and this Warrant, the terms and conditions of this Warrant shall control. In addition, for purposes herein:
(a) The Company and the Holder may be referred to herein individually as a “Party” and collectively as the “Parties”.
(b) “Affiliate” means, with respect to a specified Person, any other Person that directly or indirectly Controls, is Controlled by or is under common Control with, the specified Person.
(c) “Business Day” means any day except Saturday, Sunday and any legal holiday or a day on which banking institutions in Florida generally are authorized or required by Law or other governmental actions to close.
(d) “Control” means (a) the possession, directly or indirectly, of the power to vote 10% or more of the securities or other equity interests of a Person having ordinary voting power, (b) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, by contractor otherwise, or (c) being a director, officer, executor, trustee or fiduciary (or their equivalents) of a Person or a Person that controls such Person.
(e) “Person” means a natural person, a corporation, a limited liability company, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or any agency or instrumentality thereof.
(f) “Transfer Agent” means the Company’s transfer agent for the Common Stock as in place from time to time.
Section 2. Exercise.
(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 Issue Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or PDF copy submitted by e-mail with return receipt requested (or e-mail attachment to an e-mail with return receipt requested) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days (as defined bellow) and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(f)(i)) following the date of exercise as aforesaid, the Holder shall deliver to the Company the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) 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 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 exercised the rights to purchase 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 together with the final Notice of Exercise as 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, and the records of the Company shall be deemed controlling in the absence of manifest error. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this Section 2(a), 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.
(b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $0.08, subject to adjustment hereunder (the “Exercise Price”).
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(c) Cashless Exercise. In the event that (1) the Warrant Shares are not registered for resale pursuant to a registration statement under the Securities Act of 1933, as amended (the “Securities Act”) as of the date of the delivery of a Notice of Exercise and (2) the Market Price (as defined below) of one share of Common Stock is greater than the Exercise Price in effect at such time, 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 computed using the following formula:
X= Y(A-B)
A
Where:
X | = | The number of Warrant Shares to be issued to Holder | |
Y | = | the number of Warrant Shares that the Holder elects to purchase under this Warrant (at the date of such calculation) | |
A | = | the Market Price (at the date of such calculation) | |
B | = | the Exercise Price (as adjusted to the date of such calculation) |
(d) Characteristics. 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 characteristics of the Warrants being exercised, and the holding period of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(d).
(e) Market Price. “Market Price” for the Common Stock (or any replacement security pursuant to Section 3(b)) means, for any security as of any date, the first of the following which shall apply:
(i) | the dollar volume-weighted average price for such security on the OTC Markets or a United States national securities exchange which is the principal market on which such security is then traded (as applicable, the “Trading Market”) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg L.P. through its “HP” function (set to weighted average) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg L.P.; | |
(ii) | if no dollar volume-weighted average price is reported for such security by Bloomberg L.P. for such hours as set forth in Section 2(e)(i), the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC); and |
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(iii) | if the Market Price cannot be calculated for such security on such date on bases as set forth in Section 2(e)(i) or Section 2(e)(ii), the Market Price of such security on such date shall be the fair market value of such security as mutually determined in good faith by the Board of Directors of the Company and the Holder after taking into consideration factors they may each deem appropriate. |
(f) 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 by 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 (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 (assuming cashless exercise of the Warrants), and 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 the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period 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) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. 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. For purposes herein, “Trading Day” means any day on which the Common Stock (or any replacement security pursuant to Section 3(b)) is traded on the Trading Market or is otherwise reported on “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC) or a similar organization or agency succeeding to its functions of reporting prices. |
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(ii) | Delivery of New Warrants Upon Partial 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) | 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. | |
(iv) | 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 of the Company in respect of the issuance of such Warrant Shares, all of which taxes and Company 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. |
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(g) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and the 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 Person 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, non exercised 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 non converted 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(g), 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 and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(g) 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, and the Company shall have no obligation to verify or confirm the accuracy of such 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(g), 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 two 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 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(g), provided that the Beneficial Ownership Limitation in no event exceeds 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(g) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this Section 2(g) shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(g) to correct this Section 2(g) (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 Section 2(g) shall apply to a successor holder of this Warrant.
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Section 3. Certain Adjustments.
(a) Stock Splits. If any time while this Warrant is outstanding, the Company effects a forward split or reverse split of the Common Stock, the number of Warrant Shares shall be appropriately adjusted, with any partial resulting Warrant Share being rounded up to the next nearest whole number and the Exercise Price shall be proportionately adjusted such that the aggregate Exercise Price payable hereunder shall remain unchanged. By way of example and not limitation, (i) in the event that the Company effects a two-for-one forward split of the Common Stock, wherein each issued and outstanding share of Common Stock is converted into two shares of Common Stock, the number of Warrant Shares shall be increased by 100% and the Exercise Price shall be reduced by 50%; and (ii) in the event that the Company effects a one-for-two reverse split of the Common Stock, wherein each two issued and outstanding shares of Common Stock are converted into one share of Common Stock, the number of Warrant Shares shall be reduced by 50% and the Exercise Price shall be increased by 100%.
(b) 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 (and all of its Subsidiaries, taken as a whole), 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, merger 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, 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(g) 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 in accordance with the provisions of this Section 3(b) 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 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 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 with the same effect as if such Successor Entity had been named as the Company herein.
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(c) 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.
(d) Notice to Holder of 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.
(e) Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during the term of this Warrant, subject to the prior written consent of the Holder, reduce the then-current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.
Section 4. Transfer of Warrant; Legend.
(a) No Transfer. This Warrant may not be transferred by the Holder to any other person or entity without the prior written approval of the Company, to be given or withheld in the sole discretion of the Company, and any such attempted transfer in violation of such limitation shall be null and void and of no force or effect.
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(b) Legends. Any legend required by the securities laws of any state to the extent such laws are applicable to the Warrant Shares represented by the certificate so legended shall be included on any certificates representing the Warrant Shares. Holder also understands that the Warrant Shares may bear the following or a substantially similar legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION ARE NOT REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE NOT SET FORTH HEREIN.
Section 5. Miscellaneous.
(a) No Rights as Stockholder Until Exercise; No Settlement in Cash. 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(f)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(f)(i) and Section 2(f)(iii), in no event shall the Company be required to net cash settle an exercise of this Warrant.
(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) Entire Agreement. This Warrant (including any recitals hereto) and the Agreement set forth the entire understanding of the Parties with respect to the subject matter hereof, and shall not be modified or affected by any offer, proposal, statement or representation, oral or written, made by or for any Party in connection with the negotiation of the terms hereof, and may be modified only by instruments signed by the Company and the Holder.
(d) 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.
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(e) Notices. All notices under this Warrant shall be in writing. Notices may be served by certified or registered mail, postage paid with return receipt requested; by private courier, prepaid; by other reliable form of electronic communication; or personally. Mailed notices shall be deemed delivered five (5) days after mailing, properly addressed. Couriered notices shall be deemed delivered on the date that the courier warrants that delivery will occur. Electronic communication notices shall be deemed delivered when receipt is either confirmed by confirming transmission equipment or acknowledged by the addressee or its office. Personal delivery shall be effective when accomplished. Any Party may change its address by giving notice, in writing, stating its new address, to the other Party. Subject to the forgoing, notices shall be sent as follows:
If to the Company:
NutraLife Biosciences, Inc.
Attn: Edgar Ward
6601 Lyons Road, Suite L-6
Coconut Creek, FL 33073
Email: edgar@nutralifebiosciences.com
If to Holder, to the address of Holder as set forth in the 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) No Waiver. No waiver of any provision of this Warrant shall be effective unless it is in writing and signed by the Party against whom it is asserted, and any such written waiver shall only be applicable to the specific instance to which it relates and shall not be deemed to be a continuing or future waiver.
(h) Headings. The article and section headings contained in this Warrant are inserted for convenience only and shall not affect in any way the meaning or interpretation of the Warrant.
(i) Governing Law. This Warrant, and any dispute arising out of, relating to, or in connection with this Warrant, shall be governed by and construed in accordance with the laws of the State of Florida, without giving effect to any choice or conflict of law provision or rule (whether of the State of Florida or of any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Florida.
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(j) Enforcement of the Warrant; Jurisdiction; No Jury Trial.
(i) | Each of the Parties irrevocably agrees that any legal action or proceeding with respect to this Warrant and the rights and obligations arising under this Warrant, or for recognition and enforcement of any judgment or arbitral award or resolution in respect of this Warrant, shall be brought and determined exclusively in the courts of the State of Florida located in Broward County, Florida or in the event (but only in the event) that such courts do not have subject matter jurisdiction over such action or proceeding, in the United States District Court sitting in Broward County, Florida (the “Selected Courts”). Each of the Parties hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the Selected Courts and agrees that it will not bring any action relating to this Warrant or any of the transactions contemplated by this Warrant in any court other than the Selected Courts. Each of the Parties hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Warrant, (a) any claim that it is not personally subject to the jurisdiction of the Selected Courts for any reason other than the failure to serve in accordance with the provisions of this Warrant; (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise); and (c) to the fullest extent permitted by law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum; (ii) the venue of such suit, action or proceeding is improper; or (iii) this Warrant, or the subject matter of this Warrant, may not be enforced in or by the Selected Courts. | |
(ii) | EACH PARTY TO THIS WARRANT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR OTHER PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER, RELATING TO OR IN CONNECTION WITH THIS WARRANT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. | |
(iii) | The Holder hereby expressly acknowledges that the agreements and restrictions contained herein are reasonable and necessary to protect the Company’s legitimate interests, that the Company would not have entered into this Warrant in the absence of such agreements and restrictions, and that any violation of such restrictions will result in irreparable harm to the Company. The Holder agrees that the Company shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, and specific performance of, as well as an equitable accounting of all earnings, profits and other benefits arising from any violation of, the agreements and restrictions contained herein, which rights shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled. The Holder irrevocably and unconditionally (i) agrees that any legal proceeding arising out of this Warrant may be brought in the Selected Courts, (ii) consents to the non-exclusive jurisdiction of the Selected Courts in any such proceeding, and (iii) waives any objection to the laying of venue of any such proceeding in any Selected Court. |
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(k) Attorneys’ Fees. If any Party hereto is required to engage in litigation against any other Party, either as plaintiff or as defendant, in order to enforce or defend any rights under this Warrant, and such litigation results in a final judgment in favor of such Party (“Prevailing Party”), then the party or parties against whom said final judgment is obtained shall reimburse the Prevailing Party for all direct, indirect or incidental expenses incurred, including, but not limited to, all attorneys’ fees, court costs and other expenses incurred throughout all negotiations, trials or appeals undertaken in order to enforce the Prevailing Party’s rights hereunder.
(l) Parties in Interest. This Warrant shall be binding upon and inure solely to the benefit of each Party, and nothing in this Warrant, express or implied, is intended to confer upon any other person or entity any rights or remedies of any nature under or by reason of this Warrant.
(m) Severability; Expenses; Further Assurances. If any term, condition or other provision of this Warrant is determined by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms, conditions and provisions of this Warrant shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by this Warrant is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Warrant so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated by this Warrant be consummated as originally contemplated to the fullest extent possible. Except as otherwise specifically provided in this Warrant, each Party shall be responsible for the expenses it may incur in connection with the negotiation, preparation, execution, delivery, performance and enforcement of this Warrant. The Parties shall from time to time do and perform any additional acts and execute and deliver any additional documents and instruments that may be required by Law or reasonably requested by any Party to establish, maintain or protect its rights and remedies under, or to effect the intents and purposes of, this Warrant.
(n) Execution in Counterparts, Electronic Transmission. This Warrant may be executed in any number of counterparts, each of which shall be deemed an original. The signature of any Party which is transmitted by any reliable electronic means such as, but not limited to, a photocopy, electronically scanned or facsimile machine, for purposes hereof, is to be considered as an original signature, and the document transmitted is to be considered to have the same binding effect as an original signature or an original document.
(o) No Assignment. This Warrant may not be assigned by either Party without the prior written consent of the other Party in its sole discretion.
(p) Currency. All dollar amounts are in U.S. dollars.
********************
(SIGNATURE PAGE FOLLOWS)
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the Issue Date.
NutraLife BioSciences, Inc. | ||
By: | /s/ Edgar Ward | |
Name: | Edgar Ward | |
Title: | Chief Executive Officer |
Agreed and accepted: 12/04/2020
By: | /s/ Russell S. Smith Sr. | |
Name: | Russell S. Smith Sr. |
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NOTICE OF EXERCISE
TO: NutraLife BioSciences, 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 Section 2(c) of the attached Warrant, to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in such in Section 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:
Name of Holder:
By:
Name:
Title:
Date: __________ __, 202_
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Exhibit 4.2
NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY 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 UNDER 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. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
COMMON STOCK PURCHASE WARRANT
NutraLife BioSciences, Inc.
Warrant Shares: 1,000,000 | Issue Date: February 11th, 2021 |
THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, Thomas Reid (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 the Issue Date as set forth above (the “Issue Date”) and on or prior to 5:00 p.m. (New York City time) on the third anniversary of the Issue Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from NutraLife BioSciences, Inc., a Florida corporation (the “Company”), up to the number shares set forth above (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), subject to adjustment as set forth herein.
Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Subscription Agreement (the “Agreement”), dated February 11th, 2021, among the Company and the Holder. This Warrant is subject to the terms and conditions of the Agreement and, in the event of a conflict between the Agreement and this Warrant, the terms and conditions of this Warrant shall control. In addition, for purposes herein:
(a) The Company and the Holder may be referred to herein individually as a “Party” and collectively as the “Parties”.
(b) “Affiliate” means, with respect to a specified Person, any other Person that directly or indirectly Controls, is Controlled by or is under common Control with, the specified Person.
(c) “Business Day” means any day except Saturday, Sunday and any legal holiday or a day on which banking institutions in Florida generally are authorized or required by Law or other governmental actions to close.
(d) “Control” means (a) the possession, directly or indirectly, of the power to vote 10% or more of the securities or other equity interests of a Person having ordinary voting power, (b) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, by contractor otherwise, or (c) being a director, officer, executor, trustee or fiduciary (or their equivalents) of a Person or a Person that controls such Person.
(e) “Person” means a natural person, a corporation, a limited liability company, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or any agency or instrumentality thereof.
(f) “Transfer Agent” means the Company’s transfer agent for the Common Stock as in place from time to time.
Section 2. Exercise.
(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 Issue Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or PDF copy submitted by e-mail with return receipt requested (or e-mail attachment to an e-mail with return receipt requested) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days (as defined bellow) and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(f)(i)) following the date of exercise as aforesaid, the Holder shall deliver to the Company the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) 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 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 exercised the rights to purchase 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 together with the final Notice of Exercise as 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, and the records of the Company shall be deemed controlling in the absence of manifest error. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this Section 2(a), 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.
(b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $0.08, subject to adjustment hereunder (the “Exercise Price”).
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(c) Cashless Exercise. In the event that (1) the Warrant Shares are not registered for resale pursuant to a registration statement under the Securities Act of 1933, as amended (the “Securities Act”) as of the date of the delivery of a Notice of Exercise and (2) the Market Price (as defined below) of one share of Common Stock is greater than the Exercise Price in effect at such time, 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 computed using the following formula:
X= Y(A-B)
A
Where:
X | = | The number of Warrant Shares to be issued to Holder | |
Y | = | the number of Warrant Shares that the Holder elects to purchase under this Warrant (at the date of such calculation) | |
A | = | the Market Price (at the date of such calculation) | |
B | = | the Exercise Price (as adjusted to the date of such calculation) |
(d) Characteristics. 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 characteristics of the Warrants being exercised, and the holding period of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(d).
(e) Market Price. “Market Price” for the Common Stock (or any replacement security pursuant to Section 3(b)) means, for any security as of any date, the first of the following which shall apply:
(i) | the dollar volume-weighted average price for such security on the OTC Markets or a United States national securities exchange which is the principal market on which such security is then traded (as applicable, the “Trading Market”) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg L.P. through its “HP” function (set to weighted average) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg L.P.; | |
(ii) | if no dollar volume-weighted average price is reported for such security by Bloomberg L.P. for such hours as set forth in Section 2(e)(i), the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC); and |
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(iii) | if the Market Price cannot be calculated for such security on such date on bases as set forth in Section 2(e)(i) or Section 2(e)(ii), the Market Price of such security on such date shall be the fair market value of such security as mutually determined in good faith by the Board of Directors of the Company and the Holder after taking into consideration factors they may each deem appropriate. |
(f) 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 by 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 (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 (assuming cashless exercise of the Warrants), and 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 the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period 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) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. 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. For purposes herein, “Trading Day” means any day on which the Common Stock (or any replacement security pursuant to Section 3(b)) is traded on the Trading Market or is otherwise reported on “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC) or a similar organization or agency succeeding to its functions of reporting prices. |
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(ii) | Delivery of New Warrants Upon Partial 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) | 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. | |
(iv) | 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 of the Company in respect of the issuance of such Warrant Shares, all of which taxes and Company 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. |
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(g) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and the 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 Person 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, non exercised 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 non converted 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(g), 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 and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(g) 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, and the Company shall have no obligation to verify or confirm the accuracy of such 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(g), 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 two 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 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(g), provided that the Beneficial Ownership Limitation in no event exceeds 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(g) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this Section 2(g) shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(g) to correct this Section 2(g) (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 Section 2(g) shall apply to a successor holder of this Warrant.
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Section 3. Certain Adjustments.
(a) Stock Splits. If any time while this Warrant is outstanding, the Company effects a forward split or reverse split of the Common Stock, the number of Warrant Shares shall be appropriately adjusted, with any partial resulting Warrant Share being rounded up to the next nearest whole number and the Exercise Price shall be proportionately adjusted such that the aggregate Exercise Price payable hereunder shall remain unchanged. By way of example and not limitation, (i) in the event that the Company effects a two-for-one forward split of the Common Stock, wherein each issued and outstanding share of Common Stock is converted into two shares of Common Stock, the number of Warrant Shares shall be increased by 100% and the Exercise Price shall be reduced by 50%; and (ii) in the event that the Company effects a one-for-two reverse split of the Common Stock, wherein each two issued and outstanding shares of Common Stock are converted into one share of Common Stock, the number of Warrant Shares shall be reduced by 50% and the Exercise Price shall be increased by 100%.
(b) 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 (and all of its Subsidiaries, taken as a whole), 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, merger 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, 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(g) 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 in accordance with the provisions of this Section 3(b) 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 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 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 with the same effect as if such Successor Entity had been named as the Company herein.
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(c) 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.
(d) Notice to Holder of 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.
(e) Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during the term of this Warrant, subject to the prior written consent of the Holder, reduce the then-current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.
Section 4. Transfer of Warrant; Legend.
(a) No Transfer. This Warrant may not be transferred by the Holder to any other person or entity without the prior written approval of the Company, to be given or withheld in the sole discretion of the Company, and any such attempted transfer in violation of such limitation shall be null and void and of no force or effect.
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(b) Legends. Any legend required by the securities laws of any state to the extent such laws are applicable to the Warrant Shares represented by the certificate so legended shall be included on any certificates representing the Warrant Shares. Holder also understands that the Warrant Shares may bear the following or a substantially similar legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION ARE NOT REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE NOT SET FORTH HEREIN.
Section 5. Miscellaneous.
(a) No Rights as Stockholder Until Exercise; No Settlement in Cash. 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(f)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(f)(i) and Section 2(f)(iii), in no event shall the Company be required to net cash settle an exercise of this Warrant.
(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) Entire Agreement. This Warrant (including any recitals hereto) and the Agreement set forth the entire understanding of the Parties with respect to the subject matter hereof, and shall not be modified or affected by any offer, proposal, statement or representation, oral or written, made by or for any Party in connection with the negotiation of the terms hereof, and may be modified only by instruments signed by the Company and the Holder.
(d) 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.
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(e) Notices. All notices under this Warrant shall be in writing. Notices may be served by certified or registered mail, postage paid with return receipt requested; by private courier, prepaid; by other reliable form of electronic communication; or personally. Mailed notices shall be deemed delivered five (5) days after mailing, properly addressed. Couriered notices shall be deemed delivered on the date that the courier warrants that delivery will occur. Electronic communication notices shall be deemed delivered when receipt is either confirmed by confirming transmission equipment or acknowledged by the addressee or its office. Personal delivery shall be effective when accomplished. Any Party may change its address by giving notice, in writing, stating its new address, to the other Party. Subject to the forgoing, notices shall be sent as follows:
If to the Company:
NutraLife Biosciences, Inc.
Attn: Edgar Ward
6601 Lyons Road, Suite L-6
Coconut Creek, FL 33073
Email: edgar@nutralifebiosciences.com
If to Holder, to the address of Holder as set forth in the 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) No Waiver. No waiver of any provision of this Warrant shall be effective unless it is in writing and signed by the Party against whom it is asserted, and any such written waiver shall only be applicable to the specific instance to which it relates and shall not be deemed to be a continuing or future waiver.
(h) Headings. The article and section headings contained in this Warrant are inserted for convenience only and shall not affect in any way the meaning or interpretation of the Warrant.
(i) Governing Law. This Warrant, and any dispute arising out of, relating to, or in connection with this Warrant, shall be governed by and construed in accordance with the laws of the State of Florida, without giving effect to any choice or conflict of law provision or rule (whether of the State of Florida or of any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Florida.
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(j) Enforcement of the Warrant; Jurisdiction; No Jury Trial.
(i) | Each of the Parties irrevocably agrees that any legal action or proceeding with respect to this Warrant and the rights and obligations arising under this Warrant, or for recognition and enforcement of any judgment or arbitral award or resolution in respect of this Warrant, shall be brought and determined exclusively in the courts of the State of Florida located in Broward County, Florida or in the event (but only in the event) that such courts do not have subject matter jurisdiction over such action or proceeding, in the United States District Court sitting in Broward County, Florida (the “Selected Courts”). Each of the Parties hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the Selected Courts and agrees that it will not bring any action relating to this Warrant or any of the transactions contemplated by this Warrant in any court other than the Selected Courts. Each of the Parties hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Warrant, (a) any claim that it is not personally subject to the jurisdiction of the Selected Courts for any reason other than the failure to serve in accordance with the provisions of this Warrant; (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise); and (c) to the fullest extent permitted by law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum; (ii) the venue of such suit, action or proceeding is improper; or (iii) this Warrant, or the subject matter of this Warrant, may not be enforced in or by the Selected Courts. | |
(ii) | EACH PARTY TO THIS WARRANT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR OTHER PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER, RELATING TO OR IN CONNECTION WITH THIS WARRANT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. | |
(iii) | The Holder hereby expressly acknowledges that the agreements and restrictions contained herein are reasonable and necessary to protect the Company’s legitimate interests, that the Company would not have entered into this Warrant in the absence of such agreements and restrictions, and that any violation of such restrictions will result in irreparable harm to the Company. The Holder agrees that the Company shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, and specific performance of, as well as an equitable accounting of all earnings, profits and other benefits arising from any violation of, the agreements and restrictions contained herein, which rights shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled. The Holder irrevocably and unconditionally (i) agrees that any legal proceeding arising out of this Warrant may be brought in the Selected Courts, (ii) consents to the non-exclusive jurisdiction of the Selected Courts in any such proceeding, and (iii) waives any objection to the laying of venue of any such proceeding in any Selected Court. |
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(k) Attorneys’ Fees. If any Party hereto is required to engage in litigation against any other Party, either as plaintiff or as defendant, in order to enforce or defend any rights under this Warrant, and such litigation results in a final judgment in favor of such Party (“Prevailing Party”), then the party or parties against whom said final judgment is obtained shall reimburse the Prevailing Party for all direct, indirect or incidental expenses incurred, including, but not limited to, all attorneys’ fees, court costs and other expenses incurred throughout all negotiations, trials or appeals undertaken in order to enforce the Prevailing Party’s rights hereunder.
(l) Parties in Interest. This Warrant shall be binding upon and inure solely to the benefit of each Party, and nothing in this Warrant, express or implied, is intended to confer upon any other person or entity any rights or remedies of any nature under or by reason of this Warrant.
(m) Severability; Expenses; Further Assurances. If any term, condition or other provision of this Warrant is determined by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms, conditions and provisions of this Warrant shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by this Warrant is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Warrant so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated by this Warrant be consummated as originally contemplated to the fullest extent possible. Except as otherwise specifically provided in this Warrant, each Party shall be responsible for the expenses it may incur in connection with the negotiation, preparation, execution, delivery, performance and enforcement of this Warrant. The Parties shall from time to time do and perform any additional acts and execute and deliver any additional documents and instruments that may be required by Law or reasonably requested by any Party to establish, maintain or protect its rights and remedies under, or to effect the intents and purposes of, this Warrant.
(n) Execution in Counterparts, Electronic Transmission. This Warrant may be executed in any number of counterparts, each of which shall be deemed an original. The signature of any Party which is transmitted by any reliable electronic means such as, but not limited to, a photocopy, electronically scanned or facsimile machine, for purposes hereof, is to be considered as an original signature, and the document transmitted is to be considered to have the same binding effect as an original signature or an original document.
(o) No Assignment. This Warrant may not be assigned by either Party without the prior written consent of the other Party in its sole discretion.
(p) Currency. All dollar amounts are in U.S. dollars.
********************
(Signature Page Follows)
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the Issue Date.
NutraLife BioSciences, Inc. | ||
By: | /s/ Edgar Ward | |
Name: | Edgar Ward | |
Title: | Chief Executive Officer |
Agreed and accepted:
By: | /s/ Thomas Reid | |
Name: | Thomas Reid |
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NOTICE OF EXERCISE
TO: NutraLife BioSciences, 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 Section 2(c) of the attached Warrant, to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in such in Section 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:
Name of Holder:
By:
Name:
Title:
Date: __________ __, 202_
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Exhibit 4.3
Exhibit 4.4
NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY 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 UNDER 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. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
COMMON STOCK PURCHASE WARRANT
NutraLife BioSciences, Inc.
Warrant Shares: 1,200,000 | Issue Date: February 23, 2021 |
THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, Mark Wakeland (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 the Issue Date as set forth above (the “Issue Date”) and on or prior to 5:00 p.m. (New York City time) on the third anniversary of the Issue Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from NutraLife BioSciences, Inc., a Florida corporation (the “Company”), up to the number shares set forth above (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), subject to adjustment as set forth herein.
Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Subscription Agreement (the “Agreement”), dated February 23, 2021, among the Company and the Holder. This Warrant is subject to the terms and conditions of the Agreement and, in the event of a conflict between the Agreement and this Warrant, the terms and conditions of this Warrant shall control. In addition, for purposes herein:
(a) The Company and the Holder may be referred to herein individually as a “Party” and collectively as the “Parties”.
(b) “Affiliate” means, with respect to a specified Person, any other Person that directly or indirectly Controls, is Controlled by or is under common Control with, the specified Person.
(c) “Business Day” means any day except Saturday, Sunday and any legal holiday or a day on which banking institutions in Florida generally are authorized or required by Law or other governmental actions to close.
(d) “Control” means (a) the possession, directly or indirectly, of the power to vote 10% or more of the securities or other equity interests of a Person having ordinary voting power, (b) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, by contractor otherwise, or (c) being a director, officer, executor, trustee or fiduciary (or their equivalents) of a Person or a Person that controls such Person.
(e) “Person” means a natural person, a corporation, a limited liability company, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or any agency or instrumentality thereof.
(f) “Transfer Agent” means the Company’s transfer agent for the Common Stock as in place from time to time.
Section 2. Exercise.
(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 Issue Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or PDF copy submitted by e-mail with return receipt requested (or e-mail attachment to an e-mail with return receipt requested) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days (as defined bellow) and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(f)(i)) following the date of exercise as aforesaid, the Holder shall deliver to the Company the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) 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 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 exercised the rights to purchase 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 together with the final Notice of Exercise as 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, and the records of the Company shall be deemed controlling in the absence of manifest error. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this Section 2(a), 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.
(b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $0.08, subject to adjustment hereunder (the “Exercise Price”).
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(c) Cashless Exercise. In the event that (1) the Warrant Shares are not registered for resale pursuant to a registration statement under the Securities Act of 1933, as amended (the “Securities Act”) as of the date of the delivery of a Notice of Exercise and (2) the Market Price (as defined below) of one share of Common Stock is greater than the Exercise Price in effect at such time, 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 computed using the following formula:
X= Y(A-B)
A
Where:
X | = | The number of Warrant Shares to be issued to Holder | |
Y | = | the number of Warrant Shares that the Holder elects to purchase under this Warrant (at the date of such calculation) | |
A | = | the Market Price (at the date of such calculation) | |
B | = | the Exercise Price (as adjusted to the date of such calculation) |
(d) Characteristics. 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 characteristics of the Warrants being exercised, and the holding period of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(d).
(e) Market Price. “Market Price” for the Common Stock (or any replacement security pursuant to Section 3(b)) means, for any security as of any date, the first of the following which shall apply:
(i) | the dollar volume-weighted average price for such security on the OTC Markets or a United States national securities exchange which is the principal market on which such security is then traded (as applicable, the “Trading Market”) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg L.P. through its “HP” function (set to weighted average) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg L.P.; | |
(ii) | if no dollar volume-weighted average price is reported for such security by Bloomberg L.P. for such hours as set forth in Section 2(e)(i), the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC); and |
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(iii) | if the Market Price cannot be calculated for such security on such date on bases as set forth in Section 2(e)(i) or Section 2(e)(ii), the Market Price of such security on such date shall be the fair market value of such security as mutually determined in good faith by the Board of Directors of the Company and the Holder after taking into consideration factors they may each deem appropriate. |
(f) 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 by 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 (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 (assuming cashless exercise of the Warrants), and 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 the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period 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) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. 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. For purposes herein, “Trading Day” means any day on which the Common Stock (or any replacement security pursuant to Section 3(b)) is traded on the Trading Market or is otherwise reported on “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC) or a similar organization or agency succeeding to its functions of reporting prices. |
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(ii) | Delivery of New Warrants Upon Partial 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) | 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. | |
(iv) | 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 of the Company in respect of the issuance of such Warrant Shares, all of which taxes and Company 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. |
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(g) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and the 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 Person 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, non exercised 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 non converted 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(g), 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 and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(g) 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, and the Company shall have no obligation to verify or confirm the accuracy of such 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(g), 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 two 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 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(g), provided that the Beneficial Ownership Limitation in no event exceeds 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(g) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this Section 2(g) shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(g) to correct this Section 2(g) (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 Section 2(g) shall apply to a successor holder of this Warrant.
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Section 3. Certain Adjustments.
(a) Stock Splits. If any time while this Warrant is outstanding, the Company effects a forward split or reverse split of the Common Stock, the number of Warrant Shares shall be appropriately adjusted, with any partial resulting Warrant Share being rounded up to the next nearest whole number and the Exercise Price shall be proportionately adjusted such that the aggregate Exercise Price payable hereunder shall remain unchanged. By way of example and not limitation, (i) in the event that the Company effects a two-for-one forward split of the Common Stock, wherein each issued and outstanding share of Common Stock is converted into two shares of Common Stock, the number of Warrant Shares shall be increased by 100% and the Exercise Price shall be reduced by 50%; and (ii) in the event that the Company effects a one-for-two reverse split of the Common Stock, wherein each two issued and outstanding shares of Common Stock are converted into one share of Common Stock, the number of Warrant Shares shall be reduced by 50% and the Exercise Price shall be increased by 100%.
(b) 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 (and all of its Subsidiaries, taken as a whole), 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, merger 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, 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(g) 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 in accordance with the provisions of this Section 3(b) 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 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 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 with the same effect as if such Successor Entity had been named as the Company herein.
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(c) 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.
(d) Notice to Holder of 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.
(e) Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during the term of this Warrant, subject to the prior written consent of the Holder, reduce the then-current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.
Section 4. Transfer of Warrant; Legend.
(a) No Transfer. This Warrant may not be transferred by the Holder to any other person or entity without the prior written approval of the Company, to be given or withheld in the sole discretion of the Company, and any such attempted transfer in violation of such limitation shall be null and void and of no force or effect.
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(b) Legends. Any legend required by the securities laws of any state to the extent such laws are applicable to the Warrant Shares represented by the certificate so legended shall be included on any certificates representing the Warrant Shares. Holder also understands that the Warrant Shares may bear the following or a substantially similar legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION ARE NOT REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE NOT SET FORTH HEREIN.
Section 5. Miscellaneous.
(a) No Rights as Stockholder Until Exercise; No Settlement in Cash. 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(f)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(f)(i) and Section 2(f)(iii), in no event shall the Company be required to net cash settle an exercise of this Warrant.
(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) Entire Agreement. This Warrant (including any recitals hereto) and the Agreement set forth the entire understanding of the Parties with respect to the subject matter hereof, and shall not be modified or affected by any offer, proposal, statement or representation, oral or written, made by or for any Party in connection with the negotiation of the terms hereof, and may be modified only by instruments signed by the Company and the Holder.
(d) 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.
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(e) Notices. All notices under this Warrant shall be in writing. Notices may be served by certified or registered mail, postage paid with return receipt requested; by private courier, prepaid; by other reliable form of electronic communication; or personally. Mailed notices shall be deemed delivered five (5) days after mailing, properly addressed. Couriered notices shall be deemed delivered on the date that the courier warrants that delivery will occur. Electronic communication notices shall be deemed delivered when receipt is either confirmed by confirming transmission equipment or acknowledged by the addressee or its office. Personal delivery shall be effective when accomplished. Any Party may change its address by giving notice, in writing, stating its new address, to the other Party. Subject to the forgoing, notices shall be sent as follows:
If to the Company:
NutraLife Biosciences, Inc.
Attn: Edgar Ward
6601 Lyons Road, Suite L-6
Coconut Creek, FL 33073
Email: edgar@nutralifebiosciences.com
If to Holder, to the address of Holder as set forth in the 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) No Waiver. No waiver of any provision of this Warrant shall be effective unless it is in writing and signed by the Party against whom it is asserted, and any such written waiver shall only be applicable to the specific instance to which it relates and shall not be deemed to be a continuing or future waiver.
(h) Headings. The article and section headings contained in this Warrant are inserted for convenience only and shall not affect in any way the meaning or interpretation of the Warrant.
(i) Governing Law. This Warrant, and any dispute arising out of, relating to, or in connection with this Warrant, shall be governed by and construed in accordance with the laws of the State of Florida, without giving effect to any choice or conflict of law provision or rule (whether of the State of Florida or of any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Florida.
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(j) Enforcement of the Warrant; Jurisdiction; No Jury Trial.
(i) | Each of the Parties irrevocably agrees that any legal action or proceeding with respect to this Warrant and the rights and obligations arising under this Warrant, or for recognition and enforcement of any judgment or arbitral award or resolution in respect of this Warrant, shall be brought and determined exclusively in the courts of the State of Florida located in Broward County, Florida or in the event (but only in the event) that such courts do not have subject matter jurisdiction over such action or proceeding, in the United States District Court sitting in Broward County, Florida (the “Selected Courts”). Each of the Parties hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the Selected Courts and agrees that it will not bring any action relating to this Warrant or any of the transactions contemplated by this Warrant in any court other than the Selected Courts. Each of the Parties hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Warrant, (a) any claim that it is not personally subject to the jurisdiction of the Selected Courts for any reason other than the failure to serve in accordance with the provisions of this Warrant; (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise); and (c) to the fullest extent permitted by law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum; (ii) the venue of such suit, action or proceeding is improper; or (iii) this Warrant, or the subject matter of this Warrant, may not be enforced in or by the Selected Courts. | |
(ii) | EACH PARTY TO THIS WARRANT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR OTHER PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER, RELATING TO OR IN CONNECTION WITH THIS WARRANT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. | |
(iii) | The Holder hereby expressly acknowledges that the agreements and restrictions contained herein are reasonable and necessary to protect the Company’s legitimate interests, that the Company would not have entered into this Warrant in the absence of such agreements and restrictions, and that any violation of such restrictions will result in irreparable harm to the Company. The Holder agrees that the Company shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, and specific performance of, as well as an equitable accounting of all earnings, profits and other benefits arising from any violation of, the agreements and restrictions contained herein, which rights shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled. The Holder irrevocably and unconditionally (i) agrees that any legal proceeding arising out of this Warrant may be brought in the Selected Courts, (ii) consents to the non-exclusive jurisdiction of the Selected Courts in any such proceeding, and (iii) waives any objection to the laying of venue of any such proceeding in any Selected Court. |
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(k) Attorneys’ Fees. If any Party hereto is required to engage in litigation against any other Party, either as plaintiff or as defendant, in order to enforce or defend any rights under this Warrant, and such litigation results in a final judgment in favor of such Party (“Prevailing Party”), then the party or parties against whom said final judgment is obtained shall reimburse the Prevailing Party for all direct, indirect or incidental expenses incurred, including, but not limited to, all attorneys’ fees, court costs and other expenses incurred throughout all negotiations, trials or appeals undertaken in order to enforce the Prevailing Party’s rights hereunder.
(l) Parties in Interest. This Warrant shall be binding upon and inure solely to the benefit of each Party, and nothing in this Warrant, express or implied, is intended to confer upon any other person or entity any rights or remedies of any nature under or by reason of this Warrant.
(m) Severability; Expenses; Further Assurances. If any term, condition or other provision of this Warrant is determined by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms, conditions and provisions of this Warrant shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by this Warrant is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Warrant so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated by this Warrant be consummated as originally contemplated to the fullest extent possible. Except as otherwise specifically provided in this Warrant, each Party shall be responsible for the expenses it may incur in connection with the negotiation, preparation, execution, delivery, performance and enforcement of this Warrant. The Parties shall from time to time do and perform any additional acts and execute and deliver any additional documents and instruments that may be required by Law or reasonably requested by any Party to establish, maintain or protect its rights and remedies under, or to effect the intents and purposes of, this Warrant.
(n) Execution in Counterparts, Electronic Transmission. This Warrant may be executed in any number of counterparts, each of which shall be deemed an original. The signature of any Party which is transmitted by any reliable electronic means such as, but not limited to, a photocopy, electronically scanned or facsimile machine, for purposes hereof, is to be considered as an original signature, and the document transmitted is to be considered to have the same binding effect as an original signature or an original document.
(o) No Assignment. This Warrant may not be assigned by either Party without the prior written consent of the other Party in its sole discretion.
(p) Currency. All dollar amounts are in U.S. dollars.
********************
(Signature Page Follows)
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the Issue Date.
NutraLife BioSciences, Inc. | ||
By: | /s/ Edgar Ward | |
Name: | Edgar Ward | |
Title: | Chief Executive Officer |
Agreed and accepted:
By: | /s/ MarkWakeland | |
Name: | MarkWakeland |
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NOTICE OF EXERCISE
TO: NutraLife BioSciences, 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 Section 2(c) of the attached Warrant, to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in such in Section 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:
Name of Holder:
By:
Name:
Title:
Date: __________ __, 202_
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Exhibit 4.5
Exhibit 4.6
NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY 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 UNDER 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. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
COMMON STOCK PURCHASE WARRANT
NutraLife BioSciences, Inc.
Warrant Shares: 1,400,000 | Issue Date: 01/27/2021 |
THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, FRANK CANNAROZZO (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 the Issue Date as set forth above (the “Issue Date”) and on or prior to 5:00 p.m. (New York City time) on the third anniversary of the Issue Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from NutraLife BioSciences, Inc., a Florida corporation (the “Company”), up to the number shares set forth above (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), subject to adjustment as set forth herein.
Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Subscription Agreement (the “Agreement”), dated JANUARY 27, 2021, among the Company and the Holder. This Warrant is subject to the terms and conditions of the Agreement and, in the event of a conflict between the Agreement and this Warrant, the terms and conditions of this Warrant shall control. In addition, for purposes herein:
(a) The Company and the Holder may be referred to herein individually as a “Party” and collectively as the “Parties”.
(b) “Affiliate” means, with respect to a specified Person, any other Person that directly or indirectly Controls, is Controlled by or is under common Control with, the specified Person.
(c) “Business Day” means any day except Saturday, Sunday and any legal holiday or a day on which banking institutions in Florida generally are authorized or required by Law or other governmental actions to close.
(d) “Control” means (a) the possession, directly or indirectly, of the power to vote 10% or more of the securities or other equity interests of a Person having ordinary voting power, (b) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, by contractor otherwise, or (c) being a director, officer, executor, trustee or fiduciary (or their equivalents) of a Person or a Person that controls such Person.
(e) “Person” means a natural person, a corporation, a limited liability company, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or any agency or instrumentality thereof.
(f) “Transfer Agent” means the Company’s transfer agent for the Common Stock as in place from time to time.
Section 2. Exercise.
(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 Issue Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or PDF copy submitted by e-mail with return receipt requested (or e-mail attachment to an e-mail with return receipt requested) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days (as defined bellow) and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(f)(i)) following the date of exercise as aforesaid, the Holder shall deliver to the Company the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) 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 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 exercised the rights to purchase 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 together with the final Notice of Exercise as 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, and the records of the Company shall be deemed controlling in the absence of manifest error. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this Section 2(a), 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.
(b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $0.08, subject to adjustment hereunder (the “Exercise Price”).
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(c) Cashless Exercise. In the event that (1) the Warrant Shares are not registered for resale pursuant to a registration statement under the Securities Act of 1933, as amended (the “Securities Act”) as of the date of the delivery of a Notice of Exercise and (2) the Market Price (as defined below) of one share of Common Stock is greater than the Exercise Price in effect at such time, 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 computed using the following formula:
X= Y(A-B)
A
Where:
X | = | The number of Warrant Shares to be issued to Holder | |
Y | = | the number of Warrant Shares that the Holder elects to purchase under this Warrant (at the date of such calculation) | |
A | = | the Market Price (at the date of such calculation) | |
B | = | the Exercise Price (as adjusted to the date of such calculation) |
(d) Characteristics. 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 characteristics of the Warrants being exercised, and the holding period of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(d).
(e) Market Price. “Market Price” for the Common Stock (or any replacement security pursuant to Section 3(b)) means, for any security as of any date, the first of the following which shall apply:
(i) | the dollar volume-weighted average price for such security on the OTC Markets or a United States national securities exchange which is the principal market on which such security is then traded (as applicable, the “Trading Market”) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg L.P. through its “HP” function (set to weighted average) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg L.P.; | |
(ii) | if no dollar volume-weighted average price is reported for such security by Bloomberg L.P. for such hours as set forth in Section 2(e)(i), the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC); and |
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(iii) | if the Market Price cannot be calculated for such security on such date on bases as set forth in Section 2(e)(i) or Section 2(e)(ii), the Market Price of such security on such date shall be the fair market value of such security as mutually determined in good faith by the Board of Directors of the Company and the Holder after taking into consideration factors they may each deem appropriate. |
(f) 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 by 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 (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 (assuming cashless exercise of the Warrants), and 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 the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period 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) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. 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. For purposes herein, “Trading Day” means any day on which the Common Stock (or any replacement security pursuant to Section 3(b)) is traded on the Trading Market or is otherwise reported on “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC) or a similar organization or agency succeeding to its functions of reporting prices. |
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(ii) | Delivery of New Warrants Upon Partial 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) | 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. | |
(iv) | 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 of the Company in respect of the issuance of such Warrant Shares, all of which taxes and Company 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. |
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(g) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and the 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 Person 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, non exercised 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 non converted 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(g), 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 and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(g) 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, and the Company shall have no obligation to verify or confirm the accuracy of such 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(g), 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 two 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 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(g), provided that the Beneficial Ownership Limitation in no event exceeds 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(g) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this Section 2(g) shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(g) to correct this Section 2(g) (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 Section 2(g) shall apply to a successor holder of this Warrant.
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Section 3. Certain Adjustments.
(a) Stock Splits. If any time while this Warrant is outstanding, the Company effects a forward split or reverse split of the Common Stock, the number of Warrant Shares shall be appropriately adjusted, with any partial resulting Warrant Share being rounded up to the next nearest whole number and the Exercise Price shall be proportionately adjusted such that the aggregate Exercise Price payable hereunder shall remain unchanged. By way of example and not limitation, (i) in the event that the Company effects a two-for-one forward split of the Common Stock, wherein each issued and outstanding share of Common Stock is converted into two shares of Common Stock, the number of Warrant Shares shall be increased by 100% and the Exercise Price shall be reduced by 50%; and (ii) in the event that the Company effects a one-for-two reverse split of the Common Stock, wherein each two issued and outstanding shares of Common Stock are converted into one share of Common Stock, the number of Warrant Shares shall be reduced by 50% and the Exercise Price shall be increased by 100%.
(b) 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 (and all of its Subsidiaries, taken as a whole), 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, merger 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, 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(g) 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 in accordance with the provisions of this Section 3(b) 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 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 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 with the same effect as if such Successor Entity had been named as the Company herein.
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(c) 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.
(d) Notice to Holder of 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.
(e) Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during the term of this Warrant, subject to the prior written consent of the Holder, reduce the then-current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.
Section 4. Transfer of Warrant; Legend.
(a) No Transfer. This Warrant may not be transferred by the Holder to any other person or entity without the prior written approval of the Company, to be given or withheld in the sole discretion of the Company, and any such attempted transfer in violation of such limitation shall be null and void and of no force or effect.
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(b) Legends. Any legend required by the securities laws of any state to the extent such laws are applicable to the Warrant Shares represented by the certificate so legended shall be included on any certificates representing the Warrant Shares. Holder also understands that the Warrant Shares may bear the following or a substantially similar legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION ARE NOT REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE NOT SET FORTH HEREIN.
Section 5. Miscellaneous.
(a) No Rights as Stockholder Until Exercise; No Settlement in Cash. 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(f)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(f)(i) and Section 2(f)(iii), in no event shall the Company be required to net cash settle an exercise of this Warrant.
(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) Entire Agreement. This Warrant (including any recitals hereto) and the Agreement set forth the entire understanding of the Parties with respect to the subject matter hereof, and shall not be modified or affected by any offer, proposal, statement or representation, oral or written, made by or for any Party in connection with the negotiation of the terms hereof, and may be modified only by instruments signed by the Company and the Holder.
(d) 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.
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(e) Notices. All notices under this Warrant shall be in writing. Notices may be served by certified or registered mail, postage paid with return receipt requested; by private courier, prepaid; by other reliable form of electronic communication; or personally. Mailed notices shall be deemed delivered five (5) days after mailing, properly addressed. Couriered notices shall be deemed delivered on the date that the courier warrants that delivery will occur. Electronic communication notices shall be deemed delivered when receipt is either confirmed by confirming transmission equipment or acknowledged by the addressee or its office. Personal delivery shall be effective when accomplished. Any Party may change its address by giving notice, in writing, stating its new address, to the other Party. Subject to the forgoing, notices shall be sent as follows:
If to the Company:
NutraLife Biosciences, Inc.
Attn: Edgar Ward
6601 Lyons Road, Suite L-6
Coconut Creek, FL 33073
Email: edgar@nutralifebiosciences.com
If to Holder, to the address of Holder as set forth in the 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) No Waiver. No waiver of any provision of this Warrant shall be effective unless it is in writing and signed by the Party against whom it is asserted, and any such written waiver shall only be applicable to the specific instance to which it relates and shall not be deemed to be a continuing or future waiver.
(h) Headings. The article and section headings contained in this Warrant are inserted for convenience only and shall not affect in any way the meaning or interpretation of the Warrant.
(i) Governing Law. This Warrant, and any dispute arising out of, relating to, or in connection with this Warrant, shall be governed by and construed in accordance with the laws of the State of Florida, without giving effect to any choice or conflict of law provision or rule (whether of the State of Florida or of any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Florida.
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(j) Enforcement of the Warrant; Jurisdiction; No Jury Trial.
(i) | Each of the Parties irrevocably agrees that any legal action or proceeding with respect to this Warrant and the rights and obligations arising under this Warrant, or for recognition and enforcement of any judgment or arbitral award or resolution in respect of this Warrant, shall be brought and determined exclusively in the courts of the State of Florida located in Broward County, Florida or in the event (but only in the event) that such courts do not have subject matter jurisdiction over such action or proceeding, in the United States District Court sitting in Broward County, Florida (the “Selected Courts”). Each of the Parties hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the Selected Courts and agrees that it will not bring any action relating to this Warrant or any of the transactions contemplated by this Warrant in any court other than the Selected Courts. Each of the Parties hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Warrant, (a) any claim that it is not personally subject to the jurisdiction of the Selected Courts for any reason other than the failure to serve in accordance with the provisions of this Warrant; (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise); and (c) to the fullest extent permitted by law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum; (ii) the venue of such suit, action or proceeding is improper; or (iii) this Warrant, or the subject matter of this Warrant, may not be enforced in or by the Selected Courts. | |
(ii) | EACH PARTY TO THIS WARRANT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR OTHER PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER, RELATING TO OR IN CONNECTION WITH THIS WARRANT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. | |
(iii) | The Holder hereby expressly acknowledges that the agreements and restrictions contained herein are reasonable and necessary to protect the Company’s legitimate interests, that the Company would not have entered into this Warrant in the absence of such agreements and restrictions, and that any violation of such restrictions will result in irreparable harm to the Company. The Holder agrees that the Company shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, and specific performance of, as well as an equitable accounting of all earnings, profits and other benefits arising from any violation of, the agreements and restrictions contained herein, which rights shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled. The Holder irrevocably and unconditionally (i) agrees that any legal proceeding arising out of this Warrant may be brought in the Selected Courts, (ii) consents to the non-exclusive jurisdiction of the Selected Courts in any such proceeding, and (iii) waives any objection to the laying of venue of any such proceeding in any Selected Court. |
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(k) Attorneys’ Fees. If any Party hereto is required to engage in litigation against any other Party, either as plaintiff or as defendant, in order to enforce or defend any rights under this Warrant, and such litigation results in a final judgment in favor of such Party (“Prevailing Party”), then the party or parties against whom said final judgment is obtained shall reimburse the Prevailing Party for all direct, indirect or incidental expenses incurred, including, but not limited to, all attorneys’ fees, court costs and other expenses incurred throughout all negotiations, trials or appeals undertaken in order to enforce the Prevailing Party’s rights hereunder.
(l) Parties in Interest. This Warrant shall be binding upon and inure solely to the benefit of each Party, and nothing in this Warrant, express or implied, is intended to confer upon any other person or entity any rights or remedies of any nature under or by reason of this Warrant.
(m) Severability; Expenses; Further Assurances. If any term, condition or other provision of this Warrant is determined by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms, conditions and provisions of this Warrant shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by this Warrant is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Warrant so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated by this Warrant be consummated as originally contemplated to the fullest extent possible. Except as otherwise specifically provided in this Warrant, each Party shall be responsible for the expenses it may incur in connection with the negotiation, preparation, execution, delivery, performance and enforcement of this Warrant. The Parties shall from time to time do and perform any additional acts and execute and deliver any additional documents and instruments that may be required by Law or reasonably requested by any Party to establish, maintain or protect its rights and remedies under, or to effect the intents and purposes of, this Warrant.
(n) Execution in Counterparts, Electronic Transmission. This Warrant may be executed in any number of counterparts, each of which shall be deemed an original. The signature of any Party which is transmitted by any reliable electronic means such as, but not limited to, a photocopy, electronically scanned or facsimile machine, for purposes hereof, is to be considered as an original signature, and the document transmitted is to be considered to have the same binding effect as an original signature or an original document.
(o) No Assignment. This Warrant may not be assigned by either Party without the prior written consent of the other Party in its sole discretion.
(p) Currency. All dollar amounts are in U.S. dollars.
********************
(Signature Page Follows)
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the Issue Date.
NutraLife BioSciences, Inc. | ||
By: | /s/ Edgar Ward | |
Name: | Edgar Ward | |
Title: | Chief Executive Officer |
Agreed and accepted:
By: | /s/ FRANK CANNAROZZO | |
Name: | FRANK CANNAROZZO |
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NOTICE OF EXERCISE
TO: NutraLife BioSciences, 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 Section 2(c) of the attached Warrant, to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in such in Section 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:
Name of Holder:
By:
Name:
Title:
Date: __________ __, 202_
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Exhibit 4.7
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE PROVISIONS OF ANY APPLICABLE STATE SECURITIES LAWS. THE SECURITIES THAT MAY BE ACQUIRED UPON CONVERSION MAY NOT BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER PROVISIONS OF SUCH SECURITIES LAWS AND, IN THE CASE OF ANY EXEMPTION, ONLY IF THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION OF THE SECURITIES.
5,294,117 shares | December 21st, 2018 |
STOCK PURCHASE WARRANT
NUTRAFUELS, Inc., a Florida corporation (the “Company”), hereby certifies that, for investment made by, Kahn Family Limited PT II, (“Investor”), with offices at PO Box 549 Pompano Beach FL. 33061 (“Holder”), is entitled, subject to the terms set forth below, to purchase from the Company at any time or from time to time, on or after the date hereof and prior to the three year anniversary of the date hereof December 21st 2021 (the “Expiration Date”), 5,294,117 shares fully paid and non-assessable shares of Common Stock (as defined in Section 1.1 below) equal to the Warrant Number at thirty-five cents ($0.35) price per share equal to the Exercise Price.
1. DEFINITIONS. As used herein the following terms have the following respective meanings:
1.1. The term “Stock” includes (a) the Company’s Common Stock, at [$0.35] per share, and (b) any other securities into which or for which any of the securities described in clause (a) above have been converted or exchanged pursuant to the Certificate of Determination of Preferences applicable to such securities, or any plan of recapitalization, reorganization, merger or consolidation, or otherwise.
1.2. The term “Company” shall mean NUTRAFUELS, Inc.
1.3. The term “Exercise Price” shall mean thirty-five cents ($0. 35 USD) per share.
1.4. The term “Person” shall mean an individual, partnership, limited liability company, corporation, association, trust, joint venture, unincorporated organization or any government, governmental department or agency or political subdivision thereof.
1.5. The term “Warrant Exercise Period” shall mean the period beginning on the date hereof and ending on the Expiration Date.
2. EXERCISE OF WARRANT. Subject to the limitations set forth in Section 3, this Warrant may be exercised (in whole and not in part) by Holder at any time during the Warrant Exercise Period by surrender of this Warrant to the Company at its principal office, together with (a) the Form of Subscription at the end hereof duly executed by Holder, (b) such other documents, statements, subscription agreements or other items as may be reasonably requested by the Company in furtherance of the requirements set forth in Section 3 and (c) payment, by certified check payable to the order of the Company or by wire transfer to its account, in the amount obtained by multiplying the number of shares of Stock for which this Warrant is then being exercised by the Exercise Price then in effect.
NutraFuels Inc. 6601 Lyons Rd Unit L6 Coconut Creek FL 33073
WWW.OTCMarkets.com OTCQB: NTFU
NutraFuels.com
1.888.509.8901
3. RESTRICTIONS ON TRANSFER.
3.1. Securities Law Restrictions. Holder hereby acknowledges that neither this Warrant nor any of the securities that may be acquired upon exercise of this Warrant have been registered under the Securities Act of 1933, as amended, or under the securities laws of any state. Holder acknowledges that, upon exercise of this Warrant, the securities to be issued upon such exercise may become subject to applicable federal and state securities (or other) laws requiring registration, qualification or approval of governmental authorities before such securities may be validly issued or delivered upon notice of such exercise. With respect to any such securities, this Warrant may not be exercised by, and securities shall not be issued to, Holder in any state in which such exercise would be unlawful. Holder agrees that the Company may place such legend or legends on certificates representing securities issued upon exercise of this Warrant as the Company may reasonably deem necessary to comply with applicable state and federal securities laws for the issuance of such securities.
3.2. Representations by Holder. By acceptance of this Warrant as set forth below, Holder represents and warrants to the Company that Holder is acquiring this Warrant and will acquire any shares of Stock issued upon exercise of this Warrant, for Holder’s own account and for investment and without any present intention of selling or otherwise disposing of this Warrant or any such shares of Stock.
3.3. Warrant Non-Transferable. This Warrant is not transferable by Holder without the express prior written consent of the Company, which consent may be withheld at the Company’s sole discretion unless Holder establishes to the Company’s satisfaction that the transfer is in compliance with all federal and state securities laws and that the transferee will be bound by the terms of this Warrant and the Company’s Shareholders Agreement of even date.
4. DELIVERY OF STOCK CERTIFICATES ON EXERCISE.
4.1. Delivery. Subject to the terms and conditions of this Warrant, as soon as practicable after the exercise of this Warrant, and in any event within ten (10) days thereafter, the Company at its expense (including the payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to Holder a certificate or certificates for the number of fully paid and non-assessable shares of Stock to which such Holder shall be entitled upon such exercise, together with any other stock or other securities and property (including cash, where applicable) to which Holder is entitled upon such exercise.
4.2. Fractional Shares. This Warrant may not be exercised as to fractional shares of Stock. In the event that the exercise of this Warrant, in full or in part, results in the issuance of any fractional share of Stock, then in such event Holder shall be entitled to cash equal to the fair market value of such fractional share as determined by the Company’s Board of Directors.
5. ADJUSTMENT FOR DIVIDENDS, DISTRIBUTIONS AND RECLASSIFICATIONS. In case at any time or from time to time the holders of Stock shall have received, or (on or after the record date fixed for the determination of shareholders eligible to receive) shall have become entitled to receive, without payment therefore:
(a) other or additional stock or other securities or property (other than cash) by way of dividend; or, (b) other or additional (or less) stock or other securities or property (including cash) by way of automatic conversion, spin-off, split-up, reclassification, recapitalization, combination of shares or similar corporate restructuring; other than additional shares of Stock issued as a stock dividend or in a stock split (adjustments in respect of which are provided for in Section 7), then and in each such case Holder on the exercise hereof as provided in Section 2 above shall be entitled to receive the amount of stock and other securities and property (including cash in the case referred to in subsection (b) of this Section 5) which Holder would have held on the date of such exercise if, on the date of the events described in subsections (a) and (b) above, Holder had been the holder of record of the number of shares of Stock subject to such exercise and had thereafter, during the period from the date of such events to and including the date of such exercise, retained such shares and all such other or additional stock and other securities and property (including cash in the case referred to in subsection (b) of this Section 5) receivable by Holder as aforesaid during such period, giving effect to all further adjustments called for during such period by Sections 6 and 7.
6. ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC.
6.1. Certain Adjustments. In case at any time or from time to time the Company shall (a) consolidate with or merge into any other person or (b) transfer all or substantially all of its properties or assets to any other Person under any plan or arrangement contemplating the dissolution of the Company, then in each such case on the exercise hereof as provided in Section 2 at any time after the consummation of such consolidation or merger or transfer of assets (and prior to the effective date of such dissolution), as the case may be, Holder shall receive, in lieu of the Stock issuable on such exercise prior to such consummation, the stock and other securities and property (including cash) to which Holder would have been entitled upon such consummation or in connection with such dissolution, as the case may be, if Holder had so exercised this Warrant immediately prior thereto, all subject to further adjustment thereafter as provided in Sections 5 and 7.
6.2. Continuation of Terms. Upon any consolidation or merger referred to in Section 6.1(a), this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the shares of Stock and other securities and property receivable upon the exercise of this Warrant after the consummation of such merger or consolidation and shall be binding upon the issuer of any such Stock or other securities whether or not such person shall have expressly assumed the terms of this Warrant. Upon any partial exercise of this Warrant, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the remaining unexercised shares of Stock covered hereby. Anything herein to the contrary notwithstanding, in the event of a transfer of assets as described in Section 6.1(b), this Warrant shall expire and be of no further force or effect upon the dissolution of the Company, as and to the extent the Warrant is not properly exercised prior to the effective date of such dissolution.
7. STOCK SPLITS AND STOCK DIVIDENDS. If at any time there shall occur any stock split, stock dividend, reverse stock split or other subdivision of Stock (a “Stock Event”), then the number of shares of Stock to be received by the Holder of this Warrant shall be appropriately adjusted such that the proportion of the number of shares issuable hereunder immediately prior to such Stock Event to the total number of shares of the Company outstanding immediately prior to such Stock Event is equal to the proportion of the number of shares issuable hereunder immediately after such Stock Event to the total number of shares of the Company outstanding immediately after such Stock Event. The Exercise Price shall be proportionately decreased or increased upon the occurrence of any Stock Event.
8. CERTAIN OBLIGATIONS OF THE COMPANY. The Company covenants that it will at all times reserve and keep available out of its authorized and unissued Stock, solely for the purpose of issuance upon exercise of this Warrant, a number of shares of Stock equal to the number of shares of Stock issuable upon exercise of this Warrant in effect from time to time. The Company will from time to time, in accordance with the laws of the State of Florida, take action to increase the authorized amount of its Stock if at any time the number of shares of Stock authorized but remaining unissued and unreserved for other purposes shall be insufficient to permit the exercise of this Warrant in full. The Company will maintain an office where presentations and demands to or upon the Company in respect of this Warrant may be made. The Company will give notice in writing to Holder, at the address of the Holder of this Warrant appearing on the books of the Company, of each change in the location of such office.
9. CERTIFICATE AS TO ADJUSTMENTS. In case of any event that may require any adjustment or readjustment in the shares of Stock issuable on the exercise of this Warrant, the Company at its expense will promptly prepare and send to Holder a certificate setting forth such adjustment or readjustment, including a statement of (a) the number of shares of Stock then outstanding on a fully diluted basis, (b) the number of shares of Stock to be received upon exercise of this Warrant, as in effect immediately prior to such adjustment or readjustment and as adjusted and readjusted (if required by Section 7) on account thereof, and (c) a calculation of the new Exercise Price in case of any adjustment of the Exercise Price.
10. NOTICES OF RECORD DATE. In the event of: (a) any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right; (b) any automatic conversion of the Stock into any other securities of the Company; (c) any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any transfer of all or substantially all the assets of the Company to or any consolidation with or merger of the Company into any other Person; or (d) any voluntary or involuntary dissolution, liquidation or winding up of the Company, then, and in each such event, the Company will mail or cause to be mailed to Holder a notice specifying (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, and (ii) the estimated date on which any such conversion, reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding up is to take place, and the time, if any is to be fixed, as of which the holders of record of Stock shall be entitled to exchange their shares of Stock for securities or other property deliverable on such conversion, reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding up. Such notice shall be mailed at least 15 days prior to the date specified in such notice on which any such action is expected to be taken.
