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As filed with the Securities and Exchange Commission on September 9, 2022

 

Registration No. 333-264339

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

AMENDMENT NO. 7

TO

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

Curative Biotechnology, Inc.

(Exact name of registrant as specified in its charter)

 

Florida   2836   26-1412177

(State or other jurisdiction of

incorporation or organization)

  

(Primary Standard Industrial

Classification Code Number)

  

(I.R.S. Employer

Identification Number)

 

1825 NW Corporate Blvd, Suite 110

Boca Raton, FL 33431

(561) 907-8990

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

Paracorp Incorporated

155 Office Plaza Drive, 1st Floor

Tallahassee, FL 32301

1-800-533-7272

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

Copies to:

 

Raul Silvestre, Esq.

Dennis Gluck, Esq.

Silvestre Law Group, P.C.

2629 Townsgate Rd., Suite 215

Westlake Village, CA 91361

(818) 597-7552

  

Anthony W. Basch, Esq.

J. Britton Williston, Esq.

Kaufman & Canoles, P.C.

Two James Center, 14th Floor

1021 E. Cary St.,

Richmond, VA 23219

(804) 771-5700

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

 

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

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

 

Large accelerated filer ☐   Accelerated filer ☐
Non-accelerated filer ☒   Smaller reporting company ☒
      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 7(a)(2)(B) of the Securities Act. ☐

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said section 8(a), may determine.

 

 

 

 
 

 

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

 

PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION, DATED SEPTEMBER 9, 2022

 

 

1,142,8571 Units With Each Unit Consisting of:

One Share of Common Stock

One Warrant to Purchase One Share of Common Stock

 

This is a firm commitment public offering of 1,142,857 units of securities (each, a “Unit”), with each Unit consisting of one share of common stock, $0.0001 par value per share (“Common Stock”), and one warrant (“Warrant(s)”) to purchase one (1) shares of Common Stock of Curative Biotechnology, Inc., a Florida corporation, at a public offering price of $7.00 per Unit based on an assumed reverse stock split ratio of 1-for-275, in order to effect a price per share of Common Stock of $8.25, the closing price of the Company’s common Stock as of August 24, 2022, on a post reverse split basis. Each Warrant is immediately exercisable for one (1) share of Common Stock at an exercise price of $7.00 per share (or 100% of the price of each Unit sold in this offering, based on a public offering price of $7.00 per Unit, on an assumed reverse stock split basis) and will expire five (5) years from the date of issuance. The shares of Common Stock and Warrants are immediately separable and will be issued separately.

 

Our Common Stock is presently traded on the OTC Market Group Inc.’s Pink marketplace (“OTC Pink”) under the symbol “CUBT.” We have applied to have our Common Stock and the Warrants offered pursuant to this prospectus, listed on the NYSE American under the symbols “CUBT” and “CUBT WS,” respectively, which listing is a condition to this offering. No assurance can be given that our application will be approved. On August 24, 2022, the last reported sales price for our Common Stock as quoted on the OTC Pink was $0.03 per share or $8.25 on a post reverse split basis with an assumed ratio of 1-for-275.

 

The Units will not be certificated. The Common Stock and the Warrants included in the Units can only be purchased together in this offering, but the securities contained in the Units are immediately separable and will be issued separately.

 

Management and certain company insiders own an aggregate of 30,000,000 shares of our Series C Preferred Stock, which will automatically convert into shares of Common Stock immediately prior to the closing of this offering. For a further description, please see the section of this prospectus entitled “Description of Securities”, “Series C Preferred Stock.”

 

Except for per share and pricing information related specifically to the offering which are contained in the sections of the Prospectus entitled “Summary of the Offering”, “Capitalization”, “Dilution”, and “Description of Securities”) which contemplate an assumed 1-for-275 reverse split ratio, the share and per share information, including those contained in the financial statements in this prospectus do not reflect a contemplated reverse split of the outstanding Common Stock that we anticipate will occur immediately prior to the consummation of the offering.

 

IN REVIEWING THIS PROSPECTUS, YOU SHOULD CAREFULLY CONSIDER THE MATTERS DESCRIBED IN THE SECTION TITLED “RISK FACTORS” BEGINNING ON PAGE 7 OF THIS PROSPECTUS. INVESTORS SHOULD ONLY CONSIDER AN INVESTMENT IN THESE SECURITIES IF THEY CAN AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT.

 

We are an “emerging growth company” under the federal securities laws and may elect to comply with certain reduced public company reporting requirements for future filings.

 

We have determined that we are not a controlled company within the meaning of the NYSE American rules, and we are not requesting any exemption related thereto.

 

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

 

   Per Unit   Total 
Public offering price  $   $ 
Underwriting discounts (1)  $         $      
Underwriter’s Warrants (2)  $    $  
Proceeds to us before offering expenses (3)  $   $ 

 

(1) In addition to the underwriting discounts and commissions, we have agreed to reimburse the underwriter for certain expenses, including a non-accountable expense allowance equal to 1.0% of the gross proceeds we receive in this offering. See “Underwriting” on page 74 of this prospectus for a description of these arrangements.
(2) The Underwriter’s Warrants will represent the right to purchase 5.0% of the aggregate number of shares of common stock sold in this offering, excluding the overallotment option, at an exercise price equal to 125% of the offering price per share
(3) We estimate the total expenses of this offering will be approximately $  . Upon closing, we have also agreed to reimburse $100,000 of the underwriter’s expenses relating to the offering, including for road show, diligence, and legal expenses.

 

We have granted the underwriter a 45-day option to purchase up to 171,428 additional Units at the initial public offering price less applicable underwriting discounts, based on the assumed reverse stock split ratio of 1-for-275 which will occur concurrently with the pricing of the offering. The amount of offering proceeds to us presented in the table above does not give effect to any exercise of this over-allotment option (if any). See “Underwriting” on page 74 of this prospectus for a description of these arrangements.

 

The underwriter expects to deliver our shares and warrants to purchasers in this offering on or about             , 2022, subject to satisfaction of customary closing conditions.

 

Aegis Capital Corp.

 

The date of this prospectus is             , 2022

 

 

1 Number of Units based on an assumed reverse stock split of our Common Stock at a ratio of 1-for-275 in order to effect a stock price of $8.25 (based on closing price of Common Stock at $0.03 per share on August 24, 2022) with such offering price per Unit of $7.00.

 

 
 

 

TABLE OF CONTENTS

 

  Page
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS ii
PROSPECTUS SUMMARY 1
RISK FACTORS 7
USE OF PROCEEDS 29
CAPITALIZATION 30
DILUTION 31
DETERMINATION OF OFFERING PRICE 31
DIVIDEND POLICY 32
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 32
BUSINESS 37
DESCRIPTION OF SECURITIES 56
MANAGEMENT 63
EXECUTIVE COMPENSATION 67
PRINCIPAL STOCKHOLDERS 70
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 72
UNDERWRITING 74
LEGAL MATTERS 77
EXPERTS 77
WHERE YOU CAN FIND MORE INFORMATION 77
INDEX TO FINANCIAL STATEMENTS F-1

 

You should rely only on information contained in this prospectus. We have not, and the underwriter has not, authorized anyone to provide you with additional information or information different from that contained in this prospectus. Neither the delivery of this prospectus nor the sale of our securities means that the information contained in this prospectus is correct after the date of this prospectus. This prospectus is not an offer to sell or the solicitation of an offer to buy our securities in any circumstances under which the offer or solicitation is unlawful or in any state or other jurisdiction where the offer is not permitted.

 

The information in this prospectus is accurate only as of the date on the front cover of this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date.

 

No person is authorized in connection with this prospectus to give any information or to make any representations about us, the securities offered hereby or any matter discussed in this prospectus, other than the information and representations contained in this prospectus. If any other information or representation is given or made, such information or representation may not be relied upon as having been authorized by us.

 

Neither we nor the underwriter have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than the United States. You are required to inform yourself about, and to observe any restrictions relating to, this offering and the distribution of this prospectus.

 

Until      , all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as underwriter and with respect to their unsold allotments or subscriptions.

 

i
 

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

Some of the statements in this prospectus contain “forward-looking statements.” Forward-looking statements are made based on our management’s expectations and beliefs concerning future events impacting our company and are subject to uncertainties and factors relating to our operations and economic environment, all of which are difficult to predict and many of which are beyond our control. You can identify these statements from our use of the words “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target,” “plan,” “may” and similar expressions. These forward-looking statements may include, among other things:

 

  ● statements relating to projected growth and management’s long-term performance goals;
  ● statements relating to the anticipated effects on results of operations or our financial condition from expected developments or events;
  ● statements relating to our business and growth strategies; and
  ● any other statements which are not historical facts.

 

Forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from our expectations of future results, performance or achievements expressed or implied by these forward-looking statements. These forward-looking statements may not be realized due to a variety of factors, including without limitation:

 

  ● our current and anticipated cash needs and our need for additional financing;
  ● federal, state and foreign regulatory requirements;
  ● our future ability to conduct clinical trials with respect to our products and services;
  ● our ability to develop and commercialize our products and services;
  ● our ability to enter into agreements to implement our business strategy;
  ● the acceptance of our products and services by patients and the medical community;
  ● our manufacturing capabilities to produce our products;
  ● our ability to maintain exclusive rights with respect to our licensed technology;
  ● our ability to protect our intellectual property;
  ● our ability to obtain and maintain an adequate level of insurance;
  ● our ability to obtain third party reimbursement for our products and services from private and governmental insurers;
  ● the effects of competition in our market areas;
  ● our reliance on certain key personnel;
  ● further sales or other dilution of our equity, which may adversely affect the market price of our Common Stock; and
  ● other factors and risks described under “Risk Factors” beginning on page 7 of this prospectus.

 

You should not place undue reliance on any forward-looking statement. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events.

 

ii
 

 

PROSPECTUS SUMMARY

 

This summary is not complete and does not contain all of the information you should consider before investing in the securities offered by this prospectus. Before making an investment decision, you should read the entire prospectus, and any prospectus supplement, carefully, including the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and the notes to the financial statements included elsewhere in this prospectus.

 

Prior to purchasing our securities in this offering, we strongly urge each potential investor to obtain legal and tax advice as to the potential tax and other effects to the investor as a result of purchasing such securities.

 

Unless the context of this prospectus indicates otherwise, the terms “Curative Biotechnology,” “the Company,” “we,” “us” or “our” refer to Curative Biotechnology, Inc. and the number of shares of Common Stock to be outstanding after this offering excludes shares issuable upon any exercise of the Warrants offered by this prospectus.

 

Except for per share and pricing information related specifically to the offering which are contained in the sections of the Prospectus entitled “Summary of the Offering”, “Capitalization”, “Dilution”, and “Description of Securities” which contemplate an assumed 1-for-275 reverse split ratio, the share and per share information, including those contained in the financial statements in this prospectus do not reflect a contemplated reverse split of the outstanding Common Stock that we anticipate will occur immediately prior to the consummation of the offering.

 

What We Do

 

We are a life science company seeking to develop, in-license, sub-license or otherwise acquire early mid- or late-stage assets in the therapeutic and medical device areas. We focus on development stage products that can be acquired at advantageous valuations and terms and assets that we believe either already have, or possess the possibility for significant intellectual property. Additionally, we seek to acquire assets that lend themselves to an accelerated clinical and/or regulatory development path. As of the date of this prospectus, we have not submitted any INDs with the FDA for any of our product candidates.

 

We have licensed four (4) pre-clinical assets and are initially focused on the following four (4) indications: (i) Rabies, (ii) Glioblastoma, (iii) Age-Related Macular Degeneration, and (iv) COVID-19 vaccinations in patients with kidney failure.

 

Historically, we have devoted our efforts and financial resources primarily to our general operations and the research and acquisition of our product candidates.

 

Based on our cash position, and assuming the receipt of approximately $7.0 million in net proceeds from this offering, we anticipate utilizing the funds for the repayment of our outstanding secured convertible promissory note issued in March 2022, pre-clinical research, including toxicology, pharmacokinetics, and safety studies in animals and manufacturing in anticipation for the regulatory submissions of one or more investigational new drug application or IND with the United States Food and Drug Administration (FDA). If any of our proposed INDs are approved, we will utilize the balance of the funds for manufacturing (for certain of our therapeutics as described herein), to conduct our clinical trials (for certain of our therapeutics as described herein) and for general corporate working capital purposes. It is still too early to determine if our product candidates will meet the requirements for IND approval.

 

1

 

 

Our development pipeline focuses on three (3) therapeutic areas: infectious diseases, oncology, and degenerative eye disease. Under these therapeutic areas, we are focusing on four (4) programs: (i) Rabies, (ii) COVID 19 Vaccines in Kidney Failure Patients, (iii) Glioblastoma, and (iv) Degenerative Eye Diseases Even if we are able to raise the net proceeds described above, management has determined that it will still need to make a determination on what indications within those four (4) programs to pursue as we will not have sufficient capital to pursue all of the below indications.

 

Therapeutic Area   Candidate   Indication   Research and Pre-Clinical   Phase 1   Phase 2   Phase 3
Infectious Diseases   IMT505   Rabies   (1)            
                         
Infectious Diseases   COVID Vaccine with IMT504 Adjuvant   COVID 19 in Kidney Failure Patients   (2)            
                         
Oncology   CUBT906- CD56 Monoclonal Antibody ADC   Glioblastoma   (2)            
                         

Degenerative

Eye Disease

   Metformin Reformulation   Age-Related Macular Degeneration   (1)            

 

(1)Each of these therapeutics have undergone certain toxicology and pharmacokinetics animal studies. Please see further description in “Product Development” below for a further description of the development of each indicated therapeutic.
(2)Each of these therapeutics have not undergone pre-clinical development. Please see further description in “Product Development” below for a further description of the development of each indicated therapeutic.

 

Our licensed assets target the following indications:

 

Infectious Diseases

 

Rabies — Rabies is a viral disease that causes inflammation of the brain in humans and other mammals. Early symptoms can include fever and tingling at the site of exposure. These symptoms are followed by one or more of the following symptoms: nausea, vomiting, violent movements, uncontrolled excitement, fear of water, an inability to move parts of the body, confusion, and loss of consciousness. Once symptoms appear, the result is virtually always death. According to the CDC, from 1960 to 2018, 127 human rabies cases were reported in the United States, with roughly a quarter resulting from dog bites received during international travel. Of the infections acquired in the United States, 70% were attributed to bat exposures. We have acquired an exclusive license to certain assets for the treatment of rabies. For a further description please see the sections of this prospectus entitled “Our business – Product Development”, “Our Business – Licenses”, “Our Business – Market” and “Risk Factors.”

 

COVID-19 in Patients with Kidney Failure — COVID-19 is a contagious disease caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The first known case was identified in Wuhan, China, in December 2019. The disease has since spread worldwide, leading to an ongoing pandemic.

 

Symptoms of COVID-19 are variable, but often include fever, cough, headache, fatigue, breathing difficulties, and loss of smell and taste. At least a third of people who are infected do not develop noticeable symptoms. Of those people who develop symptoms noticeable enough to be classed as patients, most (81%) develop mild to moderate symptoms (up to mild pneumonia), while 14% develop severe symptoms (dyspnea, hypoxia, or more than 50% lung involvement on imaging), and 5% suffer critical symptoms (respiratory failure, shock or multiorgan dysfunction). Older people are at a higher risk of developing severe symptoms.

 

2

 

 

Patients that received kidney transplants have impaired responses to mRNA COVID-19 vaccines – even after 4 vaccine shots. Additionally, Kidney failure patients on dialysis do not initially respond as well to current vaccines and rapidly lose measurable antibodies when compared to the general population.

 

We have acquired an exclusive license to certain assets in order to develop and commercialize a COVID-19 vaccine. For a further description please see the sections of this prospectus entitled “Our business – Product Development”, Our Business- Licenses”, “Our Business – Market” and “Risk Factors.”

 

Oncology

 

Glioblastoma — Glioblastoma is an aggressive type of cancer that begins within the brain. Initially, signs and symptoms of glioblastoma are nonspecific. They may include headaches, personality changes, nausea, and symptoms similar to those of a stroke. Symptoms often worsen rapidly and may progress to unconsciousness. Glioblastomas represent 15% of all brain tumors. The typical duration of survival following diagnosis and treatment is 12–15 months, with fewer than 3–7% of people surviving longer than five years. About 3 in 100,000 people develop the disease per year. We have acquired an exclusive evaluation license (for evaluation purposes only) to certain assets for the treatment of Glioblastoma. For a further description please see the sections of this prospectus entitled “Our business – Product Development”, “Our Business – License”, “Our Business – Market” and “Risk Factors.”

 

Retinal Degenerative Disease

 

There are numerous degenerative eye diseases that cause blindness or low vision. The Center for Disease Control or CDC states that more than 4.2 million Americans aged 40 or older are either legally blind or have low vision. The leading cause of blindness and low vision in the United States are primarily age-related eye diseases such as age-related macular degeneration or diabetic retinopathy, among others.

 

We have entered into an exclusive license agreement to develop and commercialize therapeutics for retinal degenerative diseases with certain licensed assets. Additionally, on March 15, 2022, we entered into a cooperative research and development agreement (“CRADA”) with the National Eye Institute. For a further description please see the sections of this prospectus entitled “Our Business – Product Development”, “Our Business – Licenses”, “Our Business – Market” and “Risk Factors.” While our current focus is on Intermediate Dry Macular Degeneration and Geographic Atrophy, the Company does have the right under the license to pursue other indications with Metformin but has no plans to undertake any development related to such indications at this time.

 

Age-Related Macular Degeneration — Age-Related Macular Degeneration is a visually threatening condition, most often found in patients over age 60. Early and Intermediate AMD are characterized by enlarged drusen behind the eye’s retina. Currently there are no approved drug treatments for Dry AMD or Geographic Atrophy (late-stage dry AMD).

 

3

 

 

Impact of COVID-19 on our Company

 

Based upon our early stage of development we have not been materially impacted by COVID-19. However, in general, the biotech and pharmaceutical industries have been negatively impacted by the COVID-19 pandemic. From recruitment of patients and the conduct of clinical trials to manufacturing, CRO functions and patient travel, virtually every part of the drug development system has been negatively impacted. In the event we receive approval for one of our anticipated INDs, the manufacturing and testing of our drug candidates will undoubtedly be more challenging than it would have been had there been no pandemic.

 

Additionally, our ability to carry out any of the programs and indications described above will be contingent on our being able to raise capital as described in the Section of this prospectus entitled “Use of Proceeds”; without which some or all of the programs and indications will not be able to move forward. Please additionally see the sections of this prospectus entitled “Risk Factors” and “Our Business” for a further description.

 

Orphan Designation

 

An Orphan drug is defined as one “intended for the treatment, prevention or diagnosis of a rare disease or condition, which is one that affects less than 200,000 persons in the US” (which equates to approximately 6 cases per 10,000 population) “or meets cost recovery provisions of the act.” In the European Union (EU), the European Medicines Agency (EMA) defines a drug as “orphan” if it is intended for the diagnosis, prevention or treatment of a life-threatening or chronically and seriously debilitating condition affecting not more than 5 in 10,000 EU people. EMA also qualifies a drug as orphan if – without incentives – it would be unlikely that the drug in the EU would generate sufficient benefit for the affected people and for the drug manufacturer to justify the investment.

 

We have received Orphan drug designation with respect to our proposed Rabies therapeutic from the U.S. FDA on November 24, 2014. We have not received Orphan drug designation from the European Medicines Agency or EMA.

 

Going Concern

 

Our auditors’ report on our December 31, 2021 audited financial statements expressed an opinion that our capital resources as of the date of their audit report were not sufficient to sustain operations or complete our planned activities for the upcoming year unless we raised additional funds. Additionally, we have had a history of net losses and our current cash level raises substantial doubt about our ability to continue as a going concern. If we do not obtain additional funds, we may no longer be able to continue as a going concern and will cease operation which means that our shareholders will lose their entire investment.

 

Listing on the NYSE American Market

 

We have applied to list our Common Stock and Warrants on the NYSE American Market under the symbols “CUBT” and “CUBT WS,” respectively. If our listing application is approved, we expect to list our Common Stock and Warrants on the NYSE American upon consummation of this offering, at which point our Common Stock will cease to be traded on the OTC Pink. No assurance can be given that our listing application will be approved. This offering will occur only if the NYSE American approves the listing of our Common Stock and Warrants. NYSE American listing requirements include, among other things, a stock price threshold. As a result, prior to effectiveness, we will need to take the necessary steps to meet the NYSE American listing requirements, including but not limited to a reverse split of our Common Stock. If NYSE American does not approve the listing of our Common Stock and Warrants, we will not proceed with this offering.

 

Reverse Stock Split

 

On October 8, 2021, our stockholders approved a reverse stock split within the range of 1-for-2 to 1-for-10,000 of our issued and outstanding shares of Common Stock and authorized the board of directors (the “Board”), in its discretion, to determine the final ratio, effective date, and date of filing of the certificate of amendment to our articles of incorporation in connection with the reverse stock split. The purpose of the reverse stock split is to meet the NYSE American minimum stock price requirement for listing our Common Stock, which is a condition to the completion of this Offering. The reverse stock split will not change the number of authorized shares of Common Stock which will remain at 1,100,000,000 shares. Except for per share and pricing information related specifically to the offering which are contained in the sections of the Prospectus entitled “Summary of the Offering”, “Capitalization”, “Dilution”, and “Description of Securities” which contemplate an assumed 1-for-275 reverse split ratio, the share and per share information, including those contained in the financial statements in this prospectus do not reflect a contemplated reverse split of the outstanding Common Stock that we anticipate will occur immediately prior to the consummation of the offering.

 

Corporate History

 

We were incorporated in 1995 in the State of Nevada, under the name Frozen Assets, Inc. Since we incorporated, we have changed our name a number of times: (i) in March 1998 to Growth Industries, Inc., (ii) in July 1998 to Fragrance Express, Inc., (ii) in October 1998 to National Boston Medical Inc., and (iii) in May 2004, to Storage Innovation Technologies, Inc. In October of 2007 we reincorporated in the State of Florida under the name Connectyx Technologies Holdings Group Inc. In February of 2020 the Company changed the composition of its Board of Directors and the current management as majority shareholders acquired voting control of the Company. In November of 2020 we changed our name to Curative Biotechnology, Inc. and adopted our current business plan.

 

4

 

 

Implications of Being an Emerging Growth Company

 

As an emerging growth company, we intend to take advantage of an extended transition period for complying with new or revised accounting standards as permitted by The JOBS Act.

 

To the extent that we continue to qualify as a “smaller reporting company,” as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), after we cease to qualify as an emerging growth company, certain of the exemptions available to us as an emerging growth company may continue to be available to us as a smaller reporting company, including: (i) not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes Oxley Act; (ii) scaled executive compensation disclosures; and (iii) the requirement to provide only two years of audited financial statements, instead of three years.

 

Corporate Information

 

Our headquarters are located at 1825 NW Corporate Blvd, Suite 110, Boca Raton, FL 33431. Our telephone number is (561) 907-8990. We maintain certain information on our website at www.curativebiotech.com. The information on our website is not (and should not be considered) part of this prospectus and is not incorporated into this prospectus by reference.

 

Summary of Risk Factors

 

Our business is subject to a number of risks and uncertainties, including those highlighted in the section titled “Risk Factors” immediately following this prospectus summary. Some of these risks are:

 

  ● We have a limited operating history and may be unable to predict future operations;
     
  ● Our independent auditor’s report for the years ended December 31, 2021, and 2020, contains a qualification as to our ability to continue as a going concern, and management, in consultation with our independent auditor has also determined there is a going concern as of June 30, 2022;
     
  ● We are an early-stage company, have no product revenues, are not profitable and may never be profitable;
     
  ● We will need to obtain a significant amount of financing to initiate and complete our clinical trials and implement our business plan;
     
  ● We have incurred significant losses in prior periods, and losses in the future could have a material adverse effect on our financial condition, our ability to pay our debts as they become due, and on our cash flows;
     
  ● We expect to rely on third parties to conduct our clinical trials and all or most aspects of our research and preclinical testing, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, research, or testing;
     
  ● We may rely entirely on third parties for the manufacturing of our product candidates or other product candidates that we may develop for preclinical studies and clinical trials and expect to continue to do so for commercialization. Our business could be harmed if those third parties fail to provide us with sufficient quantities of drug product, or fail to do so at acceptable quality levels or prices;
     
  ● If we fail to comply with the obligations of our licensing agreements or these agreements are terminated or we otherwise experience disruptions to our business relationships with our licensors, we could lose intellectual property rights that are important to our business;
     
  ● If we are unable to protect the confidentiality of our trade secrets, the value of our technology could be materially adversely affected and our business would be harmed.
     
  ● The insurance coverage and reimbursement status of newly-approved products is uncertain. Our product candidates may become subject to unfavorable pricing regulations, third-party coverage and reimbursement practices, or healthcare reform initiatives, which would harm our business. Failure to obtain or maintain adequate coverage and reimbursement for new or current products could limit our ability to market those products and decrease our ability to generate revenue.
     
  ● We have paid no dividends and we do not anticipate paying any cash dividends in the foreseeable future.
     
  ● Investors in this offering will experience immediate and substantial dilution in net tangible book value.
     
  ● If, following this offering, our Common Stock becomes classified again as a “penny stock,” the restrictions of the penny stock regulations of the Securities and Exchange Commission, or SEC, may result in less liquidity for our Common Stock.
     
  ● A reverse stock split could cause our stock price to decline relative to its value before the split.
     
  ● Even if the reverse stock split achieves the requisite increase in the market price of our Common Stock, we cannot assure you that we will be able to continue to comply with the minimum trading price requirement of NYSE American.
     
  ● Following the reverse stock split, the resulting market price of our Common Stock may not attract new investors, including institutional investors, and may not satisfy the investing requirements of those investors. Consequently, the trading liquidity of our Common Stock may not improve.
     
  ● Assuming the conversion of our Series C Preferred Stock, the holders of our Series B Preferred Stock will still have certain rights, preferences, and privileges over our shares of Common Stock, including the right to approve certain transactions.
     
  ● In order to have our securities listed on the NYSE American, among other requirements, we will need to add independent qualified persons to our Board.
     
  ● In connection with the reverse stock split, we will have additional authorized shares of Common Stock available for issuance; the issuance of such additional shares would dilute the percentage ownership of existing stockholders.
     
  ● The Common Stock purchase warrant issued in our March 2022 secured note offering may be adjusted in the number of shares underlying the warrant upon completion of this offering, which would result in further dilution to our shareholders.
     
  ● As of August 24, 2022, our management team and Board of Directors have unilateral control over key decision making as a result of their control of a majority of our voting stock.
     
  ● Our amended and restated Bylaws provide that the state of Florida is the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

 

If we are unable to adequately address these and other risks we face, our business, financial condition, operating results and prospects may be adversely affected.

 

5

 

 

Summary of the Offering

 

Securities Offered:   1,142,857 Units, at a public offering price of $7.00 per Unit based on an assumed reverse stock split ratio of 1-for-275, in order to effect a price per share of Common Stock of $8.25, the closing price of the Company’s common Stock as of August 24, 2022, on a post reverse split basis, with each Unit consisting of (i) one share of Common Stock and (ii) one Warrant, with each whole Warrant exercisable for one share of common stock. Each Warrant will have an exercise price of $7.00 per share (100% of the public offering price of each Unit), will be exercisable immediately and will expire five (5) years from the date of issuance. The Warrants will be subject to forced exercise commencing six months from issuance subject to the condition that the volume weighted average price of the Company’s common stock exceeds 200% of the initial exercise price for ten consecutive trading days and subject to certain other conditions set forth in the Warrants. In the event that a holder fails to exercise the Warrants within ten trading days of notice of a forced exercise in accordance with the terms of the Warrants, the Company may redeem the Warrants at a redemption price of $0.01 per Warrant. This prospectus also relates to the offering of the shares of common stock issuable upon exercise of the Warrants. The shares of Common Stock and Warrants composing such Units are immediately separable and will be issued separately but will be purchased together in this offering.
     
Common Stock Outstanding prior to the Offering:   2,078,733 shares based on the assumed reverse stock split ratio of 1-for-275 (which amount does not include the conversion of Series C Preferred Stock).
     
Common Stock Outstanding Immediately after the Offering:   4,112,475 shares, including the conversion of Series C Preferred Stock into 890,885 shares of Common Stock (or 4,283,903 shares, if the underwriter exercises its over-allotment option in full), based on a public offering price of $7.00 per Unit based on an assumed reverse stock split ratio of 1-for-275, in order to effect a price per share of Common Stock of $8.25, the closing price of the Company’s common Stock as of August 24, 2022, on a post reverse split basis.
     
Underwriter’s Over-Allotment Option:   The underwriting agreement provides that we will grant to the underwriter, an option, exercisable within 45 days after the date of this prospectus, to acquire up to an additional 15% of the total number of shares of Common Stock and Warrants sold by us pursuant to this offering, solely for the purpose of covering over-allotments, if any.
     
 Use of Proceeds:   We estimate that we will receive net proceeds of approximately $7.0 million from our sale of Units in this offering assuming the sale of all Units at $7.00 per share (based on an assumed reverse split ratio as described on the cover page of this prospectus), after deducting underwriting discounts and estimated offering expenses payable by us. We intend to use the net proceeds of this offering, including any over-allotment amount, as follows: (i) for the repayment of amounts due under our March 2022 secured convertible promissory note and May 2022 unsecured promissory note, and (ii) for our programs, we will complete necessary preclinical trials, IND-enabling studies, manufacturing, and other necessary costs related to submitting IND applications for our product candidates. In the event we receive approval of one or more of our proposed INDs, we intend to proceed with up to two (2) clinical trials (Rabies and Dry-Age Macular Degeneration). The remainder of funds will be used for general corporate and business purposes; however, the use of the net proceeds is subject to change at the complete and absolute discretion of our management. For a more complete description of our anticipated use of proceeds from this offering, see “Use of Proceeds.”
     
Proposed Trading Symbol:   Our Common Stock is presently quoted on the OTC Pink under the symbol “CUBT.” We have applied to have our Common Stock and the warrants offered pursuant to this prospectus listed on the NYSE American under the symbols “CUBT” and “CUBT WS,” respectively. If our listing application is not approved, we will not complete this offering.
     
Series C Preferred Stock Conversion and anti-dilution rights:   Immediately prior to the closing of the offering, the holders of the issued and outstanding shares of Series C Preferred Stock have agreed to convert their shares of Series C Preferred Stock into shares of Common Stock. The Series C Preferred Stock will collectively convert into thirty percent (30%) of the total issued and outstanding shares of Common Stock on a post conversion basis immediately prior to the closing of the offering, or approximately 890,885 shares of Common Stock, without the payment of any additional consideration by the holders, based on assumed reverse stock split ratio as described on the cover page of this prospectus.
     
Risk Factors:   Investing in our securities involves substantial risks. You should carefully review and consider the “Risk Factors” section of this prospectus beginning on page 7 and the other information in this prospectus for a discussion of the factors you should consider before you decide to invest in this offering.

 

The number of shares of Common Stock that will be outstanding after this offering set forth above (4,112,475 shares) is based upon 2,078,733 shares of Common Stock outstanding as of August 24, 2022, and gives effect to our planned reverse stock split at an assumed ratio of 1-for-275, the issuance of 890,885 shares of Common Stock upon conversion of the Series C Preferred Stock, as well as the sale of 1,142,857 shares of Common Stock underlying the Units in the offering but does not include, as of that date:

 

  ● 249,432 shares of Common Stock issuable upon the exercise of outstanding warrants having an average weighted exercise price of $23.166. Notwithstanding, such amount of warrants will increase by 145,783 shares of Common Stock (assuming the $7.00 offering price and assumed 1-for-275 reverse stock split as set forth on the cover page of this Prospectus) underlying the warrant issued to the lender in our March 2022 convertible note offering pursuant to an adjustment feature in the number of shares underlying the warrant upon the consummation of an offering at least $7.2 million at a price per share in such offering that if multiplied by 75%, would be less than $13.75;
     
  ● 27,114 shares of Common Stock issuable upon the exercise of outstanding equity awards pursuant to our 2021 Equity Incentive Plan;
     
  ● exercise of the Warrants contained in the Units; and
     
  ● exercise by the underwriter of its option to purchase additional Units;

 

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RISK FACTORS

 

In addition to the other information included in this prospectus, the following factors should be carefully considered before making a decision to invest in our securities. Any of the following risks, either alone or taken together, could materially and adversely affect our business, financial condition, liquidity, results of operations and prospects. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, we could be materially and adversely affected. There may be additional risks that we do not presently know or that we currently believe are immaterial that could also materially and adversely affect our business, financial condition, liquidity, results of operations and prospects. In any such case, the market price of our Common Stock could decline substantially and you could lose all or a part of your investment.

 

Risks Related to Our Company and Stage of Development

 

We may not be able to continue as a going concern if we do not obtain additional financing.

 

We have incurred losses since our inception and have not demonstrated an ability to generate revenues from the development and sales of our proposed therapeutic products. Our ability to continue as a going concern is dependent on raising capital from the sale of our Common Stock and/or obtaining debt financing. Our cash balance at June 30, 2022 was approximately $0.1 million. Based on our current expected level of operating expenditures, we expect to be able to fund our operations until the third quarter of 2022. Our ability to remain a going concern past such time is wholly dependent upon our ability to continue to obtain sufficient capital to fund our operations. Despite our ability to secure capital in the past, there can be no assurance that additional equity or debt financing will be available to us when needed or that we may be able to secure funding from any other sources. In the event that we are not able to secure funding, we may be forced to curtail operations, delay or stop ongoing clinical trials, cease operations altogether or file for bankruptcy.

 

Our independent auditor’s report for the years ended December 31, 2021, and 2020, contains a qualification as to our ability to continue as a going concern, and management, in consultation with our independent auditor has also determined there is a going concern as of June 30, 2022.

 

Due to the uncertainty of our ability to meet our current operating and capital expenses, in our audited annual consolidated financial statements for the years ended December 31, 2021, and 2020, our independent auditor’s report included a paragraph in their opinion to our financial statements regarding concerns about our ability to continue as a going concern. Recurring losses from operations raise substantial doubt about our ability to continue as a going concern. The presence of the going concern paragraph and footnote to our financial statements may have an adverse impact on the relationships we are developing and plan to develop with third parties as we continue the development of our products and could make it challenging and difficult for us to raise additional financing, all of which could have a material adverse impact on our business and prospects and result in a significant or complete loss of your investment.

 

Management, in consultation with our independent auditor has determined that there is a going concern as of June 30, 2022. Assuming the receipt of net proceeds of $7.0 million in the offering described in this Prospectus, the going concern may be mitigated in the short term. Notwithstanding, given that the Company does not anticipate generating significant revenues in the short term, the Company may be subject to a future going concern in the event that the Company is unable to raise additional capital or otherwise sufficiently fund its operations.

 

We have a limited operating history, which may make it difficult for investors to predict future performance based on current operations.

 

We have a limited operating history upon which investors may base an evaluation of our potential future performance. In particular, our limited staff and operating history means that there is a high degree of uncertainty regarding our ability to (i) develop and commercialize our technologies and proposed products (ii) obtain regulatory approval to commence the marketing of our products, (iii) manage growth, (iv) achieve market acceptance or insurance reimbursement for any of our proposed products, if successfully developed, or (v) respond to competition. As a result, there can be no assurance that we will be able to develop or maintain consistent revenue sources, or that our operations will be profitable and/or generate positive cash flows.

 

Any forecasts we make about our operations may prove to be inaccurate. We must, among other things, determine appropriate risks, rewards, and level of investment in our product lines, respond to economic and market variables outside of our control, respond to competitive developments and continue to attract, retain, and motivate qualified employees. There can be no assurance that we will be successful in meeting these challenges and addressing such risks and the failure to do so could have a materially adverse effect on our business, results of operations, and financial condition. Our prospects must be considered in light of the risks, expenses, and difficulties frequently encountered by companies in the early stage of development. As a result of these risks, challenges, and uncertainties, the value of your investment could be significantly reduced or completely lost.

 

We are an early-stage company, have no product revenues, are not profitable and may never be profitable.

 

Since the implementation of the Curative Biotechnology business plan in January 2020 through June 30, 2022, we have raised approximately $3.9 million through the sale of our securities. During this same period, we have recorded an accumulated deficit of approximately $26.2 million. Our net loss for the two most recent fiscal years ended December 31, 2021 and 2020 were $5,340,354 and $4,670,255, respectively. None of our products in development have received approval from the FDA, or other regulatory authorities; we have no sales and have never generated revenues, nor do we expect to generate revenues for the foreseeable future from the sales of our therapeutic products. We are currently focusing our efforts on the development of our product candidates. We expect to incur significant operating losses for the foreseeable future as we continue the research, pre-clinical and clinical development of our product candidates as well as the possible in-licensing of additional clinical and pre-clinical assets. Accordingly, we will need additional capital to fund our continuing operations and any expansion plans. Since we do not generate any revenue, the most likely sources of such additional capital include the sale of our securities, a strategic licensing collaboration transaction or joint venture involving the rights to one or more of our product candidates, or from grants. To the extent that we raise additional capital by issuing equity securities, our stockholders are likely to experience dilution with regard to their percentage ownership of the company, which may be significant. If we raise additional funds through collaborations or licensing arrangements, we may be required to relinquish some or all the rights to our technologies, product candidates, or grant licenses on terms that are not favorable to us. If we raise additional capital by incurring debt, we could incur significant interest expense and become subject to covenants that could affect the manner in which we conduct our business, including securing such debt obligations with our assets.

 

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Our product candidates are at various stages of early development and significant financial resources are required to develop commercially viable products and obtain regulatory approval to market and sell such products. We will need to devote significantly more research and development efforts, financial resources and personnel to develop commercially viable products and obtain regulatory approvals. We may encounter hurdles and unexpected issues as we proceed in the development of our other product candidates.

 

We will need to obtain a significant amount of financing to initiate and complete our clinical trials and implement our business plan.

 

Since the implementation of the Curative Biotechnology business plan in January 2020, we have not generated revenues from our operations and have funded our operations through the sale of our equity securities and debt securities. The implementation of our business plan, as discussed in this prospectus under the caption “Business,” will require the receipt of sufficient equity and/or debt financing to fund our clinical trials and other research and development efforts and provide for general working capital to otherwise fund our operations. We anticipate that we will need approximately $38 million and a period of two (2) years to reach inflection points in all current indications underlying programs that we are actively pursuing. An inflection point, as used herein, is a point in product development where we believe we have enough significant value to reasonably expect to be able to partner out, license, and/or sell the program to an entity with the appetite and resources to take it to launch and commercialization. We will also require a substantial amount of additional funding to implement our other indications described in this prospectus under the caption “Business,” including our in-licensing strategy if such other programs are acquired. Although we believe the net proceeds from this offering will be sufficient to reach certain inflection points related to our current development plans, as applicable to the specific programs and indications, we do not believe it will be sufficient to receive FDA approval to market such products. Accordingly, we will need additional capital in the future. No assurance can be given that the anticipated amounts of required funding are correct or that we will be able to accomplish our goals within the timeframes projected. In addition, no assurance can be given that we will be able to obtain any required financing on commercially reasonable terms or otherwise. In the event we do not obtain the financing required for the above purposes, we may have to curtail our development, marketing and promotional activities, which would have a material adverse effect on our business, financial condition and results of operations, and ultimately, we could be forced to discontinue our operations and liquidate.

 

We have incurred significant losses in prior periods, and losses in the future could have a material adverse effect on our financial condition, our ability to pay our debts as they become due, and on our cash flows.

 

We have incurred significant losses in prior periods. For the six months ended June 30, 2022 and 2021, we incurred net losses of $2,683,704 and $3,388,763, respectively, and as of June 30, 2022 had an accumulated deficit of $29.6 million. For the years ended December 31, 2021 and 2020, we incurred net losses of $5,340,354 and, $4,670,255, respectively. Any losses in the future could have a material adverse effect on our financial condition, our ability to pay our debts as they become due, and on our cash flows.

 

We require additional financing to sustain our operations and execute our business plan. If we fail to secure the required additional financing on acceptable terms and in a timely manner, our ability to implement our business plan will be compromised and we may be unable to sustain our operations.

 

We have limited capital resources and operations. To date, our operations have been funded entirely from the proceeds of debt and equity financings. We will require substantial additional capital in the near future to acquire or in-license assets, develop our intellectual property base, and complete our pre-clinical and clinical stage studies. We may be unable to obtain additional financing on terms acceptable to us, or at all. Even if we obtain financing for our near-term operations, we expect that we will require additional capital thereafter. Our capital needs will depend on numerous factors including: (a) the level of our investment in research and development; (b) clinical trials and (c) the amount of our capital expenditures, including acquisitions. We cannot assure you that we will be able to obtain capital in the future to meet our needs. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership held by our existing shareholders will be reduced and our shareholders may experience significant dilution. In addition, new securities may contain rights, preferences, or privileges that are senior to those of our Common Stock. If we raise additional capital by incurring debt, this will result in increased interest expense. If we raise additional funds through the issuance of securities, market fluctuations in the price of our shares of Common Stock could limit our ability to obtain equity financing. We cannot give any assurance that any additional financing will be available to us, or if available, will be on terms favorable to us. If we are unable to raise capital when needed, our business, financial condition, and results of operations would be materially adversely affected, and we could be forced to reduce or discontinue our operations.

 

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Our company relies heavily upon a limited number of key employees.

 

We have been, and continue to be, heavily dependent upon the expertise and management of I Richard Garr, Paul Michaels and Barry Ginsberg, and our future performance will depend upon their continued services. The loss of any of these individuals could seriously interrupt our business operations and could have a very negative impact on our ability to fulfill our business plan and to carry out our existing development stage operations. We currently do not maintain key man life insurance. There can be no assurance that suitable replacements could be found for any of these individuals upon retirement, resignation, or upon death or disability.

 

The limited public company experience of our management could adversely impact our ability to comply with the reporting requirements of U.S. securities laws.

 

Our management has limited public company experience, which could impair our ability to comply with legal and regulatory requirements such as those imposed by Sarbanes-Oxley Act of 2002. A majority of our senior management has never had sole responsibility for managing a publicly traded company. Such responsibilities include complying with federal securities laws and making required disclosures on a timely basis. Our management may not be able to implement programs and policies in an effective and timely manner that adequately respond to such increased legal, regulatory compliance and reporting requirements, including the establishing and maintaining internal controls over financial reporting. Any such deficiencies, weaknesses or lack of compliance could have a materially adverse effect on our ability to comply with the reporting requirements of the Exchange Act, which is necessary to maintain our public company status. If we were to fail to fulfill those obligations, our ability to continue as a U.S. public company would be in jeopardy in which event you could lose your entire investment in our company.

 

The impact of COVID-19 and related risks could materially affect our results of operations and prospects.

 

Beginning in March 2020, the global pandemic related to the novel coronavirus COVID-19 began to impact the global economy. Because of the size and breadth of this pandemic, all of the direct and indirect consequences of COVID-19 are not yet known and may not emerge for some time. Risks presented by the ongoing effects of COVID-19 include, among others, the following:

 

Pre-Clinical and Clinical Studies. We anticipate that the COVID-19 pandemic may negatively impact our contemplated pre-clinical and clinical trials. Due to the worldwide efforts being taken to combat COVID-19 and the increased pre-clinical and clinical work being done in this respect, we believe that it may be difficult for certain needed laboratory supplies, equipment and other materials to be obtained in order to conduct our pre-clinical and clinical studies. We also anticipate that, due to a fear of COVID-19 transmission, there may be a hesitancy on the part of certain individuals to become clinical trial participants. We hope that these possible negative effects will lessen as more of the population becomes vaccinated; however, the impact that the vaccinations will have is uncertain at this time.

 

Adverse Legislative and/or Regulatory Action. Federal, state and local government actions to address and contain the impact of COVID-19 may adversely affect us. For example, we may be subject to legislative and/or regulatory action that negatively impacts the manner in which the clinical trials may be conducted.

 

Operational Disruptions and Heightened Cybersecurity Risks. Our operations could be disrupted if key members of our senior management or a significant percentage of our workforce are unable to continue to work because of illness, government directives or otherwise. In addition, in connection with increased remote working arrangements, we face a heightened risk of cybersecurity attacks or data security incidents and are more dependent on internet and telecommunications access and capabilities.

 

Risks Related to Our Business

 

Drug development is a highly uncertain undertaking and involves a substantial degree of risk.

 

Pharmaceutical and biopharmaceutical product development is a highly speculative undertaking and involves a substantial degree of risk. To date, we have focused principally on identifying, acquiring or in-licensing and developing our product candidates. Our product candidates are at the discovery, lead optimization and preclinical stage or in preparation to begin early-stage clinical trials.

 

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Our product candidates will require substantial additional development time, including extensive clinical research, and resources before we would be able to apply for or receive regulatory approvals and begin generating revenue from product sales. Because of the numerous risks and uncertainties associated with drug development, we are unable to predict the timing or amount of our expenses, or when we will be able to generate revenue. In addition, our expenses could increase beyond our current expectations if we are required by the FDA, or comparable foreign regulatory authorities, to perform nonclinical or preclinical studies or clinical trials in addition to those that we currently anticipate, or if there are any delays in any of our or our future collaborators’ clinical trials or the development of our product candidates that we may identify. Even if our future product candidates that we may identify are approved for commercial sale, we may incur significant costs associated with commercializing any approved product candidate and ongoing compliance efforts.

 

We may never be able to develop or commercialize some of our drugs or obtain marketing authority. Revenue from the sale of any product candidate for which regulatory approval is obtained will be dependent, in part, upon the size of the markets in the territories for which we gain regulatory approval, the accepted price for the product, the ability to obtain reimbursement at any price and whether we own the commercial rights for that territory. Our growth strategy depends, in part, on our ability to generate revenue. In addition, if the number of addressable patients is not as anticipated, the indication approved by regulatory authorities is narrower than expected, or the reasonably accepted population for treatment is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue from sales of such products, even if approved.

 

Our product candidates are in varying stages of development, all of which may require a lengthy and expensive development process with uncertain outcomes and the potential for substantial delays. We cannot give any assurance that any of our product candidates will receive regulatory approval, which is necessary before they can be commercialized.

 

Before obtaining marketing approval from regulatory authorities for the sale of our product candidates, we must conduct extensive clinical trials to demonstrate the safety and efficacy of the product candidates in humans. To date, we have focused substantially all of our efforts and financial resources on identifying, acquiring, and developing our product candidates, and providing general and administrative support for these operations. We cannot be certain that any clinical trials will be conducted as planned or completed on schedule, if at all. Our inability to successfully complete preclinical and clinical development could result in additional costs to us and negatively impact our ability to generate revenue. Our future success is dependent on our ability to successfully develop, obtain regulatory approval for, and then successfully commercialize product candidates. We currently have no products approved for sale and have not generated any revenue from sales of drugs, and we may never be able to develop or successfully commercialize a marketable drug.

 

All of our product candidates require additional development; management of preclinical, clinical, and manufacturing activities; and regulatory approval. In addition, we will need to obtain adequate manufacturing supply; build a commercial organization; commence marketing efforts; and obtain reimbursement before we generate any significant revenue from commercial product sales, if ever, for any products we commercialize ourselves. Many of our product candidates are in early-stage research or translational phases of development, and the risk of failure for these programs could be high. We cannot be certain that any of our product candidates will be successful in clinical trials or receive regulatory approval. Further, our product candidates may not receive regulatory approval even if they are successful in clinical trials. If we do not receive regulatory approvals for our product candidates, we may not be able to continue operations, which may result in us dissolving the Company, out-licensing the technology or pursuing an alternative strategy.

 

If we are unable to obtain regulatory approval in one or more jurisdictions for any product candidates that we may identify and develop, our business will be substantially harmed.

 

We cannot commercialize a product until the appropriate regulatory authorities have reviewed and approved the product candidate. Approval by the FDA and comparable foreign regulatory authorities is lengthy and unpredictable, and depends upon numerous factors, including substantial discretion of the regulatory authorities. Approval policies, regulations, or the type and amount of nonclinical or clinical data necessary to gain approval may change during the course of a product candidate’s development and may vary among jurisdictions, which may cause delays in the approval or the decision not to approve an application. We have not obtained regulatory approval for any product candidates, and it is possible that our current product candidates and any other product candidates which we may seek to develop in the future will not ever obtain regulatory approval. We cannot be certain that any of our product candidates will receive regulatory approval or be successfully commercialized even if we receive regulatory approval.

 

Obtaining marketing approval is an extensive, lengthy, expensive and inherently uncertain process, and regulatory authorities may delay, limit or deny approval of our product candidates for many reasons, including but not limited to:

 

  ● the inability to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that the applicable product candidate is safe and effective as a treatment for our targeted indications;
     
  ● the FDA or comparable foreign regulatory authorities may disagree with the design, endpoints or implementation of our clinical trials;
     
  ● the population studied in the clinical program may not be sufficiently broad or representative to assure safety or efficacy in the full population for which we seek approval;

 

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  ● the FDA or comparable foreign regulatory authorities may require additional preclinical studies or clinical trials beyond those that we currently anticipate;
     
  ● the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from nonclinical studies or clinical trials;
     
  ● the data collected from clinical trials of product candidates that we may identify and pursue may not be sufficient to support the submission of an NDA or BLA, or other submission for regulatory approval in the United States or elsewhere;
     
  ● we may be unable to demonstrate to the FDA or comparable foreign regulatory authorities that a product candidate’s risk-benefit ratio for its proposed indication is acceptable;
     
  ● the FDA or comparable foreign regulatory authorities may identify deficiencies in the manufacturing processes, test procedures and specifications, or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and
     
  ● the approval policies or regulations of the FDA or comparable foreign regulatory authorities may change in a manner that renders the clinical trial design or data insufficient for approval.

 

The lengthy approval process, as well as the unpredictability of the results of clinical trials and evolving regulatory requirements, may result in our failure to obtain regulatory approval to market product candidates that we may pursue in the United States or elsewhere, which would significantly harm our business, prospects, financial condition and results of operations.

 

We may encounter substantial delays in pre-clinical studies and clinical trials or may not be able to conduct or complete clinical trials on the expected timelines, if at all.

 

Pre-clinical studies and clinical testing is expensive, time consuming, and subject to uncertainty. We cannot guarantee that any of our planned studies or clinical trials will be conducted as planned or completed on schedule, if at all. Moreover, even if these studies and/or trials are initiated or conducted on a timely basis, issues may arise that could result in the suspension or termination of such studies or trials. A failure can occur at any stage of testing, and our ongoing and future clinical trials may not be successful. Failure to successfully complete any pre-clinical studies or clinical trials could have a material adverse effect on our company, business and prospects.

 

Our clinical trials may fail to demonstrate substantial evidence of the safety and effectiveness of product candidates that we may identify and pursue for their intended uses, which would prevent, delay or limit the scope of regulatory approval and commercialization.

 

Before obtaining regulatory approvals for the commercial sale of any of our product candidates, we must demonstrate through lengthy, complex and expensive nonclinical studies, preclinical studies and clinical trials that the applicable product candidate is both safe and effective for use in each target indication, and in the case of our product candidates regulated as biological products, that the product candidate is safe, pure, and potent for use in its targeted indication. Each product candidate must demonstrate an adequate risk versus benefit profile in its intended patient population and for its intended use.

 

Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during the clinical development process. Most product candidates that begin clinical trials are never approved by regulatory authorities for commercialization. We have limited experience in designing clinical trials and may be unable to design and execute a clinical trial to support marketing approval.

 

Use of our product candidates could be associated with side effects, adverse events or other properties or safety risks, which could delay or halt their clinical development, prevent their regulatory approval, cause us to suspend or discontinue clinical trials, abandon a product candidate, limit their commercial potential, if approved, or result in other significant negative consequences that could severely harm our business, prospects, operating results and financial condition.

 

As is the case with pharmaceuticals generally, it is likely that there may be side effects and adverse effects associated with our product candidates’ use. Results of our clinical trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics. Undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or comparable foreign regulatory authorities. The drug-related side effects could affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. Any of these occurrences may harm our business, financial condition and prospects significantly.

 

Even if we obtain FDA approval for product candidates that we may identify and pursue in the United States, we may never obtain approval to commercialize any product candidates outside of the United States, which would limit our ability to realize their full market potential.

 

In order to market any products outside of the United States, we must establish and comply with numerous and varying regulatory requirements of other countries regarding safety and effectiveness. Clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not mean that regulatory approval will be obtained in any other country. Approval processes vary among countries and can involve additional product testing and validation and additional or different administrative review periods from those in the United States, including additional preclinical studies or clinical trials, as clinical trials conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions. In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval.

 

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Seeking foreign regulatory approval could result in difficulties and costs and require additional nonclinical studies or clinical trials which could be costly and time-consuming. Regulatory requirements can vary widely from country to country and could delay or prevent the introduction of our product candidates in those countries. The foreign regulatory approval process may include all of the risks associated with obtaining FDA approval. We do not have any product candidates approved for sale in any jurisdiction, including international markets, and we do not have experience in obtaining regulatory approval in international markets. If we fail to comply with regulatory requirements in international markets or to obtain and maintain required approvals, or if regulatory approval in international markets is delayed, our target market will be reduced and our ability to realize the full market potential of our products will be harmed.

 

Even though we may apply for orphan drug designation for our product candidates, we may not be able to obtain orphan drug marketing exclusivity.

 

Our business strategy includes the development of product candidates for the treatment of diseases, which may be eligible for FDA or EMA orphan drug designation. Regulatory authorities in some jurisdictions, including the United States and European Union, may designate drugs or biologics for relatively small patient populations as orphan drugs. Under the Orphan Drug Act, the FDA may designate a drug as an orphan drug if it is intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals annually in the United States, or a patient population greater than 200,000 in the United States where there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States. In order to obtain orphan drug designation, the request must be made before submitting an NDA or BLA. In the United States, orphan drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages, and user-fee waivers. After the FDA grants orphan drug designation, the generic identity of the drug and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.

 

If a product that has orphan drug designation subsequently receives the first FDA approval of that particular product for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications, including an NDA or BLA, to market the same drug or biologic for the same indication for seven years, except in limited circumstances such as a showing of clinical superiority to the product with orphan drug exclusivity or if FDA finds that the holder of the orphan drug exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan drug to meet the needs of patients with the disease or condition for which the drug was designated. As a result, even if one of our product candidates receives orphan exclusivity, the FDA can still approve other drugs or biologics for use in treating the same indication or disease or the same biologic for a different indication or disease during the exclusivity period. Furthermore, the FDA can waive orphan exclusivity if we are unable to manufacture sufficient supply of our product or if a subsequent applicant demonstrates clinical superiority over our product.

 

In the European Union, the Committee for Orphan Medicinal Products of the EMA grants orphan drug designation to promote the development of products that are intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting not more than five in 10,000 persons in the European Union (or where it is unlikely that the development of the medicine would generate sufficient return to justify the investment) and for which no satisfactory method of diagnosis, prevention, or treatment is authorized or, if a method exists, the product would be of significant benefit to those affected by the condition.

 

Although we have received Orphan drug designation with respect to our proposed Rabies therapeutic from the U.S. FDA on November 24, 2014, there can be no assurance that will be able to receive orphan drug designation with respect to the European Medicines Agency for our Rabies therapeutics or that we will be able to receive Orphan Drug Designation in the US or Europe with respect to any of our other therapeutics.

 

Even if we obtain regulatory approval for a product candidate, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our product candidates.

 

If any of our product candidates are approved, they will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping, conduct of post-marketing studies, and submission of safety, efficacy, and other post-market information, including both federal and state requirements in the United States and requirements of comparable foreign regulatory authorities.

 

Manufacturers and manufacturers’ facilities are required to comply with extensive requirements imposed by the FDA and comparable foreign regulatory authorities, including ensuring that quality control and manufacturing procedures conform to current good manufacturing practices, or other applicable, regulations. As such, we will be subject to continual review and inspections to assess compliance with and adherence to commitments made in any NDA, BLA or marketing authorization application, or “MAA.” Accordingly, we and others with whom we work must continue to expend time, money, and effort in all areas of regulatory compliance, including manufacturing, production and quality control.

 

Any regulatory approvals that we may receive for our product candidates will be subject to limitations on the approved indicated uses for which the product may be marketed and promoted or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials and surveillance to monitor the safety and efficacy of the product candidate. We will be required to report certain adverse reactions and production problems, if any, to the FDA and comparable foreign regulatory authorities. Any new legislation addressing drug safety issues could result in delays in product development or commercialization, or increased costs to assure compliance.

 

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The FDA and other agencies, including the Department of Justice, closely regulate and monitor the post-approval marketing, labeling, advertising and promotion of products to ensure that they are manufactured, marketed and distributed only for the approved indications and in accordance with the provisions of the approved label. We will have to comply with requirements concerning advertising and promotion for our products. Promotional communications with respect to prescription drugs are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the product’s approved label. As such, we may not promote our products for indications or uses for which they do not have approval.

 

The holder of an approved NDA, BLA or MAA must submit new or supplemental applications and obtain approval for certain changes to the approved product, product labeling, or manufacturing process. We could also be asked to conduct post-marketing clinical trials to verify the safety and efficacy of our products in general or in specific patient subsets. If original marketing approval was obtained via the accelerated approval pathway, we could be required to conduct a successful post-marketing clinical trial to confirm clinical benefit for our products. An unsuccessful post-marketing study or failure to complete such a study could result in the withdrawal of marketing approval.

 

If a regulatory agency discovers previously unknown problems with a product, such as adverse events or AEs of unanticipated severity or frequency, or problems with the facility where the product is manufactured, or disagrees with the promotion, marketing or labeling of a product, such regulatory agency may impose restrictions on that product or us, including requiring withdrawal of the product from the market. If we fail to comply with applicable regulatory requirements, a regulatory agency or enforcement authority may, among other things:

 

  ● issue warning letters that would result in adverse publicity;
  ● impose civil or criminal penalties;
  ● suspend or withdraw regulatory approvals;
  ● suspend any of our ongoing clinical trials;
  ● refuse to approve pending applications or supplements to approved applications submitted by us;
  ● impose restrictions on our operations, including closing our CMOs’ facilities;
  ● seize or detain products; or
  ● require a product recall.

 

Any government investigation of alleged violations of law could require us to expend significant time and resources in response, and could generate negative publicity. Any failure to comply with ongoing regulatory requirements may significantly and adversely affect our ability to commercialize and generate revenue from our products. If regulatory sanctions are applied or if regulatory approval is withdrawn, the value of our company and our operating results will be adversely affected.

 

The FDA’s and other regulatory authorities’ policies may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates.

 

We also cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad.

 

The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.

 

If any of our product candidates are approved and we are found to have improperly promoted off-label uses of those products, we may become subject to significant liability. The FDA and other regulatory agencies strictly regulate the promotional claims that may be made about prescription products, if approved. In particular, while FDA permits the dissemination of truthful and non-misleading information about an approved product, a manufacturer may not promote a product for uses that are not approved by the FDA or such other regulatory agencies as reflected in the product’s approved labeling. If we are found to have promoted such off-label uses, we may become subject to significant liability. The federal government has levied large civil and criminal fines against companies for alleged improper promotion of off-label use and has enjoined several companies from engaging in off-label promotion. The FDA has also requested that companies enter into consent decrees, corporate integrity agreements or permanent injunctions under which specified promotional conduct must be changed or curtailed. If we cannot successfully manage the promotion of our product candidates, if approved, we could become subject to significant liability, which would materially adversely affect our business and financial condition.

 

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Risks Related to Reliance on Third Parties

 

We expect to rely on third parties to conduct our clinical trials and all or most aspects of our research and preclinical testing, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, research, or testing.

 

We currently rely and expect to continue to rely on third parties, such as subject matter experts, clinical research organizations or CROs, clinical data management organizations, medical institutions, and clinical investigators, to conduct all or most aspects of research and preclinical testing and clinical trials. Any of these third parties may terminate their engagements with us or be unable to fulfill their contractual obligations. If any of our relationships with these third parties terminate, we may not be able to enter into arrangements with alternative third parties on commercially reasonable terms, or at all. If we need to enter into alternative arrangements, it would delay product development activities.

 

Our reliance on these third parties for research and development activities reduces control over these activities but does not relieve us of our responsibilities. For example, we remain responsible for ensuring that each of our respective clinical trials is conducted in accordance with the general investigational plan and protocols for the trial and applicable legal, regulatory, and scientific standards, and our reliance on third parties does not relieve us of our regulatory responsibilities. In addition, the FDA and comparable foreign regulatory authorities require compliance with good clinical practice regulations (GCPs) for conducting, recording, and reporting the results of clinical trials to assure that data and reported results are credible, reproducible and accurate and that the rights, integrity, and confidentiality of trial participants are protected. Regulatory authorities enforce these GCPs through periodic inspections of trial sponsors, principal investigators, and trial sites. If we or any of these third parties fail to comply with applicable GCP regulations, some or all of the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional nonclinical or clinical trials or to enroll additional patients before approving our marketing applications. We cannot be certain that, upon inspection, such regulatory authorities will determine that any of our clinical trials complies with the GCP regulations. For any violations of laws and regulations during the conduct of clinical trials, we could be subject to untitled and warning letters or enforcement action that may include civil penalties up to and including criminal prosecution. We also are required to register ongoing clinical trials and post the results of completed clinical trials on a government-sponsored database within certain timeframes. Failure to do so can result in fines, adverse publicity, and civil and criminal sanctions.

 

If these third parties do not successfully carry out their contractual duties, meet expected deadlines, or conduct clinical trials in accordance with regulatory requirements or our stated protocols, we will not be able to obtain, or may be delayed in obtaining, marketing approvals for any product candidates we may develop and will not be able to, or may be delayed in our efforts to, successfully commercialize our medicines. Our failure or the failure of these third parties to comply applicable regulatory requirements or our stated protocols could also subject us to enforcement action.

 

We also expect to rely on other third parties to store and distribute drug supplies for our clinical trials. Any performance failure on the part of our distributors could delay clinical development or marketing approval of any product candidates we may develop or commercialization of our medicines, producing additional losses and depriving us of potential product revenue.

 

We may rely entirely on third parties for the manufacturing of our product candidates or other product candidates that we may develop for preclinical studies and clinical trials and expect to continue to do so for commercialization. Our business could be harmed if those third parties fail to provide us with sufficient quantities of drug product, or fail to do so at acceptable quality levels or prices.

 

We do not currently have, nor do we plan to acquire, the infrastructure or capability internally to manufacture drug supplies for our ongoing clinical trials or any future clinical trials that we may conduct, and we lack the resources to manufacture any product candidates on a commercial scale. We rely, and expect to continue to rely, on third-party manufacturers to produce our current product candidates or other product candidates that we may identify for clinical trials, as well as for commercial manufacture if any product candidates that receive marketing approval. Although we generally do not begin a clinical trial unless we believe we have a sufficient supply of a product candidate to complete the trial, any significant delay or discontinuity in the supply of a product candidate, or the raw material components thereof, for an ongoing clinical trial due to the need to replace a third-party manufacturer could considerably delay the clinical development and potential regulatory approval of our product candidates, which could harm our business and results of operations. We also expect to rely primarily on third parties for the manufacturing of commercial supply of our product candidates, if approved.

 

We may be unable to identify and appropriately qualify third-party manufacturers or establish agreements with third-party manufacturers or do so on acceptable terms. This is especially true in the time of COVID where much of the world’s biomanufacturing capacity is committed to creating vaccines and vaccine related essential materials. Even if we are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including:

 

  ● reliance on the third party for sourcing of raw materials, components, and such other goods as may be required for execution of its manufacturing processes and the oversight by the third party of its suppliers;
  ● reliance on the third party for regulatory compliance and quality assurance for the manufacturing activities each performs;
  ● the possible breach of the manufacturing agreement by the third party;
  ● the possible misappropriation of proprietary information, including trade secrets and know-how; and
  ● the possible termination or non-renewal of the agreement by the third party at a time that is costly or inconvenient for us.

 

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Furthermore, all of our contract manufacturing organizations (CMO)s are engaged with other companies to supply and/or manufacture materials or products for such companies, which exposes our manufacturers to regulatory risks for the production of such materials and products. The facilities used by our contract manufacturers to manufacture our product candidates are subject to review by the FDA pursuant to inspections that will be conducted after we submit an NDA or BLA to the FDA. We do not control the manufacturing process of, and are completely dependent on, our contract manufacturing partners for compliance with the regulatory requirements, known as current good manufacturing practice, or cGMP, requirements for manufacture of drug and biologic products. If our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or others, we will not be able to secure or maintain regulatory approval for our product candidates manufactured at these manufacturing facilities. In addition, we have no control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel. If the FDA or a comparable foreign regulatory agency does not approve these facilities for the manufacture of our product candidates or if any agency withdraws its approval in the future, we may need to find alternative manufacturing facilities, which would negatively impact the ability to develop, obtain regulatory approval for or market our product candidates, if approved.

 

Our product candidates may compete with other product candidates and marketed drugs for access to manufacturing facilities. Any performance failure on the part of our existing or future manufacturers could delay clinical development, marketing approval or commercialization. Our current and anticipated future dependence upon others for the manufacturing of our product candidates may adversely affect our future profit margins and our ability to commercialize any product candidates that receive marketing approval on a timely and competitive basis.

 

If the contract manufacturing facilities on which we rely do not continue to meet regulatory requirements or are unable to meet our supply demands, our business will be harmed.

 

All entities involved in the preparation of product candidates for clinical trials or commercial sale, including our existing CMOs for all of our product candidates, are subject to extensive regulation. Components of a finished therapeutic product approved for commercial sale or used in late-stage clinical trials must be manufactured in accordance with cGMP, or similar regulatory requirements outside the United States. These regulations govern manufacturing processes and procedures, including recordkeeping, and the implementation and operation of quality systems to control and assure the quality of investigational products and products approved for sale. Poor control of production processes can lead to the introduction of contaminants or to inadvertent changes in the properties or stability of our product candidates. Our failure, or the failure of third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, suspension of production, seizures or recalls of product candidates or marketed drugs, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect clinical or commercial supplies of our product candidates.

 

We or our CMOs must supply all necessary documentation in support of an NDA, BLA or MAA on a timely basis and must adhere to regulations enforced by the FDA and other regulatory agencies through their facilities inspection program. Some of our CMOs have never produced a commercially approved pharmaceutical product and therefore have not obtained the requisite regulatory authority approvals to do so. The facilities and quality systems of some or all of our third-party contractors must pass a pre-approval inspection for compliance with the applicable regulations as a condition of regulatory approval of our product candidates or any of our other potential products. In addition, the regulatory authorities may, at any time, audit or inspect a manufacturing facility involved with the preparation of our product candidates or our other potential products or the associated quality systems for compliance with the regulations applicable to the activities being conducted. Although we oversee the CMOs, we cannot control the manufacturing process of, and are completely dependent on, our CMO partners for compliance with the regulatory requirements. If these facilities do not pass a pre-approval plant inspection, regulatory approval of the products may not be granted or may be substantially delayed until any violations are corrected to the satisfaction of the regulatory authority, if ever.

 

The regulatory authorities also may, at any time following approval of a product for sale, audit the manufacturing facilities of our third-party contractors. If any such inspection or audit identifies a failure to comply with applicable regulations or if a violation of our product specifications or applicable regulations occurs independent of such an inspection or audit, we or the relevant regulatory authority may require remedial measures that may be costly and/or time consuming for us or a third party to implement, and that may include the temporary or permanent suspension of a clinical study or commercial sales or the temporary or permanent closure of a facility. Any such remedial measures imposed upon us or third parties with whom we contract could materially harm our business.

 

Additionally, if supply from one approved manufacturer is interrupted, an alternative manufacturer would need to be qualified through an NDA, BLA supplement or MAA variation, or equivalent foreign regulatory filing, which could result in further delay. The regulatory agencies may also require additional studies if a new manufacturer is relied upon for commercial production. Switching manufacturers may involve substantial costs and is likely to result in a delay in our desired clinical and commercial timelines.

 

These factors could cause us to incur higher costs and could cause the delay or termination of clinical trials, regulatory submissions, required approvals, or commercialization of our product candidates. Furthermore, if our suppliers fail to meet contractual requirements and we are unable to secure one or more replacement suppliers capable of production at a substantially equivalent cost, our clinical trials may be delayed or we could lose potential revenue.

 

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Collaborative relationships with third parties could cause us to expend significant resources and incur substantial business risk with no assurance of financial return.

 

We anticipate relying upon strategic collaborations for marketing and commercializing our existing product candidates, and we may rely even more on strategic collaborations for R&D of other product candidates. We may sell product offerings through strategic partnerships with pharmaceutical and biotechnology companies. If we are unable to establish or manage such strategic collaborations on terms favorable to us in the future, our R&D efforts and potential to generate revenue may be limited.

 

If we enter into R&D collaborations during the early phases of product development, success will in part depend on the performance of research collaborators. We will not directly control the amount or timing of resources devoted by research collaborators to activities related to product candidates. Research collaborators may not commit sufficient resources to our R&D programs. If any research collaborator fails to commit sufficient resources, the preclinical or clinical development programs related to the collaboration could be delayed or terminated. Also, collaborators may pursue existing or other development-stage products or alternative technologies in preference to those being developed in collaboration with us. Finally, if we fail to make required milestone or royalty payments to collaborators or to observe other obligations in agreements with them, the collaborators may have the right to terminate or stop performance of those agreements.

 

Establishing strategic collaborations is difficult and time-consuming. Our discussions with potential collaborators may not lead to the establishment of collaborations on favorable terms, if at all. Potential collaborators may reject collaborations based upon their assessment of our financial, regulatory or intellectual property position. In addition, there have been a significant number of recent business combinations among large pharmaceutical companies that have resulted in a reduced number of potential future collaborators. Even if we successfully establish new collaborations, these relationships may never result in the successful development or commercialization of product candidates or the generation of sales revenue. To the extent that we enter into collaborative arrangements, the related product revenues are likely to be lower than if we directly marketed and sold products. Such collaborators may also consider alternative product candidates or technologies for similar indications that may be available to collaborate on and whether such a collaboration could be more attractive than the one with us for any future product candidate.

 

Management of our relationships with collaborators will require:

 

  ● significant time and effort from our management team;
  ● coordination of our marketing and R&D programs with the marketing and R&D priorities of our collaborators; and
  ● effective allocation of our resources to multiple projects.

 

We are parties to and may seek to enter into additional collaborations, licenses and other similar arrangements and may not be successful in maintaining existing arrangements or entering into new ones, and even if we are, we may not realize the benefits of such relationships.

 

The success of our collaboration arrangements will depend heavily on the efforts and activities of our collaborators. Collaborations are subject to numerous risks, which may include risks that:

 

  ● collaborators may have significant discretion in determining the efforts and resources that they will apply to collaborations;
  ● collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in their strategic focus due to their acquisition of competitive products or their internal development of competitive products, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities;
  ● collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial, abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;
  ● collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates;
  ● a collaborator with marketing, manufacturing and distribution rights to one or more products may not commit sufficient resources to or otherwise not perform satisfactorily in carrying out these activities;
  ● we could grant exclusive rights to our collaborators that would prevent us from collaborating with others;
  ● collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability;
  ● disputes may arise between us and a collaborator that cause the delay or termination of the research, development or commercialization of our current or future product candidates or that results in costly litigation or arbitration that diverts management attention and resources;
  ● collaborations may be terminated, which may result in a need for additional capital to pursue further development or commercialization of the applicable current or future product candidates;
  ● collaborators may own or co-own intellectual property covering products that result from our collaboration with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property;

 

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  ● disputes may arise with respect to the ownership of any intellectual property developed pursuant to our collaborations; and
  ● a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings.

 

Additionally, we may seek to enter into additional collaborations, joint ventures, licenses and other similar arrangements for the development or commercialization of our product candidates, due to capital costs required to develop or commercialize the product candidate or manufacturing constraints. We may not be successful in our efforts to establish such collaborations for our product candidates because our research and development pipeline may be insufficient, our product candidates may be deemed to be at too early of a stage of development for collaborative effort or third parties may not view our product candidates as having the requisite potential to demonstrate safety and efficacy or significant commercial opportunity. In addition, we face significant competition in seeking appropriate strategic partners, and the negotiation process can be time consuming and complex.

 

Further, any future collaboration agreements may restrict us from entering into additional agreements with potential collaborators. We cannot be certain that, following a strategic transaction or license, we will achieve an economic benefit that justifies such transaction.

 

Even if we are successful in our efforts to establish such collaborations, the terms that we agree upon may not be favorable to us, and we may not be able to maintain such collaborations if, for example, development or approval of a product candidate is delayed, the safety of a product candidate is questioned or sales of an approved product candidate are unsatisfactory.

 

In addition, any potential future collaborations may be terminable by our strategic partners, and we may not be able to adequately protect our rights under these agreements. Furthermore, strategic partners may negotiate for certain rights to control decisions regarding the development and commercialization of our product candidates, if approved, and may not conduct those activities in the same manner as we do. Any termination of collaborations we enter into in the future, or any delay in entering into collaborations related to our product candidates, could delay the development and commercialization of our product candidates and reduce their competitiveness if they reach the market, which could have a material adverse effect on our business, financial condition and results of operations.

 

Risks Related to our Intellectual Property

 

If we are unable to obtain and maintain sufficient intellectual property for our product candidates that we may identify, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize product candidates similar or identical to ours, and our ability to successfully commercialize some product candidates that we may pursue may be impaired.

 

As is the case with other pharmaceutical and biopharmaceutical companies, our success depends in large part on our ability, or our licensors, to obtain and maintain protection of the intellectual property that we may license or own solely and jointly with others, particularly patents, in the United States and other countries with respect to our product candidates and technology. We seek to protect our proprietary position by filing patent applications in the United States and abroad related to product candidates that we may identify.

 

Obtaining and enforcing pharmaceutical and biopharmaceutical patents is costly, time consuming and complex, and we may not be able to file and prosecute necessary or desirable patent applications, or maintain, enforce and license patents that may issue from such patent applications, at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. We may not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the rights to patents licensed from third parties. Therefore, these patents and applications may not be prosecuted and enforced in a manner consistent with the best interests of our business.

 

The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal, technological and factual questions and has in recent years been the subject of much litigation. In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States, or vice versa. Further, we may not be aware of all third-party intellectual property rights potentially relating to our licensed product candidates. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing or, in some cases, not at all. Therefore, we cannot know with certainty whether if we make an inventions claimed in our future patents or pending patent applications, or that we are the first to file for patent protection of such inventions. Furthermore, the scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and the patent’s prosecution history and can involve other factors such as expert opinion. Our analysis of these issues, including interpreting the relevance or the scope of claims in a future or licensed patent or a pending application, determining applicability of such claims to our proprietary technologies or product candidates, predicting whether a third party’s pending patent application will issue with claims of relevant scope, and determining the expiration date of any patent in the United States or abroad that we consider relevant may be incorrect, which may negatively impact our ability to develop and market our product candidates. We do not always conduct independent reviews of pending patent applications of and patents issued to third parties. As a result, the issuance, scope, validity, enforceability and commercial value of our licensed patent rights are highly uncertain. Our pending and future patent applications may not result in patents being issued that protect our product candidates, in whole or in part, or which effectively prevent others from commercializing competitive product candidates. Even if our future or licensed patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors from competing with us or otherwise provide us with any competitive advantage. Our competitors may be able to circumvent our patents by developing similar or alternative product candidates in a non-infringing manner.

 

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Our ability to enforce licensed patent and future patent rights also depends on our ability to detect infringement. It may be difficult to detect infringers who do not advertise the components or methods that are used in connection with their products and services. Moreover, it may be difficult or impossible to obtain evidence of infringement in a competitor’s or potential competitor’s product or service. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded if we were to prevail may not be commercially meaningful. If we initiate lawsuits to protect or enforce our licensed or future patents, or litigate against third-party claims, such proceedings would be expensive and would divert the attention of our management and technical personnel. Such proceedings could also provoke third parties to assert claims against us, including that some or all of the claims in one or more of our patents are invalid or otherwise unenforceable.

 

In addition, the issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our licensed or future patents may be challenged in the courts or patent offices in the United States and abroad. Such challenges may result in loss of exclusivity or freedom to operate or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical product candidates to ours, or limit the duration of the patent protection of our product candidates. Given the amount of time required for the development, testing and regulatory review of new product candidates, licensed or future patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our intellectual property portfolio may not provide us with sufficient rights to exclude others from commercializing drugs similar or identical to ours.

 

Our rights to develop and commercialize our product candidates are subject in part to the terms and conditions of licenses granted to us by others, and the patent protection, prosecution and enforcement for some of our product candidates may be dependent on our licensors.

 

We currently are reliant upon licenses of certain intellectual property rights and proprietary technology from third parties that are important or necessary to the development of our proprietary technology, including technology related to our product candidates. These licenses, and other licenses we may enter into in the future, may not provide adequate rights to use such intellectual property rights and proprietary technology in all relevant fields of use or in all territories in which we may wish to develop or commercialize technology and product candidates in the future. Licenses to additional third-party proprietary technology or intellectual property rights that may be required for our development programs may not be available in the future or may not be available on commercially reasonable terms. In that event, we may be required to expend significant time and resources to redesign our proprietary technology or product candidates or to develop or license replacement technology, which may not be feasible on a technical or commercial basis. If we are unable to do so, we may not be able to develop and commercialize technology and product candidates in fields of use and territories for which we are not granted rights pursuant to such licenses, which could harm our competitive position, business, financial condition, results of operations and prospects significantly.

 

In some circumstances, we may not have the right to control the preparation, filing, prosecution and enforcement of patent applications, or to maintain the patents, covering technology that we license from third parties. In addition, some of our agreements with our licensors require us to obtain consent from the licensor before we can enforce patent rights, and our licensor may withhold such consent or may not provide it on a timely basis. Therefore, we cannot be certain that our licensors or collaborators will prosecute, maintain, enforce and defend such intellectual property rights in a manner consistent with the best interests of our business, including by taking reasonable measures to protect the confidentiality of know-how and trade secrets, or by paying all applicable prosecution and maintenance fees related to intellectual property registrations for any of our product candidates. We also cannot be certain that our licensors have drafted or prosecuted the patents and patent applications licensed to us in compliance with applicable laws and regulations, which may affect the validity and enforceability of such patents or any patents that may issue from such applications. This could cause us to lose rights in any applicable intellectual property that we in-license, and as a result our ability to develop and commercialize product candidates may be adversely affected and we may be unable to prevent competitors from making, using and selling competing products.

 

In addition, our licensors may own or control intellectual property that has not been licensed to us and, as a result, we may be subject to claims, regardless of their merit, that we are infringing or otherwise violating the licensor’s rights. In addition, while we cannot currently determine the amount of the royalty obligations we would be required to pay on sales of future products, if any, the amounts may be significant. The amount of our future royalty obligations will depend on the technology and intellectual property we use in product candidates that we successfully develop and commercialize, if any. Therefore, even if we successfully develop and commercialize product candidates, we may be unable to achieve or maintain profitability. In addition, we may seek to obtain additional licenses from our licensors and, in connection with obtaining such licenses, we may agree to amend our existing licenses in a manner that may be more favorable to the licensors, including by agreeing to terms that could enable third parties (potentially including our competitors) to receive licenses to a portion of the intellectual property rights that are subject to our existing licenses. Any of these events could have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.

 

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If we fail to comply with the obligations of our licensing agreements or these agreements are terminated or we otherwise experience disruptions to our business relationships with our licensors, we could lose intellectual property rights that are important to our business.

 

We are party to various agreements that we depend on to operate our business, and our rights to use currently licensed intellectual property, or intellectual property to be licensed in the future, are or will be subject to the continuation of and our compliance with the terms of these agreements. Such license agreements may impose, and we expect that future license agreements will impose, various development, diligence, commercialization, and other obligations on us. For example, we may be required to use commercially reasonable efforts to engage in various development and commercialization activities with respect to licensed products, and must satisfy specified milestone and royalty payment obligations. In spite of our efforts, our licensors might conclude that we have materially breached our obligations under such license agreements and might therefore terminate the license agreements, thereby removing or limiting our ability to develop and commercialize products and technology covered by these license agreements. In addition, certain provisions in our license agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our financial or other obligations under the agreement, either of which could have a material adverse effect on our business, financial condition, results of operations and prospects. Moreover, if disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates, which could have a material adverse effect on our competitive position, business, financial conditions, results of operations and prospects.

 

Third-party claims of intellectual property infringement may prevent or delay our development and commercialization efforts.

 

Our commercial success depends in part on our avoiding infringement of the patents and proprietary rights of third parties. However, our research, development and commercialization activities may be subject to claims that we infringe or otherwise violate patents or other intellectual property rights owned or controlled by third parties. There is a substantial amount of litigation, both within and outside the United States, involving patent and other intellectual property rights in the biotechnology and pharmaceutical industries, including patent infringement lawsuits, interferences, oppositions and inter partes reexamination proceedings before the USPTO, and corresponding foreign patent offices. Numerous U.S. and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are pursuing development candidates. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that some of our product candidates that we may identify may be subject to claims of infringement of the patent rights of third parties.

 

Patent terms may be inadequate to protect our competitive position on product candidates for an adequate amount of time.

 

Patents have a limited lifespan. In the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest U.S. non-provisional or international patent application filing date. Various extensions may be available, but the life of a patent, and the protection it affords, is limited. Even if patents covering our product candidates are obtained, once the patent life has expired, we may be open to competition from competitive products, including generics or biosimilars. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.

 

If we or our licensors are not able to obtain patent term extension or non-patent exclusivity in the United States under the Hatch-Waxman Act and in foreign countries under similar legislation, thereby potentially extending the marketing exclusivity term of our product candidates, our business may be materially harmed.

 

Depending upon the timing, duration and specifics of FDA marketing approval of our product candidates, one of the U.S. patents covering each of such product candidates or the use thereof may be eligible for up to five years of patent term extension under the Hatch-Waxman Act. The Hatch-Waxman Act allows a maximum of one patent to be extended per FDA approved product as compensation for the patent term lost during the FDA regulatory review process. A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval and only those claims covering such approved drug product, a method for using it or a method for manufacturing it may be extended. Patent term extension also may be available in certain foreign countries upon regulatory approval of our product candidates. Nevertheless, neither we nor our licensees may not be granted patent term extension either in the United States or in any foreign country because of, for example, failing to exercise due diligence during the testing phase or regulatory review process, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements. Moreover, the term of extension, as well as the scope of patent protection during any such extension, afforded by the governmental authority could be less than we request.

 

If we or our licensors are unable to obtain patent term extension or restoration, or the term of any such extension is less than we request, the period during which we will have the right to exclusively market our product may be shortened and our competitors may obtain approval of competing products following our patent expiration sooner, and our revenue could be reduced, possibly materially.

 

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If we are unable to protect the confidentiality of our trade secrets, the value of our technology could be materially adversely affected and our business would be harmed.

 

We seek to protect our confidential proprietary information, in part, by confidentiality agreements and invention assignment agreements with our employees, consultants, scientific advisors, contractors and collaborators. These agreements are designed to protect our proprietary information. However, we cannot be certain that such agreements have been entered into with all relevant parties, and we cannot be certain that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques. For example, any of these parties may breach the agreements and disclose proprietary information, including trade secrets, and we may not be able to obtain adequate remedies for such breaches. We also seek to preserve the integrity and confidentiality of our confidential proprietary information by maintaining physical security of our premises and physical and electronic security of our information technology systems, but it is possible that these security measures could be breached. If any of our confidential proprietary information were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent such competitor from using that technology or information to compete with us, which could harm our competitive position.

 

Unauthorized parties may also attempt to copy or reverse engineer certain aspects of our products that we consider proprietary. We may not be able to obtain adequate remedies in the event of such unauthorized use. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret can be difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. Trade secrets will also over time be disseminated within the industry through independent development, the publication of journal articles and the movement of personnel skilled in the art from company to company or academic to industry scientific positions. Though our agreements with third parties typically restrict the ability of our advisors, employees, collaborators, licensors, suppliers, third-party contractors and consultants to publish data potentially relating to our trade secrets, our agreements may contain certain limited publication rights. In addition, if any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent such competitor from using that technology or information to compete with us, which could harm our competitive position. Despite employing the contractual and other security precautions described above, the need to share trade secrets increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements. If any of these events occurs or if we otherwise lose protection for our trade secrets, the value of this information may be greatly reduced and our competitive position, business, financial condition, results of operations, and prospects would be harmed.

 

We may become involved in lawsuits to protect or enforce our licensed patents or other intellectual property, which could be expensive, time consuming and unsuccessful.

 

Competitors may infringe on our licensed patents or other intellectual property. If we were to initiate legal proceedings against a third party to enforce a patent covering one or more of our product candidates, the defendant could counterclaim that the patent covering our product candidate is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including novelty, non-obviousness, written description or enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution. The outcome following legal assertions of invalidity and unenforceability is unpredictable. Interference or derivation proceedings provoked by third parties or brought by us or declared by the USPTO may be necessary to determine the priority of inventions with respect to our licensed patents or patent applications. An unfavorable outcome could require us to cease using the related technology or to attempt to license rights to it from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms or at all, or if a non-exclusive license is offered and our competitors gain access to the same technology. Our defense of litigation or interference or derivation proceedings may fail and, even if successful, may result in substantial costs and distract our management and other employees. In addition, the uncertainties associated with litigation could have a material adverse effect on our ability to raise the funds necessary to continue clinical trials, continue research programs, license necessary technology from third parties, or enter into development partnerships that would help us bring product candidates to market. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions, or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our Common Stock.

 

We may be subject to claims challenging the inventorship of our patents and other intellectual property.

 

Our agreements with employees and our personnel policies provide that any inventions conceived by an individual in the course of rendering services to us shall be our exclusive property. Although our policy is to have all such individuals complete these agreements, we may not obtain these agreements in all circumstances, and individuals with whom we have these agreements may not comply with their terms. The assignment of intellectual property may not be automatic upon the creation of an invention and despite such agreement, such inventions may become assigned to third parties. In the event of unauthorized use or disclosure of our trade secrets or proprietary information, these agreements, even if obtained, may not provide meaningful protection, particularly for our trade secrets or other confidential information.

 

We or our licensors may be subject to claims that former employees, collaborators or other third parties have an interest in our owned or in-licensed patents, trade secrets, or other intellectual property as an inventor or co-inventor. For example, we or our licensors may have inventorship disputes arise from conflicting obligations of employees, consultants or others who are involved in developing our product candidates. Litigation may be necessary to defend against these and other claims challenging inventorship or our or our licensors’ ownership of our owned or in-licensed patents, trade secrets or other intellectual property. If we or our licensors fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, intellectual property that is important to our product candidates. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

 

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Any of the foregoing could have a material adverse effect on our competitive position, business, financial condition, results of operations and prospects.

 

Issued patents covering our product candidates could be found invalid or unenforceable if challenged in court.

 

If we or one of our licensing partners initiated legal proceedings against a third party to enforce a patent covering one or more of our product candidates, the defendant could counterclaim that the patent covering the relevant product candidate is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including novelty, non-obviousness, written description or enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution. Third parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation. Such mechanisms include re-examination, post grant review, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings). Such proceedings could result in revocation or amendment to our patents in such a way that they no longer cover our product candidates. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our product candidates. Such a loss of patent protection would have a material adverse impact on our business.

 

We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.

 

As is common in the biotechnology and pharmaceutical industry, we employ individuals who were previously employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although we try to ensure that our employees, consultants and independent contractors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of any of our employee’s former employer or other third parties. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel, which could adversely impact our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

 

Obtaining and maintaining our patent protection depends on our licensing partner’s compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

 

Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and/or applications will be due to be paid to the USPTO and various governmental patent agencies outside of the United States in several stages over the lifetime of the patents and/or applications. Although there are systems developed to remind patent holders when to pay these fees, as well as outside firms and counsel that pay these fees due to non-U.S. patent agencies, we cannot guarantee that our licensors have such systems and procedures in place to pay such fees.

 

We may not be able to protect our intellectual property rights throughout the world.

 

Filing, prosecuting and defending patents on our product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and may also export infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our products and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

 

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Risks Related to Commercialization

 

Even if any product candidates we develop receive marketing approval, they may fail to achieve the degree of market acceptance by physicians, patients, healthcare payors, and others in the medical community necessary for commercial success.

 

The commercial success of our product candidates will depend upon their degree of market acceptance by physicians, patients, third-party payors, and others in the medical community. Even if any product candidates we may develop receive marketing approval, they may nonetheless fail to gain sufficient market acceptance by physicians, patients, healthcare payors, and others in the medical community. The degree of market acceptance of any product candidates we may develop, if approved for commercial sale, will depend on a number of factors, including:

 

  ● the efficacy and safety of such product candidates as demonstrated in pivotal clinical trials and published in peer-reviewed journals;
  ● the potential and perceived advantages compared to alternative treatments, including any similar generic treatments;
  ● the ability to offer these products for sale at competitive prices;
  ● the ability to offer appropriate patient access programs, such as co-pay assistance;
  ● convenience and ease of dosing and administration compared to alternative treatments;
  ● the clinical indications for which the product candidate is approved by FDA or comparable regulatory agencies;
  ● product labeling or product insert requirements of the FDA or other comparable foreign regulatory authorities, including any limitations, contraindications or warnings contained in a product’s approved labeling;
  ● restrictions on how the product is distributed;
  ● the timing of market introduction of competitive products;
  ● publicity concerning these products or competing products and treatments;
  ● the strength of marketing and distribution support;
  ● favorable third-party coverage and sufficient reimbursement; and
  ● the prevalence and severity of any side effects or AEs.

 

Sales of medical products also depend on the willingness of physicians to prescribe the treatment, which is likely to be based on a determination by these physicians that the products are safe, therapeutically effective and cost effective. In addition, the inclusion or exclusion of products from treatment guidelines established by various physician groups and the viewpoints of influential physicians can affect the willingness of other physicians to prescribe the treatment. We cannot predict whether physicians, physicians’ organizations, hospitals, other healthcare providers, government agencies or private insurers will determine that our product is safe, therapeutically effective and cost effective as compared with competing treatments. If any product candidates we develop do not achieve an adequate level of acceptance, we may not generate significant product revenue, and we may not become profitable.

 

If, in the future, we are unable to establish sales and marketing capabilities or enter into agreements with third parties to sell and market any product candidates we may develop, we may not be successful in commercializing those product candidates if and when they are approved.

 

We do not have a sales or marketing infrastructure and have little experience in the sale, marketing, or distribution of pharmaceutical products. To achieve commercial success for any approved product for which we retain sales and marketing responsibilities, we must either develop a sales and marketing organization or outsource these functions to third parties. In the future, we may choose to build a focused sales, marketing, and commercial support infrastructure to market and sell our product candidates, if and when they are approved. We may also elect to enter into collaborations or strategic partnerships with third parties to engage in commercialization activities with respect to selected product candidates, indications or geographic territories, including territories outside the United States, although there is no guarantee we will be able to enter into these arrangements even if the intent is to do so. If we do not establish commercialization capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing our product candidates, if approved.

 

The insurance coverage and reimbursement status of newly approved products is uncertain. Our product candidates may become subject to unfavorable pricing regulations, third-party coverage and reimbursement practices, or healthcare reform initiatives, which would harm our business. Failure to obtain or maintain adequate coverage and reimbursement for new or current products could limit our ability to market those products and decrease our ability to generate revenue.

 

The regulations that govern marketing approvals, pricing, coverage, and reimbursement for new drugs vary widely from country to country. In the United States, recently enacted legislation may significantly change the approval requirements in ways that could involve additional costs and cause delays in obtaining approvals. Some countries require approval of the sale price of a drug before it can be marketed. In many countries, the pricing review period begins after marketing or product licensing approval is granted. In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted. As a result, we might obtain marketing approval for a product in a particular country, but then be subject to price regulations that delay our commercial launch of the product, possibly for lengthy time periods, and negatively impact the revenue we are able to generate from the sale of the product in that country. Adverse pricing limitations may hinder our ability to recoup our investment in one or more product candidates, even if we receive marketing approval, which would have an adverse material impact on our operations and financial resources.

 

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If we fail to comply with healthcare laws, we could face substantial penalties and our business, operations and financial conditions could be adversely affected.

 

Healthcare providers, physicians and third-party payors in the United States and elsewhere play a primary role in the recommendation and prescription of pharmaceutical products. Arrangements with third-party payors and customers can expose pharmaceutical manufacturers to broadly applicable fraud and abuse and other healthcare laws and regulations, including, without limitation, the federal Anti-Kickback Statute and the federal False Claims Act, which may constrain the business or financial arrangements and relationships through which such companies sell, market and distribute pharmaceutical products. In particular, the promotion, sales and marketing of healthcare items and services, as well as certain business arrangements in the healthcare industry, are subject to extensive laws designed to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of ownership, pricing, discounting, marketing and promotion, structuring and commission(s), certain customer incentive programs and other business arrangements generally. Failure to comply with these laws could result in regulatory or civil action against us which could have a material adverse effect on our operations and financial condition.

 

Failure to comply with health and data protection laws and regulations could lead to government enforcement actions (which could include civil or criminal penalties), private litigation, and/or adverse publicity and could negatively affect our operating results and business.

 

We and any potential collaborators may be subject to federal, state, and foreign data protection laws and regulations (i.e., laws and regulations that address privacy and data security). In the United States, numerous federal and state laws and regulations, including federal health information privacy laws, state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), that govern the collection, use, disclosure and protection of health-related and other personal information could apply to our operations or the operations of our collaborators. In addition, we may obtain health information from third parties (including research institutions from which we obtain clinical trial data) that are subject to privacy and security requirements under HIPAA, as amended by HITECH. Depending on the facts and circumstances, we could be subject to civil, criminal, and administrative penalties if we knowingly obtain, use, or disclose individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA. Failure to comply with these laws and regulations could result in government enforcement actions (which could include civil, criminal and administrative penalties), private litigation, and/or adverse publicity and could negatively affect our operating results and business.

 

European data collection is governed by restrictive regulations governing the use, processing and cross-border transfer of personal information.

 

In the event we decide to conduct clinical trials or continue to enroll subjects in our ongoing or future clinical trials in the European Union, we may be subject to additional privacy restrictions. The collection and use of personal health data in the European Union is governed by the provisions of the General Data Protection Regulation 2016/679, or GDPR. This directive imposes several requirements relating to the consent of the individuals to whom the personal data relates, the information provided to the individuals, notification of data processing obligations to the competent national data protection authorities and the security and confidentiality of the personal data. The GDPR also imposes strict rules on the transfer of personal data out of the European Union to the United States. Failure to comply with the requirements of the Data Protection Directive, which governs the collection and use of personal health data in the European Union, the GDPR, and the related national data protection laws of the European Union Member States may result in fines and other administrative penalties. The GDPR introduced new data protection requirements in the European Union and substantial fines for breaches of the data protection rules. The GDPR regulations may impose additional responsibility and liability in relation to personal data that we process and we may be required to put in place additional mechanisms ensuring compliance with these and/or new data protection rules which may result in a negative effect to our business and financial results. This may be onerous and adversely affect our business, financial condition, prospects and results of operations.

 

Healthcare legislative measures aimed at reducing healthcare costs may have a material adverse effect on our business and results of operations.

 

The United States and many foreign jurisdictions have enacted or proposed legislative and regulatory changes affecting the healthcare system that could prevent or delay marketing approval of our product candidates or any future product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell any product for which we obtain marketing approval. Changes in regulations, statutes or the interpretation of existing regulations could impact our business in the future by requiring, for example: (i) changes to our manufacturing arrangements; (ii) additions or modifications to product labelling; (iii) the recall or discontinuation of our products; or (iv) additional record-keeping requirements. If any such changes were to be imposed, they could adversely affect the operation of our business.

 

We face significant competition in an environment of rapid technological and scientific change, and there is a possibility that our competitors may achieve regulatory approval before us or develop therapies that are safer, more advanced or more effective than ours, which may negatively impact our ability to successfully market or commercialize any product candidates we may develop and ultimately harm our financial condition.

 

The development and commercialization of new drug products is highly competitive. We may face competition with respect to any product candidates that we seek to develop or commercialize in the future from major pharmaceutical companies, specialty pharmaceutical companies, and biotechnology companies worldwide. Potential competitors also include academic institutions, government agencies, and other public and private research organizations that conduct research, seek patent protection, and establish collaborative arrangements for research, development, manufacturing, and commercialization. There are a number of large pharmaceutical and biotechnology companies that are currently pursuing the development and commercialization of products for the treatment of the indications that our key drivers are pursuing. If any of these competitors or competitors for our product candidates receive FDA approval before we do, our product candidates would not be the first treatment on the market, and our market share may be limited. In addition to competition from other companies targeting our target indications, any products we may develop may also face competition from other types of therapies. Many of our current or potential competitors, either alone or with their strategic partners, have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals, and marketing approved products than we do.

 

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Risks Related to this Offering and Our Common Stock and Warrants

 

We have paid no dividends and we do not anticipate paying any cash dividends in the foreseeable.

 

We have never paid cash dividends in the past, and currently do not intend to pay any cash dividends in the foreseeable future. We intend to retain earnings, if any, to finance the development and expansion of our business. Our future dividend policy will be subject to the discretion of our Board of Directors and will be contingent upon future earnings, if any, our financial condition, capital requirements, general business conditions, and other factors. Therefore, we can give no assurance that any dividends of any kind will ever be paid to holders of our Common Stock.

 

Investors in this offering will experience immediate and substantial dilution in net tangible book value.

 

The public offering price will be substantially higher than the net tangible book value per share of our outstanding shares of Common Stock. As a result, investors in this offering will incur immediate dilution of $6.33 per share, based on the assumed public offering price of $7.00 per share of Common Stock and Warrant. Investors in this offering will pay a price per share that substantially exceeds the book value of our assets after subtracting our liabilities. See “Dilution” for a more complete description of how the value of your investment will be diluted upon the completion of this offering.

 

The Warrants are speculative in nature.

 

The Warrants offered pursuant to this prospectus do not confer any rights of Common Stock ownership on their holders, such as voting rights or the right to receive dividends, but rather merely represent the right to acquire shares of our Common Stock at a fixed price (subject to adjustment as set forth in the Warrants) for a limited period of time. Specifically, commencing on the date of issuance, holders of the Warrants may exercise their right to acquire the Common Stock and pay an exercise price equal to the public offering price of the Units in this offering), prior to five (5) years from the date of issuance for the Warrants, after which date any unexercised Warrants will expire and have no further value. Moreover, following this offering, the market value of the Warrants is uncertain and there can be no assurance that the market value of the Warrants will equal or exceed their public offering price. There can be no assurance that the market price of the Common Stock will ever equal or exceed the exercise price of the respective Warrants, and, consequently, whether it will ever be profitable for holders of the Warrants to exercise the Warrants.

 

The Warrants will be subject to forced exercise by the Company under certain conditions.

 

The Warrants will be subject to forced exercise commencing six months from issuance subject to the condition that the volume weighted average price of the Company’s Common Stock exceeds 200% of the initial exercise price for twenty (20) consecutive trading days and subject to certain other conditions set forth in the Warrants. In the event that a holder fails to exercise the Warrants within ten business days of notice of a forced exercise in accordance with the terms of the Warrants, the Company may redeem the Warrants at a redemption price of $0.01 per Warrant. This forced exercise and redemption provision may reduce the value of the Warrants because such forced exercise or redemption, if it occurs, will result in the holders no longer having the opportunity to benefit from further increases in the price of our Common Stock.

 

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You may experience future dilution as a result of future equity offerings or the achievement of certain milestones pursuant to our various licensing agreements.

 

To the extent that we raise additional funds through the sale of equity or convertible debt securities, the issuance of such securities will result in dilution to our stockholders. We may sell shares or other securities in any other offering at a price per share that is less than the price per share paid by investors in this offering, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. The price per share at which we sell additional shares of our common stock, or securities convertible or exchangeable into common stock, in future transactions may be higher or lower than the price per share paid by investors in this offering. Additionally, we are a party to certain licensing agreement for our Rabies program with Mid-Atlantic BioTherapeutics, Inc. whereby we will be required to issue (i) 6,5000,000 shares of Common Stock upon the submission of an IND application to the FDA that is accepted for our Rabies program and (ii) an additional 6,500,000 shares of Common Stock upon the successful completion of the first Rabies clinical trial conducted pursuant to such IND application. Furthermore, pursuant to a separate licensing agreement for our COVID-19 program with Mid-Atlantic BioTherapeutics, Inc. whereby we will be required to issue an additional 17,500,000 shares of Common Stock upon the submission of an IND application to the FDA that is accepted for our COVID-19 program. If and when such shares of Common Stock are issued pursuant to the terms of each respective license and the milestones thereunder, our shareholders will experience immediate dilution upon such respective issuances.

 

Substantially all of our assets are secured as collateral for repayment of a secured convertible promissory note. In the event we default on the terms of such convertible promissory note, the lender will have the right to seize and sell the collateral.

 

On March 4, 2022, we issued a secured convertible promissory note in aggregate principal of $1,142,857, in exchange for $1,000,000 in cash to Puritan Partners, LLC, an institutional investor. The note has a maturity date of March 2, 2023, accrues interest at 12.5% annually, with interest payments to be made monthly. As security for such indebtedness, we have pledged as collateral substantially all of our assets, including our intellectual property. Upon an occurrence of an event of default under the note, the lender may enforce certain rights against us, including taking possession of substantially all of our assets and selling them. Accordingly, any default would have a material adverse effect on our business, operating results, and financial condition. While we intend to use certain of the proceeds from the sale of the Units pursuant to this Prospectus to pay-off the note, there can be no guarantee that we will receive sufficient proceeds to do so. In the event that we are unable to refinance or repay our indebtedness as it becomes due or upon an event of default, we may become insolvent and be unable to continue operations.

 

You may experience substantial future dilution upon the conversion of the secured convertible promissory note and exercise of the common stock purchase warrant issued in our March 2022 secured note offering.

 

If an event of default occurs under the secured convertible promissory note issued in our March 2022 offering, the lender will have the right to convert the secured convertible note into shares of our Common Stock at a price per share equal to the lowest trading price of our Common stock for the twenty (20) prior trading days. In the event we default on the note, our shareholders may experience substantial dilution upon the lender electing to convert the promissory note into Common Stock at a substantial discount to the market price.