11. NOTICES. All notices and other communications from the Company to the Holder of this Warrant shall be mailed by first class registered or certified mail, postage prepaid, or sent by facsimile machine to such address or facsimile number set forth on the signature page hereof, unless and until Holder furnishes to the Company a different address or facsimile number.
12. MISCELLANEOUS. In case any provision of this Warrant shall be invalid, illegal or unenforceable, or partially invalid, illegal or unenforceable, the provision shall be enforced to the extent, if any, that it may legally be enforced and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. This Warrant and any term hereof may be changed, waived, discharged or terminated only by a statement in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. Holder shall have no rights as a shareholder of the Company until the date of the issuance to Holder of stock certificates for Stock upon the exercise of the Warrant in accordance with the terms hereof. This Warrant shall be governed by and construed in accordance with the domestic substantive laws (and not the conflict of law rules) of Florida. The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect any of the terms hereof.
NOTICES
THE COMPANY SHALL HAVE THE FOLLOWING AVAILABLE FOR REVIEW FOR EACH INVESTOR OR HIS AGENT, DURING THE OFFERING AND PRIOR TO THE SALE OF SHARES UPON REQUEST: (1) ACCESS TO ALL BOOKS AND RECORDS OF THE COMPANY; (2) ACCESS TO ALL MATERIAL CONTRACTS AND DOCUMENTS RELATING TO THE TRANSACTIONS DESCRIBED HEREIN AND THE COMPANY’S OPERATIONS; AND (3) THE
OPPORTUNITY TO ASK QUESTIONS OF, AND RECEIVE ANSWERS FROM, ANY PERSON AUTHORIZED TO ACT ON BEHALF OF THE COMPANY CONCERNING ANY ASPECT OF THE INVESTMENT, AND TO OBTAIN ANY ADDITIONAL INFORMATION, TO THE EXTENT THE COMPANY POSSESSES SUCH INFORMATION OR CAN DEVELOP IT WITHOUT UNREASONABLE EFFORT OR EXPENSE, NECESSARY TO VERIFY THE ACCURACY OF THE INFORMATION CONTAINED IN THIS AGREEMENT.
FLORIDA RESIDENTS ONLY
ANY SALE IN FLORIDA IS VOIDABLE BY THE PURCHASER IN SUCH SALE EITHER WITHIN 3 DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER, OR AN ESCROW AGENT OR WITHIN 3 DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER OCCURS LATER.
IN WITNESS WHEREOF, the Company has caused this Stock Purchase Warrant to be executed by its duly authorized officer as of the date first above written.
ACKNOWLEDGED AND AGREED:
NUTRAFUELS, Inc. | ||
By: | ||
Edgar Ward | ||
INVESTOR: | ||
By: |
Exhibit 4.8
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE PROVISIONS OF ANY APPLICABLE STATE SECURITIES LAWS. THE SECURITIES THAT MAY BE ACQUIRED UPON CONVERSION MAY NOT BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER PROVISIONS OF SUCH SECURITIES LAWS AND, IN THE CASE OF ANY EXEMPTION, ONLY IF THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION OF THE SECURITIES.
1,000,000 shares | October 11th, 2018 |
STOCK PURCHASE WARRANT
NUTRAFUELS, Inc., a Florida corporation (the “Company”), hereby certifies that, for investment made by, Forage Complete, LLC. (“Investor”), with offices at PO Box 8669, Boise Idaho 83707 (“Holder”), is entitled, subject to the terms set forth below, to purchase from the Company at any time or from time to time, on or after the date hereof and prior to the three year anniversary of the date hereof October 21st 2021 (the “Expiration Date”), 1,000,000 shares fully paid and non-assessable shares of Common Stock (as defined in Section 1.1 below) equal to the Initial Warrant Number at twenty cents ($0.20) price per share equal to the Initial Exercise Price.
1. DEFINITIONS. As used herein the following terms have the following respective meanings:
1.1. The term “Stock” includes (a) the Company’s Common Stock, at [$0.20] per share, and (b) any other securities into which or for which any of the securities described in clause (a) above have been converted or exchanged pursuant to the Certificate of Determination of Preferences applicable to such securities, or any plan of recapitalization, reorganization, merger or consolidation, or otherwise.
1.2. The term “Company” shall mean NUTRAFUELS, Inc.
1.3. The term “Initial Exercise Price” shall mean twenty cents ($0. 20 USD) per share.
1.4. The term “Person” shall mean an individual, partnership, limited liability company, corporation, association, trust, joint venture, unincorporated organization or any government, governmental department or agency or political subdivision thereof.
1.5. The term “Warrant Exercise Period” shall mean the period beginning on the date hereof and ending on the Expiration Date.
2. EXERCISE OF WARRANT. Subject to the limitations set forth in Section 3, this Warrant may be exercised (in whole and not in part) by Holder at any time during the Warrant Exercise Period by surrender of this Warrant to the Company at its principal office, together with (a) the Form of Subscription at the end hereof duly executed by Holder, (b) such other documents, statements, subscription agreements or other items as may be reasonably requested by the Company in furtherance of the requirements set forth in Section 3 and (c) payment, by certified check payable to the order of the Company or by wire transfer to its account, in the amount obtained by multiplying the number of shares of Stock for which this Warrant is then being exercised by the Exercise Price then in effect.
NutraFuels Inc. 6601 Lyons Rd Unit L6 Coconut Creek FL 33073
WWW.OTCMarkets.com OTCQB: NTFU
NutraFuels.com
1.888.509.8901
3. RESTRICTIONS ON TRANSFER.
3.1. Securities Law Restrictions. Holder hereby acknowledges that neither this Warrant nor any of the securities that may be acquired upon exercise of this Warrant have been registered under the Securities Act of 1933, as amended, or under the securities laws of any state. Holder acknowledges that, upon exercise of this Warrant, the securities to be issued upon such exercise may become subject to applicable federal and state securities (or other) laws requiring registration, qualification or approval of governmental authorities before such securities may be validly issued or delivered upon notice of such exercise. With respect to any such securities, this Warrant may not be exercised by, and securities shall not be issued to, Holder in any state in which such exercise would be unlawful. Holder agrees that the Company may place such legend or legends on certificates representing securities issued upon exercise of this Warrant as the Company may reasonably deem necessary to comply with applicable state and federal securities laws for the issuance of such securities.
3.2. Representations by Holder. By acceptance of this Warrant as set forth below, Holder represents and warrants to the Company that Holder is acquiring this Warrant, and will acquire any shares of Stock issued upon exercise of this Warrant, for Holder’s own account and for investment and without any present intention of selling or otherwise disposing of this Warrant or any such shares of Stock.
3.3. Warrant Non-Transferable. This Warrant is not transferable by Holder without the express prior written consent of the Company, which consent may be withheld at the Company’s sole discretion unless Holder establishes to the Company’s satisfaction that the transfer is in compliance with all federal and state securities laws and that the transferee will be bound by the terms of this Warrant and the Company’s Shareholders Agreement of even date.
4. DELIVERY OF STOCK CERTIFICATES ON EXERCISE.
4.1. Delivery. Subject to the terms and conditions of this Warrant, as soon as practicable after the exercise of this Warrant, and in any event within ten (10) days thereafter, the Company at its expense (including the payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to Holder a certificate or certificates for the number of fully paid and non-assessable shares of Stock to which such Holder shall be entitled upon such exercise, together with any other stock or other securities and property (including cash, where applicable) to which Holder is entitled upon such exercise.
4.2. Fractional Shares. This Warrant may not be exercised as to fractional shares of Stock. In the event that the exercise of this Warrant, in full or in part, results in the issuance of any fractional share of Stock, then in such event Holder shall be entitled to cash equal to the fair market value of such fractional share as determined by the Company’s Board of Directors.
5. ADJUSTMENT FOR DIVIDENDS, DISTRIBUTIONS AND RECLASSIFICATIONS. In case at any time or from time to time the holders of Stock shall have received, or (on or after the record date fixed for the determination of shareholders eligible to receive) shall have become entitled to receive, without payment therefore: (a) other or additional stock or other securities or property (other than cash) by way of dividend; or, (b) other or additional (or less) stock or other securities or property (including cash) by way of automatic conversion, spin-off, split-up, reclassification, recapitalization, combination of shares or similar corporate restructuring; other than additional shares of Stock issued as a stock dividend or in a stock split (adjustments in respect of which are provided for in Section 7), then and in each such case Holder on the exercise hereof as provided in Section 2 above shall be entitled to receive the amount of stock and other securities and property (including cash in the case referred to in subsection (b) of this Section 5) which Holder would have held on the date of such exercise if, on the date of the events described in subsections (a) and (b) above, Holder had been the holder of record of the number of shares of Stock subject to such exercise and had thereafter, during the period from the date of such events to and including the date of such exercise, retained such shares and all such other or additional stock and other securities and property (including cash in the case referred to in subsection (b) of this Section 5) receivable by Holder as aforesaid during such period, giving effect to all further adjustments called for during such period by Sections 6 and 7.
6. ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC.
6.1. Certain Adjustments. In case at any time or from time to time the Company shall (a) consolidate with or merge into any other person or (b) transfer all or substantially all of its properties or assets to any other Person under any plan or arrangement contemplating the dissolution of the Company, then in each such case on the exercise hereof as provided in Section 2 at any time after the consummation of such consolidation or merger or transfer of assets (and prior to the effective date of such dissolution), as the case may be, Holder shall receive, in lieu of the Stock issuable on such exercise prior to such consummation, the stock and other securities and property (including cash) to which Holder would have been entitled upon such consummation or in connection with such dissolution, as the case may be, if Holder had so exercised this Warrant immediately prior thereto, all subject to further adjustment thereafter as provided in Sections 5 and 7.
6.2. Continuation of Terms. Upon any consolidation or merger referred to in Section 6.1(a), this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the shares of Stock and other securities and property receivable upon the exercise of this Warrant after the consummation of such merger or consolidation and shall be binding upon the issuer of any such Stock or other securities whether or not such person shall have expressly assumed the terms of this Warrant. Upon any partial exercise of this Warrant, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the remaining unexercised shares of Stock covered hereby. Anything herein to the contrary notwithstanding, in the event of a transfer of assets as described in Section 6.1(b), this Warrant shall expire and be of no further force or effect upon the dissolution of the Company, as and to the extent the Warrant is not properly exercised prior to the effective date of such dissolution.
7. STOCK SPLITS AND STOCK DIVIDENDS. If at any time there shall occur any stock split, stock dividend, reverse stock split or other subdivision of Stock (a “Stock Event”), then the number of shares of Stock to be received by the Holder of this Warrant shall be appropriately adjusted such that the proportion of the number of shares issuable hereunder immediately prior to such Stock Event to the total number of shares of the Company outstanding immediately prior to such Stock Event is equal to the proportion of the number of shares issuable hereunder immediately after such Stock Event to the total number of shares of the Company outstanding immediately after such Stock Event. The Exercise Price shall be proportionately decreased or increased upon the occurrence of any Stock Event.
8. CERTAIN OBLIGATIONS OF THE COMPANY. The Company covenants that it will at all times reserve and keep available out of its authorized and unissued Stock, solely for the purpose of issuance upon exercise of this Warrant, a number of shares of Stock equal to the number of shares of Stock issuable upon exercise of this Warrant in effect from time to time. The Company will from time to time, in accordance with the laws of the State of Florida, take action to increase the authorized amount of its Stock if at any time the number of shares of Stock authorized but remaining unissued and unreserved for other purposes shall be insufficient to permit the exercise of this Warrant in full. The Company will maintain an office where presentations and demands to or upon the Company in respect of this Warrant may be made. The Company will give notice in writing to Holder, at the address of the Holder of this Warrant appearing on the books of the Company, of each change in the location of such office.
9. CERTIFICATE AS TO ADJUSTMENTS. In case of any event that may require any adjustment or readjustment in the shares of Stock issuable on the exercise of this Warrant, the Company at its expense will promptly prepare and send to Holder a certificate setting forth such adjustment or readjustment, including a statement of (a) the number of shares of Stock then outstanding on a fully diluted basis, (b) the number of shares of Stock to be received upon exercise of this Warrant, as in effect immediately prior to such adjustment or readjustment and as adjusted and readjusted (if required by Section 7) on account thereof, and (c) a calculation of the new Exercise Price in case of any adjustment of the Exercise Price.
10. NOTICES OF RECORD DATE. In the event of: (a) any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right; (b) any automatic conversion of the Stock into any other securities of the Company; (c) any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any transfer of all or substantially all the assets of the Company to or any consolidation with or merger of the Company into any other Person; or (d) any voluntary or involuntary dissolution, liquidation or winding up of the Company, then, and in each such event, the Company will mail or cause to be mailed to Holder a notice specifying (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, and (ii) the estimated date on which any such conversion, reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding up is to take place, and the time, if any is to be fixed, as of which the holders of record of Stock shall be entitled to exchange their shares of Stock for securities or other property deliverable on such conversion, reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding up. Such notice shall be mailed at least 15 days prior to the date specified in such notice on which any such action is expected to be taken.
11. NOTICES. All notices and other communications from the Company to the Holder of this Warrant shall be mailed by first class registered or certified mail, postage prepaid, or sent by facsimile machine to such address or facsimile number set forth on the signature page hereof, unless and until Holder furnishes to the Company a different address or facsimile number.
12. MISCELLANEOUS. In case any provision of this Warrant shall be invalid, illegal or unenforceable, or partially invalid, illegal or unenforceable, the provision shall be enforced to the extent, if any, that it may legally be enforced and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. This Warrant and any term hereof may be changed, waived, discharged or terminated only by a statement in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. Holder shall have no rights as a shareholder of the Company until the date of the issuance to Holder of stock certificates for Stock upon the exercise of the Warrant in accordance with the terms hereof. This Warrant shall be governed by and construed in accordance with the domestic substantive laws (and not the conflict of law rules) of Florida. The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect any of the terms hereof.
IN WITNESS WHEREOF, the Company has caused this Stock Purchase Warrant to be executed by its duly authorized officer as of the date first above written.
ACKNOWLEDGED AND AGREED: | ||
NUTRAFUELS, Inc. | ||
By: | /s/ Edgar Ward | |
Edgar Ward |
Exhibit 4.9
NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY 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 UNDER 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. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
COMMON STOCK PURCHASE WARRANT
Nutralife Biosciences, Inc.
Warrant Shares: 15,000,000 | Issue Date: January 11, 2021 |
THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, Edgar Ward (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 the Issue Date as set forth above (the “Issue Date”) and on or prior to 5:00 p.m. (New York City time) on the third anniversary of the Issue Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from Nutralife Biosciences, Inc., a Florida corporation (the “Company”), up to the number of shares set forth above (as subject to adjustment hereunder, the “Warrant Shares”) of common stock, par value $0.0001 per share of the Company (the “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), subject to adjustment as set forth herein.
Section 1. Definitions. For purposes herein:
(a) The Company and the Holder may be referred to herein individually as a “Party” and collectively as the “Parties”.
(b) “Affiliate” means, with respect to a specified Person, any other Person that directly or indirectly Controls, is Controlled by or is under common Control with, the specified Person.
(c) “Business Day” means any day except Saturday, Sunday and any legal holiday or a day on which banking institutions in Florida generally are authorized or required by Law or other governmental actions to close.
(d) “Control” means (a) the possession, directly or indirectly, of the power to vote 10% or more of the securities or other equity interests of a Person having ordinary voting power, (b) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, by contractor otherwise, or (c) being a director, officer, executor, trustee or fiduciary (or their equivalents) of a Person or a Person that controls such Person.
(e) “Person” means a natural person, a corporation, a limited liability company, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or any agency or instrumentality thereof.
(f) “Transfer Agent” means the Company’s transfer agent for the Common Stock as in place from time to time.
Section 2. Exercise.
(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 Issue Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or PDF copy submitted by e-mail with return receipt requested (or e-mail attachment to an e-mail with return receipt requested) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days (as defined bellow) and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(f)(i)) following the date of exercise as aforesaid, the Holder shall deliver to the Company the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) 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 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 exercised the rights to purchase 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 together with the final Notice of Exercise as 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, and the records of the Company shall be deemed controlling in the absence of manifest error. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this Section 2(a), 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.
(b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $0.1025, subject to adjustment hereunder (the “Exercise Price”).
2 |
(c) Cashless Exercise. In the event that (1) the Warrant Shares are not registered for resale pursuant to a registration statement under the Securities Act of 1933, as amended (the “Securities Act”) as of the date of the delivery of a Notice of Exercise and (2) the Market Price (as defined below) of one share of Common Stock is greater than the Exercise Price in effect at such time, 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 computed using the following formula:
X= Y(A-B)
A
Where:
X | = | The number of Warrant Shares to be issued to Holder | |
Y | = | the number of Warrant Shares that the Holder elects to purchase under this Warrant (at the date of such calculation) | |
A | = | the Market Price (at the date of such calculation) | |
B | = | the Exercise Price (as adjusted to the date of such calculation) |
(d) Characteristics. 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 characteristics of the Warrants being exercised, and the holding period of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(d).
(e) Market Price. “Market Price” for the Common Stock (or any replacement security pursuant to Section 3(b)) means, for any security as of any date, the first of the following which shall apply:
(i) | the dollar volume-weighted average price for such security on the OTC Markets or a United States national securities exchange which is the principal market on which such security is then traded (as applicable, the “Trading Market”) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg L.P. through its “HP” function (set to weighted average) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg L.P.; | |
(ii) | if no dollar volume-weighted average price is reported for such security by Bloomberg L.P. for such hours as set forth in Section 2(e)(i), the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC); and |
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(iii) | if the Market Price cannot be calculated for such security on such date on bases as set forth in Section 2(e)(i) or Section 2(e)(ii), the Market Price of such security on such date shall be the fair market value of such security as mutually determined in good faith by the Board of Directors of the Company and the Holder after taking into consideration factors they may each deem appropriate. |
(f) 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 by 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 (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 (assuming cashless exercise of the Warrants), and 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 the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period 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) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. 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. For purposes herein, “Trading Day” means any day on which the Common Stock (or any replacement security pursuant to Section 3(b)) is traded on the Trading Market or is otherwise reported on “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC) or a similar organization or agency succeeding to its functions of reporting prices. |
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(ii) | Delivery of New Warrants Upon Partial 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) | 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. | |
(iv) | 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 of the Company in respect of the issuance of such Warrant Shares, all of which taxes and Company 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. |
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(g) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and the 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 Person 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(g), 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 and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(g) 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, and the Company shall have no obligation to verify or confirm the accuracy of such 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(g), 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 two 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 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(g), provided that the Beneficial Ownership Limitation in no event exceeds 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(g) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this Section 2(g) shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(g) to correct this Section 2(g) (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 Section 2(g) shall apply to a successor holder of this Warrant.
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Section 3. Certain Adjustments.
(a) Stock Splits. If any time while this Warrant is outstanding, the Company effects a forward split or reverse split of the Common Stock, the number of Warrant Shares shall be appropriately adjusted, with any partial resulting Warrant Share being rounded up to the next nearest whole number and the Exercise Price shall be proportionately adjusted such that the aggregate Exercise Price payable hereunder shall remain unchanged. By way of example and not limitation, (i) in the event that the Company effects a two-for-one forward split of the Common Stock, wherein each issued and outstanding share of Common Stock is converted into two shares of Common Stock, the number of Warrant Shares shall be increased by 100% and the Exercise Price shall be reduced by 50%; and (ii) in the event that the Company effects a one-for-two reverse split of the Common Stock, wherein each two issued and outstanding shares of Common Stock are converted into one share of Common Stock, the number of Warrant Shares shall be reduced by 50% and the Exercise Price shall be increased by 100%.
(b) 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 (and all of its Subsidiaries, taken as a whole), 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, merger 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, 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(g) 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 in accordance with the provisions of this Section 3(b) 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 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 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 with the same effect as if such Successor Entity had been named as the Company herein.
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(c) 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.
(d) Notice to Holder of 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.
(e) Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during the term of this Warrant, subject to the prior written consent of the Holder, reduce the then-current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.
Section 4. Transfer of Warrant; Legend.
(a) No Transfer. This Warrant may not be transferred by the Holder to any other person or entity without the prior written approval of the Company, to be given or withheld in the sole discretion of the Company, and any such attempted transfer in violation of such limitation shall be null and void and of no force or effect.
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(b) Legends. Any legend required by the securities laws of any state to the extent such laws are applicable to the Warrant Shares represented by the certificate so legended shall be included on any certificates representing the Warrant Shares. Holder also understands that the Warrant Shares may bear the following or a substantially similar legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION ARE NOT REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE NOT SET FORTH HEREIN.
Section 5. Miscellaneous.
(a) No Rights as Stockholder Until Exercise; No Settlement in Cash. 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(f)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(f)(i) and Section 2(f)(iii), in no event shall the Company be required to net cash settle an exercise of this Warrant.
(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) Entire Agreement. This Warrant (including any recitals hereto) sets forth the entire understanding of the Parties with respect to the subject matter hereof, and shall not be modified or affected by any offer, proposal, statement or representation, oral or written, made by or for any Party in connection with the negotiation of the terms hereof, and may be modified only by instruments signed by the Company and the Holder.
(d) 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.
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(e) Notices. All notices under this Warrant shall be in writing. Notices may be served by certified or registered mail, postage paid with return receipt requested; by private courier, prepaid; by other reliable form of electronic communication; or personally. Mailed notices shall be deemed delivered five (5) days after mailing, properly addressed. Couriered notices shall be deemed delivered on the date that the courier warrants that delivery will occur. Electronic communication notices shall be deemed delivered when receipt is either confirmed by confirming transmission equipment or acknowledged by the addressee or its office. Personal delivery shall be effective when accomplished. Any Party may change its address by giving notice, in writing, stating its new address, to the other Party. Subject to the forgoing, notices shall be sent as follows:
If to the Company:
Nutralife Biosciences, Inc.
Attn: Edgar Ward
6601 Lyons Road, Suite L-6
Coconut Creek, FL 33073
Email: edgar@nutralifebiosciences.com
If to Holder, to the address of Holder as set forth in the books and records of the Company.
(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) No Waiver. No waiver of any provision of this Warrant shall be effective unless it is in writing and signed by the Party against whom it is asserted, and any such written waiver shall only be applicable to the specific instance to which it relates and shall not be deemed to be a continuing or future waiver.
(h) Headings. The article and section headings contained in this Warrant are inserted for convenience only and shall not affect in any way the meaning or interpretation of the Warrant.
(i) Governing Law. This Warrant, and any dispute arising out of, relating to, or in connection with this Warrant, shall be governed by and construed in accordance with the laws of the State of Florida, without giving effect to any choice or conflict of law provision or rule (whether of the State of Florida or of any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Florida.
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(j) Enforcement of the Warrant; Jurisdiction; No Jury Trial.
(i) | Each of the Parties irrevocably agrees that any legal action or proceeding with respect to this Warrant and the rights and obligations arising under this Warrant, or for recognition and enforcement of any judgment or arbitral award or resolution in respect of this Warrant, shall be brought and determined exclusively in the courts of the State of Florida located in Broward County, Florida or in the event (but only in the event) that such courts do not have subject matter jurisdiction over such action or proceeding, in the United States District Court sitting in Broward County, Florida (the “Selected Courts”). Each of the Parties hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the Selected Courts and agrees that it will not bring any action relating to this Warrant or any of the transactions contemplated by this Warrant in any court other than the Selected Courts. Each of the Parties hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Warrant, (a) any claim that it is not personally subject to the jurisdiction of the Selected Courts for any reason other than the failure to serve in accordance with the provisions of this Warrant; (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise); and (c) to the fullest extent permitted by law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum; (ii) the venue of such suit, action or proceeding is improper; or (iii) this Warrant, or the subject matter of this Warrant, may not be enforced in or by the Selected Courts. | |
(ii) | EACH PARTY TO THIS WARRANT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR OTHER PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER, RELATING TO OR IN CONNECTION WITH THIS WARRANT, OR THE TRANSACTIONS CONTEMPLATED BY THIS WARRANT. | |
(iii) | The Holder hereby expressly acknowledges that the agreements and restrictions contained herein are reasonable and necessary to protect the Company’s legitimate interests, that the Company would not have entered into this Warrant in the absence of such agreements and restrictions, and that any violation of such restrictions will result in irreparable harm to the Company. The Holder agrees that the Company shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, and specific performance of, as well as an equitable accounting of all earnings, profits and other benefits arising from any violation of, the agreements and restrictions contained herein, which rights shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled. The Holder irrevocably and unconditionally (i) agrees that any legal proceeding arising out of this Warrant may be brought in the Selected Courts, (ii) consents to the non-exclusive jurisdiction of the Selected Courts in any such proceeding, and (iii) waives any objection to the laying of venue of any such proceeding in any Selected Court. |
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(k) Attorneys’ Fees. If any Party hereto is required to engage in litigation against any other Party, either as plaintiff or as defendant, in order to enforce or defend any rights under this Warrant, and such litigation results in a final judgment in favor of such Party (“Prevailing Party”), then the party or parties against whom said final judgment is obtained shall reimburse the Prevailing Party for all direct, indirect or incidental expenses incurred, including, but not limited to, all attorneys’ fees, court costs and other expenses incurred throughout all negotiations, trials or appeals undertaken in order to enforce the Prevailing Party’s rights hereunder.
(l) Parties in Interest. This Warrant shall be binding upon and inure solely to the benefit of each Party, and nothing in this Warrant, express or implied, is intended to confer upon any other person or entity any rights or remedies of any nature under or by reason of this Warrant.
(m) Severability; Expenses; Further Assurances. If any term, condition or other provision of this Warrant is determined by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms, conditions and provisions of this Warrant shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by this Warrant is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Warrant so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated by this Warrant be consummated as originally contemplated to the fullest extent possible. Except as otherwise specifically provided in this Warrant, each Party shall be responsible for the expenses it may incur in connection with the negotiation, preparation, execution, delivery, performance and enforcement of this Warrant. The Parties shall from time to time do and perform any additional acts and execute and deliver any additional documents and instruments that may be required by Law or reasonably requested by any Party to establish, maintain or protect its rights and remedies under, or to effect the intents and purposes of, this Warrant.
(n) Execution in Counterparts, Electronic Transmission. This Warrant may be executed in any number of counterparts, each of which shall be deemed an original. The signature of any Party which is transmitted by any reliable electronic means such as, but not limited to, a photocopy, electronically scanned or facsimile machine, for purposes hereof, is to be considered as an original signature, and the document transmitted is to be considered to have the same binding effect as an original signature or an original document.
(o) No Assignment. This Warrant may not be assigned by either Party without the prior written consent of the other Party in its sole discretion.
(p) Currency. All dollar amounts are in U.S. dollars.
********************
(SIGNATURE PAGE FOLLOWS)
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the Issue Date.
Nutralife Biosciences, Inc. | ||
By: | /s/ Edgar Ward | |
Name: | Edgar Ward | |
Title: | Chief Executive Officer |
Agreed and accepted:
By: | /s/ Edgar Ward | |
Name: | Edgar Ward |
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NOTICE OF EXERCISE
TO: Nutralife Biosciences, 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 Section 2(c) of the attached Warrant, to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in such in Section 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:
Name of Holder: | ||
By: | ||
Name: | ||
Title: | ||
Date: | __________________, 202_ |
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Exhibit 4.10
Exhibit 4.11
Exhibit 4.12
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE PROVISIONS OF ANY APPLICABLE STATE SECURITIES LAWS. THE SECURITIES THAT MAY BE ACQUIRED UPON CONVERSION MAY NOT BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER PROVISIONS OF SUCH SECURITIES LAWS AND, IN THE CASE OF ANY EXEMPTION, ONLY IF THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION OF THE SECURITIES.
1,000,000 shares | October 11th, 2018 |
STOCK PURCHASE WARRANT
NUTRAFUELS, Inc., a Florida corporation (the “Company”), hereby certifies that, for investment made by, FMG LLC/Mike Farr. (“Investor”), with offices at HC61 Box 165 Battle Mt, NV (“Holder”), is entitled, subject to the terms set forth below, to purchase from the Company at any time or from time to time, on or after the date hereof and prior to the three year anniversary of the date hereof October 21st 2021 (the “Expiration Date”), 1,000,000 shares fully paid and non-assessable shares of Common Stock (as defined in Section 1.1 below) equal to the Initial Warrant Number at twenty cents ($0.20) price per share equal to the Initial Exercise Price.
1. DEFINITIONS. As used herein the following terms have the following respective meanings:
1.1. The term “Stock” includes (a) the Company’s Common Stock, at [$0.20] per share, and (b) any other securities into which or for which any of the securities described in clause (a) above have been converted or exchanged pursuant to the Certificate of Determination of Preferences applicable to such securities, or any plan of recapitalization, reorganization, merger or consolidation, or otherwise.
1.2. The term “Company” shall mean NUTRAFUELS, Inc.
1.3. The term “Initial Exercise Price” shall mean twenty cents ($0. 20 USD) per share.
1.4. The term “Person” shall mean an individual, partnership, limited liability company, corporation, association, trust, joint venture, unincorporated organization or any government, governmental department or agency or political subdivision thereof.
1.5. The term “Warrant Exercise Period” shall mean the period beginning on the date hereof and ending on the Expiration Date.
2. EXERCISE OF WARRANT. Subject to the limitations set forth in Section 3, this Warrant may be exercised (in whole and not in part) by Holder at any time during the Warrant Exercise Period by surrender of this Warrant to the Company at its principal office, together with (a) the Form of Subscription at the end hereof duly executed by Holder, (b) such other documents, statements, subscription agreements or other items as may be reasonably requested by the Company in furtherance of the requirements set forth in Section 3 and (c) payment, by certified check payable to the order of the Company or by wire transfer to its account, in the amount obtained by multiplying the number of shares of Stock for which this Warrant is then being exercised by the Exercise Price then in effect.
NutraFuels Inc. 6601 Lyons Rd Unit L6 Coconut Creek FL 33073
WWW.OTCMarkets.com OTCQB: NTFU
NutraFuels.com
1.888.509.8901
3. RESTRICTIONS ON TRANSFER.
3.1. Securities Law Restrictions. Holder hereby acknowledges that neither this Warrant nor any of the securities that may be acquired upon exercise of this Warrant have been registered under the Securities Act of 1933, as amended, or under the securities laws of any state. Holder acknowledges that, upon exercise of this Warrant, the securities to be issued upon such exercise may become subject to applicable federal and state securities (or other) laws requiring registration, qualification or approval of governmental authorities before such securities may be validly issued or delivered upon notice of such exercise. With respect to any such securities, this Warrant may not be exercised by, and securities shall not be issued to, Holder in any state in which such exercise would be unlawful. Holder agrees that the Company may place such legend or legends on certificates representing securities issued upon exercise of this Warrant as the Company may reasonably deem necessary to comply with applicable state and federal securities laws for the issuance of such securities.
3.2. Representations by Holder. By acceptance of this Warrant as set forth below, Holder represents and warrants to the Company that Holder is acquiring this Warrant, and will acquire any shares of Stock issued upon exercise of this Warrant, for Holder’s own account and for investment and without any present intention of selling or otherwise disposing of this Warrant or any such shares of Stock.
3.3. Warrant Non-Transferable. This Warrant is not transferable by Holder without the express prior written consent of the Company, which consent may be withheld at the Company’s sole discretion unless Holder establishes to the Company’s satisfaction that the transfer is in compliance with all federal and state securities laws and that the transferee will be bound by the terms of this Warrant and the Company’s Shareholders Agreement of even date.
4. DELIVERY OF STOCK CERTIFICATES ON EXERCISE.
4.1. Delivery. Subject to the terms and conditions of this Warrant, as soon as practicable after the exercise of this Warrant, and in any event within ten (10) days thereafter, the Company at its expense (including the payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to Holder a certificate or certificates for the number of fully paid and non-assessable shares of Stock to which such Holder shall be entitled upon such exercise, together with any other stock or other securities and property (including cash, where applicable) to which Holder is entitled upon such exercise.
4.2. Fractional Shares. This Warrant may not be exercised as to fractional shares of Stock. In the event that the exercise of this Warrant, in full or in part, results in the issuance of any fractional share of Stock, then in such event Holder shall be entitled to cash equal to the fair market value of such fractional share as determined by the Company’s Board of Directors.
5. ADJUSTMENT FOR DIVIDENDS, DISTRIBUTIONS AND RECLASSIFICATIONS. In case at any time or from time to time the holders of Stock shall have received, or (on or after the record date fixed for the determination of shareholders eligible to receive) shall have become entitled to receive, without payment therefore: (a) other or additional stock or other securities or property (other than cash) by way of dividend; or, (b) other or additional (or less) stock or other securities or property (including cash) by way of automatic conversion, spin-off, split-up, reclassification, recapitalization, combination of shares or similar corporate restructuring; other than additional shares of Stock issued as a stock dividend or in a stock split (adjustments in respect of which are provided for in Section 7), then and in each such case Holder on the exercise hereof as provided in Section 2 above shall be entitled to receive the amount of stock and other securities and property (including cash in the case referred to in subsection (b) of this Section 5) which Holder would have held on the date of such exercise if, on the date of the events described in subsections (a) and (b) above, Holder had been the holder of record of the number of shares of Stock subject to such exercise and had thereafter, during the period from the date of such events to and including the date of such exercise, retained such shares and all such other or additional stock and other securities and property (including cash in the case referred to in subsection (b) of this Section 5) receivable by Holder as aforesaid during such period, giving effect to all further adjustments called for during such period by Sections 6 and 7.
6. ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC.
6.1. Certain Adjustments. In case at any time or from time to time the Company shall (a) consolidate with or merge into any other person or (b) transfer all or substantially all of its properties or assets to any other Person under any plan or arrangement contemplating the dissolution of the Company, then in each such case on the exercise hereof as provided in Section 2 at any time after the consummation of such consolidation or merger or transfer of assets (and prior to the effective date of such dissolution), as the case may be, Holder shall receive, in lieu of the Stock issuable on such exercise prior to such consummation, the stock and other securities and property (including cash) to which Holder would have been entitled upon such consummation or in connection with such dissolution, as the case may be, if Holder had so exercised this Warrant immediately prior thereto, all subject to further adjustment thereafter as provided in Sections 5 and 7.
6.2. Continuation of Terms. Upon any consolidation or merger referred to in Section 6.1(a), this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the shares of Stock and other securities and property receivable upon the exercise of this Warrant after the consummation of such merger or consolidation and shall be binding upon the issuer of any such Stock or other securities whether or not such person shall have expressly assumed the terms of this Warrant. Upon any partial exercise of this Warrant, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the remaining unexercised shares of Stock covered hereby. Anything herein to the contrary notwithstanding, in the event of a transfer of assets as described in Section 6.1(b), this Warrant shall expire and be of no further force or effect upon the dissolution of the Company, as and to the extent the Warrant is not properly exercised prior to the effective date of such dissolution.
7. STOCK SPLITS AND STOCK DIVIDENDS. If at any time there shall occur any stock split, stock dividend, reverse stock split or other subdivision of Stock (a “Stock Event”), then the number of shares of Stock to be received by the Holder of this Warrant shall be appropriately adjusted such that the proportion of the number of shares issuable hereunder immediately prior to such Stock Event to the total number of shares of the Company outstanding immediately prior to such Stock Event is equal to the proportion of the number of shares issuable hereunder immediately after such Stock Event to the total number of shares of the Company outstanding immediately after such Stock Event. The Exercise Price shall be proportionately decreased or increased upon the occurrence of any Stock Event.
8. CERTAIN OBLIGATIONS OF THE COMPANY. The Company covenants that it will at all times reserve and keep available out of its authorized and unissued Stock, solely for the purpose of issuance upon exercise of this Warrant, a number of shares of Stock equal to the number of shares of Stock issuable upon exercise of this Warrant in effect from time to time. The Company will from time to time, in accordance with the laws of the State of Florida, take action to increase the authorized amount of its Stock if at any time the number of shares of Stock authorized but remaining unissued and unreserved for other purposes shall be insufficient to permit the exercise of this Warrant in full. The Company will maintain an office where presentations and demands to or upon the Company in respect of this Warrant may be made. The Company will give notice in writing to Holder, at the address of the Holder of this Warrant appearing on the books of the Company, of each change in the location of such office.
9. CERTIFICATE AS TO ADJUSTMENTS. In case of any event that may require any adjustment or readjustment in the shares of Stock issuable on the exercise of this Warrant, the Company at its expense will promptly prepare and send to Holder a certificate setting forth such adjustment or readjustment, including a statement of (a) the number of shares of Stock then outstanding on a fully diluted basis, (b) the number of shares of Stock to be received upon exercise of this Warrant, as in effect immediately prior to such adjustment or readjustment and as adjusted and readjusted (if required by Section 7) on account thereof, and (c) a calculation of the new Exercise Price in case of any adjustment of the Exercise Price.
10. NOTICES OF RECORD DATE. In the event of: (a) any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right; (b) any automatic conversion of the Stock into any other securities of the Company; (c) any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any transfer of all or substantially all the assets of the Company to or any consolidation with or merger of the Company into any other Person; or (d) any voluntary or involuntary dissolution, liquidation or winding up of the Company, then, and in each such event, the Company will mail or cause to be mailed to Holder a notice specifying (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, and (ii) the estimated date on which any such conversion, reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding up is to take place, and the time, if any is to be fixed, as of which the holders of record of Stock shall be entitled to exchange their shares of Stock for securities or other property deliverable on such conversion, reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding up. Such notice shall be mailed at least 15 days prior to the date specified in such notice on which any such action is expected to be taken.
11. NOTICES. All notices and other communications from the Company to the Holder of this Warrant shall be mailed by first class registered or certified mail, postage prepaid, or sent by facsimile machine to such address or facsimile number set forth on the signature page hereof, unless and until Holder furnishes to the Company a different address or facsimile number.
12. MISCELLANEOUS. In case any provision of this Warrant shall be invalid, illegal or unenforceable, or partially invalid, illegal or unenforceable, the provision shall be enforced to the extent, if any, that it may legally be enforced and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. This Warrant and any term hereof may be changed, waived, discharged or terminated only by a statement in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. Holder shall have no rights as a shareholder of the Company until the date of the issuance to Holder of stock certificates for Stock upon the exercise of the Warrant in accordance with the terms hereof. This Warrant shall be governed by and construed in accordance with the domestic substantive laws (and not the conflict of law rules) of Florida. The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect any of the terms hereof.
IN WITNESS WHEREOF, the Company has caused this Stock Purchase Warrant to be executed by its duly authorized officer as of the date first above written.
ACKNOWLEDGED AND AGREED:
NUTRAFUELS, Inc. | ||
By: | /s/ Edgar Ward | |
Edgar Ward |
Exhibit 4.13
NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY 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 UNDER 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. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
COMMON STOCK PURCHASE WARRANT
Nutralife Biosciences, Inc.
Warrant Shares: 1,200,000 | Issue Date: January 11, 2021 |
THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, Gregory Ross (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 the Issue Date as set forth above (the “Issue Date”) and on or prior to 5:00 p.m. (New York City time) on the third anniversary of the Issue Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from Nutralife Biosciences, Inc., a Florida corporation (the “Company”), up to the number of shares set forth above (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), subject to adjustment as set forth herein.
Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Note Exchange Agreement (the “Agreement”), dated as of the Issue Date, among the Company and the Holder. This Warrant is subject to the terms and conditions of the Agreement and, in the event of a conflict between the Agreement and this Warrant, the terms and conditions of this Warrant shall control. In addition, for purposes herein:
(a) The Company and the Holder may be referred to herein individually as a “Party” and collectively as the “Parties”.
(b) “Affiliate” means, with respect to a specified Person, any other Person that directly or indirectly Controls, is Controlled by or is under common Control with, the specified Person.
(c) “Business Day” means any day except Saturday, Sunday and any legal holiday or a day on which banking institutions in Florida generally are authorized or required by Law or other governmental actions to close.
(d) “Control” means (a) the possession, directly or indirectly, of the power to vote 10% or more of the securities or other equity interests of a Person having ordinary voting power, (b) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, by contractor otherwise, or (c) being a director, officer, executor, trustee or fiduciary (or their equivalents) of a Person or a Person that controls such Person.
(e) “Person” means a natural person, a corporation, a limited liability company, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or any agency or instrumentality thereof.
(f) “Transfer Agent” means the Company’s transfer agent for the Common Stock as in place from time to time.
Section 2. Exercise.
(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 Issue Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or PDF copy submitted by e-mail with return receipt requested (or e-mail attachment to an e-mail with return receipt requested) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days (as defined bellow) and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(f)(i)) following the date of exercise as aforesaid, the Holder shall deliver to the Company the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) 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 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 exercised the rights to purchase 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 together with the final Notice of Exercise as 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, and the records of the Company shall be deemed controlling in the absence of manifest error. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this Section 2(a), 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.
(b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $0.08, subject to adjustment hereunder (the “Exercise Price”).
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(c) Cashless Exercise. In the event that (1) the Warrant Shares are not registered for resale pursuant to a registration statement under the Securities Act of 1933, as amended (the “Securities Act”) as of the date of the delivery of a Notice of Exercise and (2) the Market Price (as defined below) of one share of Common Stock is greater than the Exercise Price in effect at such time, 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 computed using the following formula:
X = Y(A-B)
A
Where:
X | = | The number of Warrant Shares to be issued to Holder | |
Y | = | the number of Warrant Shares that the Holder elects to purchase under this Warrant (at the date of such calculation) | |
A | = | the Market Price (at the date of such calculation) | |
B | = | the Exercise Price (as adjusted to the date of such calculation) |
(d) Characteristics. 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 characteristics of the Warrants being exercised, and the holding period of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(d).
(e) Market Price. “Market Price” for the Common Stock (or any replacement security pursuant to Section 3(b)) means, for any security as of any date, the first of the following which shall apply:
(i) | the dollar volume-weighted average price for such security on the OTC Markets or a United States national securities exchange which is the principal market on which such security is then traded (as applicable, the “Trading Market”) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg L.P. through its “HP” function (set to weighted average) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg L.P.; | |
(ii) | if no dollar volume-weighted average price is reported for such security by Bloomberg L.P. for such hours as set forth in Section 2(e)(i), the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC); and |
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(iii) | if the Market Price cannot be calculated for such security on such date on bases as set forth in Section 2(e)(i) or Section 2(e)(ii), the Market Price of such security on such date shall be the fair market value of such security as mutually determined in good faith by the Board of Directors of the Company and the Holder after taking into consideration factors they may each deem appropriate. |
(f) 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 by 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 (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 (assuming cashless exercise of the Warrants), and 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 the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period 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) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. 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. For purposes herein, “Trading Day” means any day on which the Common Stock (or any replacement security pursuant to Section 3(b)) is traded on the Trading Market or is otherwise reported on “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC) or a similar organization or agency succeeding to its functions of reporting prices. |
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(ii) | Delivery of New Warrants Upon Partial 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) | 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. | |
(iv) | 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 of the Company in respect of the issuance of such Warrant Shares, all of which taxes and Company 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. |
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(g) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and the 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 Person 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(g), 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 and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(g) 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, and the Company shall have no obligation to verify or confirm the accuracy of such 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(g), 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 two 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 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(g), provided that the Beneficial Ownership Limitation in no event exceeds 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(g) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this Section 2(g) shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(g) to correct this Section 2(g) (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 Section 2(g) shall apply to a successor holder of this Warrant.
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Section 3. Certain Adjustments.
(a) Stock Splits. If any time while this Warrant is outstanding, the Company effects a forward split or reverse split of the Common Stock, the number of Warrant Shares shall be appropriately adjusted, with any partial resulting Warrant Share being rounded up to the next nearest whole number and the Exercise Price shall be proportionately adjusted such that the aggregate Exercise Price payable hereunder shall remain unchanged. By way of example and not limitation, (i) in the event that the Company effects a two-for-one forward split of the Common Stock, wherein each issued and outstanding share of Common Stock is converted into two shares of Common Stock, the number of Warrant Shares shall be increased by 100% and the Exercise Price shall be reduced by 50%; and (ii) in the event that the Company effects a one-for-two reverse split of the Common Stock, wherein each two issued and outstanding shares of Common Stock are converted into one share of Common Stock, the number of Warrant Shares shall be reduced by 50% and the Exercise Price shall be increased by 100%.
(b) 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 (and all of its Subsidiaries, taken as a whole), 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, merger 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, 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(g) 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 in accordance with the provisions of this Section 3(b) 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 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 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 with the same effect as if such Successor Entity had been named as the Company herein.
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(c) 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.
(d) Notice to Holder of 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.
(e) Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during the term of this Warrant, subject to the prior written consent of the Holder, reduce the then-current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.
Section 4. Transfer of Warrant; Legend.
(a) No Transfer. This Warrant may not be transferred by the Holder to any other person or entity without the prior written approval of the Company, to be given or withheld in the sole discretion of the Company, and any such attempted transfer in violation of such limitation shall be null and void and of no force or effect.
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(b) Legends. Any legend required by the securities laws of any state to the extent such laws are applicable to the Warrant Shares represented by the certificate so legended shall be included on any certificates representing the Warrant Shares. Holder also understands that the Warrant Shares may bear the following or a substantially similar legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION ARE NOT REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE NOT SET FORTH HEREIN.
Section 5. Miscellaneous.
(a) No Rights as Stockholder Until Exercise; No Settlement in Cash. 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(f)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(f)(i) and Section 2(f)(iii), in no event shall the Company be required to net cash settle an exercise of this Warrant.
(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) Entire Agreement. This Warrant (including any recitals hereto) and the Agreement set forth the entire understanding of the Parties with respect to the subject matter hereof, and shall not be modified or affected by any offer, proposal, statement or representation, oral or written, made by or for any Party in connection with the negotiation of the terms hereof, and may be modified only by instruments signed by the Company and the Holder.
(d) 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.
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(e) Notices. All notices under this Warrant shall be in writing. Notices may be served by certified or registered mail, postage paid with return receipt requested; by private courier, prepaid; by other reliable form of electronic communication; or personally. Mailed notices shall be deemed delivered five (5) days after mailing, properly addressed. Couriered notices shall be deemed delivered on the date that the courier warrants that delivery will occur. Electronic communication notices shall be deemed delivered when receipt is either confirmed by confirming transmission equipment or acknowledged by the addressee or its office. Personal delivery shall be effective when accomplished. Any Party may change its address by giving notice, in writing, stating its new address, to the other Party. Subject to the forgoing, notices shall be sent as follows:
If to the Company:
Nutralife Biosciences, Inc.
Attn: Edgar Ward
6601 Lyons Road, Suite L-6
Coconut Creek, FL 33073
Email: edgar@nutralifebiosciences.com
If to Holder, to the address of Holder as set forth in the 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) No Waiver. No waiver of any provision of this Warrant shall be effective unless it is in writing and signed by the Party against whom it is asserted, and any such written waiver shall only be applicable to the specific instance to which it relates and shall not be deemed to be a continuing or future waiver.
(h) Headings. The article and section headings contained in this Warrant are inserted for convenience only and shall not affect in any way the meaning or interpretation of the Warrant.
(i) Governing Law. This Warrant, and any dispute arising out of, relating to, or in connection with this Warrant, shall be governed by and construed in accordance with the laws of the State of Florida, without giving effect to any choice or conflict of law provision or rule (whether of the State of Florida or of any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Florida.
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(j) Enforcement of the Warrant; Jurisdiction; No Jury Trial.
(i) | Each of the Parties irrevocably agrees that any legal action or proceeding with respect to this Warrant and the rights and obligations arising under this Warrant, or for recognition and enforcement of any judgment or arbitral award or resolution in respect of this Warrant, shall be brought and determined exclusively in the courts of the State of Florida located in Broward County, Florida or in the event (but only in the event) that such courts do not have subject matter jurisdiction over such action or proceeding, in the United States District Court sitting in Broward County, Florida (the “Selected Courts”). Each of the Parties hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the Selected Courts and agrees that it will not bring any action relating to this Warrant or any of the transactions contemplated by this Warrant in any court other than the Selected Courts. Each of the Parties hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Warrant, (a) any claim that it is not personally subject to the jurisdiction of the Selected Courts for any reason other than the failure to serve in accordance with the provisions of this Warrant; (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise); and (c) to the fullest extent permitted by law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum; (ii) the venue of such suit, action or proceeding is improper; or (iii) this Warrant, or the subject matter of this Warrant, may not be enforced in or by the Selected Courts. | |
(ii) | EACH PARTY TO THIS WARRANT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR OTHER PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER, RELATING TO OR IN CONNECTION WITH THIS WARRANT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. | |
(iii) | The Holder hereby expressly acknowledges that the agreements and restrictions contained herein are reasonable and necessary to protect the Company’s legitimate interests, that the Company would not have entered into this Warrant in the absence of such agreements and restrictions, and that any violation of such restrictions will result in irreparable harm to the Company. The Holder agrees that the Company shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, and specific performance of, as well as an equitable accounting of all earnings, profits and other benefits arising from any violation of, the agreements and restrictions contained herein, which rights shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled. The Holder irrevocably and unconditionally (i) agrees that any legal proceeding arising out of this Warrant may be brought in the Selected Courts, (ii) consents to the non-exclusive jurisdiction of the Selected Courts in any such proceeding, and (iii) waives any objection to the laying of venue of any such proceeding in any Selected Court. |
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(k) Attorneys’ Fees. If any Party hereto is required to engage in litigation against any other Party, either as plaintiff or as defendant, in order to enforce or defend any rights under this Warrant, and such litigation results in a final judgment in favor of such Party (“Prevailing Party”), then the party or parties against whom said final judgment is obtained shall reimburse the Prevailing Party for all direct, indirect or incidental expenses incurred, including, but not limited to, all attorneys’ fees, court costs and other expenses incurred throughout all negotiations, trials or appeals undertaken in order to enforce the Prevailing Party’s rights hereunder.
(l) Parties in Interest. This Warrant shall be binding upon and inure solely to the benefit of each Party, and nothing in this Warrant, express or implied, is intended to confer upon any other person or entity any rights or remedies of any nature under or by reason of this Warrant.
(m) Severability; Expenses; Further Assurances. If any term, condition or other provision of this Warrant is determined by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms, conditions and provisions of this Warrant shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by this Warrant is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Warrant so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated by this Warrant be consummated as originally contemplated to the fullest extent possible. Except as otherwise specifically provided in this Warrant, each Party shall be responsible for the expenses it may incur in connection with the negotiation, preparation, execution, delivery, performance and enforcement of this Warrant. The Parties shall from time to time do and perform any additional acts and execute and deliver any additional documents and instruments that may be required by Law or reasonably requested by any Party to establish, maintain or protect its rights and remedies under, or to effect the intents and purposes of, this Warrant.
(n) Execution in Counterparts, Electronic Transmission. This Warrant may be executed in any number of counterparts, each of which shall be deemed an original. The signature of any Party which is transmitted by any reliable electronic means such as, but not limited to, a photocopy, electronically scanned or facsimile machine, for purposes hereof, is to be considered as an original signature, and the document transmitted is to be considered to have the same binding effect as an original signature or an original document.
(o) No Assignment. This Warrant may not be assigned by either Party without the prior written consent of the other Party in its sole discretion.
(p) Currency. All dollar amounts are in U.S. dollars.
********************
(SIGNATURE PAGE FOLLOWS)
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the Issue Date.
Nutralife Biosciences, Inc. | ||
By: | /s/ Edgar Ward | |
Name: | Edgar Ward | |
Title: | Chief Executive Officer |
Agreed and accepted:
Gregory Ross
By: | /s/ Gregory Ross | |
Name: | Gregory Ross |
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NOTICE OF EXERCISE
TO: Nutralife Biosciences, 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 Section 2(c) of the attached Warrant, to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in such in Section 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:
Name of Holder: | ||
By: | ||
Name: | ||
Title: | ||
Date: | __________________, 202 |
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Exhibit 4.14
NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY 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 UNDER 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. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
COMMON STOCK PURCHASE WARRANT
Nutralife Biosciences, Inc.
Warrant Shares: 800,000 | Issue Date: January 11, 2021 |
THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, Gregory Ross (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 the Issue Date as set forth above (the “Issue Date”) and on or prior to 5:00 p.m. (New York City time) on the third anniversary of the Issue Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from Nutralife Biosciences, Inc., a Florida corporation (the “Company”), up to the number of shares set forth above (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), subject to adjustment as set forth herein.
Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Subscription Agreement (the “Agreement”), dated January 11, 2021, among the Company and the Holder. This Warrant is subject to the terms and conditions of the Agreement and, in the event of a conflict between the Agreement and this Warrant, the terms and conditions of this Warrant shall control. In addition, for purposes herein:
(a) The Company and the Holder may be referred to herein individually as a “Party” and collectively as the “Parties”.
(b) “Affiliate” means, with respect to a specified Person, any other Person that directly or indirectly Controls, is Controlled by or is under common Control with, the specified Person.
(c) “Business Day” means any day except Saturday, Sunday and any legal holiday or a day on which banking institutions in Florida generally are authorized or required by Law or other governmental actions to close.
(d) “Control” means (a) the possession, directly or indirectly, of the power to vote 10% or more of the securities or other equity interests of a Person having ordinary voting power, (b) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, by contractor otherwise, or (c) being a director, officer, executor, trustee or fiduciary (or their equivalents) of a Person or a Person that controls such Person.
(e) “Person” means a natural person, a corporation, a limited liability company, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or any agency or instrumentality thereof.
(f) “Transfer Agent” means the Company’s transfer agent for the Common Stock as in place from time to time.
Section 2. Exercise.
(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 Issue Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or PDF copy submitted by e-mail with return receipt requested (or e-mail attachment to an e-mail with return receipt requested) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days (as defined bellow) and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(f)(i)) following the date of exercise as aforesaid, the Holder shall deliver to the Company the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) 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 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 exercised the rights to purchase 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 together with the final Notice of Exercise as 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, and the records of the Company shall be deemed controlling in the absence of manifest error. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this Section 2(a), 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.
(b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $0.08, subject to adjustment hereunder (the “Exercise Price”).
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(c) Cashless Exercise. In the event that (1) the Warrant Shares are not registered for resale pursuant to a registration statement under the Securities Act of 1933, as amended (the “Securities Act”) as of the date of the delivery of a Notice of Exercise and (2) the Market Price (as defined below) of one share of Common Stock is greater than the Exercise Price in effect at such time, 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 computed using the following formula:
X = Y(A-B)
A
Where:
X | = | The number of Warrant Shares to be issued to Holder | |
Y | = | the number of Warrant Shares that the Holder elects to purchase under this Warrant (at the date of such calculation) | |
A | = | the Market Price (at the date of such calculation) | |
B | = | the Exercise Price (as adjusted to the date of such calculation) |
(d) Characteristics. 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 characteristics of the Warrants being exercised, and the holding period of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(d).
(e) Market Price. “Market Price” for the Common Stock (or any replacement security pursuant to Section 3(b)) means, for any security as of any date, the first of the following which shall apply:
(i) | the dollar volume-weighted average price for such security on the OTC Markets or a United States national securities exchange which is the principal market on which such security is then traded (as applicable, the “Trading Market”) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg L.P. through its “HP” function (set to weighted average) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg L.P.; | |
(ii) | if no dollar volume-weighted average price is reported for such security by Bloomberg L.P. for such hours as set forth in Section 2(e)(i), the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC); and |
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(iii) | if the Market Price cannot be calculated for such security on such date on bases as set forth in Section 2(e)(i) or Section 2(e)(ii), the Market Price of such security on such date shall be the fair market value of such security as mutually determined in good faith by the Board of Directors of the Company and the Holder after taking into consideration factors they may each deem appropriate. |
(f) 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 by 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 (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 (assuming cashless exercise of the Warrants), and 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 the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period 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) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. 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. For purposes herein, “Trading Day” means any day on which the Common Stock (or any replacement security pursuant to Section 3(b)) is traded on the Trading Market or is otherwise reported on “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC) or a similar organization or agency succeeding to its functions of reporting prices. |
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(ii) | Delivery of New Warrants Upon Partial 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) | 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. | |
(iv) | 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 of the Company in respect of the issuance of such Warrant Shares, all of which taxes and Company 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. |
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(g) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and the 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 Person 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(g), 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 and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(g) 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, and the Company shall have no obligation to verify or confirm the accuracy of such 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(g), 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 two 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 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(g), provided that the Beneficial Ownership Limitation in no event exceeds 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(g) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this Section 2(g) shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(g) to correct this Section 2(g) (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 Section 2(g) shall apply to a successor holder of this Warrant.
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Section 3. Certain Adjustments.
(a) Stock Splits. If any time while this Warrant is outstanding, the Company effects a forward split or reverse split of the Common Stock, the number of Warrant Shares shall be appropriately adjusted, with any partial resulting Warrant Share being rounded up to the next nearest whole number and the Exercise Price shall be proportionately adjusted such that the aggregate Exercise Price payable hereunder shall remain unchanged. By way of example and not limitation, (i) in the event that the Company effects a two-for-one forward split of the Common Stock, wherein each issued and outstanding share of Common Stock is converted into two shares of Common Stock, the number of Warrant Shares shall be increased by 100% and the Exercise Price shall be reduced by 50%; and (ii) in the event that the Company effects a one-for-two reverse split of the Common Stock, wherein each two issued and outstanding shares of Common Stock are converted into one share of Common Stock, the number of Warrant Shares shall be reduced by 50% and the Exercise Price shall be increased by 100%.
(b) 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 (and all of its Subsidiaries, taken as a whole), 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, merger 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, 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(g) 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 in accordance with the provisions of this Section 3(b) 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 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 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 with the same effect as if such Successor Entity had been named as the Company herein.
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(c) 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.
(d) Notice to Holder of 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.
(e) Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during the term of this Warrant, subject to the prior written consent of the Holder, reduce the then-current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.
Section 4. Transfer of Warrant; Legend.
(a) No Transfer. This Warrant may not be transferred by the Holder to any other person or entity without the prior written approval of the Company, to be given or withheld in the sole discretion of the Company, and any such attempted transfer in violation of such limitation shall be null and void and of no force or effect.
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(b) Legends. Any legend required by the securities laws of any state to the extent such laws are applicable to the Warrant Shares represented by the certificate so legended shall be included on any certificates representing the Warrant Shares. Holder also understands that the Warrant Shares may bear the following or a substantially similar legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION ARE NOT REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE NOT SET FORTH HEREIN.
Section 5. Miscellaneous.
(a) No Rights as Stockholder Until Exercise; No Settlement in Cash. 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(f)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(f)(i) and Section 2(f)(iii), in no event shall the Company be required to net cash settle an exercise of this Warrant.
(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) Entire Agreement. This Warrant (including any recitals hereto) and the Agreement set forth the entire understanding of the Parties with respect to the subject matter hereof, and shall not be modified or affected by any offer, proposal, statement or representation, oral or written, made by or for any Party in connection with the negotiation of the terms hereof, and may be modified only by instruments signed by the Company and the Holder.
(d) 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.
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(e) Notices. All notices under this Warrant shall be in writing. Notices may be served by certified or registered mail, postage paid with return receipt requested; by private courier, prepaid; by other reliable form of electronic communication; or personally. Mailed notices shall be deemed delivered five (5) days after mailing, properly addressed. Couriered notices shall be deemed delivered on the date that the courier warrants that delivery will occur. Electronic communication notices shall be deemed delivered when receipt is either confirmed by confirming transmission equipment or acknowledged by the addressee or its office. Personal delivery shall be effective when accomplished. Any Party may change its address by giving notice, in writing, stating its new address, to the other Party. Subject to the forgoing, notices shall be sent as follows:
If to the Company:
Nutralife Biosciences, Inc.
Attn: Edgar Ward
6601 Lyons Road, Suite L-6
Coconut Creek, FL 33073
Email: edgar@nutralifebiosciences.com
If to Holder, to the address of Holder as set forth in the 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) No Waiver. No waiver of any provision of this Warrant shall be effective unless it is in writing and signed by the Party against whom it is asserted, and any such written waiver shall only be applicable to the specific instance to which it relates and shall not be deemed to be a continuing or future waiver.
(h) Headings. The article and section headings contained in this Warrant are inserted for convenience only and shall not affect in any way the meaning or interpretation of the Warrant.
(i) Governing Law. This Warrant, and any dispute arising out of, relating to, or in connection with this Warrant, shall be governed by and construed in accordance with the laws of the State of Florida, without giving effect to any choice or conflict of law provision or rule (whether of the State of Florida or of any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Florida.
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(j) Enforcement of the Warrant; Jurisdiction; No Jury Trial.
(i) | Each of the Parties irrevocably agrees that any legal action or proceeding with respect to this Warrant and the rights and obligations arising under this Warrant, or for recognition and enforcement of any judgment or arbitral award or resolution in respect of this Warrant, shall be brought and determined exclusively in the courts of the State of Florida located in Broward County, Florida or in the event (but only in the event) that such courts do not have subject matter jurisdiction over such action or proceeding, in the United States District Court sitting in Broward County, Florida (the “Selected Courts”). Each of the Parties hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the Selected Courts and agrees that it will not bring any action relating to this Warrant or any of the transactions contemplated by this Warrant in any court other than the Selected Courts. Each of the Parties hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Warrant, (a) any claim that it is not personally subject to the jurisdiction of the Selected Courts for any reason other than the failure to serve in accordance with the provisions of this Warrant; (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise); and (c) to the fullest extent permitted by law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum; (ii) the venue of such suit, action or proceeding is improper; or (iii) this Warrant, or the subject matter of this Warrant, may not be enforced in or by the Selected Courts. | |
(ii) | EACH PARTY TO THIS WARRANT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR OTHER PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER, RELATING TO OR IN CONNECTION WITH THIS WARRANT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. | |
(iii) | The Holder hereby expressly acknowledges that the agreements and restrictions contained herein are reasonable and necessary to protect the Company’s legitimate interests, that the Company would not have entered into this Warrant in the absence of such agreements and restrictions, and that any violation of such restrictions will result in irreparable harm to the Company. The Holder agrees that the Company shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, and specific performance of, as well as an equitable accounting of all earnings, profits and other benefits arising from any violation of, the agreements and restrictions contained herein, which rights shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled. The Holder irrevocably and unconditionally (i) agrees that any legal proceeding arising out of this Warrant may be brought in the Selected Courts, (ii) consents to the non-exclusive jurisdiction of the Selected Courts in any such proceeding, and (iii) waives any objection to the laying of venue of any such proceeding in any Selected Court. |
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(k) Attorneys’ Fees. If any Party hereto is required to engage in litigation against any other Party, either as plaintiff or as defendant, in order to enforce or defend any rights under this Warrant, and such litigation results in a final judgment in favor of such Party (“Prevailing Party”), then the party or parties against whom said final judgment is obtained shall reimburse the Prevailing Party for all direct, indirect or incidental expenses incurred, including, but not limited to, all attorneys’ fees, court costs and other expenses incurred throughout all negotiations, trials or appeals undertaken in order to enforce the Prevailing Party’s rights hereunder.