 

Additionally, in connection with the issuance of the secured convertible note, we issued the lender a warrant to purchase 22,857,143 shares of Common Stock at an exercise price of $0.0001 and a term of five (5) years. Accordingly, the warrant holder initially has the right to purchase approximately four percent (4%) of our issued and outstanding shares of Common Stock as of the date of this Prospectus for approximately $2,286. Additionally, the warrant contains certain provisions that provide for an increase in the shares underlying the warrant upon the occurrence of an offering of $10,000,000 or more in an offering of equity or debt securities at a price per share, which multiplied by 75% is less than $0.05 (subject to splits, etc.). Upon an event of a default on our secured convertible promissory note, the exercise of this warrant, including any adjustment to the warrant share amount, our shareholders will experience substantial dilution.

 

On August 18, 2022, the parties to this convertible note agreed to an amendment of this note and accompanying transaction documents. The first principal repayment was amended to be due on October 2, 2022, instead of September 1, 2022. We additionally amended the warrant to increase the number of shares of common stock underlying the warrant by 1,904,762, reduced the qualified offering from $10 million to $7.2 million and each principal payment is increased from 1/7 of the outstanding note principal balance to 1/6 of the outstanding note principal balance.

 

The common stock purchase warrant issued in our March 2022 secured note offering may be adjusted in the number of shares underlying the warrant upon completion of this offering, which would result in further dilution to our shareholders.

 

As of August 24, 2022, the lender in our March 2022 offering owns a warrant to purchase 24,761,905 shares of our Common Stock. The warrant is subject to adjustment in the number of shares underlying the warrant in the event that (i) a qualified offering occurs, which is defined, subject to an amendment to the March 2022 transaction documents, as an offering of $7.2 million or greater of equity or debt securities, and (ii) such qualified offering occurs at a price per share that when multiplied by 75%, is less than $0.05 per share (or $13.75 based on the assumed reverse split of 1-for-275 as set forth on the cover page of this Prospectus). Accordingly, assuming the completion of the offering of $8,000,000 at an assumed offering price of $7.00 per unit (as adjusted for the assumed reverse stock split of 1-for-275 as set forth on the cover page of this Prospectus), then such number of shares of common stock underlying the lender’s warrant will increase to an aggregate of approximately 64,852,608 shares or a multiplier of approximately 2.62 times the number of shares underlying the warrant prior to the offering contemplated by this Prospectus. Notwithstanding, upon the consummation of the anticipated reverse stock split, as described on the cover page of this Prospectus, the number of shares underlying such warrant will be proportionately reduced. In the event such warrant adjusts as described herein, our shareholders would experience substantial dilution upon the exercise of the warrant, which has an exercise price of $0.0001, and which the aggregate exercise price (assumed on an exercise for cash), will be substantially less than the price per Unit to be paid for by investors in the offering contemplated by this Prospectus. Further, the exercise price of the warrant, equal to $0.0001 per share, does not proportionately increase in the event of a reverse stock split.

 

Our financing documents related to the secured convertible promissory note offering contain covenants that could restrict our ability to implement our business plan.

 

Pursuant to the terms of the offering documents with the holder of our secured convertible promissory note, we must first obtain the consent of such lender before entering into certain transactions or undertaking certain activities including, without limitation, entering into certain types of indebtedness, incurring certain types of liens on our assets, amending our articles of incorporation in a manner that adversely affects the lender’s rights, repurchasing shares of our Common Stock, repaying certain types of indebtedness, paying dividends or distributions on our securities, or entering into certain transactions with any of our affiliates. While any amount is due under the secured promissory note, we will be subject to these restrictions, unless the lender, in its sole discretion, approves such matters.

 

The Warrants in this offering contain price protection for a period of 90 days from the date of issuance, which may result in the reduction of the exercise price of the Warrants and cause future dilution to our shareholders.

 

The Warrants will contain certain adjustments to the exercise price for the first 90 days of issuance, based on the then current market price in effect. As a result, the Warrants may have their exercise prices reduced for no additional consideration. Such provisions may impair our ability to raise additional capital on terms acceptable to us or result in greater dilution to our shareholders, each of which may materially impact our shareholders’ ownership of our securities.

 

Risks Associated with Our Contemplated Reverse Stock Split and NYSE American Listing

 

A reverse stock split could cause our stock price to decline relative to its value before the split.

 

We plan to effect a reverse split of our outstanding Common Stock concurrently with or before this offering in order to achieve a sufficient increase in our stock price to enable us to qualify for listing on NYSE American. There is no assurance that the reverse stock split will be successful in raising our stock price sufficiently to enable us to list on NYSE American, or that we will be accepted by the NYSE American. On October 8, 2021, the shareholders voted via written consent to authorize the Board of Directors to effect a reverse stock split at its discretion at any time before April 8, 2023 at a ratio of not less than 1-for-2 and not more than 1-for-10,000. There can be no assurances that if the reverse stock split is effected, that a reverse split will not cause an actual decline in the value of our outstanding Common Stock. Notwithstanding, the Company plans to effect a 1-for-275 reverse stock split immediately prior to the offering of securities under this Prospectus based on an assumed reverse split ratio as described on the cover page of this prospectus.

 

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Even if the reverse stock split achieves the requisite increase in the market price of our Common Stock, we cannot assure you that we will be able to continue to comply with the minimum trading price requirement of NYSE American.

 

Even if the reverse stock split achieves the requisite increase in the market price of our Common Stock to be in compliance with the minimum bid price requirement of NYSE American, there can be no assurance that the market price of our Common Stock following the reverse stock split will remain at a price per share sufficient to meet the continued listing standards on the NYSE American, which such price is determined at the discretion of the NYSE American, but which has historically been a trading price of below $0.20 per share price average over a thirty trading day period. Maintaining a low price per share for a substantial period, will result in a notice from the NYSE American requiring the Company to complete a reverse split or be subject to delisting if not completed in a reasonable time. It is not uncommon for the market price of a company’s Common Stock to decline in the period following a reverse stock split. If the market price of our Common Stock declines following the effectuation of the reverse stock split, the percentage decline may be greater than would occur in the absence of a reverse stock split. In any event, other factors unrelated to the number of shares of our Common Stock outstanding, such as negative financial or operational results, could adversely affect the market price of our Common Stock and jeopardize our ability to meet or maintain the NYSE American’s minimum trading price requirement.

 

Even if the reverse stock split increases the market price of our Common Stock, there can be no assurance that we will be able to comply with other continued listing standards of the NYSE American.

 

Even if the market price of our Common Stock increases sufficiently so that we comply with the minimum bid price requirement, we cannot assure you that we will be able to comply with the other standards, including the corporate governance requirements that we must satisfy in order to maintain a listing of our Common Stock and/or warrants on the NYSE American. Our failure to meet these requirements may result in our Common Stock and/or warrants sold in this offering being delisted from the NYSE American, irrespective of our compliance with the minimum bid price requirement.

 

The reverse stock split may decrease the liquidity of the shares of our Common Stock.

 

The liquidity of the shares of our Common Stock may be affected adversely by the contemplated reverse stock split given the reduced number of shares that will be outstanding following the reverse stock split, especially if the market price of our Common Stock does not increase correspondingly as a result of the reverse stock split. In addition, the reverse stock split may increase the number of stockholders who own odd lots (i.e., fewer than 100 shares) of our common stock, creating the potential for such stockholders to experience an increase in the cost of selling their shares and greater difficulty effecting such sales.

 

Following the reverse stock split, the resulting market price of our Common Stock may not attract new investors, including institutional investors, and may not satisfy the investing requirements of those investors. Consequently, the trading liquidity of our Common Stock may not improve.

 

Although we believe that a higher market price of our Common Stock may help generate greater or broader investor interest, there can be no assurance that the reverse stock split will result in a share price that will attract new investors, including institutional investors. In addition, there can be no assurance that the market price of our Common Stock will satisfy the investing requirements of those investors. As a result, the trading liquidity of our Common Stock may not necessarily improve.

 

Assuming the conversion of our Series C Preferred Stock, the holders of our Series B Preferred Stock will still have certain rights, preferences, and privileges over our shares of Common Stock, including the right to approve certain transactions.

 

As of the date hereof, there are 81,000 shares of Series B Preferred Stock outstanding. The Series B Preferred Stock is convertible, at the option of the holder into shares of Common Stock at $0.0075 per share, or a total of 10,800,000 shares. The Series B Preferred stock also has the right to receive $1.00 per share upon a liquidation, dissolution or winding up in preference to the holders of Common Stock. The Series B Preferred Stock votes on an as converted to Common Stock basis, except that the vote of a majority of the Series B Preferred Stock is required for (i) any amendment to the Articles of Incorporation resulting in an adverse effect to the voting powers, preferences, or special rights of the Series B Preferred Stock (ii) the creation and issuance of securities senior to the rights, preferences, and privileges of the Series B Preferred Stock with respect to the payment of dividends or the distribution of assets on liquidation, dissolution or winding up, or (iii) extraordinary corporate events, including mergers, except where the Series B Preferred Stock remains outstanding post-merger with its same rights, preferences, and privileges, or the Series B Preferred stock is converted into preferred securities of the surviving entity in the merger not having less favorable rights, preferences, privileges and voting power. As a result of the foregoing, we may not be able (i) to enter into certain transactions or (ii) create a senior class of preferred stock, each without the approval of the Series B Preferred Stock holders.

 

Notwithstanding, the Series B Preferred Stock automatically converts on certain fundamental transactions as described in the Articles of Incorporation, and we have the right, at any time, to redeem some or all of the issued and outstanding shares of Series B Preferred Stock at the greater of (i) 125% of the purchase price paid for such shares or an aggregate of approximately $101,250, or (ii) the book value for such shares as determined by an independent auditing firm.

 

In order to have our securities listed on the NYSE American, among other requirements, we will need to add independent qualified persons to our Board.

 

One of the requirements for a NYSE American listing is that a majority of the members of our Board be independent, or if we qualify as a Smaller Reporting Company (at least 50% of our Board), and that we have an Audit Committee that has at least three members (or two for a smaller reporting company), all of whom must be independent directors. In addition, at least one member of the Audit Committee must have experience that results in such individual’s financial sophistication, pursuant to SEC rules. Notwithstanding, the NYSE American authorizes a “phase-in” period whereby we will be required to have, (i) within 90 days of listing, a majority of “independent” members on our established Committees and (ii) within one (1) year of listing, in addition to a majority of independent Board members, all members of our Committees will be independent. While the Company is currently undertaking a search for qualified Board and Committee members, there can be no assurances that we will be able to find qualified Board members willing to serve on our Board and associated Committees. Currently, we have a five (5) member Board and only two Board members qualify as independent under NYSE American rules. In the event we are unable to attract a sufficient number of independent qualified persons to serve on our Board, Audit Committee, Compensation Committee and Governance and Nominating Committee, we may be unable maintain our Common Stock or warrant listings on the NYSE American even if we are initially listed subject to the foregoing “phase-in” period. In the event that our Common Stock or warrants are not initially listed on the NYSE American, we would not proceed with the offering described in this Prospectus.

 

In connection with the reverse stock split, we will have additional authorized shares of Common Stock available for issuance; the issuance of such additional shares would dilute the percentage ownership of existing stockholders.

 

On October 8, 2021, our shareholders voted via written consent to authorize the Board of Directors to effect a reverse stock split at its discretion at any time before April 8, 2023 at a ratio of not less than 1-for-2 and not more than 1-for-10,000. In the event that the Board effects a reverse stock split as contemplated in the offering described in this Prospectus, it will not reduce the number of authorized shares of Common Stock, and accordingly, we will, in effect, have additional shares of Common Stock available for issuance. Any such issuance of shares would result in a dilution of the percentage ownership of existing stockholders.

 

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Risks Related to our Corporate Structure

 

Our management team and Board of Directors have unilateral control over key decision making as a result of their control of a majority of our voting stock.

 

As a result of their ownership of approximately 52.3% of the voting power of our capital stock as of August 24, 2022, Richard Garr (our CEO and CFO), Paul Michaels (our President and Director) and Dr. Barry Ginsberg (our Chief Strategy Officer and Director), were historically able to exercise voting control of our capital stock (including capital stock owned by entities in which Controlling Shareholders control) (collectively, (the “Controlling Shareholders”). In addition to owning common stock, the Controlling Shareholders own 18,000,000 out of 30,000,000 of our issued and outstanding shares of Series C Preferred Stock, with each such share having the right to approximately 81.66 votes as of August 24, 2022. As a result, the Controlling Shareholders, as of August 24, 2022, had the ability to control the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation, or sale of all or substantially all of our assets (except where our Series B Preferred stock has certain protective provisions requiring such series to vote as a single class for approval of certain fundamental transactions). This concentrated control could delay, defer, or prevent a change of control, merger, consolidation, or sale of all or substantially all of our assets that our other stockholders support, or conversely this concentrated control could result in the consummation of such a transaction that our other stockholders do not support. This concentrated control could also discourage a potential investor from acquiring our Common Stock due to the limited voting power of such stock relative to the voting power of our Series C Preferred Stock held by the Controlling Shareholders, and might harm the market price of our Common Stock. Notwithstanding, all of the holders of Series C Preferred Stock have agreed to convert all of such Series C Preferred Stock into Common Stock of the Company prior to the offering. In addition, the Controlling Shareholders have historically had the ability to control the management and major strategic investments of our company as a result of their positions as officers and directors and their ability to control the election or replacement of our directors. In the event of the death of the Controlling Shareholders, the shares of our capital stock that they own will be transferred to the persons or entities that they designate and whom may not be familiar with our business or personnel. As members of the Board and officers, the Controlling Shareholders owe a fiduciary duty to our stockholders and must act in good faith in a manner they reasonably believe to be in the best interests of our stockholders. As stockholders, even as controlling stockholders, the Controlling Shareholders are entitled to vote their shares, and shares over which they have voting control, in their own interests, which may not always be in the interests of our stockholders generally. Notwithstanding the foregoing, assuming the completion of the conversion of the outstanding Series C Preferred Stock and the completion of the offering pursuant to this prospectus, the Controlling Shareholders ownership percentage will be reduced under 50% of the voting power of our capital stock. Notwithstanding, the Controlling Shareholders will still hold a significant ownership interest in the Company and will be able to vote a large percentage of our capital stock, albeit less than a controlling interest.

 

General Risk Factors

 

Our future success depends on our ability to attract, retain, and motivate qualified personnel.

 

Our future success largely depends upon our continuing ability to attract and retain highly qualified personnel as our business grows. There can be no assurance that we will be able to attract or retain highly qualified personnel. We face significant competition for skilled personnel in our industry. This competition may make it more difficult and expensive to attract, hire, and retain qualified managers and employees. Because of these factors, we may not be able to effectively manage or grow our business, which could adversely affect our financial condition or business. As a result, the value of your investment could be significantly reduced or completely lost.

 

There is no assurance that an active trading market for our Common Stock will be sustained; there is no market for our warrants and there is no assurance that an active trading market for our warrants will develop.

 

We have applied for the listing of our Common Stock and the warrants being offered pursuant to this prospectus on the NYSE American. However, no assurance can be given that such application will be approved, or, if approved, that an active market for our Common Stock will be sustained or that any active market for our warrants will develop or, if developed, will be sustained. In addition, although there have been market makers in our Common Stock, we cannot assure that these market makers will continue to make a market in our securities or that other factors outside of our control will not cause them to stop market making in our securities. Making a market in securities involves maintaining bid and ask quotations and being able to effect transactions in reasonable quantities at those quoted prices, subject to various securities laws and other regulatory requirements. Furthermore, the development and maintenance of a public trading market depends upon the existence of willing buyers and sellers, the presence of which is not within our control or that of any market maker. Market makers are not required to maintain a continuous two-sided market, are required to honor firm quotations for only a limited number of securities, and are free to withdraw firm quotations at any time. Even with a market maker, factors such as our past losses from operations and the small size of our company mean that there can be no assurance of an active and liquid market for our securities developing in the foreseeable future. Even if there is a market for our securities, we cannot assure that security holders will be able to resell their securities at any price.

 

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We have incurred, and will continue to incur, increased costs as a result of being an SEC reporting company.

 

The Sarbanes-Oxley Act of 2002, as well as a variety of related rules implemented by the SEC, have required changes in corporate governance practices and generally increased the disclosure requirements of public companies. As a reporting company, we will incur significant legal, accounting and other expenses in connection with our public disclosure and other obligations, particularly when we no longer qualify as an “emerging growth company”. Based upon SEC regulations currently in effect, we are required to establish, evaluate and report on our internal control over financial reporting. We believe that compliance with the myriad of rules and regulations applicable to reporting companies and related compliance issues will continue to require a significant amount of time and attention from our management.

 

If, following this offering, our Common Stock becomes classified again as a “penny stock,” the restrictions of the penny stock regulations of the Securities and Exchange Commission, or SEC, may result in less liquidity for our Common Stock.

 

The SEC has adopted regulations which define a “penny stock” to be any equity security that has a market price (as therein defined) of less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Unless exempt, the rules require the delivery, prior to any transaction involving a penny stock by a retail customer, of a disclosure schedule prepared by the SEC relating to the penny stock market. Disclosure is also required to be made about commissions payable to both the broker/dealer and the registered representative and current quotations for the securities. Finally, monthly statements are required to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. If, following this offering, the market price for shares of our Common Stock falls below $5.00, and we do not satisfy any of the exceptions to the SEC’s definition of penny stock, our Common Stock will be classified as a penny stock. If such should occur, as a result of the penny stock restrictions, brokers or potential investors may be reluctant to trade in our securities, which may result in less liquidity for our securities.

 

We may invest or spend the proceeds from this offering in ways with which you may not agree.

 

We intend to use the net proceeds of this offering for the following purposes: (i) the repayment of our outstanding secured convertible promissory note issued in March 2022, (ii) the undertaking of clinical trials with respect to, our product candidates, as well as (iii) pre-clinical research and development including manufacturing of the clinical products and (iv) general corporate and working capital purposes. However, we will retain broad discretion over the use of the proceeds from this offering and may use them for purposes other than those contemplated at the time of this offering. You may not agree with the ways we decide to use these proceeds. See “Use of Proceeds.”

 

We are an “emerging growth company” and are able to avail ourselves of reduced disclosure requirements applicable to emerging growth companies, which could make our common stock less attractive to investors.

 

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and we have elected to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. In addition, pursuant to Section 107 of the JOBS Act, as an “emerging growth company” we have elected to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. As such, our financial statements may not be comparable to companies that comply with public company effective dates.

 

We cannot predict if investors will find our Common Stock less attractive because we may rely on these exemptions. If some investors find our Common Stock less attractive as a result, there may be a less active trading market for our Common Stock and our stock price may be more volatile. We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.” We will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of this offering; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

 

Our amended and restated Bylaws provide that the state of Florida is the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

 

Our amended and restated Bylaws, provide that, unless we consent to an alternative forum, courts in the State of Florida will be the sole and exclusive forum for: (i) any derivative action or proceeding brought by or on behalf of the Company; (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, or other employee of the Company to the Company or the Company’s stockholders; (iii) any action asserting a claim arising pursuant to any provision of the FBCA or the Company’s Articles of Incorporation or Bylaws (as either may be amended from time to time); or (iv) any action asserting a claim governed by the internal affairs doctrine. This exclusive forum provision may limit a stockholder’s ability to choose its preferred judicial forum for disputes with us or our directors, officers, and employees, which may discourage the filing of lawsuits with respect to such claims. There is uncertainty as to whether a court would enforce such provision and that investors cannot waive compliance with federal securities laws and the rules and regulations thereunder. If a court were to find this exclusive forum provision to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in another jurisdiction, which could adversely affect our business and financial condition.

 

We have identified a material weakness in our internal control over financial reporting, and the failure to remediate this material weakness may adversely affect our business, investor confidence in our company, our financial results and the market value of our common stock.

 

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. The material weakness we identified is our lack of maintaining a sufficient complement of personnel commensurate with the accounting and financial reporting requirements in order to have adequate segregation of key duties and responsibilities, which affected the operation of controls over the recording of journal entries and the reconciliation of key accounts. This material weakness did not result in a material misstatement to the financial statements. We have begun exploring remedial efforts to address the underlying causes of the material weakness. There can be no assurance that any remedial efforts we take, if any, will be sufficient to remediate the control deficiencies that led to our material weakness in our internal controls over financial reporting or prevent future material weaknesses or control deficiencies from occurring.

 

We are not currently required to comply with Section 404 of the Sarbanes-Oxley Act and, therefore, are not required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose. Upon completion of this offering, we will be required to comply with the requirements of Sections 302 and 404 of the Sarbanes-Oxley Act, which will require our management to certify financial and other information in our annual reports and provide an annual management report on the effectiveness of control over financial reporting. Though we will be required to disclose material changes in internal control over financial reporting on an annual basis, we will not be required to make our first annual assessment of our internal control over financial reporting pursuant to Section 404 until the year following our first filing of an annual report on Form 10-K. Additionally, while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To achieve compliance with Section 404 within the prescribed period, we will be engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting.

 

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USE OF PROCEEDS

 

We estimate that the net proceeds from this offering, after deducting underwriting discounts and offering expenses payable by us, will be approximately $7.0 million. If the underwriter’s over-allotment option is exercised in full, we estimate that our net proceeds will be approximately $7.8 million.

 

We intend to use the net proceeds of this offering (including any over-allotment) as follows:

 

For required interest and redemption payments of the secured promissory note we issued in March of 2022 to Puritan Partners, LLC an institutional investor. The secured convertible promissory note bears interest at a rate of 12.5% per annum and has a maturity date of March 2, 2023. We anticipate that full repayment of the secured note will be approximately $1,515,000 based on a straight-line amortization with interest and redemption payments until the maturity date. The proceeds that we received from the secured convertible promissory were used for working capital purposes.

 

Additionally, we also plan to use the proceeds to repay the outstanding promissory note issued in May 2022, which we anticipate full repayment of the note will be approximately $208,284 with interest due and payable assuming the note is paid off on September 30, 2022. The proceeds that we received from the promissory note were used for working capital purposes.

 

For each of our programs described below, we anticipate such costs to be over the two (2) year period immediately following the receipt of proceeds in the offering. Notwithstanding, there can be no assurances that such estimated capital needs are accurate or that we are able to meet our budgetary estimates.

 

With regard to the below estimates, we intend to use the funds to further research, develop and begin manufacturing our development stage therapeutics. As described below, we will begin preparation for toxicology studies, animal studies, and other preliminary work to prepare for regulatory submissions with the goal of filing one or more INDs.

 

Rabies

 

We estimate that it will cost approximately $6.1 million to get through a combined phase I / II clinical trial. Of this amount, we will first need to spend approximately $2.3 million in costs related to pre-clinical trials, IND-enabling studies, manufacturing, and other costs related to submitting IND applications. Provided we are able to receive IND approval, we estimate that it will cost approximately an additional $3.8 million to conduct and complete a combined phase I / II clinical trial.

 

Glioblastoma

 

We estimate that it will cost approximately $4.4 million in pre-clinical, IND-enabling studies, manufacturing, and other costs related to submitting an IND application

 

Retinal Degeneration

 

We estimate that it will cost approximately $2.0 million in pre-clinical, IND-enabling studies, manufacturing, and other costs related to submitting an IND application. Provided we are able to receive IND approval, we estimate that it will cost approximately an additional $1.0 million to conduct and complete a phase 1 clinical trial of dry age-related macular degeneration (AMD) and Geographic Atrophy. Pursuant to the CRADA (see section of this Prospectus entitled “Product Development” – Degenerative Eye Diseases” for more information), our contribution to the first clinical trial will be a maximum of $115,000, with the balance to be covered by the National Eye Institute.

 

COVID-19

 

We estimate that it will cost approximately $18 million in pre-clinical, IND-enabling studies, manufacturing, and other costs related to submitting an IND application.

 

General and Administrative

 

We estimate that we will spend approximately $200,000 per month on general and administrative expenses based on the level of operations that we estimate that the Company will need to undertake our business plan. We additionally anticipate spending at least $200,000 on the filing and review of patent applications for our programs and indications.

 

The amounts and timing of our actual expenditures will depend upon numerous factors, including the status of our research and development efforts. We, therefore, cannot predict the relative allocation of net proceeds that we receive in this offering and may allocate it differently than indicated above. As a result, management will have broad discretion over the use of the net proceeds from this offering.

 

In the event we are not able to raise sufficient capital in this offering, or if the costs associated with our development projects exceeds our estimates, we will require raising additional capital to pursue our pre-clinical and clinical development plans and to continue to fund our operations. We anticipate raising additional cash through the private and public sales of equity or debt securities, collaborative arrangements, licensing agreements or a combination thereof. Although management believes that such funding sources will be available, there can be no assurance that any such collaborative arrangement will be entered into or that financing will be available to us when needed in order to allow us to continue our operations, or if available, on terms acceptable to us. If we do not raise sufficient funds in a timely manner, we may be forced to curtail operations, delay or stop our ongoing clinical trials, cease operations altogether, or file for bankruptcy. We currently do not have commitments for future funding from any source. We cannot assure you that we will be able to secure additional capital or that the expected income will materialize. Several factors will affect our ability to raise additional funding, including, but not limited to market conditions, interest rates and, more specifically, our progress in our exploratory, preclinical and future clinical development programs.

 

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CAPITALIZATION

 

The following table sets forth our consolidated capitalization as of June 30, 2022 (i) on an actual basis, (ii) on a pro forma basis assuming the conversion of all Series C Preferred Stock to Common Stock and (iii) on a pro forma as adjusted basis to give effect to both the conversion of all Series C Preferred stock to Common Stock and the offering at the assumed public offering price of $7.00 per Unit, based on an assumed pro forma reverse stock split ratio of 1-for-275, in order to effect a price per share of Common Stock of $8.25, the closing price of the Company’s common Stock as of August 24, 2022, on a post reverse split basis for total net proceeds of approximately $7.0 million (assuming no exercise of the underwriter’s over-allotment option).

 

This information should be read together with our consolidated financial statements and other financial information set forth in our financial statements and related notes included elsewhere in this prospectus.

 

    At June 30, 2022        
    Actual     Pro Forma     Pro Forma, as Adjusted  
                   
Cash   $ 126,850     $ 126,850     $ 7,166,849  
Preferred stock, Series C, $.0001 par value; 30,000,000 shares authorized, issued and outstanding on an actual basis and no shares issued and outstanding on a pro forma and proforma as adjusted basis     18,065,735       -       -  
Warrant liability     -       -       2,523,657  
Stockholders’ (Deficit) Equity                        
Preferred stock, Series B, $.0001 par value; 1,000,000 shares authorized, 81,000 shares issued and outstanding on an actual, pro forma and pro forma as adjusted basis     8       8       8  
Common stock, $.0001 par value; 1,100,000,000 shares authorized; 571,651,636 shares issued and outstanding on an actual basis; 816,645,194 issued and outstanding on a pro forma basis and 4,112,475 shares issued and outstanding on pro forma as adjusted basis (after reverse stock split), respectively     57,165       81,665       411  
Additional paid-in capital     11,588,070       29,629,305       34,226,901  
Accumulated deficit     (29,622,919 )     (29,622,919 )     (29,622,919 )
Total stockholders’ (deficit) equity     (17,977,676 )     88,059       4,604,401  
Total capitalization   $ 88,059     $ 88,059     $ 7,128,058  

 

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The discussion and table above assume no exercise of the Underwriter’s warrants which we will issue to the Underwriter upon completion of this offering. See “Underwriting—Underwriter Warrants” for details of the Underwriter’s warrants.

 

DILUTION

 

If you invest in the Units offered by this prospectus, you will suffer immediate and substantial dilution in the net tangible book value per share of Common Stock.

 

As of June 30, 2022, we had a deficiency in net tangible book value of $(19,813,396), or ($9.53) per share. The net tangible book value (deficit) per share of Common Stock is determined by subtracting total liabilities from the total book value of the tangible assets and dividing the difference by the number of shares of post reverse split Common Stock deemed to be outstanding as of June 30, 2022. After giving effect to the conversion of Series C Preferred Stock to Common Stock, our pro forma deficiency in net tangible book value would have been $(1,747,661) or $(0.59) per share. After giving effect to the sale of 1,142,857 Units offered by us in this offering at an assumed offering price of $7.00 per Unit based on an assumed pro forma reverse stock split ratio of 1-for-275, in order to effect a price per share of Common Stock of $8.25, the closing price of the Company’s common Stock as of August 24, 2022, on a post reverse split basis, and the application of the estimated net proceeds from this offering, our as adjusted net tangible book value as of June 30, 2022 would have been $2,768,681 or $0.67 per share. This represents an immediate increase in net tangible book value to existing stockholders of $1.26 per share and an immediate dilution to new investors of $6.33 per share. The following table illustrates this per share dilution to new investors purchasing Units in this offering.

 

Assumed offering price per share           $ 7.00  
Deficiency in net tangible book value per share as of June 30, 2022   $ (9.53 )        
Increase per share attributable to the conversion of preferred stock   $ 8.94          
Pro forma deficiency in net tangible book value per share as of June 30, 2022, before giving effect to this offering   $ (0.59 )        
Increase attributable to new investors in this offering   $ 1.26          
As adjusted, net tangible book value per share after the offering           $ 0.67  
Dilution per share to new investors           $ 6.33  

 

If the underwriter exercises in full their over-allotment option to purchase additional Units in this offering, the pro forma net tangible book value per share after the offering would be $0.81 per share, the increase in net tangible book value per share to existing stockholders would be $0.14 per share and the dilution to new investors purchasing Units in this offering would be $6.19 per share.

 

The following table sets forth, on an unaudited as adjusted basis, as of June 30, 2022, the difference between the total consideration paid and the average price per share of Common Stock paid by existing stockholders and by the new investors purchasing share in this offering at an assumed offering price of $7.00 per share, based on an assumed pro forma reverse stock split ratio of 1-for-275, in order to effect a price per share of Common Stock of $8.25, the closing price of the Company’s common Stock as of August 24, 2022, on a post reverse split basis before deducting underwriting discounts and estimated offering expenses payable by us:

 

    Shares Purchased*     Total Consideration     Average
Price Per		  
    Number     Percent     Amount     Percent     Share  
                (in thousands)              
Existing stockholders     2,969,618       72.2 %   $ 30,163,102       79.0 %   $ 10.16  
                                         
New investors     1,142,857       27.8 %   $ 7,999,999       21.0 %   $ 7.00  
                                         
Totals     4,112,475       100.0 %     38,163,101     $ 100.0 %   $ 9.28  

 

* Presented on a pro forma basis, reflecting a 1-for-275 reverse stock split of our Common Stock which will become effective after this Registration Statement is declared effective by the SEC and immediately prior to the closing of this offering

 

The above discussion and table is based on 2,969,618 shares of Common Stock outstanding as of June 30, 2022, after giving effect to the conversion of the Series C Preferred Stock, but excludes (based on an assumed 1-for-275 reverse stock split ratio as described on the cover page of this prospectus):

 

  ● 249,432 shares of our common stock issuable upon the exercise of Warrants. Notwithstanding, such amount of warrants will increase by 145,783 shares of Common Stock (assuming the $7.00 offering price and assumed 1-for-275 reverse stock split as set forth on the cover page of this Prospectus) underlying the warrant issued to the lender in our March 2022 convertible note offering pursuant to an adjustment feature in the number of shares underlying the warrant upon the consummation of an offering at least $7.2 million at a price per share in such offering that if multiplied by 75%, would be less than $13.75;
     
  ● 27,114 shares of our common stock issuable upon exercise of options to purchase shares of our common stock outstanding as of June 30, 2022, under our Stock Option Plan, with a weighted-average exercise price of $14.23125 per share;
     
  ● 176,758 shares of our common stock reserved for future issuance under our Stock Option Plan.

 

To the extent that outstanding options and warrants are exercised, investors will experience further dilution. In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities may result in further dilution to our stockholders.

 

The discussion and tables above assume no exercise of the Underwriter’s warrants which we will issue to the Underwriter upon completion of this offering. See “Underwriting—Underwriter Warrants” for details of the Underwriter’s warrants. To the extent that any of these Underwriter’s warrants are exercised, there will be further dilution to new investors.

 

DETERMINATION OF OFFERING PRICE

 

The offering price for the Units offered by this prospectus and the exercise price for the warrants forming of a portion of the Units have been negotiated between the underwriter and us. In determining such offering price and exercise price, the following factors were considered:

 

  ● prevailing market conditions;
     
  ● our historical performance and capital structure;
     
  ● estimates of our business potential and earnings prospects;
     
  ● an overall assessment of our management; and
     
  ● the consideration of these factors in relation to the market valuation of companies in related businesses.

 

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Transactions in our Common Stock are currently reported under the symbol “CUBT” on the OTC Pinksheets. Any over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not necessarily represent actual transactions.

 

As of August 24, 2022, there were 210 record holders of our shares of Common Stock.

 

DIVIDEND POLICY

 

Holders of our shares of Common Stock are entitled to dividends when, as and if declared by our Board of Directors out of legally available funds.

 

We have not declared or paid any dividends in the past to the holders of our Common Stock and do not currently anticipate declaring or paying any dividends in the foreseeable future. We intend to retain earnings, if any, to finance the development and expansion of our business. Future dividend policy will be subject to the discretion of our Board of Directors and will be contingent upon future earnings, if any, our financial condition, capital requirements, general business conditions, and other factors. Therefore, we can give no assurance that any dividends of any kind will ever be paid to holders of our Common Stock.

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements regarding our business development plans, pre-clinical and clinical studies, regulatory reviews, timing, strategies, expectations, anticipated expenses levels, business prospects and positioning with respect to market, demographic and pricing trends, business outlook, technology spending and various other matters (including contingent liabilities and obligations and changes in accounting policies, standards and interpretations) and express our current intentions, beliefs, expectations, strategies or predictions. These forward-looking statements are based on a number of assumptions and currently available information and are subject to a number of risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Special Note Regarding Forward-Looking Statements” and under “Risk Factors” and elsewhere in this Prospectus. The following discussion should be read in conjunction with our financial statements and related notes thereto included elsewhere in this Prospectus.

 

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations, (MD&A), is provided in addition to the accompanying audited annual and unaudited financial statements and notes to assist readers in understanding our results of operations, financial condition and cash flows. Our MD&A is organized as follows:

 

  ●

Executive Overview — Overview discussion of our business in order to provide context for the remainder of MD&A.

 

  ●

Critical Accounting Policies— Accounting policies that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results and forecasts.

 

  ●

Results of Operations— Analysis of our financial results comparing the: (i) year ended December 31, 2021 to the year ended December 31, 2020, and (ii) three and six months ended June 30, 2022 to the three and six months ended June 30, 2021

 

  ● Liquidity and Capital Resources—Analysis of cash flows and discussion of our financial condition and future liquidity needs.

 

Executive Overview

 

The Company is a Florida Corporation that conducts business from its headquarters in Boca Raton, Florida. The Company was formerly known as Connectyx Technologies Holdings Group, Inc., which was formed as a Nevada corporation on June 29, 1995, reincorporated in Florida on October 30, 2007, with a name change in November 2020 under completely new management with a completely different business plan and mission. The Company is a development stage biomedical company that seeks to develop, in-license, sub-license and bring to market products in both the Pharmaceutical and Medical Device space. The Company focuses, but not exclusively on products that are targeted at FDA-defined “Orphan Diseases” which are diseases with patient populations under 200,000 in the United States. The Company leverages management’s experience and business relationships in the Life Science community to acquire therapeutic candidates that fit within the company’s business model; finding programs that can be acquired at appropriate valuations; programs that have some accelerated path to commercialization; and programs where material inflexion points can be created within a two-year window. The Company has to date in licensed 4 therapeutic programs: The reformulation of metformin to treat degenerative eye diseases, from the National Eye Institute (NEI) at the National Institutes of Health (NIH); CD56 monoclonal antibody drug conjugate technology from the National Cancer Institute (NCI) to treat newly diagnosed glioblastoma; IMT504 which is a synthetic immunotherapy to treat late stage rabies as a stand-alone therapy; and IMT504 as an adjuvant to be added to protein vaccines to provide pan variant protection from Covid viruses. The Company has worldwide exclusive rights to the intellectual property in licensed in all four programs and can provide the following updates on these programs.

 

Using reformulated (into an eye drop) metformin to treat Intermediate Dry Age-Related Macular degeneration is the company’s lead program. The Company has announced the completion of the non GLP tolerability and toxicology testing, and the initiation of IND enabling GLP tolerability and toxicology studies. The Company has also announced that it will be developing this therapy in collaboration with the NEI, where the first clinical trial will be conducted after FDA approval of an IND, under the direction of Dr. Emily Chew. Dr. Chew is the Director of the Division of Epidemiology and Clinical Applications (DECA), at the National Eye Institute, the National Institutes of Health. 

 

The Company has begun the process manufacturing of its Monoclonal antibody drug conjugate to treat newly diagnosed Glioblastoma and is targeting non glp animal safety and proof of principle animal studies in Q1 2023 at Emory University conducted by Clinical and Scientific Advisory Board Member Dr. Nick Boulis.

 

The Company is targeting the end of this year to submit a pre IND meeting briefing book to the FDA for its proposed clinical trial of IMT504 to treat late stage rabies.

 

Additionally, the Company has also announced that (i) Cary Sucoff Esq. has joined the Board of Directors as an Independent Director and Chairman of the Audit Committee and (ii) Lawrence Zaslow joined the Board of Directors as an Independent director and Chairman of the Compensation Committee.

 

It is our plan after reaching key inflection points in each program to then partner the assets with companies that have the appetite and resources for commercial launch. The company has established a clinical and scientific advisory board with a successful track record of bringing pharmaceuticals to market across multiple disease areas. The Company is virtually distributed with a small group of executives managing a worldwide consortium of outsourced vendors in order to mitigate the costs and risks of internal infrastructure.

 

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Components of Results

 

Revenue

 

We have generated no revenues from the sale, licensing or other development of our proposed product candidates presented.

 

On a long-term basis, we anticipate that our revenue will be derived primarily from licensing fees and/or outright sales of our therapeutic program assets. Because we are at such an early stage in the development process, we are not yet able to accurately predict when we will have a product ready for commercialization, if ever, and whether any product can generate sufficient revenue, if at all.

 

Research and Development Expenses

 

We are just beginning our research and development efforts. Our research and development expenses are expected to consist primarily of manufacturing and pre-clinical studies, clinical trial expenses, including payments to clinical trial sites that perform our clinical trials and clinical research organizations (CROs) that help us manage our clinical trials.

 

General and Administrative Including Salaries and Professional Fees Expenses

 

General and administrative, salaries and professional fees expenses are primarily composed of salaries, benefits and other costs associated with our operations including, finance, human resources, information technology, public relations and costs associated with maintaining a public company including listing, legal, audit and compliance fees, facilities and other external general and administrative services. Additionally, expenses include non-cash share-based compensation expenses resulting from granting of equity awards to both employees and consultants in return for services.

 

Critical Accounting Policies and Significant Judgments and Estimates

 

The preparation of these financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses. Note 2 of the Notes to the Financial Statements included elsewhere herein describes the significant accounting policies used in the preparation of the financial statements. Certain of these significant accounting policies and estimates have a higher degree of inherent uncertainty and required our most significant judgments.

 

A critical accounting policy is defined as one that is both material to the presentation of our financial statements and requires management to make difficult, subjective or complex judgments that could have a material effect on our financial condition and results of operations. Specifically, critical accounting estimates have the following attributes: (1) we are required to make assumptions about matters that are highly uncertain at the time of the estimate; and (2) different estimates we could reasonably have used, or changes in the estimate that are reasonably likely to occur, would have a material effect on our financial condition or results of operations.

 

Estimates and assumptions about future events and their effects cannot be determined with certainty. We base our estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as our operating environment changes. These changes have historically been minor and have been included in the financial statements as soon as they became known. Based on a critical assessment of our accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes that our financial statements are fairly stated in accordance with U.S. GAAP, and present a meaningful presentation of our financial condition and results of operations. We believe the following critical accounting policies reflect our more significant estimates and assumptions used in the preparation of our consolidated financial statements:

 

Intangible Assets – The useful life of intangible assets is assessed as either finite or indefinite. Following the initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses, if any. Intangible assets with finite useful lives are carried at cost less accumulated amortization. Amortization is calculated using the straight-line method over the estimated useful lives. Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis. If impairment indicators are present, these assets are subject to an impairment review. Any loss resulting from impairment of intangible assets is expensed in the period the impairment is identified.

 

Share-Based Compensation – Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the shorter of period the employee or director is required to perform the services in exchange for the award or the vesting period. The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC 505-50, for share-based payments to non-employees, compensation expense is determined at the “measurement date.” The expense is recognized over the service period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date.

 

Our determination of the fair value of stock options with time-based vesting on the date of grant utilizes the Black-Scholes option pricing model, and is impacted by our common stock price as well as other variables including, but not limited to, expected term that options will remain outstanding, expected common stock price volatility over the term of the option awards, risk-free interest rates and expected dividends. Estimating the fair value of equity-settled awards as of the grant date using valuation models, such as the Black-Scholes option pricing model, is affected by assumptions regarding a number of complex variables. Changes in the assumptions can materially affect the fair value and ultimately how much stock-based compensation expense is recognized. These inputs are subjective and generally require significant analysis and judgment to develop.

 

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Results of Operations

 

Comparison of Our Results of Operations for the Three Months Ended June 30, 2022 and 2021

 

Revenue

 

We have not recognized revenue in any of the periods presented.

 

Operating Expenses

 

Operating expenses for three months ended June 30, 2022 and 2021 were as follows:

 

   Three Months Ended
June 30,		   Increase (Decrease) 
   2022   2021   $   % 
                 
General and administrative (G&A) expenses, salaries and share based compensation and professional fees separately stated below  $28,981   $21,426   $7,555    35.3%
Salaries and share based compensation – G&A   328,280    2,191,250    (1,862,970)   (85.0)%
Professional fees and share based compensation – G&A   50,436    277,921    (227,485)   (81.9)%
Research and development   553,692    95,141    458,551    482.0%
Depreciation and amortization   1,990    2,005    (15)   (0.1)%
Total operating expenses  $963,379   $2,587,743   $(1,624,364)   (62.8)%

 

General and Administrative Expenses

 

General and administrative expenses (excluding salaries, professional fees and share based compensation) for the three months ended June 30, 2022, primarily consists of office expenses and supplies.

 

Salaries and share-based compensation – G&A include approximately $20,000 and $1,917,000 of non-cash, share-based compensation for the three months ended June 30, 2022, and 2021, respectively. The decrease was caused by compensation expense incurred related to the conversion of Series A preferred stock during the three months ended June 30, 2021. Excluding share-based compensation, G&A salaries increased approximately $34,000, as a result of us continuing to increase our operations as we shift our focus to the development of our product candidates

 

Professional fees and share based compensation for the three months ended June 30, 2022, and 2021, include approximately $2,000 and $264,000, respectively, of non-cash share-based compensation. Excluding this, professional fees increased approximately $34,000, which related to the building the business as we shift our focus to the development of our product candidates.

 

Research and development

 

Research and development activities during the three months ended June 30, 2022 increased by 482% (from approximately $95,141 to $553,692). The was primarily the result of additional spending on manufacturing and testing on our metformin formulation and creating preclinical data for our CRADA with NIH to treat Dry Age Related Macular Degeneration. Under the CRADA our primary responsibility is to deliver the IND to the NEI and the drug for the trial. The company is dedicating almost all of its R&D spending to this program.

 

Interest expense

 

Interest expense was approximately $324,106 and $8,011 for the three months ended June 30, 2022, and 2021, respectively, including the amortization of debt discount. The increase is due to the additional loan obtained in March of 2022.

 

Comparison of Our Results of Operations for the Six Months Ended June 30, 2022 and 2021

 

Revenue

 

We have not recognized revenue in any of the periods presented.

 

Operating Expenses

 

Operating expenses for six months ended June 30, 2022 and 2021 were as follows:

 

    Six Months Ended
June 30,		     Increase (Decrease)  
    2022     2021     $     %  
                         
General and administrative (G&A) expenses, salaries and share-based compensation and professional fees separately stated below   $ 92,799     $ 85,338     $ 7,461       8.7 %
Salaries and share-based compensation – G&A     905,513       2,352,250       (1,446,737 )      (61.5 )%
Professional fees and share based compensation – G&A     157,032       661,597       (504,565 )     (76.3 )%
Research and development     1,092,453       95,141       997,312       1,048.3  %
Impairment of long-lived assets     -       15,000       (15,000 )     (100.0 )%
Depreciation and amortization     3,979       2,765       1,214       43.9 %
Total operating expenses   $ 2,251,776     $ 3,212,091     $ (960,315 )      (29.9 )%

 

General and Administrative Expenses

 

Overall general and administrative expenses for the six months ended June 30, 2022, primarily consists of share-based compensation, salaries, legal fees and other consulting fees. The increase (excluding share-based compensation) over the comparable six month period ending June 30, 2021 is the result of us continuing to increase our operations as we shift our focus to the development of our product candidates. We expect these expenses to continue to increase as we increase our development and operating activities and the support for those activities also increases. We also expect increased expenses related to becoming an exchange-listed company.

 

General and administrative expenses (excluding salaries, professional fees and share based compensation) for the three months ended June 30, 2022, primarily consists of office expenses and supplies.

 

Salaries and share-based compensation – G&A primarily include approximately $243,000 and $1,917,000 of non-cash, share-based compensation for the six months ended June 30, 2022, and 2021, respectively. The decrease was caused by compensation expense incurred related to the conversion of Series A preferred stock during the six months ended June 30, 2021. Excluding share-based compensation, G&A salaries increased approximately $228,000, as a result of us continuing to increase our operations as we shift our focus to the development of our product candidates

 

Professional fees and share based compensation for the six months ended June 30, 2022, and 2021, include approximately $18,000 and $635,000, respectively, of non-cash share-based compensation. Excluding this, professional fees increased $112,000, which related to the building the business as we shift our focus to the development of our product candidates.

 

We also intend to bring in highly experienced and qualified advisors to help our Clinical and Scientific Advisory Board oversee the development of our therapeutic programs.

 

Research and development

 

Research and development activities during the six months ended June 30, 2022 increased by over 1,048% (from $95,000 to just over $1,092,000. The was primarily the result of additional spending on manufacturing and testing on our metformin formulation and creating preclinical data for our CRADA with NIH to treat Dry Age Related Macular Degeneration. Under the CRADA our primary responsibility is to deliver the IND to the NEI and the drug for the trial. The company is dedicating almost all of its R&D spending to this program.

 

Impairment of long-lived assets

 

During the six months ended June 30, 2021, we recognized zero and $15,000 impairment charges, attributable to the write-off of certain assets that we deemed not recoverable. No such impairment charge was taken during the six months ended June 30, 2022.

 

34

 

 

Interest expense

 

Interest expense was approximately $431,928 and $176,672 for six months ended June 30, 2022, and 2021, respectively, including the amortization of debt discount. The increase is due to the additional loan obtained in March of 2022.

 

Comparison of Our Results of Operations for the Years Ended December 31, 2021 and 2020

 

Revenue

 

We have not recognized revenue in any of the periods presented.

 

Operating Expenses

 

Operating expenses for 2021 and 2020 were as follows:

 

   Year Ended December 31,   Increase (Decrease) 
   2021   2020   $   % 
                 
General and administrative (G&A) expenses, salaries and share-based compensation and professional fees separately stated below  $79,523   $26,689   $52,834    198.0%
Salaries and share-based compensation – G&A   3,214,987    4,446,043    (1,231,056)   (27.7)%
Professional fees and share-based compensation – G&A   916,845    125,570    791,275    630.2%
Research and development   779,275    -    779,275    NM 
Impairment of long-lived assets   16,958    32,136    (15,178)   (47.2)%
Depreciation and amortization   6,744    5,301    1,443    27.2%
Total operating expenses  $5,014,332   $4,635,739   $378,593    8.2%

 

NM – not meaningful

 

General and Administrative Expenses

 

General and administrative fees for the year ended December 31, 2021, primarily consists of share-based compensation, salaries, legal fees and other consulting fees. The increase over the comparable period of 2020 (excluding share-based compensation) is the result of us continuing to increase our operations as we shift our focus to the development of our product candidates. We expect these expenses to continue to increase as we increase our development and operating activities and the support for those activities also increases. We also expect increased expenses related to becoming an exchange-listed company.

 

Salaries and share-based compensation reflect our expansion of our executive management team in the fourth quarter of 2020 as we undertake our development and operating activities. Salaries and share-based compensation primarily include approximately $2,198,106 and $4,214,043 of non-cash, share-based compensation for the years ended December 31, 2021, and 2020, respectively. We expect the addition of a limited number of additional employees to support the growing complexity of running three or possibly four clinical programs simultaneously, although we anticipate continuing to manage the programs through our network of outsourced vendors.

 

Professional fees and share based compensation for the year ended December 31, 2021, and 2020, primarily consist of $691,461 and $88,335, respectively, of non-cash share-based compensation provided to services related to the building the business as we shift our focus to the development of our product candidates. We expect this number to increase in the event we become an exchange-listed company. We would also expect patent legal costs to increase, as we add value to our therapeutic programs through intellectual property and as we continue to prosecute the existing patent applications that we have in-licensed.

 

We also intend to bring in highly experienced and qualified advisors to help our Clinical and Scientific Advisory Board oversee the development of our therapeutic programs.

 

Research and development

 

We had no research and development activities in 2020 as we were focused on acquiring licenses and setting up our business and corporate structure. During 2021, many of our product candidates were in early-stage research or translational phases of development. As a result, we began using outside consultants for research and development activities in 2021. We expect research and development costs to increase significantly going forward as we continue our development efforts primarily through outsourced vendors.

 

Impairment of long-lived assets

 

In the years ended December 31, 2021, and 2020, we recognized impairment charges of $16,958 and $32,136, respectively, attributable to the write-off of certain assets that we deemed not recoverable.

 

Other expense

 

Other expense of approximately $326,022 and $34,516 for the years ended December 31, 2021, and 2020, respectively, consisted of $176,672 and $34,500 of interest expense, including the amortization of debt discount and $149,350 of loss on debt extinguishment for the year ended December 31, 2021.

 

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Liquidity and Capital Resources

 

Since our inception, we have financed our operations through the sales of our equity securities, issuance of debt and the exercise of stock purchase warrants.

 

We had cash and cash equivalents of approximately $126,850 at June 30, 2022. In the fourth quarter of 2020 and the first quarter of 2021, we raised approximately $385,000 and $180,000, respectively of net proceeds from the issuance of notes payable and warrants. In 2021, we received proceeds of approximately $525,000 from the exercise of outstanding stock purchase warrants and we received approximately $1,573,000 through the sale of our common stock and stock purchase warrants. In the first quarter of 2022, we raised approximately $870,000 of net proceeds from the issuance of a senior secured note payable. The Note carries a 12.5% interest rate with interest-only payments payable monthly from April through August 2022. Beginning in September 2022, we are required to make monthly redemptions at the rate of 110% of one seventh of the original principal amount, ($179,592), plus interest. The Note also carries a mandatory prepayment at 125% of the original principal amount, or $1,428,571, less any redemptions made, upon the completion of a debt or equity offering resulting in gross proceeds to us of at least $10 million. On August 18, 2022, the note parties agreed to an extension of this note whereby beginning in October 2022, we are required to make monthly redemptions at the rate of 110% of one sixth of the original principal amount, ($179,592), plus interest.

 

In May 2022 we issued a promissory note in exchange for $200,000 in cash. This note carries a 12% interest rate, and a 6 month maturity. This note is extendible at the lender’s option and the second six months carries an 18% interest rate.