(l) Parties in Interest. This Warrant shall be binding upon and inure solely to the benefit of each Party, and nothing in this Warrant, express or implied, is intended to confer upon any other person or entity any rights or remedies of any nature under or by reason of this Warrant.
(m) Severability; Expenses; Further Assurances. If any term, condition or other provision of this Warrant is determined by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms, conditions and provisions of this Warrant shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by this Warrant is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Warrant so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated by this Warrant be consummated as originally contemplated to the fullest extent possible. Except as otherwise specifically provided in this Warrant, each Party shall be responsible for the expenses it may incur in connection with the negotiation, preparation, execution, delivery, performance and enforcement of this Warrant. The Parties shall from time to time do and perform any additional acts and execute and deliver any additional documents and instruments that may be required by Law or reasonably requested by any Party to establish, maintain or protect its rights and remedies under, or to effect the intents and purposes of, this Warrant.
(n) Execution in Counterparts, Electronic Transmission. This Warrant may be executed in any number of counterparts, each of which shall be deemed an original. The signature of any Party which is transmitted by any reliable electronic means such as, but not limited to, a photocopy, electronically scanned or facsimile machine, for purposes hereof, is to be considered as an original signature, and the document transmitted is to be considered to have the same binding effect as an original signature or an original document.
(o) No Assignment. This Warrant may not be assigned by either Party without the prior written consent of the other Party in its sole discretion.
(p) Currency. All dollar amounts are in U.S. dollars.
********************
(SIGNATURE PAGE FOLLOWS)
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the Issue Date.
Nutralife Biosciences, Inc. | ||
By: | /s/ Edgar Ward | |
Name: | Edgar Ward | |
Title: | Chief Executive Officer |
Agreed and accepted:
Gregory Ross
By: | /s/ Gregory Ross | |
Name: | Gregory Ross |
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NOTICE OF EXERCISE
TO: Nutralife Biosciences, 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 Section 2(c) of the attached Warrant, to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in such in Section 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:
Name of Holder: | ||
By: | ||
Name: | ||
Title: | ||
Date: | __________________, 202 |
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Exhibit 10.29
NUTRALIFE BIOSCIENCES, INC.
INVESTMENT AGREEMENT
This Investment Agreement (the “Investment Agreement”) is made and effective as of the day set forth on the signature page hereto by and between NutraLife BioSciences, Inc., a Florida corporation (“NutraLife”), PhytoChem Technologies, Inc. (“PhytoChem”), a Florida corporation (NutraLife and PhytoChem are collectively referred to herein as the “Company”), and Kahn Family Limited PT II (the “Purchaser”). The Company and the Purchaser are referred to herein collectively as the “Parties”, or individually as a “Party”.
RECITALS
WHEREAS, the Company obtained certain rights to commercialize and monetize certain technology and phytoextractor equipment known as the Ennea Processor (“Ennea” or “Ennea Processor”) pursuant to an agreement by and between Owen J. Morgan (“Morgan”) and the Company dated February 4, 2019 (the “Morgan Agreement”.
WHEREAS, the Ennea Processor uses certain technologies to separate, process and/or extract bioactive compounds including cannabinoids from hemp and other plants to remove and/or modify, purify, dilute and extract bioactive ingredients and/or remove unwanted substances to produce finished products for a variety of applications as more fully described on Exhibit A hereto;
WHEREAS, the Company requires capital to manufacture, purchase, monetize and/or commercialize the Ennea;
WHEREAS, the Company desires to issue and sell, and the Purchaser desires to purchase a full recourse secured convertible promissory note attached hereto as Exhibit B (the “Note”) bearing interest at the rate of eight and one half percent (8.5%) per annuum (the “Interest”) in the principal amount of $1,000,000 (“Principal” or the “Principal Amount”) and the Company intends to use the Note proceeds to manufacture, purchase, monetize and/or commercialize the Ennea Processors;.
WHEREAS, the first four of the Ennea Processors (“Collateral Processors”) that the Company monetizes and/or commercializes pursuant to the Morgan Agreement shall serve as collateral for the Principal Amount pursuant to the terms of the Security Agreement (the “Security Agreement”) attached hereto as Exhibit C;
WHEREAS, at any time while the Note is outstanding, the Purchaser shall have the right to convert the Note into shares of the Company’s Common Stock at the price of $1.00 per share (the “Conversion Shares”);
WHEREAS, as consideration for the purchase of the Note, the Company shall (i) pay to the Purchaser the Interest as set forth in the Note, (ii) issue to the Purchaser, 500,000 shares of its Common Stock, $.0001 par value per share (the “Common Shares”), and (iii) grant the Purchaser eight and one half percent (8.5%) of the revenue generated from the Collateral Processors (the “Royalty”) while the Principal Amount is outstanding and five percent (5%) thereafter as set forth in the Royalty Agreement (the “Purchaser Royalty Agreement”) attached hereto as Exhibit D;
WHEREAS, the Principal Amount shall be secured by a mortgage on certain real property (the “Mortgage”) attached hereto as Exhibit E pledged by a third party the (“Pledgor”) and such Mortgage shall be reduced by any and all consideration of any nature that is paid by the Company to the Purchaser under the Transaction Documents (as defined herein); and
WHEREAS, The Company shall pay the Pledgor certain consideration for the pledge of the Collateral pursuant to the terms of the Pledge Agreement attached as Exhibit F (the “Pledge Agreement”).
NOW THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, receipt of which is hereby acknowledged, the parties to this Investment Agreement agree as follows:
ARTICLE 1. RECITALS.
ARTICLE 1.1 RECITALS. The above recitals are true and correct and made a part hereof.
ARTICLE 2. DEFINITIONS.
ARTICLE 2.1 SECURITIES. The Note, the Common Shares and the Conversion Shares are collectively referred to herein as the “Securities.”
ARTICLE 2.2 CAPITALIZED TERMS. The Note, Security Agreement, Purchaser Royalty Agreement, Pledge Agreement, Mortgage and Pledgor Royalty Agreement are referred to as the “Ancillary Agreements.” This Investment Agreement and the Ancillary Agreements shall be referred to collectively as the “Transaction Documents.”
Any capitalized term not defined herein shall have the meaning ascribed to it in Transaction Documents.
ARTICLE 3. CONSIDERATION PAID TO THE PURCHASER.
ARTICLE 3.1 ADDITIONAL CONSIDERATION. In addition to the Company’s repayment of the Principal Amount and the payment of Interest to the Company as set forth in the Note, the Company shall pay the following additional consideration to the Purchaser: (i) 500,000 of the Company’s Common Shares upon execution hereof, and (ii) the Royalty pursuant to the terms and conditions set forth in the Purchaser Royalty Agreement.
ARTICLE 3.2 SECURITIES CONSIDERATION. The Common Shares upon issuance to the Purchaser will be duly authorized and, when issued and paid for in accordance with this Investment Agreement and the Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all liens. The Company has reserved from its duly authorized capital stock the maximum number of shares of its common stock issuable upon the conversion of the Note.
ARTICLE 4. PURCHASE AND SALE OF THE NOTE.
ARTICLE 4.1 CLOSING. Subject to the terms and conditions of this Investment Agreement and the Note, the Purchaser agrees to purchase at the Closing (as defined in 4.2 below) and the Company agrees to sell and issue to the Purchaser, the Note in the Principal Amount.
ARTICLE 4.2 PLACE & TIME FOR CLOSING. The purchase and sale of the Note shall take place at the offices of the Company set forth on the signature page hereto on June 6, 2019, or at such other time and place as the Company and the Purchaser mutually agree upon orally or in writing (which time and place are designated as the “Closing”).
ARTICLE 4.3 CLOSING DELIVERIES. At the Closing, the Company shall deliver to the Purchaser signed copies of this Investment Agreement, the Common Shares and the Ancillary Agreements duly executed according to their terms. At the Closing, the Purchaser shall deliver to the Company funds representing the Principal Amount and signed copies of this Investment Agreement and the Ancillary Agreements duly executed according to their terms.
ARTICLE 5. SECURITY & COLLATERAL.
ARTICL 5.1 THE COLLATERAL PROCESSORS AS SECURITY. The Principal Amount shall be secured by the Collateral Processors in accordance with the provisions of the Note and Security Agreement.
ARTICLE 5.2 REAL PROPERTY. The Principal Amount shall be further secured by certain real property under the terms of the Pledge Agreement and Mortgage and such Mortgage shall be reduced by any and all by all consideration of any nature that is paid to the Purchaser by the Company under the Transaction Documents.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF THE PARTIES.
ARTICLE 6.1 COMPANY REPRESENTATIONS. The Company hereby represents and warrants to the Purchaser that:
(i) 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 Florida and has all requisite corporate power and authority to carry on its business as now conducted and as proposed to be conducted (the “Business”). The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure so to qualify would have a material adverse effect on its business or properties.
(ii) AUTHORIZATION. All corporate action required on the part of the Company, its officers, directors, and stockholders necessary for the authorization, execution, and delivery of this Investment Agreement and the Ancillary Agreements and the authorization, sale, issuance, and delivery of this Investment Agreement and the Ancillary Agreements and the performance of all obligations of the Company hereunder and under the Ancillary Agreements has been taken or will be taken prior to the Closing. This Investment Agreement, and each of the Ancillary Agreements, when executed and delivered, shall constitute valid and legally binding agreements, enforceable in accordance with their respective terms except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.
(iii) ISSUANCE OF THE SECURITIES. The Securities upon issuance to the Purchaser will be duly authorized and, when issued and paid for in accordance with this Investment Agreement and the Ancillary Agreements, will be duly and validly issued, fully paid and nonassessable, free and clear of all liens. The Company has reserved from its duly authorized capital stock the maximum number of shares of its common stock issuable upon the conversion of the Note.
ARTICLE 6.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser hereby represents and warrants to the Company that:
(i) AUTHORIZATION. The Purchaser has full power and authority to enter into this Investment Agreement. This Investment Agreement, when executed and delivered by the Purchaser, will constitute a valid and legally binding obligation of the Purchaser, enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of a specific performance, injunctive relief, or other equitable remedies.
(ii) PURCHASE ENTIRELY FOR OWN ACCOUNT. This Investment Agreement is made with the Purchaser in reliance upon the Purchaser’s representation to the Company, which by the Purchaser’s execution of this Investment Agreement, the Purchaser hereby confirms, that the Securities to be acquired by the Purchaser will be acquired for investment for the Purchaser’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Investment Agreement, the Purchaser further represents that the Purchaser does not presently have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the Securities.
(iii) KNOWLEDGE. The Purchaser is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Securities.
(iv) RESTRICTED SECURITIES. The Purchaser understands that the Securities have not been, and will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”), by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Purchaser’s representations as expressed herein. The Purchaser understands that the Securities are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to these laws, the Purchaser must hold the Securities indefinitely unless they are registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration and qualification requirements is available. The Purchaser acknowledges that the Company has no obligation to register or qualify the Securities for resale. The Purchaser further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Securities, and on requirements relating to the Company which are outside of the Purchaser’s control, and which the Company is under no obligation and may not be able to satisfy.
(v) LEGENDS. The Purchaser understands that the Securities may bear one or all of the following legends:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.”
(v) ACCREDITED INVESTOR. The Purchaser is an Accredited Investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
ARTICLE 7. CONDITIONS TO CLOSING.
ARTICLE 7.1 OBLIGATION TO EXECUTE ANCILLARY AGREEMENTS. The obligations of the Purchaser and the Company under this Investment Agreement are subject to the execution of the Ancillary Agreements by the parties thereto at or prior to the Closing.
ARTICLE 8. MISCELLANEOUS.
ARTICLE 8.1 ASSIGNMENT; SUCCESSORS AND ASSIGNS. The terms and conditions of this Investment Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the Parties.
ARTICLE 8.2 WAIVER OF CONFLICTS. The Company and the Purchaser each acknowledge that the Pledgor, Brenda Hamilton and her law firm, Hamilton & Associates Law Group, P.A has in the past performed, and may continue to perform, legal and/or consulting services for the Company in connection with the Transaction Documents and the matters and transactions described in this Investment Agreement as well as in matters unrelated to the Transaction Documents. Accordingly, the Company and Purchaser each hereby acknowledges that they have been advised by Brenda Hamilton & Hamilton & Associates Law Group, P.A. to seek the advice of independent legal counsel in connection with the Transaction Documents including with respect to the Pledge Agreement, Mortgage and Pledgor Royal Agreement in which Brenda Hamilton is a Party and the transactions contemplated thereby. Additionally, the Company and Purchaser each acknowledge that they have had an opportunity to ask for information relevant to this disclosure and has consulted with independent legal counsel or has had the opportunity to do so and gives its informed consent to Brenda Hamilton & Hamilton & Associates Law Group, P.A. representation of and/or performance of services for the Company in the connection with the Transaction Documents and transactions contemplated thereby.
ARTICLE 8.3 GOVERNING LAW AND JURISDICTION. This Investment Agreement shall be governed by and construed in accordance with the laws of the State of Florida without regard to principles of conflict law applicable to contracts made and to be performed with such state. Each of the parties hereto accepts for itself to the jurisdiction of Palm Beach County Florida and irrevocably consents to such jurisdiction in any proceedings and waives any objection to venue laid therein. Any controversy or claim arising out of or relating of this Investment Agreement shall be settled by binding arbitration administered by the American Arbitration Association and judgment on the award entered in any court having jurisdiction. The arbitration proceedings shall be conducted before a panel of three neutral arbitrators in Palm Beach County, Florida all of whom shall be members of the bar of the state of Florida, actively engaged in the practice of law for at least ten (10) years. Either Party hereto may apply to the arbitrator seeking injunctive relief until the arbitration award is rendered or the controversy otherwise resolved. Either Party may, without waiving any remedy under this Investment Agreement, seek from any court having jurisdiction any interim or provisional relief that is necessary to protect the rights or property of that party, pending the arbitral tribunal’s determination of the merits of the controversy. Each party shall bear its own costs, expenses and attorney fees and an equal share of the arbitrators’ and administrative fees of arbitration. Except as may be required by law, neither a party nor an arbitrator may disclose the existence content or results of any arbitration hereunder without the prior written consent of the Parties. All documents, testimony and records shall be received, heard and maintained by the arbitrators in secrecy, available for the inspection only of the Parties to this Investment Agreement and their respective attorneys and their respective experts who shall agree in advance and in writing to receive all such information confidentially and to maintain such information in secrecy until such information shall become generally known. In consideration for and as a material condition of this Investment Agreement, each Party agrees that final and binding arbitration is the exclusive means for resolving any claim or controversy arising out of or related to this Investment Agreement. This Investment Agreement is a waiver of all rights the Parties may have to a civil court action. Accordingly, only an arbitrator, not a judge or jury, will decide the dispute, although the arbitrator has the authority to award any type of relief that could otherwise be awarded by a judge or jury.
ARTICLE 8.4 COUNTERPARTS. This Investment Agreement may be executed in counterparts, each of which is deemed an original, but all of which together are deemed to be one and the same agreement. A signed copy of this Investment Agreement delivered by facsimile, e-mail or other means of electronic transmission is deemed to have the same legal effect as delivery of an original signed copy of this Investment Agreement, if the Party sending such facsimile, e-mail or other means of electronic transmission has received express confirmation that the recipient Party received the Investment Agreement, not merely an electronic facsimile confirmation or automatic e-mail reply.
ARTICLE 8.5 TITLES AND SUBTITLES. The titles and subtitles used in this Investment Agreement are used for convenience only and are not to be considered in construing or interpreting this Investment Agreement.
ARTICLE 8.6 FORCE MAJEURE. The Company shall not be liable or responsible to Purchaser, nor be deemed to have defaulted under or breached this Investment Agreement, for any failure or delay in fulfilling or performing any term of this Investment Agreement, if such failure or delay is caused by or results from acts beyond the Company’s control, including: (i) acts of nature; (ii) flood, fire, hurricane, earthquake or explosion; (iii) war, invasion, hostilities (whether war is declared or not), terrorist threats or acts, riot or other civil unrest; (iv) actions, embargos or blockades in effect on or after the date of this Investment Agreement; (v) national or regional emergency; (vi) strikes, labor stoppages or slowdowns or other industrial disturbances; (vii) shortages of or delays in receiving raw materials; or (viii) shortage of adequate power or transportation facilities (each, a “Force Majeure Event”).
ARTICLE 8.7 NOTICES. Any notice required or permitted by this Investment Agreement shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight delivery service or confirmed facsimile, or 48 hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, if such notice is addressed to the Party to be notified at such Party’s address or facsimile number as set forth on the signature page hereto or as subsequently modified by written notice.
ARTICLE 8.8 AMENDMENTS AND WAIVERS. Any term of this Investment Agreement may only be amended or waived with the written consent of the Company and the Purchaser.
ARTICLE 8.9 SEVERABILITY. If one or more provisions of this Investment Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith, in order to maintain the economic position enjoyed by each party as close as possible to that under the provision rendered unenforceable. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Investment Agreement, (ii) the balance of the Investment Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Investment Agreement shall be enforceable in accordance with its terms.
IN WITNESS WHEREOF, the Parties hereto have executed this Investment Agreement on June 6, 2019.
NUTRALIFE BIOSCIENCES, INC. | KAHN FAMILY LIMITED PT II | |||
By: | By: | |||
Edgar Ward, Chief Executive Officer | (Signature) | |||
PHYTOCHEM TECHNOLOGIES, INC. | (Print Name) | |||
By: | ||||
Edgar Ward, Chief Executive Officer | (Print Title) | |||
Address for Notice: | Address for Notice: | |||
NutraLife Biosciences, Inc. | _________________________________ | |||
Attn: Edgar Ward, Chief Executive Officer | _________________________________ | |||
6601 Lyons Rd. L-6 | _________________________________ | |||
Coconut Creek, Fl. 33073 | Phone: _________________________________ | |||
edgar@NutraFuels.com | Email: _________________________________ |
Exhibit 10.30
EXHIBIT B: THE NOTE
THIS NOTE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE, IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER 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
SECURED CONVERTIBLE PROMISSORY NOTE
DUE NOVEMBER 6, 2020
FOR VALUE RECEIVED, NutraLife BioSciences, Inc., a Florida corporation (“NutraLife”) and PhytoChem Technologies, Inc. (“PhytoChem”), a Florida corporation (NutraLife and PhytoChem are collectively referred to herein as the “Company”), promise to pay to and Kahn Family Limited PT II (the “Purchaser”), the principal sum of $1,000,000 on or before November 6, 2020 as set forth below (the “Maturity Date”) pursuant to the terms of this Secured Convertible Promissory Note (the “Note”). The Company and the Purchaser are referred to herein collectively as the “Parties”, or individually as a “Party”.
WHEREAS, the Company obtained certain rights to commercialize and monetize certain technology and phytoextractor equipment known as the Ennea Processor (“Ennea” or “Ennea Processor”) pursuant to an agreement by and between Owen J. Morgan (“Morgan”) and the Company dated February 4, 2019 (the “Morgan Agreement”);
WHEREAS, the Company requires capital to manufacture, purchase, monetize and commercialize the Ennea Processors;
WHEREAS, the Company desires to issue and sell, and the Purchaser desires to purchase this Note which shall bear interest (the “Interest”) at the rate of eight and one half percent (8.5%) per annuum (the “Interest”) in the principal amount of $1,000,000 (“Principal” or the “Principal Amount”);
WHEREAS, the first four Ennea Processors (the “Collateral Processors”) that the Company commercializes pursuant to the Morgan Agreement shall serve as collateral for the Principal Amount pursuant to the terms of the Security Agreement (the “Security Agreement”) attached to the Investment Agreement as Exhibit C;
WHEREAS, at any time while the Note is outstanding, the Purchaser shall have the right to convert the Note into shares of the Company’s Common Stock at the price of $1.00 per share (the “Conversion Shares”);
WHEREAS, as consideration for the purchase of the Note, the Company shall (i) pay to the Purchaser the Interest as set forth in this Note, (ii) issue 500,000 shares of its Common Stock, $.0001 par value per share (the “Common Shares”) to the Purchaser, and (iii) grant the Purchaser eight and one half percent (8.5%) of the revenue generated from the Collateral Processors (the “Royalty”) while the Principal Amount is outstanding and five percent (5%) thereafter as set forth in the Royalty Agreement (the “Purchaser Royalty Agreement”) attached to the Investment Agreement as Exhibit D.
WHEREAS, the Principal Amount shall be secured by a mortgage (the “Mortgage”) on certain real property (the “Real Property”) attached hereto as Exhibit E provided by a pledgor (the “Pledgor”) who will provide the Mortgage and receive consideration for the pledge of the Real Property pursuant to the terms of the Pledge Agreement attached to the Investment Agreement Exhibit F (the “Pledge Agreement”).
WHEREAS, the Principal Amount secured by the Mortgage will be reduced by any and all consideration of any nature that is paid to the Purchaser by the Company under the Transaction Documents (as defined in the Investment Agreement).
NOW THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, receipt of which is hereby acknowledged, the undersigned agrees as follows:
ARTICLE 1. RECITALS
The Recitals below are incorporated herein and made a part hereof constituting binding terms of this Note.
ARTICLE 2. MATURITY.
ARTICLE 2.1 MATURITY DATE. On December 7, 2020 (the “Maturity Date”), the entire outstanding principal balance of this Note shall mature.
ARTICLE 3. PAYMENT.
ARTICLE 3.1 AMORTIZATION. From the date of this Note (the “Effective Date”) until such time as the Principal Amount has been paid in full, Interest will accrue at the fixed rate of eight- and one-half percent (8.5%) per annum. Beginning July 7, 2019 through December 7, 2019, the Company will make interest only payments on the Principal Amount. Beginning on January 7, 2020 and continuing until the Maturity Date, the Company will make equal monthly installment payments of principal and interest in an amount sufficient to fully amortize the Principal Amount and all accrued Interest over an amortization period of twelve (12) months.
ARTICLE 3.2 PAYMENT SCHEDULE. From July 7, 2019 through December 7, 2019, the Company will make interest only payments at the fixed rate of eight- and one-half percent (8.5%) per annum. Beginning on January 7, 2020 and continuing until the Maturity Date, the Company will make equal monthly installment payments of principal and interest at the fixed rate of eight- and one-half percent (8.5%) per annum until the amounts due under the Note are paid in full.
ARTICLE 3.3 INTEREST. Interest will accrue at the rate of eight- and one-half percent (8.5%) per annum beginning on the Effective Date. Interest shall be calculated based upon a 365-day year and the actual number of days elapsed. All amounts payable under this Note are payable in lawful money of the United States during normal business hours on a Business Day. For purposes of this Note, “Business Day” means any day except Saturday, Sunday, and any day which shall be a federal legal holiday in the United States or a day on which banking institutions in the State of Florida are authorized or required by law or other government action to close.
ARTICLE 3.4 PREPAYMENT. The Company may prepay this Note in whole or in part at any time without interest or penalty.
ARTICLE 3.5 APPLICATION OF PAYMENTS. All payments made by the Company to the Purchaser under the Transaction Documents including but not limited to this Note shall be first applied, to the Principal Amount then to accrued interest outstanding. Any and all consideration paid by the Company to the Purchaser under the Transaction Documents (as defined in the Investment Agreement) shall reduce the amounts secured by the Mortgage without affecting the amounts owed by the Company to the Purchaser under the Transaction Documents. For example, for the avoidance of doubt, should the Purchaser receive consideration from Purchaser in Interest, Royalty and/or Securities having a value of $500,000 then the Mortgage would be reduced to $500,000 ($1,000,000-$500,000) without affecting the amounts owed by the Company to the Purchaser.
ARTICLE 4. COLLATERAL.
ARTICLE 4.1 ENNEA PROCESSOR AS COLLATERAL. This Note is secured by the Collateral Processors pursuant to the terms as set forth in the Investment Agreement and Security Agreement. The “Collateral Processors” as used in this Note shall mean the first four (4) Ennea Processors manufactured and/or commercialized by the Company directly or indirectly as a result of or pursuant to the Morgan Agreement.
ARTICLE 4.2 REAL PROPERTY AS COLLATERAL. The Company shall deliver a pledge of the Real Property to secure the Principal Amount pursuant to the terms of the Pledge Agreement and Mortgage attached as Exhibits E and F of the Investment Agreement and such Mortgage shall be reduced from time to time by the consideration paid by the Company to the Purchaser. Simultaneously with the payment of consideration equal to the Principal Amount, the Purchaser will record with the Palm Beach County Property Appraiser’s Officer, a Satisfaction of the Mortgage releasing the Purchaser’s Mortgage on the Real Property.
ARTICLE 4.3 FULL RECOURSE NOTE. This is a Full Recourse Promissory Note. Accordingly, in the event of a default of this Note, Purchaser shall have full recourse to all the assets of the Company (including the assets of both NutraLife and PhytoChem) and the Purchaser shall be required to proceed against or exhaust all remedies against both NutraLife and PhytoChem’s assets prior to proceeding against the Mortgage and/or commencing an action to foreclose the Mortgage on the Real Property.
ARTICLE 4.4 RECORDS. The Company and Purchaser shall provide Pledgor with copies of all consideration paid by the Company to Purchaser under the Transaction Documents.
ARTICLE 5. CONVERSION.
ARTICLE 5.1 CONVERSION BY THE PURCHASER. At any time while this Note is outstanding, the Purchaser shall have the option of converting the Principal Amount and accrued Interest due on this Note into the Company’s Common Stock at the price of $1.00 per share. The Common Stock issued upon conversion of this Note are referred to herein as the “Conversion Shares”.
ARTICLE 5.2 MECHANICS AND EFFECT OF CONVERSION. Upon conversion of this Note pursuant to this Article 5, the Purchaser shall surrender this Note, duly endorsed, at the principal offices of the Company. At its expense, the Company will, as soon as practicable thereafter, issue and deliver to such Purchaser, at such principal office, a certificate or certificates for the Conversion Shares. Upon conversion of the Principal Amount and/or Interest into Conversion Shares, the Company will be forever released from all of its obligations and liabilities under this Note. In the event Purchaser converts less than all Principal and Interest outstanding, the amount converted under the Note shall be first applied to reduce the Principal until it is paid in full. Additionally, upon conversion of all outstanding Principal at the time of conversion, the Mortgage shall be released as security for the obligations and liabilities under this Note.
ARTICLE 6. EVENTS OF DEFAULT.
ARTICLE 6.1. DEFAULT. An “Event of Default” shall mean that the Company has failed to make any payment required under this Note, within fifteen (15) days after the date the payment is due. If the Company is in default under this Note, the unpaid principal and accrued and unpaid interest and any other unpaid amounts and costs due will bear interest at the rate of ten percent (10%) (the “Default Rate”) until the Event of Default is cured. From and after the Maturity Date any unpaid principal and interest and any other unpaid amounts and costs under this Note will bear interest at the Default Rate. Additionally, and without limitation, all amounts owed under any judgment obtained by Purchaser against the Company with respect to this Note will bear interest at the Default Rate.
ARTICLE 6.2 COLLECTION COSTS. If an Event of Default occurs under this Note, the Company shall pay all reasonable costs of collection including, without limitation, attorney fees in a reasonable amount without limiting the foregoing.
ARTICLE 7. MISCELLANEOUS.
ARTICLE 7.1 NOTICES. Any and all notices or other communications or deliveries to be provided by the parties shall be delivered by facsimile, sent by a nationally recognized overnight courier service, addressed to the Company, at the addresses set forth on the signature page hereto or such other address or facsimile number as the Company may specify for such purposes by notice to the Purchaser delivered in accordance with this Article.
ARTICLE 7.2 ABSOLUTE OBLIGATION. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any accrued interest on this Note at the time, place, and rate, and in the coin or currency, herein prescribed.
ARTICLE 7.3 LOST OR MUTILATED NOTE. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, and indemnity, if requested, all reasonably satisfactory to the Company.
ARTICLE 7.4 SECURITY INTEREST. This Note is a direct debt obligation of the Company and is secured by a security interest in the Collateral Processors. The Purchaser and the Company have entered into the Security Agreement dated as of the date hereof and attached hereto as Exhibit C to the Investment Agreement in connection with the Purchaser’s security interest in the Collateral Processors.
ARTICLE 7.5 SENIORITY. The Company shall not incur any indebtedness senior to this Note while it remains outstanding and shall not encumber the Collateral Processors or the Company’s assets with any interest senior to this Note.
ARTICLE 7.6 ACTION TO COLLECT ON NOTE. If action is instituted to collect on this Note, the Company shall all pay all costs and expenses, including reasonable attorney’s fees, incurred in connection with such action.
ARTICLE 7.7 EXTENSION AND TERMINATION. The payments due under this Note may not be extended by the Purchaser and the Company without the express written consent of the Pledgor identified in the Pledge Agreement. In the event that an extension of this Note is granted without Pledgor’s written consent then the Mortgage shall be deemed satisfied and released in full as collateral for the Principal Amount and Purchaser shall be obligated to record a release of the Mortgage in the Palm Beach County Florida property records.
ARTICLE 7.8 GOVERNING LAW AND JURISDICTION. This Note shall be governed by and construed in accordance with the laws of the State of Florida without regard to principles of conflict law applicable to contracts made and to be performed with such state. Each of the parties hereto accepts for itself to the jurisdiction of Palm Beach County Florida and irrevocably consents to such jurisdiction in any proceedings and waives any objection to venue laid therein. Any controversy or claim arising out of or relating of this Note shall be settled by binding arbitration administered by the American Arbitration Association and judgment on the award entered in any court having jurisdiction. The arbitration proceedings shall be conducted before a panel of three neutral arbitrators in Palm Beach County, Florida all of whom shall be members of the bar of the state of Florida, actively engaged in the practice of law for at least ten (10) years. Either Party hereto may apply to the arbitrator seeking injunctive relief until the arbitration award is rendered or the controversy otherwise resolved. Either Party may, without waiving any remedy under this Note, seek from any court having jurisdiction any interim or provisional relief that is necessary to protect the rights or property of that party, pending the arbitral tribunal’s determination of the merits of the controversy. Each party shall bear its own costs, expenses and attorney fees and an equal share of the arbitrators’ and administrative fees of arbitration. Except as may be required by law, neither a party nor an arbitrator may disclose the existence content or results of any arbitration hereunder without the prior written consent of the Parties. All documents, testimony and records shall be received, heard and maintained by the arbitrators in secrecy, available for the inspection only of the Parties to this Note and their respective attorneys and their respective experts who shall agree in advance and in writing to receive all such information confidentially and to maintain such information in secrecy until such information shall become generally known. In consideration for and as a material condition of this Note, each Party agrees that final and binding arbitration is the exclusive means for resolving any claim or controversy arising out of or related to this Note. This Agreement is a waiver of all rights the Parties may have to a civil court action. Accordingly, only an arbitrator, not a judge or jury, will decide the dispute, although the arbitrator has the authority to award any type of relief that could otherwise be awarded by a judge or jury.
ARTICLE 7.9 SEVERABILITY. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Purchaser.
ARTCLE 7.10 HEADINGS. The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit or affect any of the provisions hereof.
ARTICLE 7.11 PAYMENT. All payments shall be made in lawful money of the United States of America at such place as the Purchaser hereof may from time to time designate in writing to the Company. Payments made by the Company under the Transaction Documents including this Note shall be credited first to the Principal Amount then outstanding until paid in full then to accrued interest. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.
ARTICLE 7.12 WAIVER OF CONFLICTS. The Company and the Purchaser each acknowledge that the Pledgor, Brenda Hamilton and her law firm, Hamilton & Associates Law Group, P.A has in the past performed, and may continue to perform, legal and/or consulting services for the Company in connection with the Transaction Documents and the matters and transactions described in this Note as well as in matters unrelated to the Transaction Documents. Accordingly, the Company and Purchaser each hereby acknowledges that they have been advised by Brenda Hamilton & Hamilton & Associates Law Group, P.A. to seek the advice of independent legal counsel in connection with the Transaction Documents including with respect to the Pledge Agreement, Mortgage and Pledgor Royal Agreement in which Brenda Hamilton is a Party and the transactions contemplated thereby. Additionally, the Company and Purchaser each acknowledge that they have had an opportunity to ask for information relevant to this disclosure and has consulted with independent legal counsel or has had the opportunity to do so and gives its informed consent to Brenda Hamilton & Hamilton & Associates Law Group, P.A. representation of and/or performance of services for the Company in the connection with the Transaction Documents and transactions contemplated thereby.
ARTICLE 7.13 FORCE MAJEURE. The Company shall not be liable or responsible to Purchaser, nor be deemed to have defaulted under or breached this Note, for any failure or delay in fulfilling or performing any term of this Note, if such failure or delay is caused by or results from acts beyond the Company’s control, including: (i) acts of nature; (ii) flood, fire, hurricane, earthquake or explosion; (iii) war, invasion, hostilities (whether war is declared or not), terrorist threats or acts, riot or other civil unrest; (iv) actions, embargos or blockades in effect on or after the date of this Note; (v) national or regional emergency; (vi) strikes, labor stoppages or slowdowns or other industrial disturbances; (vii) shortages of or delays in receiving raw materials; or (viii) shortage of adequate power or transportation facilities (each, a “Force Majeure Event”).
[REMAINDER OF PAGE LEFT BLANK]
IN WITNESS WHEREOF, the Parties hereto has executed this Note on June 6, 2019.
NUTRALIFE BIOSCIENCES, INC.
|
PHYTOCHEM TECHNOLOGIES, INC.
|
|||
By: | By: | |||
Edgar Ward, Chief Executive Officer | Edgar Ward, Chief Executive Officer | |||
Address for Notice: | Address for Notice: | |||
NutraLife Biosciences, Inc. | NutraLife Biosciences, Inc. | |||
Attn: Edgar Ward, Chief Executive Officer | Attn: Edgar Ward, Chief Executive Officer | |||
6601 Lyons Rd. L-6 | 6601 Lyons Rd. L-6 | |||
Coconut Creek, Fl. 33073 | Coconut Creek, Fl. 33073 | |||
edgar@NutraFuels.com | edgar@NutraFuels.com |
Exhibit 10.31
EXHIBIT C: SECURITY AGREEMENT
This Security Agreement (this “Security Agreement”), is made and effective as of the day set forth on the signature page hereto by and between NutraLife Biosciences, Inc. (“NutraLife”), PhytoChem Technologies, Inc. (“PhytoChem”), a Florida corporation (NutraLife and PhytoChem are collectively referred to herein as the “Company”), and Kahn Family Limited PT II (the “Purchaser”) effective as of the date on the signature page hereto. The Company and the Purchaser are referred to herein collectively as the “Parties”, or individually as a “Party”.
ARTICLE 1. RECITALS
The Recitals below are incorporated herein and made terms of this Security Agreement.
WHEREAS, the Company obtained certain rights to commercialize and monetize certain technology and phytoextractor equipment known as the Ennea Processor (“Ennea” or “Ennea Processor”) pursuant to an agreement by and between Owen J. Morgan (“Morgan”) and the Company dated February 4, 2019 (the “Morgan Agreement”).
WHEREAS, the Ennea uses certain technologies to separate, process and/or extract bioactive compounds including cannabinoids from hemp and other plants to remove and/or modify, purify, dilute and extract bioactive ingredients and/or remove unwanted substances to produce finished products for a variety of applications;
WHEREAS, the Company requires capital to manufacture, purchase, monetize and commercialize the Ennea;
WHEREAS, the Company desires to issue and sell, and the Purchaser desires to purchase a full recourse secured convertible promissory note (the “Note”) as attached as Exhibit B to the Investment Agreement in the principal amount of $1,000,000 (“Principal” or the “Principal Amount”);
WHEREAS, the Collateral Ennea Processor machines (“Collateral Processors”) shall serve as collateral for the Principal Amount pursuant to the terms of the Security Agreement (the “Security Agreement”) so long as any portion of the Principal Amount is outstanding; and
NOW, THEREFORE, under the terms hereof, the Purchaser desires to obtain and the Company desires to grant the Purchaser security for the Note under the terms hereof.
ARTICLE 1. DEFINITIONS.
ARTICLE 1.1 “Collateral Processors” shall mean the first four (4) of the Ennea Processors monetized and/or commercialized by the Company pursuant to the Morgan Agreement.
ARTICLE 1.2 “UCC” means the Uniform Commercial Code, as adopted and enacted and as in effect from time to time in the State of Florida. Terms used herein which are defined in the UCC and not otherwise defined herein shall have the respective meanings ascribed to such terms in the UCC.
ARTICLE 2. GRANT OF SECURITY INTEREST.
ARTICLE 2.1 GRANT. To secure the Obligations, the Company, as Company, hereby assigns and grants to the Purchaser, as Purchaser, a continuing lien on and security interest in the Collateral.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES.
ARTICLE 3.1 The Company represents, warrants and covenants to the Purchaser that: (a) the Company has good, marketable and indefeasible title to the Collateral, has not made any prior sale, pledge, encumbrance, assignment or other disposition of any of the Collateral, and the Collateral is free from all encumbrances and rights of setoff of any kind except the lien in favor of the Purchaser created by this Security Agreement; (b) except as herein provided, the Company will not hereafter without the Purchaser’s prior written consent sell, pledge, encumber, assign or otherwise dispose of any of the Collateral or permit any right of setoff, lien or security interest to exist thereon except to the Purchaser; and (c) the Company will defend the Collateral against all claims and demands of all persons at any time claiming the same or any interest therein.
ARTICLE 4. COMPANY’S COVENANTS.
ARTICLE 4.1 The Company covenants that it shall:
(a) from time to time and at all reasonable times allow the Purchaser, by or through any of its officers, agents, attorneys, or accountants, to examine or inspect the Collateral, and obtain valuations and audits of the Collateral, at the Company’s expense, wherever located. The Company shall do, obtain, make, execute and deliver all such additional and further acts, things, deeds, assurances and instruments as the Purchaser may require to vest in and assure to the Purchaser its rights hereunder and in or to the Collateral, and the proceeds thereof.
(b) keep the Collateral in good order and repair at all times and immediately notify the Purchaser of any event causing a material loss or decline in value of the Collateral, whether or not covered by insurance, and the amount of such loss or depreciation;
(c) only use or permit the Collateral to be used in accordance with all applicable federal, state, county and municipal laws and regulations; and
(d) have and maintain insurance at all times with respect to all Collateral against risks of fire (including so-called extended coverage), theft, sprinkler leakage, and other risks (including risk of flood if any Collateral is maintained at a location in a flood hazard zone) as the Purchaser may reasonably require, in such form, in the minimum amount of the outstanding principal of the Note and written by such companies as may be reasonably satisfactory to the Purchaser. Each such casualty insurance policy shall contain a standard Lender’s Loss Payable Clause issued in favor of the Purchaser under which all losses thereunder shall be paid to the Purchaser as the Purchaser’s interest may appear. Such policies shall expressly provide that the requisite insurance cannot be altered or canceled without at least thirty (30) days prior written notice to the Purchaser and shall insure the Purchaser notwithstanding the act or neglect of the Company. Upon the Purchaser’s demand, the Company shall furnish the Purchaser with evidence of insurance as the Purchaser may require. In the event of failure to provide insurance as herein provided, the Purchaser may, at its option, obtain such insurance and the Company shall pay to the Purchaser, on demand, the cost thereof. Proceeds of insurance shall be applied by the Purchaser to reduce the Mortgage as defined in the Transaction Documents.
(e) If the Collateral is, at any time, in the possession of a bailee, Company shall promptly notify Purchaser thereof and, if requested by Purchaser, shall promptly obtain an acknowledgment from the bailee, in form and substance satisfactory to Purchaser, that the bailee holds such Collateral for the benefit of Purchaser and shall act upon the instructions of Purchaser, without the further consent of Company.
ARTICLE 5. NO TRANSFER.
ARTICLE 5.1 NEGATIVE PLEDGE. The Company will not sell or offer to sell or otherwise transfer or grant or allow the imposition of a lien or security interest upon the Collateral or use any portion thereof in any manner inconsistent with this Security Agreement or with the terms and conditions of any policy of insurance thereon.
ARTICLE 6. FURTHER ASSURANCES.
ARTICLE 6.1 UCC FILINGS. The Company hereby irrevocably authorizes Purchaser at any time and from time to time to file in any Uniform Commercial Code jurisdiction any initial financing statements and amendments thereto that (a) indicate the Collateral (i) as all assets of Company or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the Florida Uniform Commercial Code or such jurisdiction, or (ii) as being of an equal or lesser scope or with greater detail, and (b) contain any other information required by part 5 of Article 9 of the Florida Uniform Commercial Code for the sufficiency or filing office acceptance of any financing statement or amendment, including, but not limited to (i) whether the Company is an organization, the type of organization and (ii) any organization identification number issued to Company. Company agrees to furnish any such information to purchaser promptly upon request. company also ratifies its authorization for purchaser to have filed in any uniform commercial code jurisdiction any like initial financing statements or amendments thereto if filed prior to the date hereof.
ARTICLE 7. EVENTS OF DEFAULT.
ARTICLE 7. 1 TERMS OF DEFAULT. The Company shall, at the Purchaser’s option, be in default under this Security Agreement upon the happening of any of the following events or conditions (each, an “Event of Default”): (a) a failure to pay any amount due under the Note or this Security Agreement within fifteen (15) days of the date the same is due; (b) the failure by the Company to perform any of its other obligations under this Security Agreement within thirty (30) days of notice from Purchaser of the same; (c) falsity, inaccuracy or material breach by the Company of any written warranty, representation or statement made or furnished to the Purchaser by or on behalf of the Company; (d) an uninsured material loss, theft, damage, or destruction to any of the Collateral, or the entry of any judgment against the Company or any lien against or the making of any levy, seizure or attachment of or on the Collateral; or (e) the failure of the Purchaser to have a perfected first priority security interest in the Collateral.
ARTICLE 8. REMEDIES.
ARTICLE 8.1 REMEDIES UPON DEFAULT. Upon the occurrence of any such Event of Default and at any time thereafter, the Purchaser may declare all Obligations secured hereby immediately due and payable and shall have, in addition to any remedies provided herein or by any applicable law or in equity, all the remedies of a secured party under the UCC. The Purchaser’s remedies include, but are not limited to, to the extent permitted by law, the right to (a) peaceably by its own means or with judicial assistance enter the Company’s premises and take possession of the Collateral without prior notice to the Company or the opportunity for a hearing, (b) render the Collateral unusable, (c) dispose of the Collateral on the Company’s premises, and (d) require the Company to assemble the Collateral and make it available to the Purchaser at a place designated by the Purchaser. Unless the Collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, the Purchaser will give the Company reasonable notice of the time and place of any public sale thereof or of the time after which any private sale or any other intended disposition thereof is to be made. The requirements of commercially reasonable notice shall be met if such notice is sent to the Company at least fifteen (15) days before the time of the intended sale or disposition. Expenses of retaking, holding, preparing for sale, selling or the like shall include the Purchaser’s reasonable attorney’s fees and legal expenses, incurred or expended by the Purchaser to enforce any payment due it under this Security Agreement either as against the Company, or in the prosecution or defense of any action, or concerning any matter growing out of or connection with the subject matter of this Security Agreement and the Collateral pledged hereunder. The Company waives all relief from all appraisement or exemption laws now in force or hereafter enacted.
ARTICLE 9. PAYMENT OF EXPENSES.
ARTICLE 9.1 EXPENSES. At its option, the Purchaser may, but is not required to: discharge taxes, liens, security interests or such other encumbrances as may attach to the Collateral; pay for required insurance on the Collateral; and pay for the maintenance, appraisal or reappraisal, and preservation of the Collateral, as determined by the Purchaser to be necessary. The Company will reimburse the Purchaser on demand for any payment so made or any expense incurred by the Purchaser pursuant to the foregoing authorization, and the Collateral also will secure any advances or payments so made or expenses so incurred by the Purchaser.
ARTICLE 10. MISCELLANEOUS
ARTICLE 10.1 NOTICES. All notices, demands, requests, consents, approvals and other communications required or permitted hereunder must be in writing and will be effective upon receipt. Such notices and other communications may be hand-delivered, sent by facsimile transmission with confirmation of delivery and a copy sent by first-class mail, or sent by nationally recognized overnight courier service, to a party’s address set forth above or to such other address as any party may give to the other in writing for such purpose.
ARTICLE 10.2 PRESERVATION OF RIGHTS. No delay or omission on the Purchaser’s part to exercise any right or power arising hereunder will impair any such right or power or be considered a waiver of any such right or power, nor will the Purchaser’s action or inaction impair any such right or power. The Purchaser’s rights and remedies hereunder are cumulative and not exclusive of any other rights or remedies which the Purchaser may have under other agreements, at law or in equity.
ARTICLE 10.3 ILLEGALITY. In case any one or more of the provisions contained in this Security Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.
ARTICLE 10.4 CHANGES IN WRITING. No modification, amendment or waiver of any provision of this Security Agreement nor consent to any departure by the Company therefrom will be effective unless made in a writing signed by the Purchaser, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on the Company in any case will entitle the Company to any other or further notice or demand in the same, similar or other circumstance.
ARTICLE 10.5 ENTIRE AGREEMENT. This Security Agreement (including the documents and instruments referred to herein) constitutes the entire agreement and supersedes all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof.
ARTICLE 10.6 COUNTERPARTS. This Security Agreement may be signed in any number of counterpart copies and by the parties hereto on separate counterparts, but all such copies shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Security Agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart. Any party so executing this Security Agreement by facsimile transmission shall promptly deliver a manually executed counterpart, provided that any failure to do so shall not affect the validity of the counterpart executed by facsimile transmission.
ARTICLE 10.7 SUCCESSORS AND ASSIGNS. This Security Agreement will be binding upon and inure to the benefit of the Company and the Purchaser and their respective heirs, executors, administrators, successors and assigns; provided, however, that the Company may not assign this Security Agreement in whole or in part without the Purchaser’s prior written consent and the Purchaser at any time may assign this Security Agreement in whole or in part.
ARTICLE 10.8 INTERPRETATION. In this Security Agreement, unless the Purchaser and the Company otherwise agree in writing, the singular includes the plural and the plural the singular; words importing any gender include the other genders; references to statutes are to be construed as including all statutory provisions consolidating, amending or replacing the statute referred to; the word “or” shall be deemed to include “and/or”, the words “including”, “includes” and “include” shall be deemed to be followed by the words “without limitation”; references to articles, sections (or subdivisions of sections) or exhibits are to those of this Security Agreement unless otherwise indicated. Article headings in this Security Agreement are included for convenience of reference only and shall not constitute a part of this Security Agreement for any other purpose.
ARTICLE 10.9 WAIVER OF CONFLICTS. The Company and the Purchaser each acknowledge that the Pledgor, Brenda Hamilton and her law firm, Hamilton & Associates Law Group, P.A has in the past performed, and may continue to perform, legal and/or consulting services for the Company in connection with the Transaction Documents and the matters and transactions described in this Security Agreement as well as in matters unrelated to the Transaction Documents. Accordingly, the Company and Purchaser each hereby acknowledges that they have been advised by Brenda Hamilton & Hamilton & Associates Law Group, P.A. to seek the advice of independent legal counsel in connection with the Transaction Documents including with respect to the Pledge Agreement, Mortgage and Pledgor Royal Agreement in which Brenda Hamilton is a Party and the transactions contemplated thereby. Additionally, the Company and Purchaser each acknowledge that they have had an opportunity to ask for information relevant to this disclosure and has consulted with independent legal counsel or has had the opportunity to do so and gives its informed consent to Brenda Hamilton & Hamilton & Associates Law Group, P.A. representation of and/or performance of services for the Company in the connection with the Transaction Documents and transactions contemplated thereby.
10.10 GOVERNING LAW AND JURISDICTION. This Security Agreement shall be governed by and construed in accordance with the laws of the State of Florida without regard to principles of conflict law applicable to contracts made and to be performed with such state. Each of the parties hereto accepts for itself to the jurisdiction of Palm Beach County Florida and irrevocably consents to such jurisdiction in any proceedings and waives any objection to venue laid therein. Any controversy or claim arising out of or relating of this Security Agreement shall be settled by binding arbitration administered by the American Arbitration Association and judgment on the award entered in any court having jurisdiction. The arbitration proceedings shall be conducted before a panel of three neutral arbitrators in Palm Beach County, Florida all of whom shall be members of the bar of the state of Florida, actively engaged in the practice of law for at least ten (10) years. Either Party hereto may apply to the arbitrator seeking injunctive relief until the arbitration award is rendered or the controversy otherwise resolved. Either Party may, without waiving any remedy under this Security Agreement, seek from any court having jurisdiction any interim or provisional relief that is necessary to protect the rights or property of that party, pending the arbitral tribunal’s determination of the merits of the controversy. Each party shall bear its own costs, expenses and attorney fees and an equal share of the arbitrators’ and administrative fees of arbitration. Except as may be required by law, neither a party nor an arbitrator may disclose the existence content or results of any arbitration hereunder without the prior written consent of the Parties. All documents, testimony and records shall be received, heard and maintained by the arbitrators in secrecy, available for the inspection only of the Parties to this Security Agreement and their respective attorneys and their respective experts who shall agree in advance and in writing to receive all such information confidentially and to maintain such information in secrecy until such information shall become generally known. In consideration for and as a material condition of this Security Agreement, each Party agrees that final and binding arbitration is the exclusive means for resolving any claim or controversy arising out of or related to this Security Agreement. This Agreement is a waiver of all rights the Parties may have to a civil court action. Accordingly, only an arbitrator, not a judge or jury, will decide the dispute, although the arbitrator has the authority to award any type of relief that could otherwise be awarded by a judge or jury.
IN WITNESS WHEREOF, the Parties hereto have executed this Security Agreement on June 6, 2019.
NUTRALIFE BIOSCIENCES, INC. | KAHN FAMILY LIMITED PT II | |||
By: | By: | |||
Edgar Ward, Chief Executive Officer | (Signature) | |||
PHYTOCHEM TECHNOLOGIES, INC. | (Print Name) | |||
By: | ||||
Edgar Ward, Chief Executive Officer | (Print Title) | |||
Address for Notice: | Address for Notice: | |||
NutraLife Biosciences, Inc. | ||||
Attn: Edgar Ward, Chief Executive Officer | ||||
6601 Lyons Rd. L-6 | Phone: | |||
Coconut Creek, Fl. 33073 | Email: | |||
edgar@NutraFuels.com |
Exhbit 10.32
EXHIBIT D. PURCHASER ROYALTY AGREEMENT
This Royalty Participation Agreement (the “Royalty Agreement”) is made and effective as of the day set forth on the signature page hereto by and between NutraLife BioSciences, Inc., a Florida corporation (“NutraLife”), PhytoChem Technologies, Inc. (“PhytoChem”), a Florida corporation (NutraLife and PhytoChem are collectively referred to herein as the “Company”), and Kahn Family Limited PT II (the “Purchaser”). The Company and the Purchaser are referred to herein collectively as the “Parties”, or individually as a “Party”.
RECITALS
WHEREAS, the Company obtained certain rights to commercialize and monetize certain technology and phytoextractor equipment known as the Ennea Processor (“Ennea” or “Ennea Processor”) pursuant to an agreement by and between Owen J. Morgan (“Morgan”) and the Company dated February 4, 2019 (the “Morgan Agreement”);
WHEREAS, the Company requires capital to manufacture, purchase, monetize and commercialize the Ennea Processors and the Purchaser has agreed to purchase a Convertible Promissory Note (the “Note”) which shall bear interest (the “Interest”) at the rate of eight and one half percent (8.5%) per annuum (the “Interest”) in the principal amount of $1,000,000 (“Principal” or the “Principal Amount”);
WHEREAS, the First Four (4) Ennea Processors (“Collateral Processors”) that the Company commercializes pursuant to the Morgan Agreement shall serve as collateral for the Principal Amount pursuant to the terms of the Note and Security Agreement (the “Security Agreement”) attached to the Investment Agreement as Exhibits B and C;
WHEREAS, as consideration for the purchase of the Note, the Company shall (i) pay to the Purchaser the Interest as set forth in this Purchaser Royalty Agrement, (ii) issue 500,000 shares of its Common Stock, $.0001 par value per share (the “Common Shares”) to the Purchaser, and (iii) grant the Purchaser eight and one half percent (8.5%) of the revenue generated from the Collateral Processors (the “Royalty”) while the Principal Amount is outstanding and five percent (5%) thereafter on the first two (2) collateral processors as set forth as set forth herein.
THEREFORE, in consideration of the mutual considerations herein, the receipt of which is mutually acknowledged, the parties hereto agree as follows:
ARTICLE 1. RECITALS.
ARTICLE 1.1 The above recitals are true and correct and made a part hereof.
ARTICLE 2. DEFINITIONS.
ARTICLE 2.1 The Investment Agreement and all exhibits thereto are referred to herein as the “Ancillary Agreements”. This Purchaser Royalty Agreement and the Ancillary Agreements shall be referred to collectively as the “Transaction Documents.”
The “Collateral Processors” as used in this Purchaser Royalty Agreement shall mean the first four Ennea Processors monetized and/or commercialized by the Company directly or indirectly as a result of or pursuant to the Morgan Agreement.
ARTICLE 3. FINANCING.
ARTICLE 3.1 At the Closing, Purchaser shall loan the gross amount of $1,000,000 to the Company pursuant to the Investment Agreement and Note.
ARTICLE 4. SOURCE, AMOUNT, AND TIMING OF ROYALTY PAYMENTS.
ARTICLE 4.1 Commencing upon the fiscal quarter in which revenue is derived directly or indirectly from any of the Collateral Processors, the Company shall pay to the Purchaser non-refundable Royalty Payments consisting of eight and one half percent (8.5%) of all “Net Revenue” received by the Company as a result of the commercialization and/or monetization of the Collateral Processors until such time as the Principal Amount has been paid. At such time as the Principal Amount has been paid to the Purchaser, Purchaser shall receive non-refundable Royalty Payments consisting of five percent (5%) of “Net Revenue” received by the Company as a result of the commercialization and/or monetization of the first two Collateral Processors resulting from the Morgan Agreement.
For the purposes of this Purchaser Royalty Agreement, “Net Revenue” shall mean the total Gross Receipts less direct and indirect expenses. Gross Receipts shall mean revenue from tolling fees and processing fees, product sales, extraction services, licenses, development, commercialization and/or other commercialization and monetization of the Collateral Processors including the disposition, sale or rental of the Collateral Processors.
ARTICLE 4.2 For the avoidance of doubt, Net Revenue shall be calculated in accordance with GAAP. The Company hereby agrees to use its commercial best efforts to maximize its Gross Revenue during the term of this Purchaser Royalty Agreement and in the event it commercializes any other phytoextractors similar to the Collateral Processors , it will not commercialize or monetize such other equipment until the maximum capacity of the Collateral Processors has been reached. ”Gross Revenues” shall also include all settlement amounts, payment, and damages received by Company which result from litigation or disputes related to or arising from the sale, license, development, commercialization and/or other monetization of the Collateral Processors.
ARTICLE 4.3 The Royalty Payments shall be paid by the Company to the Purchaser within fifteen (15) days after the end of the quarter in which the Company receives payment for any Net Revenue from the Collateral Processors.
ARTICLE 5. INFORMATION REQUIRED TO BE SUPPLIED WITH EACH PAYMENT.
ARTICLE 5.1 With each Royalty Payment, the Company shall supply to the Purchaser a detailed and reasonably satisfactory accounting and reconciliation of how the Royalty Payment was calculated. The Company agrees to have an officer certify each reconciliation and provide a reconciliation each calendar month during the term of this Purchaser Royalty Agreement regardless of whether any Royalty Payment is due.
ARTICLE 6. TERM.
ARTICLE 6.1 This Purchaser Royalty Agreement shall continue for a period of ten (10) years.
ARTICLE 7. NO SALE OR ASSIGNMENT BY COMPANY.
ARTICLE 7.1 During the term of this Purchaser Royalty Agreement, the Company may not (i) sell (other than ordinary course sales to customers), assign, or otherwise transfer or encumber the Collateral Processors , (ii) assign or otherwise transfer or encumber this Purchaser Royalty Agreement, or (iii) create an obligation whereby the Company is required to pay all or a portion of the revenues derived from the Collateral Processors to any party in priority to the Purchaser and/or Pledgor or the Pledgor, without first obtaining the prior written consent of the Purchaser.
ARTICLE 8. NOTICES.
ARTICLE 8.1 Any notice required or permitted by this Purchaser Royalty Agreement shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight delivery service or confirmed facsimile, or 48 hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, if such notice is addressed to the party to be notified at such party’s address or facsimile number as set forth on the signature page hereto or as subsequently modified by written notice.
ARTICLE 9. ASSIGNMENT BY PURCHASER.
ARTICLE 9.1 Purchaser may not assign a portion or all of its interest in this Purchaser Royalty Agreement to an assignee.
ARTICLE 10. EXTRAORDINARY EVENT.
ARTICLE 10.1 The Company agrees not to enter into a merger, recapitalization, sale or change of control of the Company or sale transaction involving all or substantially all of the Company’s equity or assets unless the acquiring or successor entity agrees in writing to recognize the Purchaser’s rights under this Purchaser Royalty Agreement.
ARTICLE 11. APPLICABLE LAW, VENUE, JURISDICTION.
ARTICLE 11.1 WAIVER OF CONFLICTS. The Company and the Purchaser each acknowledge that the Pledgor, Brenda Hamilton and her law firm, Hamilton & Associates Law Group, P.A has in the past performed, and may continue to perform, legal and/or consulting services for the Company in connection with the Transaction Documents and the matters and transactions described in this Investment Agreement as well as in matters unrelated to the Transaction Documents. Accordingly, the Company and Purchaser each hereby acknowledges that they have been advised by Brenda Hamilton & Hamilton & Associates Law Group, P.A. to seek the advice of independent legal counsel in connection with the Transaction Documents including with respect to the Pledge Agreement, Mortgage and Pledgor Royal Agreement in which Brenda Hamilton is a Party and the transactions contemplated thereby. Additionally, the Company and Purchaser each acknowledge that they have had an opportunity to ask for information relevant to this disclosure and has consulted with independent legal counsel or has had the opportunity to do so and gives its informed consent to Brenda Hamilton & Hamilton & Associates Law Group, P.A. representation of and/or performance of services for the Company in the connection with the Transaction Documents and transactions contemplated thereby.
ARTICLE 11.2 GOVERNING LAW AND JURISDICTION. This Purchaser Royalty Agreement shall be governed by and construed in accordance with the laws of the State of Florida without regard to principles of conflict law applicable to contracts made and to be performed with such state. Each of the parties hereto accepts for itself to the jurisdiction of Palm Beach County Florida and irrevocably consents to such jurisdiction in any proceedings, and waives any objection to venue laid therein. Any controversy or claim arising out of or relating of this Purchaser Royalty Agreement shall be settled by binding arbitration administered by the American Arbitration Association and judgment on the award entered in any court having jurisdiction. The arbitration proceedings shall be conducted before a panel of three neutral arbitrators in Palm Beach County, Florida all of whom shall be members of the bar of the state of Florida, actively engaged in the practice of law for at least ten (10) years. Either Party hereto may apply to the arbitrator seeking injunctive relief until the arbitration award is rendered or the controversy otherwise resolved. Either Party may, without waiving any remedy under this Purchaser Royalty Agreement, seek from any court having jurisdiction any interim or provisional relief that is necessary to protect the rights or property of that party, pending the arbitral tribunal’s determination of the merits of the controversy. Each party shall bear its own costs, expenses and attorney fees and an equal share of the arbitrators’ and administrative fees of arbitration. Except as may be required by law, neither a party nor an arbitrator may disclose the existence content or results of any arbitration hereunder without the prior written consent of the Parties. All documents, testimony and records shall be received, heard and maintained by the arbitrators in secrecy, available for the inspection only of the Parties to this Purchaser Royalty Agreement and their respective attorneys and their respective experts who shall agree in advance and in writing to receive all such information confidentially and to maintain such information in secrecy until such information shall become generally known. In consideration for and as a material condition of this Purchaser Royalty Agreement, each Party agrees that final and binding arbitration is the exclusive means for resolving any claim or controversy arising out of or related to this Purchaser Royalty Agreement. This Agreement is a waiver of all rights the Parties may have to a civil court action. Accordingly, only an arbitrator, not a judge or jury, will decide the dispute, although the arbitrator has the authority to award any type of relief that could otherwise be awarded by a judge or jury.
IN WITNESS WHEREOF, the Parties hereto have executed this Purchaser Royalty Agreement on June 6, 2019.