 

Based on our expected operating cash requirements we anticipate our current cash on hand will not be sufficient to fund our operations for at least 12 months after this filing. Assuming the successful completion of the offering of $8.0 million of gross proceeds as contemplated in this Prospectus, we expect to be able to fund our operations for approximately 18 months. Consequently, we will require additional capital to fund our operations. Despite our ability to secure capital in the past, there can be no assurance that additional equity or debt financing will be available to us when needed or that we may be able to secure funding from any other sources. Consequently, as explained in Note 3 to our condensed, consolidated financial statements, management has determined that there is substantial doubt about our ability to continue as a going concern.

 

We will require additional capital to pursue our product development plans. To continue to fund our operations and the development of our product candidates we anticipate raising additional cash through the private and public sales of equity or debt securities, collaborative arrangements and licensing agreements. Although management believes that such funding sources will be available, there can be no assurance that any such financing will be available to us when needed in order to allow us to continue our operations, or if available, on terms acceptable to us. If we do not raise sufficient funds in a timely manner, we may be forced to curtail operations, delay or stop our ongoing development, cease operations altogether, or file for bankruptcy. We cannot assure you that we will be able to secure additional capital or that any license revenue will materialize. Several factors will affect our ability to raise additional funding, including, but not limited to market conditions, interest rates and, more specifically, our progress in our exploratory, preclinical and future clinical development programs.

 

Comparisons of Six Months Ended June 30, 2022 compared to 2021

 

    Six Months Ended
June 30,		     Increase (Decrease)  
    2022     2021     $     %  
                         
Net cash used in operating activities   $ (1,496,394 )   $ (608,984 )   $ (887,410 )     (145.7 )%
Net cash used in investing activities   $ (40,632 )   $ (8,500 )   $ (32,132 )     (378.0 )%
Net cash provided by financing activities   $ 993,613     $ 1,185,000     $ (191,387 )      (16.2 )%

 

Net Cash Used in Operating Activities

 

Cash used in operating activities for the six months ended June 30, 2022, reflects our $2,683,704 net loss for the six months adjusted for certain non-cash items including: (i) 261,662 of share-based compensation, (ii) $380,953 of non-cash interest expense, and (iii) $540,717 of net changes in our operating assets and liabilities.

 

Cash used in operating activities for the six months ended June 30, 2021, reflects our $3,388,763 net loss for the six months adjusted for certain non-cash items including: (i) $2,552,595 of share-based compensation, (ii) $185,971 of non-cash interest expense, (iii) $15,000 write-off of abandoned assets and (iv) $23,448 of net changes in our operating assets and liabilities.

 

Net Cash Used in Investing Activities

 

Cash used in investing activities during the six months ended June 30, 2022, and 2021 consisted of our acquisition of intangible assets of $40,632 and $8,500, respectively.

 

Net Cash Provided by Financing Activities

 

For the six months ended June 30, 2022, net cash provided by financing activities of $993,613 consisted of $1,156,674 received for the issuance of notes payable, partially offset by $52,021 of repayments and $111,040 payments of deferred offering costs.

 

For the six months ended June 30, 2021, cash from financing activities of $1,185,000 consisted of (i) $1,125,000 of cash received from the issuance of common stock and exercise of warrants and (ii) $110,000 received from issuance of third-party notes payable, partially offset by $50,000 of repayments.

 

Comparisons of Cash Flows – Years Ended December 31, 2021 compared to 2020

 

   Years Ended
December 31,		   Increase (Decrease) 
   2021   2020   $   % 
                 
Net cash used in operating activities  $(1,604,035)  $(190,093)  $(1,413,942)   (743.8)%
Net cash used in investing activities  $(21,334)  $(34,300)  $12,966   37.8%
Net cash provided by financing activities  $2,135,025   $385,000   $1,750,025    (454.6)%

 

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Net Cash Used in Operating Activities

 

Cash used in operating activities for the year ended December 31, 2021, reflects our $5,340,354 net loss for the year adjusted for certain non-cash items including: (i) $2,889,567 of share-based compensation, (ii) $124,674 of non-cash interest expense, (iii) $549,026 of net changes in our operating assets and liabilities, (iv) $16,958 of impairment losses and (v) $149,350 loss on debt extinguishment.

 

Cash used in operating activities for the year ended December 31, 2020, reflects our $4,670,255 net loss for the year adjusted for certain non-cash items including: (i) $4,302,978 of share-based compensation, (ii) $30,616 of non-cash interest expense, and (iii) $106,751 of net changes in our operating assets and liabilities.

 

Net Cash Used in Investing Activities

 

Cash used in investing activities during the year ended December 31, 2021, consisted of our acquisition of fixed and intangible assets. We used $34,300 to acquire intangible assets during the year ended December 31, 2020.

 

Net Cash Provided by Financing Activities

 

For the year ended December 31, 2021, net cash provided by financing activities of approximately $2,135,000 consisted of (i) $1,573,000 of proceeds from the sale of our common stock and warrants, (ii) $525,000 of proceeds from the exercise of common stock purchase warrants, (iii) $110,000 of proceeds from debt issuances and (iv) $70,000 received for the issuance of notes payable, partially offset by $50,000 of repayments of outstanding debt and $93,000 payments of deferred offering costs.

 

For the year ended December 31, 2020, cash from financing activities of $385,000 consisted of (i) approximately $48,000 of proceeds from related party advances, (ii) $20,000 received from issuance of related party notes, (iii) $365,000 proceeds of third-party notes, partially offset by repayment of approximately $48,000 of related party advances.

 

Future Liquidity and Needs

 

We have incurred significant operating losses and negative cash flows since inception. We have not been able to generate significant revenues nor achieved profitability and may not be able to do so in the future. We do not expect to be profitable in the next several years, but rather expect to incur additional operating losses. We have limited liquidity and capital resources and must obtain significant additional capital resources in order to sustain our product development efforts, for acquisition of technologies and intellectual property rights, for preclinical and clinical testing of our anticipated products, pursuit of regulatory approvals, acquisition of capital equipment, laboratory and office facilities, establishment of production capabilities, for general and administrative expenses and other working capital requirements. We have relied on cash balances and the proceeds from the offering of our securities, and exercise of outstanding warrants to fund our operations.

 

We intend to pursue opportunities to obtain additional funds through the future through the sale of our securities.

 

As explained in the notes to our financial statements, there continues to be substantial doubt as to our ability to continue as a going concern. The source, timing and availability of any future financing will depend principally upon market conditions, interest rates and, more specifically, current and future progress in our exploratory, preclinical and clinical development programs. Funding may not be available when needed, at all, or on terms acceptable to us. Lack of necessary funds may require us, among other things, to delay, scale back or eliminate some or all of our research and product development programs, planned clinical trials, and/or our capital expenditures or to license our potential products or technologies to third parties.

 

JOBS Act

 

Please see the section of this prospectus entitled “Prospectus Summary — Implications of Being an Emerging Growth Company.”

 

OUR BUSINESS

 

Overview

 

We are a development stage biomedical company seeking to develop, in-license, sub-license and commercialize products in both the pharmaceutical and medical device areas. We have in-licensed four technologies which form the core of our current development efforts.

 

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Product Development.

 

All of our assets have been acquired from licenses as described below. As of the date of this prospectus, we plan to undertake further research efforts on our preclinical assets. In the event that we are able to generate sufficient data from our preclinical studies, we will attempt to file IND applications as we determine. There is no guarantee that we’ll be able to manufacture compliant with current good manufacturing practices (cGMP), and even if we are able to comply, there can be no assurances that we’ll be able to manufacture significant enough quantities to ever conduct a clinical trial. As of the date of this Prospectus, we have not submitted any INDs with the FDA for any of our product candidates.

 

Our development pipeline focuses on three (3) therapeutic areas: infectious diseases, oncology, and degenerative eye disease. Under these therapeutic areas, we are focusing on four (4) programs: (i) Rabies, (ii) COVID 19 Vaccines in Kidney Failure Patients, (iii) Glioblastoma, and (iv) Degenerative Eye Diseases. Even if we are able to raise the net proceeds described above, management has determined that it will still need to make a determination on what indications within those four (4) programs to pursue as we will not have sufficient capital to pursue all of the below indications.

 

Therapeutic Area   Candidate   Indication   Research and Pre-Clinical   Phase 1   Phase 2   Phase 3
Infectious Diseases   IMT505   Rabies   (1)            
                         
Infectious Diseases   COVID Vaccine with IMT504 Adjuvant   COVID 19 in Kidney Failure Patients   (2)            
                         
Oncology   CUBT906- CD56 Monoclonal Antibody ADC   Glioblastoma   (2)            
                         
Degenerative Eye Disease   Metformin Reformulation   Age-Related Macular Degeneration   (1)            

 

(1)Each of these therapeutics have undergone certain toxicology and pharmacokinetics animal studies. Please see further description in “Product Development” below for a further description of the development of each indicated therapeutic.
(2)Each of these therapeutics have not undergone pre-clinical development. Please see further description in “Product Development” below for a further description of the development of each indicated therapeutic.

 

 

We anticipate focusing on the following indications under our three (3) therapeutic areas:

 

Infectious Diseases

 

Rabies

 

In October 2020, we entered into an exclusive licensing and co-development agreement to develop a novel immunotherapy, IMT504, to treat late-stage rabies from Mid-Atlantic BioTherapeutics, Inc. If successful IMT504 will be the first drug ever approved to treat rabies in humans once the disease has passed the window in time where vaccination can prevent the onset of the disease and the disease has moved into the brain. We plan on conducting further research and preclinical studies on IMT504 to determine if we will be able to file IND applications with the FDA.

 

Our Rabies treatment is a patented immunostimulatory agent to be administered after the window of time where current Rabies vaccines can be effective, licensed on an exclusive basis from Mid Atlantic Biotherapeutics, a private biotechnology company. As a result of the relatively low rates of Rabies in the United States and large number of affected people outside the United States, our path of development for this treatment will likely be conducted outside of the U.S. which may raise additional challenges, and particularly so in the age of COVID-19.

 

As of the date of this Prospectus, we have completed IND-enabling toxicology and pharmacokinetics in two species (monkeys and rates) using clinical grade drug. We now need to complete a manufacturing plan as part of our IND application process. Thereafter, we will need to manufacture clinical grade drug in large enough quantities to conduct and complete our proposed clinical trial.

 

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COVID-19 in Kidney Failure Patients

 

In October of 2021 we entered into a licensing agreement with Mid-Atlantic BioTherapeutics, Inc. to license Mid-Atlantic’s COVID-19 vaccine which is composed of a recombinant S1 and S2 protein from SARS-CoV-2 plus an IMT504 adjuvant.

 

This is a novel COVID-19 vaccine using IMT504 as an adjuvant; initially as a vaccine to protect kidney failure patients. Kidney failure patients, whether recipients of transplants or on dialysis, are an extremely vulnerable population when it comes to infectious disease in general, and specifically with respect to the COVID variations that have spread throughout the world. They appear to have received significantly less protection against COVID infections than the rest of the vaccinated population at large. We believe that our novel vaccine and adjuvant could provide additional protection for this vulnerable population. This asset is patent pending.

 

As of the date of this Prospectus, we have not yet commenced pre-clinical development and we will need to complete animal studies with toxicology pharmacokinetics and receive approval of our manufacturing plan as part of our IND application process.

 

Oncology

 

Glioblastoma

 

In October of 2020 we entered into a worldwide exclusive agreement with the National Cancer Institute (NCI) a part of the National Institutes of Health (NIH) to license and develop a novel Monoclonal Antibody Drug Conjugate to treat Glioblastoma. There are currently no effective long-term treatments for glioblastoma.

 

Our Glioblastoma treatment is a Monoclonal Antibody Drug Conjugate (MADC) utilizing a patented CD56 monoclonal antibody conjugated with a cancer killing drug to treat newly diagnosed solid brain tumors. Glioblastoma patients have poor outcomes as a group with life expectancy under 5 years and often considerably shorter periods of time. We will attempt to deliver our MADC focally, that is directly to the tumor via a surgical route of administration to try to avoid the systemic toxicity associated with cancer drugs which are potent enough to kill the tumor(s). We are currently in the process of testing and expanding the cell lines sent to us by NCI as part of the license agreement and have identified facilities in the U.S., Ireland, and the Netherlands, potentially for both the non-clinical and clinical grade manufacturing of the drug if and when we determine that we are ready to begin manufacturing.

 

As of the date of this Prospectus, we have not yet commenced pre-clinical development and we will need to complete animal studies with toxicology pharmacokinetics and receive approval of our manufacturing plan as part of our IND application process.

 

Degenerative Eye Diseases

 

In February of 2021 we entered into a worldwide exclusive agreement with the National Eye Institute (NEI), a part of the National Institute of Health (NIH), for inventions including the repurposing of Metformin to treat retinal degenerative diseases. The Company plans on repurposing Metformin as a topical eye application (daily eye drop) and focusing on its development. We are targeting several different degenerative eye diseases, none of which have an approved drug which is considered to provide significant benefits to patients. The largest disease markets in this space are wet and dry AMD (age related macular degeneration), which dry AMD is currently our primary focus. Further indications described below may be explored after further preclinical research and development. On March 15, 2022, we entered into a cooperative research and development agreement (“CRADA”) with the NEI as the next step in commercializing our Metformin license. The NEI will conduct clinical studies under their protocols, and we will provide the proprietary drug for the clinical studies. We will provide funding not to exceed $115,000 for the clinical trials, with the balance paid by the NEI.

 

While our current focus is on Intermediate Dry Macular Degeneration and Geographic Atrophy, the Company does have the right under the license to pursue other indications with Metformin but has no plans to undertake any development related to such indications at this time.

 

As of the date of this Prospectus, we have completed preliminary toxicology, pharmacokinetics and tolerance studies in one species (rabbit) with a non-clinical grade drug. We will need to replicate these studies under Good Laboratory Practice conditions in rabbits and potentially dogs and we will need to complete a manufacturing plan as part of our IND application process. Thereafter, we will need to manufacture clinical grade drug in large enough quantities to conduct and complete the proposed clinical trial.

 

Intermediate Dry Macular Degeneration and Geographic Atrophy

 

We are primarily focusing on developing a treatment for Intermediate Dry Macular Degeneration and Geographic Atrophy (late-stage Dry AMD) from our license of a pending patent with NEI at the NIH. There are currently no FDA approved drug treatments for either. The main thrust of the invention(s) covered by our license is the use of reformulated Metformin, one of the worlds most prescribed drugs to treat diabetes, into an eye drop to treat degenerative eye diseases. We have assembled a quality and regulatory and manufacturing team, and have completed preliminary nonclinical grade animal toxicology and pharmacokinetics (PK) and have contracted for IND enabling toxicology and PK testing.

 

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Mechanisms of Action

 

Metformin (Degenerative Eye Disease) – Research from the National Eye Institute has shown that metformin can activate AMP activated protein kinase (AMPK) activity, reduce extreme vascular endothelial growth factor (VEGF) secretion, and correct baseline calcium levels in patient derived retinal pigment epithelium (RPE) cells. The new treatment indications will require reformulating the drug into an eye drop, injectable or other topical delivery method to be able to deliver sufficient drug to the RPE layer to have a therapeutic effect.

 

CUBT906 – CD56 Monoclonal Antibody ADC (Glioblastoma) – CUBT906 is a fully humanized CD56 monoclonal antibody carrying a PBD (Pyrrolobenzodiazepine dimer) directly to the tumor site to kill the tumor by inhibiting tumor growth and migration of the tumor.

 

IMT504 (Rabies / COVID-19) – IMT504 is a synthetic immunotherapy that stimulates different kinds of cells of the immune system in humans and has been studied as a vaccine adjuvant, as well as in cancer and infectious disease immunotherapies.

 

Licenses

 

Mid-Atlantic BioTherapeutics, Inc. Immunotherapy for Symptomatic Rabies

 

Effective September 30, 2021, we received an exclusive license to a pharmaceutical compound IMT504 for the development of an immunotherapy for symptomatic rabies. Pursuant to an amendment to the license entered into on October 13, 2021, the licensor will have a right to terminate the agreement and accompanying license if we do not raise a minimum of $6.5 million of net proceeds within 180 days of the SEC declaring our initial Form S-1 Registration Statement effective. The licensor previously had the right to terminate the agreement and accompanying license if we failed to raise $1,000,000 by March 31, 2022, which was satisfied. The agreement and accompanying license are additionally subject to termination in the event of a material breach of either party on 60 days’ notice with a right to cure. In exchange for the license, we (i) issued the licensor 7,000,000 shares of Common Stock on the effective date, (ii) will be required to issue an additional 6,5000,000 shares of Common Stock upon the submission of an IND application to the FDA that is accepted, (iii) will issue an additional 6,500,000 shares of Common Stock upon the successful completion of the first rabies clinical trial conducted pursuant to such IND application and (iv) will pay half of all Net Profits (as described in the license) from the licensed products to licensor. In the event we are required to issue the additional shares pursuant to the license, our shareholders may experience substantial dilution.

 

NIH License L-009-2021-0 “Antibody-Drug Conjugates for targeting glioblastoma CD56 Positive”

 

Effective October 15, 2020, we licensed US Provisional Patent Application No. 62/199,707, PCT Application No. PCT/US2016/044777, and US. Patent No. 10,548,987 from the National Cancer Institute, whereby we received an exclusive evaluation license, for evaluation purposes only and to make and use, but not sell materials or licensed products, for a term of two (2) years. We have a right to exercise an exclusive option, upon submitting a written notice to the National Cancer Institute one month prior to the termination date, which will include an application and commercial development plan and will initiate a three (3) month negotiation period to receive an exclusive commercial license. In exchange for the license, we (i) paid a $5,000 up front license fee, and (ii) will be required to pay a $5,000 payment on the one-year anniversary of effective date, which has been paid. The agreement expires 24 months from the effective date. Within 60 days of the termination or expiration of the agreement, unless a licensor exclusive or non-exclusive commercial patent license has been executed for the licensed patents in the licensed field of use, we will be required to return all materials and licensed products under the agreement to the licensor or certify their destruction. Further, the licensor has the right to terminate the agreement and accompanying license at its sole option if they determine that we (i) fail to adhere to a required commercial evaluation plan contained in Appendix E of the agreement (as described below), (ii) have not performed reasonable commercial efforts through certain benchmarks set forth in Appendix D of the agreement (as described below), (iii) have willfully made a false statement or willfully omitted a material fact in the license application or any report, (iv) have committed a material breach of a covenant or agreement contained in the agreement, or (v) cannot reasonably satisfy unmet health and safety needs. In the event we are in default in the performance of any material obligation under the license, including, but not limited to, the adherence to the commercial evaluation plan in Appendix X and/or the performance of the benchmarks set forth in Appendix D, we will provide licensor with written notice within 30 days of such default. Upon written approval that shall not be unreasonably withheld by licensor, we may be permitted to remedy such default within 60 days after the date of such written notice. Notwithstanding, licensor will have the right to terminate if such default is not remedied within 90 days after the date of such default.

 

We will be required to provide annual updates regarding our progress under the license, including, without limitation, the benchmarks and commercial development plan.

 

Benchmarks required to be met in the license agreement

 

Under our license with the National Cancer Institute, we agreed to meet certain benchmarks, which are contained in Appendix D to the license as follows:

 

1.Initiate preclinical IND-enabling studies within 6 months of the Effective Date of the license agreement.
   
2.Select at least one lead ADC candidate within eighteen (18) months of the Effective Date of the license agreement.
   
3.Raise at least a total of $500,000 within twenty-two (22) months of the Effective Date of the license agreement.
   
4.IND submission within twenty-four (24) months of the Effective Date of the license agreement.

 

Commercial Development Plan required to be met in the license agreement

 

Under our license with the National Cancer Institute, we agreed to a Commercial Development Plan with the licensor, which is contained in Appendix E to the license. A summary of the Commercial Development Plan is as follows:

 

1.Evaluate m900 and m906 to further character the ADCs and determine their stability, solubility, etc.
   
2.Select one of the two antibodies for further development and select one or two leads for IND consideration by the expiration of the license agreement.

 

The Commercial evaluation plan is also a generalized good faith estimate not a group of specific milestones. The commitment here is to demonstrate the steps required to choose between the two monoclonals covered by the patent. We have already done that. The inventor on the patent, dr. Dimiter Dimitrov has joined our SAB and had done a good bit of the characterization work while in his lab at NCI allowing us to move directly to begin the manufacture and conjugation of the drug and the anti-body; and plan the preclinical animal studies which are expected to be conducted by Nick Boulis at Emory in Q3 2022.

 

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NIH License L-088-20210 – “Druggable target to treat retinal degeneration”

 

Effective February 2, 2021, we licensed US Provisional Patent Application No. 62/899,899 and PCT Application No. PCT/US2020/050540 from the National Eye Institute (U.S. Department of Health and Human Services) whereby we received an exclusive license worldwide for therapeutics to treat retinal degenerative diseases, including the right to sublicense, pursuant to certain restrictions for a term of three (3) years, subject to an extension for the life of the licensed patents as described below. In the event we are in default in the performance of any material obligations under the agreement and if the default is not remedied within 90 days after notice, licensor may terminate this agreement and the accompanying license. Additionally, licensor may terminate or modify the agreement if it determines that we (i) are not executing the commercial development plan contained in the agreement as Appendix E (as described below), (ii) have not achieved certain benchmarks set forth in Appendix D of the agreement (as described below), (iii) have willfully made a false statement or willful omission of a material fact in the license application or in any report required under the agreement, (iv) have committed a material breach of a covenant or agreement contained in the agreement, (v) is not keeping the licensed products and processes reasonably available to the public after commercial use commences, (vi) cannot reasonably satisfy unmet health and safety needs, (vii) cannot reasonably justify a failure to comply with the domestic production requires contained in the agreement, or (viii) have been found by a court to have violated federal antitrust laws in connection with the agreement. Further, we will have the unilateral right to terminate the agreement or any licenses in any country or territory on 60 days’ notice. We will be required to provide annual updates with our progress under the license, including, without limitation, the benchmarks and commercial development plan. The licensed products relate to any direct ocular administered formulations of metformin – including injections to the eye, eye drops and other topical formulations related to the licensed patents. In exchange for the license, we (i) paid $5,000 upon execution and an additional past prosecution royalty payment of $8,500, (ii) are required to pay an annual royalty of $5,000 per year, (iii) are required to pay 3.5% of Net Sales related to the licensed assets, and (iv) may choose to extend the term for the life of the patents (which life of such patents, which we will be able to ascertain if and when the patent is granted) underlying the licensed assets upon (i) payment of $45,000 and (ii) written evidence of commercially reasonable progress toward licensee (Company) sponsored clinical studies of a Licensed Product (as defined in the license) and adherence with the Commercial Development Plan (as defined in the license). Additionally, we are required to pay certain milestone royalties as follows: (i) $75,000 upon first Phase 2 Clinical Study for a licensed product in the licensed field of use. (Retinal degenerative diseases in humans), (ii) $300,000 upon first completion of a Phase 3 Clinical Study for a licensed product in licensed field of use, (iii) $600,000 upon FDA approval of the first licensed product in the licensed field of use, (iv) $100,000 for each first commercial sale in each of the following countries: USA, Canada, European Union (including U.K., and Asia (including Japan, China, Korea and Australia).

 

Benchmarks required to be met in the license agreement

 

Under our license with the National Eye Institute, we agreed to meet certain benchmarks, which are contained in Appendix D to the license. Notwithstanding, in the event that we deviate from the benchmarks, we will need to provide the licensor with suitable reasoning. Further, we may amend the benchmarks from time to time upon approval from the licensor, which will not be unreasonably withheld by the licensor. Additionally, the licensor may not unreasonably withhold approval of any request by us to extend the time periods of the benchmarks if the request is supported by a reasonable showing of our diligence in our performance under the commercial Development Plan as described below. The initial benchmarks are as follows (with defined terms having their meaning as set forth in the license):

 

1.On or before five (5) months from the Effective Date (February 2, 2021), initiate any pre-clinical study activities, as needed, under target points 2.1 and 3.1 in the Commercial Development Plan (described below). This has been completed by the Company.
   
2.On or before twenty-four (24) months from the Effective Date, complete a Phase 1 Clinical Study for initiate a Phase 2 Clinical Study for treatment of a first indicated disease within the Field of Use using a Licensed Product.
   
3.On or before thirty-six (36) months from the Effective Date, complete a Phase 2 Clinical Study or initiate a Phase 3 Clinical Study for the treatment of a first indicated disease within the Field of Use using a Licensed Product.
   
4.On or before forty-eight (48) months from the Effective Date, complete a First Commercial Sale of a Licensed Product to treat a first indicated disease within a Field of Use.
   
5.On or before sixty (60) months from the Effective Date, initiate clinical studies for treatment of an at least second indicated disease within the Field of Use using a Licensed Product.
   
6.On or before one hundred and twenty (120) months, complete a First commercial Sale of a Licensed Product to treat at least a second indicated disease with the Field of Use.

 

Commercial Development Plan required to be met in the license agreement

 

Under our license with the National Eye Institute, we agreed to a Commercial Development Plan with the licensor, which are contained in Appendix E to the license. Notwithstanding, we may propose amendments to the Commercial Development Plan, which cannot be unreasonably denied by the licensor. A summary of the initial Commercial Development Plan is as follows:

 

1.Gap analysis will be performed on the information provided by the National Eye Institute too assess development requirements for pre-IND and IND preparation.
   
2.We are required to utilize certain consultants with sufficient training to perform certain chemistry, manufacturing and control processes.
   
3.Create and analyze a clinical development strategy.
   
4.Target point 2.1 of the Commercial Development Plan sets forth certain process development, analytics and formulation for first in human GMP manufacturing.
   
5.Target points 3.1 and 3.2 of the Commercial Development Plan set forth certain manufacturing, IND and clinical initiation plans.
   
6.Target point 4.1 sets forth future manufacturing and development plans, including Phase 1.
   
7.Target point 4.2 through 7.1 sets forth future manufacturing and development plans, including potential Phase 2, Phase 3, and NDA (New Drug Application) submissions

 

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Cooperative Research and Development Agreement for Intramural-PHS Clinical Research

 

Under the CRADA, the NEI will assist in the evaluation and of the Company’s proprietary ocular metformin in clinical studies for the treatment of AMD. The purpose of the CRADA is to assist in commercializing our Metformin license. Pursuant to the terms of the CRADA, we are responsible for manufacturing drug and delivering it in an acceptable form to the clinician. NEI is responsible for conducting the trial and collecting the data. The NEI will conduct clinical studies under their protocols, and we will provide the proprietary drug for the clinical studies. We will provide funding not to exceed $115,000 for the clinical trials, with the balance paid by the NEI.

 

The CRADA expires on March 15, 2025.

 

Under the terms of the CRADA, either party has the right to unilaterally terminate the CRADA at any time by providing at least sixty (60) days written notice. In the event that we terminate the CRADA, the NEI, at its option, may retain funds transferred to it before such termination. Additionally, in the event that we terminate the CRADA before the completion of all approved or active protocols, we will supply enough drug to complete the protocols, unless such termination was due to safety concerns.

 

IEM, Inc. License US Patent # 8,287,505 – “Ophthalmic Drop Dispensing Tip Assembly”

 

Effective September 30, 2020, we received an option to pay $50,000 for an exclusive royalty-free license to US Patent #8,287,505 relating to an ophthalmic drop dispending tip assembly. Pursuant to the license, we were able to exercise the option right at any time upon written notice one month prior to September 30, 2021. We provided such notice prior to such date to extend the option period for an additional six (6) months or until March 31, 2022 and in March of 2022, we additionally extended the option for another six (6) months or until September 30, 2022. Upon such extensions we were required to pay $1,000 fee for each extension to licensor. We additionally agreed to pay $1,800 of maintenance fees to the USPTO for the license as well as any future payments for maintenance and defense rights of the patents. In the event we materially breach our obligations under the agreement and fail to cure within 30 days’ written notice, the party providing us the option will have the right to terminate the agreement.

 

Mid-Atlantic BioTherapeutics, Inc. COVID-19 vaccine License

 

Effective October 1, 2021, we received an exclusive license to a pharmaceutical compound IMT504 for the development of a COVID-19 vaccine composed of recombinant S1 and S2 proteins from SARS-CoV—2 plus IMT504 adjuvant. The licensor will have a right to terminate the agreement and accompanying license if we have not raised $10,000,000 within 90 days of the SEC declaring our initial Form S-1 Registration Statement effective to fund the development of projects related to the license (which will be overseen by a joint steering committee including licensor and our personnel). Additionally, pursuant to an amendment to the license agreement entered into on December 31, 2021, the licensor will have the right to terminate the agreement if we do not provide at least $10,000,000 for the initial funding of projects under the license in a reasonable time frame to accomplish the initiation of the projects in a timely fashion. The agreement and accompanying license are additionally subject to termination in the event of a material breach of either party on 60 days’ notice with a right to cure. In exchange for the license, we (i) issued the licensor 12,500,000 shares of Common Stock on the effective date, (ii) will be required to issue an additional 17,500,000 shares of Common Stock upon the submission of an IND application to the FDA that is accepted, and (iii) will pay half of all Net Profits (as described in the license) from the licensed products to licensor. In the event we are required to issue the additional shares pursuant to the license, our shareholders may experience substantial dilution.

 

Market

 

Infectious Diseases

 

Rabies

 

Rabies is a viral disease that causes inflammation of the brain in humans and other mammals. Early symptoms can include fever and tingling at the site of exposure. These symptoms are followed by one or more of the following symptoms: nausea, vomiting, violent movements, uncontrolled excitement, fear of water, an inability to move parts of the body, confusion, and loss of consciousness. Once symptoms appear, the result is virtually always death.

 

It is extremely rare in the U.S. when patients do not get vaccinated in time. However unfortunately this is not the case outside of the U.S. particularly in large population areas of the near and far east and northern Africa, which are poorly served by modern “western” medicine.

 

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According to the CDC, from 1960 to 2018, 127 human rabies cases were reported in the United States, with roughly a quarter resulting from dog bites received during international travel. Of the infections acquired in the United States, 70% were attributed to bat exposures.

 

According to the WHO, every year, more than 29 million people worldwide receive a post-bite vaccination. This is estimated to prevent hundreds of thousands of rabies deaths annually. Globally, the economic burden of dog-mediated rabies is estimated at USD 8.6 billion per year.

 

The WHO reports that rabies is present on all continents, except Antarctica, with over 95% of human deaths occurring in the Asia and Africa regions. Rabies is one of the Neglected Tropical Diseases (NTD) that predominantly affects poor and vulnerable populations who live in remote rural locations. Approximately 80% of human cases occur in rural areas. Although effective human vaccines and immunoglobulins exist for rabies, they are not readily available or accessible to those in need. According to the WHO, globally, rabies deaths are rarely reported and children between the ages of 5–14 years are frequent victims.

 

Notwithstanding, the rabies market worldwide contains no drug / vaccine which can be administered after the standard window for treatment of (sometimes days, usually weeks, and occasionally a few months) and the disease has moved into the brain. There are no approved drugs anywhere in the world that can treat patients after this window has closed.

 

COVID-19

 

COVID-19 is a contagious disease caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The first known case was identified in Wuhan, China, in December 2019. The disease has since spread worldwide, leading to an ongoing pandemic.

 

COVID-19 has been declared a pandemic by the World Health Organization (WHO). As of October 26, 2021, more than 245 million people have been infected and COVID-19 has caused more than 4.9 million deaths.

 

Many biopharmaceutical companies and academic centers have been in a race to develop a prophylactic vaccine by using several platforms including mRNA, adenoviral vectors and recombinant proteins. As of October 1, 2021, four vaccines have been approved by US or European regulatory authorities.

 

According to Kidney.org, there are an estimated 37 million people in the U.S. with some type of kidney disease. Further, according to niddk.nih.gov, approximately 800,000 people in the U.S. are living with end stage kidney disease with 71% on dialysis and 29% with a kidney transplant.

 

Oncology

 

Glioblastoma

 

Glioblastoma is the most aggressive type of cancer that begins within the brain. Initially, signs and symptoms of glioblastoma are nonspecific. They may include headaches, personality changes, nausea, and symptoms similar to those of a stroke. Symptoms often worsen rapidly and may progress to unconsciousness.

 

The cause of most cases of glioblastoma is not known. Uncommon risk factors include genetic disorders, such as neurofibromatosis and Li-Fraumeni syndrome, and previous radiation therapy. Glioblastomas represent 15% of all brain tumors. They can either start from normal brain cells or develop from an existing low-grade astrocytoma. The diagnosis typically is made by a combination of a CT scan, MRI scan, and tissue biopsy.

 

Despite maximum treatment, the cancer always recurs. The typical duration of survival following diagnosis is 12–15 months, with fewer than 3–7% of people surviving longer than five years. Without treatment, survival is typically three months. It is the most common cancer that begins within the brain and the second-most common brain tumor, after meningioma. About 3 in 100,000 people in the U.S. develop the disease per year. The average age at diagnosis is 64, and the disease occurs more commonly in males than females.

  

Globally, over 241,000 people die each year as a result of brain or nervous system cancer, with Glioblastoma being the most common form of the disease and the most common primary malignant form of brain cancer. According to an iHealthcare Analyst: GBM has an incidence of two to three per 100,000 adults per year, and accounts for 52 percent of all primary brain tumors. Glioblastoma multiforme (GBM) is the most common and deadly brain tumor in adults. The incidence of GBM in the USA and Europe is 2-3 per 100,000. By definition, an orphan disease is one affecting 200,000 persons in the USA (one in every 1,500). In Europe, the definition is narrower, with fewer than five in 10,000 (one in every 2,000) people affected. The global GBM drugs market is projected to reach nearly $1.8 billion by 2027 driven by rising geriatric population, growing incidence of cases, and a rich clinical pipeline of new products. Despite technological advances in surgery and radio-chemotherapy, glioblastoma remains largely resistant to treatment. Active biotech and pharma companies in the markets include CSN Pharmaceuticals, Inc. (Nasdaq: CNSP), Intellia Therapeutics, Inc. (Nasdaq: NTLA), Anavex Life Sciences Corp. (Nasdaq: AVXL), Bristol Myers Squibb (NYSE: BMY), and Clovis Oncology, Inc. (Nasdaq: CLVS). Almost all of the current attempts to treat GBM involve attempts to expand the labels of drugs already approved to treat some other type of cancer, as standalone treatments or in combination with existing chemotherapies.

 

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Retinal Degenerative Diseases

 

Nearly 10% of the world’s population is over 60, increasing the prevalence of age-related macular degeneration. Dry AMD accounts for 80-90% of AMD cases, while wet AMD is 10-20% of cases. Currently there are no approved drug treatments for Dry AMD or Geographic Atrophy (late-stage dry AMD).

 

According to eyewire.news, in 2019, annual anti-VEGF (Vascular Endothelial Growth Factor) sales reported for the treatment of retinal diseases was estimated to exceed $11 billion in 2019 globally. The current AMD market is limited, comprising only five available drugs in the US, EU, and Japan and four in China. A main drawback for all these drugs and many gene therapies being developed for these indications is the requirement of continued periodic direct injections into the eye which creates issues of compliance.

 

Despite the significant benefits of existing therapeutic options, the need for frequent intravitreal injections is burdensome for both patients and retinal specialists. Retinal practitioners surveyed by the American Society of Retinal Specialists responded that their three greatest unmet needs are availability of long-acting sustained drug delivery, therapies that reduce treatment burden and new treatment mechanisms of action. According to a 2019 study of patient interviews in the United States, France and Australia, the factors affecting adherence from the patient perspective included the psychological burden of repeated intravitreal injections, the time burden of both treatment and monitoring visits for both patients and caregivers.

 

Patents

 

The intellectual property underlying our technology is covered by certain patents and patent applications licensed pursuant to our licensing agreements as described above. The following table describes our patent portfolio and the rights contained thereunder.

 

Program   Country   Appl. No./ Patent No.   Filing Date   Issuance Date   Recorded Owner   Owned or Licensed by Curative Biotechnology   Status   Expiration
COVID-19   U.S.  

10/309,775

7,038,029

   12/4/2002   5/2/2006   David Horn, LLC   Licensed   Issued   Standard expiration Apr. 1, 2023 (+ 118 day PTA)
COVID-19   U.S.  

11/178,086

7,381,807

   7/8/2005   6/3/2008   David Horn, LLC   Licensed   Issued   Standard expiration Nov. 25, 2023 (+ 356 days PTA)
COVID-19   U.S.  

12/111,006

7,943,316

   4/28/2008   5/17/2011   David Horn, LLC   Licensed   Issued   Standard expiration Dec. 4, 2022 (+ 0 days PTA)

 

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COVID-19   U.S.   13/099,778 8,871,436   5/3/2011   10/28/2014   David Horn, LLC   Licensed   Issued   Standard Expiration June 28, 2024 (+ 572 days PTA)
COVID-19   Australia  

2003250334

2003250334

   5/30/2003   11/25/2005   David Horn, LLC   Licensed   Issued   4/20/2023
COVID-19   European Patent Convention  

03755959.8

1511845

   5/30/2003   3/9/2005   David Horn, LLC   Licensed   Issued   5/30/2023
COVID-19   India   3773/DLNP72004 252038   11/29/2004   4/23/2012   David Horn, LLC   Licensed   Issued   11/29/2024
COVID-19   Mexico   2004/011937   11/30/2004   3/9/2005   David Horn, LLC   Licensed   Issued   11/30/2024
COVID-19   New Zealand  

20030536962

536962

   11/25/2004   1/11/2007   David Horn, LLC   Licensed   Issued   11/25/2024
                                 
Retinal Degeneration   U.S.   PCT/US 2020/050540   9/11/2020   N/A   National Institute of Health   License   Pending   N/A
                                 
Rabies   U.S.  

10/309,775

7,038,029

   12/4/2002   5/2/2006   David Horn, LLC   License   Issued   12/4/2022
Rabies   U.S.  

11/178,086

7,381,807

   7/8/2005   6/3/2008   David Horn, LLC   License   Issued   7/8/2025
Rabies   U.S.  

12/111,006

7,943,316

   4/28/2008   5/17/2011   David Horn, LLC   License   Issued   4/28/2028
Rabies   U.S.  

13/099,778

8,871,436

   5/3/2011   10/28/2014   David Horn, LLC   License   Issued   5/3/2031
Rabies   Australia  

2003250334

2003250334

   5/30/2003   11/25/2004   David Horn, LLC   License   Issued   5/30/2023
Rabies   European Patent Convention  

03755959.8

1511845

   5/30/2003   3/9/2005   David Horn, LLC   License   Issued   5/30/2023
Rabies   India  

3773/DLNP7

2004 252038

   11/29/2004   4/23/2012   David Horn, LLC   License   Issued   11/29/2024
Rabies   Mexico   2004/011937   11/30/2004   3/9/2005   David Horn, LLC   License   Issued   11/30/2024
Rabies   New Zealand  

20030536962

536962

   11/25/2004   1/11/2007   David Horn, LLC   License   Issued   11/24/2024
                                 
Glioblastoma   U.S.   15/747/620   1/25/2018   2/4/2020   National Cancer Institute   License   Issued   10/25/2036

 

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Note – All issued patents contain composition of matter claims, as well as process claims and claims for the treatment of disease.

 

When appropriate, we will continue to seek patent protection for inventions in our core technologies and in ancillary technologies that support our core technologies or which we otherwise believe will provide us with a competitive advantage. We will accomplish this by filing and maintaining patent applications for discoveries we make, either alone or in collaboration with scientific collaborators and strategic partners. In addition, we plan to obtain licenses or options to acquire licenses to patent filings from other individuals and organizations that we anticipate could be useful in advancing our research, development, and commercialization initiatives and our strategic business interest.

 

Consultant Agreement with Sohn Health Strategies

 

On September 27, 2021, the Company entered into an agreement with Sohn Health Strategies, LLC (“Sohn Health”) to serve as a special advisor to the Board of Directors and CEO of the Company for a term of two (2) years from the effective date. Sohn Health will provide the following services: (i) monthly review sessions with the CEO, (ii) assistance in quarterly joint steering committees, including meetings with the National Eye Institute Joint Steering Committee and Infectious Disease Joint Steering Committee, (iii) serve as Chairperson and participate in the Infections Disease and National Eye institute Joint Steering Committees (iii) preparation of minutes for both Steering Committees, and (iv) attending key scientific meetings as a representative of the Company. As compensation, we agreed to issue the consultant (i) 250,000 shares of Common Stock on the grant date and (ii) an option to purchase 1% of the issued and outstanding capital stock of the Company on a fully diluted basis, or an aggregate of 8,081,037 options to purchase Common Stock. The option has an exercise price of $0.11 per share, a term of 10 years, and vests (i) 50% on issuance and (ii) 50% on the one (1) year anniversary of the issuance date, subject to Sohn Health’s continued service to the Company. Additionally, upon the Company completing a reverse stock split and capital raising transaction of at least $5,000,000, Sohn Health will receive additional options such that the total option including such additional options will remain as 1% of the fully diluted capital stock of the Company. As of the date of this prospectus, the consultant is currently providing services to the Company.

 

Manufacturing

 

We do not own or intend to own or operate any manufacturing facilities. We currently and anticipate that we will continue to rely on third-party contract manufacturing organizations (“CMOs”) to manufacture and supply our preclinical and potentially clinical materials to be used during the development of our drug candidates. As our product candidates advance through development, we expect to enter into longer-term commercial supply agreements with key suppliers and manufacturers to fulfill and secure our production needs. There can be no assurances that we will be able to successfully manufacturer our product candidates pursuant to cGMP or that we will be able to produce sufficient quantities to advance our preclinical product candidates to clinical trials.

 

Competition

 

Drug development is highly competitive and subject to rapid and significant technological advancements. Our ability to compete will greatly depend upon our ability to complete necessary preclinical, IND applications, clinical trials and other related regulatory approval processes, and successfully market any product that we may successfully develop. The key competitive factors that will affect the commercial success of any product candidate for which we may receive marketing approval include efficacy, safety, tolerability, dosing convenience, price, coverage and reimbursement.

 

We are at a significant disadvantage at competing with our various product candidates because we are still in the preclinical stage of research with all of our product candidates. As a result, other companies looking to create products for the same indications would likely be further along in their drug development and would likely have access to greater resources given our limited operating history and going concern opinion from our independent registered public accounting firm. It is still too early to determine the competitive landscape of our product candidates at this time.

 

Our current and potential future competitors are diverse. There are many public and private biopharmaceutical companies, universities, governmental agencies and other research organizations actively engaged in the research and development of products that may be similar to our product candidates or address similar markets. In addition, the number of companies seeking to develop and commercialize products and therapies similar to our product candidates may increase during the period of our product development.

 

Intellectual Property

 

Our commercial success depends in part on our ability to (i) obtain and maintain proprietary protection to protect our current and future product candidates, novel discoveries, product development technologies, improvements, and know-how; (ii) preserve the confidentiality of our trade secrets and confidential information; (iii) maintain our co-development agreements and licenses for exclusive commercial rights to intellectual property, including patent rights co-owned with third parties; (iv) defend and enforce our proprietary rights, including our patents; and (v) operate without infringing valid and enforceable patents and other proprietary rights of third parties.

 

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We seek to protect our proprietary position by, among other methods, filing or in-licensing U.S. and foreign patents and patent applications related to technology, inventions and improvements that are important to the development and implementation of our business. As for the product candidates we develop and plan to commercialize, as a normal course of business, we generally have pursued, or intend to pursue, composition and therapeutic use patents, as well as patents directed to dosing regimens and additional prospective indications. We also rely, as needed, on trademarks, trade secrets, copyright protection, know-how, continuing technological innovation and confidential information to develop and maintain our proprietary position. We also will pursue data exclusivity, market exclusivity, and other regulatory exclusivities, as applicable and available.

 

Regardless of the coverage we seek under our existing patent families, there is always a risk that an alteration to our products, methods, or processes may provide sufficient basis for a competitor to avoid infringement claims. In addition, the coverage claimed in a patent application can be significantly reduced before a patent is issued, and courts can reinterpret patent scope after issuance. Moreover, many jurisdictions, including the United States, permit third parties to challenge issued patents in administrative proceedings, which may result in further narrowing or even cancellation of patent claims. Moreover, we cannot provide any assurance that any patents will be issued from our pending or any future applications or that any current or future issued patents will adequately protect our intellectual property.

 

While we seek broad coverage under our existing patent applications, there is always a risk that an alteration to the products or processes may provide sufficient basis for a competitor to avoid infringing our patent claims. In addition, patents, if granted, expire and we cannot provide any assurance that any patents will be issued from our pending or any future applications or that any potentially issued patents will adequately protect our products or product candidates.

 

Individual patents extend for varying periods depending on the date of filing of the patent application or the date of patent issuance and the legal term of patents in the countries in which they are obtained. Generally, patents issued for regularly filed applications in the United States are granted a term of 20 years from the earliest effective non-provisional filing date. In addition, in certain instances, a patent term can be extended to recapture a period due to delay by the USPTO in issuing the patent as well as a portion of the term effectively lost as a result of the FDA regulatory review period. However, as to the FDA component, the restoration period cannot be longer than five years and the total patent term including the restoration period must not exceed 14 years following FDA approval. The duration of foreign patents varies in accordance with provisions of applicable local law, but typically is also 20 years from the earliest effective non-provisional filing date. However, the actual protection afforded by a patent varies on a product-by-product basis, from country to country, and depends upon many factors, including the type of patent, the scope of its coverage, the availability of regulatory-related extensions, the availability of legal remedies in a particular country and the validity and enforceability of the patent.

 

Our commercial success will also depend in part on not infringing upon the proprietary rights of third parties. It is uncertain whether the issuance of any third-party patent would require us to alter our development or commercial strategies for our products, if approved, or processes, or to obtain licenses or cease certain activities. Our breach of any license agreements or failure to obtain a license to proprietary rights that we may require to develop or commercialize our future products may have an adverse impact on us. If third parties prepare and file patent applications in the United States that also claim technology to which we have rights, we may have to participate in interference or derivation.

 

Trade Secrets and Confidentiality

 

We rely, in some circumstances, on trade secrets and other confidential information to protect our unpatented technology. However, trade secrets can be difficult to protect. We seek to protect our trade secrets and proprietary technology and processes, in part, by entering into non-disclosure and confidentiality agreements with our employees, consultants, collaborators, scientific advisors, suppliers, contractors and other third parties. In addition, we enter into consulting agreements and employment agreements that require employees and consultants to assign to us any inventions, trade secrets or know-how that they develop while employed or contracted by us.

 

We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems. While we have confidence in these individuals, organizations and systems, agreements or security measures may be breached, and our trade secrets and other proprietary information may be disclosed. We may not have adequate remedies for any breach and could lose our trade secrets and other proprietary information through such a breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our consultants, contractors or collaborators use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting trade secrets, know-how and inventions.

 

Government Regulation and Product Approval

 

The FDA and other regulatory authorities at federal, state and local levels, as well as in foreign countries, extensively regulate, among other things, the research, development, testing, manufacture, quality control, import, export, safety, effectiveness, labeling, packaging, storage, distribution, record keeping, approval, advertising, promotion, marketing, post-approval monitoring and post-approval reporting of drugs and biologics such as those we are developing.

 

Small molecule drugs are subject to regulation under the Food, Drug, and Cosmetic Act (“FDCA”) and biological products are additionally subject to regulation under the Public Health Service Act (“PHSA”) and both are subject to additional federal, state, local and foreign statutes and regulations. We, along with third-party contractors, will be required to navigate the various preclinical, clinical and commercial approval requirements of the governing regulatory agencies of the countries in which we wish to conduct studies or seek approval or licensure of our product candidates.

 

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U.S. Biopharmaceuticals Regulation

 

The process required by the FDA before drug and biologic product candidates may be marketed in the United States generally involves the following:

 

  ● completion of extensive preclinical laboratory tests and animal studies performed in accordance with applicable regulations, including the FDA’s Good Laboratory Practice (“GLP”) regulations;

 

  ● submission to the FDA of an investigational new drug application (“IND”) which must become effective before clinical trials may begin;

 

  ● approval by an independent institutional review board or ethics committee at each clinical site before the trial is commenced;

 

  ● performance of adequate and well-controlled human clinical trials in accordance with FDA’s Good Clinical Practice (“GCP”) regulations to establish the safety and efficacy of a drug candidate and safety, purity and potency of a proposed biologic product candidate for its intended purpose;

 

  ● preparation of and submission to the FDA of a new drug application (“NDA”) or biologics license application (“BLA”), as applicable, after completion of all pivotal clinical trials;

 

  ● satisfactory completion of an FDA Advisory Committee review, if applicable;

 

  ● a determination by the FDA within 60 days of its receipt of an NDA or BLA to file the application for review;

 

  ● satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with current Good Manufacturing Practice requirements, or cGMPs, and of selected clinical investigation sites to assess compliance with GCPs; and

 

  ● FDA review and approval of an NDA, or licensure of a BLA, to permit commercial marketing of the product for particular indications for use in the United States.

 

Preclinical and Clinical Development

 

Prior to beginning the first clinical trial with a product candidate, we must submit an IND to the FDA. An IND is a request for authorization from the FDA to administer an investigational new drug product to humans. The central focus of an IND submission is on the general investigational plan and the protocol or protocols for preclinical studies and clinical trials. The IND also includes results of animal and in vitro studies assessing the toxicology, pharmacokinetics, pharmacology and pharmacodynamic characteristics of the product, chemistry, manufacturing and controls information, and any available human data or literature to support the use of the investigational product. An IND must become effective before human clinical trials may begin. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day period, raises safety concerns or questions about the proposed clinical trial. In such a case, the IND may be placed on clinical hold and the IND sponsor and the FDA must resolve any outstanding concerns or questions before the clinical trial can begin. Submission of an IND therefore may or may not result in FDA authorization to begin a clinical trial.

 

Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with GCPs, which include the requirement that all research subjects provide their informed consent for their participation in any clinical study. Clinical trials are conducted under protocols detailing, among other things, the objectives of the study, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated. A separate submission to the existing IND must be made for each successive clinical trial conducted during product development and for any subsequent protocol amendments. Furthermore, an independent institutional review board for each site proposing to conduct the clinical trial must review and approve the plan for any clinical trial and its informed consent form before the clinical trial begins at that site, and must monitor the study until completed. Regulatory authorities, the institutional review board or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk or that the trial is unlikely to meet its stated objectives. Some studies also include oversight by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring board, which provides authorization for whether or not a study may move forward at designated check points based on access to certain data from the study and may halt the clinical trial if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy.

 

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For purposes of biopharmaceutical development, human clinical trials are typically conducted in three sequential phases that may overlap or be combined:

 

  ● Phase 1. The investigational product is initially introduced into patients with the target disease or condition. These studies are designed to test the safety, dosage tolerance, absorption, metabolism and distribution of the investigational product in humans, the side effects associated with increasing doses, and, if possible, to gain early indications of effectiveness.
     
  ● Phase 2. The investigational product is administered to a limited patient population to evaluate the preliminary efficacy, optimal dosages and dosing schedule and to identify possible adverse side effects and safety risks.
     
  ● Phase 3. The investigational product is administered to an expanded patient population to further evaluate dosage, to provide statistically significant evidence of clinical efficacy and to further test for safety, generally at multiple geographically dispersed clinical trial sites. These clinical trials are intended to establish the overall risk/benefit ratio of the investigational product and to provide an adequate basis for product approval

 

In some cases, the FDA may require, or companies may voluntarily pursue, additional clinical trials after a product is approved to gain more information about the product. These so-called “Phase 4” studies may be made a condition to approval of the application. Concurrent with clinical trials, companies may complete additional animal studies and develop additional information about the characteristics of the product candidate, and must finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, must develop methods for testing the identity, strength, quality and purity of the final product, or for biologics, the safety, purity and potency. Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.