NUTRALIFE BIOSCIENCES, INC. | KAHN FAMILY LIMITED PT II | |||
By: | By: | |||
Edgar Ward, Chief Executive Officer | (Signature) | |||
PHYTOCHEM TECHNOLOGIES, INC. | (Print Name) | |||
By: | (Print Title) | |||
Edgar Ward, Chief Executive Officer | ||||
Address for Notice: | ||||
Address for Notice: | ||||
NutraLife Biosciences, Inc. | ||||
Attn: Edgar Ward, Chief Executive Officer | ||||
6601 Lyons Rd. L-6 | Phone: | |||
Coconut Creek, Fl. 33073 | Email: | |||
edgar@NutraFuels.com |
Exhibit 10.33
EXHIBIT E: PLEDGE AGREEMENT
This Agreement (the “Pledge Agreement”) is made and effective as of the day set forth on the signature page hereto by and between NutraLife BioSciences, Inc., a Florida corporation (“NutraLife”), PhytoChem Technologies, Inc. (“PhytoChem”), a Florida corporation (NutraLife and PhytoChem are collectively referred to herein as the “Company”), Brenda Hamilton, an individual (the “Pledgor”) and Kahn Family Limited PT II (the “Purchaser”) and is effective as of the day set forth on the signature page hereto. The Company, the Pledgor and the Purchaser are referred to herein collectively as the “Parties”, or individually as a “Party”.
RECITALS:
WHEREAS, the Company obtained certain rights to commercialize and monetize certain technology and phytoextractor equipment known as the Ennea Processor (“Ennea” or “Ennea Processor”) pursuant to an agreement by and between Owen J. Morgan (“Morgan”) and the Company dated February 4, 2019 (the “Morgan Agreement”);
WHEREAS, the Company requires capital to manufacture, purchase, monetize and commercialize the Ennea Processors and the Purchaser has agreed to purchase a Convertible Promissory Note (the “Note”) which shall bear interest (the “Interest”) at the rate of eight and one half percent (8.5%) per annuum (the “Interest”) in the principal amount of $1,000,000 (“Principal” or the “Principal Amount”);
WHEREAS, the first four of the Ennea Processors that the Company commercializes and/or monetizes pursuant to the Morgan Agreement shall serve as collateral (“Collateral Processors”) for the Principal Amount pursuant to the terms of the Note and Security Agreement (the “Security Agreement”) attached to the Investment Agreement as Exhibits B and C;
WHEREAS, in addition to the Collateral Processors, Interest and Securities paid by the Company to the Purchaser as consideration for the Note, the Purchaser requested additional security (the “Additional Collateral”) for the Principal Amount in the form of a mortgage on real property;
WHEREAS, the Pledgor agreed to provide a mortgage lien covering certain real property (the “Real Property”) as set forth in the mortgage (the “Mortgage”) attached as Exhibit F to the Investment Agreement as the Additional Collateral. In exchange for providing the Additional Collateral, the Company shall pay to the Pledgor the consideration set forth in this Pledge Agreement and in the Pledgor Royalty Agreement attached as Exhibit G to the Investment Agreement; and
WHEREAS, the Mortgage will be reduced by all consideration paid to the Purchaser by the Company under the Transaction Documents.
NOW THERFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, receipt of which is hereby acknowledged, the parties to this Pledge Agreement agree as follows:
ARTICLE 1. RECITALS.
ARTICLE 1.1 The above recitals are true and correct and made a part hereof.
ARTICLE 2. DEFINITIONS.
ARTICLE 2.1 The Investment Agreement, Note, Purchaser Royalty Agreement, Security Agreement, Pledgor Royalty Agreement and the Mortgage are referred to as the “Ancillary Agreements”. This Pledge Agreement and the Ancillary Agreements shall be referred to collectively as the “Transaction Documents”.
ARTICLE 3. REPRESENTATIONS OF THE COMPANY.
ARTICLE 3.1 To induce Pledgor to enter into this Pledge Agreement and the Mortgage, the Company represents and warrants to the Pledgor and Purchaser that the Company will timely pay all amounts owing to the Purchaser, whether for Royalty Payments, Principal, Interest, Fees, Expenses, Premiums, Indemnities or otherwise, and that it will delivery full and timely payment of all and any amounts due and/or which may become due to the Purchaser from the Company from time to time in connection with the Transaction Documents without limitation. Purchaser understands that all consideration delivered to the Purchaser by the Company pursuant to the Transaction Documents will be applied to the Principal Amount and as a result, the Mortgage will be reduced by any and all payments of consideration of any type made by the Company to the Purchaser under the Transaction Documents.
ARTICLE 4. PLEDGE AND CONSIDERATION TO PLEDGOR
ARTICLE 4.1 REAL PROPERTY. Based upon the representations of the Company and the Purchaser that they will perform and comply with their obligations an duties under the Transaction Documents, the Pledgor shall provide the Purchaser with the Mortgage which shall secure the Company’s payment of the Principal Amount pursuant to the Transaction Documents. The Principal Amount shall be secured by the real property located at 1576 Fan Palm Road Boca Raton, Florida (“Real Property Collateral”) as set forth in the Mortgage. The Mortgage will be reduced from time to time by any and all payments made by the Company to the Purchaser under the Transaction Documents.
ARTICLE 4.2 CONSIDERATION FOR PLEDGE. In exchange for providing the Real Property Collateral, Pledgor shall receive: (i) 500,000 shares of the Company’s common stock, $.0001 par value per share (the “Common Shares”) which shall be issued upon execution hereof, (ii) commencing on December 5, 2019, monthly payments equal to the interest paid by the Company to the Borrower under the Note accruing from the time of the Purchaser’s delivery of the Principal Amount to the Company until the Note is paid in full, and (iii) eight and one half percent (8.5%) of the revenue generated from the Collateral Processors (the “Royalty”) while the Principal Amount is outstanding and five percent (5%) thereafter on the first two (2) machines commercialized and/or monetized by the Company as set forth in the Pledgor Royalty Agreement (the “Pledgor Royalty Agreement”) attached to the Investment Agreement as Exhibit G.
ARTICLE 4.3 ISSUANCE OF THE SECURITIES. The Common Shares issued to Pledgor pursuant to Article 4 hereof upon issuance will be duly authorized, validly issued, fully paid and nonassessable, free and clear of all rights, liens and encumbrances.
ARTICLE 4.4 FULL RECOURSE NOTE. The Note granted by the Company to the Purchaser is a full recourse promissory note and in the event of a default by the Company of the Note, the Purchaser shall have full recourse to all the assets of the Company. In the event of a default by the Company, the Purchaser must first proceed against and exhaust all remedies against the Company and its assets prior to proceeding against the Mortgage and/or commencing an action to foreclose the Mortgage to recover the difference between the then outstanding Principal Amount and any and all consideration of any nature paid by the Company to the Purchaser under the Transaction Documents.
ARTICLE 4.5 EXTENSION AND TERMINATION. The terms including payment due dates and Maturity Dates of the Note may not be extended by the Purchaser and the Company without the express written consent of the Pledgor. In the event that the Note is amended or modified including to extend a payment due date or the Maturity Date, without Pledgor’s written consent, then Pledgors obligation to provide security under this Pledge Agreement shall automatically cease and the Mortgage shall be deemed satisfied and released in full as security for the Principal Amount of the Note and the Purchaser will immediately record with the Palm Beach County Property Appraiser’s Officer, a Satisfaction of the Mortgage releasing the Purchaser’s lien on the Real Property.
ARTICLE 5. THE NOTE & COLLATERAL PROCESSORS.
ARTICLE 5.1 COLLATERAL PROCESSORS AS SECURITY. A condition precedent to the execution of this Pledge Agreement is that the Principal Amount of the Note be secured by the Collateral Processors as set forth in the Security Agreement. The Principal Amount of the Note is a direct debt obligation of the Company and is secured by a security interest in the Collateral Processors and the other assets of the Company. The Security Agreement will not be amended, and the Collateral as defined in the Security Agreement shall not be modified or released without the express written consent of the Pledgor. The Company will not sell or offer to sell or otherwise transfer or grant or allow the imposition of a lien or security interest upon the Collateral as defined in the Security Agreement or use any portion thereof in any manner inconsistent with the Security Agreement or with the terms and conditions of any policy of insurance thereon. The Company will not sell or offer to sell or otherwise transfer or grant or allow the imposition of a lien or security interest upon the any of its other assets while the Principal is outstanding or use any portion thereof in any manner inconsistent with this Pledge Agreement or with the terms and conditions of any policy of insurance thereon. In the event that the Security Agreement is amended or modified without Pledgor’s written consent, the Mortgage shall be deemed satisfied and released in full as security for the Principal Amount of the Note and the Purchaser will immediately record with the Palm Beach County Property Appraiser’s Officer, a Satisfaction of the Mortgage releasing the Purchaser’s lien on the Real Property.
ARTICLE 6. COVENANTS.
ARTICLE 6.1 The Company agrees in general to indemnify Pledgor against all losses, claims, demands, liabilities and expenses of every kind caused by Pledgor’s entry into this Pledge Agreement and the Mortgage. The Company further agrees that while the Mortgage is outstanding not to permit any lien on its assets and that the Company not to sell, hypothecate or otherwise dispose of, nor permit the transfer by operation of law of, any of its assets until such time as the Purchaser has recorded with the Palm Beach County Property Appraiser’s Officer, a Satisfaction of the Mortgage releasing the Mortgage on the Real Property.
ARTICLE 7. CONVERSION OF PRINCIPAL AMOUNT BY PURCHASER.
ARTICLE 7.1 Under the terms of the Note, the Purchaser may at any time while the Note is outstanding, convert the amount of outstanding Principal and accrued Interest due under the Note into the Company’s Common Stock, $.0001 par value per share (the “Common Stock”) at the price of $1.00 per share. Should the Purchaser exercise its right to convert the Note into the Common Stock then the Real Property Collateral shall be released as security for the Principal Amount and the Purchaser will record with the Palm Beach County Property Appraiser’s Officer, a Satisfaction of the Mortgage releasing the Purchaser’s lien on the Real Property.
ARTICLE 8. DEFAULT OF THE NOTE.
ARTICLE 8.1. DEFAULT. A “Default” shall mean that the Company has failed to make any payment required under the Note, within fifteen (15) days after the date the payment is due.
ARTICLE 8.2 PRIORITY. If after the exhaustion of all other remedies including enforcement of the lien against the Collateral Processors and collection of all amounts due from the Company, there remains a Default, then the Purchaser shall provide written notice to Pledgor of the default (“Notice of Default”) and Pledgor shall have the option but not the obligation to cure the Default. In such event, the amounts paid by Pledgor shall bear interest at the highest rate allowed under Florida law.
ARTICLE 8.3 INTEREST IN THE EVENT OF DEFAULT. So long as the Company is in default of its obligations under the Note, then the Company shall pay Pledgor interest on the amounts outstanding under the Note at a rate of ten percent (10%) per annum.
ARTICLE 8.4 PLEDGOR’S LIABILITY. Under no circumstances shall the Mortgage secure more than the Principal Amount minus all consideration of any nature paid by the Company to the Purchaser under the Transaction Documents.
ARTICLE 8.5 COLLECTION. If the Company defaults on its obligations under the Note, this Pledge Agreement or any of the other Transaction Documents, the Company shall reimburse Pledgor on demand for (i) payments made by Pledgor to Purchaser to cure a Default by the Company under the Investment Agreement and/or Note, and (ii) all costs and expenses, including attorneys’ fees and disbursements that Pledgor incurs in exercising any right, power, or remedy provided by this Pledge Agreement, the Ancillary Documents or by law or defending any action arising out of this Pledge Agreement or the Ancillary Documents. Additionally, in the event of a Default by the Company, all costs incurred and paid by Pledgor including any amounts Pledgor pays to cure a Default by the Company of the Note will bear interest at the highest rate allowed under Florida law.
ARTICLE 9. RELEASE OF COLLATERAL UPON SATISFACTION OF NOTE.
ARTICLE 9.1 Simultaneously with the Purchaser’s receipt of consideration from the Company with a value equal to the Principal Amount pursuant to the Transaction Documents, the Company will record with the Palm Beach County Property Appraiser’s Officer, a Satisfaction of the Mortgage signed by the Purchaser releasing the Purchaser’s lien on the Real Property.
ARTICLE 10. WAIVER OF CONFLICTS.
ARTICLE 10.1 The Company and the Purchaser each acknowledge that the Pledgor, Brenda Hamilton and her law firm, Hamilton & Associates Law Group, P.A has in the past performed, and may continue to perform, legal and/or consulting services for the Company in connection with the Transaction Documents and the matters and transactions described therein as well as in matters unrelated to the Transaction Documents. Accordingly, the Company and Purchaser each hereby acknowledge that they have been advised by Brenda Hamilton & Hamilton & Associates Law Group, P.A. to seek the advice of independent legal counsel in connection with the Transaction Documents and transactions contemplated thereby including the Pledge Agreement, Mortgage and Pledgor Royalty Agreement in which Brenda Hamilton is a Party. Additionally, the Company and Purchaser each acknowledge that they have had an opportunity to ask for information relevant to this disclosure and has consulted with independent legal counsel or has had the opportunity to do so and gives its informed consent to Brenda Hamilton & Hamilton & Associates Law Group, P.A. representation of and/or performance of services for the Company in the connection with the Transaction Documents and transactions contemplated thereby.
11. MISCELLANEOUS.
ARTICLE 11.1 NOTICES. Any and all notices or other communications or deliveries to be provided by the parties shall be delivered by facsimile, sent by a nationally recognized overnight courier service, addressed to the Company, at the addresses set forth on the signature page hereto or such other address or facsimile number as the Company may specify for such purposes by notice to the Purchaser delivered in accordance with this Article.
ARTICLE 11.2 ABSOLUTE OBLIGATION. Except as expressly provided herein, no provision of this Pledge Agreement shall alter or impair the obligation of the Company to pay all amounts due to Purchaser under the Note, which is absolute and unconditional. The Note is a direct debt obligation of the Company.
ARTICLE 11.3 GOVERNING LAW AND JURISDICTION. This Pledge Agreement shall be governed by and construed in accordance with the laws of the State of Florida without regard to principles of conflict law applicable to contracts made and to be performed with such state. Each of the parties hereto accepts for itself to the jurisdiction of Palm Beach County Florida and irrevocably consents to such jurisdiction in any proceedings and waives any objection to venue laid therein. Any controversy or claim arising out of or relating of this Pledge Agreement shall be settled by binding arbitration administered by the American Arbitration Association and judgment on the award entered in any court having jurisdiction. The arbitration proceedings shall be conducted before a panel of three neutral arbitrators in Palm Beach County, Florida all of whom shall be members of the bar of the state of Florida, actively engaged in the practice of law for at least ten (10) years. Either Party hereto may apply to the arbitrator seeking injunctive relief until the arbitration award is rendered or the controversy otherwise resolved. Either Party may, without waiving any remedy under this Pledge Agreement, seek from any court having jurisdiction any interim or provisional relief that is necessary to protect the rights or property of that party, pending the arbitral tribunal’s determination of the merits of the controversy. Each party shall bear its own costs, expenses and attorney fees and an equal share of the arbitrators’ and administrative fees of arbitration. Except as may be required by law, neither a party nor an arbitrator may disclose the existence content or results of any arbitration hereunder without the prior written consent of the Parties. All documents, testimony and records shall be received, heard and maintained by the arbitrators in secrecy, available for the inspection only of the Parties to this Pledge Agreement and their respective attorneys and their respective experts who shall agree in advance and in writing to receive all such information confidentially and to maintain such information in secrecy until such information shall become generally known. In consideration for and as a material condition of this Pledge Agreement, each Party agrees that final and binding arbitration is the exclusive means for resolving any claim or controversy arising out of or related to this Pledge Agreement. This Pledge Agreement is a waiver of all rights the Parties may have to a civil court action. Accordingly, only an arbitrator, not a judge or jury, will decide the dispute, although the arbitrator has the authority to award any type of relief that could otherwise be awarded by a judge or jury.
ARTICLE 11.4 SENIORITY. The Company shall not incur any indebtedness senior to the Note while it remains outstanding and shall not encumber the Collateral Processors with any interest senior to the Note. If action is instituted to collect on the Note, the Company shall all pay all costs and expenses of Pledgor related thereto, including attorney’s fees, incurred in connection with such action.
ARTICLE 11.5 BANKRUPTCY. The Company’s obligations hereunder shall not be influenced, affected or diminished by any composition of debts, winding up, bankruptcy, as the case may be, of the Company, including any scheme or arrangement approved by any court or other compromise or arrangement made by the Company. The Company undertakes not to claim in such cases in competition with the Purchaser or Pledgor and not to claim from the Pledgor or Purchaser any amount received by the Pledgor or Purchaser in this way or in any other way for any reason whatsoever. The Company shall not claim any debt or payment or enter proof thereof in any Bankruptcy or winding-up proceedings or in any other arrangement or compromise with respect to the Company, until such time as the Pledgor and Purchaser shall receive in full all the amounts due or which may become due to the Purchaser and/or Pledgor from the Company as a result of the Ancillary Agreements or this Pledge Agreement.
ARTICLE 11.6 SEVERABILITY. If any provision of this Pledge Agreement is invalid, illegal or unenforceable, the balance of this Pledge Agreement shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on the Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of the Note, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Purchaser or Pledgor.
ARTCLE 11.7 HEADINGS. The headings contained herein are for convenience only, do not constitute a part of this Pledge Agreement and shall not be deemed to limit or affect any of the provisions hereof.
ARTICLE 11.8 PAYMENT. All payments by the Company shall be made in lawful money of the United States of America at such place as the Pledgor hereof may from time to time designate in writing to the Company.
IN WITNESS WHEREOF, the Parties hereto have executed this Pledge Agreement on June 6, 2019.
By: | ||
Brenda Hamilton, an individual as Pledgor | ||
Address for Notice: | ||
1576 Fan Palm Road | ||
Boca Raton Fl 33432 | ||
561-271-8417 | ||
bhamilton@securitieslawyer101.com |
EXHIBIT F. MORTGAGE
This mortgage is made on June 5, 2019 by and between Brenda Hamilton of 1576 Fan Palm Road Boca Raton Florida 33432, referred to below as Mortgagor, to Kahn Family Limited PT II of ______, referred to below as Mortgagee.
Subject to the terms of that certain Pledge Agreement of even date herewith by and between the Mortgagor, Mortgagee and NutraLife BioSciences, Inc., a Florida corporation (the “Company”), the Pledgor does hereby grant and convey to the Mortgagee an interest in the following-described real estate, situated, lying and being in Boca Raton, Palm Beach County, State of Florida to secure the payment of the Principal Amount set forth in that certain Convertible Promissory Note of even date herewith in the amount of $1,000,000 made by the Company payable to the order of the Mortgagee.
Together with the tenements, hereditaments, and appurtenances belonging or appertaining to it.
The Mortgagor shall and will warrant, and by these presents forever defend, the premises to the Mortgagee, the Mortgagee’s heirs and assigns against the lawful claims of all and every person or persons.
The Mortgagor covenants to keep perfect the security hereby given; to keep the improvements upon the mortgaged property insured for a sum not less than $1,000,000 dollars; to pay all taxes, assessments and charges which may or might become liens superior to that created by this Mortgage.
The Mortgagor agrees that the indebtedness covered by this Mortgage shall be paid by the Company according to the terms of the Note which is a Full Recourse Promissory Note and the Principal Amount secured by this Mortgage will be reduced by (i) all principal and interest paid by the Company to Purchaser pursuant to the Note, and (ii) all Royal Payments paid by the Company to the Purchaser under the Purchaser Royalty Agreement.
By: | ||
Brenda Hamilton as Mortgagor |
Exhibit 10.34
EXHIBIT G: PLEDGOR ROYALTY AGREEMENT
This Royalty Participation Agreement (the “Pledgor Royalty Agreement”) is made and effective as of the day set forth on the signature page hereto by and between NutraLife BioSciences, Inc., a Florida corporation (“NutraLife”), PhytoChem Technologies, Inc. (“PhytoChem”), a Florida corporation (NutraLife and PhytoChem are collectively referred to herein as the “Company”), and Brenda Hamilton, an individual (“Pledgor). The Company and the Pledgor are referred to herein collectively as the “Parties”, or individually as a “Party”.
RECITALS
WHEREAS, Company sold a Secured Convertible Promissory Note (the “Note”) to Kahn Family Limited PT I (“Purchaser”) in a principal aggregate amount of $1,000,000 (the “Principal Amount”) pursuant to that certain Investment Agreement (“Investment Agreement”), and entered into a Security agreement (the “Security Agreement”) of even date herewith which is attached as Exhibit C to the Investment Agreement;
WHEREAS, the first four of the Ennea Processors that the Company commercializes and/or monetizes pursuant to the Morgan Agreement shall serve as collateral (“Collateral Processors”) for the Principal Amount pursuant to the terms of the Security Agreement and Note attached to the Investment Agreement as Exhibit B;
WHEREAS, in addition to the collateral and consideration provided by the Company, the Purchaser requested additional collateral (the “Additional Collateral”) in the form of real property as a condition precedent to providing the Principal Amount of the Note to the Company;
WHEREAS, the Company plans to use the Note proceeds to commercialize and monetize a phytoextractor (the “Ennea Processor”) that uses certain technologies to separate and/or process the components of hemp to remove and/or modify, purify, dilute and extract bioactive ingredients and/or remove unwanted substances to produce finished products for a variety of applications pursuant to an agreement by and between the Company and Owen J. Morgan(“Morgan”) dated February 4, 2019 (the “Morgan Agreement”).
WHEREAS, the Pledgor agreed to provide a mortgage lien covering certain real property (the “Real Property”) as set forth in the mortgage (the “Mortgage”) and Pledge Agreement (“Pledge Agreement”) of even date herewith as the Additional Collateral. In exchange for providing the Additional Collateral, the Company desires to pay to the Pledgor the consideration set forth in the Pledge Agreement which includes a royalty (the “Royalty” or (the “Royalty Payments”) of eight and one half percent (“8.5%”) of Net Sales (as defined herein) derived from the Collateral Processors so long as the Principal Amount is outstanding and five percent (5%) thereafter on the first two (2) machines monetized and/or commercialized pursuant to the Owen Agreement; and
WHEREAS, Pledgor and the Company wish to define the terms and conditions of the Royalty Payments to Pledgor by entering into this Pledgor Royalty Agreement.
THEREFORE, in consideration of the mutual considerations herein, the receipt of which is mutually acknowledged, the parties hereto agree as follows:
ARTICLE 1. RECITALS.
ARTICLE 1.1 The above recitals are true and correct and made a part hereof.
ARTICLE 2. DEFINITIONS.
ARTICLE 2.1 ARTICLE 2.1 The Investment Agreement, Note, Purchaser Royalty Agreement, Security Agreement, and the Mortgage are referred to as the “Ancillary Agreements”. This Pledgor Royalty Agreement and the Ancillary Agreements shall be referred to collectively as the “Transaction Documents”.
ARTICLE 3. PLEDGE.
ARTICLE 3.1 Pledgor has agreed to provide the Additional Collateral for the Note as set forth in the Pledge Agreement.
ARTICLE 4. SOURCE, AMOUNT, AND TIMING OF ROYALTY PAYMENTS.
ARTICLE 4.1 Commencing upon the fiscal quarter in which revenue is derived directly or indirectly from any of the Collateral Processors, the Company shall pay to the Pledgor non-refundable Royalty Payments consisting of eight and one half percent (8.5%) of all “Net Revenue” received by the Company as a result of the commercialization and/or monetization of the Collateral Processors until such time as the Principal Amount has been paid. At such time as the Principal Amount has been paid to the Purchaser, Pledgor shall receive non-refundable Royalty Payments consisting of five percent (5%) of “Net Revenue” received by the Company as a result of the commercialization and/or monetization of the first two Ennea Processors resulting from the Morgan Agreement.
For the purposes of this Pledgor Royalty Agreement, “Net Revenue” shall mean the total Gross Receipts less direct and indirect expenses. Gross Receipts shall mean revenue from tolling fees and processing fees, product sales, extraction services, licenses, development, commercialization and/or other commercialization and monetization of the Collateral Processors including the disposition, sale or rental of the Collateral Processors.
ARTICLE 4.2 For the avoidance of doubt, Net Revenue shall be calculated in accordance with GAAP. The Company hereby agrees to use its commercial best efforts to maximize its Gross Revenue during the term of this Pledgor Royalty Agreement and in the event it commercializes any other phytoextractors similar to the Collateral Processors , it will not commercialize or monetize such other equipment until the maximum capacity of the Collateral Processors has been reached. “Gross Revenues” shall also include all settlement amounts, payment, and damages received by Company which result from litigation or disputes related to or arising from the sale, license, development, commercialization and/or other monetization of the Collateral Processors.
ARTICLE 4.3 The Royalty Payments shall be paid by the Company to the Pledgor within fifteen (15) days after the end of the quarter in which the Company receives payment for any Net Revenue from the Collateral Processors.
ARTICLE 5. INFORMATION REQUIRED TO BE SUPPLIED WITH EACH PAYMENT.
ARTICLE 5.1 With each Royalty Payment, the Company shall supply to the Pledgor a detailed and reasonably satisfactory accounting and reconciliation of how the Royalty Payment was calculated. The Company agrees to have an officer certify each reconciliation and provide a reconciliation each calendar month during the term of this Pledgor Royalty Agreement regardless of whether any Royalty Payment is due.
ARTICLE 6. TERM.
ARTICLE 6.1 This Pledgor Royalty Agreement shall continue for a period of ten (10) years.
ARTICLE 7. NO SALE OR ASSIGNMENT.
ARTICLE 9.1 During the term of this Pledgor Royalty Agreement, the Company may not (i) sell (other than ordinary course sales to customers), assign, or otherwise transfer or encumber the Collateral Processors, (ii) assign or otherwise transfer or encumber this Pledgor Royalty Agreement, or (iii) create an obligation whereby the Company is required to pay all or a portion of the revenue derived from the Collateral Processors to any party in priority to the Pledgor without first obtaining the prior written consent of the Pledgor.
ARTICLE 8. EXTRAORDINARY EVENT.
ARTICLE 8.1 The Company agrees not to enter into a merger, recapitalization, sale or change of control of the Company or sale transaction involving all or substantially all of the Company’s equity or assets unless the acquiring or successor entity agrees in writing to recognize the Pledgor’s rights under this Pledgor Royalty Agreement.
ARTICLE 9. NOTICES.
ARTICLE 9.1 Any notice required or permitted by this Pledgor Royalty Agreement shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight delivery service or confirmed facsimile, or 48 hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, if such notice is addressed to the party to be notified at such party’s address or facsimile number as set forth on the signature page hereto or as subsequently modified by written notice.
ARTICLE 10. APPLICABLE LAW, VENUE, JURISDICTION.
ARTICLE 10.1 GOVERNING LAW AND JURISDICTION. This Pledgor Royalty Agreement shall be governed by and construed in accordance with the laws of the State of Florida without regard to principles of conflict law applicable to contracts made and to be performed with such state. Each of the parties hereto accepts for itself to the jurisdiction of Palm Beach County Florida and irrevocably consents to such jurisdiction in any proceedings, and waives any objection to venue laid therein. Any controversy or claim arising out of or relating of this Pledgor Royalty Agreement shall be settled by binding arbitration administered by the American Arbitration Association and judgment on the award entered in any court having jurisdiction. The arbitration proceedings shall be conducted before a panel of three neutral arbitrators in Palm Beach County, Florida all of whom shall be members of the bar of the state of Florida, actively engaged in the practice of law for at least ten (10) years. Either Party hereto may apply to the arbitrator seeking injunctive relief until the arbitration award is rendered or the controversy otherwise resolved. Either Party may, without waiving any remedy under this Pledgor Royalty Agreement, seek from any court having jurisdiction any interim or provisional relief that is necessary to protect the rights or property of that party, pending the arbitral tribunal’s determination of the merits of the controversy. Each party shall bear its own costs, expenses and attorney fees and an equal share of the arbitrators’ and administrative fees of arbitration. Except as may be required by law, neither a party nor an arbitrator may disclose the existence content or results of any arbitration hereunder without the prior written consent of the Parties. All documents, testimony and records shall be received, heard and maintained by the arbitrators in secrecy, available for the inspection only of the Parties to this Royalty Agreement and their respective attorneys and their respective experts who shall agree in advance and in writing to receive all such information confidentially and to maintain such information in secrecy until such information shall become generally known. In consideration for and as a material condition of this Pledgor Royalty Agreement, each Party agrees that final and binding arbitration is the exclusive means for resolving any claim or controversy arising out of or related to this Royalty Agreement. This Pledgor Royalty Agreement is a waiver of all rights the Parties may have to a civil court action. Accordingly, only an arbitrator, not a judge or jury, will decide the dispute, although the arbitrator has the authority to award any type of relief that could otherwise be awarded by a judge or jury.
ARTICLE 10.2 JOINT AND SEVERAL OBLIGATIONS. All obligations of NutraLife and PhytoChem under the Transaction Documents are joint and not several. All obligations of the Pledgor are several and not joint under the Transaction Documents, and in no event shall the Pledger have any liability or obligation with respect to the acts or omissions of the Company or any other party to this Agreement.
ARTICLE 10.3 FURTHER ASSURANCES. Upon Pledgor’s reasonable request, the Company and Purchaser shall, at the Company’s sole cost and expense, execute and deliver all such further documents and instruments, and take all such further acts, necessary to give full effect to this P Pledgor Royalty Agreement.
ARTICLE 10.4 ENTIRE AGREEMENT. This Pledgor Royalty Agreement constitutes the sole and entire agreement of the Parties with respect to the subject matter contained herein and therein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter.
ARTICLE 10.5 HEADINGS. The headings in this Agreement are for reference only and do not affect the interpretation of this Pledgor Royalty Agreement.
ARTICLE 10.6 AMENDMENT AND MODIFICATION. No amendment to this Pledgor Royalty Agreement is effective unless it is in writing and signed by each Party.
ARTICLE 10.7 WAIVER. No waiver under this Pledgor Royalty Agreement is effective unless it is in writing and signed by the Party waiving its right. Any waiver authorized on one occasion is effective only in that instance and only for the purpose stated and does not operate as a waiver on any future occasion. None of the following constitutes a waiver or estoppel of any right, remedy, power, privilege or condition arising from this Pledgor Royalty Agreement: (a) any failure or delay in exercising any right, remedy, power or privilege or in enforcing any condition under this Pledgor Royalty Agreement; or (b) any act, omission or course of dealing between the Parties.
ARTICLE 10.8 WAIVER OF CONFLICTS. The Company acknowledges that the Pledgor, Brenda Hamilton and her law firm, Hamilton & Associates Law Group, P.A has in the past performed, and may continue to perform, legal and/or consulting services for the Company in connection with the Transaction Documents and the matters and transactions described in the Transaction Documents well as in matters unrelated to the Transaction Documents. Accordingly, the Company hereby acknowledges that it has been advised by Brenda Hamilton & Hamilton & Associates Law Group, P.A. to seek the advice of independent legal counsel in connection with the Transaction Documents and transactions contemplated thereby including the Pledge Agreement, Mortgage and Pledgor Royalty Agreement in which Brenda Hamilton is a party. Additionally, the Company and each acknowledge that they have had an opportunity to ask for information relevant to this disclosure and has consulted with independent legal counsel or has had the opportunity to do so and gives its informed consent to Brenda Hamilton & Hamilton & Associates Law Group, P.A. representation of and/or performance of services for the Company in the connection with the Transaction Documents and transactions contemplated thereby.
ARTICLE 10.9 EQUITABLE REMEDIES. Each Party acknowledges and agrees that (a) a breach or threatened breach by such Party of any of its obligations would give rise to irreparable harm to the other Party for which monetary damages would not be an adequate remedy and (b) in the event of a breach or a threatened breach by such Party of any such obligations, the other Party shall, in addition to any and all other rights and remedies that may be available to such Party at law, at equity or otherwise in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction, without any requirement to post a bond or other security, and without any requirement to prove actual damages or that monetary damages will not afford an adequate remedy. Each Party agrees that such Party will not oppose or otherwise challenge the appropriateness of equitable relief or the entry by a court of competent jurisdiction of an order granting equitable relief, in either case, consistent with the terms of this Section.
ARTICLE 10.10 SEVERABILITY. If any provision of this Pledgor Royalty Agreement is invalid, illegal or unenforceable, the balance of this Pledgor Royalty Agreement shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on the Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of the Note, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Pledgor.
ARTICLE 10.11 COUNTERPARTS. This Pledgor Royalty Agreement may be executed in counterparts, each of which is deemed an original, but all of which together are deemed to be one and the same agreement. A signed copy of this Pledgor Royalty Agreement delivered by facsimile, e-mail or other means of electronic transmission is deemed to have the same legal effect as delivery of an original signed copy of this Pledgor Royalty Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Pledgor Royalty Agreement on June 6, 2019.
NUTRALIFE BIOSCIENCES, INC. | ||||
By: | By: | |||
Edgar Ward, Chief Executive Officer | Brenda Hamilton, an individual | |||
PHYTOCHEM TECHNOLOGIES, INC. | ||||
By: | ||||
Edgar Ward, Chief Executive Officer | ||||
Address for Notice: | Address for Notice: | |||
NutraLife Biosciences, Inc. | 1576 Fan Palm Road Boca Raton Fl 33432 | |||
Attn: Edgar Ward, Chief Executive Officer | Phone: 561-416-8956 | |||
6601 Lyons Rd. L-6, Coconut Creek, Fl. 33432 | Email: bhamilton@securitieslawyer101.com | |||
Telephone: 561-212-3816 | ||||
Email: edgar@NutraFuels.com |
Exhibit 10.35
NUTRALIFE BIOSCIENCES, INC.
INVESTMENT AGREEMENT
AMENDED NOVEMBER 13, 2019
This is an amendment executed on the date set forth on the signature page hereto, to the Investment Agreement dated June 6, 2019, (the “Original Investment Agreement”) by and between NutraLife BioSciences, Inc., a Florida corporation (“NutraLife”), PhytoChem Technologies, Inc. (“PhytoChem”), a Florida corporation (NutraLife and PhytoChem are collectively referred to herein as the “Company”), and Kahn Family Limited PT II (the “Purchaser”). The Company and the Purchaser are referred to herein collectively as the “Parties”, or individually as a “Party”.
NOW THEREFORE, the Parties hereby amend and replace the Original Investment Agreement in its entirety and replace it with this agreement, (the “Investment Agreement”) in exchange for good and valuable consideration the receipt of which is hereby acknowledged as follows:
RECITALS
WHEREAS, the Company obtained certain rights to commercialize and monetize certain technology and phytoextractor equipment known as the Ennea Processor (“Ennea” or “Ennea Processor”) pursuant to an agreement by and between Owen J. Morgan (“Morgan”) and the Company dated February 4, 2019 (the “Morgan Agreement”.
WHEREAS, the Ennea Processor uses certain technologies to separate, process and/or extract bioactive compounds including cannabinoids from hemp and other plants to remove and/or modify, purify, dilute and extract bioactive ingredients and/or remove unwanted substances to produce finished products for a variety of applications as more fully described on Exhibit A hereto;
WHEREAS, the Company requires capital to manufacture, purchase, monetize and/or commercialize the Ennea;
WHEREAS, the Company issued and sold a full recourse secured convertible promissory note attached hereto as Exhibit B, as amended (the “Note”) bearing interest at the rate of five point seven five percent (5.75%) per annuum (the “Interest”) on the principal amount of $1,000,000 (“Principal” or the “Principal Amount”) and the Company intends to use the Note proceeds to manufacture, purchase, monetize and/or commercialize the Ennea Processors;.
WHEREAS, In addition to the Collateral (as defined in the Note), the first four of the Ennea Processors (“Collateral Processors”) that the Company monetizes and/or commercializes pursuant to the Morgan Agreement shall serve as collateral for the Principal Amount pursuant to the terms of the Security Agreement (the “Security Agreement”) attached hereto as Exhibit C;
WHEREAS, at any time while the Note is outstanding, the Purchaser shall have the right to convert the Note into shares of the Company’s Common Stock at the price of $1.00 per share (the “Conversion Shares”);
WHEREAS, as consideration for the purchase of the Note, the Company: (i) shall pay to the Purchaser the Interest as set forth in the Note, (ii) issued to the Purchaser, 500,000 shares of its Common Stock, $.0001 par value per share (the “Common Shares””), and (iii) grant the Purchaser eight and one-half percent (8.5%) of the revenue generated from the Collateral Processors (the “Royalty” or “Royalties”) while any portion of the Principal Amount is outstanding and five percent (5%) thereafter as set forth in the Royalty Agreement (the “Purchaser Royalty Agreement”) attached hereto as Exhibit D;
WHEREAS, The Company shall pay the Pledgor certain consideration for the pledge of the Collateral (as defined in the Note) pursuant to the terms of the Pledge Agreement attached as Exhibit E (the “Pledge Agreement”).
WHEREAS, the Principal Amount is secured by the Collateral and a mortgage on certain real property (the “Mortgage”) attached hereto as Exhibit F pledged by a third party the (“Pledgor”) and such Mortgage shall be automatically reduced by any and all consideration of any nature that is paid by the Company to the Purchaser under the Transaction Documents (as defined herein); and
NOW THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, receipt of which is hereby acknowledged, the parties to this Investment Agreement agree as follows:
ARTICLE 1. RECITALS.
ARTICLE 1.1 RECITALS. The above recitals are true and correct and made a part hereof.
ARTICLE 2. DEFINITIONS.
ARTICLE 2.1 SECURITIES. The Note, the Common Shares and the Conversion Shares (as defined herein) are collectively referred to herein as the “Securities.”
ARTICLE 2.2 CAPITALIZED TERMS. The Note, Security Agreement, Purchaser Royalty Agreement, Pledge Agreement, Mortgage and Pledgor Royalty Agreement are referred to as the “Ancillary Agreements.” This Investment Agreement and the Ancillary Agreements shall be referred to collectively as the “Transaction Documents.”
Any capitalized term not defined herein shall have the meaning ascribed to it in Transaction Documents.
ARTICLE 3. CONSIDERATION PAID TO THE PURCHASER.
ARTICLE 3.1 ADDITIONAL CONSIDERATION. In addition to the Company’s repayment of the Principal Amount and the payment of Interest to the Company as set forth in the Note, the Company shall pay the following additional consideration to the Purchaser: (i) 500,000 of the Company’s Common Shares upon execution hereof, and (ii) the Royalty pursuant to the terms and conditions set forth in the Purchaser Royalty Agreement.
ARTICLE 3.2 SECURITIES CONSIDERATION. The Common Shares upon issuance to the Purchaser are duly authorized and, when issued and paid for in accordance with this Investment Agreement and the Transaction Documents, are duly and validly issued, fully paid and nonassessable, free and clear of all liens. The Company has reserved from its duly authorized capital stock the maximum number of shares of its common stock issuable upon the conversion of the Note.
ARTICLE 4. PURCHASE AND SALE OF THE NOTE.
ARTICLE 4.1 CLOSING. Subject to the terms and conditions of this Investment Agreement and the Note, the Purchaser agrees to purchase at the Closing (as defined in 4.2 below) and the Company agrees to sell and issue to the Purchaser, the Note (as amended on the date hereof) in the Principal Amount.
ARTICLE 4.2 PLACE & TIME FOR CLOSING. The purchase and sale of the Original Note occurred on June 6, 2019. This Investment Agreement, as amended and all exhibits hereto, shall be effective upon execution (the “Closing”).
ARTICLE 4.3 CLOSING DELIVERIES. At the Closing, the Company will deliver to the Purchaser signed copies of this Investment Agreement, and the Ancillary Agreements duly executed according to their terms. The Purchaser previously delivered funds to the Company representing the Principal Amount and signed copies of the Original Investment Agreement and the Ancillary Agreements duly executed according to their terms on or about June 6, 2019.
ARTICLE 5. SECURITY & COLLATERAL.
ARTICL 5.1 THE COLLATERAL PROCESSORS AS SECURITY. The Principal Amount is secured by the Collateral including the Collateral Processors in accordance with the provisions of the Note and Security Agreement.
ARTICLE 5.2 REAL PROPERTY. The Principal Amount shall be further secured by certain real property under the terms of the Pledge Agreement and Mortgage and such Mortgage shall be reduced by any and all by all consideration of any nature that is paid to the Purchaser by the Company under the Transaction Documents.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF THE PARTIES.
ARTICLE 6.1 COMPANY REPRESENTATIONS. The Company hereby represents and warrants to the Purchaser that:
(i) 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 Florida and has all requisite corporate power and authority to carry on its business as now conducted and as proposed to be conducted (the “Business”). The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure so to qualify would have a material adverse effect on its business or properties.
(ii) AUTHORIZATION. All corporate action required on the part of the Company, its officers, directors, and stockholders necessary for the authorization, execution, and delivery of this Investment Agreement and the Ancillary Agreements and the authorization, sale, issuance, and delivery of this Investment Agreement and the Ancillary Agreements and the performance of all obligations of the Company hereunder and under the Ancillary Agreements has been taken or will be taken prior to the Closing. This Investment Agreement, and each of the Ancillary Agreements, as amended, when executed and delivered, shall constitute valid and legally binding agreements, enforceable in accordance with their respective terms except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.
(iii) ISSUANCE OF THE SECURITIES. The Securities upon issuance to the Purchaser will be duly authorized and, when issued and paid for in accordance with this Investment Agreement and the Ancillary Agreements, will be duly and validly issued, fully paid and nonassessable, free and clear of all liens. The Company has reserved from its duly authorized capital stock the maximum number of shares of its common stock issuable upon the conversion of the Note.
ARTICLE 6.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser hereby represents and warrants to the Company that:
(i) AUTHORIZATION. The Purchaser has full power and authority to enter into this Investment Agreement. This Investment Agreement, when executed and delivered by the Purchaser, will constitute a valid and legally binding obligation of the Purchaser, enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of a specific performance, injunctive relief, or other equitable remedies.
(ii) PURCHASE ENTIRELY FOR OWN ACCOUNT. This Investment Agreement is made with the Purchaser in reliance upon the Purchaser’s representation to the Company, which by the Purchaser’s execution of this Investment Agreement, the Purchaser hereby confirms, that the Securities to be acquired by the Purchaser are and will be acquired for investment for the Purchaser’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Investment Agreement, the Purchaser further represents that the Purchaser does not presently have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the Securities.
(iii) KNOWLEDGE. The Purchaser is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Securities.
(iv) RESTRICTED SECURITIES. The Purchaser understands that the Securities have not been, and will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”), by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Purchaser’s representations as expressed herein. The Purchaser understands that the Securities are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to these laws, the Purchaser must hold the Securities indefinitely unless they are registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration and qualification requirements is available. The Purchaser acknowledges that the Company has no obligation to register or qualify the Securities for resale. The Purchaser further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Securities, and on requirements relating to the Company which are outside of the Purchaser’s control, and which the Company is under no obligation and may not be able to satisfy.
arbitration administered by the American Arbitration Association and judgment on the award entered in any court having jurisdiction. The arbitration proceedings shall be conducted before a panel of three neutral arbitrators in Palm Beach County, Florida all of whom shall be members of the bar of the state of Florida, actively engaged in the practice of law for at least ten (10) years. Either Party hereto may apply to the arbitrator seeking injunctive relief until the arbitration award is rendered or the controversy otherwise resolved. Either Party may, without waiving any remedy under this Investment Agreement, seek from any court having jurisdiction any interim or provisional relief that is necessary to protect the rights or property of that party, pending the arbitral tribunal’s determination of the merits of the controversy. Each party shall bear its own costs, expenses and attorney fees and an equal share of the arbitrators’ and administrative fees of arbitration. Except as may be required by law, neither a party nor an arbitrator may disclose the existence content or results of any arbitration hereunder without the prior written consent of the Parties. All documents, testimony and records shall be received, heard and maintained by the arbitrators in secrecy, available for the inspection only of the Parties to this Investment Agreement and their respective attorneys and their respective experts who shall agree in advance and in writing to receive all such information confidentially and to maintain such information in secrecy until such information shall become generally known. In consideration for and as a material condition of this Investment Agreement, each Party agrees that final and binding arbitration is the exclusive means for resolving any claim or controversy arising out of or related to this Investment Agreement. This Investment Agreement is a waiver of all rights the Parties may have to a civil court action. Accordingly, only an arbitrator, not a judge or jury, will decide the dispute, although the arbitrator has the authority to award any type of relief that could otherwise be awarded by a judge or jury.
ARTICLE 8.4 COUNTERPARTS. This Investment Agreement may be executed in counterparts, each of which is deemed an original, but all of which together are deemed to be one and the same agreement. A signed copy of the Transaction Documents delivered by facsimile, e-mail or other means of electronic transmission is deemed to have the same legal effect as delivery of an original signed copy of this Investment Agreement, if the Party sending such facsimile, e-mail or other means of electronic transmission has received express confirmation that the recipient Party received the Investment Agreement, not merely an electronic facsimile confirmation or automatic e-mail reply.
ARTICLE 8.5 TITLES AND SUBTITLES. The titles and subtitles used in this Investment Agreement are used for convenience only and are not to be considered in construing or interpreting this Investment Agreement.
ARTICLE 8.6 FORCE MAJEURE. The Company shall not be liable or responsible to Purchaser, nor be deemed to have defaulted under or breached this Investment Agreement, for any failure or delay in fulfilling or performing any term of this Investment Agreement, if such failure or delay is caused by or results from acts beyond the Company’s control, including: (i) acts of nature; (ii) flood, fire, hurricane, earthquake or explosion; (iii) war, invasion, hostilities (whether war is declared or not), terrorist threats or acts, riot or other civil unrest; (iv) actions, embargos or blockades in effect on or after the date of this Investment Agreement; (v) national or regional emergency; (vi) strikes, labor stoppages or slowdowns or other industrial disturbances; (vii) shortages of or delays in receiving raw materials; or (viii) shortage of adequate power or transportation facilities (each, a “Force Majeure Event”).
ARTICLE 8.7 NOTICES. Any notice required or permitted by this Investment Agreement shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight delivery service or confirmed facsimile, or 48 hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, if such notice is addressed to the Party to be notified at such Party’s address or facsimile number as set forth on the signature page hereto or as subsequently modified by written notice.
ARTICLE 8.8 AMENDMENTS AND WAIVERS. Any term of this Investment Agreement may only be amended or waived with the written consent of the Company and the Purchaser.
ARTICLE 8.9 SEVERABILITY. If one or more provisions of this Investment Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith, in order to maintain the economic position enjoyed by each party as close as possible to that under the provision rendered unenforceable. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Investment Agreement, (ii) the balance of the Investment Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Investment Agreement shall be enforceable in accordance with its terms.
IN WITNESS WHEREOF, the Parties hereto have executed this Investment Agreement on November 13, 2019.
Exhibit 10.36
EXHIBIT B:
THE NOTE
AMENDED NOVEMBER 13, 2019
THIS NOTE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE, IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER 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
SECURED
CONVERTIBLE PROMISSORY NOTE
DUE DECEMBER 7, 2020
This is an amendment executed and effective on the date set forth on the signature page hereto, to the Secured Convertible Promissory Note dated June 6, 2019, (the “Original Note”) by and between NutraLife BioSciences, Inc., a Florida corporation (“NutraLife”), PhytoChem Technologies, Inc. (“PhytoChem”), a Florida corporation (NutraLife and PhytoChem are collectively referred to herein as the “Company”), and Kahn Family Limited PT II (the “Purchaser”). The Company and the Purchaser are referred to herein collectively as the “Parties”, or individually as a “Party”.
NOW THEREFORE, the Parties hereby amend and replace the Original Note in its entirety and replace it with this Note (as defined below) in exchange for good and valuable consideration the receipt of which is hereby acknowledged as follows:
FOR VALUE RECEIVED, the Company promises to pay to and Kahn Family Limited PT II (the “Purchaser”), the principal sum of $1,000,000 and all accrued interest on or before December 7, 2020 as set forth below (the “Maturity Date”) pursuant to the terms of this Secured Convertible Promissory Note (the “Note”). The Company and the Purchaser are referred to herein collectively as the “Parties”, or individually as a “Party”.
WHEREAS, the Company obtained certain rights to commercialize and monetize certain technology and phytoextractor equipment known as the Ennea Processor (“Ennea” or “Ennea Processor”) pursuant to an agreement by and between Owen J. Morgan (“Morgan”) and the Company dated February 4, 2019 (the “Morgan Agreement”);
WHEREAS, the Company requires capital to manufacture, purchase, monetize and commercialize the Ennea Processors;
WHEREAS, the Company desires to issue and sell, and the Purchaser desires to purchase this Note which shall bear interest (the “Interest”) at the rate of five point seven five percent (5.75%) per annuum (the “Interest”) on the principal amount of $1,000,000 (“Principal” or the “Principal Amount”);
WHEREAS, in addition to the Collateral, the first four Ennea Processors (the “Collateral Processors”) that the Company commercializes pursuant to the Morgan Agreement shall serve as collateral for the Principal Amount pursuant to the terms of the Security Agreement (the “Security Agreement”) attached to the Investment Agreement as Exhibit C;
WHEREAS, at any time while the Note is outstanding, the Purchaser shall have the right to convert the Note into shares of the Company’s Common Stock at the price of $1.00 per share (the “Conversion Shares”);
WHEREAS, as consideration for the purchase of the Note, the Company shall (i) pay to the Purchaser the Interest as set forth in this Note, (ii) issue 500,000 shares of its Common Stock, $.0001 par value per share (the “Common Shares”) to the Purchaser, and (iii) grant the Purchaser eight and one-half percent (8.5%) of the revenue generated from the Collateral Processors (the “Royalty”) while any portion of the Principal Amount is outstanding and five percent (5%) thereafter as set forth in the Royalty Agreement (the “Purchaser Royalty Agreement”) attached to the Investment Agreement as Exhibit D.
WHEREAS, the Principal Amount shall be secured by the Collateral (as defined herein) and a mortgage (the “Mortgage”) on certain real property (the “Real Property”) attached hereto as Exhibit F provided by a pledgor (the “Pledgor”) who will provide the Mortgage and receive consideration for the pledge of the Real Property pursuant to the terms of the Pledge Agreement attached to the Investment Agreement Exhibit E (the “Pledge Agreement”).
WHEREAS, the Principal Amount secured by the Mortgage will be reduced by any and all consideration of any nature that is paid to the Purchaser by the Company under the Transaction Documents (as defined in the Investment Agreement).
NOW THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, receipt of which is hereby acknowledged, the undersigned agrees as follows:
ARTICLE 1. RECITALS
The Recitals below are incorporated herein and made a part hereof constituting binding terms of this Note.
ARTICLE 2. MATURITY.
ARTICLE 2.1 MATURITY DATE. On December 7, 2020 (the “Maturity Date”), the entire outstanding principal balance of this Note shall mature.
ARTICLE 3. PAYMENT.
ARTICLE 3.1 AMORTIZATION. The Company will make the first interest only payment on December 7, 2019 at the fixed rate of five point seven five percent (5.75%) per annum. Beginning January 7, 2020 through the Maturity Date, the Company will make equal monthly installment payments of principal and interest in an amount sufficient to fully amortize the Principal Amount and all accrued interest over an amortization period of eighteen (18) months.
ARTICLE 3.2 PAYMENT SCHEDULE. On December 7, 2019 the Company will pay an interest only payment on the Principal at the fixed rate of five point seven five percent (5.75%) per annum. Beginning on January 7, 2020 and continuing until the Maturity Date, the Company will make equal monthly installment payments of principal and interest at the fixed rate of five point seven five percent (5.75%) per annum until all amounts due under the Note are paid in full.
ARTICLE 3.3 INTEREST. Interest will accrue from June 6, 2019 (the “Effective Date”) at the rate of five point seven five percent (5.75%) per annum until the Maturity Date. Interest shall be calculated based upon a 365-day year and the actual number of days elapsed. All amounts payable under this Note are payable in lawful money of the United States during normal business hours on a Business Day. For purposes of this Note, “Business Day” means any day except Saturday, Sunday, and any day which shall be a federal legal holiday in the United States or a day on which banking institutions in the State of Florida are authorized or required by law or other government action to close.
ARTICLE 3.4 PREPAYMENT. The Company may prepay this Note in whole or in part at any time without interest or penalty.
ARTICLE 3.5 APPLICATION OF PAYMENTS. All payments made by the Company to the Purchaser under the Transaction Documents including but not limited to this Note shall be first applied, to the Principal Amount then to accrued interest outstanding. Any and all consideration paid by the Company to the Purchaser under the Transaction Documents (as defined in the Investment Agreement) shall reduce the amounts secured by the Mortgage without affecting the amounts owed by the Company to the Purchaser under the Transaction Documents. For example, for the avoidance of doubt, should the Purchaser receive consideration from the Company consisting of Interest, Royalty, the Securities (as defined in the Investment Agreement) having a value of $500,000 then the Mortgage would be reduced to $500,000 ($1,000,000-$500,000) without affecting the amounts owed by the Company to the Purchaser.
ARTICLE 4. COLLATERAL.
ARTICLE 4.1 ENNEA PROCESSOR AS COLLATERAL. In addition to the assets of the Company as set forth in Article 4.3 hereof, this Note is secured by the Collateral including the Collateral Processors as defined by the Investment Agreement and Security Agreement. The “Collateral Processors” as used in this Note shall mean the first four (4) Ennea Processors manufactured and/or commercialized by the Company directly or indirectly as a result of or pursuant to the Morgan Agreement.
ARTICLE 4.2 REAL PROPERTY AS COLLATERAL. A pledge of the Real Property shall secure the Principal Amount pursuant to the terms of the Pledge Agreement and Mortgage attached as Exhibits E and F of the Investment Agreement and such Mortgage shall be reduced from time to time by the consideration paid by the Company to the Purchaser. Simultaneously with the payment of consideration whether Interest, Royalty and/or Securities (as defined in the Investment Agreement) equal to the Principal Amount, the Purchaser will record with the Palm Beach County Property Appraiser’s Officer, a Satisfaction of the Mortgage releasing the Purchaser’s Mortgage on the Real Property.
ARTICLE 4.3 FULL RECOURSE NOTE. This is a Full Recourse Promissory Note. Accordingly, Purchaser shall have full recourse to all the current assets and future assets of the Company and its subsidiaries (the “Collateral”) and the Purchaser shall be required to proceed against and exhaust all remedies against the Collateral prior to proceeding against the Mortgage and/or commencing an action to foreclose the Mortgage on the Real Property.
ARTICLE 4.4 RECORDS. The Company and Purchaser shall provide Pledgor with monthly statements of all payments made to Purchaser and copies of all consideration paid by the Company to Purchaser under the Transaction Documents.
ARTICLE 5. CONVERSION.
ARTICLE 5.1 CONVERSION BY THE PURCHASER. At any time while this Note is outstanding, the Purchaser shall have the option of converting the Principal Amount and accrued Interest due on this Note into the Company’s Common Stock at the price of $1.00 per share. The Common Stock issued upon conversion of this Note is referred to herein as the “Conversion Shares”.
ARTICLE 5.2 MECHANICS AND EFFECT OF CONVERSION. Upon conversion of this Note pursuant to this Article 5, the Purchaser shall surrender this Note, duly endorsed, at the principal offices of the Company. At its expense, the Company will, as soon as practicable thereafter, issue and deliver to such Purchaser, at such principal office, a certificate or certificates for the Conversion Shares. Upon conversion of the Principal Amount and/or Interest into Conversion Shares, the Company will be forever released from all of its obligations and liabilities under this Note. In the event Purchaser converts less than all Principal and Interest outstanding, the amount converted under the Note shall be first applied to reduce the Principal until it is paid in full. Additionally, upon conversion of all outstanding Principal at the time of conversion, the Mortgage shall be released as security for the obligations and liabilities under this Note.
ARTICLE 6. EVENTS OF DEFAULT.
ARTICLE 6.1. DEFAULT. An “Event of Default” shall mean that the Company has failed to make any payment required under this Note, within fifteen (15) days after the date the payment is due. If the Company is in default under this Note, the unpaid principal and accrued and unpaid interest and any other unpaid amounts and costs due will bear interest at the rate of 10% (the “Default Rate”) until the Event of Default is cured. From and after the Maturity Date any unpaid principal and interest and any other unpaid amounts and costs under this Note will bear interest at the Default Rate. Additionally, and without limitation, all amounts owed under any judgment obtained by Purchaser against the Company with respect to this Note will bear interest at the Default Rate.
ARTICLE 6.2 COLLECTION COSTS. If an Event of Default occurs under this Note, the Company shall pay all reasonable costs of collection including, without limitation, attorney fees in a reasonable amount without limiting the foregoing.
ARTICLE 7. MISCELLANEOUS.
ARTICLE 7.1 NOTICES. Any and all notices or other communications or deliveries to be provided by the parties shall be delivered by facsimile, sent by a nationally recognized overnight courier service, addressed to the Company, at the addresses set forth on the signature page hereto or such other address or facsimile number as the Company may specify for such purposes by notice to the Purchaser delivered in accordance with this Article.
ARTICLE 7.2 ABSOLUTE OBLIGATION. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the Principal of and any accrued interest on this Note at the time, place, and rate, and in the coin or currency, herein prescribed.
ARTICLE 7.3 LOST OR MUTILATED NOTE. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the Principal Amount of this Note so mutilated, lost, stolen or destroyed but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, and indemnity, if requested, all reasonably satisfactory to the Company.
ARTICLE 7.4 SECURITY INTEREST. This Note is a direct debt obligation of the Company and is secured by a security interest in the Collateral. The Purchaser and the Company have entered into the Security Agreement dated as of the date hereof and attached hereto as Exhibit C to the Investment Agreement in connection with the Purchaser’s security interest in the Collateral.
ARTICLE 7.5 SENIORITY. The Company shall not incur any indebtedness senior to this Note while it remains outstanding and shall not encumber the Collateral or the Company’s assets with any interest senior to this Note.
ARTICLE 7.6 ACTION TO COLLECT ON NOTE. If action is instituted to collect on this Note, the Company shall all pay all costs and expenses, including reasonable attorney’s fees, incurred in connection with such action.
ARTICLE 7.7 EXTENSION AND TERMINATION. The payments due under this Note may not be extended by the Purchaser and the Company without the express written consent of the Pledgor identified in the Pledge Agreement. In the event that an extension of this Note is granted without Pledgor’s written consent then the Mortgage shall be deemed satisfied and released in full as collateral for the Principal Amount and Purchaser shall be obligated to record a release of the Mortgage in the Palm Beach County Florida property records.
ARTICLE 7.8 GOVERNING LAW AND JURISDICTION. This Note shall be governed by and construed in accordance with the laws of the State of Florida without regard to principles of conflict law applicable to contracts made and to be performed with such state. Each of the parties hereto accepts for itself to the jurisdiction of Palm Beach County Florida and irrevocably consents to such jurisdiction in any proceedings and waives any objection to venue laid therein. Any controversy or claim arising out of or relating of this Note shall be settled by binding arbitration administered by the American Arbitration Association and judgment on the award entered in any court having jurisdiction. The arbitration proceedings shall be conducted before a panel of three neutral arbitrators in Palm Beach County, Florida all of whom shall be members of the bar of the state of Florida, actively engaged in the practice of law for at least ten (10) years. Either Party hereto may apply to the arbitrator seeking injunctive relief until the arbitration award is rendered or the controversy otherwise resolved. Either Party may, without waiving any remedy under this Note, seek from any court having jurisdiction any interim or provisional relief that is necessary to protect the rights or property of that party, pending the arbitral tribunal’s determination of the merits of the controversy. Each party shall bear its own costs, expenses and attorney fees and an equal share of the arbitrators’ and administrative fees of arbitration. Except as may be required by law, neither a party nor an arbitrator may disclose the existence content or results of any arbitration hereunder without the prior written consent of the Parties. All documents, testimony and records shall be received, heard and maintained by the arbitrators in secrecy, available for the inspection only of the Parties to this Note and their respective attorneys and their respective experts who shall agree in advance and in writing to receive all such information confidentially and to maintain such information in secrecy until such information shall become generally known. In consideration for and as a material condition of this Note, each Party agrees that final and binding arbitration is the exclusive means for resolving any claim or controversy arising out of or related to this Note. This Agreement is a waiver of all rights the Parties may have to a civil court action. Accordingly, only an arbitrator, not a judge or jury, will decide the dispute, although the arbitrator has the authority to award any type of relief that could otherwise be awarded by a judge or jury.
ARTICLE 7.9 SEVERABILITY. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Purchaser.
ARTCLE 7.10 HEADINGS. The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit or affect any of the provisions hereof.
ARTICLE 7.11 PAYMENT. All payments shall be made in lawful money of the United States of America at such place as the Purchaser hereof may from time to time designate in writing to the Company. Payments made by the Company under the Transaction Documents including this Note shall be credited first to the Principal Amount then outstanding until paid in full then to accrued interest. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.
ARTICLE 7.12 WAIVER OF CONFLICTS. The Company and the Purchaser each acknowledge that the Pledgor, Brenda Hamilton and her law firm, Hamilton & Associates Law Group, P.A has in the past performed, and may continue to perform, legal and/or consulting services for the Company in connection with the Transaction Documents and the matters and transactions described in this Note as well as in matters unrelated to the Transaction Documents. Accordingly, the Company and Purchaser each hereby acknowledges that they have been advised by Brenda Hamilton & Hamilton & Associates Law Group, P.A. to seek the advice of independent legal counsel in connection with the Transaction Documents including with respect to the Pledge Agreement, Mortgage and Pledgor Royal Agreement in which Brenda Hamilton is a Party and the transactions contemplated thereby. Additionally, the Company and Purchaser each acknowledge that they have had an opportunity to ask for information relevant to this disclosure and has consulted with independent legal counsel or has had the opportunity to do so and gives its informed consent to Brenda Hamilton & Hamilton & Associates Law Group, P.A. representation of and/or performance of services for the Company in the connection with the Transaction Documents and transactions contemplated thereby.
ARTICLE 7.13 FORCE MAJEURE. The Company shall not be liable or responsible to Purchaser, nor be deemed to have defaulted under or breached this Note, for any failure or delay in fulfilling or performing any term of this Note, if such failure or delay is caused by or results from acts beyond the Company’s control, including: (i) acts of nature; (ii) flood, fire, hurricane, earthquake or explosion; (iii) war, invasion, hostilities (whether war is declared or not), terrorist threats or acts, riot or other civil unrest; (iv) actions, embargos or blockades in effect on or after the date of this Note; (v) national or regional emergency; (vi) strikes, labor stoppages or slowdowns or other industrial disturbances; (vii) shortages of or delays in receiving raw materials; or (viii) shortage of adequate power or transportation facilities (each, a “Force Majeure Event”).