 

During all phases of clinical development, regulatory agencies require extensive monitoring and auditing of all clinical activities, clinical data, and clinical study investigators. The FDA or the sponsor or its data safety monitoring board may suspend a clinical study at any time on various grounds, including a finding that the research patients or patients are being exposed to an unacceptable health risk. Similarly, an institutional review board can suspend or terminate approval of a clinical study at its institution if the clinical study is not being conducted in accordance with the institutional review board’s requirements or if the biological product candidate has been associated with unexpected serious harm to patients. There are also requirements governing the reporting of ongoing clinical trials and completed clinical trial results to public registries. Sponsors of clinical trials of FDA-regulated products are required to register and disclose certain clinical trial information, which is publicly available at www.clinicaltrials.gov.

 

NDA/BLA Submission and Review

 

Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, the results of product development, nonclinical studies and clinical trials are submitted to the FDA as part of an NDA or BLA, as applicable, requesting approval to market the product for one or more indications. The application must include all relevant data available from pertinent preclinical studies and clinical trials, including negative or ambiguous results as well as positive findings, together with detailed information relating to the product’s chemistry, manufacturing, controls, and proposed labeling, among other things. The submission of an application requires payment of a substantial application user fee to the FDA, unless a waiver or exemption applies. The FDA has sixty days from the applicant’s submission to either issue a refusal to file letter or accept the application for filing, indicating that it is sufficiently complete to permit substantive review.

 

Once an NDA or BLA has been accepted for filing, the FDA’s goal is to review standard applications within 10 months after it accepts the application for filing, or, if the application qualifies for priority review, six months after the FDA accepts the application for filing. In both standard and priority reviews, the review process is often significantly extended by FDA requests for additional information or clarification. The FDA reviews an NDA to determine whether a drug is safe and effective for its intended use and a BLA to determine whether a biologic is safe, pure and potent. FDA also reviews whether the facility in which the product is manufactured, processed, packed or held meets standards designed to assure and preserve the product’s identity, safety, strength, quality, potency and purity. The FDA may convene an advisory committee to provide clinical insight on application review questions. Before approving an NDA or BLA, the FDA will typically inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving an application, the FDA will typically inspect one or more clinical sites to assure compliance with GCPs. If the FDA determines that the application, manufacturing process or manufacturing facilities are not acceptable, it will outline the deficiencies in the submission and often will request additional testing or information. Notwithstanding the submission of any requested additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.

 

After the FDA evaluates an application and conducts inspections of manufacturing facilities where the investigational product and/or its drug substance will be manufactured, the FDA may issue an approval letter or a Complete Response letter. An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications. A Complete Response letter will describe all of the deficiencies that the FDA has identified in the application, except that where the FDA determines that the data supporting the application are inadequate to support approval, the FDA may issue the Complete Response letter without first conducting required inspections, testing submitted product lots and/or reviewing proposed labeling. In issuing the Complete Response letter, the FDA may recommend actions that the applicant might take to place the application in condition for approval, including requests for additional information or clarification, which may include the potential requirement for additional clinical studies. The FDA may delay or refuse approval of an application if applicable regulatory criteria are not satisfied, require additional testing or information and/or require post-marketing testing and surveillance to monitor safety or efficacy of a product.

 

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If regulatory approval of a product is granted, such approval will be granted for particular indications and may entail limitations on the indicated uses for which such product may be marketed. For example, the FDA may approve the application with a risk evaluation and mitigation strategy (“REMS”), to ensure the benefits of the product outweigh its risks. A REMS is a safety strategy to manage a known or potential serious risk associated with a product and to enable patients to have continued access to such medicines by managing their safe use, and could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. The FDA also may condition approval on, among other things, changes to proposed labeling or the development of adequate controls and specifications. Once approved, the FDA may withdraw the product approval if compliance with pre- and post-marketing requirements is not maintained or if problems occur after the product reaches the marketplace. The FDA may require one or more Phase 4 post-market studies and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization, and may limit further marketing of the product based on the results of these post-marketing studies.

 

Expedited Development and Review Programs

 

The FDA offers a number of expedited development and review programs for qualifying product candidates. The fast track program is intended to expedite or facilitate the process for reviewing new products that meet certain criteria. Specifically, new products are eligible for fast track designation if they are intended to treat a serious or life-threatening disease or condition and demonstrate the potential to address unmet medical needs for the disease or condition. Fast track designation applies to the combination of the product and the specific indication for which it is being studied. The sponsor of a fast track product has opportunities for frequent interactions with the review team during product development and, once an NDA or BLA is submitted, the product may be eligible for priority review. A fast track product may also be eligible for rolling review, where the FDA may consider for review sections of the NDA or BLA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the application, the FDA agrees to accept sections of the application and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the application.

 

A product intended to treat a serious or life-threatening disease or condition may also be eligible for breakthrough therapy designation to expedite its development and review. A product can receive breakthrough therapy designation if preliminary clinical evidence indicates that the product, alone or in combination with one or more other drugs or biologics, may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. The designation includes all of the fast track program features, as well as more intensive FDA interaction and guidance beginning as early as Phase 1 and an organizational commitment to expedite the development and review of the product, including involvement of senior managers.

 

Any marketing application for a drug or biologic submitted to the FDA for approval, including a product with a fast track designation and/or breakthrough therapy designation, may be eligible for other types of FDA programs intended to expedite the FDA review and approval process, such as priority review and accelerated approval. A product is eligible for priority review if it has the potential to provide a significant improvement in the treatment, diagnosis or prevention of a serious disease or condition. Priority review designation means the FDA’s goal is to take action on the marketing application within six months of the 60-day filing date.

 

Additionally, products studied for their safety and effectiveness in treating serious or life-threatening diseases or conditions may receive accelerated approval upon a determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. As a condition of accelerated approval, the FDA will generally require the sponsor to perform adequate and well-controlled post-marketing clinical studies to verify and describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit. In addition, the FDA currently requires as a condition for accelerated approval pre-approval of promotional materials, which could adversely impact the timing of the commercial launch of the product.

 

Fast track designation, breakthrough therapy designation and priority review do not change the standards for approval but may expedite the development or approval process. Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.

 

Orphan Drug Act

 

Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biologic intended to treat a rare disease or condition, which is a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States for which there is no reasonable expectation that the cost of developing and making available in the United States a drug or biologic for this type of disease or condition will be recovered from sales in the United States for that drug or biologic. Orphan drug designation must be requested before submitting an NDA or BLA. After the FDA grants orphan drug designation, the generic identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. The orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review or approval process.

 

If a product that has orphan drug designation subsequently receives the first FDA approval for the disease for which it has such designation, the product is entitled to orphan drug exclusive approval (or exclusivity), which means that the FDA may not approve any other applications, including a full NDA or BLA, to market the same drug or biologic for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity or if the FDA finds that the holder of the orphan drug exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan drug to meet the needs of patients with the disease or condition for which the drug was designated. Orphan drug exclusivity does not prevent the FDA from approving a different drug or biologic for the same disease or condition, or the same drug or biologic for a different disease or condition. Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the NDA or BLA application fee.

 

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A designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation. In addition, exclusive marketing rights in the United States may be lost if the FDA later determines that the request for designation was materially defective.

 

Post-Approval Requirements

 

Any products manufactured or distributed by us pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to record-keeping, reporting of adverse experiences, periodic reporting, product sampling and distribution, and advertising and promotion of the product. After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval. There also are continuing user fee requirements, under which the FDA assesses an annual program fee for each product identified in an approved NDA or BLA. Biopharmaceutical manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMPs, which impose certain procedural and documentation requirements upon us and our third-party manufacturers. Changes to the manufacturing process are strictly regulated, and, depending on the significance of the change, may require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMPs and impose reporting requirements upon us and any third-party manufacturers that we may decide to use. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with cGMPs and other aspects of regulatory compliance.

 

The FDA may withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical studies to assess new safety risks; or imposition of distribution restrictions or other restrictions under a REMS program. Other potential consequences include, among other things:

 

  ● restrictions on the marketing or manufacturing of a product, complete withdrawal of the product from the market or product recalls;

 

  ● fines, warning or untitled letters or holds on post-approval clinical studies;

 

  ● refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of existing product approvals;

 

  ● product seizure or detention, or refusal of the FDA to permit the import or export of products;

 

  ● consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs;

 

  ● mandated modification of promotional materials and labeling and the issuance of corrective information;

 

  ● the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; or

 

  ● injunctions or the imposition of civil or criminal penalties.

 

The FDA closely regulates the marketing, labeling, advertising and promotion of biopharmaceutical products. A company can make only those claims relating to safety and efficacy, purity and potency that are approved by the FDA and in accordance with the provisions of the approved label. However, companies may share truthful and not misleading information that is otherwise consistent with a product’s FDA approved labeling. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses. Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties. Physicians may prescribe legally available products for uses that are not described in the product’s labeling and that differ from those tested by us and approved by the FDA. Such off-label uses are common across medical specialties. Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances. The FDA does not regulate the behavior of physicians in their choice of treatments. The FDA does, however, restrict manufacturer’s communications on the subject of off-label use of their products.

 

Biosimilars and Exclusivity

 

The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively the “ACA”), signed into law in 2010, includes a subtitle called the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), which created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product.

 

Biosimilarity, which requires that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity and potency, can be shown through analytical studies, animal studies and a clinical study or studies. Interchangeability requires that a product is biosimilar to the reference product and the product must demonstrate that it can be expected to produce the same clinical results as the reference product in any given patient and, for products that are administered multiple times to an individual, the biologic and the reference biologic may be alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic. However, complexities associated with the larger, and often more complex, structures of biological products, as well as the processes by which such products are manufactured, pose significant hurdles to implementation of the abbreviated approval pathway that are still being worked out by the FDA.

 

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Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date that the reference product was first licensed by the FDA. In addition, the approval of a biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first licensed. During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing that applicant’s own preclinical data and data from adequate and well-controlled clinical studies to demonstrate the safety, purity and potency of its product. The BPCIA also created certain exclusivity periods for biosimilars approved as interchangeable products. At this juncture, it is unclear whether products deemed “interchangeable” by the FDA will, in fact, be readily substituted by pharmacies, which are governed by state pharmacy law.

 

The BPCIA is complex and continues to be interpreted and implemented by the FDA. In addition, recent government proposals have sought to reduce the 12-year reference product exclusivity period. Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have also been the subject of recent litigation. As a result, the ultimate impact, implementation, and impact of the BPCIA is subject to significant uncertainty.

 

Hatch-Waxman Amendments and Exclusivity

 

Section 505 of the FDCA describes three types of marketing applications that may be submitted to the FDA to request marketing authorization for a new drug. A Section 505(b)(1) NDA is an application that contains full reports of investigations of safety and efficacy. A 505(b)(2) NDA is an application that contains full reports of investigations of safety and efficacy but where at least some of the information required for approval comes from investigations that were not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use from the person by or for whom the investigations were conducted. This regulatory pathway enables the applicant to rely, in part, on the FDA’s prior findings of safety and efficacy for an existing product, or published literature, in support of its application. Section 505(j) establishes an abbreviated approval process for a generic version of approved drug products through the submission of an Abbreviated New Drug Application (“ANDA”). An ANDA provides for marketing of a generic drug product that has the same active ingredients, dosage form, strength, route of administration, labeling, performance characteristics and intended use, among other things, to a previously approved product. ANDAs are termed “abbreviated” because they are generally not required to include preclinical (animal) and clinical (human) data to establish safety and efficacy. Instead, generic applicants must scientifically demonstrate that their product is bioequivalent to, or performs in the same manner as, the innovator drug through in vitro, in vivo or other testing. The generic version must deliver the same amount of active ingredient(s) in the same amount of time as the innovator drug and can often be substituted by pharmacists under prescriptions written for the reference listed drug. In seeking approval for a drug through an NDA, applicants are required to list with the FDA each patent with claims that cover the applicant’s drug or a method of using the drug. Upon approval of a drug, each of the patents listed in the application for the drug is then published in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book. Drugs listed in the Orange Book can, in turn, be cited by potential competitors in support of approval of an ANDA or 505(b)(2) NDA.

 

Upon submission of an ANDA or a 505(b)(2) NDA, an applicant must certify to the FDA that (1) no patent information on the drug product that is the subject of the application has been submitted to the FDA; (2) such patent has expired; (3) the date on which such patent expires; or (4) such patent is invalid or will not be infringed upon by the manufacture, use or sale of the drug product for which the application is submitted. Generally, the ANDA or 505(b)(2) NDA cannot be approved until all listed patents have expired, except where the ANDA or 505(b)(2) NDA applicant challenges a listed patent through the last type of certification, also known as a paragraph IV certification. If the applicant does not challenge the listed patents, or indicates that it is not seeking approval of a patented method of use, the ANDA or 505(b)(2) NDA application will not be approved until all of the listed patents claiming the referenced product have expired.

 

The FDA also cannot approve an ANDA or 505(b)(2) application until all applicable non-patent exclusivities listed in the Orange Book for the branded reference drug have expired. For example, a pharmaceutical manufacturer may obtain five years of non-patent exclusivity upon NDA approval of a new chemical entity, or NCE, which is a drug containing an active moiety that has not been approved by FDA in any other NDA. An “active moiety” is defined as the molecule responsible for the drug substance’s physiological or pharmacologic action. During that five-year exclusivity period, the FDA cannot accept for filing (and therefore cannot approve) any ANDA seeking approval of a generic version of that drug or any 505(b)(2) NDA that relies on the FDA’s approval of the drug, provided that that the FDA may accept an ANDA four years into the NCE exclusivity period if the ANDA applicant also files a paragraph IV certification.

 

Drugs and biologics can also obtain pediatric market exclusivity in the United States. Pediatric exclusivity, if granted, adds six months to existing exclusivity periods and patent terms. This six-month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based on the voluntary completion of a pediatric study in accordance with an FDA-issued “Written Request” for such a study.

 

Federal and State Fraud and Abuse, Data Privacy and Security, and Transparency Laws and Regulations

 

In addition to FDA restrictions on marketing of pharmaceutical products, federal and state healthcare laws and regulations restrict business practices in the biopharmaceutical industry. These laws may impact, among other things, our current and future business operations, including our clinical research activities, and proposed sales, marketing and education programs and constrain the business or financial arrangements and relationships with healthcare providers and other parties through which we market, sell and distribute our products for which we obtain marketing approval. These laws include anti-kickback and false claims laws and regulations, data privacy and security, and transparency laws and regulations, including, without limitation, those laws described below.

 

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The U.S. federal Anti-Kickback Statute prohibits any person or entity from, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce or in return for purchasing, leasing, ordering or arranging for or recommending the purchase, lease or order of any item or service reimbursable under Medicare, Medicaid or other federal healthcare programs. The term “remuneration” has been broadly interpreted to include anything of value. The U.S. federal Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formulary managers on the other. Although there are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, the exceptions and safe harbors are drawn narrowly. Practices that involve remuneration that may be alleged to be intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor. Several courts have interpreted the statute’s intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the statute has been violated.

 

A person or entity does not need to have actual knowledge of this statute or specific intent to violate it in order to have committed a violation. In addition, the government may assert that a claim including items or services resulting from a violation of the U.S. federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act or the civil monetary penalties laws.

 

Federal civil and criminal false claims laws, including the federal civil False Claims Act, which can be enforced by individuals through civil whistleblower and qui tam actions, and civil monetary penalties laws, prohibit any person or entity from, among other things, knowingly presenting, or causing to be presented, a false claim for payment to the federal government or knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government. A claim includes “any request or demand” for money or property presented to the U.S. government. Several pharmaceutical and other healthcare companies have been prosecuted under these laws for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product. Other companies have been prosecuted for causing false claims to be submitted because of the companies’ marketing of products for unapproved, and thus non-reimbursable, uses.

 

The federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) created additional federal criminal statutes that prohibit, among other things, knowingly and willfully executing a scheme to defraud any healthcare benefit program, including private third-party payors and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Also, many states have similar fraud and abuse statutes or regulations that apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor.

 

In addition, we may be subject to data privacy and security regulation by both the federal government and the states in which we conduct our business. HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and their respective implementing regulations, impose specified requirements on certain types of individuals and entities relating to the privacy, security and transmission of individually identifiable health information. Among other things, HITECH makes HIPAA’s security standards directly applicable to “business associates,” defined as independent contractors or agents of covered entities, which include certain healthcare providers, healthcare clearinghouses and health plans, that create, receive, maintain or transmit individually identifiable health information in connection with providing a service for or on behalf of a covered entity. HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and seek attorney’s fees and costs associated with pursuing federal civil actions. In addition, state laws govern the privacy and security of health information in certain circumstances, many of which are not pre-empted by HIPAA, differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

 

The federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services (“CMS”), information related to payments or other transfers of value made to physicians, as defined by such law, and teaching hospitals, and applicable manufacturers and applicable group purchasing organizations to report annually to CMS ownership and investment interests held by physicians and their immediate family members.

 

We may also be subject to state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers, marketing expenditures or drug pricing, and state and local laws that require the registration of pharmaceutical sales representatives.

 

Because of the breadth of these laws and the narrowness of available statutory exceptions and regulatory safe harbors, it is possible that some of our business activities could be subject to challenge under one or more of such laws. If our operations are found to be in violation of any of the federal and state laws described above or any other governmental regulations that apply to us, we may be subject to significant criminal, civil and administrative penalties including damages, fines, imprisonment, disgorgement, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, contractual damages, reputational harm, diminished profits and future earnings, exclusion from participation in government healthcare programs and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations. To the extent that any of our products are sold in a foreign country, we may be subject to similar foreign laws and regulations, which may include, for instance, applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws, implementation of corporate compliance programs, reporting of payments or transfers of value to healthcare professionals, and additional data privacy and security requirements.

 

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Coverage and Reimbursement

 

The future commercial success of our product candidates, if approved, will depend in part on the extent to which third-party payors, such as governmental payor programs at the federal and state levels, including Medicare and Medicaid, private health insurers and other third-party payors, provide coverage of and establish adequate reimbursement levels for our product candidates. Third-party payors generally decide which products they will pay for and establish reimbursement levels for those products. In particular, in the United States, no uniform policy for coverage and reimbursement exists. Private health insurers and other third-party payors often provide coverage and reimbursement for products based on the level at which the government, through the Medicare program, provides coverage and reimbursement for such products, but also on their own methods and approval process apart from Medicare determinations. Therefore, coverage and reimbursement can differ significantly from payor to payor.

 

In the United States, the European Union (“EU”), and other potentially significant markets for our product candidates, government authorities and third-party payors are increasingly attempting to limit or regulate the price of products, particularly for new and innovative products, which often has resulted in average selling prices lower than they would otherwise be. Further, the increased emphasis on managed healthcare in the United States and on country and regional pricing and reimbursement controls in the EU will put additional pressure on product pricing, reimbursement and usage. These pressures can arise from rules and practices of managed care groups, judicial decisions and laws and regulations related to Medicare, Medicaid and healthcare reform, pharmaceutical coverage and reimbursement policies and pricing in general.

 

Third-party payors are increasingly imposing additional requirements and restrictions on coverage and limiting reimbursement levels for products. For example, federal and state governments reimburse products at varying rates generally below average wholesale price. These restrictions and limitations influence the purchase of products. Third-party payors may limit coverage to specific products on an approved list, or formulary, which might not include all of the FDA-approved products for a particular indication. Similarly, because certain of our product candidates are physician-administered, separate reimbursement for the product itself may or may not be available. Instead, the administering physician may only be reimbursed for providing the treatment or procedure in which our product is used. Third-party payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of products, in addition to their safety and efficacy. We may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of our product candidates, in addition to the costs required to obtain the FDA approvals. Our product candidates may not be considered medically necessary or cost-effective. A payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved. Adequate third-party payor reimbursement may not be available to enable us to realize an appropriate return on our investment in product development. Legislative proposals to reform healthcare or reduce costs under government insurance programs may result in lower reimbursement for our product candidates, if approved, or exclusion of our product candidates from coverage and reimbursement. The cost containment measures that third-party payors and providers are instituting and any healthcare reform could significantly reduce our revenue from the sale of any approved product candidates.

 

Healthcare Reform

 

The United States and some foreign jurisdictions are considering enacting or have enacted a number of additional legislative and regulatory proposals to change the healthcare system in ways that could affect our ability to sell our product candidates profitably, if approved. Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts, which include major legislative initiatives to reduce the cost of care through changes in the healthcare system, including limits on the pricing, coverage, and reimbursement of pharmaceutical and biopharmaceutical products, especially under government-funded healthcare programs, and increased governmental control of drug pricing.

 

There have been several U.S. government initiatives over the past few years to fund and incentivize certain comparative effectiveness research, including creation of the Patient-Centered Outcomes Research Institute under the ACA. It is also possible that comparative effectiveness research demonstrating benefits in a competitor’s product could adversely affect the sales of our product candidates.

 

The ACA became law in March 2010 and substantially changed the way healthcare is financed by third-party payors, and significantly impacts the U.S. pharmaceutical industry. Among other measures that may have an impact on our business, the ACA established an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents; a new Medicare Part D coverage gap discount program; and a new formula that increased the rebates a manufacturer must pay under the Medicaid Drug Rebate Program. Additionally, the ACA extended manufacturers’ Medicaid rebate liability, expands eligibility criteria for Medicaid programs, and expanded entities eligible for discounts under the Public Health Service Act. At this time, we are unsure of the full impact that the ACA will have on our business.

 

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There has been increasing legislative and enforcement interest in the United States with respect to drug pricing practices. Specifically, there have been several recent U.S. Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs. At the federal level, the Trump administration’s budget proposal for fiscal year 2021 includes a $135 billion allowance to support legislative proposals seeking to reduce drug prices, increase competition, lower out-of-pocket drug costs for patients, and increase patient access to lower-cost generic and biosimilar drugs. Additionally, the Trump administration previously released a “Blueprint” to lower drug prices and reduce out of pocket costs of drugs that contains additional proposals to increase manufacturer competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products and reduce the out of pocket costs of drug products paid by consumers. The U.S. Department of Health and Human Services has solicited feedback on some of these measures and has implemented others under its existing authority. For example, in May 2019, CMS issued a final rule to allow Medicare Advantage plans the option to use step therapy for Part B drugs beginning January 1, 2020. This final rule codified CMS’s policy change that was effective January 1, 2019. Congress and the Trump administration have each indicated that it will continue to seek new legislative and/or administrative measures to control drug costs. At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine which drugs and suppliers will be included in their healthcare programs. Furthermore, there has been increased interest by third party payors and governmental authorities in reference pricing systems and publication of discounts and list prices. These measures could reduce future demand for our products or put pressure on our pricing.

 

Foreign Regulation

 

In order to market any product outside of the United States, we would need to comply with numerous and varying regulatory requirements of other countries regarding safety and efficacy and governing, among other things, clinical trials, marketing authorization, commercial sales and distribution of our product candidates. For example, in the EU, we must obtain authorization of a clinical trial application (“CTA”) in each member state in which we intend to conduct a clinical trial. Whether or not we obtain FDA approval for a drug, we would need to obtain the necessary approvals by the comparable regulatory authorities of foreign countries before we can commence clinical trials or marketing of the drug in those countries. The approval process varies from country to country and can involve additional product testing and additional administrative review periods. The time required to obtain approval in other countries might differ from and be longer than that required to obtain FDA approval. Regulatory approval in one country does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country may negatively impact the regulatory process in others.

 

Further, some countries outside of the United States, including the EU member states, Switzerland and the United Kingdom, have also adopted data protection laws and regulations, which impose significant compliance obligations. In the EU, the collection and use of personal health data is governed by the provisions of the General Data Protection Regulation (“GDPR”). The GDPR became effective on May 25, 2018, repealing its predecessor directive and increasing responsibility and liability of pharmaceutical companies in relation to the processing of personal data of EU subjects. The GDPR, together with the national legislation of the EU member states governing the processing of personal data, impose strict obligations and restrictions on the ability to process personal data, including health data from clinical trials and adverse event reporting. In particular, these obligations and restrictions concern potentially burdensome documentation requirements, granting certain rights to individuals to control how we collect, use, disclose, retain and process information about them, the information provided to the individuals, the transfer of personal data out of the EU, security breach notifications, and security and confidentiality of the personal data. The processing of sensitive personal data, such as physical health condition, may impose heightened compliance burdens under the GDPR and is a topic of active interest among foreign regulators. In addition, the GDPR provides for more robust regulatory enforcement and fines of up to €20 million or 4% of the annual global revenue of the noncompliant company, whichever is greater. Data protection authorities from the different EU member states may interpret the GDPR and national laws differently and impose additional requirements, which add to the complexity of processing personal data in the EU. Guidance on implementation and compliance practices are often updated or otherwise revised.

 

Employees

 

We have four (4) employees as of August 24, 2022. As a virtually distributed company, we maintain a small number of employees that oversee the outside contractors and consultants responsible for specific projects and services. We currently have outside CRO’s, CMO’s, KOL’s, accountants, and legal personnel performing services under the supervision of our employees. While the Company intends to hire and retain additional employees as needed if and when we are able to grow as an organization, it anticipates continuing to use the services of outside consultants and contractors and to maintain its near virtual structure.

 

Corporate Information

 

Our principal executive offices are located at 1825 NW Corporate Blvd Suite 110, Boca Raton, FL 33431; our telephone number is (561)-907-8990; our corporate website is located at www.curativebiotech.com. No information found on our company’s website is part of this Prospectus.

 

We were incorporated in the state of Nevada on June 29th, 1995, as Frozen Assets, Inc. Subsequently the Company changed its name to Growth Industries, Inc. in March 1998, Fragrance Express, Inc. in June 1998, National Boston Medical in October 1998, Storage Innovation Technologies in May 2004, and Connectyx Technologies in October 2007, and as of October 31, 2007 reincorporated in the state of Florida. In April 2017, the Company voluntarily dissolved its wholly owned subsidiary USA Medical Monitoring, LLC (“USA Medical”), which was a Florida Limited Liability Company. In May 2019, the Company voluntarily dissolved its wholly owned subsidiary Connectyx Technologies Corp. (“CTP”), which was a Florida Corporation. The Company remains active in the state of Florida. On November 23, 2020, the Company changed its name to Curative Biotechnology, Inc.

 

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DESCRIPTION OF SECURITIES

 

General

 

Our authorized capital stock consists of 1,100,000,000 shares of Common Stock, $0.0001 par value per share, and 200,000,000 shares of preferred stock, $0.0001 par value per share. As of August 24, 2022, there were (i) 571,651,636 shares of our Common Stock issued and outstanding, (ii) 81,000 shares of Series B Preferred Stock issued and outstanding and (iii) 30,000,000 shares of Series C Preferred Stock issued and outstanding.

 

Set forth below is a summary description of all of the material terms of our securities, including those being registered hereunder. These descriptions are qualified their entirety by reference to our amended and restated articles of incorporation, bylaws and forms warrants, each of which is filed as an exhibit to the Prospectus, of which this prospectus forms a part.

 

Units in this Offering

 

Each Unit being offered in this offering consists of (i) one share of Common Stock and (ii) one Warrant, each whole Warrant exercisable for one share of common stock at an exercise price of $7.00 per share (based on an assumed reverse stock split ratio as described on the cover page of this prospectus). The Warrants have a term of five (5) years from the date of issuance. The Common Stock and Warrants that are part of the Units are immediately separable and will be issued separately in this offering, although they will have been purchased together in this offering.

 

Common Stock

 

Voting

 

Each holder of record of Common Stock shall have the right to one vote for each share of Common Stock registered in their name on the books of the Corporation on all matters submitted to a vote of shareholders except as the right to exercise such vote may be limited by the provisions of the Company’s Articles of Incorporation.

 

Dividends

 

The holders of Common Stock shall be entitled to such dividends as may be declared by the Board of Directors from time to time, provided that required dividends, if any, on the Preferred Stock have been paid or provided for.

 

Liquidation Preference

 

In the event of the liquidation, dissolution, or winding up, whether voluntary or involuntary of the Corporation, the assets and funds of the Corporation available for distribution to shareholders and remaining after the payment to holders of Preferred Stock of the amounts (if any) to which they are entitled, shall be divided and paid to the holders of the Common Stock according to their respective shares.

 

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Warrants

 

The Warrants will be issued as part of the Units in the offering pursuant to this Prospectus. For each Unit purchased, each purchaser will receive one (1) Warrant to purchase one (1) share of Common Stock.

 

The following is a brief summary of certain terms and conditions of the Warrants and is subject in all respects to the provisions contained in the Warrants.

 

Form. The Warrant will be issued as part of the Units, and each whole Warrant shall be exercisable for one share of common stock. You should review a copy of the form of Warrant, which will be attached as exhibit 4.18 to this Registration Statement, for a complete description of the terms and conditions of the Warrants.

 

Exercisability. The Warrants are exercisable at any time after their original issuance and at any time up to the date that is five years after their original issuance. The Warrants will be exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice and, at any time a registration statement registering the issuance of the shares of common stock underlying the Warrants under the Securities Act is effective and available for the issuance of such shares, or an exemption from registration under the Securities Act is available for the issuance of such shares, by payment in full in immediately available funds for the number of shares of Common Stock purchased upon such exercise. If a registration statement registering the issuance of the shares of Common Stock underlying the Warrants under the Securities Act is not effective or available and an exemption from registration under the Securities Act is not available for the issuance of such shares, the holder may elect to exercise the Warrant through a cashless exercise, in which case the holder would receive upon such exercise the net number of shares of Common Stock determined according to the formula set forth in the Warrant. No fractional shares of Common Stock will be issued in connection with the exercise of a Warrant. In lieu of fractional shares, we will pay the holder an amount in cash equal to the fractional amount multiplied by the exercise price.

 

Exercise Limitation. A holder will not have the right to exercise any portion of the Warrant if the holder (together with its affiliates) would beneficially own in excess of 4.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the warrants. However, any holder may increase or decrease such percentage to any other percentage not in excess of 9.99%, provided that any increase in such percentage shall not be effective until 61 days following notice from the holder to us.

 

Exercise Price; Adjustments. Each Warrant is exercisable at a price of $7.00 per whole share (based on an assumed reverse stock split ratio as described on the cover page of this prospectus), subject to adjustment. The exercise price, and the number of shares underlying the Warrants is subject to customary adjustments in the event of subsequent financings, stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our shares of Common Stock, distributions of assets, including cash, stock or other property to our stockholders, and Fundamental Transactions to be defined in the Warrants.

 

Subject to certain exemptions outlined in the Warrant, for a period until the later of: (i) two years from the date of issuance of the Warrant, or (ii) on the date no Warrants remain outstanding, if the Company issues or sells or is deemed to have sold or issued at an effective price per share less than the exercise price of the Warrant then in effect (a “Dilutive Issuance”), the exercise price of the Warrant shall be reduced to equal the effective price per share in such Dilutive Issuance; provided, however, that in no event shall the exercise price of the Warrant be reduced to an exercise price lower than 50% of public offering price per Unit in this offering. On the date that is 90 calendar days immediately following the initial issuance date of the Warrants, the exercise price of the Warrants will adjust to be equal to the greater of (i) 50% of the initial exercise price of the Warrant or (ii) 100% of the lowest closing price of the Company’s Common Stock on a trading day occurring during the ninety (90) calendar days following the date of issuance. The Reset Price is equal to the greater of (a) 50% of the initial exercise price of the Warrants on the issuance date or (b) 100% of the lowest volume weighted average price per share of Common Stock occurring during the 90 calendar days following the issuance date of the Warrants. The lowest Reset Price is $3.50, which is 50% of the offering price, based on an assumed public offering price of $7.00 per Unit, based on an assumed reverse stock split ratio of 1-for-275, in order to effect a price per share of Common Stock of $8.25, the closing price of the Company’s common Stock as of August 24, 2022, on a post reverse split basis.

 

Forced Exercise and Redemption. The Warrants will be subject to forced exercise commencing six (6) months after issuance subject to the condition that the volume weighted average price of the Company’s Common Stock exceeds 200% of the initial exercise price for twenty (20) consecutive trading days and subject to certain other conditions set forth in the Warrants. In the event that a holder fails to exercise the Warrants within ten business days of notice of a forced exercise in accordance with the terms of the Warrants, the Company may redeem the Warrants at a redemption price of $0.01 per Warrant.

 

Transferability. Subject to applicable laws, the Warrants may be offered for sale, sold, transferred or assigned without our consent. There is currently no trading market for the Warrants and a trading market is not expected to develop.

 

Fundamental Transactions. In the event of a fundamental transaction, as described in the Warrants and generally including any reorganization, recapitalization or reclassification of our common stock, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding common stock, or any person or group becoming the beneficial owner of 50% of the voting power represented by our outstanding Common Stock, the holders of the Warrants will be entitled to receive upon exercise of the Warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised the warrants immediately prior to such fundamental transaction.

 

Exchange Listing. There is no established public trading market for the Warrants, and there is no assurance that a market will develop. We have applied to have the warrants listed on the NYSE American under the symbol “CUBT WS”. We will not consummate this offering unless our shares of Common Stock and Warrants are approved for listing on NYSE American.

 

Rights as a Stockholder. Except as otherwise provided in the Warrants or by virtue of such holder’s ownership of shares of our Common Stock, the holder of a Warrant does not have the rights or privileges of a holder of our Common Stock, including any voting rights, until the holder exercises the Warrant.

 

Governing Law. The Warrants are governed pursuant to the terms of the Underwriting Agreement.

 

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Series A Preferred Stock

 

The Articles of Incorporation have a class of Preferred Stock designated as Series A Preferred Stock. Prior to the date hereof, all of the shares of Series A Preferred Stock have been converted into Common Stock of the Company. Previously, the Company had authorized 134,109,750 shares of Series A Preferred Stock which have been deducted from the number of shares of Preferred Stock that the Company is entitled to designate, authorize and issue, pursuant to its Articles of Incorporation.

 

Series B Preferred Stock

 

The Articles of Incorporation have a class of Preferred Stock designated as Series B Preferred Stock. The Company has authorized 1,000,000 shares of Series B Preferred Stock. As of the date hereof, the Company has issued 293,000 shares of Series B Preferred Stock, of which 81,000 are currently outstanding as of August 24, 2022.

 

Voting

 

Except as otherwise required by law, each holder of record of the Series B Preferred Stock shall be entitled to notice of any and all meetings of the shareholders of the Corporation and shall be entitled to one (1) vote for each full share of Common Stock into which each share of Series B Preferred Stock registered in his/her/its name on the books of the Corporation would be convertible on the record date for any matter submitted to the shareholders of the Corporation for a vote, or, if no such record date is established, at the date such vote is taken or any written consent of shareholders is solicited.

 

Further, so long as any share of Series B Preferred Stock remains outstanding, in addition to any other vote or consent of shareholders required by law or the Article of Incorporation of the Company, the vote or consent of the holders of at least 50. l% of the shares of Series B Preferred Stock at the time outstanding, voting together as a single class, given in person or by proxy, either in writing without, a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating (i) any change that would adversely affect Series B Preferred Stock, (ii) the creation and issuance of securities senior to the rights, preferences, and privileges of the Series B Preferred Stock, and (iii) extraordinary corporate events, including mergers, except where the Series B Preferred Stock remains outstanding post-merger with its same rights, preferences, and privileges, or the Series B Preferred stock is converted into preferred securities of the surviving entity in the merger not having less favorable rights, preferences, privileges and voting power. As a result of the foregoing, we may not be able (i) to enter into certain transactions or (ii) create a senior class of preferred stock, each without the approval of the Series B Preferred Stock holders.

 

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Dividends

 

The holders of the Series B Preferred Stock are not entitled to receive dividends on account of their Series B Preferred Stock.

 

Liquidation Preference

 

In the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or otherwise, after payment or provision for payment of the debts and other liabilities of the Corporation, the holders of the Series B Preferred Stock shall be entitled to receive, prior to the holders of any Series B Junior Stock (as defined in the Article of Incorporation of the Company) and/or Series B Parity Stock (as defined in the Article of Incorporation of the Company) and prior and in preference to any distribution of the assets or surplus funds of the Corporation to the holders of any other shares of stock of the Corporation by reason of their ownership of such stock, an amount equal to $1.00 per share with respect to each share of Series B Preferred Stock.

 

Conversion

 

Series B Preferred Stock is convertible into shares of Common Stock as follows. The Conversion price for the Series B Preferred Stock is $0.0075 per share.

 

Each share of Series B Preferred Stock shall be convertible at the option of the holder in whole or in part, at the option of the holder thereof, into that number of fully paid and non-assessable shares of Common Stock as may be purchased for the Conversion Price based on the aggregate purchase price paid for the shares of Series B Preferred Stock (the “Series B Conversion Right”). The Series B Conversion Right shall be exercised by a holder submitting written notice to the Corporation informing the Corporation of his/her/its intent to exercise its Series B Conversion Right, specifying the date for such conversion (the “Series B Conversion Date”) and identify which shares of Series B Preferred Stock such holder has elected to be converted into Common Stock in accordance with the Series B Conversion Right.

 

In addition, Series B Preferred Stock is subject to mandatory conversion. In the event that there be a Fundamental Change (as defined in the Company’s Articles of Incorporation), the Series B Preferred Stock will automatically convert into that number of shares of Common Stock as may be purchased for the Conversion Price, calculated as of the close of business the day immediately prior to such Fundamental Change, based on the aggregate purchase price paid for the shares of Series B Preferred Stock.

 

Redemption

 

Subject at all times to the Series B Conversation Right set forth above, the issued and outstanding shares of Series B Preferred Stock shall be redeemable, in whole or in part, at the option of the Corporation by resolution of the Board of Directors, from time to time and at any time, commencing any time after the date of issuance of the Series B Preferred Stock as follows. The redemption price per share of Series B Preferred Stock shall be equal to the greater of: (i) one hundred and twenty five percent (125%) of the purchase price paid for such share or (ii) the book value for such share as determined by an independent auditing firm.

 

Series C Preferred Stock

 

The Articles of Incorporation have a class of Preferred Stock designated as Series C Preferred Stock. The Company has authorized 30,000,000 shares of Series C Preferred Stock. As of the date hereof, the Company has issued 30,000,000 shares of Series C Preferred Stock, all of which are currently outstanding and fully vested as of August 24, 2022.

 

Voting

 

Except as otherwise required by law, each holder of Series C Preferred Stock is entitled to notice of any and all meetings of the shareholders of the Corporation and shall be entitled to ten (10) votes for each full share of Common Stock on an as converted basis on the record date for any matter submitted to the shareholders of the Corporation for a vote, or, if no such record date is established, at the date such vote is taken or any written consent of shareholders is solicited.

 

Further, so long as any share of Series C Preferred Stock remains outstanding, in addition to any other vote or consent of shareholders required by law or the Article of Incorporation of the Company, the vote or consent of the holders of at least 50. l % of the shares of Series C Preferred Stock at the time outstanding, voting together as a single class, given in person or by proxy, either in writing without, a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating any change that would adversely affect Series C Preferred Stock and in order for the Company to consummate what the Articles of Incorporation of the Company define as Extraordinary Corporate Transactions.

 

Dividends

 

The holders of the Series C Preferred Stock shall not be entitled to receive dividends on account of their Series C Preferred Stock.

 

Liquidation Preference

 

In the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary or otherwise, after payment or provision for payment of the debts and other liabilities of the Corporation, the holders of the Series C Preferred Stock shall be entitled to receive, prior to the holders of any Series C Junior Stock (as defined in the Articles of Incorporation of the Company) and/or Series C Parity Stock (as defined in the Articles of Incorporation of the Company) and prior and in preference to any distribution of the assets or surplus funds of the Corporation to the holders of any other shares of stock of the Corporation by reason of their ownership of such stock, an amount per share equal to the Conversion Rate described immediately below with respect to each share of Series C Preferred Stock.

 

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Conversion

 

The Series C Preferred Stock shall be convertible into shares of Common Stock, as follows.

 

All of the issued and outstanding shares of Series C Preferred Stock (the “Total Series C Shares”) shall collectively be convertible into thirty percent (30%) of the total issued and outstanding shares of Common Stock at the time of such conversion (the “Conversion Rate”) without any additional consideration by the holders to effectuate the conversion. For the avoidance of doubt, and as an example, in the event of a conversion of Series C Preferred Stock, Series C Preferred Shareholders whose shares have vested will own no more than 30% of all Common Stock post conversion, and the remaining 70% of Common Stock will be held by Common Stock shareholders.

 

Each share of Series C Preferred Stock that has vested is voluntarily convertible in whole or in part, at the option of the holder thereof, into that number of fully paid and non-assessable shares of Common Stock as may be converted pursuant to the Conversion Rate for the shares of Series C Preferred Stock.

 

Further, in the event Fundamental Change (as described in the Article of Incorporation of the Company), all Series C Preferred Stock shall automatically vest, regardless of any longer vesting schedule set forth in an award document, and will, upon acceleration of vesting, automatically convert into that number of shares of Common Stock as may be issued at the Conversion Rate described above.

 

All of the holders of the Series C Preferred Stock have agreed to convert their shares of Series C Stock for Common Stock immediately prior to the closing of the offering contemplated by this Prospectus.

 

Common Stock Purchase Warrants

 

As of August 24, 2022, the Company had an aggregate of 68,593,939 Common Stock purchase warrants issued and outstanding with a range of exercise prices from $0.0001 to $0.20 per share and an average weighted exercise price of $0.08424 per share, consisting of:

 

Description of Securities  Exercise Price   Expiration Date  Price Adjustment
Consultant / Employee Warrants           
4,000,000 Warrants  $0.10   5/20/2026  Stock Splits and Dividends
5,000,000 Warrants  $0.20   6/11/2024  Stock Splits and Dividends
500,000 Warrants (1)  $0.124   7/14/2024  Stock Splits and Dividends
Offering Warrants           
400,000 Warrants  $0.05   12/3/2023  Stock Splits, Dividends and Fundamental Transactions
5,000,000 Warrants  $0.11   5/21/2026  Stock Splits and Dividends
125,000 Warrants  $0.15   7/9/2024  Stock Splits and Dividends
3,000,000 Warrants  $0.15   8/18/2024  Stock Splits and Dividends
1,111,111 Warrants  $0.14   8/19/2024  Stock Splits and Dividends
403,225 Warrants  $0.11   11/12/2024  Stock Splits and Dividends
12,146,349 Warrants  $0.09   Dec. 2024  Stock Splits and Dividends
12,146,349 Warrants  $0.15   Dec. 2024  Stock Splits and Dividends
24,761,905 Warrants  $0.0001   3/4/2027  N/A

 

Of the warrants listed above, the 24,761,905 warrants that expire on 3/4/2027, are subject to an increase in the number of shares underlying such warrants upon an offering of $7,200,000 or greater in equity or debt securities of the Company at a price per share which multiplied by 75% is less than $0.05 per share. Accordingly, based on the assumed offering price and reverse split ratio of 1-for-275 as set forth on the cover page of this Prospectus, these warrants would adjust in number such that the number of shares of common stock exercisable under the warrant will increase to 64,852,608 shares, with no adjustment to the exercise price on a reverse stock split. Notwithstanding, upon the consummation of the anticipated reverse stock split, as described on the cover page of this Prospectus, the number of shares underlying such warrant will be proportionately reduced.

 

Common Stock Purchase Options

 

On August 26, 2021, the Company’s Board approved our 2021 Equity Incentive Plan. The plan was approved by our shareholders on October 8, 2021. The plan is described below under the heading “Securities authorized under equity compensation plans”.

 

As of August 24, 2022, the Company has issued options to purchase 7,456,500 shares of Common Stock and 1,000,000 shares of restricted Common Stock under our 2021 Equity Incentive Plan.

 

On September 27, 2021, the Company issued Sohn Health Strategies, LLC, a consultant a non-qualified Common Stock purchase option to purchase 1% of the issued and outstanding capital stock of the Company on a fully diluted basis, or an aggregate of 8,081,037 options at September 27, 2021. The option has an exercise price of $0.11 per share, a term of 10 years, and vests (i) 50% on issuance and (ii) 50% on the one (1) year anniversary of the issuance date, subject to the consultant’s continued service to the Company. Additionally, upon the Company completing a reverse stock split and capital raising transaction of at least $5,000,000, the consultant will receive additional options such that the total option including such additional options will remain as 1% of the fully diluted capital stock of the Company. As of the date of this prospectus, the consultant is currently providing services to the Company.

 

Registration Rights

 

On August 9, 2021, pursuant to a settlement agreement, the Company issued 2,000,000 shares of Common Stock with such shares having piggyback registration rights, with such rights not including participation in this registration statement without underwriter approval.

 

Between August 18, 2021 and December 14, 2021, the Company sold 16,660,685 shares of Common Stock and warrants to purchase 16,660,685 shares of Common Stock to investors. The shares of Common Stock have piggyback registration rights, with such rights not including participation in this registration statement without underwriter approval.

 

The Company granted piggyback registration rights to the investor holder of the original issue discount senior secured debenture and shares underlying common stock purchase warrants issued in the offering on March 4, 2022, with such rights not including participation in this registration statement provided that prior notice is provided to the investor.

 

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Choice of Forum

 

Our amended and restated Bylaws provides that, unless we consent in writing to the selection of an alternative forum, the State of Florida is the exclusive forum for:

 

● any derivative action or proceeding brought on our behalf;
   
● any action asserting a claim of breach of a fiduciary duty;
   
● any action asserting a claim against us arising pursuant to any provision of the Florida Business Corporation Act (“FBCA”), our amended and restated certificate of incorporation or our amended and restated bylaws; or
   
● any action asserting a claim against us that is governed by the internal affairs doctrine.

 

The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with any action, a court could find the choice of forum provisions contained in our amended and restated Bylaws to be inapplicable or unenforceable in such action. These provisions would not apply to suits brought to enforce a duty or liability created by the Exchange Act, Securities Act or any other claim for which the federal courts have exclusive or concurrent jurisdiction. Any person or entity purchasing or otherwise acquiring any interest in our securities shall be deemed to have notice of and consented to these provisions. Our exclusive forum provision will not relieve us of our duties to comply with the federal securities laws and the rules and regulations thereunder, and our shareholders will not be deemed to have waived our compliance with these laws, rules and regulations.

 

The provisions of the FBCA, our amended and restated Bylaws could have the effect of discouraging others from attempting hostile takeovers and may also have the effect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.

 

Transfer Agent

 

Issuer Direct Corporation is the transfer agent for our Common Stock. Issuer Direct Corporation’s address is One Glenwood Ave, Suite 1001, Raleigh, NC 27603; its telephone number is (919) 481-4000; its website is issuerdirect.com. No information found on Issuer Direct Corporation’s website is part of this Registration Statement.

 

PROPERTIES

 

Currently, the Company utilizes a virtual office space at 1825 NW Corporate Blvd, Suite 110, Boca Raton, FL 3343 at a cost of $99 per month on a month-to-month basis. We feel that our office space is adequate for our current and future needs as we are a virtually distributed company with our employees and consultants around the USA.

 

LEGAL PROCEEDINGS

 

We are not currently subject to any material legal proceedings.

 

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MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

 

Market Information

 

Our common shares are quoted on the pink sheets of the OTC Markets under the symbol CUBT. Any over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

 

Holders

 

As of August 24, 2022, we had approximately 210 record holders of our Common Stock. Because many of our shares of Common Stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial holders represented by these record holders, but it is well in excess of the number of record holders.

 

Dividend Policy

 

We have never declared or paid any cash dividends on our capital stock and we do not currently anticipate declaring or paying cash dividends on our capital stock in the foreseeable future. We currently intend to retain all of our future earnings, if any, to finance the operation and expansion of our business. Any future determination relating to our dividend policy will be made at the discretion of our Board and will depend on a number of factors, including future earnings, capital requirements, financial conditions, future prospects, contractual restrictions and covenants, applicable law and other factors that our Board may deem relevant. If we do not pay dividends, a return on your investment will occur only if the market price of our Common Stock appreciates.

 

Securities authorized for issuance under equity compensation plans

 

On August 26, 2021, our Board approved the 2021 Equity Incentive Plan (“2021 Plan”). On October 8, 2021, a majority of the voting power of our capital stock approved the 2021 Plan. The 2021 Plan is administered by our Board or such committee appointed by the Board. The 2021 Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock, performance units, performance shares, restricted stock units, and other stock-based awards to our employees, directors, and consultants. The purpose of the 2021 Plan is to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to our employees, directors and consultants, and to promote the success of the Company’s business. Under the terms of the 2021 Plan, the Company initially reserved 53,852,119 shares of Common Stock, subject to an automatic increase on the first day of each calendar year such that the number of shares available for issuance under the 2021 Plan will be 10% of the outstanding shares of Common Stock of the company. The 2021 Plan further authorizes the administrator to amend the exercise price and terms of certain awards thereunder. As of January 1, 2022, the number of shares authorized under the 2021 Plan increased to 57,065,163 shares of Common Stock. As of August 24, 2022, the Company has issued 1,000,000 shares of restricted Common Stock and options to purchase 7,456,500 shares of Common Stock.

 

Securities Authorized for Issuance under Equity Compensation Plans

 

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The following table sets forth securities authorized for issuance under any equity compensation plans approved by our shareholders as well as any equity compensation plans not approved by our stockholders as of December 31, 2021.

 

Plan category    

Number of securities to

be issued

upon

exercise of outstanding options, warrants

and

rights(a)

      

Weighted average

exercise price

of

outstanding options, warrants and rights ($)

      

Number of securities remaining available for future

issuance

under equity compensation plans

(excluding securities reflected in column (a)

  
                         
Plans approved by our stockholders:     —       —       —  
2021 Equity Incentive Plan (1)     —       —       53,852,119  
Plans not approved by stockholders                        

 

  (1) The 2021 Equity Incentive Plan was adopted on August 26, 2021, by the Board and approved by our stockholders on October 8, 2021. On January 1 of each year, the number of shares available for issuance under the 2021 Equity Incentive Plan will increase, if necessary, to be equal to 10% of the outstanding shares of Common Stock of the Company. We initially reserved 53,852,119 shares of Common Stock under the 2021 Equity Incentive Plan. Pursuant to the automatic increase, as of January 1, 2022, there were 57,065,163 shares of Common Stock authorized under the Plan. As of August 24, 2022, we have issued awards or grants under the plan in the aggregate of 8,456,500 awards underlying shares.

 

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

We have not had a change in or disagreement with our accountants within twenty four (24) months prior to the date of our most recent financial statements or in any period subsequent to such date.

 

OUR MANAGEMENT

 

Directors, Executive Officers and Significant Employees

 

The names of our directors and executive officers and their ages, positions, and biographies as of the date of this Prospectus are set forth below. Our executive officers are appointed by, and serve at the discretion of the Board. There are no family relationships among any of our directors or executive officers. For a description of the employment agreements and other ancillary agreements entered into between our officers and directors and the Company, please refer to the section entitled Executive Compensation below.

 

Executive Officers and Directors

 

Name   Age   Positions   Officer / Director
Since
I Richard Garr   68   CEO (Principal Executive Officer, CFO (Principal Accounting Officer) and General Counsel   2020
Paul Michaels   56   President, Chairman of the Board of Directors   2020
Michael Fish   64   Director   2021
Barry A. Ginsberg, O.D.   65   Chief Strategy Officer, Director   2020
Cary Sucoff *   70   Director   2022
Lawrence Zaslow +   60   Director   2022

 

* Mr. Sucoff was appointed to the Board of Directors on May 16, 2022.