IN WITNESS WHEREOF, the Parties hereto has executed this Note on November 13, 2019.
NUTRALIFE BIOSCIENCES, INC. | PHYTOCHEM TECHNOLOGIES, INC. | |||
By: | By: | |||
Edgar Ward, Chief Executive Officer | Edgar Ward, Chief Executive Officer | |||
Address for Notice: | Address for Notice: | |||
NutraLife Biosciences, Inc. | NutraLife Biosciences, Inc. | |||
Attn: Edgar Ward, Chief Executive Officer | Attn: Edgar Ward, Chief Executive Officer | |||
6601 Lyons Rd. L-6 | 6601 Lyons Rd. L-6 | |||
Coconut Creek, Fl. 33073 edgar@NutraFuels.com |
Coconut Creek, Fl. 33073 edgar@NutraFuels.com |
Exhibit 10.37
EXHIBIT C:
SECURITY AGREEMENT
AMENDED NOVEMBER 13, 2019
This is an amendment executed on the date set forth on the signature page hereto, to the Security Agreement dated June 6, 2019, (the “Original Security Agreement”) by and between NutraLife BioSciences, Inc., a Florida corporation (“NutraLife”), PhytoChem Technologies, Inc. (“PhytoChem”), a Florida corporation (NutraLife and PhytoChem are collectively referred to herein as the “Company”), and Kahn Family Limited PT II (the “Purchaser”). The Company and the Purchaser are referred to herein collectively as the “Parties”, or individually as a “Party”.
NOW THEREFORE, the Parties hereby amend and replace the Original Security Agreement in its entirety with this agreement (the “Security Agreement”) in exchange for good and valuable consideration the receipt of which is hereby acknowledged as follows:
ARTICLE 1. RECITALS
The Recitals below are incorporated herein and made terms of this Security Agreement.
WHEREAS, the Company obtained certain rights to commercialize and monetize certain technology and phytoextractor equipment known as the Ennea Processor (“Ennea” or “Ennea Processor”) pursuant to an agreement by and between Owen J. Morgan (“Morgan”) and the Company dated February 4, 2019 (the “Morgan Agreement”) which will be manufactured in the future;
WHEREAS, the Ennea uses certain technologies to separate, process and/or extract bioactive compounds including cannabinoids from hemp and other plants to remove and/or modify, purify, dilute and extract bioactive ingredients and/or remove unwanted substances to produce finished products for a variety of applications;
WHEREAS, the Company requires capital to manufacture, purchase, monetize and commercialize the Ennea;
WHEREAS, the Company issued and sold a full recourse secured convertible promissory not, as amended (the “Note”) as attached as Exhibit B to the Investment Agreement in the principal amount of $1,000,000 (“Principal” or the “Principal Amount”);
WHEREAS, the Company’s present and future assets as set forth in the Note including the Ennea Processors (collectively the “Collateral”) shall serve as collateral for the Principal Amount pursuant to the terms of the Security Agreement (the “Security Agreement”) so long as any portion of the Principal Amount is outstanding; and
NOW, THEREFORE, under the terms hereof, the Purchaser desires to obtain and the Company desires to grant the Purchaser security for the Note under the terms hereof.
ARTICLE 1. DEFINITIONS.
ARTICLE 1.1 “Collateral Processors” shall mean the first four (4) of the Ennea Processors monetized and/or commercialized by the Company pursuant to the Morgan Agreement.
ARTICLE 1.2 “UCC” means the Uniform Commercial Code, as adopted and enacted and as in effect from time to time in the State of Florida. Terms used herein which are defined in the UCC and not otherwise defined herein shall have the respective meanings ascribed to such terms in the UCC.
ARTICLE 2. GRANT OF SECURITY INTEREST.
ARTICLE 2.1 GRANT. To secure the Obligations, the Company, hereby assigns and grants to the Purchaser, as Purchaser, a continuing lien on and security interest in the Collateral including the Collateral Processors.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES.
ARTICLE 3.1 The Company represents, warrants and covenants to the Purchaser that: (a) the Company has good, marketable and indefeasible title to the Collateral, has not made any prior sale, pledge, encumbrance, assignment or other disposition of any of the Collateral including the Collateral Processors, and the Collateral is free from all encumbrances and rights of setoff of any kind except the lien in favor of the Purchaser created by this Security Agreement; (b) except as herein provided, the Company will not hereafter without the Purchaser’s prior written consent sell, pledge, encumber, assign or otherwise dispose of any of the Collateral including the Collateral Processors or permit any right of setoff, lien or security interest to exist thereon except to the Purchaser; and (c) the Company will defend the Collateral including the Collateral Processors against all claims and demands of all persons at any time claiming the same or any interest therein.
ARTICLE 4. COMPANY’S COVENANTS.
ARTICLE 4.1 The Company covenants that it shall:
(a) from time to time and at all reasonable times allow the Purchaser, by or through any of its officers, agents, attorneys, or accountants, to examine or inspect the Collateral, and obtain valuations and audits of the Collateral, at the Company’s expense, wherever located. The Company shall do, obtain, make, execute and deliver all such additional and further acts, things, deeds, assurances and instruments as the Purchaser may require to vest in and assure to the Purchaser its rights hereunder and in or to the Collateral, and the proceeds thereof.
(b) keep the Collateral in good order and repair at all times and immediately notify the Purchaser of any event causing a material loss or decline in value of the Collateral, whether or not covered by insurance, and the amount of such loss or depreciation;
(c) only use or permit the Collateral to be used in accordance with all applicable federal, state, county and municipal laws and regulations; and
(d) have and maintain insurance at all times with respect to all Collateral against risks of fire (including so-called extended coverage), theft, sprinkler leakage, and other risks (including risk of flood if any Collateral is maintained at a location in a flood hazard zone) as the Purchaser may reasonably require, in such form, in the minimum amount of the outstanding principal of the Note and written by such companies as may be reasonably satisfactory to the Purchaser. Each such casualty insurance policy shall contain a standard Lender’s Loss Payable Clause issued in favor of the Purchaser under which all losses thereunder shall be paid to the Purchaser as the Purchaser’s interest may appear. Such policies shall expressly provide that the requisite insurance cannot be altered or canceled without at least thirty (30) days prior written notice to the Purchaser and shall insure the Purchaser notwithstanding the act or neglect of the Company. Upon the Purchaser’s demand, the Company shall furnish the Purchaser with evidence of insurance as the Purchaser may require. In the event of failure to provide insurance as herein provided, the Purchaser may, at its option, obtain such insurance and the Company shall pay to the Purchaser, on demand, the cost thereof. Proceeds of insurance shall be applied by the Purchaser to reduce the Mortgage as defined in the Transaction Documents.
(e) If the Collateral is, at any time, in the possession of a bailee, Company shall promptly notify Purchaser thereof and, if requested by Purchaser, shall promptly obtain an acknowledgment from the bailee, in form and substance satisfactory to Purchaser, that the bailee holds such Collateral for the benefit of Purchaser and shall act upon the instructions of Purchaser, without the further consent of Company.
ARTICLE 5. NO TRANSFER.
ARTICLE 5.1 NEGATIVE PLEDGE. The Company will not sell or offer to sell or otherwise transfer or grant or allow the imposition of a lien or security interest upon the Collateral or use any portion thereof in any manner inconsistent with this Security Agreement or with the terms and conditions of any policy of insurance thereon.
ARTICLE 6. FURTHER ASSURANCES.
ARTICLE 6.1 UCC FILINGS. The Company hereby irrevocably authorizes Purchaser at any time and from time to time to file in any Uniform Commercial Code jurisdiction any initial financing statements and amendments thereto that (a) indicate the Collateral (i) as all assets of Company or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the Florida Uniform Commercial Code or such jurisdiction, or (ii) as being of an equal or lesser scope or with greater detail, and (b) contain any other information required by part 5 of Article 9 of the Florida Uniform Commercial Code for the sufficiency or filing office acceptance of any financing statement or amendment, including, but not limited to (i) whether the Company is an organization, the type of organization and (ii) any organization identification number issued to Company. Company agrees to furnish any such information to purchaser promptly upon request. company also ratifies its authorization for purchaser to have filed in any uniform commercial code jurisdiction any like initial financing statements or amendments thereto if filed prior to the date hereof.
ARTICLE 7. EVENTS OF DEFAULT.
ARTICLE 7. 1 TERMS OF DEFAULT. The Company shall, at the Purchaser’s option, be in default under this Security Agreement upon the happening of any of the following events or conditions (each, an “Event of Default”): (a) a failure to pay any amount due under the Note or this Security Agreement within fifteen (15) days of the date the same is due; (b) the failure by the Company to perform any of its other obligations under this Security Agreement within thirty (30) days of notice from Purchaser of the same; (c) falsity, inaccuracy or material breach by the Company of any written warranty, representation or statement made or furnished to the Purchaser by or on behalf of the Company; (d) an uninsured material loss, theft, damage, or destruction to any of the Collateral, or the entry of any judgment against the Company or any lien against or the making of any levy, seizure or attachment of or on the Collateral; or (e) the failure of the Purchaser to have a perfected first priority security interest in the Collateral.
ARTICLE 8. REMEDIES.
ARTICLE 8.1 REMEDIES UPON DEFAULT. Upon the occurrence of any such Event of Default and at any time thereafter, the Purchaser may declare all Obligations secured hereby immediately due and payable and shall have, in addition to any remedies provided herein or by any applicable law or in equity, all the remedies of a secured party under the UCC. The Purchaser’s remedies include, but are not limited to, to the extent permitted by law, the right to (a) peaceably by its own means or with judicial assistance enter the Company’s premises and take possession of the Collateral without prior notice to the Company or the opportunity for a hearing, (b) render the Collateral unusable, (c) dispose of the Collateral on the Company’s premises, and (d) require the Company to assemble the Collateral and make it available to the Purchaser at a place designated by the Purchaser. Unless the Collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, the Purchaser will give the Company reasonable notice of the time and place of any public sale thereof or of the time after which any private sale or any other intended disposition thereof is to be made. The requirements of commercially reasonable notice shall be met if such notice is sent to the Company at least fifteen (15) days before the time of the intended sale or disposition. Expenses of retaking, holding, preparing for sale, selling or the like shall include the Purchaser’s reasonable attorney’s fees and legal expenses, incurred or expended by the Purchaser to enforce any payment due it under this Security Agreement either as against the Company, or in the prosecution or defense of any action, or concerning any matter growing out of or connection with the subject matter of this Security Agreement and the Collateral pledged hereunder. The Company waives all relief from all appraisement or exemption laws now in force or hereafter enacted.
ARTICLE 9. PAYMENT OF EXPENSES.
ARTICLE 9.1 EXPENSES. At its option, the Purchaser may, but is not required to: discharge taxes, liens, security interests or such other encumbrances as may attach to the Collateral; pay for required insurance on the Collateral; and pay for the maintenance, appraisal or reappraisal, and preservation of the Collateral, as determined by the Purchaser to be necessary. The Company will reimburse the Purchaser on demand for any payment so made or any expense incurred by the Purchaser pursuant to the foregoing authorization, and the Collateral also will secure any advances or payments so made or expenses so incurred by the Purchaser.
ARTICLE 10. MISCELLANEOUS
ARTICLE 10.1 NOTICES. All notices, demands, requests, consents, approvals and other communications required or permitted hereunder must be in writing and will be effective upon receipt. Such notices and other communications may be hand-delivered, sent by facsimile transmission with confirmation of delivery and a copy sent by first-class mail, or sent by nationally recognized overnight courier service, to a party’s address set forth above or to such other address as any party may give to the other in writing for such purpose.
ARTICLE 10.2 PRESERVATION OF RIGHTS. No delay or omission on the Purchaser’s part to exercise any right or power arising hereunder will impair any such right or power or be considered a waiver of any such right or power, nor will the Purchaser’s action or inaction impair any such right or power. The Purchaser’s rights and remedies hereunder are cumulative and not exclusive of any other rights or remedies which the Purchaser may have under other agreements, at law or in equity.
ARTICLE 10.3 ILLEGALITY. In case any one or more of the provisions contained in this Security Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.
ARTICLE 10.4 CHANGES IN WRITING. No modification, amendment or waiver of any provision of this Security Agreement nor consent to any departure by the Company therefrom will be effective unless made in a writing signed by the Purchaser, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on the Company in any case will entitle the Company to any other or further notice or demand in the same, similar or other circumstance.
ARTICLE 10.5 ENTIRE AGREEMENT. This Security Agreement (including the documents and instruments referred to herein) constitutes the entire agreement and supersedes all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof.
ARTICLE 10.6 COUNTERPARTS. This Security Agreement may be signed in any number of counterpart copies and by the parties hereto on separate counterparts, but all such copies shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Security Agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart. Any party so executing this Security Agreement by facsimile transmission shall promptly deliver a manually executed counterpart, provided that any failure to do so shall not affect the validity of the counterpart executed by facsimile transmission.
ARTICLE 10.7 SUCCESSORS AND ASSIGNS. This Security Agreement will be binding upon and inure to the benefit of the Company and the Purchaser and their respective heirs, executors, administrators, successors and assigns; provided, however, that the Company may not assign this Security Agreement in whole or in part without the Purchaser’s prior written consent and the Purchaser at any time may assign this Security Agreement in whole or in part.
ARTICLE 10.8 INTERPRETATION. In this Security Agreement, unless the Purchaser and the Company otherwise agree in writing, the singular includes the plural and the plural the singular; words importing any gender include the other genders; references to statutes are to be construed as including all statutory provisions consolidating, amending or replacing the statute referred to; the word “or” shall be deemed to include “and/or”, the words “including”, “includes” and “include” shall be deemed to be followed by the words “without limitation”; references to articles, sections (or subdivisions of sections) or exhibits are to those of this Security Agreement unless otherwise indicated. Article headings in this Security Agreement are included for convenience of reference only and shall not constitute a part of this Security Agreement for any other purpose.
ARTICLE 10.9 WAIVER OF CONFLICTS. The Company and the Purchaser each acknowledge that the Pledgor, Brenda Hamilton and her law firm, Hamilton & Associates Law Group, P.A has in the past performed, and may continue to perform, legal and/or consulting services for the Company in connection with the Transaction Documents and the matters and transactions described in this Security Agreement as well as in matters unrelated to the Transaction Documents. Accordingly, the Company and Purchaser each hereby acknowledges that they have been advised by Brenda Hamilton & Hamilton & Associates Law Group, P.A. to seek the advice of independent legal counsel in connection with the Transaction Documents including with respect to the Pledge Agreement, Mortgage and Pledgor Royal Agreement in which Brenda Hamilton is a Party and the transactions contemplated thereby. Additionally, the Company and Purchaser each acknowledge that they have had an opportunity to ask for information relevant to this disclosure and has consulted with independent legal counsel or has had the opportunity to do so and gives its informed consent to Brenda Hamilton & Hamilton & Associates Law Group, P.A. representation of and/or performance of services for the Company in the connection with the Transaction Documents and transactions contemplated thereby.
10.10 GOVERNING LAW AND JURISDICTION. This Security Agreement shall be governed by and construed in accordance with the laws of the State of Florida without regard to principles of conflict law applicable to contracts made and to be performed with such state. Each of the parties hereto accepts for itself to the jurisdiction of Palm Beach County Florida and irrevocably consents to such jurisdiction in any proceedings and waives any objection to venue laid therein. Any controversy or claim arising out of or relating of this Security Agreement shall be settled by binding arbitration administered by the American Arbitration Association and judgment on the award entered in any court having jurisdiction. The arbitration proceedings shall be conducted before a panel of three neutral arbitrators in Palm Beach County, Florida all of whom shall be members of the bar of the state of Florida, actively engaged in the practice of law for at least ten (10) years. Either Party hereto may apply to the arbitrator seeking injunctive relief until the arbitration award is rendered or the controversy otherwise resolved. Either Party may, without waiving any remedy under this Security Agreement, seek from any court having jurisdiction any interim or provisional relief that is necessary to protect the rights or property of that party, pending the arbitral tribunal’s determination of the merits of the controversy. Each party shall bear its own costs, expenses and attorney fees and an equal share of the arbitrators’ and administrative fees of arbitration. Except as may be required by law, neither a party nor an arbitrator may disclose the existence content or results of any arbitration hereunder without the prior written consent of the Parties. All documents, testimony and records shall be received, heard and maintained by the arbitrators in secrecy, available for the inspection only of the Parties to this Security Agreement and their respective attorneys and their respective experts who shall agree in advance and in writing to receive all such information confidentially and to maintain such information in secrecy until such information shall become generally known. In consideration for and as a material condition of this Security Agreement, each Party agrees that final and binding arbitration is the exclusive means for resolving any claim or controversy arising out of or related to this Security Agreement. This Agreement is a waiver of all rights the Parties may have to a civil court action. Accordingly, only an arbitrator, not a judge or jury, will decide the dispute, although the arbitrator has the authority to award any type of relief that could otherwise be awarded by a judge or jury.
[SIGNATURE PAGE TO FOLLOW]
IN WITNESS WHEREOF, the Parties hereto have executed this Security Agreement on November 13, 2019.
Exhibit 10.38
EXHIBIT D.
PURCHASER ROYALTY AGREEMENT
AMENDED NOVEMBER 13, 2019
This is an amendment executed on the date set forth on the signature page hereto, to the Purchaser Royalty Agreement (the “Original Purchaser Royalty Agreement”) dated June 6, 2019, (the “Original Security Agreement”) by and between NutraLife BioSciences, Inc., a Florida corporation (“NutraLife”), PhytoChem Technologies, Inc. (“PhytoChem”), a Florida corporation (NutraLife and PhytoChem are collectively referred to herein as the “Company”), and Kahn Family Limited PT II (the “Purchaser”). The Company and the Purchaser are referred to herein collectively as the “Parties”, or individually as a “Party”.
NOW THEREFORE, the Parties hereby amend and replace the Original Purchaser Royalty Agreement in its entirety and replace it with this agreement (the “Purchaser Royalty Agreement”) in exchange for good and valuable consideration the receipt of which is hereby acknowledged as follows:
RECITALS
WHEREAS, the Company obtained certain rights to commercialize and monetize certain technology and phytoextractor equipment known as the Ennea Processor (“Ennea” or “Ennea Processor”) pursuant to an agreement by and between Owen J. Morgan (“Morgan”) and the Company dated February 4, 2019 (the “Morgan Agreement”);
WHEREAS, the Company requires capital to manufacture, purchase, monetize and commercialize the Ennea Processors and the Purchaser purchased a Convertible Promissory Note (the “Note”) which shall bear interest (the “Interest”) at the rate of 5.75 % per annuum (the “Interest”) in the principal amount of $1,000,000 (“Principal” or the “Principal Amount”) from June 6, 2019 until the Maturity Date (as defined in the Note);
WHEREAS, the First Four (4) Ennea Processors (“Collateral Processors”) that the Company commercializes pursuant to the Morgan Agreement shall serve as collateral for the Principal Amount pursuant to the terms of the Note and Security Agreement (the “Security Agreement”) attached to the Investment Agreement as Exhibits B and C;
WHEREAS, as consideration for the purchase of the Note, the Company shall (i) pay to the Purchaser the Interest as set forth in this Purchaser Royalty Agreement, (ii) issue 500,000 shares of its Common Stock, $.0001 par value per share (the “Common Shares”) to the Purchaser, and (iii) grant the Purchaser eight and one-half percent (8.5%) of the revenue generated from the Collateral Processors (the “Royalty”) while the Principal Amount and any interest is outstanding and five percent (5%) thereafter on the first two (2) collateral processors as set forth as set forth herein.
THEREFORE, in consideration of the mutual considerations herein, the receipt of which is mutually acknowledged, the parties hereto agree as follows:
ARTICLE 1. RECITALS.
ARTICLE 1.1 The above recitals are true and correct and made a part hereof.
ARTICLE 2. DEFINITIONS.
ARTICLE 2.1 The Investment Agreement and all exhibits thereto are referred to herein as the “Ancillary Agreements”. This Purchaser Royalty Agreement and the Ancillary Agreements shall be referred to collectively as the “Transaction Documents.”
The “Collateral Processors” as used in this Purchaser Royalty Agreement shall mean the first four Ennea Processors monetized and/or commercialized by the Company directly or indirectly as a result of or pursuant to the Morgan Agreement.
ARTICLE 3. FINANCING.
ARTICLE 3.1 On or about June 6, 2019, the Purchaser loaned the gross amount of $1,000,000 to the Company pursuant to the Investment Agreement and Note, each as amended.
ARTICLE 4. SOURCE, AMOUNT, AND TIMING OF ROYALTY PAYMENTS.
ARTICLE 4.1 Commencing upon the fiscal quarter in which revenue is derived directly or indirectly from any of the Collateral Processors, the Company shall pay to the Purchaser non-refundable Royalty Payments consisting of eight and one-half percent (8.5%) of all “Net Revenue” received by the Company as a result of the commercialization and/or monetization of the Collateral Processors until such time as the Principal Amount has been paid. At such time as the Principal Amount has been paid to the Purchaser, Purchaser shall receive non-refundable Royalty Payments consisting of 5.00 % of “Net Revenue” received by the Company as a result of the commercialization and/or monetization of the first two Collateral Processors resulting from the Morgan Agreement.
For the purposes of this Purchaser Royalty Agreement, “Net Revenue” shall mean the total Gross Receipts less direct and indirect expenses. Gross Receipts shall mean revenue from tolling fees and processing fees, product sales, extraction services, licenses, development, commercialization and/or other commercialization and monetization of the Collateral Processors including the disposition, sale or rental of the Collateral Processors.
ARTICLE 4.2 For the avoidance of doubt, Net Revenue shall be calculated in accordance with GAAP. The Company hereby agrees to use its commercial best efforts to maximize its Gross Revenue during the term of this Purchaser Royalty Agreement and in the event it commercializes any other phytoextractors similar to the Collateral Processors , it will not commercialize or monetize such other equipment until the maximum capacity of the Collateral Processors has been reached. “Gross Revenues” shall also include all settlement amounts, payment, and damages received by Company which result from litigation or disputes related to or arising from the sale, license, development, commercialization and/or other monetization of the Collateral Processors.
ARTICLE 4.3 The Royalty Payments shall be paid by the Company to the Purchaser within fifteen (15) days after the end of the quarter in which the Company receives payment for any Net Revenue from the Collateral Processors.
ARTICLE 5. INFORMATION REQUIRED TO BE SUPPLIED WITH EACH PAYMENT.
ARTICLE 5.1 With each Royalty Payment, the Company shall supply to the Purchaser a detailed and reasonably satisfactory accounting and reconciliation of how the Royalty Payment was calculated. The Company agrees to have an officer certify each reconciliation and provide a reconciliation each calendar month during the term of this Purchaser Royalty Agreement regardless of whether any Royalty Payment is due.
ARTICLE 6. TERM.
ARTICLE 6.1 This Purchaser Royalty Agreement shall continue for a period of ten (10) years.
ARTICLE 7. NO SALE OR ASSIGNMENT BY COMPANY.
ARTICLE 7.1 During the term of this Purchaser Royalty Agreement, the Company may not (i) sell (other than ordinary course sales to customers), assign, or otherwise transfer or encumber the Collateral Processors , (ii) assign or otherwise transfer or encumber this Purchaser Royalty Agreement, or (iii) create an obligation whereby the Company is required to pay all or a portion of the revenues derived from the Collateral Processors to any party in priority to the Purchaser and/or Pledgor or the Pledgor, without first obtaining the prior written consent of the Purchaser.
ARTICLE 8. NOTICES.
ARTICLE 8.1 Any notice required or permitted by this Purchaser Royalty Agreement shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight delivery service or confirmed facsimile, or 48 hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, if such notice is addressed to the party to be notified at such party’s address or facsimile number as set forth on the signature page hereto or as subsequently modified by written notice.
ARTICLE 9. ASSIGNMENT BY PURCHASER.
ARTICLE 9.1 Purchaser may not assign a portion or all of its interest in this Purchaser Royalty Agreement to an assignee.
ARTICLE 10. EXTRAORDINARY EVENT.
ARTICLE 10.1 The Company agrees not to enter into a merger, recapitalization, sale or change of control of the Company or sale transaction involving all or substantially all of the Company’s equity or assets unless the acquiring or successor entity agrees in writing to recognize the Purchaser’s rights under this Purchaser Royalty Agreement.
ARTICLE 11. APPLICABLE LAW, VENUE, JURISDICTION.
ARTICLE 11.1 WAIVER OF CONFLICTS. The Company and the Purchaser each acknowledge that the Pledgor, Brenda Hamilton and her law firm, Hamilton & Associates Law Group, P.A has in the past performed, and may continue to perform, legal and/or consulting services for the Company in connection with the Transaction Documents and the matters and transactions described in this Investment Agreement as well as in matters unrelated to the Transaction Documents. Accordingly, the Company and Purchaser each hereby acknowledges that they have been advised by Brenda Hamilton & Hamilton & Associates Law Group, P.A. to seek the advice of independent legal counsel in connection with the Transaction Documents including with respect to the Pledge Agreement, Mortgage and Pledgor Royal Agreement in which Brenda Hamilton is a Party and the transactions contemplated thereby. Additionally, the Company and Purchaser each acknowledge that they have had an opportunity to ask for information relevant to this disclosure and has consulted with independent legal counsel or has had the opportunity to do so and gives its informed consent to Brenda Hamilton & Hamilton & Associates Law Group, P.A. representation of and/or performance of services for the Company in the connection with the Transaction Documents and transactions contemplated thereby.
ARTICLE 11.2 GOVERNING LAW AND JURISDICTION. This Purchaser Royalty Agreement shall be governed by and construed in accordance with the laws of the State of Florida without regard to principles of conflict law applicable to contracts made and to be performed with such state. Each of the parties hereto accepts for itself to the jurisdiction of Palm Beach County Florida and irrevocably consents to such jurisdiction in any proceedings, and waives any objection to venue laid therein. Any controversy or claim arising out of or relating of this Purchaser Royalty Agreement shall be settled by binding arbitration administered by the American Arbitration Association and judgment on the award entered in any court having jurisdiction. The arbitration proceedings shall be conducted before a panel of three neutral arbitrators in Palm Beach County, Florida all of whom shall be members of the bar of the state of Florida, actively engaged in the practice of law for at least ten (10) years. Either Party hereto may apply to the arbitrator seeking injunctive relief until the arbitration award is rendered or the controversy otherwise resolved. Either Party may, without waiving any remedy under this Purchaser Royalty Agreement, seek from any court having jurisdiction any interim or provisional relief that is necessary to protect the rights or property of that party, pending the arbitral tribunal’s determination of the merits of the controversy. Each party shall bear its own costs, expenses and attorney fees and an equal share of the arbitrators’ and administrative fees of arbitration. Except as may be required by law, neither a party nor an arbitrator may disclose the existence content or results of any arbitration hereunder without the prior written consent of the Parties. All documents, testimony and records shall be received, heard and maintained by the arbitrators in secrecy, available for the inspection only of the Parties to this Purchaser Royalty Agreement and their respective attorneys and their respective experts who shall agree in advance and in writing to receive all such information confidentially and to maintain such information in secrecy until such information shall become generally known. In consideration for and as a material condition of this Purchaser Royalty Agreement, each Party agrees that final and binding arbitration is the exclusive means for resolving any claim or controversy arising out of or related to this Purchaser Royalty Agreement. This Agreement is a waiver of all rights the Parties may have to a civil court action. Accordingly, only an arbitrator, not a judge or jury, will decide the dispute, although the arbitrator has the authority to award any type of relief that could otherwise be awarded by a judge or jury.
[SIGNATURE PAGE TO FOLLOW]
IN WITNESS WHEREOF, the Parties hereto have executed this Purchaser Royalty Agreement on November 13, 2019.
Exhibit 10.39
EXHIBIT
E:
PLEDGE AGREEMENT
AMENDED NOVEMBER 13, 2019
This is an amendment to that pledge agreement (the “Original Pledge Agreement”) made and effective on June 6, 2019, by and between NutraLife BioSciences, Inc., a Florida corporation (“NutraLife”), PhytoChem Technologies, Inc. (“PhytoChem”), a Florida corporation (NutraLife and PhytoChem are collectively referred to herein as the “Company”), Brenda Hamilton, an individual (the “Pledgor”) and Kahn Family Limited PT II (the “Purchaser”) and is effective as of the day set forth on the signature page hereto. The Company, the Pledgor and the Purchaser are referred to herein collectively as the “Parties”, or individually as a “Party”.
NOW THEREFORE, the Parties hereby amend and replace the Original Pledge Agreement in its entirety and replace it with this agreement (the “Pledge Agreement”) in exchange for good and valuable consideration the receipt of which is hereby acknowledged as follows:
RECITALS:
WHEREAS, the Company obtained certain rights to commercialize and monetize certain technology and phytoextractor equipment known as the Ennea Processor (“Ennea” or “Ennea Processor”) pursuant to an agreement by and between Owen J. Morgan (“Morgan”) and the Company dated February 4, 2019 (the “Morgan Agreement”);
WHEREAS, the Company requires capital to manufacture, purchase, monetize and commercialize the Ennea Processors and the Purchaser purchased a Convertible Promissory Note, as amended (the “Note”) from the Company which bears interest (the “Interest”) at the rate set forth in the Note (the “Interest”) on the principal amount of $1,000,000 (“Principal” or the “Principal Amount”);
WHEREAS, the first four of the Ennea Processors that the Company commercializes and/or monetizes pursuant to the Morgan Agreement shall serve as collateral (“Collateral Processors”) for the Principal Amount pursuant to the terms of the Note and Security Agreement (the “Security Agreement”) attached to the Investment Agreement as Exhibits B and C;
WHEREAS, in addition to the Company’s Assets, Collateral Processors, Interest (the “Collateral”) and Securities paid by the Company to the Purchaser as consideration for the Note, the Purchaser requested additional security (the “Additional Collateral”) for the Principal Amount in the form of a mortgage on real property held by Pledgor which Pledgor has agreed to provide based upon the representations of the Company and Purchase contained in the Transaction Documents (as defined herein);
WHEREAS, the Pledgor agreed to provide a mortgage lien covering certain real property (the “Real Property”) as set forth in the mortgage (the “Mortgage”) attached as Exhibit F to the Investment Agreement as the Additional Collateral. In exchange for providing the Additional Collateral, the Company shall pay to the Pledgor the consideration set forth in this Pledge Agreement and in the Pledgor Royalty Agreement attached as Exhibit G to the Investment Agreement; and
WHEREAS, the Mortgage will be reduced by all consideration paid to the Purchaser by the Company under the Transaction Documents.
NOW THERFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, receipt of which is hereby acknowledged, the parties to this Pledge Agreement agree as follows:
ARTICLE 1. RECITALS.
ARTICLE 1.1 The above recitals are true and correct and made a part hereof.
ARTICLE 2. DEFINITIONS.
ARTICLE 2.1 The Investment Agreement, Note, Purchaser Royalty Agreement, Security Agreement, Pledgor Royalty Agreement and the Mortgage are referred to as the “Ancillary Agreements”. This Pledge Agreement and the Ancillary Agreements shall be referred to collectively as the “Transaction Documents”.
ARTICLE 3. REPRESENTATIONS OF THE COMPANY.
ARTICLE 3.1 To induce Pledgor to enter into this Pledge Agreement and the Mortgage, the Company and Purchaser hereby represent and warrant to the Pledgor that each the Company and Pledgor will timely comply with all requirements and obligations under the Transaction Documents and the Company shall pay all amounts owing to the Purchaser, whether for Royalty Payments, Principal, Interest, Fees, Expenses, Premiums, Indemnities or otherwise, and that it will delivery full and timely payment of all and any amounts due and/or which may become due to the Purchaser from the Company from time to time in connection with the Transaction Documents without limitation. Purchaser understands that all consideration delivered to the Purchaser by the Company pursuant to the Transaction Documents will be applied to reduce the Principal Amount secured by the Mortgage and as a result, the Mortgage will be reduced by any and all payments of consideration of any type (including cash or Securities) made by the Company to the Purchaser under (i) the Transaction Documents and (ii) the Original Investment Agreement and Original Note each dated June 6, 2019.
ARTICLE 4. PLEDGE AND CONSIDERATION TO PLEDGOR
ARTICLE 4.1 REAL PROPERTY. Based upon the representations of the Company and the Purchaser that they will perform and comply with their obligations and duties under the Transaction Documents, the Pledgor shall provide the Purchaser with the Mortgage which shall secure the Company’s payment of the Principal Amount pursuant to the Transaction Documents. The Principal Amount is secured by the real property located at 1576 Fan Palm Road Boca Raton, Florida (“Real Property Collateral”) as set forth in the Mortgage. The Mortgage will be reduced from time to time by any and all payments of any nature (including cash or Securities) made by the Company to the Purchaser under the Transaction Documents.
ARTICLE 4.2 CONSIDERATION FOR PLEDGE. In exchange for providing the Real Property Collateral, the Company shall pay to Pledgor: (i) 500,000 shares of the Company’s common stock, $.0001 par value per share (the “Common Shares”) which was issued upon execution of the Original Pledge agreement, (ii) commencing on December 7, 2019 and ending on the Maturity Date, monthly payments equal to 5% interest on the Principal Amount accruing on the Principal Amount and accrued interest from June 6, 2019 until the Maturity Date, and (iii) eight and one-half percent (8.5%) of the revenue generated from the Collateral Processors (the “Royalty”) so long as any portion of the Principal Amount is outstanding and five percent (5%) thereafter on the first two (2) machines commercialized and/or monetized by the Company as set forth in the Pledgor Royalty Agreement (the “Pledgor Royalty Agreement”) attached to the Investment Agreement as Exhibit G.
ARTICLE 4.3 ISSUANCE OF THE SECURITIES. The Common Shares issued to Pledgor pursuant to Article 4 hereof upon issuance were duly authorized, validly issued, fully paid and nonassessable, free and clear of all rights, liens and encumbrances.
ARTICLE 4.4 FULL RECOURSE NOTE. The Note granted by the Company to the Purchaser is a full recourse promissory note and in the event of a default by the Company of the Note, the Purchaser shall have full recourse to all the assets of the Company. In the event of a default by the Company, the Purchaser must first proceed against and exhaust all remedies against the Company and its assets prior to proceeding against the Mortgage and/or commencing an action to foreclose the Mortgage to recover the difference between the then outstanding Principal Amount and any and all consideration of any nature paid by the Company to the Purchaser under the Transaction Documents.
ARTICLE 4.5 EXTENSION AND TERMINATION. The terms set forth in the Transaction Documents including may not be extended by the Purchaser and the Company without the express written consent of the Pledgor so long as any portion of the Principal Amount is outstanding. In the event that any of the Transaction Documents are amended and/or modified in any respect without the Pledgor’s written consent while any portion of the Principal Amount is outstanding then (i) Pledgor’s obligation to provide security under this Pledge Agreement shall automatically cease, (ii) the Mortgage shall be deemed satisfied and released in full as security for the Principal Amount of the Note and (iii) the Purchaser will immediately record with the Palm Beach County Property Appraiser’s Officer, a Satisfaction of the Mortgage releasing the Purchaser’s lien on the Real Property at the cost of the Company.
ARTICLE 5. THE NOTE & COLLATERAL PROCESSORS.
ARTICLE 5.1 COLLATERAL AS SECURITY. A condition precedent to the execution of this Pledge Agreement by the Pledgor is that the Principal Amount be first secured by the Company’s current and future assets as set forth in the Transaction Documents. The payment of the Principal Amount by the Company to the Purchaser is a direct debt obligation of the Company and is secured by all current and future assets of the Company. The Transaction Documents will not be amended, and the Collateral as defined in the Security Agreement shall not be modified or released without the express written consent of the Pledgor. The Company will not sell or offer to sell or otherwise transfer or grant or allow the imposition of a lien or security interest upon the Collateral as defined in the Security Agreement or use any portion thereof in any manner inconsistent with the Transaction Documents or with the terms and conditions of any policy of insurance thereon. The Company will not sell or offer to sell or otherwise transfer or grant or allow the imposition of a lien or security interest upon the Collateral or any of its other assets while the Principal is outstanding or use any portion thereof in any manner inconsistent with this Pledge Agreement or with the terms and conditions of any policy of insurance thereon. In the event that the Transaction Documents are amended or modified by the Company and Purchaser without Pledgor’s written consent, the Mortgage shall be deemed satisfied and released in full as security for the Principal Amount of the Note and the Purchaser will immediately record with the Palm Beach County Property Appraiser’s Officer, a Satisfaction of the Mortgage releasing the Purchaser’s lien on the Real Property.
ARTICLE 6. COVENANTS.
ARTICLE 6.1 The Company agrees to indemnify, defend and hold harmless Pledgor against all losses, claims, demands, liabilities and expenses of every kind caused by Pledgor’s entry into this Pledge Agreement and the Mortgage including attorneys fees. The Company further agrees that while the Mortgage is outstanding not to permit any lien on its assets and that the Company not to sell, hypothecate or otherwise dispose of, nor permit the transfer by operation of law of, any of its assets until such time as the Purchaser has recorded with the Palm Beach County Property Appraiser’s Officer, a Satisfaction of the Mortgage releasing the Mortgage on the Real Property.
ARTICLE 7. CONVERSION OF PRINCIPAL AMOUNT BY PURCHASER.
ARTICLE 7.1 Under the terms of the Note, the Purchaser may at any time while the Note is outstanding, convert the amount of outstanding Principal and accrued Interest due under the Note into the Company’s Common Stock, $.0001 par value per share (the “Conversion Shares”) at the price of $1.00 per share. Should the Purchaser exercise its right to convert the Note into the Conversion Shares then the Real Property Collateral shall be released as security for the Principal Amount and the Purchaser will record with the Palm Beach County Property Appraiser’s Officer, a Satisfaction of the Mortgage releasing the Purchaser’s lien on the Real Property.
ARTICLE 8. DEFAULT OF THE NOTE.
ARTICLE 8.1. DEFAULT. A “Default” shall mean that the Company has failed to make any payment required under the Note, within fifteen (15) days after the date the payment is due.
ARTICLE 8.2 PRIORITY. If after the exhaustion of all other remedies including enforcement of the lien against the Collateral and collection of all amounts due from the Company, there remains a Default owed to Purchaser, then the Purchaser shall provide written notice to Pledgor of the default (“Notice of Default”) and Pledgor shall have the option but not the obligation to cure the Default. In such event, the amounts paid by Pledgor to enforce its rights hereunder shall bear interest at the highest rate allowed under Florida law.
ARTICLE 8.3 INTEREST IN THE EVENT OF DEFAULT. So long as the Company is in default of its obligations under the Transaction Documents, then the Company shall pay Pledgor interest on the Principal and accrued interest outstanding under the Note at the highest rate allowed under Florida law.
ARTICLE 8.4 PLEDGOR’S LIABILITY. Under no circumstances shall the Mortgage secure more than the Principal Amount minus all consideration of any nature paid by the Company to the Purchaser under the Transaction Documents.
ARTICLE 8.5 COLLECTION. If the Company defaults on its obligations under the Note, this Pledge Agreement or any of the other Transaction Documents, the Company shall reimburse Pledgor on demand for (i) payments made by Pledgor to Purchaser to cure a Default by the Company under the Investment Agreement and/or Note, and (ii) all costs and expenses, including attorneys’ fees and disbursements that Pledgor incurs in exercising any right, power, or remedy provided by this Pledge Agreement, the Ancillary Documents or by law or defending any action arising out of this Pledge Agreement or the Ancillary Documents. Additionally, in the event of a Default by the Company, all costs incurred and paid by Pledgor including but not limited to attorney fees and any amounts Pledgor pays to cure a Default by the Company of the Note will bear interest at the highest rate allowed under Florida law.
ARTICLE 9. RELEASE OF COLLATERAL UPON SATISFACTION OF NOTE.
ARTICLE 9.1 Simultaneously with the Purchaser’s receipt of consideration from the Company from time to time in any form (including Securities, Interest or Royalties as defined in the Investment Agreement) with an aggregate value equal to the Principal Amount pursuant to the Transaction Documents, the Purchase will record with the Palm Beach County Property Appraiser’s Officer, a Satisfaction of the Mortgage signed by the Purchaser releasing the Purchaser’s lien on the Real Property. All costs associated with the Mortgage including recording fees and taxes shall be paid by the Company.
ARTICLE 10. WAIVER OF CONFLICTS.
ARTICLE 10.1 The Company and the Purchaser each acknowledge that the Pledgor, Brenda Hamilton and her law firm, Hamilton & Associates Law Group, P.A has in the past performed, and may continue to perform, legal and/or consulting services for the Company in connection with the Transaction Documents and the matters and transactions described therein as well as in matters unrelated to the Transaction Documents. Accordingly, the Company and Purchaser each hereby acknowledge that they have been advised by Brenda Hamilton & Hamilton & Associates Law Group, P.A. to seek the advice of independent legal counsel in connection with the Transaction Documents and transactions contemplated thereby including the Pledge Agreement, Mortgage and Pledgor Royalty Agreement in which Brenda Hamilton is a Party. Additionally, the Company and Purchaser each acknowledge that they have had an opportunity to ask for information relevant to this disclosure and has consulted with independent legal counsel or has had the opportunity to do so and gives its informed consent to Brenda Hamilton & Hamilton & Associates Law Group, P.A. representation of and/or performance of services for the Company in the connection with the Transaction Documents and transactions contemplated thereby.
11. MISCELLANEOUS.
ARTICLE 11.1 NOTICES. Any and all notices or other communications or deliveries to be provided by the parties shall be delivered by facsimile, sent by a nationally recognized overnight courier service, addressed to the Company, at the addresses set forth on the signature page hereto or such other address or facsimile number as the Company may specify for such purposes by notice to the Purchaser delivered in accordance with this Article.
ARTICLE 11.2 ABSOLUTE OBLIGATION. Except as expressly provided herein, no provision of this Pledge Agreement shall alter or impair the obligation of the Company to pay all amounts due to Purchaser and Pledgor, which are absolute and unconditional. The Note is a direct debt obligation of the Company secured by the Collateral (as defined in the Note).
ARTICLE 11.3 GOVERNING LAW AND JURISDICTION. This Pledge Agreement shall be governed by and construed in accordance with the laws of the State of Florida without regard to principles of conflict law applicable to contracts made and to be performed with such state. Each of the parties hereto accepts for itself to the jurisdiction of Palm Beach County Florida and irrevocably consents to such jurisdiction in any proceedings and waives any objection to venue laid therein. Any controversy or claim arising out of or relating of this Pledge Agreement shall be settled by binding arbitration administered by the American Arbitration Association and judgment on the award entered in any court having jurisdiction. The arbitration proceedings shall be conducted before a panel of three neutral arbitrators in Palm Beach County, Florida all of whom shall be members of the bar of the state of Florida, actively engaged in the practice of law for at least ten (10) years. Either Party hereto may apply to the arbitrator seeking injunctive relief until the arbitration award is rendered or the controversy otherwise resolved. Either Party may, without waiving any remedy under this Pledge Agreement, seek from any court having jurisdiction any interim or provisional relief that is necessary to protect the rights or property of that party, pending the arbitral tribunal’s determination of the merits of the controversy. Each party shall bear its own costs, expenses and attorney fees and an equal share of the arbitrators’ and administrative fees of arbitration. Except as may be required by law, neither a party nor an arbitrator may disclose the existence content or results of any arbitration hereunder without the prior written consent of the Parties. All documents, testimony and records shall be received, heard and maintained by the arbitrators in secrecy, available for the inspection only of the Parties to this Pledge Agreement and their respective attorneys and their respective experts who shall agree in advance and in writing to receive all such information confidentially and to maintain such information in secrecy until such information shall become generally known. In consideration for and as a material condition of this Pledge Agreement, each Party agrees that final and binding arbitration is the exclusive means for resolving any claim or controversy arising out of or related to this Pledge Agreement. This Pledge Agreement is a waiver of all rights the Parties may have to a civil court action. Accordingly, only an arbitrator, not a judge or jury, will decide the dispute, although the arbitrator has the authority to award any type of relief that could otherwise be awarded by a judge or jury.
ARTICLE 11.4 SENIORITY. The Company agrees that it shall not incur any indebtedness senior to the Note while it remains outstanding and shall not encumber the Collateral (as defined in the Note) with any interest senior to the Note. If action is instituted to collect on the Note, the Company shall all pay all costs and expenses of Pledgor related thereto, including attorney’s fees, incurred in connection with such action.
ARTICLE 11.5 BANKRUPTCY. The Company’s obligations hereunder shall not be influenced, affected or diminished by any composition of debts, winding up, bankruptcy, as the case may be, of the Company, including any scheme or arrangement approved by any court or other compromise or arrangement made by the Company. The Company undertakes not to claim in such cases in competition with the Purchaser or Pledgor and not to claim from the Pledgor or Purchaser any amount received by the Pledgor or Purchaser in this way or in any other way for any reason whatsoever. The Company shall not claim any debt or payment or enter proof thereof in any Bankruptcy or winding- up proceedings or in any other arrangement or compromise with respect to the Company, until such time as the Pledgor and Purchaser shall receive in full all the amounts due or which may become due to the Purchaser and/or Pledgor from the Company as a result of the Ancillary Agreements or this Pledge Agreement.
ARTICLE 11.6 SEVERABILITY. If any provision of this Pledge Agreement is invalid, illegal or unenforceable, the balance of this Pledge Agreement shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on the Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of the Note, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Purchaser or Pledgor.
ARTCLE 11.7 HEADINGS. The headings contained herein are for convenience only, do not constitute a part of this Pledge Agreement and shall not be deemed to limit or affect any of the provisions hereof.
ARTICLE 11.8 PAYMENT. All payments by the Company shall be made in lawful money of the United States of America at such place as the Pledgor hereof may from time to time designate in writing to the Company.
IN WITNESS WHEREOF, the Parties hereto have executed this Pledge Agreement on November 13, 2019.
By: | |||
Brenda Hamilton, an individual as Pledgor |
Address for Notice: | ||
1576 Fan Palm Road Boca Raton Fl 33432 561-271-8417 |
||
bhamilton@securitieslawyer101.com |
Exhibit 10.40
EXHIBIT G:
PLEDGOR ROYALTY AGREEMENT AMENDED
NOVEMBER 13, 2019
This is an amendment to that Royal Participation Agreement (the “Original Royalty Agreement “) made and effective on June 6, 2019, by and between NutraLife BioSciences, Inc., a Florida corporation (“NutraLife”), PhytoChem Technologies, Inc. (“PhytoChem”), a Florida corporation (NutraLife and PhytoChem are collectively referred to herein as the “Company”), Brenda Hamilton, an individual (the “Pledgor”) and Kahn Family Limited PT II (the “Purchaser”) and is effective as of the day set forth on the signature page hereto. The Company, the Pledgor and the Purchaser are referred to herein collectively as the “Parties”, or individually as a “Party”.
NOW THEREFORE, the Parties hereby amend and replace the Original Royalty Agreement in its entirety and replace it with this agreement, (the “Pledgor Royalty Agreement”) in exchange for good and valuable consideration the receipt of which is hereby acknowledged as follows:
RECITALS
WHEREAS, Company sold a Secured Convertible Promissory Note (the “Note”) to Kahn Family Limited PT I (“Purchaser”) in a principal aggregate amount of $1,000,000 (the “Principal Amount”) pursuant to that certain Investment Agreement (“Investment Agreement”), and entered into a Security agreement (the “Security Agreement”) of even date herewith which is attached as Exhibit C to the Investment Agreement;
WHEREAS, the first four of the Ennea Processors that the Company commercializes and/or monetizes pursuant to the Morgan Agreement shall serve as collateral (“Collateral Processors”) for the Principal Amount pursuant to the terms of the Security Agreement and Note attached to the Investment Agreement as Exhibit B;
WHEREAS, in addition to the Collateral (as defined in the Note and Security Agreement) and consideration provided by the Company, the Purchaser requested additional collateral (the “Additional Collateral”) in the form of real property as a condition precedent to providing the Principal Amount of the Note to the Company;
WHEREAS, the Company plans to use the Note proceeds to commercialize and monetize a phytoextractor (the “Ennea Processor”) that uses certain technologies to separate and/or process the components of hemp to remove and/or modify, purify, dilute and extract bioactive ingredients and/or remove unwanted substances to produce finished products for a variety of applications pursuant to an agreement by and between the Company and Owen J. Morgan(“Morgan”) dated February 4, 2019 (the “Morgan Agreement”).
WHEREAS, the Pledgor agreed to provide a mortgage lien covering certain real property (the “Real Property”) as set forth in the mortgage (the “Mortgage”) and Pledge Agreement (“Pledge Agreement”) of even date herewith as the Additional Collateral. In exchange for providing the Additional Collateral, among other things, the Company desires to pay to the Pledgor the consideration set forth in the Pledge Agreement which includes a royalty (the “Royalty” or (the “Royalty Payments”) of eight and one-half percent (8.5%) of Net Revenue (as defined herein) derived from the Collateral Processors so long as any portion of the Principal Amount is outstanding and five percent (5%) thereafter on the first two (2) machines monetized and/or commercialized pursuant to the Owen Agreement; and
WHEREAS, Pledgor and the Company wish to define the terms and conditions of the Royalty Payments to Pledgor by entering into this Pledgor Royalty Agreement.
THEREFORE, in consideration of the mutual considerations herein, the receipt of which is mutually acknowledged, the parties hereto agree as follows:
ARTICLE 1. RECITALS.
ARTICLE 1.1 The above recitals are true and correct and made a part hereof.
ARTICLE 2. DEFINITIONS.
ARTICLE 2.1 ARTICLE 2.1 The Investment Agreement, Note, Purchaser Royalty Agreement, Security Agreement, and the Mortgage are referred to as the “Ancillary Agreements”. This Pledgor Royalty Agreement and the Ancillary Agreements shall be referred to collectively as the “Transaction Documents”.
ARTICLE 3. PLEDGE.
ARTICLE 3.1 Pledgor has agreed to provide the Additional Collateral for the Note as set forth in the Pledge Agreement based upon the representations and warranties of the Company and Purchaser as set forth in the Transaction Documents.
ARTICLE 4. SOURCE, AMOUNT, AND TIMING OF ROYALTY PAYMENTS.
ARTICLE 4.1 Commencing upon the fiscal quarter in which revenue is derived directly or indirectly from any of the Collateral Processors, the Company shall pay to the Pledgor non-refundable Royalty Payments consisting of eight and one-half percent (8.5%) of all “Net Revenue” received by the Company as a result of the commercialization and/or monetization of the Collateral Processors until such time as the Principal Amount has been paid. At such time as the Principal Amount has been paid to the Purchaser, Pledgor shall receive non-refundable Royalty Payments consisting of five percent (5%) of “Net Revenue” received by the Company as a result of the commercialization and/or monetization of the first two Ennea Processors resulting from the Morgan Agreement.
For the purposes of this Pledgor Royalty Agreement, “Net Revenue” shall mean the total Gross Receipts less direct and indirect expenses of Gross Receipts. Gross Receipts shall mean revenue from tolling fees and processing fees, product sales, extraction services, licenses, development, commercialization and/or other commercialization and monetization of the Collateral Processors including the use, disposition, sale or rental of the Collateral Processors.
ARTICLE 4.2 For the avoidance of doubt, Net Revenue shall be calculated in accordance with GAAP. The Company hereby agrees to use its commercial best efforts to maximize its Gross Revenue during the term of this Pledgor Royalty Agreement and in the event it commercializes any other phytoextractors similar to the Collateral Processors, it will not commercialize or monetize such other equipment until the maximum capacity of the Collateral Processors has been reached. “Gross Revenues” shall also include all settlement amounts, payment, and damages received by Company which result from litigation or disputes related to or arising from the sale, license, development, commercialization and/or other monetization of the Collateral Processors.
ARTICLE 4.3 The Royalty Payments shall be paid by the Company to the Pledgor within fifteen (15) days after the end of the quarter in which the Company receives payment for any Net Revenue from the Collateral Processors.
ARTICLE 5. INFORMATION REQUIRED TO BE SUPPLIED WITH EACH PAYMENT.
ARTICLE 5.1 With each Royalty Payment, the Company shall supply to the Pledgor a detailed and satisfactory accounting and reconciliation of how the Royalty Payment was calculated within 5 days of Pledgor’s request. The Company agrees to have an officer certify each reconciliation and provide a reconciliation each calendar month during the term of this Pledgor Royalty Agreement regardless of whether any Royalty Payment is due.
ARTICLE 6. TERM.
ARTICLE 6.1 This Pledgor Royalty Agreement shall continue for a period of ten (10) years.
ARTICLE 7. NO SALE OR ASSIGNMENT.
ARTICLE 7.1 During the term of this Pledgor Royalty Agreement, the Company may not (i) sell (other than ordinary course sales to customers), assign, or otherwise transfer or encumber the Collateral Processors, (ii) assign or otherwise transfer or encumber this Pledgor Royalty Agreement, or (iii) create an obligation whereby the Company is required to pay all or a portion of the revenue derived from the Collateral Processors to any party in priority to the Pledgor without first obtaining the prior written consent of the Pledgor.
ARTICLE 8. EXTRAORDINARY EVENT.
ARTICLE 8.1 The Company agrees not to enter into a merger, recapitalization, sale or change of control of the Company or sale transaction involving all or substantially all of the Company’s equity or assets unless the acquiring or successor entity agrees in writing to recognize the Pledgor’s rights under this Pledgor Royalty Agreement.
ARTICLE 9. NOTICES.
ARTICLE 9.1 Any notice required or permitted by this Pledgor Royalty Agreement shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight delivery service or confirmed facsimile, or 48 hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, if such notice is addressed to the party to be notified at such party’s address or facsimile number as set forth on the signature page hereto or as subsequently modified by written notice.
ARTICLE 10. APPLICABLE LAW, VENUE, JURISDICTION.
ARTICLE 10.1 GOVERNING LAW AND JURISDICTION. This Pledgor Royalty Agreement shall be governed by and construed in accordance with the laws of the State of Florida without regard to principles of conflict law applicable to contracts made and to be performed with such state. Each of the parties hereto accepts for itself to the jurisdiction of Palm Beach County Florida and irrevocably consents to such jurisdiction in any proceedings, and waives any objection to venue laid therein. Any controversy or claim arising out of or relating of this Pledgor Royalty Agreement shall be settled by binding arbitration administered by the American Arbitration Association and judgment on the award entered in any court having jurisdiction. The arbitration proceedings shall be conducted before a panel of three neutral arbitrators in Palm Beach County, Florida all of whom shall be members of the bar of the state of Florida, actively engaged in the practice of law for at least ten (10) years. Either Party hereto may apply to the arbitrator seeking injunctive relief until the arbitration award is rendered or the controversy otherwise resolved. Either Party may, without waiving any remedy under this Pledgor Royalty Agreement, seek from any court having jurisdiction any interim or provisional relief that is necessary to protect the rights or property of that party, pending the arbitral tribunal’s determination of the merits of the controversy. Each party shall bear its own costs, expenses and attorney fees and an equal share of the arbitrators’ and administrative fees of arbitration. Except as may be required by law, neither a party nor an arbitrator may disclose the existence content or results of any arbitration hereunder without the prior written consent of the Parties. All documents, testimony and records shall be received, heard and maintained by the arbitrators in secrecy, available for the inspection only of the Parties to this Royalty Agreement and their respective attorneys and their respective experts who shall agree in advance and in writing to receive all such information confidentially and to maintain such information in secrecy until such information shall become generally known. In consideration for and as a material condition of this Pledgor Royalty Agreement, each Party agrees that final and binding arbitration is the exclusive means for resolving any claim or controversy arising out of or related to this Royalty Agreement. This Pledgor Royalty Agreement is a waiver of all rights the Parties may have to a civil court action. Accordingly, only an arbitrator, not a judge or jury, will decide the dispute, although the arbitrator has the authority to award any type of relief that could otherwise be awarded by a judge or jury.
ARTICLE 10.2 JOINT AND SEVERAL OBLIGATIONS. All obligations of NutraLife and PhytoChem under the Transaction Documents are joint and not several. All obligations of the Pledgor are several and not joint under the Transaction Documents, and in no event shall the Pledger have any liability or obligation with respect to the acts or omissions of the Company or any other party to this Agreement.
ARTICLE 10.3 FURTHER ASSURANCES. Upon Pledgor’s reasonable request, the Company and Purchaser shall, at the Company’s sole cost and expense, execute and deliver all such further documents and instruments, and take all such further acts, necessary to give full effect to this P Pledgor Royalty Agreement.
ARTICLE 10.4 ENTIRE AGREEMENT. The Transaction Documents including the Pledgor Royalty Agreement constitute the sole and entire agreement of the Parties with respect to the subject matter contained herein and therein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter.
ARTICLE 10.5 HEADINGS. The headings in this Agreement are for reference only and do not affect the interpretation of this Pledgor Royalty Agreement.
ARTICLE 10.6 AMENDMENT AND MODIFICATION. No amendment to this Pledgor Royalty Agreement is effective unless it is in writing and signed by each Party.
ARTICLE 10.7 WAIVER. No waiver under this Pledgor Royalty Agreement is effective unless it is in writing and signed by the Party waiving its right. Any waiver authorized on one occasion is effective only in that instance and only for the purpose stated and does not operate as a waiver on any future occasion. None of the following constitutes a waiver or estoppel of any right, remedy, power, privilege or condition arising from this Pledgor Royalty Agreement: (a) any failure or delay in exercising any right, remedy, power or privilege or in enforcing any condition under this Pledgor Royalty Agreement; or (b) any act, omission or course of dealing between the Parties.
ARTICLE 10.8 WAIVER OF CONFLICTS. The Company acknowledges that the Pledgor, Brenda Hamilton and her law firm, Hamilton & Associates Law Group, P.A has in the past performed, and may continue to perform, legal and/or consulting services for the Company in connection with the Transaction Documents and the matters and transactions described in the Transaction Documents well as in matters unrelated to the Transaction Documents. Accordingly, the Company hereby acknowledges that it has been advised by Brenda Hamilton & Hamilton & Associates Law Group, P.A. to seek the advice of independent legal counsel in connection with the Transaction Documents and transactions contemplated thereby including the Pledge Agreement, Mortgage and Pledgor Royalty Agreement in which Brenda Hamilton is a party. Additionally, the Company and each acknowledge that they have had an opportunity to ask for information relevant to this disclosure and has consulted with independent legal counsel or has had the opportunity to do so and gives its informed consent to Brenda Hamilton & Hamilton & Associates Law Group, P.A. representation of and/or performance of services for the Company in the connection with the Transaction Documents and transactions contemplated thereby.
ARTICLE 10.9 EQUITABLE REMEDIES. Each Party acknowledges and agrees that (a) a breach or threatened breach by such Party of any of its obligations would give rise to irreparable harm to the other Party for which monetary damages would not be an adequate remedy and (b) in the event of a breach or a threatened breach by such Party of any such obligations, the other Party shall, in addition to any and all other rights and remedies that may be available to such Party at law, at equity or otherwise in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction, without any requirement to post a bond or other security, and without any requirement to prove actual damages or that monetary damages will not afford an adequate remedy. Each Party agrees that such Party will not oppose or otherwise challenge the appropriateness of equitable relief or the entry by a court of competent jurisdiction of an order granting equitable relief, in either case, consistent with the terms of this Section.
ARTICLE 10.10 SEVERABILITY. If any provision of this Pledgor Royalty Agreement is invalid, illegal or unenforceable, the balance of this Pledgor Royalty Agreement shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on the Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of the Note, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Pledgor.
ARTICLE 10.11 COUNTERPARTS. This Pledgor Royalty Agreement may be executed in counterparts, each of which is deemed an original, but all of which together are deemed to be one and the same agreement. A signed copy of this Pledgor Royalty Agreement delivered by facsimile, e-mail or other means of electronic transmission is deemed to have the same legal effect as delivery of an original signed copy of this Pledgor Royalty Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Pledgor Royalty Agreement November 13, 2019.
NUTRALIFE BIOSCIENCES, INC. | ||||
By: | By: | |||
Edgar Ward, Chief Executive Officer | Brenda Hamilton, an individual | |||
PHYTOCHEM TECHNOLOGIES, INC. | Address for Notice: | |||
By: |
1576 Fan Palm Road Boca Raton Fl 33432 |
|||
Edgar Ward, Chief Executive Officer | Phone: 561-416-8956 | |||
Email: bhamilton@securitieslawyer101.com | ||||
Address for Notice: | ||||
NutraLife Biosciences, Inc. | ||||
Attn: Edgar Ward, Chief Executive Officer 6601 Lyons Rd. L-6, Coconut Creek Fl 33432 Telephone: 561-212-3816 |
||||
Email: edgar@NutraFuels.com |
Exhibit 10.41
|
Nutritional, Wellness & CBD Products |
Development, Manufacturing & Distribution | |
6601
Lyons Road, L-6
Coconut Creek, Fl 33073 |
|
Company
Website: www.nutralifebiosciences.com
Telephone: 1-888-509-8901 OTC Markets OTCQB: NLBS |
February 12th, 2020
CONFIDENTIAL
Convertible Promissory Note
Attn: Barbara Ludwig
Address: 22 Saint Marks Place,
Massapequa, NY 11758
Re: $35,000.00 Promissory Note
FOR VALUE RECEIVED, the undersigned, (the “Maker”), hereby promises to pay to the order of Barbara Ludwig (“Payee”), the principal sum of $35,000 pursuant to the terms and conditions set forth herein.
PAYMENT OF PRINCIPAL The principal amount of this Promissory Note (the “Note shall be due and payable in one (1) lump sum payment on May 15th, 2020.
1. | EQUITY KICKER. Payee shall receive three hundred and fifty thousand (350,000) shares of the Company’s common stock as additional consideration. |
2. | CONVERSION RIGHTS. |
At the election of Payee, at any time prior to the Maturity Date, Payee shall have the right, to convert all of the then outstanding principal amount and any and all accrued and unpaid interest on this Note into the Maker’s Common Stock at a price of ten cents ($0.10 USD) per share. | |
Payee shall exercise its conversion rights by providing written notice of conversion (the “Conversion Notice”) duly executed and given by Payee to Maker’s Common Stock in accordance with the procedures set forth herein. In order to convert the outstanding principal and interest into shares of Maker’s stock, Payee shall send the Conversion Notice which shall state therein nature and amount to be converted and the name or names in which the certificate or certificates for shares of Maker’s stock are to be issued. Payee’s right to convert this note into Maker’s Common Stock will expire on the Maturity Date. In the event that Payee is converting the then outstanding principal amount and any and all accrued and unpaid interest of this Note, Payee shall surrender this Note upon issuance of the certificate(s) representing such shares in Maker. Maker shall issue and deliver to Payee, or to the nominee or nominees of Payee, a certificate or certificates for the number of shares of Maker’s stock to which Payee shall be entitled as aforesaid. Such conversion shall be deemed to have been made on the close of business on the date of the Conversion Notice. |
4. | PREPAYMENT. The Maker shall have the right at any time and from time to time to prepay this Note in whole or in part without premium or penalty. |
5. | REMEDIES. No delay or omission on part of the holder of this Note in exercising any right hereunder shall operate as a waiver of any such right or of any other right of such holder, nor shall any delay, omission or waiver on any one occasion be deemed a bar to or waiver of the same or any other right on any future occasion. The rights and remedies of the Payee shall be cumulative and may be pursued singly, successively, or together, in the sole discretion of the Payee. |
6. | SUBORDINATION. The Maker’s obligations under this Promissory Note are subordinated to all indebtedness, if any, of Maker, to any unrelated third party lender to the extent such indebtedness is outstanding on the date of this Note and such subordination is required under the loan documents providing for such indebtedness. |
7. | WAIVERS BY MAKER. All parties to this Note including Maker and any sureties, endorsers, and guarantors hereby waive protest, presentment, notice of dishonor, and notice of acceleration of maturity and agree to continue to remain bound for the payment of principal, interest and all other sums due under this Note notwithstanding any change or changes by way of release, surrender, exchange, modification or substitution of any security for this Note or by way of any extension or extensions of time for the payment of principal and interest; and all such parties waive all and every kind of notice of such change or changes and agree that the same may be made without notice or consent of any of them. |
8. | GOVERNING LAW. This Note shall be governed by, and construed in accordance with, the laws of the State of Florida. |
9. | SUCCESSORS. All of the foregoing is the promise of Maker and shall bind Maker and Maker’s successors, heirs and assigns; provided, however, that Maker may not assign any of its rights or delegate any of its obligations hereunder without the prior written consent of the holder of this Note. |
IN WITNESS WHEREOF, Maker has executed this Promissory Note as of the day and year first above written.
NutraLife Biosciences, Inc. (Borrower) | ||
By: | /s/ Edgar Ward | |
Edgar Ward, Chief Executive Officer |
Exhibit 10.42
Exhibit 10.43
Exhibit 10.44
Exhibit 10.45
Exhibit 10.46
Exhibit 10.47
Exhibit 10.48
Exhibit 10.49
Exhibit 10.50
NUTRALIFE BIOSCIENCES, INC.
SUBSCRIPTION AGREEMENT
The undersigned “Subscriber”, on the terms and conditions herein set forth, hereby irrevocable submits this subscription agreement (the “Subscription Agreement”) to NutraLife Biosciences, Inc., a Florida corporation (the “Company”), in connection with a private offering by the Company (the “Offering”) to raise a maximum of $100,000 through the sale to Subscriber as an “accredited investor” (as defined below) of a Promissory Note of the Company (a “Note”) and a Warrant of the Company (the “Warrant”) to acquire certain shares of common stock, par value $0.0001 per share, of the Company (the “Common Stock”).
The Company is offering up to $100,000 of aggregate principal amount of Notes and warrants to acquire up to 4,000,000 shares of Common Stock.
For each one dollar of aggregate principal amount of a Note that Subscriber subscribes for, the Subscriber shall be issued a warrant to acquire forty shares of Common Stock, at a price of $0.08 per share, subject to customary adjustments as set forth in the Warrant.
By way of example, and not limitation, in the event that Subscriber subscribed for a Note in the principal amount of $50,000, Subscriber will be issued a Warrant to acquire 2,000,000 shares of Common Stock.
The minimum subscription amount is a Note in the aggregate principal amount of $25,000, provided that the Company may accept subscriptions in lesser amounts in its sole discretion.
The principal amount of Note subscribed for and the Warrant to be issued is set forth below.
****
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Subscription:
The undersigned Subscriber, intending to be legally bound, hereby subscribes for:
(i) a Note in the principal amount of $70,000.00 (the “Subscription Amount”); and
(ii) A Warrant to acquire 2,800,000 shares of Common Stock.
The Note is attached to this Subscription Agreement as Exhibit A and the Warrant is attached to this Subscription Agreement as Exhibit B. The Note and the Warrant may be referred to herein collectively as the “Securities”.
The undersigned acknowledges that the Company is offering the Securities to those who are “accredited investors” as defined herein pursuant to of Rule 506(b) of Regulation D promulgated by the Securities Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”).
The undersigned agrees to execute this Subscription Agreement and if by mail, send to the Company. You as an individual or you on behalf of the subscribing entity are being asked to complete this Subscription Agreement so that a determination can be made as to whether or not you (it) are qualified to purchase the Securities under applicable federal and state securities laws. Your answers to the questions contained herein must be true and correct in all respects, and a false representation by you may constitute a violation of law for which a claim for damages may be made against you. Your answers will be kept strictly confidential; however, by signing this Subscription Agreement, you will be authorizing the Company to present a completed copy of this Subscription Agreement to such parties as they may deem appropriate in order to make certain that the offer and sale of the securities will not result in a violation of the Securities Act or of the securities laws of any state.
All questions must be answered. If the appropriate answer is “None” or “Not Applicable,” please state so. Please print or type your answers to all questions and attach additional sheets if necessary to complete your answers to any item. Please initial any corrections.
1. | Subscription for the Purchase of Securities. The undersigned Subscriber hereby subscribes to purchase the Securities as set forth above. Subscriber agrees to forward payment in the amount of the Subscription Price to the Company via one of the following methods: |
(a) | by wiring payment of the Subscription Amount in accordance with the information set forth below: |
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For financial institutions in the United States, give your bank this information:
Send to: | BB&T | |
450 N. Pine Island Rd. Plantation, FL. 33324 | ||
ABA# 263191387 | ||
For credit to: | NutraLife Biosciences, Inc. | |
Attn: Edgar Ward | ||
6601 Lyons Road, Suite L-6 | ||
Coconut Creek, FL 33073 | ||
Account # 241628361 | ||
For the benefit of: | NutraLife Biosciences, Inc. | |
6601 Lyons Rd. L-6 | ||
Coconut Creek Fl. 33073 | ||
United States | ||
888.509.8901 edgar.ward@nutralifebiosciences.com |
For financial institutions outside the United States, please contact the Company.
OR
(b) | by mailing a certified check in the amount of the Subscription Price, payable to “NutraLife Biosciences, Inc.”, to the Company as follows: |
NutraLife Biosciences, Inc.
Attn: Edgar Ward
6601 Lyons Road, Suite L-6
Coconut Creek, FL 33073
Regardless of whether paying by wire transfer or check, you must also deliver a fully completed and executed copy of this Subscription Agreement and an executed copy of the signature page to the Note and an executed copy of the signature page to the Warrant to the Company at:
NutraLife Biosciences, Inc.
Attn: Edgar Ward
6601 Lyons Road, Suite L-6
Coconut Creek, FL 33073
Subscriber recognizes and agrees that (i) this subscription is irrevocable and, if Subscriber is a natural person, shall survive Subscriber’s death, disability or other incapacity, and (ii) the Company has complete discretion to accept or to reject this Subscription Agreement in its entirety and shall have no liability for any rejection of this Subscription Agreement. This Subscription Agreement shall be deemed to be accepted by the Company only when it is executed by the Company.
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2. | Effect of Acceptance. Subscriber hereby acknowledges and agrees that on the Company’s acceptance of this Subscription Agreement, it shall become a binding and fully enforceable agreement between the Company and the Subscriber. As a result, upon acceptance by the Company of this Subscription Agreement, Subscriber will become the record and beneficial holder of the Securities and the Company will be entitled to receive the purchase price of the Securities as specified herein. By Subscriber’s execution of this Subscription Agreement, Subscriber agrees to the bound by the terms and conditions of the Note and the Warrant. |
3. | Representation as to Investor Status. In order for the Company to sell the Securities (in conformance with state and federal securities laws), the following information must be obtained regarding Subscriber’s investor status. Please initial each item applicable to you as an investor in the Company. |
(a) | Accredited Investor. Rule 501(a) of Regulation D defines an “accredited investor” as any person who comes within any of the following categories, or whom the issuer reasonably believes comes within any of the following categories, at the time of the sale of the securities to that person: |
(i) | X A natural person whose net worth, either individually or jointly with such person’s spouse, at the time of Subscriber’s purchase, exceeds $1,000,000. | |
(ii) | _____ A natural person who had an individual income in excess of $200,000, or joint income with that person’s spouse in excess of $300,000, in each of the two most recent years and reasonably expects to reach the same income level in the current year. | |
(iii) | _____ A bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary capacity. | |
(iv) | _____ A broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). | |
(v) | _____ An insurance company as defined in section 2(13) of the Exchange Act. | |
(vi) | _____ An investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act. | |
(vii) | _____ A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958. | |
(viii) | _____ A plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state, or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000. | |
(ix) | _____ An employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors. |
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(x) | _____ A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940. | |
(xi) | _____ An organization described in Section 501(c)(3) of the Internal Revenue Code, or a corporation, business trust or partnership, not formed for the specific purpose of acquiring the Securities, with total assets in excess of $5,000,000. | |
(xii) | _____ A director or executive officer of the Company. | |
(xiii) | _____ A trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, whose purchase is directed by a sophisticated person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of investing in the Company. | |
(xiv) | _____ An entity in which all of the equity owners qualify under any of the above subparagraphs. |
_________ Subscriber does not qualify under any of the investor categories set forth in Section (3)(a)(i) through Section (3)(a)(iv).
The term “net worth” means the excess of total assets over total liabilities (including personal and real property, but excluding the estimated fair market value of a person’s primary home).
In determining individual “income,” Subscriber should add to Subscriber’s individual taxable adjusted gross income (exclusive of any spousal income) any amounts attributable to tax exempt income received, losses claimed as a limited partner in any limited partnership, deductions claimed for depletion, contributions to an IRA or Keogh retirement plan, alimony payments, and any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross income.
(b) | Type of Subscriber. Indicate the form of entity of Subscriber: |
[X] | Individual | [ ] | Limited Partnership | |
[ ] | Corporation | [ ] | General Partnership |
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[ ] | Revocable Trust | [ ] | Other Type of Trust (indicate type): |
[ ] | Other (indicate form of organization): _____________________________________________________ |
(i) | If Subscriber is not an individual, indicate the approximate date Subscriber entity was formed: __________. |
(ii) | If Subscriber is not an individual, initial the line below which correctly describes the application of the following statement to Subscriber’s situation: Subscriber (x) was not organized or reorganized for the specific purpose of acquiring the Securities and (y) has made investments prior to the date hereof, and each beneficial owner thereof has and will share in the investment in proportion to his or her ownership interest in Subscriber. |
True
False
If the “False” box is checked, each person participating in the entity will be required to fill out a Subscription Agreement.
4. | Additional Representations and Warranties of Subscriber. Subscriber hereby represents and warrants to the Company as follows: |
(a) | Subscriber has been furnished all documents related to the Company and its operations as requested by Subscriber, and Subscriber has carefully read such documents. Subscriber has been furnished with all documents and materials relating to the business, finances and operations of the Company and information that Subscriber requested and deemed material to making an informed investment decision regarding its purchase of the Securities. Subscriber has been afforded the opportunity to review such documents and materials and the information contained therein. Subscriber has been afforded the opportunity to ask questions of the Company and its management. Subscriber understands that such discussions, as well as any written information provided by the Company, were intended to describe the aspects of the Company’s business and prospects which the Company believes to be material, but were not necessarily a thorough or exhaustive description, and except as expressly set forth in this Subscription Agreement, the Company makes no representation or warranty with respect to the completeness of such information and makes no representation or warranty of any kind with respect to any information provided by any entity other than the Company. Some of such information may include projections as to the future performance of the Company, which projections may not be realized, may be based on assumptions which may not be correct and may be subject to numerous factors beyond the Company’s control. Additionally, Subscriber understands and represents that Subscriber is purchasing the Securities notwithstanding the fact that the Company may disclose in the future certain material information that the Subscriber has not received, including the financial results of the Company for their current fiscal quarters. Neither such inquiries nor any other due diligence investigations conducted by such Subscriber shall modify, amend or affect such Subscriber’s right to rely on the Company’s representations and warranties, if any, contained in this Subscription Agreement. Subscriber has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its investment in the Securities. Subscriber has full power and authority to make the representations referred to herein, to purchase the Securities and to execute and deliver this Subscription Agreement. |
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(b) | Subscriber has read and understood, and is familiar with, this Subscription Agreement, the Securities and the business and financial affairs of the Company. | |
(c) | Subscriber, either personally, or together with Subscriber’s advisors (other than any securities broker/dealers who may receive compensation from the sale of any of the Securities), has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Securities, is able to bear the risks of an investment in the Securities and understands the risks of, and other considerations relating to, a purchase of a Unit. The Subscriber and its advisors have had a reasonable opportunity to ask questions of and receive answers from the Company concerning the Securities. Subscriber’s financial condition is such that Subscriber is able to bear the risk of holding the Securities that Subscriber may acquire pursuant to this Agreement, for an indefinite period of time, and the risk of loss of Subscriber’s entire investment in the Company. | |
(d) | Subscriber has investigated the acquisition of the Securities to the extent Subscriber deemed necessary or desirable and the Company has provided Subscriber with any reasonable assistance Subscriber has requested in connection therewith. | |
(e) | The Securities are being acquired for Subscriber’s own account for investment, with no intention by Subscriber to distribute or sell any portion thereof within the meaning of the Securities Act, and will not be transferred by Subscriber in violation of the Securities Act or the then applicable rules or regulations thereunder. No one other than Subscriber has any interest in or any right to acquire the Securities. Subscriber understands and acknowledges that the Company will have no obligation to recognize the ownership, beneficial or otherwise, of the Securities by anyone but Subscriber. | |
(f) | No representations or warranties have been made to Subscriber by the Company, or any representative of the Company, or any securities broker/dealer, other than as set forth in this Subscription Agreement. | |
(g) | Subscriber is aware that Subscriber’s rights to transfer the Securities is restricted by the Securities Act and applicable state securities laws, and Subscriber will not offer for sale, sell or otherwise transfer the Securities without registration under the Securities Act and qualification under the securities laws of all applicable states, unless such sale would be exempt therefrom. |
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(h) | Subscriber understands and agrees that the Securities have not been registered under the Securities Act or any state securities act in reliance on exemptions therefrom and that the Company has no obligation to register any of the Securities. | |
(i) | The Subscriber has had an opportunity to ask questions of, and receive answers from, representatives of the Company concerning the terms and conditions of this investment and all such questions have been answered to the full satisfaction of the undersigned. Subscriber understands that no person other than the Company has been authorized to make any representation and if made, such representation may not be relied on unless it is made in writing and signed by the Company. The Company has not, however, rendered any investment advice to the undersigned with respect to the suitability. | |
(j) | Subscriber understands that the certificates or other instruments representing the Securities shall bear a restrictive legend in substantially the following form (and a stop transfer order may be placed against transfer of such certificates): | |
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE SECURITIES LAWS, AND NO INTEREST MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION INVOLVING SAID SECURITIES, (B) THIS CORPORATION RECEIVES AN OPINION OF LEGAL COUNSEL FOR THE HOLDER OF THESE SECURITIES SATISFACTORY TO THIS CORPORATION STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION, OR (C) THIS CORPORATION OTHERWISE SATISFIES ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION. | ||
(k) | Subscriber also acknowledges and agrees to the following: |
(i) | an investment in the Securities is highly speculative and involves a high degree of risk of loss of the entire investment in the Company; and | |
(ii) | there is no assurance that a public market for the will be available and that, as a result, Subscriber may not be able to liquidate Subscriber’s investment in the Securities should a need arise to do so. |
(l) | Subscriber is not dependent for liquidity on any of the amounts Subscriber is investing in the Securities. | |
(m) | Subscriber’s address set forth below is his or her or its correct residence or business address. | |
(n) | Subscriber has full power and authority to make the representations referred to herein, to purchase the Securities and to execute and deliver this Subscription Agreement. | |
(o) | Subscriber understands that the foregoing representations and warranties are to be relied upon by the Company as a basis for the exemptions from registration and qualification of the sale of the Securities under the federal and state securities laws and for other purposes. |
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5. | Representations and Warranties Regarding Patriot Act; Anti-Money Laundering; OFAC. The Subscriber should check the Office of Foreign Assets Control (“OFAC”) website at http://www.treas.gov/ofac before making the following representations. Subscriber hereby represents and warrants to the Company as follows: |
(a) | The Subscriber represents that (i) no part of the funds used by the Subscriber to acquire the Securities or to satisfy his/her capital commitment obligations with respect thereto has been, or shall be, directly or indirectly derived from, or related to, any activity that may contravene United States federal or state or non-United States laws or regulations, including anti-money laundering laws and regulations, and (ii) no capital commitment, contribution or payment to the Company by the Subscriber and no distribution to the Subscriber shall cause the Company to be in violation of any applicable anti-money laundering laws or regulations including, without limitation, Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001 and the United States Department of the Treasury Office of Foreign Assets Control regulations. The Subscriber acknowledges and agrees that, notwithstanding anything to the contrary contained in any other agreement, to the extent required by any anti-money laundering law or regulation, the Company may prohibit capital contributions, restrict distributions or take any other reasonably necessary or advisable action with respect to the Securities, and the Subscriber shall have no claim, and shall not pursue any claim, against the Company or any other person in connection therewith. U.S. federal regulations and executive orders administered by OFAC prohibit, among other things, the engagement in transactions with, and the provision of services to, certain foreign countries, territories, entities and individuals. The lists of OFAC prohibited countries, territories, persons and entities can be found on the OFAC website at http://www.treas.gov/ofac. In addition, the programs administered by OFAC (the “OFAC Programs”) prohibit dealing with individuals1 or entities in certain countries regardless of whether such individuals or entities appear on the OFAC lists. | |
(b) | To the best of the Subscriber’s knowledge, none of: (1) the Subscriber; (2) any person controlling or controlled by the Subscriber; (3) if the Subscriber is a privately-held entity, any person having a beneficial interest in the Subscriber; or (4) any person for whom the Subscriber is acting as agent or nominee in connection with this investment is a country, territory, individual or entity named on an OFAC list, or a person or entity prohibited under the OFAC Programs. Please be advised that the Company may not accept any amounts from a prospective investor if such prospective investor cannot make the representation set forth in this paragraph. The Subscriber agrees to promptly notify the Company should the Subscriber become aware of any change in the information set forth in these representations. The Subscriber understands and acknowledges that, by law, the Company may be obligated to “freeze the account” of the Subscriber, either by prohibiting additional subscriptions from the Subscriber, declining any redemption requests and/or segregating the assets in the account in compliance with governmental regulations, and any broker may also be required to report such action and to disclose the Subscriber’s identity to OFAC. The Subscriber further acknowledges that the Company may, by written notice to the Subscriber, suspend the redemption rights, if any, of the Subscriber if the Company reasonably deems it necessary to do so to comply with anti-money laundering regulations applicable to the Company or any Broker or any of the Company’s other service providers. These individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanctions and embargo programs. |
1 | These individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanctions and embargo programs. |
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(c) | To the best of the Subscriber’s knowledge, none of: (1) the Subscriber; (2) any person controlling or controlled by the Subscriber; (3) if the Subscriber is a privately-held entity, any person having a beneficial interest in the Subscriber; or (4) any person for whom the Subscriber is acting as agent or nominee in connection with this investment is a senior foreign political figure2, or any immediate family3 member or close associate4 of a senior foreign political figure, as such terms are defined in the footnotes below. | |
(d) | If the Subscriber is affiliated with a non-U.S. banking institution (a “Foreign Bank”), or if the Subscriber receives deposits from, makes payments on behalf of, or handles other financial transactions related to a Foreign Bank, the Subscriber represents and warrants to the Company that: (1) the Foreign Bank has a fixed address, other than solely an electronic address, in a country in which the Foreign Bank is authorized to conduct banking activities; (2) the Foreign Bank maintains operating records related to its banking activities; (3) the Foreign Bank is subject to inspection by the banking authority that licensed the Foreign Bank to conduct banking activities; and (4) the Foreign Bank does not provide banking services to any other Foreign Bank that does not have a physical presence in any country and that is not a regulated affiliate. | |
(e) | The Subscriber acknowledges that, to the extent applicable, the Company will seek to comply with the Foreign Account Tax Compliance Act provisions of the U.S. Internal Revenue Code and any rules, regulations, forms, instructions or other guidance issued in connection therewith (the “FATCA Provisions”). In furtherance of these efforts, the Subscriber agrees to promptly deliver any additional documentation or information, and updates thereto as applicable, which the Company may request in order to comply with the FATCA Provisions. The Subscriber acknowledges and agrees that, notwithstanding anything to the contrary contained in any side letter or any other agreement, the failure to promptly comply with such requests, or to provide such additional information, may result in the withholding of amounts with respect to, or other limitations on, distributions made to the Subscriber and such other reasonably necessary or advisable action by the Company with respect to the Securities (including, without limitation, required withdrawal), and the Subscriber shall have no claim, and shall not pursue any claim, against the Company or any other person in connection therewith |
2 | A “senior foreign political figure” is defined as a senior official in the executive, legislative, administrative, military or judicial branches of a foreign government (whether elected or not), a senior official of a major foreign political party, or a senior executive of a foreign government-owned corporation. In addition, a “senior foreign political figure” includes any corporation, business or other entity that has been formed by, or for the benefit of, a senior foreign political figure. |
3 | “Immediate family” of a senior foreign political figure typically includes the figure’s parents, siblings, spouse, children and in-laws. |
4 | A “close associate” of a senior foreign political figure is a person who is widely and publicly known to maintain an unusually close relationship with the senior foreign political figure, and includes a person who is in a position to conduct substantial domestic and international financial transactions on behalf of the senior foreign political figure. |
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The foregoing representations and warranties are true and accurate as of the date hereof and shall survive such date. If any of the above representations and warranties shall cease to be true and accurate prior to the acceptance of this Subscription Agreement, Subscriber shall give prompt notice of such fact to the Company by telegram, or facsimile or e-mail, specifying which representations and warranties are not true and accurate and the reasons therefor.
6. | Indemnification. Subscriber acknowledges that Subscriber understands the meaning and legal consequences of the representations and warranties made by Subscriber herein, and that the Company is relying on such representations and warranties in making the determination to accept or reject this Subscription Agreement. Subscriber hereby agrees to indemnify and hold harmless the Company and each employee and agent thereof from and against any and all losses, damages or liabilities due to or arising out of a breach of any representation or warranty of Subscriber contained in this Subscription Agreement. |
7. | Transferability. Subscriber agrees not to transfer or assign this Subscription Agreement, or any interest herein, and further agrees that the assignment and transferability of the Securities acquired pursuant hereto shall be made only in accordance with applicable federal and state securities laws. |
8. | Termination of Agreement; Return of Funds. In the event that, for any reason, this Subscription Agreement is rejected in its entirety by the Company, this Subscription Agreement shall be null and void and of no further force and effect, and no party shall have any rights against any other party hereunder. In the event that the Company rejects this Subscription Agreement, the Company shall promptly return or cause to be returned to Subscriber any money tendered hereunder without interest or deduction. |
9. | Notices. All notices or other communications given or made hereunder shall be in writing and shall be delivered or mailed by registered or certified mail, return receipt requested, postage prepaid, or delivered by, facsimile or e-mail to Subscriber at the address set forth below and to the Company at the address set forth above, or at such other place as the Company may designate by written notice to Subscriber. |
10. | Amendments. Neither this Subscription Agreement nor any term hereof may be changed, waived, discharged or terminated except in a writing signed by Subscriber and the Company. |
11. | Governing Law. This Subscription Agreement and all amendments hereto shall be governed by and construed in accordance with the laws of the State of Florida without application of the conflicts of laws provisions thereof. |
12. | Headings. The headings in this Subscription Agreement are for convenience of reference, and shall not by themselves determine the meaning of this Subscription Agreement or of any part hereof. |
13. | Counterparts. This Subscription Agreement may be executed in any number of counterparts with the same force and effect as if all parties had executed the same document. The execution and delivery of a facsimile or other electronic transmission of this Subscription Agreement shall constitute delivery of an executed original and shall be binding upon the person whose signature appears on the transmitted copy. |
14. | Continuing Obligation of Subscriber to Confirm Investor Status. Upon the request of the Company and for as long as the Subscriber holds Securities or other securities in the Company, the Subscriber shall confirm Subscriber’s investor status as an “Accredited Investor,” as defined by the Securities and Exchange Commission at the time of such request. In connection therewith, the Company shall deliver to the Subscriber a questionnaire that elicits the necessary information to determine the Subscriber’s investor status. Upon receipt of the questionnaire, the Subscriber shall: (i) complete it, (ii) execute the signature page therein, and (iii) return it to the Company, or its designee, in accordance with the instructions therein, no later than ten (10) days after receipt of the questionnaire. |
[Remainder of page intentionally left blank. Signatures appear on following pages.]
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INDIVIDUALS
In witness whereof, the parties hereto have executed this Agreement as of the dates set forth below.
Dated: 12/04/2020.
ACCEPTANCE | ||
NutraLife Biosciences, Inc. | ||
Date: 12/04/2020 | By: | /s/ Edgar Ward |
Name: | Edgar Ward | |
Title: | Chief Executive Officer |
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CORPORATIONS, PARTNERSHIPS, TRUSTS OR OTHER ENTITIES
In witness whereof, the parties hereto have executed this Agreement as of the dates set forth below.
Dated: ___________, 2020.
Name of Purchaser (Please Print): | ||
By: | ||
Name (Please Print): | ||
Title: | ||
Address: | ||
Phone Number: | (____) _____ - __________________________ |
Cellular Number: | (____) _____ - __________________________ |
Taxpayer ID Number/EIN : | _____________________________________ |
Email address: | _______________ @ ____________________ |
ACCEPTANCE | ||
NutraLife Biosciences, Inc. | ||
Date:_____________ , 2020. | By: | /s/ Edgar Ward |
Name: | Edgar Ward | |
Title: | Chief Executive Officer |
Page 13 |
Exhibit A
Promissory Note
(Attached)
Exhibit B Warrant
(Attached)
Exhibit 10.51
Exhibit 10.52
Exhibit 10.53
Exhibit 10.54
Exhibit 10.55
Exhibit 10.56
Exhibit 10.57
Exhibit 10.58
Exhibit 10.59
Exhibit 10.60
Exhibit 10.61
Exhibit 10.62
Exhibit 10.63
Exhibit 10.64
NutraLife Biosciences, Inc.
Subscription Agreement
The undersigned “Subscriber”, on the terms and conditions herein set forth, hereby irrevocable submits this subscription agreement (the “Subscription Agreement”) to NutraLife Biosciences, Inc., a Florida corporation (the “Company”), in connection with a private offering by the Company (the “Offering”) to raise a maximum of $200,000 through the sale to Subscriber as an “accredited investor” (as defined below) of a Promissory Note of the Company (a “Note”) and a Warrant of the Company (the “Warrant”) to acquire certain shares of common stock, par value $0.0001 per share, of the Company (the “Common Stock”).
The Company is offering up to $200,000 of aggregate principal amount of Notes and warrants to acquire up to 8,000,000 shares of Common Stock.
For each one dollar of aggregate principal amount of a Note that Subscriber subscribes for, the Subscriber shall be issued a warrant to acquire forty shares of Common Stock, at a price of $0.08 per share, subject to customary adjustments as set forth in the Warrant.
By way of example, and not limitation, in the event that Subscriber subscribed for a Note in the principal amount of $50,000, Subscriber will be issued a Warrant to acquire 2,000,000 shares of Common Stock.
The minimum subscription amount is a Note in the aggregate principal amount of $25,000, provided that the Company may accept subscriptions in lesser amounts in its sole discretion.
The principal amount of Note subscribed for and the Warrant to be issued is set forth below.
****
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Subscription:
The undersigned Subscriber, intending to be legally bound, hereby subscribes for:
(i) | a Note in the principal amount of $25,000.00 (the “Subscription Amount”); and | |
(ii) | A Warrant to acquire 1,000,000 shares of Common Stock. |
The Note is attached to this Subscription Agreement as Exhibit A and the Warrant is attached to this Subscription Agreement as Exhibit B. The Note and the Warrant may be referred to herein collectively as the “Securities”.
The undersigned acknowledges that the Company is offering the Securities to those who are “accredited investors” as defined herein pursuant to of Rule 506(b) of Regulation D promulgated by the Securities Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”).
The undersigned agrees to execute this Subscription Agreement and if by mail, send to the Company. You as an individual or you on behalf of the subscribing entity are being asked to complete this Subscription Agreement so that a determination can be made as to whether or not you (it) are qualified to purchase the Securities under applicable federal and state securities laws. Your answers to the questions contained herein must be true and correct in all respects, and a false representation by you may constitute a violation of law for which a claim for damages may be made against you. Your answers will be kept strictly confidential; however, by signing this Subscription Agreement, you will be authorizing the Company to present a completed copy of this Subscription Agreement to such parties as they may deem appropriate in order to make certain that the offer and sale of the securities will not result in a violation of the Securities Act or of the securities laws of any state.
All questions must be answered. If the appropriate answer is “None” or “Not Applicable,” please state so. Please print or type your answers to all questions and attach additional sheets if necessary to complete your answers to any item. Please initial any corrections.
1. | Subscription for the Purchase of Securities. The undersigned Subscriber hereby subscribes to purchase the Securities as set forth above. Subscriber agrees to forward payment in the amount of the Subscription Price to the Company via one of the following methods: | |
(a) | by wiring payment of the Subscription Amount in accordance with the information set forth below: |
For financial institutions in the United States, give your bank this information:
Send to: | BB&T | |
450 N. Pine Island Rd. Plantation, FL. 33324 | ||
ABA# 263191387 |
Page 2 |
For credit to: | NutraLife Biosciences, Inc. | |
Attn: Edgar Ward | ||
6601 Lyons Road, Suite L-6 | ||
Coconut Creek, FL 33073 | ||
Account # 241628361 | ||
For the benefit of: | NutraLife Biosciences, Inc. | |
6601 Lyons Rd. L-6 | ||
Coconut Creek Fl. 33073 | ||
United States | ||
888.509.8901 edgar.ward@nutralifebiosciences.com |
For financial institutions outside the United States, please contact the Company.
OR
(b) | by mailing a certified check in the amount of the Subscription Price, payable to “NutraLife Biosciences, Inc.”, to the Company as follows: |
NutraLife Biosciences, Inc.
Attn: Edgar Ward
6601 Lyons Road, Suite L-6
Coconut Creek, FL 33073
Regardless of whether paying by wire transfer or check, you must also deliver a fully completed and executed copy of this Subscription Agreement and an executed copy of the signature page to the Note and an executed copy of the signature page to the Warrant to the Company at:
NutraLife Biosciences, Inc.
Attn: Edgar Ward
6601 Lyons Road, Suite L-6
Coconut Creek, FL 33073
Subscriber recognizes and agrees that (i) this subscription is irrevocable and, if Subscriber is a natural person, shall survive Subscriber’s death, disability or other incapacity, and (ii) the Company has complete discretion to accept or to reject this Subscription Agreement in its entirety and shall have no liability for any rejection of this Subscription Agreement. This Subscription Agreement shall be deemed to be accepted by the Company only when it is executed by the Company.
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2. | Effect of Acceptance. Subscriber hereby acknowledges and agrees that on the Company’s acceptance of this Subscription Agreement, it shall become a binding and fully enforceable agreement between the Company and the Subscriber. As a result, upon acceptance by the Company of this Subscription Agreement, Subscriber will become the record and beneficial holder of the Securities and the Company will be entitled to receive the purchase price of the Securities as specified herein. By Subscriber’s execution of this Subscription Agreement, Subscriber agrees to the bound by the terms and conditions of the Note and the Warrant. |
3. | Representation as to Investor Status. In order for the Company to sell the Securities (in conformance with state and federal securities laws), the following information must be obtained regarding Subscriber’s investor status. Please initial each item applicable to you as an investor in the Company. |
(a) | Accredited Investor. Rule 501(a) of Regulation D defines an “accredited investor” as any person who comes within any of the following categories, or whom the issuer reasonably believes comes within any of the following categories, at the time of the sale of the securities to that person: | ||
(i) | TR A natural person whose net worth, either individually or jointly with such person’s spouse, at the time of Subscriber’s purchase, exceeds $1,000,000. | ||
(ii) | _____ A natural person who had an individual income in excess of $200,000, or joint income with that person’s spouse in excess of $300,000, in each of the two most recent years and reasonably expects to reach the same income level in the current year. | ||
(iii) | _____ A bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary capacity. | ||
(iv) | _____ A broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). | ||
(v) | _____ An insurance company as defined in section 2(13) of the Exchange Act. | ||
(vi) | _____ An investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act. | ||
(vii) | _____ A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958. | ||
(viii) | _____ A plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state, or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000. | ||
(ix) | _____ An employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors. |
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(x) | _____ A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940. | ||
(xi) | _____ An organization described in Section 501(c)(3) of the Internal Revenue Code, or a corporation, business trust or partnership, not formed for the specific purpose of acquiring the Securities, with total assets in excess of $5,000,000. | ||
(xii) | _____ A director or executive officer of the Company. | ||
(xiii) | _____ A trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, whose purchase is directed by a sophisticated person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of investing in the Company. | ||
(xiv) | _____ An entity in which all of the equity owners qualify under any of the above subparagraphs. | ||
________ Subscriber does not qualify under any of the investor categories set forth in Section (3)(a)(i) through Section (3)(a)(iv). | |||
The term “net worth” means the excess of total assets over total liabilities (including personal and real property, but excluding the estimated fair market value of a person’s primary home). | |||
In determining individual “income,” Subscriber should add to Subscriber’s individual taxable adjusted gross income (exclusive of any spousal income) any amounts attributable to tax exempt income received, losses claimed as a limited partner in any limited partnership, deductions claimed for depletion, contributions to an IRA or Keogh retirement plan, alimony payments, and any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross income. | |||
(b) | Type of Subscriber. Indicate the form of entity of Subscriber: |
[X] | Individual | [ ] | Limited Partnership | |
[ ] | Corporation | [ ] | General Partnership | |
[ ] | Revocable Trust | [ ] | Other Type of Trust (indicate type): | |
[ ] | Other (indicate form of organization): _________________________________________________ |
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(i) | If Subscriber is not an individual, indicate the approximate date Subscriber entity was formed: ________________________. | |
(ii) | If Subscriber is not an individual, initial the line below which correctly describes the application of the following statement to Subscriber’s situation: Subscriber (x) was not organized or reorganized for the specific purpose of acquiring the Securities and (y) has made investments prior to the date hereof, and each beneficial owner thereof has and will share in the investment in proportion to his or her ownership interest in Subscriber. |
True
False
If the “False” box is checked, each person participating in the entity will be required to fill out a Subscription Agreement. |
4. | Additional Representations and Warranties of Subscriber. Subscriber hereby represents and warrants to the Company as follows: | |
(a) | Subscriber has been furnished all documents related to the Company and its operations as requested by Subscriber, and Subscriber has carefully read such documents. Subscriber has been furnished with all documents and materials relating to the business, finances and operations of the Company and information that Subscriber requested and deemed material to making an informed investment decision regarding its purchase of the Securities. Subscriber has been afforded the opportunity to review such documents and materials and the information contained therein. Subscriber has been afforded the opportunity to ask questions of the Company and its management. Subscriber understands that such discussions, as well as any written information provided by the Company, were intended to describe the aspects of the Company’s business and prospects which the Company believes to be material, but were not necessarily a thorough or exhaustive description, and except as expressly set forth in this Subscription Agreement, the Company makes no representation or warranty with respect to the completeness of such information and makes no representation or warranty of any kind with respect to any information provided by any entity other than the Company. Some of such information may include projections as to the future performance of the Company, which projections may not be realized, may be based on assumptions which may not be correct and may be subject to numerous factors beyond the Company’s control. Additionally, Subscriber understands and represents that Subscriber is purchasing the Securities notwithstanding the fact that the Company may disclose in the future certain material information that the Subscriber has not received, including the financial results of the Company for their current fiscal quarters. Neither such inquiries nor any other due diligence investigations conducted by such Subscriber shall modify, amend or affect such Subscriber’s right to rely on the Company’s representations and warranties, if any, contained in this Subscription Agreement. Subscriber has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its investment in the Securities. Subscriber has full power and authority to make the representations referred to herein, to purchase the Securities and to execute and deliver this Subscription Agreement. |
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(b) | Subscriber has read and understood, and is familiar with, this Subscription Agreement, the Securities and the business and financial affairs of the Company. | |
(c) | Subscriber, either personally, or together with Subscriber’s advisors (other than any securities broker/dealers who may receive compensation from the sale of any of the Securities), has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Securities, is able to bear the risks of an investment in the Securities and understands the risks of, and other considerations relating to, a purchase of a Unit. The Subscriber and its advisors have had a reasonable opportunity to ask questions of and receive answers from the Company concerning the Securities. Subscriber’s financial condition is such that Subscriber is able to bear the risk of holding the Securities that Subscriber may acquire pursuant to this Agreement, for an indefinite period of time, and the risk of loss of Subscriber’s entire investment in the Company. | |
(d) | Subscriber has investigated the acquisition of the Securities to the extent Subscriber deemed necessary or desirable and the Company has provided Subscriber with any reasonable assistance Subscriber has requested in connection therewith. | |
(e) | The Securities are being acquired for Subscriber’s own account for investment, with no intention by Subscriber to distribute or sell any portion thereof within the meaning of the Securities Act, and will not be transferred by Subscriber in violation of the Securities Act or the then applicable rules or regulations thereunder. No one other than Subscriber has any interest in or any right to acquire the Securities. Subscriber understands and acknowledges that the Company will have no obligation to recognize the ownership, beneficial or otherwise, of the Securities by anyone but Subscriber. | |
(f) | No representations or warranties have been made to Subscriber by the Company, or any representative of the Company, or any securities broker/dealer, other than as set forth in this Subscription Agreement. | |
(g) | Subscriber is aware that Subscriber’s rights to transfer the Securities is restricted by the Securities Act and applicable state securities laws, and Subscriber will not offer for sale, sell or otherwise transfer the Securities without registration under the Securities Act and qualification under the securities laws of all applicable states, unless such sale would be exempt therefrom. |
Page 7 |
(h) | Subscriber understands and agrees that the Securities have not been registered under the Securities Act or any state securities act in reliance on exemptions therefrom and that the Company has no obligation to register any of the Securities. | ||
(i) | The Subscriber has had an opportunity to ask questions of, and receive answers from, representatives of the Company concerning the terms and conditions of this investment and all such questions have been answered to the full satisfaction of the undersigned. Subscriber understands that no person other than the Company has been authorized to make any representation and if made, such representation may not be relied on unless it is made in writing and signed by the Company. The Company has not, however, rendered any investment advice to the undersigned with respect to the suitability. | ||
(j) | Subscriber understands that the certificates or other instruments representing the Securities shall bear a restrictive legend in substantially the following form (and a stop transfer order may be placed against transfer of such certificates): | ||
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE SECURITIES LAWS, AND NO INTEREST MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION INVOLVING SAID SECURITIES, (B) THIS CORPORATION RECEIVES AN OPINION OF LEGAL COUNSEL FOR THE HOLDER OF THESE SECURITIES SATISFACTORY TO THIS CORPORATION STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION, OR (C) THIS CORPORATION OTHERWISE SATISFIES ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION. | |||
(k) | Subscriber also acknowledges and agrees to the following: |
(i) | an investment in the Securities is highly speculative and involves a high degree of risk of loss of the entire investment in the Company; and | ||
(ii) | there is no assurance that a public market for the will be available and that, as a result, Subscriber may not be able to liquidate Subscriber’s investment in the Securities should a need arise to do so. |
(l) | Subscriber is not dependent for liquidity on any of the amounts Subscriber is investing in the Securities. | ||
(m) | Subscriber’s address set forth below is his or her or its correct residence or business address. | ||
(n) | Subscriber has full power and authority to make the representations referred to herein, to purchase the Securities and to execute and deliver this Subscription Agreement. |
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(o) | Subscriber understands that the foregoing representations and warranties are to be relied upon by the Company as a basis for the exemptions from registration and qualification of the sale of the Securities under the federal and state securities laws and for other purposes. | |
5. | Representations and Warranties Regarding Patriot Act; Anti-Money Laundering; OFAC. The Subscriber should check the Office of Foreign Assets Control (“OFAC”) website at http://www.treas.gov/ofac before making the following representations. Subscriber hereby represents and warrants to the Company as follows: | |
(a) | The Subscriber represents that (i) no part of the funds used by the Subscriber to acquire the Securities or to satisfy his/her capital commitment obligations with respect thereto has been, or shall be, directly or indirectly derived from, or related to, any activity that may contravene United States federal or state or non-United States laws or regulations, including anti-money laundering laws and regulations, and (ii) no capital commitment, contribution or payment to the Company by the Subscriber and no distribution to the Subscriber shall cause the Company to be in violation of any applicable anti-money laundering laws or regulations including, without limitation, Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001 and the United States Department of the Treasury Office of Foreign Assets Control regulations. The Subscriber acknowledges and agrees that, notwithstanding anything to the contrary contained in any other agreement, to the extent required by any anti-money laundering law or regulation, the Company may prohibit capital contributions, restrict distributions or take any other reasonably necessary or advisable action with respect to the Securities, and the Subscriber shall have no claim, and shall not pursue any claim, against the Company or any other person in connection therewith. U.S. federal regulations and executive orders administered by OFAC prohibit, among other things, the engagement in transactions with, and the provision of services to, certain foreign countries, territories, entities and individuals. The lists of OFAC prohibited countries, territories, persons and entities can be found on the OFAC website at http://www.treas.gov/ofac. In addition, the programs administered by OFAC (the “OFAC Programs”) prohibit dealing with individuals1 or entities in certain countries regardless of whether such individuals or entities appear on the OFAC lists. | |
(b) | To the best of the Subscriber’s knowledge, none of: (1) the Subscriber; (2) any person controlling or controlled by the Subscriber; (3) if the Subscriber is a privately-held entity, any person having a beneficial interest in the Subscriber; or (4) any person for whom the Subscriber is acting as agent or nominee in connection with this investment is a country, territory, individual or entity named on an OFAC list, or a person or entity prohibited under the OFAC Programs. Please be advised that the Company may not accept any amounts from a prospective investor if such prospective investor cannot make the representation set forth in this paragraph. The Subscriber agrees to promptly notify the Company should the Subscriber become aware of any change in the information set forth in these representations. The Subscriber understands and acknowledges that, by law, the Company may be obligated to “freeze the account” of the Subscriber, either by prohibiting additional subscriptions from the Subscriber, declining any redemption requests and/or segregating the assets in the account in compliance with governmental regulations, and any broker may also be required to report such action and to disclose the Subscriber’s identity to OFAC. The Subscriber further acknowledges that the Company may, by written notice to the Subscriber, suspend the redemption rights, if any, of the Subscriber if the Company reasonably deems it necessary to do so to comply with anti-money laundering regulations applicable to the Company or any Broker or any of the Company’s other service providers. These individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanctions and embargo programs. |
1 | These individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanctions and embargo programs. |
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(c) | To the best of the Subscriber’s knowledge, none of: (1) the Subscriber; (2) any person controlling or controlled by the Subscriber; (3) if the Subscriber is a privately-held entity, any person having a beneficial interest in the Subscriber; or (4) any person for whom the Subscriber is acting as agent or nominee in connection with this investment is a senior foreign political figure2, or any immediate family3 member or close associate4 of a senior foreign political figure, as such terms are defined in the footnotes below. | |
(d) | If the Subscriber is affiliated with a non-U.S. banking institution (a “Foreign Bank”), or if the Subscriber receives deposits from, makes payments on behalf of, or handles other financial transactions related to a Foreign Bank, the Subscriber represents and warrants to the Company that: (1) the Foreign Bank has a fixed address, other than solely an electronic address, in a country in which the Foreign Bank is authorized to conduct banking activities; (2) the Foreign Bank maintains operating records related to its banking activities; (3) the Foreign Bank is subject to inspection by the banking authority that licensed the Foreign Bank to conduct banking activities; and (4) the Foreign Bank does not provide banking services to any other Foreign Bank that does not have a physical presence in any country and that is not a regulated affiliate. | |
(e) | The Subscriber acknowledges that, to the extent applicable, the Company will seek to comply with the Foreign Account Tax Compliance Act provisions of the U.S. Internal Revenue Code and any rules, regulations, forms, instructions or other guidance issued in connection therewith (the “FATCA Provisions”). In furtherance of these efforts, the Subscriber agrees to promptly deliver any additional documentation or information, and updates thereto as applicable, which the Company may request in order to comply with the FATCA Provisions. The Subscriber acknowledges and agrees that, notwithstanding anything to the contrary contained in any side letter or any other agreement, the failure to promptly comply with such requests, or to provide such additional information, may result in the withholding of amounts with respect to, or other limitations on, distributions made to the Subscriber and such other reasonably necessary or advisable action by the Company with respect to the Securities (including, without limitation, required withdrawal), and the Subscriber shall have no claim, and shall not pursue any claim, against the Company or any other person in connection therewith |
2 | A “senior foreign political figure” is defined as a senior official in the executive, legislative, administrative, military or judicial branches of a foreign government (whether elected or not), a senior official of a major foreign political party, or a senior executive of a foreign government-owned corporation. In addition, a “senior foreign political figure” includes any corporation, business or other entity that has been formed by, or for the benefit of, a senior foreign political figure. |
3 | “Immediate family” of a senior foreign political figure typically includes the figure’s parents, siblings, spouse, children and in-laws. |
4 | A “close associate” of a senior foreign political figure is a person who is widely and publicly known to maintain an unusually close relationship with the senior foreign political figure, and includes a person who is in a position to conduct substantial domestic and international financial transactions on behalf of the senior foreign political figure. |
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The foregoing representations and warranties are true and accurate as of the date hereof and shall survive such date. If any of the above representations and warranties shall cease to be true and accurate prior to the acceptance of this Subscription Agreement, Subscriber shall give prompt notice of such fact to the Company by telegram, or facsimile or e-mail, specifying which representations and warranties are not true and accurate and the reasons therefor.
6. | Indemnification. Subscriber acknowledges that Subscriber understands the meaning and legal consequences of the representations and warranties made by Subscriber herein, and that the Company is relying on such representations and warranties in making the determination to accept or reject this Subscription Agreement. Subscriber hereby agrees to indemnify and hold harmless the Company and each employee and agent thereof from and against any and all losses, damages or liabilities due to or arising out of a breach of any representation or warranty of Subscriber contained in this Subscription Agreement. |
7. | Transferability. Subscriber agrees not to transfer or assign this Subscription Agreement, or any interest herein, and further agrees that the assignment and transferability of the Securities acquired pursuant hereto shall be made only in accordance with applicable federal and state securities laws. |
8. | Termination of Agreement; Return of Funds. In the event that, for any reason, this Subscription Agreement is rejected in its entirety by the Company, this Subscription Agreement shall be null and void and of no further force and effect, and no party shall have any rights against any other party hereunder. In the event that the Company rejects this Subscription Agreement, the Company shall promptly return or cause to be returned to Subscriber any money tendered hereunder without interest or deduction. |
9. | Notices. All notices or other communications given or made hereunder shall be in writing and shall be delivered or mailed by registered or certified mail, return receipt requested, postage prepaid, or delivered by, facsimile or e-mail to Subscriber at the address set forth below and to the Company at the address set forth above, or at such other place as the Company may designate by written notice to Subscriber. |
10. | Amendments. Neither this Subscription Agreement nor any term hereof may be changed, waived, discharged or terminated except in a writing signed by Subscriber and the Company. |
11. | Governing Law. This Subscription Agreement and all amendments hereto shall be governed by and construed in accordance with the laws of the State of Florida without application of the conflicts of laws provisions thereof. |
12. | Headings. The headings in this Subscription Agreement are for convenience of reference, and shall not by themselves determine the meaning of this Subscription Agreement or of any part hereof. |
13. | Counterparts. This Subscription Agreement may be executed in any number of counterparts with the same force and effect as if all parties had executed the same document. The execution and delivery of a facsimile or other electronic transmission of this Subscription Agreement shall constitute delivery of an executed original and shall be binding upon the person whose signature appears on the transmitted copy. |
14. | Continuing Obligation of Subscriber to Confirm Investor Status. Upon the request of the Company and for as long as the Subscriber holds Securities or other securities in the Company, the Subscriber shall confirm Subscriber’s investor status as an “Accredited Investor,” as defined by the Securities and Exchange Commission at the time of such request. In connection therewith, the Company shall deliver to the Subscriber a questionnaire that elicits the necessary information to determine the Subscriber’s investor status. Upon receipt of the questionnaire, the Subscriber shall: (i) complete it, (ii) execute the signature page therein, and (iii) return it to the Company, or its designee, in accordance with the instructions therein, no later than ten (10) days after receipt of the questionnaire. |
[Remainder of page intentionally left blank. Signatures appear on following pages.]
Page 11 |
INDIVIDUALS
In witness whereof, the parties hereto have executed this Agreement as of the dates set forth below.
Dated: February 11, 2021.
ACCEPTANCE | ||
NutraLife Biosciences, Inc. | ||
Date: February 10th , 2021. | ||
By: | /s/ Edgar Ward | |
Name: | Edgar Ward | |
Title: | Chief Executive Officer |
Page 12 |
CORPORATIONS, PARTNERSHIPS, TRUSTS OR OTHER ENTITIES
In witness whereof, the parties hereto have executed this Agreement as of the dates set forth below.
Dated: __________________, 2020.
Name of Purchaser (Please Print): __________________________________
By: | __________________________________ |
Name (Please Print): | __________________________________ |
Title: | __________________________________ |
Address: | __________________________________ |
__________________________________ | |
__________________________________ | |
Phone Number: | (______) _______-___________________ |
Cellular Number: | (______) _______-___________________ |
Taxpayer ID Number/EIN: | __________________________________ |
Email address: | _________________@________________________ |
ACCEPTANCE | ||
NutraLife Biosciences, Inc. | ||
Date: _____________, 2020. | ||
By: | ||
Name: | Edgar Ward | |
Title: | Chief Executive Officer |
Page 13 |
Exhibit A
Promissory Note
(Attached)
Exhibit B
Warrant
(Attached)
Exhibit 10.65
Exhibit 10.66
Exhibit 10.67
Exhibit 10.68
Exhibit 10.69
NutraLife Biosciences, Inc.
Subscription Agreement
The undersigned “Subscriber”, on the terms and conditions herein set forth, hereby irrevocable submits this subscription agreement (the “Subscription Agreement”) to NutraLife Biosciences, Inc., a Florida corporation (the “Company”), in connection with a private offering by the Company (the “Offering”) to raise a maximum of $200,000 through the sale to Subscriber as an “accredited investor” (as defined below) of a Promissory Note of the Company (a “Note”) and a Warrant of the Company (the “Warrant”) to acquire certain shares of common stock, par value $0.0001 per share, of the Company (the “Common Stock”).
The Company is offering up to $200,000 of aggregate principal amount of Notes and warrants to acquire up to 8,000,000 shares of Common Stock.
For each one dollar of aggregate principal amount of a Note that Subscriber subscribes for, the Subscriber shall be issued a warrant to acquire forty shares of Common Stock, at a price of $0.08 per share, subject to customary adjustments as set forth in the Warrant.
By way of example, and not limitation, in the event that Subscriber subscribed for a Note in the principal amount of $50,000, Subscriber will be issued a Warrant to acquire 2,000,000 shares of Common Stock.
The minimum subscription amount is a Note in the aggregate principal amount of $25,000, provided that the Company may accept subscriptions in lesser amounts in its sole discretion.
The principal amount of Note subscribed for and the Warrant to be issued is set forth below.
****
Page 1 |
Subscription:
The undersigned Subscriber, intending to be legally bound, hereby subscribes for:
(i) | a Note in the principal amount of $30,000.00 (the “Subscription Amount”); and | |
(ii) | A Warrant to acquire 1,200,000 shares of Common Stock. |
The Note is attached to this Subscription Agreement as Exhibit A and the Warrant is attached to this Subscription Agreement as Exhibit B. The Note and the Warrant may be referred to herein collectively as the “Securities”.
The undersigned acknowledges that the Company is offering the Securities to those who are “accredited investors” as defined herein pursuant to of Rule 506(b) of Regulation D promulgated by the Securities Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”).
The undersigned agrees to execute this Subscription Agreement and if by mail, send to the Company. You as an individual or you on behalf of the subscribing entity are being asked to complete this Subscription Agreement so that a determination can be made as to whether or not you (it) are qualified to purchase the Securities under applicable federal and state securities laws. Your answers to the questions contained herein must be true and correct in all respects, and a false representation by you may constitute a violation of law for which a claim for damages may be made against you. Your answers will be kept strictly confidential; however, by signing this Subscription Agreement, you will be authorizing the Company to present a completed copy of this Subscription Agreement to such parties as they may deem appropriate in order to make certain that the offer and sale of the securities will not result in a violation of the Securities Act or of the securities laws of any state.
All questions must be answered. If the appropriate answer is “None” or “Not Applicable,” please state so. Please print or type your answers to all questions and attach additional sheets if necessary to complete your answers to any item. Please initial any corrections.
1. | Subscription for the Purchase of Securities. The undersigned Subscriber hereby subscribes to purchase the Securities as set forth above. Subscriber agrees to forward payment in the amount of the Subscription Price to the Company via one of the following methods: | |
(a) | by wiring payment of the Subscription Amount in accordance with the information set forth below: |
For financial institutions in the United States, give your bank this information:
Send to: | BB&T | |
450 N. Pine Island Rd. Plantation, FL. 33324 | ||
ABA# 263191387 |
Page 2 |
For credit to: | NutraLife Biosciences, Inc. | |
Attn: Edgar Ward | ||
6601 Lyons Road, Suite L-6 | ||
Coconut Creek, FL 33073 | ||
Account # 241628361 | ||
For the benefit of: | NutraLife Biosciences, Inc. | |
6601 Lyons Rd. L-6 | ||
Coconut Creek Fl. 33073 | ||
United States | ||
888.509.8901 edgar.ward@nutralifebiosciences.com |
For financial institutions outside the United States, please contact the Company.
OR
(b) | by mailing a certified check in the amount of the Subscription Price, payable to “NutraLife Biosciences, Inc.”, to the Company as follows: |
NutraLife Biosciences, Inc.
Attn: Edgar Ward
6601 Lyons Road, Suite L-6
Coconut Creek, FL 33073
Regardless of whether paying by wire transfer or check, you must also deliver a fully completed and executed copy of this Subscription Agreement and an executed copy of the signature page to the Note and an executed copy of the signature page to the Warrant to the Company at:
NutraLife Biosciences, Inc.
Attn: Edgar Ward
6601 Lyons Road, Suite L-6
Coconut Creek, FL 33073
Subscriber recognizes and agrees that (i) this subscription is irrevocable and, if Subscriber is a natural person, shall survive Subscriber’s death, disability or other incapacity, and (ii) the Company has complete discretion to accept or to reject this Subscription Agreement in its entirety and shall have no liability for any rejection of this Subscription Agreement. This Subscription Agreement shall be deemed to be accepted by the Company only when it is executed by the Company.