+ Mr. Zaslow was appointed to the Board of Directors on June 16, 2022

 

I Richard Garr, joined as our chief executive officer and general counsel in 2021. In 2021 he was further appointed to serve as chief financial officer. Mr. Garr has over 24 years of experience in the biotechnology industry. For the last five (5) years, he has served as the managing partner of Access Hope, a CRO focused on expanded access clinical programs. Prior to that, Mr. Garr served as chief executive officer, general counsel, and as a member of the Board of Directors for Neuralstem, Inc. a publicly traded biotechnology company (NASDAQ: formerly CUR – now PALI). Mr. Garr also previously served as the chief financial and principal accounting officer for Neuralstem as well. Mr. Garr is a graduate of Drew University (1976) and the Columbus School of Law, The Catholic University of America (1979).

 

Paul M. Michaels, serves as the Company’s president and chairman of the Board of Directors since September 1, 2020. For the past five (5) years, Mr. Michaels has been an active investor in small cap and private companies. Prior to that, Mr. Michaels cofounded Nobelpharma, Ltd. Japan, an affiliate of Inabata & Co. Ltd. that is now one of Japan’s orphan drug companies. Mr. Michaels has provided financial leadership and business development to biotechnology companies for more than 20 years, including structuring major pharma transactions. Mr. Michaels attended Tulane University. In evaluating Mr. Michael’s specific experience, qualifications, attributes, and skills in connection with his appointment to the Board, the Board took into account his experience in the biotechnology industry, including his financial and capital markets knowledge

 

Michael Fish, is a licensed CPA and founder of a certified public accounting firm in Florida, He has been the principal of such accounting firm for the previous 30 years. He has expertise in all areas of accounting, finance, and taxes regarding corporate entities in various industries. Mr. Fish earned his bachelor of arts degree in accounting from Florida Atlantic University. In evaluating Mr. Fish’s specific experience, qualifications, attributes, and skills in connection with his appointment to the Board, the Board took into account his experience in financial matters, accounting, taxes, and capital markets.

 

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Barry A. Ginsberg, serves as Chief Strategy Officer and as a member of the Board of Directors of the Company since September 1, 2020. For the past five (5) years, Dr. Ginsberg has been an active investor in small cap and private companies. For more than 10 years, Dr. Ginsberg has consulted with healthcare companies to develop global strategies and operating models in the health and wellness industries. Dr. Ginsberg is a Board-Certified Optometric Physician who has practiced in Florida since 1983. Dr. Ginsberg earned a bachelor’s degree in Chemistry with a minor in economics from Yeshiva University and bachelor’s and doctorate degree from Pennsylvania College of Optometry. He also attended the MBA program at LaSalle College in Philadelphia. In evaluating Dr. Ginsberg’s specific experience, qualifications, attributes, and skills in connection with his appointment to the Board, the Board took into account his wide knowledge of pharmaceuticals, the medical field, and development of healthcare companies.

 

Cary Sucoff, has more than 40 years of legal and securities industry experience. Since 2011, Mr. Sucoff has owned and operated Equity Source Partners LLC, an advisory and consulting firm. He has participated in the financing of hundreds of public and private healthcare companies. Since 2010, Mr. Sucoff has served on the board of directors of Contrafect Corp. (Nasdaq: CFRX) (audit, nom/gov and pricing committees) and since 2020 he has served on the board of IMAC Holdings, Inc. (Nasdaq: IMAC) (audit, compensation and nom/gov committees). Additionally, Mr. Sucoff currently serves on the boards of First Wave Technologies, Inc. (since 2016), and Galimedix Therapeutics (since 2018). He previously served as a director of Legacy Education Alliance, Inc. (OTC: LEAI) from 2015 to 2021. Mr. Sucoff, a former New York City prosecutor, is the past President of New England Law/Boston and has been a member of the Board of Trustees for over 30 years. He has been Chairman of the Endowment Committee for over ten years. Mr. Sucoff received a B.A. from SUNY Binghamton in 1974 and a J.D. from New England School of Law in 1977, where he was the Managing Editor of the Law Review and graduated magna cum laude. He has been a member of the Bar of the State of New York since 1978. We believe that Mr. Sucoff’s broad financial and legal experience qualifies him to serve as a member of our board of directors.

 

Lawrence Zaslow, has over 30 years experience in the biotechnology industry. Between 2014 through 2020, he served as President, Director, Treasurer, and Secretary of BioTheryX, Inc., a private biotechnology company, which he cofounded. In 2020, Mr. Zaslow transitioned to a senior advisor of the company until 2021. While employed by BioTheryX, Mr. Zaslow was responsible for strategic and operational planning, capital raising, finance and budgeting, and corporate and business development. Prior to working for BioTheryX, Mr. Zaslow was a founding member and managing director of Amphion PLC, a company focused on the financing and managing of life science and technology companies. Mr. Zaslow holds a B.A. in economics from Brandeis University and an MBA in finance from Columbia Business School. We believe that Mr. Zaslow’s experience in financing and managing biotechnology and life science companies qualifies him to serve as a member of our board of directors.

 

Family Relationships

 

There are no family relationships between any director, executive officer, or person nominated or chosen by the registrant to become a director or executive officer.

 

Involvement in Certain Legal Proceedings

 

None of our management or directors are currently subject to any legal proceedings.

 

CORPORATE GOVERNANCE

 

Independent Directors

 

For purposes of determining independence, the Company has adopted the definition of independence as contained in the NYSE American Market Section 803(A). Pursuant to the definition, the Company has determined that as of the date hereof, that Messrs. Sucoff and Zaslow qualify as independent. Under the NYSE American Market rules, we are required to have a majority of our directors be independent, or in the event that we qualify as a Smaller Reporting Company, at least 50% of our directors must be independent. Notwithstanding the foregoing, pursuant to NYSE American Market rule 809, we will have a one (1) year grace period to comply with the foregoing independent director requirements.

 

Committees

 

The Board of Directors has established three standing committees: (1) an Audit Committee, (2) a Governance and Nominating Committee, and (3) a Compensation Committee. Each of the committees operates under a written charter adopted by the Board of Directors. A copy of each respective committee’s charter can be viewed as Exhibits 99.01, 99.02, and 99.03 to this Registration Statement. On August 6, 2022, the Board reconstituted the Committees and adopted new Committee Charters in compliance with NYSE American rules.

 

The table below identifies the Board’s standing committees and committee membership as of August 8, 2022:

 

Director   Independent   Audit Committee Corporate
Governance
and Nominating
Committee		 
Compensation
Committee
Michael Fish   No   No 

No

  No
Dr. Barry Ginsberg   No   No  No  No
Paul Michaels   No   No  No  No
Cary Sucoff   Yes   Yes (1)  Yes  Yes
Lawrence Zaslow   Yes   Yes  Yes (1)  Yes (1)

 

(1) Denotes Chairperson of the applicable committee.

 

Only Cary Sucoff and Lawrence Zaslow are considered independent under the NYSE American Market rules pursuant to the Board’s determination. The NYSE American Market requires:

 

  (1) An Audit Committee composed of at least three (3) members, each of whom:

 

  a. Satisfies the independence standards specified in Section 803(A) of the NYSE American Market rules;
     
  b. Must not have participated in the preparation of the financial statements of the issuer or any current subsidiary of the issuer at any time during the past three years;
     
  c. Is able to read and understand fundamental financial statements, including a company’s balance sheet, income statement, and cash flow statement. Additionally, each issuer must certify that it has, and will continue to have, at least one member of the audit committee who is financially sophisticated, in that or she has past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in the individual’s financial sophistication, including but not limited to being or having been a chief executive officer, chief financial officer, other senior officer with financial oversight responsibilities. A director who qualifies as an audit committee financial expert under Item 407(d)(5)(ii) and (iii) of Regulation S-K or Item 3 of Form N-CSR (in the case of a registered management investment company) is presumed to qualify as financially sophisticated;

 

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  d. A Smaller Reporting Company is only required to maintain an audit committee of at least two members, composed solely of independent directors who also meet the requirements of Rule 10A-3 under the Securities Exchange Act of 1934, as amended.

 

  (2) A Compensation Committee (composed of independent directors or simply a majority of the independent directors of its Board can serve in such capacity) that:

 

  a. In addition to satisfying the independence requirements of Section 803(A) of the NYSE American Market rules, the Board affirmatively determines that all of the members of the Compensation Committee are independent.

 

  (3) A Nominating Committee responsible for Board nominations that is either a committee composed solely of independent directors, or the function can be performed by a majority of the independent directors. The NYSE American Market rules further require:

 

  a. That each listed company adopt a formal written charter or board resolutions, as applicable, addressing the nominations process and such related matters as may be required under federal securities laws.

 

The Board has determined that subject to NYSE American Market rule 809, for each applicable committee that the company establishes, it will have (i) a majority of independent members within 90 days of listing and (ii) all members of the committee will be independent within one (1) year of listing. Additionally, the Company will meet the required majority independent Board requirement (or 50% independent in the case of a Smaller Reporting Company) within one year of listing.

 

Audit Committee

 

We have a designated an audit committee in accordance with section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended. The Audit Committee assists the board in fulfilling its oversight responsibility relating to:

 

  ● the integrity of our financial statements;
     
  ● our compliance with legal and regulatory requirements; and
     
  ● the qualifications and independence of our independent registered public accountants.

 

The Audit Committee has the ultimate authority to select, evaluate and, where appropriate, replace the independent auditor, approve all audit engagement fees and terms, and engage outside advisors, including its own counsel, as it deems necessary to carry out its duties. The Audit Committee is also responsible for performing other related responsibilities set forth in its charter.

 

Pursuant to NYSE American Market rules, the Audit Committee is required to have three (3) members (two (2) for a smaller reporting company), all of whom are independent and financially sophisticated. The Audit Committee currently consists of Cary Sucoff (chairperson), and Lawrence Zaslow. Cary Sucoff and Lawrence Zaslow have been determined to be independent and Cary Sucoff has been determined to be financially sophisticated by NYSE American Market rules. Pursuant to NYSE American Market rule 809 there is a phase-in period whereby the Audit Committee will have (i) a majority of independent members within 90 days of listing and (ii) all independent members within one (1) year of listing.

 

The Board has determined that Cary Sucoff qualifies as an “audit committee financial expert” within the meaning of SEC rules. An audit committee financial expert is a person who can demonstrate the following attributes: (1) an understanding of generally accepted accounting principles and financial statements; (2) the ability to assess the general application of such principles in connection with the accounting for estimates, accruals and reserves; (3) experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Company’s financial statements, or experience actively supervising one or more persons engaged in such activities; (4) an understanding of internal controls and procedures for financial reporting; and (5) an understanding of audit committee functions. Mr. Sucoff and Mr. Zaslow qualify as independent as such term is defined in the NYSE American Market rules.

 

A copy of the Audit Committee Charter is contained in Exhibit 99.01 to this Registration Statement.

 

Compensation Committee

 

The Compensation Committee assists the Board in:

 

  ● Recommending, in executive session at which our chief executive officer is not present, the compensation and awards / bonuses for our CEO or president, if such person is acting as the CEO, as well as other executive officers;
     
  ● discharging its responsibilities for approving and evaluating our officer compensation plans, policies and programs;

 

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  ● reviewing and recommending to the Board, compensation to be provided to our employees and directors; and
     
  ● administering our equity compensation plan(s).

 

The Compensation Committee is charged with ensuring that our compensation programs are competitive, designed to attract and retain highly qualified directors, officers and employees, encourage high performance, promote accountability and assure that employee interests are aligned with the interests of our stockholders. The Compensation Committee is composed of two (2) directors, Lawrence Zaslow (chairperson) and Cary Sucoff. Mr. Sucoff and Mr. Zaslow qualify as independent. Pursuant to NYSE American Market rule 809, the Compensation Committee will have (i) a majority of independent members within 90 days of listing and (ii) all independent members within one (1) year of listing.

 

A copy of the Compensation Committee Charter is contained in Exhibit 99.02 to this Registration Statement.

 

Corporate Governance and Nominating Committee

 

The Corporate Governance and Nominating Committee:

 

  ● assists the Board in selecting nominees for election to the Board;
     
  ● monitor the composition of the Board;
     
  ● develops and recommends to the Board, and annually reviews, a set of effective corporate governance policies and procedures applicable to our company; and
     
  ● regularly review the overall corporate governance of the Company and recommends improvements to the Board as necessary.

 

The purpose of the Corporate Governance and Nominating Committee is to assess the performance of the Board and to make recommendations to the Board from time to time, or whenever it shall be called upon to do so, regarding nominees for the Board and to ensure our compliance with appropriate corporate governance policies and procedures. The Corporate Governance and Nominating Committee is composed of two (2) directors, Cary Sucoff and Lawrence Zaslow (chairperson). Mr. Sucoff and Mr. Zaslow qualify as independent within the meaning of NYSE American Market rules.

 

Pursuant to NYSE American Market rule 809, the Compensation Committee will have (i) a majority of independent members within 90 days of listing and (ii) all independent members within one (1) year of listing.

 

A copy of the Corporate Governance and Nominating Committee Charter is contained in Exhibit 99.03 to this Registration Statement.

 

Scientific and Clinical Advisory Board

 

The Company has a Scientific and Clinical Advisory Board (“SAB”) that consists of (i) Michael Grace PhD, (ii) Ronald Bordens, PhD, (iii) Dr. Barry Ginsberg, (iv) Dr. Kapil Bharti, (v) Dr. Dimiter Dimitrov; and (vi) Dr. Nicholas Boulis. Our SAB is not subject to a charter or any specific rules or procedures governing the SAB. We have compensated members of our SAB through ad hoc grants of Common Stock and Series C Preferred Stock in the past. The Company plans on adopting a formal policy for remuneration of our SAB in the future. The main role of our SAB is to advise our Board and management regarding scientific and intellectual property matters related to the Company’s assets, anticipated research, and product candidates.

 

Section 16(a) Beneficial Ownership Reporting Compliance

 

N/A

 

Stockholder Recommendation of Board Nominees

 

We currently do not have a formal policy on the submission of recommendations for candidates to the Board from stockholders. While the Board has not adopted a formal diversity policy or specific standards with regard to the selection of director nominees, due to the nature of our business, the Board believes it is important to consider diversity of race, ethnicity, gender, age, education, cultural background, and professional experiences in evaluating board candidates. Additionally, although the Board has not formally established any specific, minimum qualifications that must be met by each candidate for the Board or specific qualities or skills that are necessary for one or more of the members of the Board to possess, when considering a potential non-incumbent candidate, the Board will factor into its determination the following qualities of a candidate: educational background, diversity of professional experience, including whether the person is a current or former chief executive officer or chief financial officer of a public company or the head of a division of a large international organization, knowledge of our business, integrity, professional reputation, independence, and ability to represent the best interests of our stockholders.

 

Code of Ethics

 

We are committed to maintaining the highest standards of honest and ethical conduct in running our business efficiently, serving our stockholders interests and maintaining our integrity in the marketplace. To further this commitment, we have adopted our Code of Ethics and Business Conduct, which applies to all our directors, officers and employees. A copy of our Code of Ethics and Business Conduct is attached to this Registration Statement as Exhibit 14.01. If you would like to receive a copy of our Code of Ethics and Business Conduct, we will provide you a copy free of charge. Please see the section of the Registration Statement entitled “Where to Find More Information” for directions on how to request such information.

 

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Limitation on Liability and Indemnification of Directors and Officers

 

Our directors and officers are indemnified as provided by the FBCA and our Bylaws. Please see the section entitled “Indemnification of Directors and Officers” beginning on page II-1 hereof.

 

EXECUTIVE COMPENSATION

 

Summary Compensation Table

 

The following table provides disclosure concerning all compensation paid for services to us in all capacities for our fiscal years ended December 31, 2021 and 2020 provided by (i) each person serving as our principal executive officer, or PEO, or acting in a similar capacity during our fiscal year ended December 31, 2020 (ii) our most highly compensated executive officers other than our PEO who were serving as executive officers on December 31, 2021 and whose total compensation exceeded $100,000 (collectively with the PEO referred to as the “named executive officers” in this Executive Compensation section); and (iii) our Principal Financial Officer.

 

Name

and principal

position

  Year   Salary ($)   Bonus ($)  

Stock

Awards

($)

   Option Awards ($)   Non-equity incentive plan compensation ($)  

Non-qualified

deferred

compensation

earnings

($)

   All other compensation ($)   Total ($) 
                                     
Paul Michaels   2021    150,000(1)   -         -    -    -    2,888,660(1)   3,038,660 
President   2020    -    -    1,687,232(4)   -    -    -    40,889(7)   1,728,121 
                                              
I Richard Garr   2021    170,000(2)   -         -    -    -    2,896,411(2)   3,066,411 
CEO, CFO, General Counsel   2020    -    -    919,312(5)   -    -    -    60,889(7)   980,201 
                                              
Barry Ginsberg   2021    150,000(3)   -         -    -    -    2,801,411(3)   2,951,411 
Chief Strategy Officer   2020    -    -    1,687,232(6)   -    -    -    40,889(7)   1,728,121 

 

  (1) Includes (i) $100,000 of cash compensation paid as an independent contractor, (ii) $150,000 of cash compensation paid as a W-2 employee,  (iii) $6,000 in Company paid medical benefits and (iv) $2,695,411 in deemed dividend for additional common shares value to be received upon conversion of the Series C Preferred stock to common stock.
  (2) Includes (i) $195,000 of cash compensation paid as an independent contractor, (ii) $170,000 of cash compensation paid as a W-2 employee,  (iii) $6,000 in Company paid medical benefits and (iv) $2,695,411 in deemed dividend for additional common shares value to be received upon conversion of the Series C Preferred stock to common stock.
  (3) Includes (i) $100,000 of cash compensation paid as an independent contractor, (ii) $150,000 of cash compensation paid as a W-2 employee,  (iii) $6,000 in Company paid medical benefits and (iv) $2,695,411 in deemed dividend for additional common shares value to be received upon conversion of the Series C Preferred stock to common stock.
  (4) Includes (i) 50,000,000 shares of Series A Preferred Stock issued by the Company for services pursuant to the Company’s restructuring and in-licensing of technology, on November 11, 2020 with a value at the grant date of $775,420.17, and (ii) 6,000,000 shares of Series C Preferred Stock issued by the Company for services related to restructuring and in-licensing of technology, on November 18, 2020 with a value at grant date of $911,812.32.
  (5) Includes (i) 250,000 shares of Common Stock issued by the Company for services on May 18, 2020, with a fair value on the grant date of $7,500, and (ii) 6,000,000 shares of Series C Preferred Stock issued by the Company for services related to restructuring and in-licensing of technology, on November 18, 2020 with a value at grant date of $911,812.32.
  (6) Incudes (i) 50,000,000 shares of Series A Preferred Stock issued by the Company for services pursuant to the Company’s restructuring and in-licensing of technology, on November 11, 2020 with a value at the grant date of $775,420.17, and (ii) 6,000,000 shares of Series C Preferred Stock issued by the Company for services related to restructuring.
  (7) Includes cash compensation paid as an independent contractor and $889 in deemed dividend for additional common shares to be received upon conversion of the Series C Preferred stock to common stock. Additional cash compensation was accrued by the Company at year end, which was forgiven by the officer in 2021.

 

Employment Agreement of Paul Michaels

 

On October 1, 2020, the Company entered into an employment agreement with Paul Michaels to serve as President for a term of three (3) years beginning on September 1, 2020, and expiring on August 31, 2023 (“Michaels Employment Agreement”). Pursuant to the Michaels Employment Agreement, Mr. Michaels receives an annual salary of $240,000 per annum, which was increased by the Board to $300,000 per annum, effective September 1, 2021. The Michaels Employment Agreement states that the Company will accrue his outstanding salary until such time as the Company receives adequate funding. Mr. Michaels received all compensation as an independent contractor until June 15, 2021, when Mr. Michaels began receiving his salary as an employee. Effective September 30, 2021, the Board agreed to provide an additional $1,500 per month healthcare / transportation stipend to all employees, including Mr. Michaels.

 

The Company may terminate Mr. Michaels’ employment at any time for “Cause” as such term is defined in the Michaels Employment Agreement without any further compensation due to Mr. Michaels. In the event that the Company terminates Mr. Michaels’ employment without “Cause”, the Company will pay within 15 days of such termination, an amount equal to one year’ salary at the current base salary, plus continued medical coverage, if any, for the remainder of the term of the Michaels Employment Agreement. The Michaels Employment Agreement further stipulates that Mr. Michaels will not directly or indirectly solicit any customers of the Company.

 

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There are no family relationships between Mr. Michaels and any of the directors or officers of the Company.

 

The following table shows the required severance payments to be paid to Mr. Michaels upon a termination without “Cause” as of December 31, 2021:

 

Officer  Severance(1)   Medical Payments / Premiums (2)   Total 
Paul Michaels  $300,000   $33,000   $333,000 

 

  (1) Effective Base Salary of $300,000 as of December 31, 2021.
  (2) Represents continued medical coverage cost for remainder of Term (22 months as of 12/31/2021) based on the $1,500 per month healthcare stipend effective September 30, 2021.

 

Employment Agreement of I Richard Garr

 

On October 1, 2020, the Company entered into an employment agreement with I Richard Garr to serve as CEO and General Counsel for a term of three (3) years beginning on September 1, 2020 and expiring on August 31, 2023 (“Garr Employment Agreement”). On August 26, 2021, the Board additionally appointed Mr. Garr to serve as CFO of the Company. Pursuant to the Garr Employment Agreement, Mr. Garr receives an annual salary of $360,000 per annum, which was increased by the Board to $420,000 per annum, effective September 1, 2021. The Garr Employment Agreement states that the Company will accrue his outstanding salary until such time as the Company receives adequate funding. Mr. Garr received all compensation as an independent contractor until August 1, 2021, when Mr. Garr began receiving his salary as an employee. Effective September 30, 2021, the Board agreed to provide an additional $1,500 per month healthcare / transportation stipend to all employees, including Mr. Garr.

 

The Company may terminate Mr. Garr’s employment at any time for “Cause” as such term is defined in the Garr Employment Agreement without any further compensation due to Mr. Garr. In the event that the Company terminates Mr. Garr’s employment without “Cause”, the Company will pay within 15 days of such termination, an amount equal to one year’ salary at the current base salary, plus continued medical coverage, if any, for the remainder of the term of the Garr Employment Agreement. The Garr Employment Agreement further stipulates that Mr. Garr will not directly or indirectly solicit any customers of the Company.

 

There are no family relationships between Mr. Garr and any of the directors or officers of the Company.

 

The following table shows the required severance payments to be paid to Mr. Garr upon a termination without “Cause” as of December 31, 2021:

 

Officer  Severance(1)   Medical Payments / Premiums (2)   Total 
I Richard Garr  $420,000   $33,000   $453,000 

 

  (1) Effective Base Salary of $420,000 as of December 31, 2021.
  (2) Represents continued medical coverage cost for remainder of Term (22 months as of 12/31/2021) based on the $1,500 per month healthcare stipend effective September 30, 2021.

 

Employment Agreement of Barry Ginsberg

 

On October 1, 2020, the Company entered into an employment agreement with Dr. Barry Ginsberg to serve as Chief Strategy Officer for a term of three (3) years beginning on September 1, 2020, and expiring on August 31, 2023 (“Ginsberg Employment Agreement”). Pursuant to the Ginsberg Employment Agreement, Dr. Ginsberg receives an annual salary of $240,000 per annum, which was increased by the Board to $300,000 per annum, effective September 1, 2021. The Ginsberg Employment Agreement states that the Company will accrue his outstanding salary until such time as the Company receives adequate funding. Dr. Ginsberg received all compensation as an independent contractor until June 15, 2021, when Dr. Ginsberg began receiving his salary as an employee. Effective September 30, 2021, the Board agreed to provide an additional $1,500 per month healthcare / transportation stipend to all employees, including Dr. Ginsberg.

 

The Company may terminate Mr. Ginsberg’s employment at any time for “Cause” as such term is defined in the Ginsberg Employment Agreement without any further compensation due to Dr. Ginsberg. In the event that the Company terminates Dr. Ginsberg’s employment without “Cause”, the Company will pay within 15 days of such termination, an amount equal to one year’ salary at the current base salary, plus continued medical coverage, if any, for the remainder of the term of the Ginsberg Employment Agreement. The Ginsberg Employment Agreement further stipulates that Dr. Ginsberg will not directly or indirectly solicit any customers of the Company.

 

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There are no family relationships between Dr. Ginsberg and any of the directors or officers of the Company.

 

The following table shows the required severance payments to be paid to Dr. Ginsberg upon a termination without “Cause” as of December 31, 2021:

 

Officer  Severance(1)   Medical Payments / Premiums (2)   Total 
Dr. Barry Ginsberg  $300,000   $33,000   $333,000 

 

  (1) Effective Base Salary of $300,000 as of December 31, 2021.
  (2) Represents continued medical coverage cost for remainder of Term (12 months as of 12/31/2020) based on the $1,500 per month healthcare stipend effective September 30, 2021.

 

Outstanding Equity Awards Value at Fiscal Year-End

 

Please see Stock Awards for Executive Compensation Table above.

 

Our Equity Compensation Plans

 

On August 26, 2021, our Board approved the 2021 Equity Incentive Plan (“2021 Plan”). On October 8, 2021, a majority of the voting power of our capital stock approved the 2021 Plan. The 2021 Plan is administered by our Board or such committee appointed by the Board. The 2021 Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock, performance units, performance shares, restricted stock units, and other stock-based awards to our employees, directors, and consultants. The purpose of the 2021 Plan is to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to our employees, directors and consultants, and to promote the success of the Company’s business. Under the terms of the 2021 Plan, the Company initially reserved 53,852,119 shares of Common Stock, subject to an automatic increase on the first day of each calendar year such that the number of shares available for issuance under the 2021 Plan will be 10% of the outstanding shares of Common Stock of the company. As of January 1, 2022, there were 57,065,163 shares reserved for issuance under the 2021 Plan, none of which were outstanding. The 2021 Plan further authorizes the administrator to amend the exercise price and terms of certain awards thereunder. As of August 24, 2022, the Company has issued options to purchase 7,456,500 shares of Common Stock and 1,000,000 shares of restricted Common Stock under our 2021 Equity Incentive Plan.

 

Securities Authorized for Issuance under Equity Compensation Plans

 

The following table sets forth securities authorized for issuance under any equity compensation plans approved by our shareholders as well as any equity compensation plans not approved by our stockholders as of December 31, 2021.

 

Plan category    

Number of securities to

be issued

upon

exercise of outstanding options, warrants

and

rights(a)

      

Weighted average

exercise price

of

outstanding options, warrants and rights ($)

      

Number of securities remaining available for future

issuance

under equity compensation plans

(excluding securities reflected in column (a)

  
                         
Plans approved by our stockholders:     —       —       —  
2021 Equity Incentive Plan (1)     —       —       53,582,119  
Plans not approved by stockholders                        

 

  (1) The 2021 Equity Incentive Plan was adopted on August 26, 2021, by the Board and approved by our stockholders on October 8, 2021. On January 1 of each year, the number of shares available for issuance under the 2021 Equity Incentive Plan will increase, if necessary, to be equal to 10% of the outstanding shares of common stock of the Company. We initially reserved 53,852,119 shares of Common Stock under the 2021 Equity Incentive Plan. Pursuant to the automatic increase, as of January 1, 2022, there were 57,065,163 shares of Common Stock authorized under the Plan. As of August 24, 2022, we have issued awards or grants under the plan in the aggregate of 8,456,500.

 

Director Compensation

 

Current Board Compensation Policy

 

The Board does not have a formal compensation policy regarding its non-employee directors. The Board has previously awarded its non-employee directors with ad hoc equity based awards upon joining the Board. The Board anticipates continuing to issue equity grants for its non-employee directors until such time that it implements a formal compensation policy for its non-employee Board members.

 

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The following table provides information concerning the compensation paid to our non-executive directors for their services as members of our board of directors for the year ended December 31, 2021.

 

Name 

Fees earned

or paid

in cash

($)

  

Stock awards

($)

  

Option awards

($)

   Non-equity incentive plan compensation ($)   Nonqualified deferred compensation earnings ($)   All other compensation ($)   Total ($) 
Marc Drimer (1)   —    —    34,382    —    —         34,382 
Michael Fish (2)   —    36,720(4)   —    —    —    —    36,720 
Cary Sucoff (3)   —    —    —    —    —    —    — 
Lawrence Zaslow (5)   —    —    —    —    —    —    — 

 

(1)Mr. Drimer joined the Board effective July 14, 2021. On such date, Mr. Drimer was granted a warrant to purchase 1,000,000 shares of Common Stock, with an exercise price of $0.124 and a term of 3 years. The shares underlying the warrant vest as follows: (i) 250,000 shares on July 14, 2021, (ii) 250,000 shares on November 14, 2021, (iii) 250,000 shares on March 14, 2022, and (iv) 250,000 shares on July 14, 2022. Pursuant to Mr. Drimer’s passing on November 13, 2021, the Board agreed to vest the second tranche of Mr. Drimer’s warrants. Accordingly, 500,000 warrants vested and the remaining 500,000 that were unvested were cancelled on November 13, 2021.
   
(2)Mr. Fish resigned as a member of the Board of Directors effective September 1, 2021. On November 12, 2021, Mr. Fish was reappointed to the Board to fill the vacancy created by Mr. Drimer’s passing.
   
 (3)Mr. Sucoff was appointed to the Board effective May 16, 2022.
   
(4)On September 1, 2021, Mr. Fish received a grant of 300,000 shares of Common Stock valued at $36,720.
   
 (5)Mr. Zaslow was appointed to the Board effective June 16, 2022.

 

PRINCIPAL STOCKHOLDERS

 

Security ownership of certain beneficial owners.

 

Beneficial ownership for the purposes of the following table is determined in accordance with the rules and regulations of the SEC. These rules generally provide that a person is the beneficial owner of securities if they have or share the power to vote or direct the voting thereof, or to dispose or direct the disposition thereof or have the right to acquire such powers within 60 days. Accordingly, the following tables do not include options or warrants to purchase our common stock that are not exercisable within the next 60 days.

 

COMMON STOCK

 

Name and Address of Beneficial Owner (1)  Shares   Shares Underlying Convertible Securities   Total   Percent of Class (2) 
Directors and named executive officers                    
Paul Michaels (11)   29,609,695(3)   5,200,000(4)   34,809,695    6.034%
I Richard Garr (11)   14,550,000    2,485,500(5)   17,035,500    2.97%
Barry Ginsberg (11)   71,676,362(6)   2,685,500(7)   74,361,862    12.95%
Michael Fish (8)   500,000    -    500,000    * 
Marc Drimer (9)   -    500,000(10)   500,000    * 
Cary Sucoff (12)   

-

    

-

    

-

    

-

 
Lawrence Zaslow (13)                    
All directors and named executive officers as a group (7) individuals)   116,336,057    10,871,000    127,207,057    21.83%

 

 

* Represents less than one percent.
   
(1) Except as otherwise indicated, the persons named in this table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable and to the information contained in the footnotes to this table. Unless otherwise indicated, the address of the beneficial owner is c/o Curative Biotechnology, Inc., 1825 NW Corporate Blvd., Suite 110, Boca Raton, FL 33431.
   
(2) Pursuant to Rules 13d-3 and 13d-5 of the Exchange Act, beneficial ownership includes any shares as to which a shareholder has sole or shared voting power or investment power, and also any shares which the shareholder has the right to acquire within 60 days, including upon exercise of common share purchase options or warrants. There are 571,651,636 shares of common stock issued and outstanding as of August 24, 2022.
   
(3) Represents Shares owned personally by Mr. Michaels and further includes 10,965,882 shares out of 21,931,765 shares owned by SunMed Advisors, an entity that is owned 50% by Mr. Michaels.

 

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(4) Represents (i) a warrant to purchase 5,000,000 shares of Common Stock issued on June 11, 2021, having an exercise price of $0.20 per share and term of three years from issuance, (ii) a warrant to purchase 200,000 shares of Common stock issued on December 3, 2020, having an exercise price of $0.05 per share and a term of three (3) years.
   
(5) Represents an option to purchase 2,485,500 shares of Common Stock issued on January 14, 2022, having an exercise price of $0.0517, and a term of five (5) years.
   
(6) Represents shares owned personally by Dr. Ginsberg and further includes 10,965,883 shares out of 21,931,765 shares owned by SunMed Advisors, an entity that is owned 50% by Dr. Ginsberg
   
(7) Represents (i) a warrant to purchase 200,000 shares of Common stock issued on December 3, 2020, having an exercise price of $0.05 per share and a term of three (3) years and (ii) an option to purchase 2,485,500 shares of Common Stock issued on January 14, 2022, having an exercise price of $0.0517, and a term of five (5) years.
   
(8) Mr. Fish resigned from the Board of Directors effective September 1, 2021. Effective November 12, 2021, Mr. Fish was reappointed to the Board to fill the vacancy created by Mr. Drimer’s passing.
   
(9) Mr. Drimer joined the Board effective July 14, 2021. Mr. Drimer passed away on November 12, 2021.
   
(10) Represents a warrant to purchase 1,000,000 shares of Common Stock with an exercise price of $0.124, and a term of three (3) years from issuance. The Warrant vests (i) 250,000 shares on July 14, 2021, (ii) 250,000 shares on November 1, 2021, (iii) 250,000 shares on March 14, 2022, and (iv) 250,000 shares on July 14, 2022. Pursuant to Mr. Drimer’s passing, the Board agreed to vest the second tranche of Mr. Drimer’s warrant, and in total, the warrant vested 500,000 and the remaining 500,000 that were unvested were cancelled on November 13, 2021.
   
(11) Does not include 6,000,000 shares of Series C Preferred Stock owned by such person. All 6,000,000 shares of Series C Preferred Stock are convertible into approximately 48,998,711 shares of Common Stock as of August 24, 2022. Such ownership on conversion is not reflected in the above “Totals” or “Percent of Class” columns. 100% of the Series C Preferred Stock converts into 30% of the issued and outstanding Common Stock in the aggregate on a post conversion basis. For a further description of the beneficial ownership of the Series C Preferred Stock, please see the beneficial ownership table of “Series C Preferred Stock” below.
   
(12) Mr. Sucoff joined the Board effective May 16, 2022.
   
(13) Mr. Zaslow joined the Board effective June 16, 2022.

 

 

SERIES B PREFERRED STOCK

 

The Company also has 81,000 shares of Series B Preferred Stock issued and outstanding. Each Share of Series B Preferred Stock converts into Common Stock at a price per share of $0.0075. The Series B Preferred Stock votes on an as converted to Common Stock basis or approximately 133.33 votes per share of Series B Preferred Stock.

 

Name and Address of Beneficial Owner (1)    Shares   Shares Underlying Convertible Securities   Total   Percent of Class (2) 
5% owners                    
Charma Larkin (3)   26,000    -    26,000    32.10%
Red Tie Financial, Inc. (4)     10,000    -    10,000    12.35%
Big Apple LLC (5)   45,000    -    45,000    55.56%
All 5% owners as a group (3 individuals)   81,000    -    81,000    100%

 

(1) Except as otherwise indicated, the persons named in this table have sole voting and investment power with respect to all shares of Series B Preferred Stock shown as beneficially owned by them, subject to community property laws where applicable and to the information contained in the footnotes to this table.
   
(2) Pursuant to Rules 13d-3 and 13d-5 of the Exchange Act, beneficial ownership includes any shares as to which a shareholder has sole or shared voting power or investment power, and also any shares which the shareholder has the right to acquire within 60 days, including upon exercise of common share purchase options or warrants. There are 81,000 shares of Series B Preferred Stock issued and outstanding as of August 24, 2022.
   
(3) 556 Vintage Oaks Terrace, Delray Beach, Florida 33484
   
(4) 195 Wekaiva Spring Road #320, Longwood, Florida 32779
   
(5) C/O 850 North West Federal Highway #411, Stuart, Florida 33494

 

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SERIES C PREFERRED STOCK

 

The Company also has 30,000,000 shares of Series C Preferred Stock issued and outstanding. The Series C Preferred Stock votes such that each share of Common Stock upon conversion of a share of Series C Preferred Stock will have 10 votes. The Series C Preferred Stock in the aggregate converts into 30% of the issued and outstanding shares of Common Stock on the date of conversion. All of the holders have agreed to convert their shares of Series C Preferred stock into Common Stock immediately prior to the closing of the offering contemplated by this Prospectus.

 

Name and Address of Beneficial Owner (1)  Shares   Shares Underlying Convertible Securities   Total   Percent of Class (2) 
5% owners                    
Paul Michaels   6,000,000    -    6,000,000    20.00%
Barry Ginsberg   6,000,000    -    6,000,000    20.00%
Michael Grace   6,000,000    -    6,000,000    20.00%
Ronald Bordens   6,000,000    -    6,000,000    20.00%
I Richard Garr   6,000,000    -    6,000,000    20.00%
All 5% owners as a group (5 individuals)   30,000,000    -    30,000,000    100%

 

(1) Except as otherwise indicated, the persons named in this table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable and to the information contained in the footnotes to this table. Unless otherwise indicated, the address of the beneficial owner is c/o Curative Biotechnology, Inc., 1825 NW Corporate Blvd., Suite 110, Boca Raton, FL 33431.
   
(2) Pursuant to Rules 13d-3 and 13d-5 of the Exchange Act, beneficial ownership includes any shares as to which a shareholder has sole or shared voting power or investment power, and also any shares which the shareholder has the right to acquire within 60 days, including upon exercise of common share purchase options or warrants. There are 30,000,000 shares of Series C Preferred Stock issued and outstanding as of August 24, 2022.
   
(3) All 30,000,000 shares of Series C Preferred Stock of beneficial owner are convertible into 244,993,558 shares of Common Stock as of August 24, 2022. The Series C Preferred Stock converts into 30% of the issued and outstanding Common Stock in the aggregate on a post conversion basis.

 

Change of Control

 

None.

 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

Related Party Transactions

 

Information regarding disclosure of an employment relationship or transaction involving an executive officer and any related compensation solely resulting from that employment relationship or transaction is incorporated by reference from the section of this Prospectus entitled “Executive Compensation.”

 

Information regarding disclosure of compensation to a director is incorporated by reference from the section of this Prospectus entitled “Director Compensation.”

 

Summarized below are certain transactions and business relationships between the Company and persons who are or were an executive officer, director or holder of more than five percent of any class of our securities (at the time of the transaction) since January 1, 2020:

 

Related Party Transactions

 

  ● On February 24, 2020, SunMed Advisors, Inc. purchased 21,653,000 shares of Series A Preferred Stock from former principals of the Company in exchange for $60,000. SunMed Advisors is owned (i) 50% by Barry Ginsberg, our Chief Strategy Officer and director and (ii) 50% by Paul Michaels, our president. On March 30, 2021, SunMed Advisors converted all of its Series A Preferred Stock into 21,931,765 shares of Common Stock.
     
  ● On May 18, 2020, the Board granted Richard Garr, our chief executive officer, 250,000 shares of restricted stock valued at $7,500.
     
  ● On November 8, 2020, the Board granted Michael Fish, a member of our Board, 100,000 shares of restricted stock valued at $3,000. Mr. Fish resigned from the Board in August 2021.
     
  ● On November 11, 2020, the Company issued 100,000,000 shares Series A Preferred Stock in exchange for services related to corporate restructuring and in-licensing of technology to the Company to Paul Michaels and Barry Ginsberg, our president and Chief Strategy Officer, respectively. Each of Dr. Ginsberg and Mr. Michaels received 50,000,000 shares of Series A Preferred Stock valued at $775,420 each. The Series A Preferred Stock in the aggregate, including other outstanding shares of which there were 34,109,750 already outstanding, was convertible at any time into 35% of the issued and outstanding Common Stock post conversion. On April 7, 2021, Mr. Michaels and Dr. Ginsberg converted all of their outstanding shares of Series A Preferred Stock into 101,287,626 shares of Common Stock.

 

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  ● On November 11, 2020, the Company issued an aggregate of 30,000,000 shares of Series C Preferred Stock to certain employee and service providers of the Company. The Series C Preferred Stock is collectively convertible into such number of shares of Common Stock as will equal 30% of the issued and outstanding Common Stock post conversion. The Series C Preferred Stock votes 10 votes for every 1 share of Common Stock that the Series C Stock is convertible into. Of the 30,000,000 shares of Series C Preferred Stock issued, 6,000,000 were issued to each of (i) Paul Michaels, our Chairman and President, (ii) Barry Ginsberg, our Chief Strategy Officer and Director, and (iii) Richard Garr, our Chief Executive Officer, Chief Financial Officer, and General Counsel, for services related to corporate restructuring and in-licensing of technology. Such 18,000,000 shares of Series C Preferred Stock are valued at an aggregate of $2,735,437. Pursuant to the ownership of 18,000,000 shares of Series C Preferred Stock, Richard Garr, Barry Ginsberg, and Paul Michaels collectively, have the right to exercise voting control with respect to their Series C Preferred Stock only, of approximately 48.47% of the voting power of all capital stock of the Company as of September 30, 2021.
     
  ● On December 3, 2020, the Company sold $40,000 of promissory notes to Paul Michaels and Barry Ginsberg ($20,000 each), our president and Chief Strategy Officer. The Notes have an original issue discount such that an aggregate of $50,000 is due under the Notes within six (6) months from issuance. The Company paid back $50,000 in satisfaction of the Notes on June 3, 2021. Additionally, Mr. Michaels and Dr. Ginsberg were each issued warrants to purchase 200,000 shares of Common Stock with an exercise price of $0.05 per share and a term of three (3) years.
     
  ● On June 11, 2021, the Board granted Paul Michaels, our president and a director, warrants to purchase 5,000,000 shares of Common Stock. The exercise price of the warrant is $0.20 per share, and the warrant has a term of 3 years from issuance. The warrant grant was valued at $87,249.
     
  ● On July 14, 2021, upon joining the Board, Marc Drimer was granted a warrant to purchase 1,000,000 shares of Common Stock. The warrant has an exercise price of $0.124 per share, a term of 3 years from issuance and vests in 4 equal quarterly installments beginning July 14, 2021 and ending on July 14, 2022. The warrant was valued at $34,382. Pursuant to Mr. Drimer’s passing, 500,000 shares underlying warrants vested and the remaining 500,000 that were unvested were cancelled.
     
  ● On September 1, 2021, in conjunction with his initial resignation from the Board, Michael Fish was granted 300,000 shares of Common Stock valued at $36,750.
     
  ● On January 14, 2022, the Board granted 1,000,000 shares of common stock valued at $51,750, to Paul Michaels and Options to purchase 2,485,500 shares of common stock at an exercise price of $0.05175 to each of Barry Ginsberg and Richard Garr, with each such grant valued at $51,750.

 

INDEMNIFICATION OF DIRECTORS AND OFFICERS

 

Florida law permits, under certain circumstances, the indemnification of any person with respect to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, to which such person was or is a party or is threatened to be made a party, by reason of his or her being an officer, director, employee or agent of the corporation or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against liability incurred in connection with such proceeding, including appeals thereof; provided, however, that the officer, director, employee or agent acted in good faith and in a manner that he or she reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any such third-party action by judgment, order, settlement, or conviction or upon a plea of nolo contendere or its equivalent does not, of itself, create a presumption that the person (i) did not act in good faith and in a manner which he or she reasonably believed to be in, or not opposed to, the best interests of the corporation or (ii) with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful. In the case of proceedings by or in the right of the corporation, Florida law permits indemnification of any person by reason of the fact that such person is or was a director, officer, employee or agent of the corporation or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against liability incurred in connection with such proceeding, including appeals thereof; provided, however, that the officer, director, employee or agent acted in good faith and in a manner that he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, except that no indemnification is made where such person is adjudged liable, unless a court of competent jurisdiction determines that, despite the adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.

 

To the extent that such person is successful on the merits or otherwise in defending against any such proceeding, Florida law provides that he or she shall be indemnified against expenses actually and reasonably incurred by him or her in connection therewith.

 

Also, under Florida law, expenses incurred by an officer or director in defending a civil or criminal proceeding may be paid by the corporation in advance of the final disposition of such proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if he or she is ultimately found not to be entitled to indemnification by the corporation pursuant to this section. Expenses incurred by other employees and agents may be paid in advance upon such terms or conditions that the Board of Directors deems appropriate.

 

Our Bylaws provides that we shall indemnify our officers, directors, and employees, and agents unless specifically approved in writing by the Board of Directors, to the fullest extent authorized by Section 607.0850 of the Florida Business Corporation Act, or the FBCA, as it existed when the Bylaws were adopted or as it may hereafter be amended, but, in the case of any such amendment, only to the extent that such amendment permits us to provide broader indemnification rights than were permitted prior to such amendment. Such indemnification shall continue as to a person who has ceased to be a director, officer, employee, or agent; provided, however, that we shall indemnify any such person seeking indemnity in connection with an action, suit, or proceeding (or part thereof) initiated by such person only if such action, suit, or proceeding (or part thereof) was authorized by our Board of Directors.

 

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The Bylaws also provide that such rights of indemnification shall be a contract right and shall include the right to be paid by us for all reasonable expenses incurred in defending any such proceeding in advance of final disposition; provided, however, that the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer in advance of the final disposition of such proceeding shall be made only upon delivery to us of an undertaking, by or on behalf of such director or officer, to repay amounts so advanced if it should be determined ultimately that such director or officer is not entitled to be indemnified under the Bylaws or otherwise.

 

In addition to the authority granted to us by Florida law to indemnify our directors, certain other provisions of the Florida Act have the effect of further limiting the personal liability of our directors. Pursuant to Florida law, a director of a Florida corporation cannot be held personally liable for monetary damages to the corporation or any other person for any act or failure to act regarding corporate management or policy except in the case of certain qualifying breaches of the director’s duties.

 

Prior to the completion of the offering, the Company anticipates entering into indemnification agreements with our officers and directors.

 

Insofar as indemnification for liabilities arising under the Securities Act, as amended, may be permitted to our directors and officers, or to persons controlling us, pursuant to our charter documents and Florida law, we have been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933, as amended and is therefore unenforceable.

 

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the Company pursuant to the foregoing provisions, the Securities and Exchange Commission’s position is that such indemnification is against public policy as expressed in the Securities Act of 1933 and is therefore unenforceable.

 

UNDERWRITING

 

Aegis Capital Corp. (“Aegis) is acting as the sole underwriter of the offering. We have entered into an underwriting agreement dated   , 2022, with Aegis. Subject to the terms and conditions of the underwriting agreement, we have agreed to sell to the underwriter named below and the underwriter named below have agreed to purchase, at the public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus, the following number of shares of our common stock and Warrants:

 

Underwriter  Number of Shares   Number Of Warrants 
Aegis Capital Corp.        

 

The underwriter is committed to purchase all the shares of common stock and Warrants offered by us other than those covered by the option to purchase additional shares described below, if they purchase any shares. The obligations of the underwriter may be terminated upon the occurrence of certain events specified in the underwriting agreement. Furthermore, pursuant to the underwriting agreement, the underwriter’s obligations are subject to customary conditions, representations and warranties contained in the underwriting agreement, such as receipt by the underwriter of officers’ certificates and legal opinions.

 

We have agreed to indemnify the underwriter against specified liabilities, including liabilities under the Securities Act of 1933, as amended, and to contribute to payments the underwriter may be required to make in respect thereof.

 

The underwriter is offering the common stock and Warrants, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel and other conditions specified in the underwriting agreement. The underwriter reserves the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.

 

The underwriter proposes to offer the Common Stock and Warrants offered by us to the public at the public offering price set forth on the cover of this prospectus. In addition, the underwriter may offer some of the common stock and/or the Warrants to other securities dealers at such price less a concession of $.049 per share or Warrant. After the initial offering, the public offering price and concession to dealers may be changed.

 

Discounts and Commissions. The following table shows the public offering price, underwriting discount, non-accountable underwriter’s expense allowance and proceeds, before expenses, to us. The information assumes either no exercise or full exercise by the underwriter of its over-allotment option.

 

           Total 
   Per Share   Warrant  

Without Over-

Allotment

  

With Over-

 Allotment

 
Public offering price  $                 $                    $                       $                     
Underwriting discount (7.0%)  $   $   $   $ 
Non-accountable expense allowance (1.0%)  $   $         
Proceeds, before expenses, to us  $   $   $   $ 

 

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We have agreed to pay a non-accountable expense allowance to the underwriter equal to 1.0% of the gross proceeds we received in this offering. In addition, we have also agreed to pay all expenses relating to the offering, including (a) all filing fees and expenses relating to the registration of the shares to be sold in the offering (including shares sold upon exercise of the underwriter’ over-allotment option) with the Commission; (b) all FINRA Public Offering filing fees; (c) all fees and expenses relating to the listing of the Company’s equity or equity-linked securities on an Exchange; (d) all fees, expenses and disbursements relating to the registration or qualification of the Securities under the “blue sky” securities laws of such states and other jurisdictions as the underwriter may reasonably designate (including, without limitation, all filing and registration fees, and the reasonable fees and disbursements of the Company’s “blue sky” counsel, which will be underwriter’s counsel) unless such filings are not required in connection with the Company’s proposed Exchange listing; (e) all fees, expenses and disbursements relating to the registration, qualification or exemption of the shares under the securities laws of such foreign jurisdictions as underwriter may reasonably designate; (f) the costs of all mailing and printing of the offering documents; (g) transfer and/or stamp taxes, if any, payable upon the transfer of shares from the Company to underwriter; and (h) the fees and expenses of the Company’s accountants; and (i) fees and expenses including “road show”, diligence, and reasonable legal fees and disbursements for Aegis’s counsel.

 

We estimate that the total expenses of the offering, excluding underwriting discount and non-accountable expense allowance, will be approximately $300,000. Upon closing, we have also agreed to reimburse $100,000 of the underwriter’s expenses relating to the offering, including for road show, diligence, and legal expenses.

 

Over-Allotment Option

 

We have granted the underwriter an over-allotment option. This option, which is exercisable for up to 45 days after the date of this prospectus, permits the underwriter to purchase additional shares of common stock and/or Warrants, representing 15% of the common stock sold in the offering (including the overallotment option). If the underwriter exercises all or part of this option, they will purchase shares of common stock covered by the option at the public offering price that appears on the cover page of this prospectus, less the underwriting discount.

 

Stabilization

 

In accordance with Regulation M under the Exchange Act, the underwriter may engage in activities that stabilize, maintain or otherwise affect the price of our common stock, including short sales and purchases to cover positions created by short positions, stabilizing transactions, syndicate covering transactions, penalty bids and passive market making.

 

  ● Short positions involve sales by the underwriter of shares in excess of the number of shares the underwriters are obligated to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of shares involved in the sales made by the underwriters in excess of the number of shares they are obligated to purchase is not greater than the number of shares that they may purchase by exercising their option to purchase additional shares. In a naked short position, the number of shares involved is greater than the number of shares in their option to purchase additional shares. The underwriter may close out any short position by either exercising its option to purchase additional shares or purchasing shares in the open market.

 

  ● Stabilizing transactions permit bids to purchase the underlying security as long as the stabilizing bids do not exceed a specific maximum price.
     
  ● Syndicate covering transactions involve purchases of our common stock in the open market after the distribution has been completed to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriter will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the underwriter’s option to purchase additional shares. If the underwriter sells more shares than could be covered by the underwriter’s option to purchase additional shares, thereby creating a naked short position, the position can only be closed out by buying shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering.
     