Page 3 |
2. | Effect of Acceptance. Subscriber hereby acknowledges and agrees that on the Company’s acceptance of this Subscription Agreement, it shall become a binding and fully enforceable agreement between the Company and the Subscriber. As a result, upon acceptance by the Company of this Subscription Agreement, Subscriber will become the record and beneficial holder of the Securities and the Company will be entitled to receive the purchase price of the Securities as specified herein. By Subscriber’s execution of this Subscription Agreement, Subscriber agrees to the bound by the terms and conditions of the Note and the Warrant. |
3. | Representation as to Investor Status. In order for the Company to sell the Securities (in conformance with state and federal securities laws), the following information must be obtained regarding Subscriber’s investor status. Please initial each item applicable to you as an investor in the Company. |
(a) | Accredited Investor. Rule 501(a) of Regulation D defines an “accredited investor” as any person who comes within any of the following categories, or whom the issuer reasonably believes comes within any of the following categories, at the time of the sale of the securities to that person: | ||
(i) | X A natural person whose net worth, either individually or jointly with such person’s spouse, at the time of Subscriber’s purchase, exceeds $1,000,000. | ||
(ii) | _____ A natural person who had an individual income in excess of $200,000, or joint income with that person’s spouse in excess of $300,000, in each of the two most recent years and reasonably expects to reach the same income level in the current year. | ||
(iii) | _____ A bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary capacity. | ||
(iv) | _____ A broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). | ||
(v) | _____ An insurance company as defined in section 2(13) of the Exchange Act. | ||
(vi) | _____ An investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act. | ||
(vii) | _____ A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958. | ||
(viii) | _____ A plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state, or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000. | ||
(ix) | _____ An employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors. |
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(x) | _____ A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940. | ||
(xi) | _____ An organization described in Section 501(c)(3) of the Internal Revenue Code, or a corporation, business trust or partnership, not formed for the specific purpose of acquiring the Securities, with total assets in excess of $5,000,000. | ||
(xii) | _____ A director or executive officer of the Company. | ||
(xiii) | _____ A trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, whose purchase is directed by a sophisticated person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of investing in the Company. | ||
(xiv) | _____ An entity in which all of the equity owners qualify under any of the above subparagraphs. | ||
________ Subscriber does not qualify under any of the investor categories set forth in Section (3)(a)(i) through Section (3)(a)(iv). | |||
The term “net worth” means the excess of total assets over total liabilities (including personal and real property, but excluding the estimated fair market value of a person’s primary home). | |||
In determining individual “income,” Subscriber should add to Subscriber’s individual taxable adjusted gross income (exclusive of any spousal income) any amounts attributable to tax exempt income received, losses claimed as a limited partner in any limited partnership, deductions claimed for depletion, contributions to an IRA or Keogh retirement plan, alimony payments, and any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross income. | |||
(b) | Type of Subscriber. Indicate the form of entity of Subscriber: |
[X] | Individual | [ ] | Limited Partnership | |
[ ] | Corporation | [ ] | General Partnership | |
[ ] | Revocable Trust | [ ] | Other Type of Trust (indicate type): | |
[ ] | Other (indicate form of organization): _________________________________________________ |
Page 5 |
(i) | If Subscriber is not an individual, indicate the approximate date Subscriber entity was formed: ________________________. | |
(ii) | If Subscriber is not an individual, initial the line below which correctly describes the application of the following statement to Subscriber’s situation: Subscriber (x) was not organized or reorganized for the specific purpose of acquiring the Securities and (y) has made investments prior to the date hereof, and each beneficial owner thereof has and will share in the investment in proportion to his or her ownership interest in Subscriber. |
True
False
If the “False” box is checked, each person participating in the entity will be required to fill out a Subscription Agreement. |
4. | Additional Representations and Warranties of Subscriber. Subscriber hereby represents and warrants to the Company as follows: | |
(a) | Subscriber has been furnished all documents related to the Company and its operations as requested by Subscriber, and Subscriber has carefully read such documents. Subscriber has been furnished with all documents and materials relating to the business, finances and operations of the Company and information that Subscriber requested and deemed material to making an informed investment decision regarding its purchase of the Securities. Subscriber has been afforded the opportunity to review such documents and materials and the information contained therein. Subscriber has been afforded the opportunity to ask questions of the Company and its management. Subscriber understands that such discussions, as well as any written information provided by the Company, were intended to describe the aspects of the Company’s business and prospects which the Company believes to be material, but were not necessarily a thorough or exhaustive description, and except as expressly set forth in this Subscription Agreement, the Company makes no representation or warranty with respect to the completeness of such information and makes no representation or warranty of any kind with respect to any information provided by any entity other than the Company. Some of such information may include projections as to the future performance of the Company, which projections may not be realized, may be based on assumptions which may not be correct and may be subject to numerous factors beyond the Company’s control. Additionally, Subscriber understands and represents that Subscriber is purchasing the Securities notwithstanding the fact that the Company may disclose in the future certain material information that the Subscriber has not received, including the financial results of the Company for their current fiscal quarters. Neither such inquiries nor any other due diligence investigations conducted by such Subscriber shall modify, amend or affect such Subscriber’s right to rely on the Company’s representations and warranties, if any, contained in this Subscription Agreement. Subscriber has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its investment in the Securities. Subscriber has full power and authority to make the representations referred to herein, to purchase the Securities and to execute and deliver this Subscription Agreement. |
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(b) | Subscriber has read and understood, and is familiar with, this Subscription Agreement, the Securities and the business and financial affairs of the Company. | |
(c) | Subscriber, either personally, or together with Subscriber’s advisors (other than any securities broker/dealers who may receive compensation from the sale of any of the Securities), has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Securities, is able to bear the risks of an investment in the Securities and understands the risks of, and other considerations relating to, a purchase of a Unit. The Subscriber and its advisors have had a reasonable opportunity to ask questions of and receive answers from the Company concerning the Securities. Subscriber’s financial condition is such that Subscriber is able to bear the risk of holding the Securities that Subscriber may acquire pursuant to this Agreement, for an indefinite period of time, and the risk of loss of Subscriber’s entire investment in the Company. | |
(d) | Subscriber has investigated the acquisition of the Securities to the extent Subscriber deemed necessary or desirable and the Company has provided Subscriber with any reasonable assistance Subscriber has requested in connection therewith. | |
(e) | The Securities are being acquired for Subscriber’s own account for investment, with no intention by Subscriber to distribute or sell any portion thereof within the meaning of the Securities Act, and will not be transferred by Subscriber in violation of the Securities Act or the then applicable rules or regulations thereunder. No one other than Subscriber has any interest in or any right to acquire the Securities. Subscriber understands and acknowledges that the Company will have no obligation to recognize the ownership, beneficial or otherwise, of the Securities by anyone but Subscriber. | |
(f) | No representations or warranties have been made to Subscriber by the Company, or any representative of the Company, or any securities broker/dealer, other than as set forth in this Subscription Agreement. | |
(g) | Subscriber is aware that Subscriber’s rights to transfer the Securities is restricted by the Securities Act and applicable state securities laws, and Subscriber will not offer for sale, sell or otherwise transfer the Securities without registration under the Securities Act and qualification under the securities laws of all applicable states, unless such sale would be exempt therefrom. |
Page 7 |
(h) | Subscriber understands and agrees that the Securities have not been registered under the Securities Act or any state securities act in reliance on exemptions therefrom and that the Company has no obligation to register any of the Securities. | ||
(i) | The Subscriber has had an opportunity to ask questions of, and receive answers from, representatives of the Company concerning the terms and conditions of this investment and all such questions have been answered to the full satisfaction of the undersigned. Subscriber understands that no person other than the Company has been authorized to make any representation and if made, such representation may not be relied on unless it is made in writing and signed by the Company. The Company has not, however, rendered any investment advice to the undersigned with respect to the suitability. | ||
(j) | Subscriber understands that the certificates or other instruments representing the Securities shall bear a restrictive legend in substantially the following form (and a stop transfer order may be placed against transfer of such certificates): | ||
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE SECURITIES LAWS, AND NO INTEREST MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION INVOLVING SAID SECURITIES, (B) THIS CORPORATION RECEIVES AN OPINION OF LEGAL COUNSEL FOR THE HOLDER OF THESE SECURITIES SATISFACTORY TO THIS CORPORATION STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION, OR (C) THIS CORPORATION OTHERWISE SATISFIES ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION. | |||
(k) | Subscriber also acknowledges and agrees to the following: |
(i) | an investment in the Securities is highly speculative and involves a high degree of risk of loss of the entire investment in the Company; and | ||
(ii) | there is no assurance that a public market for the will be available and that, as a result, Subscriber may not be able to liquidate Subscriber’s investment in the Securities should a need arise to do so. |
(l) | Subscriber is not dependent for liquidity on any of the amounts Subscriber is investing in the Securities. | ||
(m) | Subscriber’s address set forth below is his or her or its correct residence or business address. | ||
(n) | Subscriber has full power and authority to make the representations referred to herein, to purchase the Securities and to execute and deliver this Subscription Agreement. |
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(o) | Subscriber understands that the foregoing representations and warranties are to be relied upon by the Company as a basis for the exemptions from registration and qualification of the sale of the Securities under the federal and state securities laws and for other purposes. | |
5. | Representations and Warranties Regarding Patriot Act; Anti-Money Laundering; OFAC. The Subscriber should check the Office of Foreign Assets Control (“OFAC”) website at http://www.treas.gov/ofac before making the following representations. Subscriber hereby represents and warrants to the Company as follows: | |
(a) | The Subscriber represents that (i) no part of the funds used by the Subscriber to acquire the Securities or to satisfy his/her capital commitment obligations with respect thereto has been, or shall be, directly or indirectly derived from, or related to, any activity that may contravene United States federal or state or non-United States laws or regulations, including anti-money laundering laws and regulations, and (ii) no capital commitment, contribution or payment to the Company by the Subscriber and no distribution to the Subscriber shall cause the Company to be in violation of any applicable anti-money laundering laws or regulations including, without limitation, Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001 and the United States Department of the Treasury Office of Foreign Assets Control regulations. The Subscriber acknowledges and agrees that, notwithstanding anything to the contrary contained in any other agreement, to the extent required by any anti-money laundering law or regulation, the Company may prohibit capital contributions, restrict distributions or take any other reasonably necessary or advisable action with respect to the Securities, and the Subscriber shall have no claim, and shall not pursue any claim, against the Company or any other person in connection therewith. U.S. federal regulations and executive orders administered by OFAC prohibit, among other things, the engagement in transactions with, and the provision of services to, certain foreign countries, territories, entities and individuals. The lists of OFAC prohibited countries, territories, persons and entities can be found on the OFAC website at http://www.treas.gov/ofac. In addition, the programs administered by OFAC (the “OFAC Programs”) prohibit dealing with individuals1 or entities in certain countries regardless of whether such individuals or entities appear on the OFAC lists. | |
(b) | To the best of the Subscriber’s knowledge, none of: (1) the Subscriber; (2) any person controlling or controlled by the Subscriber; (3) if the Subscriber is a privately-held entity, any person having a beneficial interest in the Subscriber; or (4) any person for whom the Subscriber is acting as agent or nominee in connection with this investment is a country, territory, individual or entity named on an OFAC list, or a person or entity prohibited under the OFAC Programs. Please be advised that the Company may not accept any amounts from a prospective investor if such prospective investor cannot make the representation set forth in this paragraph. The Subscriber agrees to promptly notify the Company should the Subscriber become aware of any change in the information set forth in these representations. The Subscriber understands and acknowledges that, by law, the Company may be obligated to “freeze the account” of the Subscriber, either by prohibiting additional subscriptions from the Subscriber, declining any redemption requests and/or segregating the assets in the account in compliance with governmental regulations, and any broker may also be required to report such action and to disclose the Subscriber’s identity to OFAC. The Subscriber further acknowledges that the Company may, by written notice to the Subscriber, suspend the redemption rights, if any, of the Subscriber if the Company reasonably deems it necessary to do so to comply with anti-money laundering regulations applicable to the Company or any Broker or any of the Company’s other service providers. These individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanctions and embargo programs. |
1 | These individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanctions and embargo programs. |
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(c) | To the best of the Subscriber’s knowledge, none of: (1) the Subscriber; (2) any person controlling or controlled by the Subscriber; (3) if the Subscriber is a privately-held entity, any person having a beneficial interest in the Subscriber; or (4) any person for whom the Subscriber is acting as agent or nominee in connection with this investment is a senior foreign political figure2, or any immediate family3 member or close associate4 of a senior foreign political figure, as such terms are defined in the footnotes below. | |
(d) | If the Subscriber is affiliated with a non-U.S. banking institution (a “Foreign Bank”), or if the Subscriber receives deposits from, makes payments on behalf of, or handles other financial transactions related to a Foreign Bank, the Subscriber represents and warrants to the Company that: (1) the Foreign Bank has a fixed address, other than solely an electronic address, in a country in which the Foreign Bank is authorized to conduct banking activities; (2) the Foreign Bank maintains operating records related to its banking activities; (3) the Foreign Bank is subject to inspection by the banking authority that licensed the Foreign Bank to conduct banking activities; and (4) the Foreign Bank does not provide banking services to any other Foreign Bank that does not have a physical presence in any country and that is not a regulated affiliate. | |
(e) | The Subscriber acknowledges that, to the extent applicable, the Company will seek to comply with the Foreign Account Tax Compliance Act provisions of the U.S. Internal Revenue Code and any rules, regulations, forms, instructions or other guidance issued in connection therewith (the “FATCA Provisions”). In furtherance of these efforts, the Subscriber agrees to promptly deliver any additional documentation or information, and updates thereto as applicable, which the Company may request in order to comply with the FATCA Provisions. The Subscriber acknowledges and agrees that, notwithstanding anything to the contrary contained in any side letter or any other agreement, the failure to promptly comply with such requests, or to provide such additional information, may result in the withholding of amounts with respect to, or other limitations on, distributions made to the Subscriber and such other reasonably necessary or advisable action by the Company with respect to the Securities (including, without limitation, required withdrawal), and the Subscriber shall have no claim, and shall not pursue any claim, against the Company or any other person in connection therewith |
2 | A “senior foreign political figure” is defined as a senior official in the executive, legislative, administrative, military or judicial branches of a foreign government (whether elected or not), a senior official of a major foreign political party, or a senior executive of a foreign government-owned corporation. In addition, a “senior foreign political figure” includes any corporation, business or other entity that has been formed by, or for the benefit of, a senior foreign political figure. |
3 | “Immediate family” of a senior foreign political figure typically includes the figure’s parents, siblings, spouse, children and in-laws. |
4 | A “close associate” of a senior foreign political figure is a person who is widely and publicly known to maintain an unusually close relationship with the senior foreign political figure, and includes a person who is in a position to conduct substantial domestic and international financial transactions on behalf of the senior foreign political figure. |
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The foregoing representations and warranties are true and accurate as of the date hereof and shall survive such date. If any of the above representations and warranties shall cease to be true and accurate prior to the acceptance of this Subscription Agreement, Subscriber shall give prompt notice of such fact to the Company by telegram, or facsimile or e-mail, specifying which representations and warranties are not true and accurate and the reasons therefor.
6. | Indemnification. Subscriber acknowledges that Subscriber understands the meaning and legal consequences of the representations and warranties made by Subscriber herein, and that the Company is relying on such representations and warranties in making the determination to accept or reject this Subscription Agreement. Subscriber hereby agrees to indemnify and hold harmless the Company and each employee and agent thereof from and against any and all losses, damages or liabilities due to or arising out of a breach of any representation or warranty of Subscriber contained in this Subscription Agreement. |
7. | Transferability. Subscriber agrees not to transfer or assign this Subscription Agreement, or any interest herein, and further agrees that the assignment and transferability of the Securities acquired pursuant hereto shall be made only in accordance with applicable federal and state securities laws. |
8. | Termination of Agreement; Return of Funds. In the event that, for any reason, this Subscription Agreement is rejected in its entirety by the Company, this Subscription Agreement shall be null and void and of no further force and effect, and no party shall have any rights against any other party hereunder. In the event that the Company rejects this Subscription Agreement, the Company shall promptly return or cause to be returned to Subscriber any money tendered hereunder without interest or deduction. |
9. | Notices. All notices or other communications given or made hereunder shall be in writing and shall be delivered or mailed by registered or certified mail, return receipt requested, postage prepaid, or delivered by, facsimile or e-mail to Subscriber at the address set forth below and to the Company at the address set forth above, or at such other place as the Company may designate by written notice to Subscriber. |
10. | Amendments. Neither this Subscription Agreement nor any term hereof may be changed, waived, discharged or terminated except in a writing signed by Subscriber and the Company. |
11. | Governing Law. This Subscription Agreement and all amendments hereto shall be governed by and construed in accordance with the laws of the State of Florida without application of the conflicts of laws provisions thereof. |
12. | Headings. The headings in this Subscription Agreement are for convenience of reference, and shall not by themselves determine the meaning of this Subscription Agreement or of any part hereof. |
13. | Counterparts. This Subscription Agreement may be executed in any number of counterparts with the same force and effect as if all parties had executed the same document. The execution and delivery of a facsimile or other electronic transmission of this Subscription Agreement shall constitute delivery of an executed original and shall be binding upon the person whose signature appears on the transmitted copy. |
14. | Continuing Obligation of Subscriber to Confirm Investor Status. Upon the request of the Company and for as long as the Subscriber holds Securities or other securities in the Company, the Subscriber shall confirm Subscriber’s investor status as an “Accredited Investor,” as defined by the Securities and Exchange Commission at the time of such request. In connection therewith, the Company shall deliver to the Subscriber a questionnaire that elicits the necessary information to determine the Subscriber’s investor status. Upon receipt of the questionnaire, the Subscriber shall: (i) complete it, (ii) execute the signature page therein, and (iii) return it to the Company, or its designee, in accordance with the instructions therein, no later than ten (10) days after receipt of the questionnaire. |
[Remainder of page intentionally left blank. Signatures appear on following pages.]
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INDIVIDUALS
In witness whereof, the parties hereto have executed this Agreement as of the dates set forth below.
Dated: February 23, 2021.
ACCEPTANCE | ||
NutraLife Biosciences, Inc. | ||
Date: February 23, 2021. | ||
By: | /s/ Edgar Ward | |
Name: | Edgar Ward | |
Title: | Chief Executive Officer |
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CORPORATIONS, PARTNERSHIPS, TRUSTS OR OTHER ENTITIES
In witness whereof, the parties hereto have executed this Agreement as of the dates set forth below.
Dated: __________________, 2020.
Name of Purchaser (Please Print): __________________________________
By: | __________________________________ |
Name (Please Print): | __________________________________ |
Title: | __________________________________ |
Address: | __________________________________ |
__________________________________ | |
__________________________________ | |
Phone Number: | (______) _______-___________________ |
Cellular Number: | (______) _______-___________________ |
Taxpayer ID Number/EIN: | __________________________________ |
Email address: | _________________@________________________ |
ACCEPTANCE | ||
NutraLife Biosciences, Inc. | ||
Date: _____________, 2020. | ||
By: | ||
Name: | Edgar Ward | |
Title: | Chief Executive Officer |
Page 13 |
Exhibit A
Promissory Note
(Attached)
Exhibit B
Warrant
(Attached)
Exhibit 10.70
Exhibit 10.71
Exhibit 10.72
NUTRALIFE BIOSCIENCES, INC.
SUBSCRIPTION AGREEMENT
The undersigned “Subscriber”, on the terms and conditions herein set forth, hereby irrevocable submits this subscription agreement (the “Subscription Agreement”) to NutraLife Biosciences, Inc., a Florida corporation (the “Company”), in connection with a private offering by the Company (the “Offering”) to raise a maximum of $200,000 through the sale to Subscriber as an “accredited investor” (as defined below) of a Promissory Note of the Company (a “Note”) and a Warrant of the Company (the “Warrant”) to acquire certain shares of common stock, par value $0.0001 per share, of the Company (the “Common Stock”).
The Company is offering up to $200,000 of aggregate principal amount of Notes and warrants to acquire up to 8,000,000 shares of Common Stock.
For each one dollar of aggregate principal amount of a Note that Subscriber subscribes for, the Subscriber shall be issued a warrant to acquire forty shares of Common Stock, at a price of $0.08 per share, subject to customary adjustments as set forth in the Warrant.
By way of example, and not limitation, in the event that Subscriber subscribed for a Note in the principal amount of $50,000, Subscriber will be issued a Warrant to acquire 2,000,000 shares of Common Stock.
The minimum subscription amount is a Note in the aggregate principal amount of $25,000, provided that the Company may accept subscriptions in lesser amounts in its sole discretion.
The principal amount of Note subscribed for and the Warrant to be issued is set forth below.
****
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Subscription:
The undersigned Subscriber, intending to be legally bound, hereby subscribes for:
(i) a Note in the principal amount of $35,000.00 (the “Subscription Amount”); and
(ii) A Warrant to acquire 1,400,000 shares of Common Stock.
The Note is attached to this Subscription Agreement as Exhibit A and the Warrant is attached to this Subscription Agreement as Exhibit B. The Note and the Warrant may be referred to herein collectively as the “Securities”.
The undersigned acknowledges that the Company is offering the Securities to those who are “accredited investors” as defined herein pursuant to of Rule 506(b) of Regulation D promulgated by the Securities Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”).
The undersigned agrees to execute this Subscription Agreement and if by mail, send to the Company. You as an individual or you on behalf of the subscribing entity are being asked to complete this Subscription Agreement so that a determination can be made as to whether or not you (it) are qualified to purchase the Securities under applicable federal and state securities laws. Your answers to the questions contained herein must be true and correct in all respects, and a false representation by you may constitute a violation of law for which a claim for damages may be made against you. Your answers will be kept strictly confidential; however, by signing this Subscription Agreement, you will be authorizing the Company to present a completed copy of this Subscription Agreement to such parties as they may deem appropriate in order to make certain that the offer and sale of the securities will not result in a violation of the Securities Act or of the securities laws of any state.
All questions must be answered. If the appropriate answer is “None” or “Not Applicable,” please state so. Please print or type your answers to all questions and attach additional sheets if necessary to complete your answers to any item. Please initial any corrections.
1. | Subscription for the Purchase of Securities. The undersigned Subscriber hereby subscribes to purchase the Securities as set forth above. Subscriber agrees to forward payment in the amount of the Subscription Price to the Company via one of the following methods: |
(a) | by wiring payment of the Subscription Amount in accordance with the information set forth below: |
For financial institutions in the United States, give your bank this information:
Send to: | BB&T | |
450 N. Pine Island Rd. Plantation, FL. 33324 | ||
ABA# 263191387 |
Page 2 |
For credit to: | NutraLife Biosciences, Inc. | |
Attn: Edgar Ward | ||
6601 Lyons Road, Suite L-6 | ||
Coconut Creek, FL 33073 | ||
Account # 241628361 |
For the benefit of: | NutraLife Biosciences, Inc. | |
6601 Lyons Rd. L-6 | ||
Coconut Creek Fl. 33073 | ||
United States | ||
888.509.8901 edgar.ward@nutralifebiosciences.com |
For financial institutions outside the United States, please contact the Company.
OR
(b) | by mailing a certified check in the amount of the Subscription Price, payable to “NutraLife Biosciences, Inc.”, to the Company as follows: |
NutraLife Biosciences, Inc.
Attn: Edgar Ward
6601 Lyons Road, Suite L-6
Coconut Creek, FL 33073
Regardless of whether paying by wire transfer or check, you must also deliver a fully completed and executed copy of this Subscription Agreement and an executed copy of the signature page to the Note and an executed copy of the signature page to the Warrant to the Company at:
NutraLife Biosciences, Inc.
Attn: Edgar Ward
6601 Lyons Road, Suite L-6
Coconut Creek, FL 33073
Subscriber recognizes and agrees that (i) this subscription is irrevocable and, if Subscriber is a natural person, shall survive Subscriber’s death, disability or other incapacity, and (ii) the Company has complete discretion to accept or to reject this Subscription Agreement in its entirety and shall have no liability for any rejection of this Subscription Agreement. This Subscription Agreement shall be deemed to be accepted by the Company only when it is executed by the Company.
Page 3 |
2. | Effect of Acceptance. Subscriber hereby acknowledges and agrees that on the Company’s acceptance of this Subscription Agreement, it shall become a binding and fully enforceable agreement between the Company and the Subscriber. As a result, upon acceptance by the Company of this Subscription Agreement, Subscriber will become the record and beneficial holder of the Securities and the Company will be entitled to receive the purchase price of the Securities as specified herein. By Subscriber’s execution of this Subscription Agreement, Subscriber agrees to the bound by the terms and conditions of the Note and the Warrant. |
3. | Representation as to Investor Status. In order for the Company to sell the Securities (in conformance with state and federal securities laws), the following information must be obtained regarding Subscriber’s investor status. Please initial each item applicable to you as an investor in the Company. |
(a) | Accredited Investor. Rule 501(a) of Regulation D defines an “accredited investor” as any person who comes within any of the following categories, or whom the issuer reasonably believes comes within any of the following categories, at the time of the sale of the securities to that person: |
(i) | x A natural person whose net worth, either individually or jointly with such person’s spouse, at the time of Subscriber’s purchase, exceeds $1,000,000. | |
(ii) | _____ A natural person who had an individual income in excess of $200,000, or joint income with that person’s spouse in excess of $300,000, in each of the two most recent years and reasonably expects to reach the same income level in the current year. | |
(iii) | _____ A bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary capacity. | |
(iv) | _____ A broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). | |
(v) | _____ An insurance company as defined in section 2(13) of the Exchange Act. | |
(vi) | _____ An investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act. | |
(vii) | _____ A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958. | |
(viii) | _____ A plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state, or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000. | |
(ix) | _____ An employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors. |
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(x) | _____ A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940. | |
(xi) | _____ An organization described in Section 501(c)(3) of the Internal Revenue Code, or a corporation, business trust or partnership, not formed for the specific purpose of acquiring the Securities, with total assets in excess of $5,000,000. | |
(xii) | _____ A director or executive officer of the Company. | |
(xiii) | _____ A trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, whose purchase is directed by a sophisticated person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of investing in the Company. | |
(xiv) | _____ An entity in which all of the equity owners qualify under any of the above subparagraphs. |
_________ Subscriber does not qualify under any of the investor categories set forth in Section (3)(a)(i) through Section (3)(a)(iv).
The term “net worth” means the excess of total assets over total liabilities (including personal and real property, but excluding the estimated fair market value of a person’s primary home).
In determining individual “income,” Subscriber should add to Subscriber’s individual taxable adjusted gross income (exclusive of any spousal income) any amounts attributable to tax exempt income received, losses claimed as a limited partner in any limited partnership, deductions claimed for depletion, contributions to an IRA or Keogh retirement plan, alimony payments, and any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross income.
(b) | Type of Subscriber. Indicate the form of entity of Subscriber: |
[x] | Individual | [ ] | Limited Partnership | |
[ ] | Corporation | [ ] | General Partnership |
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[ ] | Revocable Trust | [ ] | Other Type of Trust (indicate type): |
[ ] | Other (indicate form of organization): _____________________________________________________ |
(i) | If Subscriber is not an individual, indicate the approximate date Subscriber entity was formed: __________. |
(ii) | If Subscriber is not an individual, initial the line below which correctly describes the application of the following statement to Subscriber’s situation: Subscriber (x) was not organized or reorganized for the specific purpose of acquiring the Securities and (y) has made investments prior to the date hereof, and each beneficial owner thereof has and will share in the investment in proportion to his or her ownership interest in Subscriber. |
True
False
If the “False” box is checked, each person participating in the entity will be required to fill out a Subscription Agreement.
4. | Additional Representations and Warranties of Subscriber. Subscriber hereby represents and warrants to the Company as follows: |
(a) | Subscriber has been furnished all documents related to the Company and its operations as requested by Subscriber, and Subscriber has carefully read such documents. Subscriber has been furnished with all documents and materials relating to the business, finances and operations of the Company and information that Subscriber requested and deemed material to making an informed investment decision regarding its purchase of the Securities. Subscriber has been afforded the opportunity to review such documents and materials and the information contained therein. Subscriber has been afforded the opportunity to ask questions of the Company and its management. Subscriber understands that such discussions, as well as any written information provided by the Company, were intended to describe the aspects of the Company’s business and prospects which the Company believes to be material, but were not necessarily a thorough or exhaustive description, and except as expressly set forth in this Subscription Agreement, the Company makes no representation or warranty with respect to the completeness of such information and makes no representation or warranty of any kind with respect to any information provided by any entity other than the Company. Some of such information may include projections as to the future performance of the Company, which projections may not be realized, may be based on assumptions which may not be correct and may be subject to numerous factors beyond the Company’s control. Additionally, Subscriber understands and represents that Subscriber is purchasing the Securities notwithstanding the fact that the Company may disclose in the future certain material information that the Subscriber has not received, including the financial results of the Company for their current fiscal quarters. Neither such inquiries nor any other due diligence investigations conducted by such Subscriber shall modify, amend or affect such Subscriber’s right to rely on the Company’s representations and warranties, if any, contained in this Subscription Agreement. Subscriber has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its investment in the Securities. Subscriber has full power and authority to make the representations referred to herein, to purchase the Securities and to execute and deliver this Subscription Agreement. |
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(b) | Subscriber has read and understood, and is familiar with, this Subscription Agreement, the Securities and the business and financial affairs of the Company. | |
(c) | Subscriber, either personally, or together with Subscriber’s advisors (other than any securities broker/dealers who may receive compensation from the sale of any of the Securities), has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Securities, is able to bear the risks of an investment in the Securities and understands the risks of, and other considerations relating to, a purchase of a Unit. The Subscriber and its advisors have had a reasonable opportunity to ask questions of and receive answers from the Company concerning the Securities. Subscriber’s financial condition is such that Subscriber is able to bear the risk of holding the Securities that Subscriber may acquire pursuant to this Agreement, for an indefinite period of time, and the risk of loss of Subscriber’s entire investment in the Company. | |
(d) | Subscriber has investigated the acquisition of the Securities to the extent Subscriber deemed necessary or desirable and the Company has provided Subscriber with any reasonable assistance Subscriber has requested in connection therewith. | |
(e) | The Securities are being acquired for Subscriber’s own account for investment, with no intention by Subscriber to distribute or sell any portion thereof within the meaning of the Securities Act, and will not be transferred by Subscriber in violation of the Securities Act or the then applicable rules or regulations thereunder. No one other than Subscriber has any interest in or any right to acquire the Securities. Subscriber understands and acknowledges that the Company will have no obligation to recognize the ownership, beneficial or otherwise, of the Securities by anyone but Subscriber. | |
(f) | No representations or warranties have been made to Subscriber by the Company, or any representative of the Company, or any securities broker/dealer, other than as set forth in this Subscription Agreement. | |
(g) | Subscriber is aware that Subscriber’s rights to transfer the Securities is restricted by the Securities Act and applicable state securities laws, and Subscriber will not offer for sale, sell or otherwise transfer the Securities without registration under the Securities Act and qualification under the securities laws of all applicable states, unless such sale would be exempt therefrom. |
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(h) | Subscriber understands and agrees that the Securities have not been registered under the Securities Act or any state securities act in reliance on exemptions therefrom and that the Company has no obligation to register any of the Securities. | |
(i) | The Subscriber has had an opportunity to ask questions of, and receive answers from, representatives of the Company concerning the terms and conditions of this investment and all such questions have been answered to the full satisfaction of the undersigned. Subscriber understands that no person other than the Company has been authorized to make any representation and if made, such representation may not be relied on unless it is made in writing and signed by the Company. The Company has not, however, rendered any investment advice to the undersigned with respect to the suitability. | |
(j) | Subscriber understands that the certificates or other instruments representing the Securities shall bear a restrictive legend in substantially the following form (and a stop transfer order may be placed against transfer of such certificates): | |
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE SECURITIES LAWS, AND NO INTEREST MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION INVOLVING SAID SECURITIES, (B) THIS CORPORATION RECEIVES AN OPINION OF LEGAL COUNSEL FOR THE HOLDER OF THESE SECURITIES SATISFACTORY TO THIS CORPORATION STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION, OR (C) THIS CORPORATION OTHERWISE SATISFIES ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION. | ||
(k) | Subscriber also acknowledges and agrees to the following: |
(i) | an investment in the Securities is highly speculative and involves a high degree of risk of loss of the entire investment in the Company; and | |
(ii) | there is no assurance that a public market for the will be available and that, as a result, Subscriber may not be able to liquidate Subscriber’s investment in the Securities should a need arise to do so. |
(l) | Subscriber is not dependent for liquidity on any of the amounts Subscriber is investing in the Securities. | |
(m) | Subscriber’s address set forth below is his or her or its correct residence or business address. | |
(n) | Subscriber has full power and authority to make the representations referred to herein, to purchase the Securities and to execute and deliver this Subscription Agreement. | |
(o) | Subscriber understands that the foregoing representations and warranties are to be relied upon by the Company as a basis for the exemptions from registration and qualification of the sale of the Securities under the federal and state securities laws and for other purposes. |
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5. | Representations and Warranties Regarding Patriot Act; Anti-Money Laundering; OFAC. The Subscriber should check the Office of Foreign Assets Control (“OFAC”) website at http://www.treas.gov/ofac before making the following representations. Subscriber hereby represents and warrants to the Company as follows: |
(a) | The Subscriber represents that (i) no part of the funds used by the Subscriber to acquire the Securities or to satisfy his/her capital commitment obligations with respect thereto has been, or shall be, directly or indirectly derived from, or related to, any activity that may contravene United States federal or state or non-United States laws or regulations, including anti-money laundering laws and regulations, and (ii) no capital commitment, contribution or payment to the Company by the Subscriber and no distribution to the Subscriber shall cause the Company to be in violation of any applicable anti-money laundering laws or regulations including, without limitation, Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001 and the United States Department of the Treasury Office of Foreign Assets Control regulations. The Subscriber acknowledges and agrees that, notwithstanding anything to the contrary contained in any other agreement, to the extent required by any anti-money laundering law or regulation, the Company may prohibit capital contributions, restrict distributions or take any other reasonably necessary or advisable action with respect to the Securities, and the Subscriber shall have no claim, and shall not pursue any claim, against the Company or any other person in connection therewith. U.S. federal regulations and executive orders administered by OFAC prohibit, among other things, the engagement in transactions with, and the provision of services to, certain foreign countries, territories, entities and individuals. The lists of OFAC prohibited countries, territories, persons and entities can be found on the OFAC website at http://www.treas.gov/ofac. In addition, the programs administered by OFAC (the “OFAC Programs”) prohibit dealing with individuals1 or entities in certain countries regardless of whether such individuals or entities appear on the OFAC lists. | |
(b) | To the best of the Subscriber’s knowledge, none of: (1) the Subscriber; (2) any person controlling or controlled by the Subscriber; (3) if the Subscriber is a privately-held entity, any person having a beneficial interest in the Subscriber; or (4) any person for whom the Subscriber is acting as agent or nominee in connection with this investment is a country, territory, individual or entity named on an OFAC list, or a person or entity prohibited under the OFAC Programs. Please be advised that the Company may not accept any amounts from a prospective investor if such prospective investor cannot make the representation set forth in this paragraph. The Subscriber agrees to promptly notify the Company should the Subscriber become aware of any change in the information set forth in these representations. The Subscriber understands and acknowledges that, by law, the Company may be obligated to “freeze the account” of the Subscriber, either by prohibiting additional subscriptions from the Subscriber, declining any redemption requests and/or segregating the assets in the account in compliance with governmental regulations, and any broker may also be required to report such action and to disclose the Subscriber’s identity to OFAC. The Subscriber further acknowledges that the Company may, by written notice to the Subscriber, suspend the redemption rights, if any, of the Subscriber if the Company reasonably deems it necessary to do so to comply with anti-money laundering regulations applicable to the Company or any Broker or any of the Company’s other service providers. These individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanctions and embargo programs. |
1 | These individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanctions and embargo programs. |
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(c) | To the best of the Subscriber’s knowledge, none of: (1) the Subscriber; (2) any person controlling or controlled by the Subscriber; (3) if the Subscriber is a privately-held entity, any person having a beneficial interest in the Subscriber; or (4) any person for whom the Subscriber is acting as agent or nominee in connection with this investment is a senior foreign political figure2, or any immediate family3 member or close associate4 of a senior foreign political figure, as such terms are defined in the footnotes below. | |
(d) | If the Subscriber is affiliated with a non-U.S. banking institution (a “Foreign Bank”), or if the Subscriber receives deposits from, makes payments on behalf of, or handles other financial transactions related to a Foreign Bank, the Subscriber represents and warrants to the Company that: (1) the Foreign Bank has a fixed address, other than solely an electronic address, in a country in which the Foreign Bank is authorized to conduct banking activities; (2) the Foreign Bank maintains operating records related to its banking activities; (3) the Foreign Bank is subject to inspection by the banking authority that licensed the Foreign Bank to conduct banking activities; and (4) the Foreign Bank does not provide banking services to any other Foreign Bank that does not have a physical presence in any country and that is not a regulated affiliate. | |
(e) | The Subscriber acknowledges that, to the extent applicable, the Company will seek to comply with the Foreign Account Tax Compliance Act provisions of the U.S. Internal Revenue Code and any rules, regulations, forms, instructions or other guidance issued in connection therewith (the “FATCA Provisions”). In furtherance of these efforts, the Subscriber agrees to promptly deliver any additional documentation or information, and updates thereto as applicable, which the Company may request in order to comply with the FATCA Provisions. The Subscriber acknowledges and agrees that, notwithstanding anything to the contrary contained in any side letter or any other agreement, the failure to promptly comply with such requests, or to provide such additional information, may result in the withholding of amounts with respect to, or other limitations on, distributions made to the Subscriber and such other reasonably necessary or advisable action by the Company with respect to the Securities (including, without limitation, required withdrawal), and the Subscriber shall have no claim, and shall not pursue any claim, against the Company or any other person in connection therewith |
2 | A “senior foreign political figure” is defined as a senior official in the executive, legislative, administrative, military or judicial branches of a foreign government (whether elected or not), a senior official of a major foreign political party, or a senior executive of a foreign government-owned corporation. In addition, a “senior foreign political figure” includes any corporation, business or other entity that has been formed by, or for the benefit of, a senior foreign political figure. |
3 | “Immediate family” of a senior foreign political figure typically includes the figure’s parents, siblings, spouse, children and in-laws. |
4 | A “close associate” of a senior foreign political figure is a person who is widely and publicly known to maintain an unusually close relationship with the senior foreign political figure, and includes a person who is in a position to conduct substantial domestic and international financial transactions on behalf of the senior foreign political figure. |
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The foregoing representations and warranties are true and accurate as of the date hereof and shall survive such date. If any of the above representations and warranties shall cease to be true and accurate prior to the acceptance of this Subscription Agreement, Subscriber shall give prompt notice of such fact to the Company by telegram, or facsimile or e-mail, specifying which representations and warranties are not true and accurate and the reasons therefor.
6. | Indemnification. Subscriber acknowledges that Subscriber understands the meaning and legal consequences of the representations and warranties made by Subscriber herein, and that the Company is relying on such representations and warranties in making the determination to accept or reject this Subscription Agreement. Subscriber hereby agrees to indemnify and hold harmless the Company and each employee and agent thereof from and against any and all losses, damages or liabilities due to or arising out of a breach of any representation or warranty of Subscriber contained in this Subscription Agreement. |
7. | Transferability. Subscriber agrees not to transfer or assign this Subscription Agreement, or any interest herein, and further agrees that the assignment and transferability of the Securities acquired pursuant hereto shall be made only in accordance with applicable federal and state securities laws. |
8. | Termination of Agreement; Return of Funds. In the event that, for any reason, this Subscription Agreement is rejected in its entirety by the Company, this Subscription Agreement shall be null and void and of no further force and effect, and no party shall have any rights against any other party hereunder. In the event that the Company rejects this Subscription Agreement, the Company shall promptly return or cause to be returned to Subscriber any money tendered hereunder without interest or deduction. |
9. | Notices. All notices or other communications given or made hereunder shall be in writing and shall be delivered or mailed by registered or certified mail, return receipt requested, postage prepaid, or delivered by, facsimile or e-mail to Subscriber at the address set forth below and to the Company at the address set forth above, or at such other place as the Company may designate by written notice to Subscriber. |
10. | Amendments. Neither this Subscription Agreement nor any term hereof may be changed, waived, discharged or terminated except in a writing signed by Subscriber and the Company. |
11. | Governing Law. This Subscription Agreement and all amendments hereto shall be governed by and construed in accordance with the laws of the State of Florida without application of the conflicts of laws provisions thereof. |
12. | Headings. The headings in this Subscription Agreement are for convenience of reference, and shall not by themselves determine the meaning of this Subscription Agreement or of any part hereof. |
13. | Counterparts. This Subscription Agreement may be executed in any number of counterparts with the same force and effect as if all parties had executed the same document. The execution and delivery of a facsimile or other electronic transmission of this Subscription Agreement shall constitute delivery of an executed original and shall be binding upon the person whose signature appears on the transmitted copy. |
14. | Continuing Obligation of Subscriber to Confirm Investor Status. Upon the request of the Company and for as long as the Subscriber holds Securities or other securities in the Company, the Subscriber shall confirm Subscriber’s investor status as an “Accredited Investor,” as defined by the Securities and Exchange Commission at the time of such request. In connection therewith, the Company shall deliver to the Subscriber a questionnaire that elicits the necessary information to determine the Subscriber’s investor status. Upon receipt of the questionnaire, the Subscriber shall: (i) complete it, (ii) execute the signature page therein, and (iii) return it to the Company, or its designee, in accordance with the instructions therein, no later than ten (10) days after receipt of the questionnaire. |
[Remainder of page intentionally left blank. Signatures appear on following pages.]
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INDIVIDUALS
In witness whereof, the parties hereto have executed this Agreement as of the dates set forth below.
Dated: 01/27/2021
ACCEPTANCE | ||
NutraLife Biosciences, Inc. | ||
Date: 01/27/2021 | By: | /s/ Edgar Ward |
Name: | Edgar Ward | |
Title: | Chief Executive Officer |
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CORPORATIONS, PARTNERSHIPS, TRUSTS OR OTHER ENTITIES
In witness whereof, the parties hereto have executed this Agreement as of the dates set forth below.
Dated: ___________, 2020.
Name of Purchaser (Please Print): | ||
By: | ||
Name (Please Print): | ||
Title: | ||
Address: | ||
Phone Number: | (____) _____ - __________________________ |
Cellular Number: | (____) _____ - __________________________ |
Taxpayer ID Number/EIN : | _____________________________________ |
Email address: | _______________ @ ____________________ |
ACCEPTANCE | ||
NutraLife Biosciences, Inc. | ||
Date:_____________ , 2020. | By: | |
Name: | Edgar Ward | |
Title: | Chief Executive Officer |
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Exhibit A
Promissory Note
(Attached)
Exhibit B
Warrant
(Attached)
Exhibit 10.73
Exhibit 10.74
Exhibit 10.75
Exhibit 10.76
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION ARE NOT REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS NOTE IS FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE SET FORTH HEREIN.
Principal Amount: $20,000.00 | Issue Date: January 11, 2021 |
NutraLife Biosciences, Inc.
10% PROMISSORY NOTE
FOR VALUE RECEIVED, pursuant to the terms and conditions of this 10% Promissory Note (this “Note”), NutraLife Biosciences, Inc., a Florida corporation (the “Company”), hereby promises to pay to the order of the holder as set forth on the signature page hereof, or registered assigns (the “Holder”), on the one year anniversary of the Issue Date as set forth above (the “Maturity Date”) or earlier as required pursuant to this Note, the principal amount as set forth above (the “Principal Amount”), and to pay interest on the outstanding Principal Amount as set forth herein in each case to the extent that this Note and the Principal Amount and any accrued interest hereunder (the “Indebtedness”) has not been repaid by the Company as of such applicable date. Interest shall commence accruing on the date hereof (the “Issue Date”), computed on the basis of a 365-day year and the actual number of days elapsed, and shall be payable as set forth herein.
This Note is entered into pursuant to a Subscription Agreement by and between the Company and the Holder dated as of the Issue Date (the “Agreement”) and is subject to the terms and conditions thereof.
This Note is not a certificate of deposit or similar obligation of, and is not guaranteed or insured by, any depository institution, the Federal Deposit Insurance Corporation, the Securities Holder Protection Corporation or any other governmental or private fund or entity.
The following terms shall apply to this Note:
Section 1. Definitions. Defined terms used herein without definition have the meanings given them in the Agreement. The Company and the Holder may be referred to herein individually as a “Party” and collectively as the “Parties”.
Section 2. Interest; Late Fees; Prepayment.
(a) Interest shall accrue on the Principal Amount at the rate of ten percent (10%) per annum, simple interest, non-compounded basis (the “Interest”). To the extent not earlier repaid as set forth herein, the Principal Amount and the accrued and unpaid Interest (collectively, the “Indebtedness”) shall be due and payable in full on the Maturity Date or such earlier date as the Indebtedness may be due hereunder pursuant to the terms herein. No payments of the Principal Amount or Interest herein shall be required prior to the Maturity Date.
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(b) The Company may prepay all or any portion of the Principal Amount and any accrued and unpaid Interest at any time.
(c) Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.
Section 3. Events of Default.
(a) The Holder may elect to declare an “Event of Default” if any of the following conditions or events shall occur and be continuing:
(i) | the Company fails to pay the then-outstanding Indebtedness on any date any such amounts become due and payable, and any such failure is not cured within three Business Days of written notice thereof by Holder; | |
(ii) | any representation or warranty of the Company is materially false or untrue when given; | |
(iii) | the Company fails to comply in any material respect with any other covenant or agreement in this Note or in the Agreement and any such failure is not cured within three Business Days of written notice thereof by Holder; | |
(iv) | the Company shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator; (ii) make a general assignment for the benefit of the Company’s creditors; or | |
(iii) | commence a voluntary case under the U.S. Bankruptcy Code as now and hereafter in effect, or any successor statute; or | |
(v) | a proceeding or case shall be commenced, without the application or consent of the Company, in any court of competent jurisdiction, seeking (1) liquidation, reorganization or other relief with respect to it or its assets or the composition or readjustment of its debts, or (2) the appointment of a trustee, receiver, custodian, liquidator or the like of any substantial part of its assets, and, in each case, such proceedings or case shall continue undismissed, or an order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 60 days, if in the United States, or 90 days, if outside of the United States; or an order for relief against the Company shall be entered in an involuntary case under any bankruptcy, insolvency, composition, readjustment of debt, liquidation of assets or similar Law of any jurisdiction. | |
(b) Consequences of Events of Default. If an Event of Default has occurred and is continuing (i) the Holder may, by notice to the Company, declare all or any portion of the then- outstanding Indebtedness due and payable, and the Note and the then-outstanding Indebtedness shall thereupon become immediately due and payable in cash and (ii) the Holder shall have the right to pursue any other remedies that the Holder may have under applicable law.
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Section 4. Miscellaneous.
(a) Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of this Note, and of the ownership hereof reasonably satisfactory to the Company.
(b) Entire Agreement. This Note (including any recitals hereto) and the Agreement set forth the entire understanding of the Parties with respect to the subject matter hereof, and shall not be modified or affected by any offer, proposal, statement or representation, oral or written, made by or for any Party in connection with the negotiation of the terms hereof, and may be modified only by instruments signed by the Company and the Holder.
(c) Notices. All notices under this Note shall be in writing. Notices may be served by certified or registered mail, postage paid with return receipt requested; by private courier, prepaid; by other reliable form of electronic communication; or personally. Mailed notices shall be deemed delivered five (5) days after mailing, properly addressed. Couriered notices shall be deemed delivered on the date that the courier warrants that delivery will occur. Electronic communication notices shall be deemed delivered when receipt is either confirmed by confirming transmission equipment or acknowledged by the addressee or its office. Personal delivery shall be effective when accomplished. Any Party may change its address by giving notice, in writing, stating its new address, to the other Party. Subject to the forgoing, notices shall be sent as follows:
If to the Company:
NutraLife Biosciences, Inc.
Attn: Edgar Ward
6601 Lyons Road, Suite L-6
Coconut Creek, FL 33073
Email: edgar@nutralifebiosciences.com
If to Holder, to the address of Holder as set forth in the Agreement.
(d) No Waiver. No waiver of any provision of this Note shall be effective unless it is in writing and signed by the Party against whom it is asserted, and any such written waiver shall only be applicable to the specific instance to which it relates and shall not be deemed to be a continuing or future waiver.
(e) Headings. The article and section headings contained in this Note are inserted for convenience only and shall not affect in any way the meaning or interpretation of the Note.
(f) Governing Law. This Note, and any dispute arising out of, relating to, or in connection with this Note, shall be governed by and construed in accordance with the laws of the State of Florida, without giving effect to any choice or conflict of law provision or rule (whether of the State of Florida or of any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Florida.
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(g) Enforcement of the Note; Jurisdiction; No Jury Trial.
(i) | Each of the Parties irrevocably agrees that any legal action or proceeding with respect to this Note and the rights and obligations arising under this Note, or for recognition and enforcement of any judgment or arbitral award or resolution in respect of this Note, shall be brought and determined exclusively in the courts of the State of Florida located in Broward County, Florida or in the event (but only in the event) that such courts do not have subject matter jurisdiction over such action or proceeding, in the United States District Court sitting in Broward County, Florida (the “Selected Courts”). Each of the Parties hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the Selected Courts and agrees that it will not bring any action relating to this Note or any of the transactions contemplated by this Note in any court other than the Selected Courts. Each of the Parties hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Note, (a) any claim that it is not personally subject to the jurisdiction of the Selected Courts for any reason other than the failure to serve in accordance with the provisions of this Note; (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise); and (c) to the fullest extent permitted by law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum; (ii) the venue of such suit, action or proceeding is improper; or (iii) this Note, or the subject matter of this Note, may not be enforced in or by the Selected Courts. | |
(ii) | EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR OTHER PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER, RELATING TO OR IN CONNECTION WITH THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. | |
(iii) | The Holder hereby expressly acknowledges that the agreements and restrictions contained herein are reasonable and necessary to protect the Company’s legitimate interests, that the Company would not have entered into this Note in the absence of such agreements and restrictions, and that any violation of such restrictions will result in irreparable harm to the Company. The Holder agrees that the Company shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, and specific performance of, as well as an equitable accounting of all earnings, profits and other benefits arising from any violation of, the agreements and restrictions contained herein, which rights shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled. The Holder irrevocably and unconditionally (i) agrees that any legal proceeding arising out of this Note may be brought in the Selected Courts, (ii) consents to the non-exclusive jurisdiction of the Selected Courts in any such proceeding, and (iii) waives any objection to the laying of venue of any such proceeding in any Selected Court. |
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(h) Attorneys’ Fees. If any Party hereto is required to engage in litigation against any other Party, either as plaintiff or as defendant, in order to enforce or defend any rights under this Note, and such litigation results in a final judgment in favor of such Party (“Prevailing Party”), then the party or parties against whom said final judgment is obtained shall reimburse the Prevailing Party for all direct, indirect or incidental expenses incurred, including, but not limited to, all attorneys’ fees, court costs and other expenses incurred throughout all negotiations, trials or appeals undertaken in order to enforce the Prevailing Party’s rights hereunder.
(i) Usury Savings Clause. Notwithstanding any provision in this Note to the contrary, the total liability for payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions, or other sums which may at any time be deemed to be interest, shall not exceed the limit imposed by the usury laws of the jurisdiction governing this Note or any other applicable law. In the event the total liability of payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions or other sums which may at any time be deemed to be interest, shall, for any reason whatsoever, result in an effective rate of interest, which for any month or other interest payment period exceeds the limit imposed by the usury laws of the jurisdiction governing this Note, all sums in excess of those lawfully collectible as interest for the period in question shall, without further agreement or notice by, between, or to any party hereto, be applied to the reduction of the outstanding principal balance due hereunder immediately upon receipt of such sums by the Holder hereof, with the same force and effect as though the Company had specifically designated such excess sums to be so applied to the reduction of the principal balance then outstanding, and the Holder hereof had agreed to accept such sums as a penalty-free payment of principal; provided, however, that the Holder may, at any time and from time to time, elect, by notice in writing to the Company, to waive, reduce, or limit the collection of any sums in excess of those lawfully collectible as interest, rather than accept such sums as a prepayment of the principal balance then outstanding. It is the intention of the Parties that the Company does not intend or expect to pay, nor does the Holder intend or expect to charge or collect any interest under this Note greater than the highest non-usurious rate of interest which may be charged under applicable law.
(j) Parties in Interest. This Note shall be binding upon and inure solely to the benefit of each Party, and nothing in this Note, express or implied, is intended to confer upon any other person or entity any rights or remedies of any nature under or by reason of this Note.
(k) Severability; Expenses; Further Assurances. If any term, condition or other provision of this Note is determined by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms, conditions and provisions of this Note shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by this Note is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Note so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated by this Note be consummated as originally contemplated to the fullest extent possible. Except as otherwise specifically provided in this Note, each Party shall be responsible for the expenses it may incur in connection with the negotiation, preparation, execution, delivery, performance and enforcement of this Note. The Parties shall from time to time do and perform any additional acts and execute and deliver any additional documents and instruments that may be required by Law or reasonably requested by any Party to establish, maintain or protect its rights and remedies under, or to effect the intents and purposes of, this Note.
(l) Execution in Counterparts, Electronic Transmission. This Note may be executed in any number of counterparts, each of which shall be deemed an original. The signature of any Party which is transmitted by any reliable electronic means such as, but not limited to, a photocopy, electronically scanned or facsimile machine, for purposes hereof, is to be considered as an original signature, and the document transmitted is to be considered to have the same binding effect as an original signature or an original document.
(m) No Assignment. This Note may not be assigned by either Party without the prior written consent of the other Party in its sole discretion.
(n) Currency. All dollar amounts are in U.S. dollars.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned has executed this Note as of the Issue Date.
NutraLife Biosciences, Inc. | ||
By: | /s/ Edgar Ward | |
Name: | Edgar Ward | |
Title: | Chief Executive Officer |
Agreed and accepted:
Holder name: Gregory Ross | ||
By: | /s/ Gregory Ross | |
Name: | Gregory Ross |
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Exhibit 10.77
NutraLife Biosciences, Inc.
Subscription Agreement
The undersigned “Subscriber”, on the terms and conditions herein set forth, hereby irrevocable submits this subscription agreement (the “Subscription Agreement”) to NutraLife Biosciences, Inc., a Florida corporation (the “Company”), in connection with a private offering by the Company (the “Offering”) to raise a maximum of $200,000 through the sale to Subscriber as an “accredited investor” (as defined below) of a Promissory Note of the Company (a “Note”) and a Warrant of the Company (the “Warrant”) to acquire certain shares of common stock, par value $0.0001 per share, of the Company (the “Common Stock”).
The Company is offering up to $200,000 of aggregate principal amount of Notes and warrants to acquire up to 8,000,000 shares of Common Stock.
For each one dollar of aggregate principal amount of a Note that Subscriber subscribes for, the Subscriber shall be issued a warrant to acquire forty shares of Common Stock, at a price of $0.08 per share, subject to customary adjustments as set forth in the Warrant.
By way of example, and not limitation, in the event that Subscriber subscribed for a Note in the principal amount of $50,000, Subscriber will be issued a Warrant to acquire 2,000,000 shares of Common Stock.
The minimum subscription amount is a Note in the aggregate principal amount of $25,000, provided that the Company may accept subscriptions in lesser amounts in its sole discretion.
The principal amount of Note subscribed for and the Warrant to be issued is set forth below.
****
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Subscription:
The undersigned Subscriber, intending to be legally bound, hereby subscribes for:
(i) | a Note in the principal amount of $20,000.00 (the “Subscription Amount”); and | |
(ii) | A Warrant to acquire 800,000 shares of Common Stock. |
The Note is attached to this Subscription Agreement as Exhibit A and the Warrant is attached to this Subscription Agreement as Exhibit B. The Note and the Warrant may be referred to herein collectively as the “Securities”.
The undersigned acknowledges that the Company is offering the Securities to those who are “accredited investors” as defined herein pursuant to of Rule 506(b) of Regulation D promulgated by the Securities Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”).
The undersigned agrees to execute this Subscription Agreement and if by mail, send to the Company. You as an individual or you on behalf of the subscribing entity are being asked to complete this Subscription Agreement so that a determination can be made as to whether or not you (it) are qualified to purchase the Securities under applicable federal and state securities laws. Your answers to the questions contained herein must be true and correct in all respects, and a false representation by you may constitute a violation of law for which a claim for damages may be made against you. Your answers will be kept strictly confidential; however, by signing this Subscription Agreement, you will be authorizing the Company to present a completed copy of this Subscription Agreement to such parties as they may deem appropriate in order to make certain that the offer and sale of the securities will not result in a violation of the Securities Act or of the securities laws of any state.
All questions must be answered. If the appropriate answer is “None” or “Not Applicable,” please state so. Please print or type your answers to all questions and attach additional sheets if necessary to complete your answers to any item. Please initial any corrections.
1. | Subscription for the Purchase of Securities. The undersigned Subscriber hereby subscribes to purchase the Securities as set forth above. Subscriber agrees to forward payment in the amount of the Subscription Price to the Company via one of the following methods: | |
(a) | by wiring payment of the Subscription Amount in accordance with the information set forth below: |
For financial institutions in the United States, give your bank this information:
Send to: | BB&T | |
450 N. Pine Island Rd. Plantation, FL. 33324 | ||
ABA# 263191387 |
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For credit to: | NutraLife Biosciences, Inc. | |
Attn: Edgar Ward | ||
6601 Lyons Road, Suite L-6 | ||
Coconut Creek, FL 33073 | ||
Account # 241628361 |
For the benefit of: | NutraLife Biosciences, Inc. | |
6601 Lyons Rd. L-6 | ||
Coconut Creek Fl. 33073 | ||
United States | ||
561.212.3816 edgar.ward@nutralifebiosciences.com |
For financial institutions outside the United States, please contact the Company.
OR
(b) | by mailing a certified check in the amount of the Subscription Price, payable to “NutraLife Biosciences, Inc.”, to the Company as follows: |
NutraLife Biosciences, Inc.
Attn: Edgar Ward
6601 Lyons Road, Suite L-6
Coconut Creek, FL 33073
Regardless of whether paying by wire transfer or check, you must also deliver a fully completed and executed copy of this Subscription Agreement and an executed copy of the signature page to the Note and an executed copy of the signature page to the Warrant to the Company at:
NutraLife Biosciences, Inc.
Attn: Edgar Ward
6601 Lyons Road, Suite L-6
Coconut Creek, FL 33073
Subscriber recognizes and agrees that (i) this subscription is irrevocable and, if Subscriber is a natural person, shall survive Subscriber’s death, disability or other incapacity, and (ii) the Company has complete discretion to accept or to reject this Subscription Agreement in its entirety and shall have no liability for any rejection of this Subscription Agreement. This Subscription Agreement shall be deemed to be accepted by the Company only when it is executed by the Company.
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2. | Effect of Acceptance. Subscriber hereby acknowledges and agrees that on the Company’s acceptance of this Subscription Agreement, it shall become a binding and fully enforceable agreement between the Company and the Subscriber. As a result, upon acceptance by the Company of this Subscription Agreement, Subscriber will become the record and beneficial holder of the Securities and the Company will be entitled to receive the purchase price of the Securities as specified herein. By Subscriber’s execution of this Subscription Agreement, Subscriber agrees to the bound by the terms and conditions of the Note and the Warrant. |
3. | Representation as to Investor Status. In order for the Company to sell the Securities (in conformance with state and federal securities laws), the following information must be obtained regarding Subscriber’s investor status. Please initial each item applicable to you as an investor in the Company. |
(a) | Accredited Investor. Rule 501(a) of Regulation D defines an “accredited investor” as any person who comes within any of the following categories, or whom the issuer reasonably believes comes within any of the following categories, at the time of the sale of the securities to that person: | ||
(i) | _____ A natural person whose net worth, either individually or jointly with such person’s spouse, at the time of Subscriber’s purchase, exceeds $1,000,000. | ||
(ii) | GR A natural person who had an individual income in excess of $200,000, or joint income with that person’s spouse in excess of $300,000, in each of the two most recent years and reasonably expects to reach the same income level in the current year. | ||
(iii) | _____ A bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary capacity. | ||
(iv) | _____ A broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). | ||
(v) | _____ An insurance company as defined in section 2(13) of the Exchange Act. | ||
(vi) | _____ An investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act. | ||
(vii) | _____ A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958. | ||
(viii) | _____ A plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state, or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000. | ||
(ix) | _____ An employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors. |
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(x) | _____ A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940. | ||
(xi) | _____ An organization described in Section 501(c)(3) of the Internal Revenue Code, or a corporation, business trust or partnership, not formed for the specific purpose of acquiring the Securities, with total assets in excess of $5,000,000. | ||
(xii) | _____ A director or executive officer of the Company. | ||
(xiii) | _____ A trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, whose purchase is directed by a sophisticated person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of investing in the Company. | ||
(xiv) | _____ An entity in which all of the equity owners qualify under any of the above subparagraphs. | ||
________ Subscriber does not qualify under any of the investor categories set forth in Section (3)(a)(i) through Section (3)(a)(iv). | |||
The term “net worth” means the excess of total assets over total liabilities (including personal and real property, but excluding the estimated fair market value of a person’s primary home). | |||
In determining individual “income,” Subscriber should add to Subscriber’s individual taxable adjusted gross income (exclusive of any spousal income) any amounts attributable to tax exempt income received, losses claimed as a limited partner in any limited partnership, deductions claimed for depletion, contributions to an IRA or Keogh retirement plan, alimony payments, and any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross income. | |||
(b) | Type of Subscriber. Indicate the form of entity of Subscriber: |
[X] | Individual | [ ] | Limited Partnership | |
[ ] | Corporation | [ ] | General Partnership | |
[ ] | Revocable Trust | [ ] | Other Type of Trust (indicate type): ___________ | |
[ ] | Other (indicate form of organization): _________________________________________________ | |||
(i) | If Subscriber is not an individual, indicate the approximate date Subscriber entity was formed: ________________________. |
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(ii) | If Subscriber is not an individual, initial the line below which correctly describes the application of the following statement to Subscriber’s situation: Subscriber (x) was not organized or reorganized for the specific purpose of acquiring the Securities and (y) has made investments prior to the date hereof, and each beneficial owner thereof has and will share in the investment in proportion to his or her ownership interest in Subscriber. |
________ True
________ False
If the “False” box is checked, each person participating in the entity will be required to fill out a Subscription Agreement. |
4. | Additional Representations and Warranties of Subscriber. Subscriber hereby represents and warrants to the Company as follows: | |
(a) | Subscriber has been furnished all documents related to the Company and its operations as requested by Subscriber, and Subscriber has carefully read such documents. Subscriber has been furnished with all documents and materials relating to the business, finances and operations of the Company and information that Subscriber requested and deemed material to making an informed investment decision regarding its purchase of the Securities. Subscriber has been afforded the opportunity to review such documents and materials and the information contained therein. Subscriber has been afforded the opportunity to ask questions of the Company and its management. Subscriber understands that such discussions, as well as any written information provided by the Company, were intended to describe the aspects of the Company’s business and prospects which the Company believes to be material, but were not necessarily a thorough or exhaustive description, and except as expressly set forth in this Subscription Agreement, the Company makes no representation or warranty with respect to the completeness of such information and makes no representation or warranty of any kind with respect to any information provided by any entity other than the Company. Some of such information may include projections as to the future performance of the Company, which projections may not be realized, may be based on assumptions which may not be correct and may be subject to numerous factors beyond the Company’s control. Additionally, Subscriber understands and represents that Subscriber is purchasing the Securities notwithstanding the fact that the Company may disclose in the future certain material information that the Subscriber has not received, including the financial results of the Company for their current fiscal quarters. Neither such inquiries nor any other due diligence investigations conducted by such Subscriber shall modify, amend or affect such Subscriber’s right to rely on the Company’s representations and warranties, if any, contained in this Subscription Agreement. Subscriber has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its investment in the Securities. Subscriber has full power and authority to make the representations referred to herein, to purchase the Securities and to execute and deliver this Subscription Agreement. |
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(b) | Subscriber has read and understood, and is familiar with, this Subscription Agreement, the Securities and the business and financial affairs of the Company. | |
(c) | Subscriber, either personally, or together with Subscriber’s advisors (other than any securities broker/dealers who may receive compensation from the sale of any of the Securities), has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Securities, is able to bear the risks of an investment in the Securities and understands the risks of, and other considerations relating to, a purchase of a Unit. The Subscriber and its advisors have had a reasonable opportunity to ask questions of and receive answers from the Company con-cerning the Securities. Subscriber’s financial condition is such that Subscriber is able to bear the risk of holding the Securities that Subscriber may acquire pursuant to this Subscription Agreement, for an indefinite period of time, and the risk of loss of Subscriber’s entire investment in the Company. | |
(d) | Subscriber has investigated the acquisition of the Securities to the extent Subscriber deemed necessary or desirable and the Company has provided Subscriber with any reasonable assistance Subscriber has requested in connection therewith. | |
(e) | The Securities are being acquired for Subscriber’s own account for investment, with no intention by Subscriber to distribute or sell any portion thereof within the meaning of the Securities Act, and will not be transferred by Subscriber in violation of the Securities Act or the then applicable rules or regulations thereunder. No one other than Subscriber has any interest in or any right to acquire the Securities. Subscriber understands and acknowledges that the Company will have no obligation to recognize the ownership, beneficial or otherwise, of the Securities by anyone but Subscriber. | |
(f) | No representations or warranties have been made to Subscriber by the Company, or any representative of the Company, or any securities broker/dealer, other than as set forth in this Subscription Agreement. | |
(g) | Subscriber is aware that Subscriber’s rights to transfer the Securities is restricted by the Securities Act and applicable state securities laws, and Subscriber will not offer for sale, sell or otherwise transfer the Securities without registration under the Securities Act and qualification under the securities laws of all applicable states, unless such sale would be exempt therefrom. | |
(h) | Subscriber understands and agrees that the Securities have not been registered under the Securities Act or any state securities act in reliance on exemptions therefrom and that the Company has no obligation to register any of the Securities. | |
(i) | The Subscriber has had an opportunity to ask questions of, and receive answers from, representatives of the Company concerning the terms and conditions of this investment and all such questions have been answered to the full satisfaction of the undersigned. Subscriber understands that no person other than the Company has been authorized to make any representation and if made, such representation may not be relied on unless it is made in writing and signed by the Company. The Company has not, however, rendered any investment advice to the undersigned with respect to the suitability. |
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(j) | Subscriber understands that the certificates or other instruments representing the Securities shall bear a restrictive legend in substantially the following form (and a stop transfer order may be placed against transfer of such certificates): | ||
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE SECURITIES LAWS, AND NO INTEREST MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION INVOLVING SAID SECURITIES, (B) THIS CORPORATION RECEIVES AN OPINION OF LEGAL COUNSEL FOR THE HOLDER OF THESE SECURITIES SATISFACTORY TO THIS CORPORATION STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION, OR (C) THIS CORPORATION OTHERWISE SATISFIES ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION. | |||
(k) | Subscriber also acknowledges and agrees to the following: |
(i) | an investment in the Securities is highly speculative and involves a high degree of risk of loss of the entire investment in the Company; and | ||
(ii) | there is no assurance that a public market for the will be available and that, as a result, Subscriber may not be able to liquidate Subscriber’s investment in the Securities should a need arise to do so. |
(l) | Subscriber is not dependent for liquidity on any of the amounts Subscriber is investing in the Securities. | ||
(m) | Subscriber’s address set forth below is his or her or its correct residence or business address. | ||
(n) | Subscriber has full power and authority to make the representations referred to herein, to purchase the Securities and to execute and deliver this Subscription Agreement. | ||
(o) | Subscriber understands that the foregoing representations and warranties are to be relied upon by the Company as a basis for the exemptions from registration and qualification of the sale of the Securities under the federal and state securities laws and for other purposes. |
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5. | Representations and Warranties Regarding Patriot Act; Anti-Money Laundering; OFAC. The Subscriber should check the Office of Foreign Assets Control (“OFAC”) website at http://www.treas.gov/ofac before making the following representations. Subscriber hereby represents and warrants to the Company as follows: | |
(a) | The Subscriber represents that (i) no part of the funds used by the Subscriber to acquire the Securities or to satisfy his/her capital commitment obligations with respect thereto has been, or shall be, directly or indirectly derived from, or related to, any activity that may contravene United States federal or state or non-United States laws or regulations, including anti-money laundering laws and regulations, and (ii) no capital commitment, contribution or payment to the Company by the Subscriber and no distribution to the Subscriber shall cause the Company to be in violation of any applicable anti-money laundering laws or regulations including, without limitation, Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001 and the United States Department of the Treasury Office of Foreign Assets Control regulations. The Subscriber acknowledges and agrees that, notwithstanding anything to the contrary contained in any other agreement, to the extent required by any anti-money laundering law or regulation, the Company may prohibit capital contributions, restrict distributions or take any other reasonably necessary or advisable action with respect to the Securities, and the Subscriber shall have no claim, and shall not pursue any claim, against the Company or any other person in connection therewith. U.S. federal regulations and executive orders administered by OFAC prohibit, among other things, the engagement in transactions with, and the provision of services to, certain foreign countries, territories, entities and individuals. The lists of OFAC prohibited countries, territories, persons and entities can be found on the OFAC website at http://www.treas.gov/ofac. In addition, the programs administered by OFAC (the “OFAC Programs”) prohibit dealing with individuals1 or entities in certain countries regardless of whether such individuals or entities appear on the OFAC lists. | |
(b) | To the best of the Subscriber’s knowledge, none of: (1) the Subscriber; (2) any person controlling or controlled by the Subscriber; (3) if the Subscriber is a privately-held entity, any person having a beneficial interest in the Subscriber; or (4) any person for whom the Subscriber is acting as agent or nominee in connection with this investment is a country, territory, individual or entity named on an OFAC list, or a person or entity prohibited under the OFAC Programs. Please be advised that the Company may not accept any amounts from a prospective investor if such prospective investor cannot make the representation set forth in this paragraph. The Subscriber agrees to promptly notify the Company should the Subscriber become aware of any change in the information set forth in these representations. The Subscriber understands and acknowledges that, by law, the Company may be obligated to “freeze the account” of the Subscriber, either by prohibiting additional subscriptions from the Subscriber, declining any redemption requests and/or segregating the assets in the account in compliance with governmental regulations, and any broker may also be required to report such action and to disclose the Subscriber’s identity to OFAC. The Subscriber further acknowledges that the Company may, by written notice to the Subscriber, suspend the redemption rights, if any, of the Subscriber if the Company reasonably deems it necessary to do so to comply with anti-money laundering regulations applicable to the Company or any Broker or any of the Company’s other service providers. These individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanctions and embargo programs. |
1 | These individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanctions and embargo programs. |
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(c) | To the best of the Subscriber’s knowledge, none of: (1) the Subscriber; (2) any person controlling or controlled by the Subscriber; (3) if the Subscriber is a privately-held entity, any person having a beneficial interest in the Subscriber; or (4) any person for whom the Subscriber is acting as agent or nominee in connection with this investment is a senior foreign political figure2, or any immediate family3 member or close associate4 of a senior foreign political figure, as such terms are defined in the footnotes below. | |
(d) | If the Subscriber is affiliated with a non-U.S. banking institution (a “Foreign Bank”), or if the Subscriber receives deposits from, makes payments on behalf of, or handles other financial transactions related to a Foreign Bank, the Subscriber represents and warrants to the Company that: (1) the Foreign Bank has a fixed address, other than solely an electronic address, in a country in which the Foreign Bank is authorized to conduct banking activities; (2) the Foreign Bank maintains operating records related to its banking activities; (3) the Foreign Bank is subject to inspection by the banking authority that licensed the Foreign Bank to conduct banking activities; and (4) the Foreign Bank does not provide banking services to any other Foreign Bank that does not have a physical presence in any country and that is not a regulated affiliate. | |
(e) | The Subscriber acknowledges that, to the extent applicable, the Company will seek to comply with the Foreign Account Tax Compliance Act provisions of the U.S. Internal Revenue Code and any rules, regulations, forms, instructions or other guidance issued in connection therewith (the “FATCA Provisions”). In furtherance of these efforts, the Subscriber agrees to promptly deliver any additional documentation or information, and updates thereto as applicable, which the Company may request in order to comply with the FATCA Provisions. The Subscriber acknowledges and agrees that, notwithstanding anything to the contrary contained in any side letter or any other agreement, the failure to promptly comply with such requests, or to provide such additional information, may result in the withholding of amounts with respect to, or other limitations on, distributions made to the Subscriber and such other reasonably necessary or advisable action by the Company with respect to the Securities (including, without limitation, required withdrawal), and the Subscriber shall have no claim, and shall not pursue any claim, against the Company or any other person in connection therewith |
The foregoing representations and warranties are true and accurate as of the date hereof and shall survive such date. If any of the above representations and warranties shall cease to be true and accurate prior to the acceptance of this Subscription Agreement, Subscriber shall give prompt notice of such fact to the Company by telegram, or facsimile or e-mail, specifying which representations and warranties are not true and accurate and the reasons therefor.