  ● Penalty bids permit the underwriter to reclaim a selling concession from a syndicate member when the common stock originally sold by the syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.
     
  ● In passive market making, market makers in our common stock who are underwriters or prospective underwriters may, subject to limitations, make bids for or purchase shares of our common stock until the time, if any, at which a stabilizing bid is made.

 

These activities may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price of our common stock. As a result of these activities, the price of our common stock may be higher than the price that might otherwise exist in the open market. These transactions may be effected on [●] or otherwise and, if commenced, may be discontinued at any time.

 

Neither we nor the underwriter make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our common stock. In addition, neither we nor the underwriter make any representation that the underwriter will engage in these stabilizing transactions or that any transaction, once commenced, will not be discontinued without notice.

 

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Offering Price Determination

 

The public offering price was negotiated between the underwriter and us. In determining the public offering price of our common stock, the underwriter considered:

 

● the history and prospects for the industry in which we compete;
   
● our financial information;
   
● the ability of our management and our business potential and earning prospects;
   
● the prevailing securities markets at the time of this offering; and
   
● the recent market prices of, and the demand for, publicly traded shares of generally comparable companies, as well as the recent market price of our Company’s common stock.

 

Indemnification

 

We have agreed to indemnify Aegis, its affiliates and each person controlling Aegis against any losses, claims, damages, judgments, assessments, costs, and other liabilities, as the same are incurred (including the reasonable fees and expenses of counsel), relating to or arising out of the offering, undertaken in good faith.

 

Discretionary Accounts

 

The underwriter has informed us that they do not expect to make sales to accounts over which they exercise discretionary authority in excess of 5% of the shares of our common stock being offered in this offering.

 

Lock-Up Agreements

 

We and all of our directors and executive officers have agreed that, for a period of one hundred eighty (180) days, respectively, after the date of the offering, subject to certain limited exceptions, not to directly or indirectly, without the prior written consent of Aegis, (a) offer, sell, or otherwise transfer or dispose of, directly or indirectly, any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company; or (b) file or caused to be filed any registration statement with the Commission relating to the offering of any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company.

 

The prior sentence will not apply to (i) the shares to be sold pursuant to the Underwriting Agreement, (ii) any shares of common stock issued upon the exercise of an option or other security outstanding on the date of the Offering, (iii) such issuances of options or grants of restricted stock or other equity-based awards under the Company’s 2021 Equity Incentive Plan and the issuance of shares issuable upon exercise of any such equity-based awards, (iv) the filing of registration statements on Form S-8, (v) the issuance of securities to affiliates and subsidiaries of the Company, and, (vi) the issuance of securities in connection with mergers, acquisitions, joint ventures, licensing arrangements or any other similar non-capital raising transactions.

 

Aegis, in its sole discretion, may release the common stock and other securities subject to the lock-up agreements described above in whole or in part at any time. When determining whether or not to release common stock and other securities from lock-up agreements, Aegis will consider, among other factors, the holder’s reasons for requesting the release, the number of shares of common stock and other securities for which the release is being requested and market conditions at the time.

 

Underwriter Warrants

 

We have agreed to issue to Aegis or its designees warrants to purchase up to a total of 5.0% of the shares of Common Stock sold in this offering (excluding the shares sold through the exercise of the over-allotment option). Such warrants and underlying shares of Common Stock are included in this prospectus. The warrants are exercisable at $8.75 per share (125% of the public offering price per ordinary share) commencing on a date which is six (6) months from the commencement of sales of the offering under this prospectus and expiring on a date which is no more than five (5) years from the commencement of sales of the offering in compliance with FINRA Rule 5110. The warrants have been deemed compensation by FINRA and are therefore subject to a 6-month lock-up pursuant to Rule 5110 of FINRA. The underwriter (or its permitted assignees under the Rule) will not sell, transfer, assign, pledge, or hypothecate these warrants or the shares of Common Stock underlying these warrants, nor will it engage in any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the warrants or the underlying securities for a period of 180 days from the commencement of sales of the offering. The warrants may be exercised as to all, or a lesser number of shares of Common Stock and will provide for cashless exercise for the underlying shares. Such warrants will provide for registration rights upon request, in certain cases. The sole demand registration right provided will not be greater than five years from the commencement of sales of the public offering in compliance with FINRA Rule 5110(g)(8)(C). The piggyback registration rights provided will not be greater than seven years from the commencement of sales of the public offering in compliance with FINRA Rule 5110(g)(8)(D). The warrants will have anti-dilution terms that are consistent with FINRA Rule 5110(g)(8)(E) and (F). We will bear all fees and expenses attendant to registering the securities issuable on exercise of the warrants other than underwriting commissions incurred and payable by the holders. The exercise price and number of shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary cash dividend or our recapitalization, reorganization, merger or consolidation. However, the warrant exercise price or underlying shares will not be adjusted for issuances of shares of Common Stock at a price below the warrant exercise price.

 

Tail Financing

 

We have agreed to pay the above cash compensation to the extent that any fund which the underwriter contacted or introduced to us during the term of our engagement agreement with the underwriter provides financing or capital in any public or private offering or capital raising transaction during the four (4)-month period following expiration or termination of our engagement letter with the underwriter.

 

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Securities Issuance Standstill

 

We have agreed, subject to certain exceptions, for a period of eighteen (18) months after the closing date of this offering, that we will not, without the prior written consent of the underwriter, offer, sell, issue, enter into any agreement to issue or announce the issuance or proposed issuance of any common stock, shares or share equivalents.

 

Other Relationships

 

Aegis may in the future provide us and our affiliates with investment banking and financial advisory services for which Aegis may in the future receive customary fees. Aegis may release, or authorize us to release, as the case may be, the common stock and other securities subject to the lock-up agreements described above in whole or in part at any time with or without notice.

 

Offer restrictions outside the United States

 

Other than in the United States, no action has been taken by us or the underwriter that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons who come into possession of this prospectus are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

 

Electronic Distribution

 

A prospectus in electronic format may be made available on the websites maintained by the underwriter or selling group members, if any, participating in the offering. The underwriter may allocate a number of shares to the underwriter and selling group members, if any, for sale to their online brokerage account holders. Any such allocations for online distributions will be made by the underwriter on the same basis as other allocations.

 

Listing

 

Our Common Stock listed on the OTC Markets under the symbol “CUBT.”

 

Transfer Agent and Registrar

 

The transfer agent and registrar for our Common Stock is Issuer Direct Corporation, One Glenwood Ave, Suite 1001, Raleigh, NC 27603; (919) 481-4000.

 

LEGAL MATTERS

 

Certain legal matters concerning this offering will be passed upon for us by Silvestre Law Group, P.C., Westlake Village, California. Certain legal matters related to the offering will be passed upon for the underwriter by Kaufman & Canoles, P.C., Richmond, Virginia.

 

Interests of named experts and counsel

 

The Silvestre Law Group, P.C. or its various principals and/or affiliates, own warrants to purchase 3,000,000 shares of our Common Stock.

 

EXPERTS

 

The financial statements included in this prospectus and in the registration statement of which it forms a part, have been so included in reliance on the reports of Daszkal Bolton LLP, our independent registered public accounting firm for the years ended December 31, 2021, and 2020, appearing elsewhere in this prospectus and the registration statement of which it forms a part, given on the authority of said firms as experts in auditing and accounting.

 

WHERE YOU CAN FIND MORE INFORMATION

 

We will file annual, quarterly and other reports, proxy statements and other information with the SEC. You may read and copy any document we file at the public reference facilities of the SEC at 100 F Street, NE, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms. Our SEC filings are also available to the public at the SEC’s web site at http://www.sec.gov and at our website at http://www.curativebiotech.com. We will furnish our stockholders with annual reports containing audited financial statements.

 

This prospectus is part of a registration statement on Form S-1 that we filed with the SEC. Certain information in the registration statement has been omitted from this prospectus in accordance with the rules and regulations of the SEC. We have also filed exhibits and schedules with the registration statement that are excluded from this prospectus. For further information you may:

 

  ● read a copy of the registration statement, including the exhibits and schedules, without charge at the SEC’s public reference rooms; or
     
  ● obtain a copy from the SEC upon payment of the fees prescribed by the SEC.

 

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INDEX TO FINANCIAL STATEMENTS

 

As of and for the year ended December 31, 2021 and 2020  
   
Report of Independent Registered Public Accounting Firm F-2
   
Balance Sheets F-4
   
Statements of Operations F-5
   
Statement of Deficiency in Stockholders’ Equity F-6
   
Statements of Cash Flows F-7
   
Notes to Financial Statements F-8

 

As of June 30, 2022 (unaudited) and December 31, 2021 (audited) and for the six months ended June 30, 2022 and 2021 (unaudited)  
   
Condensed Balance Sheets F-19
   
Condensed Statements of Operations F-20
   
Condensed Statement of Deficiency in Stockholders’ Equity F-21
   
Condensed Statements of Cash Flows F-23
   
Notes to Financial Statements F-24

 

F-1
 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and

Stockholders of Curative Biotechnology, Inc.

 

Opinion on the Financial Statements

 

We have audited the accompanying balance sheets of Curative Biotechnology, Inc. (the Company) at December 31, 2021 and 2020, and the related statements of operations, deficiency in stockholder’s equity, and cash flows for each of the years in the two-year period ended December 31, 2021, 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, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

 

Going Concern Uncertainty

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 3 to the financial statements, the Company has sustained 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 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 financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s 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 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 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 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 audits 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 audits provide a reasonable basis for our opinion.

 

Critical Audit Matters

 

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.

 

F-2
 

 

Intangible Assets Impairment Assessments

 

As described in Note 4 to the financial statements, the Company has intangible assets of $1.6 million at December 31, 2021, which includes licensed rights for the development and commercialization of a COVID-19 vaccine. The value of intangible assets makes up approximately 65% of total assets. In most cases, no directly observable market inputs are available to measure the fair value to determine if the assets are impaired. Therefore, an estimate is derived indirectly and is based on net present value techniques utilizing post-tax cash flows and discount rates. The estimates that management used in calculating the net present values depend on assumptions specific to the nature of the development activities with regard to the amount and timing of projected future cash flows; long-term forecasts; actions of competitors, future tax and discount rates.

 

The principal consideration for our determination that performing procedures relating to the intangible assets impairment assessment is a critical audit matter is the significant judgment by management when developing the net present value of the intangible assets. This, in turn, led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the amount and timing of projected future cash flows.

 

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included evaluating the significant assumptions used by management, including the amount and timing of projected future cash flows. Evaluating management’s assumptions related to the amount and timing of projected future cash flows involved evaluating whether the assumptions used by management were reasonable considering the current and past performance of similar intangible assets, the consistency with external market and industry data, and whether these assumptions were consistent with evidence obtained in other areas of the audit.

 

/s/ Daszkal Bolton LLP

 

Daszkal Bolton LLP

 

March 25, 2022

 

Boca Raton, Florida

 

We have served as the Company’s auditor since 2021

 

F-3
 

 

Curative Biotechnology, Inc

Balance Sheets

December 31,

 

   2021   2020 
ASSETS          
CURRENT ASSETS          
Cash  $670,263   $160,607 
Subscription receivable   25,000    - 
Prepaid expenses   58,642    1,900,859 
Funds receivable on notes payable   -    70,000 
           
Total current assets   753,905    2,131,466 
           
FIXED ASSETS          
Property and equipment   6,834    81,515 
Accumulated depreciation   (114)   (79,177)
           
Total fixed assets   6,720    2,338 
           
OTHER ASSETS          
Deferred offering costs   92,975    - 
Intangible assets, net   1,558,550    140,300 
           
Total other assets   1,651,525    140,300 
           
Total Assets  $2,412,150   $2,274,104 
           
LIABILITIES AND DEFICIENCY IN STOCKHOLDERS’ EQUITY          
CURRENT LIABILITIES          
Accounts payable and accrued liabilities  $726,904   $97,830 
Convertible note payable   -    128,700 
Liability to issue common shares   3,431    7,400 
Short term note payable - related parties, net of discounts   -    25,415 
Third party short term loans, net of discounts   -    405,646 
           
Total current liabilities   730,335    664,991 
           
Total Liabilities   730,335    664,991 
           
Commitments and Contingencies   -    - 
           
Preferred stock, Series A, 0 and 134,109,750 shares issued and outstanding   -    1,564,251 
Preferred stock, Series C, 30,000,000 and 30,000,000 shares issued and outstanding   18,043,557    4,566,502 
           
DEFICIENCY IN STOCKHOLDERS’ EQUITY          
Preferred stock, $0.0001 par value, authorized 200,000,000 shares, Series B 81,000 and 293,000 shares issued and outstanding   8    29 
Common stock, $0.0001 par value, authorized 1,100,000,000
shares; 570,651,636 and 333,000,327 shares issued and outstanding		   57,065    33,300 
Additional paid-in capital   10,498,221    3,544,658 
Accumulated deficit   (26,917,036)   (8,099,627)
           
Total deficiency in stockholders’ equity   (16,361,742)   (4,521,640)
           
Total Liabilities and Deficiency in Stockholders’ Equity  $2,412,150   $2,274,104 

 

The accompanying notes are an integral part of the financial statements

 

F-4
 

 

Curative Biotechnology, Inc

Statements of Operations

Year ended December 31,

 

   2021   2020 
           
REVENUES  $-   $- 
           
COST OF REVENUES   -    - 
           
GROSS MARGIN   -    - 
           
OPERATING EXPENSES:          
General and administrative expenses   4,211,355    4,598,302 
Research and development expenses   779,275    - 
Impairment of long-lived assets   16,958    32,136 
Depreciation and amortization   6,744    5,301 
           
Total expenses   5,014,332    4,635,739 
           
Loss from operations   (5,014,332)   (4,635,739)
           
Other expense:          
Interest expense   176,672    34,516 
Loss on debt extinguishment   149,350    - 
Total other expense   326,022    34,516 
           
Net loss   (5,340,354)   (4,670,255)
           
Series C deemed dividend   (13,477,055)   (4,440)
           
Net loss to common shareholders  $(18,817,409)  $(4,674,695)
           
(Loss) income per basic weighted average common share  $(0.04)  $(0.01)
           
Number of weighted average basic and diluted common shares outstanding   500,981,957    326,678,469 

 

The accompanying notes are an integral part of the financial statements

 

F-5
 

 

Curative Biotechnology, Inc

Statement of Deficiency in Stockholders’ Equity

 

    Common     Preferred     Common     Preferred     Capital     Deficit     Equity  
    Number of Shares     Par Value    

Additional

Paid-in

     Accumulated    

Total Deficiency in

Stockholders’

  
    Common     Preferred     Common     Preferred     Capital     Deficit     Equity  
                                           
BALANCE, January 1, 2020     322,800,327       34,402,750     $ 32,280     $ 29     $ 3,304,188     $ (3,424,932 )   $ (88,435 )
Common shares issued for services     1,700,000       -       170       -       36,630       -       36,800  
Common shares issued for intangible assets     8,500,000       -       850       -       105,150       -       106,000  
Warrants issued in connection with debt     -       -       -       -       54,555       -       54,555  
Warrants issued for services     -       -       -       -       44,135       -       44,135  
Preferred stock Series A issued for services     -       100,000,000       -      

 

-*

      

 

-*

       -      

 

-*

  
Preferred stock Series C issued for services     -       30,000,000       -      

 

-*

      

 

-*

       -      

 

-*

  
Series C deemed dividend     -       -       -       -       -*       (4,440 )     (4,440 )
Net loss     -       -       -       -       -       (4,670,255 )     (4,670,255 )
                                                         
BALANCE, December 31, 2020     333,000,327       164,402,750       33,300       29       3,544,658       (8,099,627 )     (4,521,640 )
Common shares issued for services     8,715,000       -       872       -       539,264       -       540,136  
Common shares issued for intangible assets     12,500,000       -       1,250       -       1,423,750       -       1,425,000  
Warrants issued in connection with debt     -       -       -       -       9,533       -       9,533  
Warrants issued for services     -       -       -       -       485,487       -       485,487  
Common stock issued for conversion of Preferred stock Series A     135,836,702       (134,109,750 )     13,584       -*       1,550,667       -       1,564,251  
Common stock issued for conversion of Preferred stock Series B     28,266,666       (212,000 )     2,826       (21 )     (2,805 )     -       0  
Shares issued for cash     27,520,442       -       2,752       -       1,570,248               1,573,000  
Shares issued to convert debt     10,937,499       -       1,094       -       655,156       -       656,250  
Warrant exercises for cash     10,500,000       -       1,050       -       523,950       -       525,000  
Shares issued to settle payables     375,000       -       37       -       11,213       -       11,250  
Shares issued to settle debt     2,000,000       -       200       -       179,800       -       180,000  
Shares issued to settle liability to issue shares     1,000,000       -       100       -       7,300       -       7,400  
Series C deemed dividend     -       -       -       -       -*       (13,477,055 )     (13,477,055 )
Net loss     -       -       -       -       -       (5,340,354 )     (5,340,354 )
BALANCE, December 31, 2021     570,651,636       30,081,000     $ 57,065     $ 8     $ 10,498,221     $ (26,917,036 )   $ (16,361,742 )

 

*Series A and Series C Preferred Stock amounts reflected in mezzanine equity

 

The accompanying notes are an integral part of the financial statements

 

F-6
 

 

Curative Biotechnology, Inc

Statements of Cash Flows

Year ended December 31,

 

   2021   2020 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net loss  $(5,340,354)  $(4,670,255)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   6,744    5,301 
Share based compensation   2,889,567    4,302,978 
Amortization of warrant discount   2,545    11,495 
Amortization of Original Issue Discount   122,129    19,121 
Loss on debt extinguishment   149,350    - 
Impairment of long lived assets   16,958    32,136 
Changes in operating assets and liabilities          
(Increase) in stock subscription receivable   (25,000)   - 
(Increase) in prepaid expenses   (18,294)   - 
Increase in accounts payable and accrued expenses   592,320    109,131 
           
Net cash used in operating activities   (1,604,035)   (190,093)
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchase of fixed assets   (6,834)   - 
Purchase of intangible assets   (14,500)   (34,300)
           
Net cash used in investing activities   (21,334)   (34,300)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Cash received for issuance of common stock   1,573,000    - 
Cash received for exercise of warrants   525,000    - 
Cash received for amounts receivable on notes payable   70,000    - 
Cash paid for deferred offering costs   (92,975)   - 
Advances from related party   -    48,083 
Payments on related party advances   -    (48,083)
Payments on related party notes payable   (50,000)   - 
Cash received from related party notes payable   -    20,000 
Cash received from third party notes payable   110,000    365,000 
           
Net cash provided by financing activities   2,135,025    385,000 
           
Net increase in cash   509,656    160,607 
           
CASH, beginning of year   160,607    - 
           
CASH, end of year  $670,263   $160,607 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:          
Interest paid in cash  $10,000   $- 
Income taxes paid in cash  $-   $- 
Non-Cash Financing Activities:          
Common shares issued for intangible assets  $1,425,000   $106,000 
Common shares issued upon conversion of debt  $656,250   $- 
Common shares issued upon conversion of preferred stock  $1,564,251   $- 
Warrants issued as debt discount  $9,533   $54,555 
Series C preferred stock deemed dividend  $13,477,055   $4,440 
Common shares issued to settle liabilities  $198,650   $- 

 

F-7
 

 

Curative Biotechnology, Inc

Notes to Financial Statements

 

NOTE 1 - NATURE OF OPERATIONS

 

Curative Biotechnology Inc. (f/k/a Connectyx Technologies Holdings Group, Inc.), (CUBT), is a Florida corporation, formed as a Nevada corporation on June 29, 1995, reincorporated in Florida on October 30, 2007, with a name change November 30, 2020, which conducts business from its headquarters in Boca Raton, Florida. Curative Biotechnology, Inc. is a development stage biomedical company that seeks to develop, in-license, sub-license and bring to market products in both the Pharmaceutical and Medical Device space. The Company focuses on products that are targeted at FDA-defined “Orphan Diseases” with patient populations under 200,000 in the United States. The company leverages management’s experience and business relationships with Life Science research institutions as well as Life Science industry members to acquire Life Science candidates that fit within the company’s business model. The company has established a scientific advisory board with a successful track record of bringing pharmaceuticals to market.

 

NOTE 2 - 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”).

 

b) Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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.

 

(c) Cash and equivalents The Company considers all highly liquid investments with maturity of three months or less when purchased to be cash equivalents.

 

(d) Prepaid expenses From time to time, the Company may prepay expenses either through the transfer of cash, assets or the issuance of securities. Prepaid expenses are amortized over the period of benefit.

 

(e) Property and equipment All property and equipment are recorded at cost and depreciated over their estimated useful lives, using the straight-line method. 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.

 

(f) Intangible Assets The useful life of intangible assets is assessed as either finite or indefinite. Following the initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses, if any.

 

Intangible assets with finite useful lives are carried at cost less accumulated amortization. Amortization is calculated using the straight line method over the estimated useful lives.

 

Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis. If impairment indicators are present, these assets are subject to an impairment review. Any loss resulting from impairment of intangible assets is expensed in the period the impairment is identified.

 

(g) 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.

 

F-8
 

 

Curative Biotechnology, Inc

Notes to Financial Statements

 

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES, continued

 

(h) Financial Instruments and Fair Value Measurements

 

ASC 825-10 “Financial Instruments”, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.

 

ASC 825 also requires disclosures of the fair value of financial instruments. The carrying value of the Company’s current financial instruments, which include cash and cash equivalents, accounts payable and accrued liabilities approximates their fair values because of the short-term maturities of these instruments.

 

FASB ASC 820 “Fair Value Measurement” clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. It also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows:

 

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability.

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

 

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

 

(i) Related Party Transactions All transactions with related parties are in the normal course of operations and are measured at the exchange amount.

 

(j) Revenue Recognition The Company adopted Accounting Standards Codification, (“ASC”), 606, “Revenue from Contracts with Customer” on January 1, 2018. This revenue recognition standard has a five step process: a) Determine whether a contract exists; b) Identify the performance obligations; c) Determine the transaction price; d) Allocate the transaction price; e) Recognize revenue when (or as) performance obligations are satisfied. The Company’s financial statements are prepared under the accrual method of accounting. Revenues will be recognized when pervasive evidence of an arrangement exists, services have been rendered (product delivered), the sales price is fixed or determinable, and collectability is reasonably assured. This occurs only when the product(s) is ordered and subsequently delivered.

 

(k) Stock based compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award. The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC 505-50, for share-based payments to non-employees, compensation expense is determined at the “measurement date.” The expense is recognized over the service period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date.

 

F-9
 

 

Curative Biotechnology, Inc

Notes to Financial Statements

 

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES, continued

 

(l) Income Taxes Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes on temporary differences between the amount of taxable income and pretax financial income, and between the tax bases of assets and liabilities and their reported amounts in the financial statements. Deferred tax assets and liabilities are included in the consolidated financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled as prescribed in FASB ASC 740. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Tax positions initially need to be recognized in the financial statements when it is more-likely-than-not the positions will be sustained upon examination by the tax authorities.

 

(m) Net income (loss) per share Basic loss per share is computed by dividing the net income (loss) by the weighted average number of common shares outstanding during 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 period and dilutive potential shares outstanding unless consideration of such dilutive potential shares would result in anti-dilution. There were no dilutive common stock equivalents for the years ended December 31, 2021 and 2020.

 

(n) Recent Accounting Pronouncements The Company has considered recent accounting pronouncements during the preparation of these financial statements.

 

NOTE 3 - LIQUIDITY AND GOING CONCERN CONSIDERATIONS

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company’s financial position and operating results raise substantial doubt about the Company’s ability to continue as a going concern, as reflected by the net loss of approximately $5.3 million and accumulated deficit of approximately $26.9 million through December 31, 2021. The ability of the Company to continue as a going concern is dependent upon commencing operations, developing sales and obtaining additional capital and financing. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company is currently seeking additional capital to allow it to grow its operations

 

NOTE 4 - INTANGIBLE ASSETS

 

During the 4th quarter 2021, the Company acquired the following intangible asset:

 

(a) MABT Covid-19 license The Company entered into a licensing agreement with Mid-Atlantic BioTheraputics, Inc., (MABT), to license MABT’s COVID-19 vaccine which is composed of a recombinant S1 and S2 protein from SARS-CoV-2 plus an IMT504 adjuvant. The Company issued 12,500,000 shares of common stock valued at $1,425,000 to acquire this license.

 

During the 4th quarter 2020, the Company acquired the following intangible assets:

 

(b) Website In December 2020, the Company contracted with a third party to develop and produce a new website for the Company for a contract price of $22,500, one-half in cash and one-half in common stock of the Company. The Company is amortizing this cost over 3 years. This website was placed into service in March 2021. Amortization expense for the year ended December 31, 2021 was $6,250.

 

In March 2020, the Company contracted with a third party to develop and produce a new website for the Company for a contract price of $15,000, for which the Company issued 1,500,000 shares of common stock.

 

F-10
 

 

Curative Biotechnology, Inc

Notes to Financial Statements

 

NOTE 4 - INTANGIBLE ASSETS, continued

 

(c) Patent rights option In October 2020, the Company entered into an agreement for the option to purchase certain exclusive license rights for US Patent No. 8,287,505 Ophthalmic Drop Dispensing Tip Assembly, issued October 16, 2012, from IEM, Inc., (IEM), the sole owner of this patent. The cost of this option was $1,800.

 

The Company had until September 30, 2021, to advise IEM in writing that it wishes to exercise this Option Right and pay IEM $50,000 in exchange for an exclusive world-wide, royalty free perpetual license. In September 2021, the Company exercised the option to extend the deadline for notification in the contract with IEM, from September 30, 2020 to March 31, 2022, in exchange for the payment of $1,000. The Company is evaluating the Patent rights, potential products and markets under this Patent.

 

(d) IMT504 Patent license In October 2020, the Company entered into a license agreement with MidAtlantic BioTheraputics, Inc., (MABT), to license the development of a pharmaceutical compound known as IMT504, as immununotherapy for late stage symptomatic rabies. The license is for worldwide use. There are certain conditions to the license, principally that the Company raise $6.5 million to fund the development. There is not a time limit on raising these funds unless the Company utilizes a public offering process, such as Regulation A.

 

The total cost for this license is 20 million shares of the Company’s common stock, issuable in three tranches - 1- 7 million shares upon execution of the license (which have been issued, valued at $91,000), 2- 6.5 million shares upon the submission of an Investigational New Drug (IND) to the FDA and 3- 6.5 million shares upon the successful completion of the first rabies clinical trial of this IND. This license calls for royalties of 50% of the net profit, after reimbursement for development costs, of successfully marketed products utilizing IMT504.

 

(e) National Institute of Health (NIH) Patent license #1 In October 2020, the Company entered into an exclusive 24 month evaluation license of Provisional Patent Application No. 62/199,707, filed July 31, 2015; PCT Application No. PCT/US2016/044777 filed July 29, 2016 and Patent No. 10,548,987 issued February 4, 2020. This license is for the evaluation of and development of an anti-CD56 antibody drug conjugate for the treatment of glioblastoma. Should the Company develop a marketable product, the Company is then required to negotiate a new license with appropriate royalties.

 

This license calls for the payment of a non-creditable non-refundable license issue royalty of $10,000, paid ½ at issuance and ½ on the one year anniversary.

 

(f) National Institute of Health (NIH) Patent license #2 In January 2021 the Company entered into an NIH exclusive 36 month worldwide license of Provisional Patent Application No. 62/899,899, filed September 13, 2019 and PCT Application No. PCT/US2020/050540 filed September 11, 2020. This license is for the development of ocular metformin formulation for the treatment of retinal degenerative diseases.

 

This license requires two separate royalty streams of payments:

 

First is a royalty equal to the unreimbursed patent expenses paid by NIH, with an initial amount of $8,500 due within 30 days of execution of the license. At the first anniversary of the license NIH will supply a statement of additional unreimbursed patent expenses paid by NIH during the year, of which the Company is required to pay 50%, with the remaining balance due on the third anniversary.

 

F-11
 

 

Curative Biotechnology, Inc

Notes to Financial Statements

 

NOTE 4 - INTANGIBLE ASSETS, continued

 

(f) National Institute of Health (NIH) Patent license #2, continued

 

Second is an ongoing royalty schedule: an initial royalty of $5,000 upon execution of the license, and annually thereafter as the minimum royalty amount. The license can be extended on the third anniversary to the remaining life of the licensed patent by the payment of a one-time non-refundable, non-creditable royalty of $45,000. There are three benchmark royalties - $75,000 upon the initiation of the first Phase 2 Clinical Study; $300,000 upon the completion of Phase 3 Clinical Study and $600,000 upon the FDA approval of the first Licensed Product. Upon first commercial sale there is a royalty of $100,000 each for the United States, Canada, European Union and Asian region. Last is a 3.5% of net sales royalty.

 

The patent rights and patent licenses are under development, therefore amortization of the costs has not commenced, as these patent rights and licenses have not been placed in service.

 

NOTE 5 - RELATED PARTY TRANSACTIONS

 

From time to time the Company may enter into non-arm’s length transactions with related parties, however the Company exercises its best efforts to ensure that such transactions are valued on a basis comparable to a true arm’s length transaction.

 

During 2020, one officer advanced $48,083 to the Company, carrying no stated interest rate nor maturity. This advance was repaid during 2020.

 

During the second quarter of 2021, the remaining two notes from officers of the Company, totaling $40,000 of principal and $10,000 of OID, were repaid in cash.

 

NOTE 6 - NOTES PAYABLE

 

During the first quarter 2021, 13 of the 15 total notes were converted into 10,937,499 shares of common stock.

 

In January 2021, the amounts receivable for notes payable were received.

 

During the first quarter of 2021, the Company entered into two (2) notes payable with a face amount of $137,500, including 25% Original Issue Discount (OID), for a total amount of cash received of $110,000. The notes are identical and carry a maturity of six months from inception and a 25% OID. The maturity is extendable at the Company’s option for up to three months with a 3% per month extension fee. In connection with the notes, the Company issued warrants to purchase 1,100,000 shares of common stock of the Company, which were recorded as a discount in the amount of $9,533, which is being amortized over the term of the notes. These notes are collateralized by Preferred C shares representing 9.24% of the issued and outstanding common stock shares. Two officers holding Preferred C shares have pledged the Preferred C shares as this collateral.

 

During 2020, the Company issued thirteen (13) notes payable with a face amount of $568,750, including 25% OID, for a total amount of cash received of $455,000. The notes are identical and carry a six-month maturity. The maturity is extendable at the Company’s option for up to three months with a 3% per month extension fee. In connection with the notes, the Company issued warrants to purchase 4,550,000 shares of common stock of the Company, which were recorded as a discount in the amount of $54,555, which is being amortized over the term of the notes. These notes are collateralized by Preferred C shares representing 9.24% of the issued and outstanding common stock shares. Two officers holding Preferred C shares have pledged the Preferred C shares as this collateral. During the first quarter of 2021, 13 of the 15 note holders converted their notes into shares of common stock at the rate of $0.06 per share, for a total of 10,937,499 shares of common stock for a total of $656,250 convertible debt.

 

F-12
 

 

Curative Biotechnology, Inc

Notes to Financial Statements

 

NOTE 7 - CONVERTIBLE NOTE PAYABLE

In April 2013, the Company entered into a convertible note in the principal amount of $97,500, which carried a 4% interest rate. This note was convertible at a conversion price equal to the lesser of 90% of the previous 10 day closing price or $0.001 per share. The balance of the convertible note, including accrued interest, was $128,700 at December 31, 2020. During 2021, the note holder filed a lawsuit to enforce the conversion of this note, which was settled in August 2021, via the payment of $100,000 and the issuance of 2,000,000 shares of common stock. (See Note 9)

 

NOTE 8 - LIABILITY TO ISSUE COMMON STOCK

 

In March 2020, the Company entered into an agreement to issue 1,000,000 shares of the Company’s common stock in exchange for services valued at $7,400. These shares were issued in June 2021.

 

NOTE 9 – DEFICIENCY IN STOCKHOLDERS EQUITY

 

At December 31, 2021 and 2020, the Company has 1,100,000,000 shares of par value $0.0001 common stock authorized and 570,651,636 and 333,000,327 issued and outstanding, respectively. At December 31, 2021 and 2020, the Company has 200,000,000 shares of $0.0001 par value preferred stock authorized.

 

The Company accounts for the Series A and Series C preferred stock in accordance with FASB Accounting Standards Codification (ASC) 480, as mezzanine equity due to Series A having a redemption provision and Series C being convertible into a variable number of common shares.

 

   No. Shares   Par   No. Shares   Par   No. Shares   Par   No. Shares   Par 
   Series A   Series B   Series C   Total 
   No. Shares   Par   No. Shares   Par   No. Shares   Par   No. Shares   Par 
January 1, 2020   34,109,750   $3,411    293,000   $29    -   $-    34,402,750   $3,440 
Issuance of shares for services   100,000,000    10,000    -    -    30,000,000    3,000    130,000,000    13,000 
December 31, 2020   134,109,750    13,411    293,000    29    30,000,000    3,000    164,402,750    16,440 
Conversion to common shares   (134,109,750)   (13,411)   (212,000)   (21)   -    -    (134,321,750)   (13,432)
December 31, 2021   -   $-    81,000   $8    30,000,000   $3,000    30,081,000   $3,008 

 

The preferred shares have the following respective rights and privileges:

 

Series A Preferred carry 10 votes for each share of common stock that each Series A shares are convertible into at the record date; is convertible into common stock aggregating 35% of the total issued and outstanding common shares at conversion date post conversion; are redeemable at the Company’s option for the greater of 45% of the total market value of the common shares or the calculation of the book value of the Company made by an independent audit firm or $5,000,000.

 

Series B Preferred are convertible in common shares of common stock at a conversion price of $0.0075 per share; are redeemable at the Company’s option at a price of 125% of the purchase price paid for the shares; carry one vote for each common share that the Series B is convertible into at the record date; are senior to all other securities in the event of a liquidation.

 

Series C Preferred are convertible into common stock aggregating 30% of the total issued and outstanding common shares at conversion date post conversion; carry ten votes for each common share that the Series C is convertible into at the record date.

 

F-13
 

 

Curative Biotechnology, Inc

Notes to Financial Statements

 

NOTE 9 – DEFICIENCY IN STOCKHOLDERS EQUITY, continued

 

During the fourth quarter 2021, the Company issued 13,159,331 shares of common stock and 25,915,437 warrants for the purchase of common stock in exchange for $523,000 in cash and $25,000 in deposit in transit. During the fourth quarter 2021, the Company issued 200,000 shares of common stock, valued at $21,960 for services. During the fourth quarter 2021, the Company issued 12,500,000 shares of common stock, valued at $1,425,000 for the license to MABT’s COVID-19 vaccine.

 

During the third quarter 2021, the Company issued 4,361,111 shares of common stock and 4,236,111 warrants for the purchase of common stock in exchange for $425,000 in cash. During the third quarter 2021, the Company issued 250,000 shares of common stock, valued at $22,500, to an individual for services to be rendered as a member of the Company’s Advisory Board. These shares vest 60,000 immediately, 60,000 in December 2021, 60,000 in April 2022 and 70,000 in August 2022. During the third quarter 2021, the Company issued 300,000 shares of common stock, valued at $36,720, to an individual for services rendered as a member of the Company’s Board of Directors. During the third quarter 2021, the Company issued 250,000 shares of common stock, valued at $28,475, to an individual for services to be rendered as a member of the Company’s Advisory Board. These shares vested immediately. During the third quarter the Company issued 2,000,000 shares of common stock, valued at $180,000, to settle the lawsuit brought to enforce the convertible note. During the third quarter 2021, 9,000 shares of the Series B preferred stock was converted into 1,200,000 shares of common stock.

 

During the second quarter 2021, the Company issued 10,000,000 shares of common stock and 5,000,000 warrants for the purchase of common stock in exchange for $600,000 in cash. The warrants mature in May 2026, and carry an exercise price of $0.11 per share. During the second quarter 2021, the Company issued 1,000,000 shares of common stock to settle the liability to issue shares.

 

During the second quarter 2021, the Company issued 250,000 shares of common stock to an individual for services to be rendered as a member of the Company’s Advisory Board. These shares vest 60,000 immediately, 60,000 in August 2021, 60,000 in December 2021 and 70,000 in April 2022. During the second quarter 2021, the Company issued 840,000 shares of common stock to an employee for services to be rendered. These shares vest 210,000 immediately, 210,000 in September 2021, 210,000 in December 2021 and 210,000 in March 2022. 840,000 of these shares to the two (2) individuals were issued and recorded as a prepaid expense to be amortized as they vest.

 

During the first quarter 2021, the Company issued 125,000 shares of common stock in exchange for services valued at $5,575, or $0.0446 per share. During the first quarter 2021, the Company issued 375,000 shares of common stock to settle a payable in the amount of $11,250. During the first quarter 2021, all of the Series A preferred stock was converted into 135,836,702 shares of common stock. During the first quarter 2021, 203,000 shares of the Series B preferred stock was converted into 27,066,666 shares of common stock. During the first quarter of 2021, 13 of the 15 note holders converted their note receivable into shares of common stock at the rate of $0.06 per share, for a total of 10,937,499 shares of common stock for a total of $656,250 convertible debt. During the first quarter 2021, the Company issued 10,500,000 shares of common stock upon receipt of $525,000 in cash for the exercise of 10,500,000 warrants. During the first quarter 2021, the Company issued 6,500,000 shares of common stock for the exercise of 6,500,000 warrants in exchange for services valued at $325,000.

 

During the 4th quarter 2020, the Company issued 1,700,000 shares of common stock in exchange for services valued at $36,800, or $0.0216 per share. During the 4th quarter 2020, the Company issued 8,500,000 shares of common stock to acquire intangible assets valued at $106,000, or $0.0125 per share.

 

During the 4th quarter 2020, the Company issued 100,000,000 shares of Series A preferred stock in exchange for services valued at $1,560,840, or $0.0156 per share. During the 4th quarter 2020, the Company issued 30,000,000 shares of Series C preferred stock in exchange for services valued at $4,562,062, or $0.152 per share. 50% of the Series C shares vested upon issuance and the other 50% vest in May 2021. The Company recorded 50% of the compensation expense upon issuance and 50% as a prepaid expense which will be amortized over the remaining of the six month service period.

 

During the 2nd quarter 2020, the Company issued 1,250,000 shares of common stock in exchange for services valued at $23,300, or $0.01864 per share.

 

F-14
 

 

Curative Biotechnology, Inc

Notes to Financial Statements

 

NOTE 9 – DEFICIENCY IN STOCKHOLDERS EQUITY, continued

 

During the 1st quarter 2020, the Company issued 1,500,000 shares of common stock in exchange for services valued at $15,000, or $0.01 per share.

 

A deemed dividend for the Series C preferred stock is calculated and recorded as shares of common stock are issued. This is calculated as the increase in common shares that the Series C would receive upon conversion, as a result of the change in the number of common shares issued and outstanding during the period multiplied by the closing price of the common stock at the end of the period. The deemed dividend was 13,477,055 and $4,440 for the year ended December 31, 2021 and 202, respectively.

 

NOTE 10 - WARRANTS

 

During the fourth quarter 2021, the Company issued 403,225 warrants for the purchase of common stock of the Company in conjunction with the sale of 403,225 shares of common stock for cash. These warrants expire in December 2024 and have an exercise price of $0.11 per share. During the fourth quarter 2021, the Company issued 25,512,212 warrants for the purchase of common stock of the Company in conjunction with the sale of 12,756,106 shares of common stock for cash and subscription receivable. These warrants expire in December 2024 and have an exercise price of $0.09 and $0.15 per share.

 

During the third quarter 2021, the Company issued 4,236,111 warrants for the purchase of common stock of the Company in conjunction with the sale of 4,361,111 shares of common stock for cash. These warrants expire in July and August 2026 and have an exercise price of $0.15 and $0.14 per share. During the third quarter 2021, the Company issued 1,000,000 warrants for the purchase of common stock of the Company in exchange for services as a member of the Board of Directors. These warrants expire in July 2024 and have an exercise price of $0.124 per share and have a cash-less exercise provision. These warrants were recorded at a total value of $34,382.

 

During the second quarter 2021, the Company issued 5,000,000 warrants for the purchase of common stock of the Company in conjunction with the sale of 10,000,000 shares of common stock for cash. These warrants expire in May 2026 and have an exercise price of $0.11 per share. During the second quarter 2021, the Company issued 5,000,000 warrants for the purchase of common stock of the Company in exchange for services as a member of the Board of Directors. These warrants expire in June 2024 and have an exercise price of $0.20 per share. The warrants were recorded at a total value of $87,249. During the second quarter 2021, the Company issued 3,000,000 warrants for the purchase of common stock of the Company in exchange for legal services. These warrants expire in May 2026 and have an exercise price of $0.10 per share. The warrants were recorded at a total value of $155,717.

 

During the second quarter 2021, the Company issued 1,000,000 warrants for the purchase of common stock of the Company in exchange for services. These warrants expire in May 2026 and have an exercise price of $0.10 per share. The warrants were recorded at a total value of $51,906 and vest 250,000 shares on May 20, 2021 and September 20, 2021, January 20, 2022 and May 20, 2022.

 

During the first quarter 2021, the Company issued 10,500,000 shares of common stock upon receipt of $525,000 in cash for the exercise of 10,500,000 warrants. During the first quarter 2021, the Company issued 6,500,000 shares of common stock in exchange for services valued at $325,000 for the exercise of 6,500,000 warrants.

 

In the first quarter 2021, the Company issued 1,100,000 warrants for the purchase of common stock of the Company in conjunction with the short-term debt at the rate of 10 warrants for each $1 loaned. These warrants carry an expiration of thirty-six months from issuance; an exercise price of $0.05 per share and are exercisable immediately. The warrants were recorded at a total value of $9,533.

 

In the first quarter 2021, the Company issued 5,000,000 warrants for services. These warrants carry an expiration of 60 months from issuance and an exercise price of $0.05 per share. The warrants were recorded at a total value of $40,600.

 

The method utilized to value the warrants was the Black-Scholes model with the following assumption ranges: Expected life - three or five years; stock price between $0.04 and $0.10; volatility between 60.51 and 31.56; exercise price between $0.05 and $0.2 and bond equivalent yield rate between 0.09% and 0.83%.

 

F-15
 

 

Curative Biotechnology, Inc

Notes to Financial Statements

 

NOTE 10 - WARRANTS, continued

 

During the 4th quarter 2020, the Company issued 4,550,000 warrants for the purchase of common stock of the Company in conjunction with the issuance of short-term debt at the rate of 10 warrants for each $1 loaned. These warrants carry an expiration of thirty-six months from issuance; an exercise price of $0.05 per share and are exercisable immediately. These warrants were valued at $54,555, and are being amortized to the maturity of the related debt.

 

During the 4th quarter 2020, the Company issued 6,750,000 warrants to two people for services. These warrants carry an expiration of 60 months from issuance and an exercise price of $0.05 per share. These warrants were valued at $44,135, and are being amortized over the service period.

 

The method utilized to value the warrants was the Black-Scholes model with the following assumption ranges: Expected life three years; stock price $0.03; volatility between 109.96 and 30.22; exercise price $0.05 and bond equivalent yield rate between 0.08% and 0.11%.

 

NOTE 11 - OPTIONS

 

In the third quarter of 2021, the Company issued options in conjunction with an agreement for Board of Advisor services and the evaluation of certain potential intangible asset acquisitions. These options call for an undivided 1% of the fully diluted issued and outstanding shares upon exercise. These options amounted to 8,081,037 shares at issuance date. These option s contain a single recalculation upon the completion of a reverse split of the existing common stock and the Company raising a minimum of $5 million in an offering. These options carry an exercise price of $0.11 per share and expire in September 2031. These options were valued at $436,908 and vest 50% upon issuance and 50% in September 2022.

 

The method utilized to value the options was the Black-Scholes model with the following assumption ranges: Expected life - ten years; stock price $0.114; volatility 35.13; exercise price $0.11 and bond equivalent yield rate 1.47%.

 

During the quarter ended March 31, 2022, a total of 1,000,000 shares of common stock and 7,456,500 options at a weighted-average exercise price of $0.0518 per share were granted to employees exercisable for a period of five years with immediate vesting. The weighted-average fair value attributable to options granted in 2022 was $0.0208.

 

Risk-free interest rate   %
Exercise price  $ 
Expected life    
Expected volatility   %
Expected dividends    

 

   Number of options   Weighted average exercise price 
Balance - beginning of the year      $ 
Granted        
Exercised        
Cancelled        
Balance - end of period      $ 

.

NOTE 12 - FINANCIAL INSTRUMENTS

 

(a) Liquidity Risk Liquidity risk is the risk that the Company will not be able to meet its obligations associated with financial liabilities. The Company relies on cash flows generated from operations, as well as injections of capital through the issuance of the Company’s capital stock to settle its liabilities when they become due.

 

(b) Interest Rate Risk The Company is not exposed to significant interest rate risk due to the short-term maturity of its monetary current assets and current liabilities.

 

NOTE 13 - GENERAL AND ADMINISTRATIVE EXPENSES

 

   2021   2020 
   Year ended December 31, 
   2021   2020 
Salaries  $1,016,881   $143,065 
Share based compensation   2,889,567    4,302,978 
Professional fees   225,384    117,860 
Other   79,523    34,399 
Total general and administrative expenses  $4,211,355   $4,598,302 

 

F-16
 

 

Curative Biotechnology, Inc

Notes to Financial Statements

 

NOTE 14 - IMPAIRMENT OF LONG-LIVED ASSETS

NOTE 12 - IMPAIRMENT OF LONG LIVED ASSETS

In the fourth quarter the Company determined that its fixed assets were obsolete and wrote off the undepreciated balance of $1,958.

 

In March 2021, when the Company’s new website was placed in service, the remaining unamortized cost of the Company’s old website was written off, for a total of $15,000.

 

During the 4th quarter 2020, the Company elected to abandon certain intangible assets it had been attempting to commercialize under previous management. As such the Company recorded a $34,516 impairment charge.

 

NOTE 15 - INCOME TAXES

 

The Company recognizes 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:

 SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE

 

    2021    2020 
Current  $-   $- 
Deferred  $-   $- 
Total tax provisions  $-   $- 

 

The following is a reconciliation of the effective income tax rate with the statutory income tax rate at December 31:

 SCHEDULE OF EFFECTIVE RECONCILIATION INCOME TAX RATE

 

   2021   2020 
U.S. Federal statutory income tax rate   (21)%   (21)%
State income tax, net of federal benefit   (4.5)%   (4.5)%
Valuation allowance   25.5%   25.5%
Total   0.0%   0.0%

 

The net deferred tax assets and liabilities included in the financial statements consist of the following amounts at December 31:

 SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

 

   2021   2020 
Deferred tax assets:          
Net operating loss carry forwards  $1,337,957   $831,988 
Stock based compensation   1,600,548    958,197 
Other   -    (10,061)
Total   2,938,505    1,780,124 
Deferred tax liabilities:   -    - 
Less: valuation allowance   (2,938,505)   (1,780,124)
Net deferred tax assets  $-   $- 

 

F-17
 

 

Curative Biotechnology, Inc

Notes to Financial Statements

 

NOTE 15 - INCOME TAXES, continued

 

The change in valuation allowance was ($1,158,381) and ($1,021,331) for the years ended December 31, 2021 and 2020, respectively. We have recorded a 100% valuation allowance related to the deferred tax asset for the income 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. 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, 2021 and 2020, 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 16 - COMMITMENTS AND CONTINGENCIES

 

(a) Other 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.

 

NOTE 17 - 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 $416,178 and no cash balance in excess of FDIC insured limits at December 31, 2021 and 2020.

 

NOTE 18 - COVID-19 PANDEMIC AND VARIANTS

 

The full extent to which the COVID-19 pandemic may directly or indirectly impact our business, results of operations and financial condition, will depend on future developments that are uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat COVID-19, as well as the economic impact on local, regional, national and international customers and markets. We have made estimates of the impact of COVID-19 within our financial statements, and although there is currently no major impact, there may be changes to those estimates in future periods.

 

NOTE 19 - SUBSEQUENT EVENTS

 

(a) Intangible Assets In March 2022, the Company entered into a Cooperative Research and Development Agreement, (CRADA) with the National Institute of Health, (NIH). This is the next step in the process to commercialize NIH Patent License #2. The CRADA is for the clinical evaluation of the Company’s proprietary ocular metformin formulation. The National Eye Institute, (NEI), will conduct clinical studies under NIH protocols and the Company will provide the proprietary drug for the clinical studies. The terms of the CRADA are confidential.

 

(b) Senior Secured Note In March 2022, the Company issued a 12 month Senior Secured Note with a face amount of $1,142,857, with a stated 12.5% original issue discount (OID). The Note carries a 12.5% interest rate with interest only payable monthly from April through August 2022. The Company received $874,286 in cash, net of the OID of $142,857and legal and other fees in the amount of $125,714. The Note was issued to Puritan Partners, LLC, an institutional investor.

 

Beginning in September 2022, the Company is required to make monthly redemptions at the rate of 110% of one seventh of the original principal amount, ($179,592), plus interest. It also carries a mandatory prepayment at 125% of the original principal amount, or $1,428,571, less any redemptions made, upon the completion of a Qualified Offering, as defined.

 

The Note is convertible into common stock of the Company upon an event of default, as defined.

 

The lender received five-year warrants to purchase 22,857,143 shares of common stock of the Company, with an exercise price of $0.0001 per share. These warrants were recorded as debt discount in the amount of $1.0 million which will be amortized over the term of the Note. The warrants can be exercised on a cash-less basis if a registration statement for the common shares underlying the warrants is not declared effective by September 2022.

 

The Note is secured by all the tangible and intangible assets of the Company.

 

(c) Deficiency in Stockholders Equity Subsequent to December 31, 2021 the Company issued 1,000,000 shares of common stock valued at $51,750, as a bonus to an officer of the Company.

 

In January 2022, the $25,000 common stock subscription was received.

 

(d) Options In January 2022, the Company issued to three employees an aggregate of 7,465,500 five-year term Options at a strike price of $0.05175 to purchase $155,250 worth of common shares, as a bonus to Company officers and employees.