2 | A “senior foreign political figure” is defined as a senior official in the executive, legislative, administrative, military or judicial branches of a foreign government (whether elected or not), a senior official of a major foreign political party, or a senior executive of a foreign government-owned corporation. In addition, a “senior foreign political figure” includes any corporation, business or other entity that has been formed by, or for the benefit of, a senior foreign political figure. |
3 | “Immediate family” of a senior foreign political figure typically includes the figure’s parents, siblings, spouse, children and in-laws. |
4 | A “close associate” of a senior foreign political figure is a person who is widely and publicly known to maintain an unusually close relationship with the senior foreign political figure, and includes a person who is in a position to conduct substantial domestic and international financial transactions on behalf of the senior foreign political figure. |
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6. | Indemnification. Subscriber acknowledges that Subscriber understands the meaning and legal consequences of the representations and warranties made by Subscriber herein, and that the Company is relying on such representations and warranties in making the determination to accept or reject this Subscription Agreement. Subscriber hereby agrees to indemnify and hold harmless the Company and each employee and agent thereof from and against any and all losses, damages or liabilities due to or arising out of a breach of any representation or warranty of Subscriber contained in this Subscription Agreement. |
7. | Transferability. Subscriber agrees not to transfer or assign this Subscription Agreement, or any interest herein, and further agrees that the assignment and transferability of the Securities acquired pursuant hereto shall be made only in accordance with applicable federal and state securities laws. |
8. | Termination of Agreement; Return of Funds. In the event that, for any reason, this Subscription Agreement is rejected in its entirety by the Company, this Subscription Agreement shall be null and void and of no further force and effect, and no party shall have any rights against any other party hereunder. In the event that the Company rejects this Subscription Agreement, the Company shall promptly return or cause to be returned to Subscriber any money tendered hereunder without interest or deduction. |
9. | Notices. All notices or other communications given or made hereunder shall be in writing and shall be delivered or mailed by registered or certified mail, return receipt requested, postage prepaid, or delivered by, facsimile or e-mail to Subscriber at the address set forth below and to the Company at the address set forth above, or at such other place as the Company may designate by written notice to Subscriber. |
10. | Amendments. Neither this Subscription Agreement nor any term hereof may be changed, waived, discharged or terminated except in a writing signed by Subscriber and the Company. |
11. | Governing Law. This Subscription Agreement and all amendments hereto shall be governed by and construed in accordance with the laws of the State of Florida without application of the conflicts of laws provisions thereof. |
12. | Headings. The headings in this Subscription Agreement are for convenience of reference, and shall not by themselves determine the meaning of this Subscription Agreement or of any part hereof. |
13. | Counterparts. This Subscription Agreement may be executed in any number of counterparts with the same force and effect as if all parties had executed the same document. The execution and delivery of a facsimile or other electronic transmission of this Subscription Agreement shall constitute delivery of an executed original and shall be binding upon the person whose signature appears on the transmitted copy. |
14. | Continuing Obligation of Subscriber to Confirm Investor Status. Upon the request of the Company and for as long as the Subscriber holds Securities or other securities in the Company, the Subscriber shall confirm Subscriber’s investor status as an “Accredited Investor,” as defined by the Securities and Exchange Commission at the time of such request. In connection therewith, the Company shall deliver to the Subscriber a questionnaire that elicits the necessary information to determine the Subscriber’s investor status. Upon receipt of the questionnaire, the Subscriber shall: (i) complete it, (ii) execute the signature page therein, and (iii) return it to the Company, or its designee, in accordance with the instructions therein, no later than ten (10) days after receipt of the questionnaire. |
[Remainder of page intentionally left blank. Signatures appear on following pages.]
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In witness whereof, the parties hereto have executed this Subscription Agreement as of the dates set forth below.
Dated: January 11, 2021.
ACCEPTANCE | ||
NutraLife Biosciences, Inc. | ||
Date: January 11, 2021. | ||
By: | /s/ Edgar Ward | |
Name: | Edgar Ward | |
Title: | Chief Executive Officer |
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Exhibit A
Promissory Note
(Attached)
Exhibit B
Warrant
(Attached)
Exhibit 10.78
NOTE EXCHANGE AGREEMENT
by and among
Nutralife Biosciences, Inc.
And
Gregory Ross
TABLE OF CONTENTS
PAGE | ||
ARTICLE I. | DEFINITIONS | 1 |
Section 1.01 | Definitions. | 1 |
Section 1.02 | Interpretive Provisions | 4 |
ARTICLE II. | EXCHANGE | 4 |
Section 2.01 | The Exchange | 4 |
Section 2.02 | Section 3(a)(9). | 5 |
Section 2.03 | Closing | 5 |
Section 2.04 | Holder’s Deliverables. | 5 |
Section 2.05 | Company Issuance | 5 |
Section 2.06 | Additional Documents. | 5 |
Section 2.07 | Taxes. | 5 |
ARTICLE III. | REPRESENTATIONS AND WARRANTIES OF THE HOLDER | 6 |
Section 3.01 | Existence and Power. | 6 |
Section 3.02 | Due Authorization. | 6 |
Section 3.03 | Valid Obligation | 6 |
Section 3.04 | Governmental Authorization. | 6 |
Section 3.05 | Title to and Issuance of Current Note. | 6 |
Section 3.06 | Broker’s, Finder’s or Similar Fees | 6 |
Section 3.07 | Investment Representations | 6 |
Section 3.08 | Full Disclosure | 9 |
ARTICLE IV. | REPRESENTATIONS AND WARRANTIES OF THE COMPANY | 9 |
Section 4.01 | Organization | 9 |
Section 4.02 | No Conflict; Due Authorization | 9 |
Section 4.03 | Valid Obligation | 9 |
Section 4.04 | Governmental Authorization | 9 |
Section 4.05 | Approval of Agreement | 9 |
Section 4.06 | Broker’s, Finder’s or Similar Fees | 9 |
ARTICLE V. | INDEMNIFICATION | 10 |
Section 5.01 | Indemnification of Company. | 10 |
Section 5.02 | Indemnification of Holder. | 10 |
Section 5.03 | Procedure | 10 |
Section 5.04 | Periodic Payments. | 12 |
Section 5.05 | Insurance | 12 |
Section 5.06 | Time Limit. | 12 |
ARTICLE VI. | MISCELLANEOUS | 12 |
Section 6.01 | Governing Law | 12 |
Section 6.02 | Notices | 13 |
Section 6.03 | Attorneys’ Fees | 14 |
Section 6.04 | Public Announcements and Filings | 14 |
Section 6.05 | Third Party Beneficiaries | 14 |
Section 6.06 | Expenses | 14 |
Section 6.07 | Entire Agreement | 14 |
Section 6.08 | Survival; Termination | 14 |
Section 6.09 | Amendment; Waiver | 14 |
Section 6.10 | Arm’s Length Bargaining; No Presumption Against Drafter. | 15 |
Section 6.11 | Headings | 15 |
Section 6.12 | No Assignment or Delegation. | 15 |
Section 6.13 | Commercially Reasonable Efforts | 16 |
Section 6.14 | Further Assurances. | 16 |
Section 6.15 | Specific Performance | 16 |
Section 6.16 | Counterparts | 16 |
Exhibit A | Current Note |
Exhibit B | Form of New Note |
Exhibit C | Form of Warrant |
Exhibit B | Form of Assignment of Promissory Note |
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NOTE EXCHANGE AGREEMENT
Dated as of January 11, 2021
This Note Exchange Agreement (together with the exhibits and other attachments hereto, this “Agreement”) is entered into as of the date first set forth above (the “Closing Date”) by and between (i) Nutralife Biosciences, Inc., a Florida corporation (the “Company”) and (ii) Gregory Ross (“Holder”). Each of the Company and Holder may be referred to herein collectively as the “Parties” and separately as a “Party.”
WHEREAS, Holder is the owner of the promissory note of the Company as attached hereto as Exhibit A (the “Current Note”);
WHEREAS, pursuant to the Current Note, certain amounts are owed by the Company to the Holder (the “Indebtedness”); and
WHEREAS, the Parties now desire to enter into this Agreement pursuant to which the Current Note shall be exchanged for a new promissory note of the Company and a warrant to acquire certain shares of common stock, par value $0.0001 per share (the “Common Stock”) of the Company, reliance upon the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”);
NOW THEREFORE, on the stated premises and for and in consideration of the mutual covenants and agreements hereinafter set forth and the mutual benefits to the Parties to be derived herefrom, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties hereby agree as follows:
ARTICLE I. DEFINITIONS
Section 1.01 Definitions. The following terms, as used herein, have the following meanings
(a) | “Accredited Investor” has the meaning set forth in Section 3.07(b). | |
(b) | “Action” means any legal action, suit, claim, investigation, hearing or proceeding, including any audit, claim or assessment for Taxes or otherwise. | |
(c) | “Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with such Person. | |
(d) | “Agreement” has the meaning set forth in the introductory paragraph hereto. | |
(e) | “Assignment” has the meaning set forth in Section 2.04. | |
(f) | “Authority” means any governmental, regulatory or administrative body, agency or authority, any court or judicial authority, any arbitrator, or any public, private or industry regulatory authority, whether international, national, Federal, state, or local. |
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(g) | “Business Day” means any day that is not a Saturday, Sunday or other day on which banking institutions in Florida are authorized or required by law or executive order to close. | |
(h) | “Closing Date” has the meaning set forth in the introductory paragraph hereto. | |
(i) | “Closing” has the meaning set forth in Section 2.03. | |
(j) | “Code” means the Internal Revenue Code of 1986, as amended. | |
(k) | “Company Indemnified Party” has the meaning set forth in Section 5.01. | |
(l) | “Company Indemnifying Party” has the meaning set forth in Section 5.02. | |
(m) | “Company Organizational Documents” has the meaning set forth in Section 4.02. | |
(n) | “Company Shares” has the meaning set forth in Section 3.07(f). | |
(o) | “Company” has the meaning set forth in the introductory paragraph hereto. | |
(p) | “Control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise.” Controlled”, “Controlling” and “under common Control with” have correlative meanings. Without limiting the foregoing a Person (the “Controlled Person”) shall be deemed Controlled by (a) any other Person (the “10% Owner”) (i) owning beneficially, as meant in Rule 13d-3 under the Exchange Act, securities entitling such Person to cast 10% or more of the votes for election of directors or equivalent governing authority of the Controlled Person or (ii) entitled to be allocated or receive 10% or more of the profits, losses, or distributions of the Controlled Person; (b) an officer, director, general partner, partner (other than a limited partner), manager, or member (other than a member having no management authority that is not a 10% Owner ) of the Controlled Person; or (c) a spouse, parent, lineal descendant, sibling, aunt, uncle, niece, nephew, mother-in-law, father-in-law, sister-in-law, or brother-in-law of an Affiliate of the Controlled Person or a trust for the benefit of an Affiliate of the Controlled Person or of which an Affiliate of the Controlled Person is a trustee. | |
(q) | “Current Note” has the meaning set forth in the recitals hereto. | |
(r) | “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. | |
(s) | “Exchange” has the meaning set forth in Section 2.01(c). | |
(t) | “Holder Indemnified Party” has the meaning set forth in Section 5.02. | |
(u) | “Holder Indemnifying Party” has the meaning set forth in Section 5.01. | |
(v) | “Holder” has the meaning set forth in the introductory paragraph hereto. | |
(w) | “Holder” has the meaning set forth in the recitals hereto. |
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(x) | “Indebtedness” has the meaning set forth in the recitals hereto. | |
(y) | “Indemnification Notice” has the meaning set forth in Section 5.03(a). | |
(z) | “Indemnified Party” has the meaning set forth in Section 5.03. | |
(aa) | “Indemnifying Party” has the meaning set forth in Section 5.03. | |
(bb) | “Law” means any domestic or foreign, federal, state, municipality or local law, statute, ordinance, code, rule, or regulation. | |
(cc) | “Lien” means any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, and any conditional sale or voting agreement or proxy, including any agreement to give any of the foregoing. | |
(dd) | “Losses” has the meaning set forth in Section 5.01. | |
(ee) | “New Instruments” has the meaning set forth in the Section 2.01(a). | |
(ff) | “Order” means any decree, order, judgment, writ, award, injunction, rule, injunction, stay, decree, judgment or restraining order or consent of or by an Authority. | |
(gg) | “Party” and “Parties” have the meanings set forth in the introductory paragraph hereto. | |
(hh) | “Person” means an individual, corporation, partnership (including a general partnership, limited partnership or limited liability partnership), limited liability company, association, trust or other entity or organization, including a government, domestic or foreign, or political subdivision thereof, or an agency or instrumentality thereof. | |
(ii) | “Regulation S” has the meaning set forth in Section 3.07(f). | |
(jj) | “Rule 144” has the meaning set forth in Section 3.07(f). | |
(kk) | “Securities Act” has the meaning set forth in the recitals hereto. | |
(ll) | “Tax(es)” means any federal, state, local or foreign tax, charge, fee, levy, custom, duty, deficiency, or other assessment of any kind or nature imposed by the Internal Revenue Service and any other Authority responsible for the collection, assessment or imposition of any Tax or the administration of any Law relating to any Tax (including any income (net or gross), gross receipts, profits, windfall profit, sales, use, goods and services, ad valorem, franchise, license, withholding, employment, social security, workers compensation, unemployment compensation, employment, payroll, transfer, excise, import, real property, personal property, intangible property, occupancy, recording, minimum, alternative minimum, environmental or estimated tax), including any liability therefor as a transferee (including under Section 6901 of the Code or similar provision of applicable Law) or successor, as a result of Treasury Regulation Section 1.1502-6 or similar provision of applicable Law or as a result of any Tax sharing, indemnification or similar agreement, together with any interest, penalty, additions to tax or additional amount imposed with respect thereto. | |
(mm) | “Third Party Claim” has the meaning set forth in Section 5.03(a). |
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Section 1.02 Interpretive Provisions. Unless the express context otherwise requires:
(a) | the words “hereof,” “herein,” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement; | |
(b) | terms defined in the singular shall have a comparable meaning when used in the plural, and vice versa; | |
(c) | the terms “Dollars” and “$” mean United States Dollars; | |
(d) | references herein to a specific Section, Subsection, Recital, or Exhibit shall refer, respectively, to Sections, Subsections, Recitals or Exhibits of this Agreement; | |
(e) | wherever the word “include,” “includes,” or “including” is used in this Agreement, it shall be deemed to be followed by the words “without limitation”; | |
(f) | references herein to any gender shall include each other gender; | |
(g) | references herein to any Person shall include such Person’s heirs, executors, personal representatives, administrators, successors and assigns; provided, however, that nothing contained in this Section 1.03(g) is intended to authorize any assignment or transfer not otherwise permitted by this Agreement; | |
(h) | references herein to a Person in a particular capacity or capacities shall exclude such Person in any other capacity; | |
(i) | references herein to any contract or agreement (including this Agreement) mean such contract or agreement as amended, supplemented or modified from time to time in accordance with the terms thereof; | |
(j) | with respect to the determination of any period of time, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding”; | |
(k) | references herein to any Law or any license mean such Law or license as amended, modified, codified, reenacted, supplemented or superseded in whole or in part, and in effect from time to time; and | |
(l) | references herein to any Law shall be deemed also to refer to all rules and regulations promulgated thereunder. |
ARTICLE II. EXCHANGE
Section 2.01 The Exchange.
(a) | On the terms and subject to the conditions set forth in this Agreement, on the Closing Date the Holder shall sell, assign, transfer and deliver to the Company, free and clear of all liens, pledges, encumbrances, charges, restrictions or known claims of any kind, nature, or description, the Current Note in exchange for the issuance to Holder of (i) a new promissory note of the Company in the form as attached hereto as Exhibit B (the “New Note”) and (ii) a warrant of the Company in the form as attached hereto as Exhibit C (the “Warrant” and, together with the New Note, collectively, the “New Instruments”). |
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(b) | Promptly following the recordation of the Holder as the beneficial owner of the New Note, the Current Note shall be cancelled and terminated and of no further force or effect, the Indebtedness shall be deemed satisfied and paid in full and any and all security interests that Holder may have in any assets or property of the Company pursuant to the Current Note or any documents or agreements entered into in connection therewith shall be released and terminated and of no further force or effect. | |
(c) | The exchange as set forth in this Section 2.01, subject to the other terms and conditions herein, is referred to herein as the “Exchange.” |
Section 2.02 Section 3(a)(9). The Company represents that the exchange of the Current Note for the New Instruments is being made in reliance upon the exemption from registration provided by Section 3(a)(9) of the Securities Act and agrees not to take any position contrary to this Section 2.02.
Section 2.03 Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date simultaneously with the execution and delivery of this Agreement by remote exchange of electronic documents.
Section 2.04 Holder’s Deliverables. At the Closing, the Holder shall deliver to the Company the Assignment of Promissory Note in the form as attached hereto as Exhibit D with respect to the Current Note (the “Assignment”), and thus all right, title and interest in and to the Current Note, free and clear of all liens, pledges, encumbrances, charges, restrictions or known claims of any kind, nature, or description, accompanied by such other instruments of transfer duly executed in blank and in form and substance satisfactory to the Company as required for the same to be transferred to the ownership of the Company, with all necessary transfer Tax and other revenue stamps, acquired at Holder’s expense, affixed.
Section 2.05 Company Issuance. At the Closing and open receipt of the items as set forth in Section 2.04, the Company shall issue to Holder the New Instruments, duly executed by the Company, and record the Holder as the owner of the New Instruments in the books and records of the Company.
Section 2.06 Additional Documents. At and following the Closing, the Parties shall execute, acknowledge, and deliver (or shall ensure to be executed, acknowledged, and delivered), any and all certificates, opinions, financial statements, schedules, agreements, resolutions, rulings or other instruments required by this Agreement to be so delivered at or prior to the Closing, together with such other items as may be reasonably requested by the Parties and their respective legal counsel in order to effectuate or evidence the transactions contemplated hereby.
Section 2.07 Taxes. Holder will pay all income, gain, sales, use, value added, transfer, stamp, registration, documentary, excise, real property transfer or gains, or similar Taxes incurred as a result of the transactions contemplated by this Agreement with respect to Holder.
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ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE HOLDER
As an inducement to, and to obtain the reliance of the Company, Holder represents and warrants to the Company, as of the Closing Date, as follows:
Section 3.01 Existence and Power. Holder is a natural person and has the full power and is duly authorized under all applicable Laws, regulations, ordinances, and orders of public authorities to carry on its business in all material respects as it is now being conducted and to enter into this Agreement and fulfill its obligations herein.
Section 3.02 Due Authorization. The execution, delivery and performance of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any applicable Law. Holder has taken all actions required by Law or otherwise to authorize the execution, delivery and performance of this Agreement and to consummate the transactions herein contemplated
Section 3.03 Valid Obligation. This Agreement and all agreements and other documents executed by Holder in connection herewith constitute the valid and binding obligations of Holder, enforceable in accordance with its or their terms, except as may be limited by the Enforceability Exceptions
Section 3.04 Governmental Authorization. Neither the execution, delivery nor performance of this Agreement by Holder requires any consent, approval, license or other action by or in respect of, or registration, declaration or filing with any Authority.
Section 3.05 Title to and Issuance of Current Note. Holder is the record and beneficial owner and holder of the Current Note free and clear of all Liens. No part of the Current Note is subject to pre-emptive or similar rights and Holder does not have any pre-emptive rights or similar rights to purchase or receive any interest in the Current Note. Holder has the power and authority to transfer the Current Note to the Company as contemplated pursuant to the terms of this Agreement. Upon delivery of the New Instruments to Holder in exchange for the Current Note held by Holder as contemplated hereby, the Company shall acquire good and valid title to such Current Note, free and clear of all Liens.
Section 3.06 Broker’s, Finder’s or Similar Fees. There are no brokerage commissions, finder’s fees or similar fees or commissions payable by Holder in connection with the transactions contemplated hereby based on any agreement, arrangement or understanding with Holder or any action taken by Holder.
Section 3.07 Investment Representations.
(a) | Investment Purpose. Holder understands and agrees that the consummation of this Agreement including the delivery of the New Instruments to Holder in exchange for the Current Note as contemplated hereby constitutes the offer and sale of securities under the Securities Act and applicable state statutes and that the New Instruments are being acquired for Holder’s own account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the Securities Act. |
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(b) | Investor Status. Holder is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”) promulgated under the Securities Act. Holder has been furnished with all documents and materials relating to the business, finances and operations of the Company and its subsidiaries and information that Holder requested and deemed material to making an informed decision regarding this Agreement and the underlying transactions. | |
(c) | Reliance on Exemptions. Holder understands that the New Instruments are being offered and sold to the Holder in reliance upon specific exemptions from the registration requirements of United States federal and state securities Laws and that the Company is relying upon the truth and accuracy of, and the Holder’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Holder set forth herein in order to determine the availability of such exemptions and the eligibility of the Holder to acquire the New Instruments. | |
(d) | Information. Holder 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 New Instruments which have been requested by Holder or its advisors. Holder and its advisors, if any, have been afforded the opportunity to ask questions of the Company. Holder understands that their investment in the New Instruments involves a significant degree of risk. The Holder represents and warrants that the Holder (i) can bear the economic risk of the Holder’s respective investments, and (ii) possesses such knowledge and experience in financial and business matters that the Holder is capable of evaluating the merits and risks of the investment in the Company and the New Instruments. The Holder acknowledges that he has carefully reviewed such information as the Holder has deemed necessary to evaluate an investment in the Company and the New Instruments. | |
(e) | Governmental Review. Holder understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the New Instruments. The Holder further acknowledges that neither the Securities and Exchange Commission nor the securities regulatory body of any other jurisdiction, has received, considered or passed upon the accuracy or adequacy of the information and representations made in this Agreement. | |
(f) | Transfer or Resale. Holder understands that (i) the sale or re-sale of the New Instruments and any shares of Common Stock that may be acquired pursuant to the New Instruments (collectively, the “Company Shares”) has not been and is not being registered under the Securities Act or any applicable state securities Laws, and the Company Shares may not be transferred unless (a) the Company Shares are sold pursuant to an effective registration statement under the Securities Act, (b) Holder shall have delivered to the Company, at the cost of Holder, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in comparable transactions to the effect that the Company Shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by the Company, (c) the Company Shares are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the Securities Act (or a successor rule) (“Rule 144”)) of Holder who agree to sell or otherwise transfer the Company Shares only in accordance with this Section 3.07 and who is an Accredited Investor, (d) the Company Shares are sold pursuant to Rule 144, or (e) the Company Shares are sold pursuant to Regulation S under the Securities Act (or a successor rule) (“Regulation S”), and Holder shall have delivered to the Company, at the cost of Holder, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any sale of such Company Shares made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Company Shares under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other person is under any obligation to register such Company Shares under the Securities Act or any state securities Laws or to comply with the terms and conditions of any exemption thereunder (in each case). Notwithstanding the foregoing or anything else contained herein to the contrary, the Company Shares may be pledged as collateral in connection with a bona fide margin account or other lending arrangement. |
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(a) | Legends. Holder understands that the Company Shares, until such time as the Company Shares have been registered under the Securities Act, or may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, the Company Shares may bear a standard Rule 144 legend and a stop-transfer order may be placed against transfer of the certificates for such Company Shares, and that any certificate representing the Company Shares shall be endorsed with the following legends, in addition to any other legend required to be placed thereon by applicable federal or state securities Laws: |
“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (TOGETHER WITH THE RULES AND REGULATIONS THEREUNDER, 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.”
(g) | Removal. The legend(s) referenced in Section 1.01(a) shall be removed and the Company shall issue a certificate without such legend to the holder of any Company Shares upon which it is stamped, if, unless otherwise required by applicable state securities Laws, (a) the Company Shares are registered for sale under an effective registration statement filed under the Securities Act or otherwise may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Company Shares may be made without registration under the Securities Act, which opinion shall be accepted by the Company so that the sale or transfer is effected. Holder agrees to sell all Company Shares, including those represented by a certificate(s) from which the legend has been removed, only in compliance with applicable prospectus delivery requirements, if any. |
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Section 3.08 Full Disclosure. No representation or warranty by Holder in this Agreement or any certificate or other document furnished or to be furnished to the Company pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As an inducement to, and to obtain the reliance of the Holder, the Company represents and warrants to the Holder as of the Closing Date as follows:
Section 4.01 Organization. The Company is a corporation duly organized, validly existing, and in good standing under the Laws of the State of Florida and has the corporate power and is duly authorized under all applicable Laws, regulations, ordinances, and orders of public authorities to carry on its business in all material respects as it is now being conducted.
Section 4.02 No Conflict; Due Authorization. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any provision of the Articles of Incorporation and Bylaws of the Company as in effect on the Closing Date (the “Company Organizational Documents”). The Company has taken all action required by Law, the Company Organizational Documents, or otherwise to authorize the execution and delivery of this Agreement, and the Company has full power, authority, and legal right and has taken all action required by Law, the Company Organizational Documents or otherwise to consummate the transactions herein contemplated.
Section 4.03 Valid Obligation. This Agreement and all agreements and other documents executed by the Company in connection herewith constitute the valid and binding obligation of the Company, enforceable in accordance with its or their terms, except as may be limited by the Enforceability Exceptions.
Section 4.04 Governmental Authorization. Neither the execution and delivery nor performance of this Agreement by any the Company Party requires any consent, approval, license or other action by or in respect of, or registration, declaration or filing with any Authority.
Section 4.05 Approval of Agreement. The Board of Directors of the Company has authorized the execution and delivery of this Agreement by the Company and has approved this Agreement and the transactions contemplated hereby.
Section 4.06 Broker’s, Finder’s or Similar Fees. There are no brokerage commissions, finder’s fees or similar fees or commissions payable by the Company in connection with the transactions contemplated hereby based on any agreement, arrangement or understanding with the Company or any action taken by the Company.
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ARTICLE V. INDEMNIFICATION
Section 5.01 Indemnification of Company. Holder hereby agrees to indemnify and hold harmless to the fullest extent permitted by applicable law, the Company, its Affiliates, representatives, members, managers, partners, directors, officers, employees, stockholders, attorneys and agents and permitted assignees (each a “Company Indemnified Party”), against and in respect of any and all out-of-pocket loss, cost, payments, demand, penalty, forfeiture, expense, liability, judgment, deficiency or damage, and diminution in value or claim (including actual costs of investigation and attorneys’ fees and other costs and expenses) (all of the foregoing collectively, “Losses”) incurred or sustained by any Company Indemnified Party as a result of or in connection with any breach, inaccuracy or nonfulfillment or the alleged breach, inaccuracy or nonfulfillment of any of the representations, warranties, covenants and agreements of Holder contained herein or in any of the additional agreements or any certificate or other writing delivered pursuant hereto.
Section 5.02 Indemnification of Holder. The Company hereby agrees to indemnify and hold harmless to the fullest extent permitted by applicable law the Holder and its Affiliates, representatives, members, managers, partners, directors, officers, employees, stockholders, attorneys and agents and permitted assignees (each a “Holder Indemnified Party”), against and in respect of any and all Losses incurred or sustained by any Holder Indemnified Party as a result of or in connection with any breach, inaccuracy or nonfulfillment or the alleged breach, inaccuracy or nonfulfillment of any of the representations, warranties, covenants and agreements of the Company contained herein or in any of the additional agreements or any certificate or other writing delivered pursuant hereto.
Section 5.03 Procedure. The person or entity seeking indemnification pursuant to this Agreement shall be referred to as the “Indemnified Party” and the person or entity from whom such indemnification is sought pursuant to this Agreement shall be referred to as the “Indemnifying Party.” The following shall apply with respect to all claims by any Holder Indemnified Party or Company Indemnified Party for indemnification:
(a) | An Indemnified Party shall give the Indemnifying Party prompt notice (an “Indemnification Notice”) of any third-party Action with respect to which such Indemnified Party seeks indemnification pursuant to Section 5.01 or Section 5.02 (a “Third-Party Claim”), which shall describe in reasonable detail the Loss that has been or may be suffered by the Indemnified Party. The failure to give the Indemnification Notice shall not impair any of the rights or benefits of such Indemnified Party under Section 5.01 or Section 5.02, except to the extent such failure materially and adversely affects the ability of the Indemnifying Party to defend such claim or increases the amount of such liability. | |
(b) | In the case of any Third-Party Claims as to which indemnification is sought by any Indemnified Party, such Indemnified Party shall be entitled, at the sole expense and liability of the Indemnifying Party, to exercise full control of the defense, compromise or settlement of any Third-Party Claim unless the Indemnifying Party, within a reasonable time after the giving of an Indemnification Notice by the Indemnified Party (but in any event within ten (10) days thereafter), shall (i) deliver a written confirmation to such Indemnified Party that the indemnification provisions of Section 5.01 or Section 5.02 are applicable to such Action and the Indemnifying Party will indemnify such Indemnified Party in respect of such Action pursuant to the terms of this Article V and, notwithstanding anything to the contrary, shall do so without asserting any challenge, defense, limitation on the Indemnifying Party’s liability for Losses, counterclaim or offset, (ii) notify such Indemnified Party in writing of the intention of the Indemnifying Party to assume the defense thereof, and (iii) retain legal counsel reasonably satisfactory to such Indemnified Party to conduct the defense of such Third-Party Claim. |
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(c) | If the Indemnifying Party assumes the defense of any such Third-Party Claim pursuant to Section 5.03(b), then the Indemnified Party shall cooperate with the Indemnifying Party in any manner reasonably requested in connection with the defense, and the Indemnified Party shall have the right to be kept fully informed by the Indemnifying Party and their legal counsel with respect to the status of any legal proceedings, to the extent not inconsistent with the preservation of attorney-client or work product privilege. If the Indemnifying Party so assumes the defense of any such Third-Party Claim, the Indemnified Party shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise, or settlement thereof, but the fees and expenses of such counsel employed by the Indemnified Party shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party has agreed to pay such fees and expenses, or (ii) the named parties to any such Third-Party Claim (including any impleaded parties) include an Indemnified Party and the Indemnifying Party and the Indemnified Party shall have been advised by its counsel that there may be a conflict of interest between such Indemnified Party and the Indemnifying Party in the conduct of the defense thereof, and in any such case the reasonable fees and expenses of such separate counsel shall be borne by the Indemnifying Party. |
(d) | If the Indemnifying Party elects to assume the defense of any Third-Party Claim pursuant to Section 5.03(b), the Indemnified Party shall not pay, or permit to be paid, any part of any claim or demand arising from such asserted liability unless the Indemnifying Party withdraws from or fails to vigorously prosecute the defense of such asserted liability, or unless a judgment is entered against the Indemnified Party for such liability. If the Indemnifying Party does not elect to defend, or if, after commencing or undertaking any such defense, the Indemnifying Party fails to adequately prosecute or withdraw such defense, the Indemnified Party shall have the right to undertake the defense or settlement thereof, at the Indemnifying Party’s expense. Notwithstanding anything to the contrary, the Indemnifying Party shall not be entitled to control, but may participate in, and the Indemnified Party (at the expense of the Indemnifying Party) shall be entitled to have sole control over, the defense or settlement of (x) that part of any Third Party Claim (i) that seeks a temporary restraining order, a preliminary or permanent injunction or specific performance against the Indemnified Party, or (ii) to the extent such Third Party Claim involves criminal allegations against the Indemnified Party or (y) the entire Third Party Claim if such Third Party Claim would impose liability on the part of the Indemnified Party. In the event the Indemnified Party retains control of the Third-Party Claim, the Indemnified Party will not settle the subject claim without the prior written consent of the Indemnifying Party, which consent will not be unreasonably withheld or delayed. |
(e) | If the Indemnified Party undertakes the defense of any such Third-Party Claim pursuant to Section 5.03(b) and proposes to settle the same prior to a final judgment thereon or to forgo appeal with respect thereto, then the Indemnified Party shall give the Indemnifying Party prompt written notice thereof and the Indemnifying Party shall have the right to participate in the settlement, assume or reassume the defense thereof or prosecute such appeal, in each case at the Indemnifying Party’s expense. |
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(f) | The Indemnifying Party shall not, without the prior written consent of such Indemnified Party settle or compromise or consent to entry of any judgment with respect to any such Third-Party Claim (i) in which any relief other than the payment of money damages is or may be sought against such Indemnified Party, (ii) in which such Third Party Claim could be reasonably expected to impose or create a monetary liability on the part of the Indemnified Party (such as an increase in the Indemnified Party’s income Tax) other than the monetary claim of the third party in such Third-Party Claim being paid pursuant to such settlement or judgment, or (iii) which does not include as an unconditional term thereof the giving by the claimant, person conducting such investigation or initiating such hearing, plaintiff or petitioner to such Indemnified Party of a release from all liability with respect to such Third-Party Claim and all other Actions (known or unknown) arising or which might arise out of the same facts. |
Section 5.04 Periodic Payments. Any indemnification required by this Article V for costs, disbursements or expenses of any Indemnified Party in connection with investigating, preparing to defend or defending any Action shall be made by periodic payments by the Indemnifying Party to each Indemnified Party during the course of the investigation or defense, as and when bills are received or costs, disbursements or expenses are incurred.
Section 5.05 Insurance. Any indemnification payments hereunder shall take into account any insurance proceeds or other third-party reimbursement actually received.
Section 5.06 Time Limit. The obligations of the Holder and the Company Indemnifying Party under Section 5.01 and Section 5.02 shall expire two (2) years from the Closing Date, except with respect to (i) an indemnification claim asserted in accordance with the provisions of this Article V which remains unresolved, for which the obligation to indemnify shall continue until such claim is resolved; and (ii) resolved claims for which payment has not yet been paid to the Indemnified Party.
ARTICLE VI. MISCELLANEOUS
Section 6.01 Governing Law; Jurisdiction; Waiver of Jury Trial.
(a) | This Agreement and any of the New Instruments, if applicable, shall be governed by, enforced, and construed under and in accordance with the Laws of the State of Florida, without giving effect to the principles of conflicts of law thereunder. | |
(b) | ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT, ANY NEW INSTRUMENTS, IF APPLICABLE, OR THE TRANSACTIONS CONTEMPLATED HEREIN SHALL BE INSTITUTED SOLELY IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF FLORIDA, IN EACH CASE LOCATED IN BROWARD COUNTY, FLORIDA, AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO SUCH PARTY’S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. |
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(c) | EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS THIS AGREEMENT, ANY NEW INSTRUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREIN IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY NEW INSTRUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREIN. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS Section 6.01(c). |
Section 6.02 Notices.
(a) | Any notice or other communications required or permitted hereunder shall be in writing and shall be sufficiently given if personally delivered to it or sent by email with return receipt requested, overnight courier or registered mail or certified mail, postage prepaid, addressed as follows: |
If to the Company:
NutraLife Biosciences, Inc.
Attn: Edgar Ward
6601 Lyons Road, Suite L-6
Coconut Creek, FL 33073
Email: edgar@nutralifebiosciences.com
With a copy, which shall not constitute notice, to:
Anthony L.G., PLLC
Attn: John Cacomanolis
625 North Flagler Drive, Suite 600
West Palm Beach, Florida 33401
Email: jcacomanolis@anthonypllc.com
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If to Holder, to the address for notices set forth on the signature page hereto.
(b) | Any Party may change its address for notices hereunder upon notice to each other Party in the manner for giving notices hereunder. | |
(c) | Any notice hereunder shall be deemed to have been given (i) upon receipt, if personally delivered, (ii) on the day after dispatch, if sent by overnight courier, (iii) upon dispatch, if transmitted by email with return receipt requested and received and (iv) three (3) days after mailing, if sent by registered or certified mail. |
Section 6.03 Attorneys’ Fees. In the event that any Party institutes any action or suit to enforce this Agreement or to secure relief from any default hereunder or breach hereof, the prevailing Party shall be reimbursed by the losing Party for all costs, including reasonable attorney’s fees, incurred in connection therewith and in enforcing or collecting any judgment rendered therein.
Section 6.04 Public Announcements and Filings. Unless required by applicable Law or regulatory authority, none of the Parties will issue any report, statement or press release to the general public, to the trade, to the general trade or trade press, or to any third party (other than its advisors and representatives in connection with the transactions contemplated hereby) or file any document, relating to this Agreement and the transactions contemplated hereby, except as may be mutually agreed by the Parties. Copies of any such filings, public announcements or disclosures, including any announcements or disclosures mandated by Law or regulatory authorities, shall be delivered to each Party at least one (1) Business Day prior to the release thereof.
Section 6.05 Third Party Beneficiaries. This contract is strictly between the Company and the Holder and, except as specifically provided (including in Article V), no other Person and no director, officer, stockholder, employee, agent, independent contractor or any other Person shall be deemed to be a third-party beneficiary of this Agreement.
Section 6.06 Expenses. Other than as specifically set forth herein, each of the Company and the Holder will bear their own respective expenses, including legal, accounting and professional fees, incurred in connection with the Exchange or any of the other transactions contemplated hereby.
Section 6.07 Entire Agreement. This Agreement and the New Instruments represent the entire agreement between the Parties relating to the subject matter thereof and supersede all prior agreements, understandings and negotiations, written or oral, with respect to such subject matter.
Section 6.08 Survival; Termination. The representations, warranties, and covenants of the respective Parties shall survive the Closing Date and the consummation of the transactions herein contemplated for a period of two years.
Section 6.09 Amendment; Waiver; Severability; Remedies
(a) | This Agreement may be amended, modified, superseded, terminated or cancelled, and any of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by the Company and the Holder. |
(b) | Every right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, at law, or in equity, and may be enforced concurrently herewith, and no waiver by any Party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default then, theretofore, or thereafter occurring or existing. |
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(c) | Neither any failure or delay in exercising any right or remedy hereunder or in requiring satisfaction of any condition herein nor any course of dealing shall constitute a waiver of or prevent any Party from enforcing any right or remedy or from requiring satisfaction of any condition. No notice to or demand on a Party waives or otherwise affects any obligation of that Party or impairs any right of the Party giving such notice or making such demand, including any right to take any action without notice or demand not otherwise required by this Agreement. No exercise of any right or remedy with respect to a breach of this Agreement shall preclude exercise of any other right or remedy, as appropriate to make the aggrieved Party whole with respect to such breach, or subsequent exercise of any right or remedy with respect to any other breach. | |
(d) | If any term, condition or other provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms, conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated by this Agreement be consummated as originally contemplated to the fullest extent possible. | |
(e) | Notwithstanding anything else contained herein, no Party shall seek, nor shall any Party be liable for, consequential, punitive or exemplary damages, under any tort, contract, equity, or other legal theory, with respect to any breach (or alleged breach) of this Agreement or any provision hereof or any matter otherwise relating hereto or arising in connection herewith. |
Section 6.10 Arm’s Length Bargaining; No Presumption Against Drafter. This Agreement has been negotiated at arm’s-length by parties of equal bargaining strength, each represented by counsel or having had but declined the opportunity to be represented by counsel and having participated in the drafting of this Agreement. This Agreement creates no fiduciary or other special relationship between the Parties, and no such relationship otherwise exists. No presumption in favor of or against any Party in the construction or interpretation of this Agreement or any provision hereof shall be made based upon which Person might have drafted this Agreement or such provision.
Section 6.11 Headings. The headings contained in this Agreement are intended solely for convenience and shall not affect the rights of the Parties.
Section 6.12 No Assignment or Delegation. No Party may assign any right or delegate any obligation hereunder, including by merger, consolidation, operation of law, or otherwise, without the written consent of all of the Parties and any purported assignment or delegation without such consent shall be void, in addition to constituting a material breach of this Agreement. This Agreement shall be binding on the permitted successors and assigns of the Parties.
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Section 6.13 Commercially Reasonable Efforts. Subject to the terms and conditions herein provided, each Party shall use their respective commercially reasonable efforts to perform or fulfill all conditions and obligations to be performed or fulfilled by it under this Agreement so that the transactions contemplated hereby shall be consummated as soon as practicable, and to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable Laws and regulations to consummate and make effective this Agreement and the transactions contemplated herein.
Section 6.14 Further Assurances. Each Party shall execute and deliver such documents and take such action, as may reasonably be considered within the scope of such Party’s obligations hereunder, necessary to effectuate the transactions contemplated by this Agreement.
Section 6.15 Specific Performance. The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by them in accordance with the terms hereof or were otherwise breached and that each Party hereto shall be entitled to an injunction or injunctions, specific performance and other equitable relief to prevent breaches of the provisions hereof and to enforce specifically the terms and provisions hereof, without the proof of actual damages, in addition to any other remedy to which they are entitled at law or in equity. Each Party agrees to waive any requirement for the security or posting of any bond in connection with any such equitable remedy, and agrees that it will not oppose the granting of an injunction, specific performance or other equitable relief on the basis that (a) the other Party has an adequate remedy at law, or (b) an award of specific performance is not an appropriate remedy for any reason at law or equity.
Section 6.16 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which taken together shall be but a single instrument. The execution and delivery of a facsimile or other electronic transmission of a signature to this Agreement shall constitute delivery of an executed original and shall be binding upon the person whose signature appears on the transmitted copy.
[Signatures Appear on Following Page]
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Closing Date.
Nutralife Biosciences, Inc. | ||
By: | /s/ Edgar Ward | |
Name: | Edgar Ward | |
Title: | Chief Executive Officer |
Gregory Ross | ||
By: | /s/ Gregory Ross | |
Name: | Gregory Ross | |
Address for notices: | ||
Gregory Ross | ||
515 Windermere Lane | ||
Annoyo Grande, CA 93240 | ||
Email: | drosscva@gmail.com |
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Exhibit A
Current Note
(Attached)
Exhibit B
New Promissory Note
(Attached)
Exhibit C
Warrant
(Attached)
Exhibit D
Assignment and Assumption of Promissory Note
Dated as of January 11, 2021
This Assignment and Assumption of Promissory Note (“Assignment”) dated as of the date set forth above, is entered into by and between the person or entity as set forth on the signature page hereto (“Assignor”), and Nutralife Biosciences, Inc., a Florida corporation. This Assignment is entered into pursuant to the Note Exchange Agreement by and between Assignor and Assignee, dated as of the date set forth above (the “Exchange and Acknowledgement Agreement”). Defined terms used herein without definition shall have the meanings as set forth in the Exchange and Acknowledgement Agreement.
That Assignor, for and in consideration of the sum of Ten and No/100 Dollars ($10.00) and other good and valuable consideration received from or on behalf of the Assignee at or before the ensealing and delivery of these presents, the receipt and sufficiency whereof is hereby acknowledged, hereby assigns, transfers and sets over unto the Assignee all its right, title and interest in and to the Current Note held by Assignor as identified on Exhibit A to the Exchange Agreement (the “Current Note”).
Assignor, in connection with its assignment of the Current Note, does hereby represent and warrant to, covenant and agree with, the Assignee that immediately prior to this Agreement:
1. Assignor has good and unencumbered right title and interest in the Current Note, as well as lawful authority to execute this Assignment;
2. All representations, warranties and covenants of Assignor herein and under the Exchange and Acknowledgement Agreement are true and correct, and are made as an inducement of and to Assignee to accept this Assignment and Assignor’s liability as to said representations and warranties shall survive the delivery of this Assignment; and
3. This Assignment may be executed in any number of counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the same instrument. Facsimile signatures hereupon shall be deemed their originals for all purposes.
TO HAVE AND TO HOLD the same unto the Assignee, its legal representatives, successors, heirs and assigns forever.
[Remainder of page intentionally left blank. Signature page follows.]
Exhibit D - Page 1 |
IN WITNESS WHEREOF, the parties hereunto have caused this Assignment to be executed on the day and year first above written.
Gregory Ross | ||
By: | ||
Name: | Gregory Ross |
STATE OF _____________
COUNTY OF _______________
Sworn to and subscribed before me this ___ day of January, 2021, by Gregory Ross, who is personally known to me or who has produced as identification.
Notary’s Signature:
Print Notary’s Name:
NOTARY PUBLIC, State of
My commission expires:
_______________________________________________________________________________________________
Agreed and accepted:
Nutralife Biosciences, Inc.
By: | /s / Edgar Ward | |
Name: | Edgar Ward | |
Title: | Chief Executive Officer |
Exhibit D - Page 2 |
Exhibit 10.79
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION ARE NOT REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS NOTE IS FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE SET FORTH HEREIN.
Principal Amount: $30,000.00 | Issue Date: January 11, 2021 |
NutraLife Biosciences, Inc.
10% PROMISSORY NOTE
FOR VALUE RECEIVED, pursuant to the terms and conditions of this 10% Promissory Note (this “Note”), NutraLife Biosciences, Inc., a Florida corporation (the “Company”), hereby promises to pay to the order of Gregory Ross, or registered assigns (the “Holder”), on the one year anniversary of the Issue Date as set forth above (the “Maturity Date”) or earlier as required pursuant to this Note, the principal amount as set forth above (the “Principal Amount”), and to pay interest on the outstanding Principal Amount as set forth herein in each case to the extent that this Note and the Principal Amount and any accrued interest hereunder (the “Indebtedness”) has not been repaid by the Company as of such applicable date. Interest shall commence accruing on the date hereof (the “Issue Date”), computed on the basis of a 365-day year and the actual number of days elapsed, and shall be payable as set forth herein.
This Note is entered into pursuant to a Note Exchange Agreement by and between the Company and the Holder dated as of the Issue Date (the “Agreement”) and is subject to the terms and conditions thereof.
This Note is not a certificate of deposit or similar obligation of, and is not guaranteed or insured by, any depository institution, the Federal Deposit Insurance Corporation, the Securities Holder Protection Corporation or any other governmental or private fund or entity.
The following terms shall apply to this Note:
Section 1. Definitions. Defined terms used herein without definition have the meanings given them in the Agreement. The Company and the Holder may be referred to herein individually as a “Party” and collectively as the “Parties”.
Section 2. Interest; Late Fees; Prepayment.
(a) Interest shall accrue on the Principal Amount at the rate of ten percent (10%) per annum, simple interest, non-compounded basis (the “Interest”). To the extent not earlier repaid as set forth herein, the Principal Amount and the accrued and unpaid Interest (collectively, the “Indebtedness”) shall be due and payable in full on the Maturity Date or such earlier date as the Indebtedness may be due hereunder pursuant to the terms herein. No payments of the Principal Amount or Interest herein shall be required prior to the Maturity Date.
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(b) The Company may prepay all or any portion of the Principal Amount and any accrued and unpaid Interest at any time.
(c) Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.
Section 3. Events of Default.
(a) The Holder may elect to declare an “Event of Default” if any of the following conditions or events shall occur and be continuing:
(i) | the Company fails to pay the then-outstanding Indebtedness on any date any such amounts become due and payable, and any such failure is not cured within three Business Days of written notice thereof by Holder; | |
(ii) | any representation or warranty of the Company is materially false or untrue when given; | |
(iii) | the Company fails to comply in any material respect with any other covenant or agreement in this Note or in the Agreement and any such failure is not cured within three Business Days of written notice thereof by Holder; | |
(iv) | the Company shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator; (ii) make a general assignment for the benefit of the Company’s creditors; or | |
(iii) | commence a voluntary case under the U.S. Bankruptcy Code as now and hereafter in effect, or any successor statute; or | |
(v) | a proceeding or case shall be commenced, without the application or consent of the Company, in any court of competent jurisdiction, seeking (1) liquidation, reorganization or other relief with respect to it or its assets or the composition or readjustment of its debts, or (2) the appointment of a trustee, receiver, custodian, liquidator or the like of any substantial part of its assets, and, in each case, such proceedings or case shall continue undismissed, or an order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 60 days, if in the United States, or 90 days, if outside of the United States; or an order for relief against the Company shall be entered in an involuntary case under any bankruptcy, insolvency, composition, readjustment of debt, liquidation of assets or similar Law of any jurisdiction. | |
(b) Consequences of Events of Default. If an Event of Default has occurred and is continuing (i) the Holder may, by notice to the Company, declare all or any portion of the then- outstanding Indebtedness due and payable, and the Note and the then-outstanding Indebtedness shall thereupon become immediately due and payable in cash and (ii) the Holder shall have the right to pursue any other remedies that the Holder may have under applicable law.
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Section 4. Miscellaneous.
(a) Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of this Note, and of the ownership hereof reasonably satisfactory to the Company.
(b) Entire Agreement. This Note (including any recitals hereto) and the Agreement set forth the entire understanding of the Parties with respect to the subject matter hereof, and shall not be modified or affected by any offer, proposal, statement or representation, oral or written, made by or for any Party in connection with the negotiation of the terms hereof, and may be modified only by instruments signed by the Company and the Holder.
(c) Notices. All notices under this Note shall be in writing. Notices may be served by certified or registered mail, postage paid with return receipt requested; by private courier, prepaid; by other reliable form of electronic communication; or personally. Mailed notices shall be deemed delivered five (5) days after mailing, properly addressed. Couriered notices shall be deemed delivered on the date that the courier warrants that delivery will occur. Electronic communication notices shall be deemed delivered when receipt is either confirmed by confirming transmission equipment or acknowledged by the addressee or its office. Personal delivery shall be effective when accomplished. Any Party may change its address by giving notice, in writing, stating its new address, to the other Party. Subject to the forgoing, notices shall be sent as follows:
If to the Company:
NutraLife Biosciences, Inc.
Attn: Edgar Ward
6601 Lyons Road, Suite L-6
Coconut Creek, FL 33073
Email: edgar@nutralifebiosciences.com
If to Holder, to the address of Holder as set forth in the Agreement.
(d) No Waiver. No waiver of any provision of this Note shall be effective unless it is in writing and signed by the Party against whom it is asserted, and any such written waiver shall only be applicable to the specific instance to which it relates and shall not be deemed to be a continuing or future waiver.
(e) Headings. The article and section headings contained in this Note are inserted for convenience only and shall not affect in any way the meaning or interpretation of the Note.
(f) Governing Law. This Note, and any dispute arising out of, relating to, or in connection with this Note, shall be governed by and construed in accordance with the laws of the State of Florida, without giving effect to any choice or conflict of law provision or rule (whether of the State of Florida or of any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Florida.
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(g) Enforcement of the Note; Jurisdiction; No Jury Trial.
(i) | Each of the Parties irrevocably agrees that any legal action or proceeding with respect to this Note and the rights and obligations arising under this Note, or for recognition and enforcement of any judgment or arbitral award or resolution in respect of this Note, shall be brought and determined exclusively in the courts of the State of Florida located in Broward County, Florida or in the event (but only in the event) that such courts do not have subject matter jurisdiction over such action or proceeding, in the United States District Court sitting in Broward County, Florida (the “Selected Courts”). Each of the Parties hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the Selected Courts and agrees that it will not bring any action relating to this Note or any of the transactions contemplated by this Note in any court other than the Selected Courts. Each of the Parties hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Note, (a) any claim that it is not personally subject to the jurisdiction of the Selected Courts for any reason other than the failure to serve in accordance with the provisions of this Note; (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise); and (c) to the fullest extent permitted by law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum; (ii) the venue of such suit, action or proceeding is improper; or (iii) this Note, or the subject matter of this Note, may not be enforced in or by the Selected Courts. | |
(ii) | EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR OTHER PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER, RELATING TO OR IN CONNECTION WITH THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. | |
(iii) | The Holder hereby expressly acknowledges that the agreements and restrictions contained herein are reasonable and necessary to protect the Company’s legitimate interests, that the Company would not have entered into this Note in the absence of such agreements and restrictions, and that any violation of such restrictions will result in irreparable harm to the Company. The Holder agrees that the Company shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, and specific performance of, as well as an equitable accounting of all earnings, profits and other benefits arising from any violation of, the agreements and restrictions contained herein, which rights shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled. The Holder irrevocably and unconditionally (i) agrees that any legal proceeding arising out of this Note may be brought in the Selected Courts, (ii) consents to the non-exclusive jurisdiction of the Selected Courts in any such proceeding, and (iii) waives any objection to the laying of venue of any such proceeding in any Selected Court. |
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(h) Attorneys’ Fees. If any Party hereto is required to engage in litigation against any other Party, either as plaintiff or as defendant, in order to enforce or defend any rights under this Note, and such litigation results in a final judgment in favor of such Party (“Prevailing Party”), then the party or parties against whom said final judgment is obtained shall reimburse the Prevailing Party for all direct, indirect or incidental expenses incurred, including, but not limited to, all attorneys’ fees, court costs and other expenses incurred throughout all negotiations, trials or appeals undertaken in order to enforce the Prevailing Party’s rights hereunder.
(i) Usury Savings Clause. Notwithstanding any provision in this Note to the contrary, the total liability for payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions, or other sums which may at any time be deemed to be interest, shall not exceed the limit imposed by the usury laws of the jurisdiction governing this Note or any other applicable law. In the event the total liability of payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions or other sums which may at any time be deemed to be interest, shall, for any reason whatsoever, result in an effective rate of interest, which for any month or other interest payment period exceeds the limit imposed by the usury laws of the jurisdiction governing this Note, all sums in excess of those lawfully collectible as interest for the period in question shall, without further agreement or notice by, between, or to any party hereto, be applied to the reduction of the outstanding principal balance due hereunder immediately upon receipt of such sums by the Holder hereof, with the same force and effect as though the Company had specifically designated such excess sums to be so applied to the reduction of the principal balance then outstanding, and the Holder hereof had agreed to accept such sums as a penalty-free payment of principal; provided, however, that the Holder may, at any time and from time to time, elect, by notice in writing to the Company, to waive, reduce, or limit the collection of any sums in excess of those lawfully collectible as interest, rather than accept such sums as a prepayment of the principal balance then outstanding. It is the intention of the Parties that the Company does not intend or expect to pay, nor does the Holder intend or expect to charge or collect any interest under this Note greater than the highest non-usurious rate of interest which may be charged under applicable law.
(j) Parties in Interest. This Note shall be binding upon and inure solely to the benefit of each Party, and nothing in this Note, express or implied, is intended to confer upon any other person or entity any rights or remedies of any nature under or by reason of this Note.
(k) Severability; Expenses; Further Assurances. If any term, condition or other provision of this Note is determined by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms, conditions and provisions of this Note shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by this Note is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Note so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated by this Note be consummated as originally contemplated to the fullest extent possible. Except as otherwise specifically provided in this Note, each Party shall be responsible for the expenses it may incur in connection with the negotiation, preparation, execution, delivery, performance and enforcement of this Note. The Parties shall from time to time do and perform any additional acts and execute and deliver any additional documents and instruments that may be required by Law or reasonably requested by any Party to establish, maintain or protect its rights and remedies under, or to effect the intents and purposes of, this Note.
(l) Execution in Counterparts, Electronic Transmission. This Note may be executed in any number of counterparts, each of which shall be deemed an original. The signature of any Party which is transmitted by any reliable electronic means such as, but not limited to, a photocopy, electronically scanned or facsimile machine, for purposes hereof, is to be considered as an original signature, and the document transmitted is to be considered to have the same binding effect as an original signature or an original document.
(m) No Assignment. This Note may not be assigned by either Party without the prior written consent of the other Party in its sole discretion.
(n) Currency. All dollar amounts are in U.S. dollars.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned has executed this Note as of the Issue Date.
NutraLife Biosciences, Inc. | ||
By: | /s/ Edgar Ward | |
Name: | Edgar Ward | |
Title: | Chief Executive Officer |
Agreed and accepted:
Gregory Ross | ||
By: | /s/ Gregory Ross | |
Name: | Gregory Ross |
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EXHIBIT 21.1
NutraLife BioSciences, Inc. currently has the following wholly owned subsidiaries:
● | Precision Analytic Testing, LLC, a Florida limited liability company (“PAT”) formed on May 11, 2017; | |
● | NutraDerma Technologies, Inc., (“NutraDerma”) a Florida corporation formed on January 28, 2019; | |
● | PhytoChem Technologies, Inc., a Florida corporation (“PhytoChem”) formed on February 4, 2019; and | |
● | TransDermalRX, Inc., a Florida corporation (“TransDermal”) formed on February 8, 2019. |
EXHIBIT 31.1
CERTIFICATIONS
I, Edgar Ward, certify that:
1. | I have reviewed this Annual Report on Form 10-K for the fiscal year ended December 31, 2019 of NutraLife BioSciences, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have: | |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and; | |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions); | |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls. |
Dated: March 19, 2021 | /s/ Edgar Ward | |
Edgar Ward | ||
Chief Executive Officer | ||
(principal executive officer, principal financial and accounting officer) |
EXHIBIT 32.1
CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K of NutraLife BioSciences, Inc. (the “Company”) for the fiscal year ended December 31, 2019 as filed with the Securities and Exchange Commission (the “Report”), I, Robert Stevens, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: March 19, 2021 | /s/ Edgar Ward | |
Edgar Ward | ||
Chief Executive Officer | ||
(principal executive officer, principal financial and accounting officer) |
This certification accompanies this Annual Report on Form 10-K pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.