 

F-18
 

  

Curative Biotechnology, Inc

Condensed Balance Sheets

 

   June 30, 2022   December 31, 2021 
    (unaudited)      
ASSETS          
CURRENT ASSETS          
Cash  $126,850   $670,263 
Subscription receivable   -    25,000 
Prepaid expenses   64,808    58,642 
           
Total current assets   191,658    753,905 
           
FIXED ASSETS          
Property and equipment   6,834    6,834 
Accumulated depreciation   (342)   (114)
           
Total Fixed Assets   6,492    6,720 
           
OTHER ASSETS          
Deferred offering costs   204,015    92,975 
Intangible assets, net of amortization   1,631,705    1,558,550 
           
Total other assets   1,835,720    1,651,525 
           
Total Assets  $2,033,870   $2,412,150 
           
LIABILITIES AND DEFICIENCY IN STOCKHOLDERS’ EQUITY (DEFICIT)          
CURRENT LIABILITIES          
Accounts payable and accrued liabilities  $1,352,265   $726,904 
Liability to issue common shares   12,594    3,431 
Short term convertible note payable, net of discounts   380,952    - 
Short term loan   200,000    - 
           
Total current liabilities   1,945,811    730,335 
           
Total Liabilities   1,945,811    730,335 
           
Commitments and Contingencies          
           
Preferred Stock, Series C, 30,000,000 shares issued and outstanding   18,065,735    18,043,557 
           
DEFICIENCY IN STOCKHOLDERS’ EQUITY          
Preferred stock, $0.0001 par value, authorized 200,000,000 shares, zero Series A; Series B, 81,000 shares issued and outstanding   8    8 
Common stock, $0.0001 par value, authorized 1,100,000,000 shares; 571,651,636 and 570,651,636 shares issued and outstanding   57,165    57,065 
Additional paid-in capital   11,588,070    10,498,221 
Accumulated deficit   (29,622,919)   (26,917,036)
           
Total deficiency in stockholders’ equity   (17,977,676)   (16,361,742)
           
Total Liabilities and Deficiency in Stockholders’ Equity  $2,033,870   $2,412,150 

 

The accompanying notes are an integral part of the unaudited condensed financial statements

 

F-19
 

 

Curative Biotechnology, Inc

Condensed Statements of Operations

(Unaudited)

 

                     2022     2021 
    Three months ended June 30,    Six months ended June 30, 
    2022     2021    2022   2021 
                         
REVENUES, net   $ -     $ -    $-   $- 
                           
COST OF REVENUES   -     -     -    - 
                           
GROSS MARGIN   -     -     -    - 
                           
OPERATING EXPENSES:                          
General and administrative expenses     407,697       2,490,597     1,155,344    3,099,185 
Research and development     553,692       95,141     1,092,453    95,141 
Impairment of long-lived assets     -       -     -    15,000 
Depreciation and amortization     1,990       2,005     3,979    2,765 
                           
Total operating expenses     963,379       2,587,743     2,251,776    3,212,091 
                           
LOSS FROM OPERATIONS     (963,379 )     (2,587,743 )   (2,251,776)   (3,212,091)
                           
OTHER EXPENSES                          
Interest expense     324,106       8,011     431,928    176,672 
Total other expense     324,106       8,011     431,928    176,672 
                           
Net loss     (1,287,485 )     (2,595,754 )  (2,683,704)  (3,388,763)
                           
Series C deemed dividend     -       (566,946 )   (22,179)   (12,182,310)
                           
Net loss to common shareholders     (1,287,485 )     (3,162,700 )  $(2,705,883)  $(15,571,073)
                           
Loss per weighted average common share, basic and diluted   $ (0.00 )   $ (0.01 )  $(0.00)  $(0.03)
                           
Number of weighted average common shares outstanding, basic and diluted     571,651,636       529,253,750     571,474,288    452,174,976 

 

The accompanying notes are an integral part of the financial statements

 

F-20
 

 

Curative Biotechnology, Inc

Condensed Statement of Deficiency in Stockholders’ Equity

(Unaudited)

Six months ended June 30, 2022

 

   Common   Preferred   Common   Preferred  

Capital

   Deficit  

Deficit

 
   Number of Shares   Par Value  

Additional

Paid-in

   Accumulated   Total
Stockholders’		 
   Common   Preferred   Common   Preferred  

Capital

   Deficit  

Deficit

 
BALANCE, January 1, 2022   570,651,636    30,081,000   $57,065   $8   $10,498,221   $(26,917,036)  $(16,361,742)
                                    
Common shares issued for services   1,000,000    -    100    -    51,650    -    51,750 
Options issued for services   -    -    -    -    155,250    -    155,250 
Warrants issued in connection with debt   -    -    -    -    869,973    -    869,973 
Warrants issued for services   -    -    -    -    12,976    -    12,976 
Deemed dividend   -    -    -    -    -    (22,179)   (22,179)
Net loss   -    -    -    -    -    (2,683,704)   (2,683,704)
                                    
BALANCE, June 30, 2022   571,651,636    30,081,000   $57,165   $8   $11,588,070   $(29,622,919)  $(17,977,676)

 

Series C Preferred Stock amounts reflected in mezzanine equity

 

The accompanying notes are an integral part of the unaudited condensed financial statements

 

F-21
 

 

Curative Biotechnology, Inc

Condensed Statement of Deficiency in Stockholders’ Equity

(Unaudited)

Six months ended June 30, 2021

 

   Common   Preferred   Common   Preferred  

Capital

   Deficit  

Deficit

 
   Number of Shares   Par Value  

Additional

Paid-in

   Accumulated   Total
Stockholders’		 
   Common   Preferred   Common   Preferred  

Capital

   Deficit  

Deficit

 
                             
BALANCE, January 1, 2021   333,000,327    164,402,750   $33,300   $29   $3,544,658   $(8,099,627)  $(4,521,640)
                                    
Series B preferred converted to common   27,066,666    (203,000)   2,707    (21)   (2,686)   -    - 
Series A preferred converted to common   135,836,702    (134,109,750)   13,584    -    1,550,667    -    1,564,251 
Warrants issued with notes payable   -    -    -    -    9,533    -    9,533 
Warrants issued for services   -    -    -    -    296,543    -    296,543 
Common shares issued for cash   10,000,000    -    1,000    -    599,000    -    600,000 
Common shares issued to settle payable   375,000    -    37    -    11,212    -    11,249 
Common shares issued for services   7,715,000    -    771    -    429,656    -    430,427 
Common shares issued to settle debt   10,937,499    -    1,094    -    655,156    -    656,250 
Common shares issued for warrant exercise   10,500,000    -    1,050    -    523,950    -    525,000 
Shares issued to settle liability to issue shares   1,000,000    -    100    -    7,300    -    7,400 
Deemed dividend   -    -    -    -    -    (12,182,310)   (12,182,310)
Net loss   -    -    -    -    -    (3,388,763)   (3,388,763)
                                    
BALANCE, June 30, 2021   536,431,194    30,090,000   $53,643   $8   $7,624,989   $(23,670,700)  $(15,992,060)

 

Series C Preferred Stock amounts reflected in mezzanine equity

 

The accompanying notes are an integral part of the unaudited condensed financial state

 

F-22
 

 

Curative Biotechnology, Inc

Condensed Statements of Cash Flows

(Unaudited)

Six months ended June 30,

 

   2022   2021 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net loss  $(2,683,704)  $(3,388,763)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   3,979    2,765 
Share based compensation   261,662    2,552,595 
Amortization of Original Issue Discount   47,619    132,129 
Amortization of debt discount   333,333    53,842 
Impairment of long lived assets   -    15,000 
Changes in operating assets and liabilities          
Decrease in other receivable   25,000    70,000 
Increase in prepaid expenses   (13,991)   (28,249)
Increase (decrease) in accounts payable and accrued liabilities   529,708    (20,253)
Increase in accrued interest   -    1,950 
           
Net cash used in operating activities   (1,496,394)   (608,984)
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchase of intangible assets   (40,632)   (8,500)
           
Net cash used in investing activities   (40,632)   (8,500)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Cash received for issuance of common stock   -    600,000 
Cash received upon warrant exercise   -    525,000 
Repayments of related party notes payable   -    (50,000)
Repayments of note payable   (52,021)   - 
Cash paid for deferred offering costs   (111,040)   - 
Cash received from convertible note payable   869,972    - 
Cash received from third party notes payable   286,702    110,000 
           
Net cash provided by financing activities   993,613    1,185,000 
           
Net (decrease) increase in cash   (543,413)   567,516 
           
CASH, beginning of period   670,263    160,607 
           
CASH, end of period  $126,850   $728,123 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:          
Interest paid in cash  $50,977   $10,000 
Income taxes paid in cash  $-   $- 
Non-cash financing activities:          
Series C preferred stock deemed dividend  $22,179   $12,182,310 

 

The accompanying notes are an integral part of the unaudited condensed financial state

 

F-23
 

 

Curative Biotechnology, Inc

Notes to Condensed Financial Statements

(Unaudited)

 

NOTE 1 - NATURE OF OPERATIONS

 

Curative Biotechnology Inc. (f/k/a Connectyx Technologies Holdings Group, Inc.), (CUBT), is a Florida corporation, formed as a Nevada corporation on June 29, 1995, reincorporated in Florida on October 30, 2007, with a name change November 30, 2020, which conducts business from its headquarters in Boca Raton, Florida. Curative Biotechnology, Inc. is a development stage biomedical company that seeks to develop, in-license, sub-license and bring to market products in both the Pharmaceutical and Medical Device space. The Company focuses on products that are targeted at FDA-defined “Orphan Diseases” with patient populations under 200,000 in the United States. The company leverages management’s experience and business relationships with Life Science research institutions as well as Life Science industry members to acquire Life Science candidates that fit within the company’s business model. The company has established a scientific advisory board with a successful track record of bringing pharmaceuticals to market.

 

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

 

(a) Basis of Presentation The accompanying condensed interim financial statements have been prepared without audit 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”). In our opinion, the accompanying unaudited interim financial statements contain all adjustments (which are of a normal recurring nature) necessary for a fair presentation. Operating results for the six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. Certain comparative period items have been reclassified to conform with the current period presentation.

 

(b) Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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.

 

(c) Cash and equivalents For purposes of the statement of cash flows, the Company considers all highly liquid investments with maturity of three months or less when purchased to be cash equivalents. The Company had no cash equivalents at June 30, 2022 and December 31, 2021.

 

(d) Prepaid expenses From time to time, the Company may prepay expenses either through the transfer of cash, assets or the issuance of securities. Prepaid expenses are amortized over the period of benefit.

 

(e) Property and equipment All property and equipment are recorded at cost and depreciated over their estimated useful lives, using the straight-line method. 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.

 

(f) Intangible Assets The useful life of intangible assets is assessed as either finite or indefinite. Following the initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses, if any.

 

Intangible assets with finite useful lives are carried at cost less accumulated amortization. Amortization is calculated using the straight line method over the estimated useful lives.

 

Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis. If impairment indicators are present, these assets are subject to an impairment review. Any loss resulting from impairment of intangible assets is expensed in the period the impairment is identified.

 

F-24
 

 

Curative Biotechnology, Inc

Notes to Condensed Financial Statements

(Unaudited)

 

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES, continued

 

(g) 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.

 

(h) Financial Instruments and Fair Value Measurements ASC 825-10 “Financial Instruments”, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.

 

ASC 825 also requires disclosures of the fair value of financial instruments. The carrying value of the Company’s current financial instruments, which include cash and cash equivalents, accounts payable and accrued liabilities approximates their fair values because of the short-term maturities of these instruments.

 

FASB ASC 820 “Fair Value Measurement” clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. It also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows:

 

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability.

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

 

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

 

(i) Related Party Transactions All transactions with related parties are in the normal course of operations and are measured at the exchange amount.

 

(j) Revenue Recognition The Company adopted Accounting Standards Codification, (“ASC”), 606, “Revenue from Contracts with Customer” on January 1, 2018. This revenue recognition standard has a five step process: a) Determine whether a contract exists; b) Identify the performance obligations; c) Determine the transaction price; d) Allocate the transaction price; e) Recognize revenue when (or as) performance obligations are satisfied. The Company’s financial statements are prepared under the accrual method of accounting. Revenues will be recognized when pervasive evidence of an arrangement exists, services have been rendered (product delivered), the sales price is fixed or determinable, and collectability is reasonably assured. This occurs only when the product(s) is ordered and subsequently delivered.

 

(k) Stock based compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award. The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC 505-50, for share-based payments to non-employees, compensation expense is determined at the “measurement date.” The expense is recognized over the service period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the measurement date.

 

F-25
 

 

Curative Biotechnology, Inc

Notes to Condensed Financial Statements

(Unaudited)

 

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES, continued

 

(l) Income Taxes Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes on temporary differences between the amount of taxable income and pretax financial income, and between the tax bases of assets and liabilities and their reported amounts in the financial statements. Deferred tax assets and liabilities are included in the consolidated financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled as prescribed in FASB ASC 740. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Tax positions initially need to be recognized in the financial statements when it is more-likely-than-not the positions will be sustained upon examination by the tax authorities.

 

(m) Net loss per share Basic loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during 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 period and dilutive potential shares outstanding unless consideration of such dilutive potential shares would result in anti-dilution. There were no dilutive common stock equivalents for the periods ended June 30, 2022 and 2021.

 

NOTE 3 - LIQUIDITY AND GOING CONCERN CONSIDERATIONS

 

The accompanying interim condensed financial statements have been prepared assuming that the Company will continue as a going concern. The Company’s financial position and operating results raise substantial doubt about the Company’s ability to continue as a going concern, as reflected by the net loss of approximately $2.7 million, accumulated deficit of approximately $29.6 million through June 30, 2022 and a deficiency in working capital of approximately $1.8 million at June 30, 2022. The ability of the Company to continue as a going concern is dependent upon commencing operations, developing sales and obtaining additional capital and financing. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company is currently seeking additional capital to allow it to grow its operations

 

NOTE 4 - INTANGIBLE ASSETS

 

During the 4th quarter 2021, the Company acquired the following intangible asset:

 

(a) MABT Covid-19 license The Company entered into a licensing agreement with Mid-Atlantic BioTheraputics, Inc., (MABT), to license MABT’s COVID-19 vaccine which is composed of a recombinant S1 and S2 protein from SARS-CoV-2 plus an IMT504 adjuvant. The Company issued 12,500,000 shares of common stock valued at $1,425,000 to acquire this license.

 

During the 4th quarter 2020, the Company acquired the following intangible assets:

 

(b) Website In December 2020, the Company contracted with a third party to develop and produce a new website for the Company for a contract price of $22,500, one-half in cash and one-half in common stock of the Company. The Company is amortizing this cost over 3 years. This website was placed into service in March 2021. Amortization expense for the six months ended June 30, 2022 was $3,750.

 

(c) Patent rights option In October 2020, the Company entered into an agreement for the option to purchase certain exclusive license rights for US Patent No. 8,287,505 Ophthalmic Drop Dispensing Tip Assembly, issued October 16, 2012, from IEM, Inc., (IEM), the sole owner of this patent. The cost of this option was $1,800.

 

F-26
 

 

Curative Biotechnology, Inc

Notes to Condensed Financial Statements

(Unaudited)

 

NOTE 4 - INTANGIBLE ASSETS, continued

 

(c) Patent rights option, continued

The Company had until September 30, 2021, to advise IEM in writing that it wishes to exercise this Option Right and pay IEM $50,000 in exchange for an exclusive world-wide, royalty free perpetual license. In September 2021, the Company exercised the option to extend the deadline for notification in the contract with IEM, from September 30, 2020 to March 31, 2022, in exchange for the payment of $1,000. In April 2022 the Company paid $1,000 for an additional six month extension. The Company is evaluating the Patent rights, potential products and markets under this Patent.

 

(d) IMT504 Patent license In October 2020, the Company entered into a license agreement with MidAtlantic BioTheraputics, Inc., (MABT), to license the development of a pharmaceutical compound known as IMT504, as immununotherapy for late stage symptomatic rabies. The license is for worldwide use. There are certain conditions to the license, principally that the Company raise $6.5 million to fund the development. There is not a time limit on raising these funds unless the Company utilizes a public offering process, such as Regulation A.

 

The total cost for this license is 20 million shares of the Company’s common stock, issuable in three tranches - (1) 7 million shares upon execution of the license (which have been issued, valued at $91,000), (2) 6.5 million shares upon the submission of an Investigational New Drug (IND) to the FDA and (3) 6.5 million shares upon the successful completion of the first rabies clinical trial of this IND. This license calls for royalties of 50% of the net profit, after reimbursement for development costs, of successfully marketed products utilizing IMT504.

 

A principal goal of this license is to obtain a Priority Review Voucher (PRV) issued by the US FDA, and subsequently sell the PRV to a major pharmaceutical company. The Company and MABT will split the proceeds from the sale of such PRV equally.

 

(e) National Institute of Health (NIH) Patent license #1 In October 2020, the Company entered into an exclusive 24 month evaluation license of Provisional Patent Application No. 62/199,707, filed July 31, 2015; PCT Application No. PCT/US2016/044777 filed July 29, 2016 and Patent No. 10,548,987 issued February 4, 2020. This license is for the evaluation of and development of an anti-CD56 antibody drug conjugate for the treatment of gioblastoma. Should the Company develop a marketable product, the Company is then required to negotiate a new license with market based royalties.

 

This license calls for the payment of a non-creditable non-refundable license issue royalty of $10,000, paid ½ at issuance and ½ on the one year anniversary.

 

(f) National Institute of Health (NIH) Patent license #2 In January 2021 the Company entered into an NIH exclusive 36 month worldwide license of Provisional Patent Application No. 62/899,899, filed September 13, 2019 and PCT Application No. PCT/US2020/050540 filed September 11, 2020. This license is for the development of ocular metformin formulation for the treatment of retinal degenerative diseases.

 

This license requires two separate royalty streams of payments.

 

First is a royalty equal to the unreimbursed patent expenses paid by NIH, with an initial amount of $8,500 due within 30 days of execution of the license. At the first anniversary of the license NIH will supply a statement of additional unreimbursed patent expenses paid by NIH during the year, of which the Company is required to pay 50%, with the remaining balance due on the third anniversary.

 

F-27
 

 

Curative Biotechnology, Inc

Notes to Condensed Financial Statements

(Unaudited)

 

NOTE 4 - INTANGIBLE ASSETS, continued

 

(f) National Institute of Health (NIH) Patent license #2, continued

 

Second is an ongoing royalty schedule: an initial royalty of $5,000 upon execution of the license, and annually thereafter as the minimum royalty amount. The license can be extended on the third anniversary to the remaining life of the licensed patent by the payment of a one-time non-refundable non-creditable royalty of $45,000. There are three benchmark royalties - $75,000 upon the initiation of the first Phase 2 Clinical Study; $300,000 upon the completion of Phase 3 Clinical Study and $600,000 upon the FDA approval of the first Licensed Product. Upon first commercial sale there is a royalty of $100,000 each for the United States, Canada, European Union and Asian region. Last is a 3.5% of net sales royalty.

 

NOTE 5 - RELATED PARTY TRANSACTIONS

 

From time to time the Company may enter into non-arms length transactions with related parties, however the Company exercises its best efforts to ensure that such transactions are valued on a basis comparable to a true arms length transaction.

 

During the second quarter of 2021, the remaining two notes from officers of the Company, totaling $40,000 of principal and $10,000 of OID, were repaid in cash.

 

NOTE 6 - NOTES PAYABLE

 

During the second quarter of 2022, the Company issued a promissory note in exchange for $200,000 in cash. This note carries a 12% interest rate, interest payable monthly, and a six month maturity.

 

During the quarter ended March 31, 2022, the Company entered into a financing for the purchase of a Directors and Officers (D&O) Liability Insurance policy. This financing carries a 5.65% interest rate and is payable monthly for 10 months. At June 30, 2022, the outstanding balance on this note was $34,681.

 

During the second quarter of 2021, the then remaining two notes, totaling $40,000 of principal and $10,000 of OID, were repaid in cash.

 

During the first quarter of 2021, 13 of the 15 note holders converted their note receivable into shares of common stock at the rate of $0.06 per share, for a total of 10,937,499 shares of common stock for a total of $656,250 convertible debt.

 

During the first quarter of 2021, the Company entered into 2 notes payable for a total amount of cash received of $110,000. The notes are identical and carry a maturity of six months from inception and a 25% original issue discount (OID). The maturity was extendable at the Company’s option for up to three months with a 3% per month extension fee. The notes also carried 10 warrants for each $1 loaned. These notes were collateralized by Preferred C shares representing 2.64% of the issued and outstanding common stock shares. Two officers holding Preferred C shares have pledged the Preferred C shares as this collateral.

 

NOTE 7 - CONVERTIBLE SENIOR SECURED NOTE PAYABLE

 

In March 2022, the Company issued a 12-month Senior Secured Note with a face amount of $1,142,857, with a stated 12.5% original issue discount (OID). The Note carries a 12.5% interest rate with interest-only payable monthly from April through August 2022. The Company received $869,972 in cash, net of the OID of $142,857 and legal and other fees in the amount of $125,714.

 

Beginning in September 2022, the Company is required to make monthly redemptions at the rate of 110% of one seventh of the original principal amount, ($179,592), plus interest. It also carries a mandatory prepayment at 125% of the original principal amount, or $1,428,571, less any redemptions made, upon the completion of a Qualified Offering, as defined.

 

F-28
 

 

Curative Biotechnology, Inc

Notes to Condensed Financial Statements

(Unaudited)

 

NOTE 7 - CONVERTIBLE SENIOR SECURED NOTE PAYABLE, continued

 

The Note is convertible into common stock of the Company upon an event of default, as defined.

 

The lender received five year warrants to purchase 22,857,143 shares of common stock of the Company, with an exercise price of $0.0001 per share. These warrants were recorded as debt discount in the amount of $0.9 million which is being amortized over the term of the Note. The warrants can be exercised on a cash-less basis if a registration statement for the common shares underlying the warrants is not declared effective by September 2022.

 

The Note is secured by all the tangible and intangible assets of the Company.

 

Subsequent to June 30, 2022, certain of the terms of the Note were modified.

 

NOTE 8 – DEFICIENCY IN STOCKHOLDERS EQUITY

 

At June 30, 2022 and December 31, 2021, the Company has 1,100,000,000 shares of par value $0.0001 common stock authorized and 571,651,636 and 570,651,636 issued and outstanding, respectively. At June 30, 2022 and December 31, 2021, the Company has 200,000,000 shares of $0.0001 par value preferred stock authorized.

 

The Series A and Series C preferred stock has been accounted for in accordance with FASB Accounting Standards Codification (ASC) 480, as mezzanine equity due to Series A having a redemption provision by the holder and Series C being convertible into a variable number of common shares.

   No. Shares   Par   No. Shares   Par   No. Shares   Par   No. Shares   Par 
   Series A   Series B   Series C   Total 
   No. Shares   Par   No. Shares   Par   No. Shares   Par   No. Shares   Par 
January 1, 2021   134,109,750   $13,411    293,000   $29    30,000,000   $3,000    164,402,750   $16,440 
Conversion to common shares   (134,109,750)   (13,411)   (212,000)   (21)   -    -    (134,321,750)   (13,432)
December 31, 2021   -    -    81,000    8    30,000,000   $3,000    30,081,000    3,008 
no transactions   -    -    -    -    -    -    -    - 
June 30, 2022   -   $-    81,000   $8    30,000,000   $3,000    30,081,000   $3,008 

 

The preferred shares have the following respective rights and privileges:

 

Series A Preferred carry 10 votes for each share of common stock that each Series A shares are convertible into at the record date; is convertible into common stock aggregating 35% of the total issued and outstanding common shares at conversion date post conversion; are redeemable for the greater of 45% of the total market value of the common share or the calculation of the book value of the Company made by an independent audit firm or $5,000,000. During the first quarter of 2021, all of the Series A was converted into 135,836,702 shares of common stock.

 

Series B Preferred are convertible in common shares of common stock at a conversion price of $0.0075 per share; are redeemable at a price of 125% of the purchase price paid for the shares; carry one vote for each common share that the Series B is convertible into at the record date; are senior to all other securities in the event of a liquidation. During the first quarter of 2021, 203,000 shares of the Series B was converted into 27,066,666 shares of common stock.

 

F-29
 

 

Curative Biotechnology, Inc.

Notes to Condensed Financial Statements

(Unaudited)

 

NOTE 8 – DEFICIENCY IN STOCKHOLDERS EQUITY, continued

 

Series C Preferred are convertible into at the record date; is convertible into common stock aggregating 30% of the total issued and outstanding common shares at conversion date post conversion; carry one vote for each common share that the Series C is convertible into at the record date.

 

Quarter ended March 31, 2022: The Company issued 1,000,000 shares of common stock to one employee for past services valued at $51,750.

 

Quarter ended December 31, 2021: The Company issued 13,159,331 shares of common stock and 25,915,437 warrants for the purchase of common stock in exchange for $523,000 in cash and $25,000 in deposit in transit. The Company issued 200,000 shares of common stock, valued at $21,960 for services. The Company issued 12,500,000 shares of common stock, valued at $1,425,000 for the license to MABT’s COVID-19 vaccine.

 

Quarter ended September 30, 2021: The Company issued 4,361,111 shares of common stock and 4,236,111 warrants for the purchase of common stock in exchange for $425,000 in cash. The Company issued 250,000 shares of common stock, valued at $22,500, to an individual for services to be rendered as a member of the Company’s Advisory Board. These shares vest 60,000 immediately, 60,000 in December 2021, 60,000 in April 2022 and 70,000 in August 2022. The Company issued 300,000 shares of common stock, valued at $36,720, to an individual for services rendered as a member of the Company’s Board of Directors. The Company issued 250,000 shares of common stock, valued at $28,475, to an individual for services to be rendered as a member of the Company’s Advisory Board. These shares vested immediately. The Company issued 2,000,000 shares of common stock, valued at $180,000, to settle the lawsuit brought to enforce the convertible note. 9,000 shares of the Series B preferred stock was converted into 1,200,000 shares of common stock.

 

Quarter ended June 30, 2021: The Company issued 10,000,000 shares of common stock and 5,000,000 warrants for the purchase of common stock in exchange for $600,000 in cash. The warrants mature in May 2026, and carry an exercise price of $0.11 per share. The Company issued 1,000,000 shares of common stock to settle the liability to issue shares.

 

Quarter ended March 31, 2021: The Company issued 125,000 shares of common stock in exchange for services valued at $5,575, or $0.0446 per share. The Company issued 375,000 shares of common stock to settle a payable in the amount of $11,250. All of the Series A preferred stock was converted into 135,836,702 shares of common stock. 203,000 shares of the Series B preferred stock was converted into 27,066,666 shares of common stock. 13 of the 15 note holders converted their note receivable into shares of common stock at the rate of $0.06 per share, for a total of 10,937,499 shares of common stock for a total of $656,250 convertible debt. The Company issued 10,500,000 shares of common stock upon receipt of $525,000 in cash for the exercise of 10,500,000 warrants. The Company issued 6,500,000 shares of common stock for the exercise of 6,500,000 warrants in exchange for services valued at $325,000.

 

NOTE 9 - WARRANTS

 

Quarter ended March 31, 2022: The lender of the Convertible Senior Secured Note received five year warrants to purchase 22,857,143 shares of common stock of the Company, with an exercise price of $0.0001 per share. These warrants were recorded as debt discount in the amount of $0.9 million which will be amortized over the term of the Note. The warrants can be exercised on a cash-less basis if a registration statement for the common shares underlying the warrants is not declared effective by September 2022.

 

Quarter ended December 31, 2021: The Company issued 403,225 warrants for the purchase of common stock of the Company in conjunction with the sale of 403,225 shares of common stock for cash. These warrants expire in December 2024 and have an exercise price of $0.11 per share. The Company issued 25,512,212 warrants for the purchase of common stock of the Company in conjunction with the sale of 12,756,106 shares of common stock for cash and subscription receivable. These warrants expire in December 2024 and have an exercise price of $0.09 and $0.15 per share.

 

F-30
 

 

Curative Biotechnology, Inc.

Notes to Condensed Financial Statements

(Unaudited)

 

NOTE 9 - WARRANTS, continued

 

Quarter ended September 30, 2021: The Company issued 4,236,111 warrants for the purchase of common stock of the Company in conjunction with the sale of 4,361,111 shares of common stock for cash. These warrants expire in July and August 2026 and have an exercise price of $0.15 and $0.14 per share. The Company issued 1,000,000 warrants for the purchase of common stock of the Company in exchange for services as a member of the Board of Directors. These warrants expire in July 2024 and have an exercise price of $0.124 per share and have a cash-less exercise provision. These warrants were recorded at a total value of $34,382.

 

Quarter ended June 30, 2021: The Company issued 5,000,000 warrants for the purchase of common stock of the Company in conjunction with the sale of 10,000,000 shares of common stock for cash. These warrants expire in May 2026 and have an exercise price of $0.11 per share. The Company issued 5,000,000 warrants for the purchase of common stock of the Company in exchange for services as a member of the Board of Directors. These warrants expire in June 2024 and have an exercise price of $0.20 per share. The warrants were recorded at a total value of $87,249. The Company issued 3,000,000 warrants for the purchase of common stock of the Company in exchange for legal services. These warrants expire in May 2026 and have an exercise price of $0.10 per share. The warrants were recorded at a total value of $155,717. The Company issued 1,000,000 warrants for the purchase of common stock of the Company in exchange for services. These warrants expire in May 2026 and have an exercise price of $0.10 per share. The warrants were recorded at a total value of $51,906 and vest 250,000 shares on May 20, 2021 and September 20, 2021, January 20, 2022 and May 20, 2022.

 

Quarter ended March 31, 2021: The Company issued 10,500,000 shares of common stock upon receipt of $525,000 in cash for the exercise of 10,500,000 warrants. The Company issued 6,500,000 shares of common stock in exchange for services valued at $325,000 for the exercise of 6,500,000 warrants. The Company issued 1,100,000 warrants for the purchase of common stock of the Company in conjunction with the short term debt at the rate of 10 warrants for each $1 loaned. These warrants carry an expiration of thirty six months from issuance; an exercise price of $0.05 per share and are exercisable immediately. The warrants were recorded at a total value of $9,533. The Company issued 5,000,000 warrants for services. These warrants carry an expiration of 60 months from issuance and an exercise price of $0.05 per share. The warrants were recorded at a total value of $40,600.

 

The method utilized to value the warrants was the Black-Scholes model with the following assumption ranges: Expected life - three or five years; stock price between $0.04 and $0.10; volatility between 60.51 and 31.56; exercise price between $0.0001 and $0.20 and bond equivalent yield rate between 0.09% and 0.83%.

 

NOTE 10 - OPTIONS

 

Quarter ended March 31, 2022: The Company issued 7,456,500 options to purchase shares of common stock equally to three employees for past services, valued at $155,250. These options have an exercise price of $0.05175 and a five year life.

 

Quarter ended September 30, 2021: The Company issued options in conjunction with an agreement for Board of Advisor services and the evaluation of certain potential intangible asset acquisitions. These options call for an undivided 1% of the fully diluted issued and outstanding shares upon exercise. These options amounted to 8,081,037 shares at issuance date. These option s contain a single recalculation upon the completion of a reverse split of the existing common stock and the Company raising a minimum of $5 million in an offering. These options carry an exercise price of $0.11 per share and expire in September 2031. These options were valued at $436,908 and vest 50% upon issuance and 50% in September 2022.

 

The method utilized to value the options was the Black-Scholes model with the following assumption ranges: Expected life - ten years; stock price $0.114; volatility 35.13; exercise price $0.11 and bond equivalent yield rate 1.47%.

 

F-31
 

 

Curative Biotechnology, Inc

Notes to Condensed Financial Statements

(Unaudited)

 

NOTE 11 - EQUITY INCENTIVE PLAN

 

On August 26, 2021, the Company adopted a equity incentive plan providing for the issuance of shares of common stock, options or SARs with a rolling maximum number equal to 10% of the issued and outstanding Common Shares set at the beginning of each fiscal year. The Company may grant incentives to its directors, officers, employees and service providers. The options are exercisable for a maximum of up to ten years from the date of grant and may be subject to vesting provisions as set by the Plan Administrator.

 

During the quarter ended March 31, 2022, a total of 1,000,000 shares of common stock and 7,456,500 options at a weighted-average exercise price of $0.0518 per share were granted to employees exercisable for a period of five years with immediate vesting. The weighted-average fair value attributable to options granted in 2022 was $0.0208.

 

The fair value of the stock options recognized in the period has been estimated using the Black-Scholes option pricing model.

 

Assumptions used in the pricing model are as provided below.

Risk-free interest rate   1.55%
Exercise price  $0.0518 
Expected life   5 years 
Expected volatility   44.12%
Expected dividends   - 

 

The Company recognized a equity incentive expense of $243,435 for the six months ended June 30, 2022.

 

As of June 30, 2022, there were 7,456,500 fully vested options outstanding with a weighted average exercise price of $0.0518 per share. There were no non-vested options outstanding.

 

A summary of the Company’s stock option plan and changes during the six months ended June 30, 2022 is as follows:

   Number of options   Weighted average exercise price 
Balance - beginning of the year   -   $- 
Granted   7,596,500    0.0518 
Exercised   -    - 
Cancelled   -    - 
Balance - end of period   7,596,500   $0.0518 

 

The aggregate intrinsic value of vested share options (the market value less the exercise price) at June 30, 2022 was zero.

 

F-32
 

 

Curative Biotechnology, Inc

Notes to Condensed Financial Statements

(Unaudited)

 

NOTE 11 - FINANCIAL INSTRUMENTS

 

(a) Liquidity Risk Liquidity risk is the risk that the Company will not be able to meet its obligations associated with financial liabilities. The Company relies on cash flows generated from operations, as well as injections of capital through the issuance of the Company’s capital stock to settle its liabilities when they become due.

 

(b) Interest Rate Risk The Company is not exposed to significant interest rate risk due to the short-term maturity of its monetary assets and liabilities.

 

NOTE 12 - IMPAIRMENT OF LONG LIVED ASSETS

 

In the fourth quarter 2021 the Company determined that its fixed assets were obsolete and wrote off the undepreciated balance of $1,958.

 

In March 2021, when the Company’s new website was placed in service, the remaining unamortized cost of the Company’s legacy website was written off, for a total charge of $15,000.

 

NOTE 13 - COMMITMENTS AND CONTINGENCIES

 

(a) Other 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.

 

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 zero and $416,178 cash balance in excess of FDIC insured limits at June 30, 2022 and December 31, 2021, respectively.

 

NOTE 15 - COVID-19 PANDEMIC AND VARIANTS

 

The full extent to which the COVID-19 pandemic may directly or indirectly impact our business, results of operations and financial condition, will depend on future developments that are uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat COVID-19, as well as the economic impact on local, regional, national and international customers and markets. We have made estimates of the impact of COVID-19 within our financial statements, and although there is currently no major impact, there may be changes to those estimates in future periods.

 

NOTE 16 - SUBSEQUENT EVENTS

 

(a) Convertible Senior Secured Note Payable and Warrants In August 2022, The Company and the lender agreed to a modification of the Note. In exchange for a one month extension to begin the principal payments under this Note, the parties agreed to reduce the qualified offering amount from $10 million to $7.2 million; modify the payment schedule from seven (7) months to six (6) months. In addition, the lender received 1,904,762 additional warrants having a fair value of $58,884, which will be recorded as an additional debt discount and amortized over the remaining life of the Note.

 

F-33
 

 

 

1,142,8571 Units With Each Unit Consisting of:

One Share of Common Stock

 

One Warrant to Purchase One Share of Common Stock

 

                    , 2022

 

 

1 Number of Units based on an assumed reverse stock split of our Common Stock at a ratio of 1-for-275 in order to effect a stock price of $8.25 (based on closing price of Common Stock at $0.03 per share on August 24, 2022) with such offering price per Unit of $7.00. 

 

 
 

 

PART II

 

INFORMATION NOT REQUIRED IN PROSPECTUS 

 

Item 13. Other Expenses of Issuance and Distribution.

 

The following table sets forth the estimated costs and expenses in connection with the sale and distribution of the securities being registered, other than placement agent fees. All expenses incurred will be paid by the Company. All of the amounts shown are estimates other than the Securities and Exchange Commission, or SEC, registration fees.

 

      To be Paid by the
Registrant 		 
SEC registration fees   $ 1,760  
FINRA Filing Fee   $ 5,000  
NYSE Listing Fee   $ 50,000  
Legal fees and expenses   $ 136,000  
Accounting fees and expenses   $ 77,000  
Printing and engraving expenses   $ 5,000  
Transfer agent’s fees   $ 10,000  
Blue Sky fees and expenses   $ 3,000  
Miscellaneous fees and expenses   $ 12,240  
Total   $ 300,000  

 

Item 14. Indemnification of Directors and Officers.

 

Florida law permits, under certain circumstances, the indemnification of any person with respect to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, to which such person was or is a party or is threatened to be made a party, by reason of his or her being an officer, director, employee or agent of the corporation or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against liability incurred in connection with such proceeding, including appeals thereof; provided, however, that the officer, director, employee or agent acted in good faith and in a manner that he or she reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any such third-party action by judgment, order, settlement, or conviction or upon a plea of nolo contendere or its equivalent does not, of itself, create a presumption that the person (i) did not act in good faith and in a manner which he or she reasonably believed to be in, or not opposed to, the best interests of the corporation or (ii) with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful. In the case of proceedings by or in the right of the corporation, Florida law permits indemnification of any person by reason of the fact that such person is or was a director, officer, employee or agent of the corporation or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against liability incurred in connection with such proceeding, including appeals thereof; provided, however, that the officer, director, employee or agent acted in good faith and in a manner that he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, except that no indemnification is made where such person is adjudged liable, unless a court of competent jurisdiction determines that, despite the adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.

 

II-1
 

 

To the extent that such person is successful on the merits or otherwise in defending against any such proceeding, Florida law provides that he or she shall be indemnified against expenses actually and reasonably incurred by him or her in connection therewith.

 

Also, under Florida law, expenses incurred by an officer or director in defending a civil or criminal proceeding may be paid by the corporation in advance of the final disposition of such proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if he or she is ultimately found not to be entitled to indemnification by the corporation pursuant to this section. Expenses incurred by other employees and agents may be paid in advance upon such terms or conditions that the Board of Directors deems appropriate.

 

Our Bylaws provides that we shall indemnify our officers, directors, and employees, and agents unless specifically approved in writing by the Board of Directors, to the fullest extent authorized by Section 607.0850 of the Florida Business Corporation Act, or the FBCA, as it existed when the Bylaws were adopted or as it may hereafter be amended, but, in the case of any such amendment, only to the extent that such amendment permits us to provide broader indemnification rights than were permitted prior to such amendment. Such indemnification shall continue as to a person who has ceased to be a director, officer, employee, or agent; provided, however, that we shall indemnify any such person seeking indemnity in connection with an action, suit, or proceeding (or part thereof) initiated by such person only if such action, suit, or proceeding (or part thereof) was authorized by our Board of Directors.

 

The Bylaws also provide that such rights of indemnification shall be a contract right and shall include the right to be paid by us for all reasonable expenses incurred in defending any such proceeding in advance of final disposition; provided, however, that the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer in advance of the final disposition of such proceeding shall be made only upon delivery to us of an undertaking, by or on behalf of such director or officer, to repay amounts so advanced if it should be determined ultimately that such director or officer is not entitled to be indemnified under the Bylaws or otherwise.

 

In addition to the authority granted to us by Florida law to indemnify our directors, certain other provisions of the Florida Act have the effect of further limiting the personal liability of our directors. Pursuant to Florida law, a director of a Florida corporation cannot be held personally liable for monetary damages to the corporation or any other person for any act or failure to act regarding corporate management or policy except in the case of certain qualifying breaches of the director’s duties.

 

As a general policy, the Company anticipates entering into indemnification agreements with our officers and directors.

 

Insofar as indemnification for liabilities arising under the Securities Act, as amended, may be permitted to our directors and officers, or to persons controlling us, pursuant to our charter documents and Florida law, we have been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933, as amended and is therefore unenforceable.

 

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the Company pursuant to the foregoing provisions, the Securities and Exchange Commission’s position is that such indemnification is against public policy as expressed in the Securities Act of 1933 and is therefore unenforceable.

 

Item 15. Recent Sales of Unregistered Securities.

 

The following information is given with regard to unregistered securities sold during the preceding three years including the dates and amounts of securities sold, the persons or class of persons to whom we sold the securities, the consideration received in connection with such sales and, if the securities were issued or sold other than for cash, the description of the transaction and the type and amount of consideration received. The descriptions contained below are a summary and qualified by the agreements, if applicable, included as Exhibits to this Registration Statement. The following securities were issued in private offerings pursuant to the exemption from registration contained in Section 4(2) of the Securities Act of 1933, as amended, or the Securities Act and the rules promulgated thereunder.

 

  ●  On March 5, 2020, the Company issued a consultant 1,500,000 shares of Common Stock for services. The shares were valued at $15,000.
     
  ● On April 28, 2020, the Company issued a consultant 500,000 shares of Common Stock for services. The shares were valued at $800.
     
  ● On May 18, 2020, the Company issued consultants 500,000 shares of Common Stock for services. The shares were valued at $15,000.
     
  ● On May 18, 2020, the Company granted Richard Garr, our chief executive officer, 250,000 shares of Common Stock valued at $7,500.
     
  ● On October 8, 2020, the Company issued Mid-Atlantic Biotherapeutics, Inc 7,000,000 shares of Common Stock pursuant to the licensing of certain assets on September 30, 2020. The shares were valued at $91,000.
     
  ● On November 8, 2020, the Company granted Michael Fish, our former director, 100,000 shares of restricted stock valued at $3,000.
     
  ● On November 11, 2020, the Company issued 100,000,000 shares Series A Preferred Stock in exchange for services to Paul Michaels and Barry Ginsberg, our president and Chief Strategy Officer, respectively. Each person received 50,000,000 shares of Series A Preferred Stock valued at $775,420 each. The Series A Preferred Stock in the aggregate, including other outstanding shares of which there were 34,109,750 already outstanding, was convertible at any time into 35% of the issued and outstanding Common Stock post conversion. During the first quarter of 2021, all of the Series A Preferred Stockholders (all of the Series A Preferred Stock consisted of 134,109,750) converted their shares into an aggregate of 135,836,702 shares of Common Stock.
     
  ● On November 11, 2020, the Company issued an aggregate of 30,000,000 shares of Series C Preferred Stock to certain employee and service providers of the Company. The Series C Preferred Stock is collectively convertible into such number of shares of Common Stock as will equal 30% of the issued and outstanding Common Stock post conversion. The Series C Preferred Stock votes 10 votes for every 1 share of Common Stock that the Series C Stock is convertible into. All 30,000,000 shares of Series C Preferred Stock are valued at an aggregate of $4,559,062. Of the 30,000,000 shares of Series C Preferred Stock issued, 6,000,000 were issued to each of (i) Paul Michaels, our Chairman and President, (ii) Barry Ginsberg, our Chief Strategy Officer and Director, and (iii) Richard Garr, our Chief Executive Officer, Chief Financial Officer, and General Counsel.

 

II-2
 

 

  ● Between November 18, 2020 and January 14, 2021, the Company sold an aggregate of $525,000 in original issue discount promissory notes (the “Notes”) to third party investors. The Notes were issued at a 25% original issue discount and accordingly, the Company was required to pay back an aggregate of $656,250 by the six (6) month anniversary of each respective Note. The Company additionally had the right to extend the maturity dates of the Notes in exchange for a 3% monthly penalty against the total amount payable under the respective Note. As additional consideration for the Company extending the Notes, Paul Michaels and Barry Ginsberg agreed to pledge certain of their Series C Preferred Stock as collateral for ensure the payment of the Notes. All of the Notes were exchanged for Common Stock pursuant to a Note Exchange Agreement at a price of $0.06 per share on March 10, 2021 resulting in the issuance of 10,937,499 shares of Common Stock. Additionally, on the dates that the respective Notes were issued, the Company issued each Note holder such number of warrants equal to ten (10) shares for every dollar in cash loaned on the Note. As a result, the Company issued the Note holders an aggregate of 5,500,000 warrants to purchase Common Stock, having an exercise price of $0.05 per share, and a term of three (3) years from issuance. All 5,500,000 warrants were exercised in the first quarter of 2021 for cash.
     
  ● On December 3, 2020, the Company sold an additional $40,000 of Notes to Paul Michaels and Barry Ginsberg ($20,000 each). The Company paid back $50,000 on the Notes, pursuant to their terms on June 3, 2021. Additionally, Mr. Michaels and Dr. Ginsberg were each issued warrants to purchase 200,000 shares of Common Stock with an exercise price of $0.05 per share and a term of three (3) years.
     
  ● On December 3, 2020, the Company issued a consultant (i) 250,000 shares of Common Stock and (ii) a warrant to purchase 250,000 shares of Common Stock, with an exercise price per share of $0.05 and a term of five (5) years. The Shares were valued at $7,500 and the warrant was valued at $1,635.
     
  ● On December 9, 2020, the Company issued consultants an aggregate of 100,000 shares of Common Stock for services. The shares were valued at $3,000.
     
  ● On January 14, 2021, the Company issued consultants an aggregate of 100,000 shares of Common Stock for services. The shares were valued at $4,400.
     
  ● Between December 9, 2020 and January 14, 2021, the Company issued a consultant warrants to purchase 11,500,000 shares of Common Stock with an exercise price of $0.05 and a term of five (5) years (“Service Provider Warrants”). The Service Provider Warrants were valued at $83,100.
     
  ● On January 25, 2021, the Company issued a consultant 400,000 shares of Common Stock for services. The shares were valued at $12,425.
     
  ● On February 10, 2021, the holder of the Service Provider Warrant exercised 5,000,000 shares at $0.05 per share for aggregate proceeds to the Company of $250,000.
     
  ● On March 10, 2021, the Company issued the holder of the Service Provider Warrant 6,500,000 shares of Common Stock in exchange for the cancellation of 6,500,000 shares underlying the Service Provider Warrant described above and issued previously on January 14, 2021. The shares were valued at $325,000.
     
  ● On April 26, 2021, the Company issued a consultant 250,000 shares of Common Stock for services that vest (i) 60,000 shares at issuance, (ii) 60,000 shares on the 4 month anniversary of issuance, (iii) 60,000 on the 8 month of issuance and (iv) 70,000 shares on the 1 year anniversary of issuance. The shares were valued at $34,500.
     
  ● On May 20, 2021, the Company issued a consultant a warrant to purchase 1,000,000 shares of Common Stock, with an exercise price of $0.10 per share and a term of five (5) years. The warrant vests (i) 25% on May 20, 2020, (ii) 25% on September 20, 2021, (iii) 25% on January 20, 2022, and (iv) 25% on May 20, 2022. The warrant was valued at $51,906.
     
  ● On May 20, 2021, the Company issued a consultant a warrant to purchase 3,000,000 shares of Common Stock, with an exercise price of $0.10 per share and a term of five (5) years. The warrant was valued at $155,717.
     
  ● On May 21, 2021, the Company sold 10,000,000 units at a price per unit of $0.06 or an aggregate of $600,000. Each unit consisted of (i) one (1) share of Common Stock and (ii) a warrant to purchase one half (1/2) of one share of Common Stock. The warrants have an exercise price per share of $0.11 per share and a term of five (5) years. As a result of the offering, the Company issued 10,000,000 shares of Common Stock and warrants to purchase 5,000,000 shares of Common Stock.
     
  ● On June 11, 2021, the Board granted Paul Michaels, our president and a director, warrants to purchase 5,000,000 shares of Common Stock. The exercise price of the warrant is $0.20 per share, and the warrant has a term of 3 years from issuance. The warrant grant was valued at $87,249.
     
  ● On June 11, 2021, the Company issued a consultant 1,000,000 shares of Common Stock for services. The shares were valued at $7,400.
     
  ● On June 23, 2021, the Company issued an employee 840,000 shares of Common Stock with (i) 210,000 shares vested on the grant date, (ii) 210,000 shares vesting on September 28, 2021, (iii) 210,000 shares vesting on December 28, 2021, and (iv) 210,000 shares vesting on March 8, 2022, The Shares were valued at $65,352 on the grant date.
     
  ● On July 9, 2021, a holder of 9,000 shares of Series B Preferred Stock converted such shares into 1,200,000 shares of Common Stock
     
  ● On July 9, 2021, the Company sold 250,000 units at a price per unit of $0.10 or an aggregate of $25,000. Each unit consisted of (i) one (1) share of Common Stock and (ii) a warrant to purchase one half (1/2) of one share of Common Stock. The warrants have an exercise price per share of $0.15 per share and a term of three (3) years. As a result of the offering, the Company issued 250,000 shares of Common Stock and warrants to purchase 125,000 shares of Common Stock.
     
  ● On July 14, 2021, upon joining the Board, Marc Drimer was granted a warrant to purchase 1,000,000 shares of Common Stock. The warrant has an exercise price of $0.124 per share, a term of 3 years from issuance and vests in 4 equal quarterly installments beginning July 14, 2021, and ending on July 14, 2022. The warrant was valued at $34,382. Pursuant to Mr. Drimer’s passing, 500,000 shares underlying warrants vested and the remaining 500,000 that were unvested were cancelled.

 

II-3
 

 

  ● On August 9, 2021, pursuant to a settlement agreement, the Company settled a lawsuit against the Company in exchange for (i) the payment of $100,000 in cash and (ii) the issuance of 2,000,000 shares of Common Stock. The shares have piggyback registration rights and were valued at $180,000 on the date of grant.
     
  ● On August 18, 2021, the Company sold 3,000,000 units at a price per unit of $0.10 or an aggregate of $300,000. Each unit consisted of (i) one (1) share of Common Stock and (ii) a warrant to purchase one (1) share of Common Stock. The warrants have an exercise price per share of $0.15 per share and a term of three (3) years. As a result of the offering, the Company issued 3,000,000 shares of Common Stock and warrants to purchase 3,000,000 shares of Common Stock.
     
  ● On August 19, 2021, the Company sold 1,111,111 units at a price per unit of $0.09 or an aggregate of $100,000. Each unit consisted of (i) one (1) share of Common Stock and (ii) a warrant to purchase one (1) share of Common Stock. The warrants have an exercise price per share of $0.14 per share and a term of three (3) years. As a result of the offering, the Company issued 1,111,111 shares of Common Stock and warrants to purchase 1,111,111 shares of Common Stock.
     
  ● On August 26, 2021, the Company issued a consultant 250,000 shares of Common Stock for services that vest (i) 60,000 shares on the grant date, (ii) 60,000 shares on the 4-month anniversary of issuance, (iii) 60,000 shares on the 8-month anniversary of issuance, and (iv) 70,000 shares on the 1-year anniversary of issuance. The warrant was valued at $22,500.
     
  ● On September 1, 2021, in conjunction with his resigning from the Board, Michael Fish was granted 300,000 shares of Common Stock valued at $36,750.
     
  ● On September 27, 2021, the Company entered into a consulting agreement with a third-party advisor. Pursuant to the agreement, we agreed to issue the consultant (i) 250,000 shares of Common Stock valued at $28,500 on the grant date and (ii) an option to purchase 1% of the issued and outstanding capital stock of the Company on a fully diluted basis, or an aggregate of 8,081,037 options to purchase Common Stock (the “Consultant Option”). The Consultant Option has an exercise price of $0.11 per share, a term of 10 years, and vests (i) 50% on issuance and (ii) 50% on the one (1) year anniversary of the issuance date, subject to the consultant’s continued service to the Company. Additionally, upon the Company completing a reverse stock split and capital raising transaction of at least $5,000,000, the consultant will receive additional options such that the total Consultant Option including such additional options will remain as 1% of the fully diluted capital stock of the Company. The option was valued at $436,908.
     
  ● On October 1, 2021, the Company entered into a licensing agreement with Mid-Atlantic Biotherapeutics, Inc. (“MABT”). Pursuant to the terms of the agreement we issued MABT 12,500,000 shares of Common Stock and agreed to issue MABT another 17,500,000 shares of Common Stock upon a successful IND Application with the FDA as set forth in the agreement. The Common Stock grant issued on October 1, 2021 was valued at $1,425,000.
     
  ● On November 12, 2021, the Company sold 403,225 units at a price per unit of $0.062 or an aggregate of $25,000. Each unit consisted of (i) one (1) share of Common Stock and (ii) a warrant to purchase one (1) share of Common Stock. The warrants have an exercise price per share of $0.11 per share and a term of three (3) years. As a result of the offering, the Company issued 403,225 shares of Common Stock and warrants to purchase 403,225 shares of Common Stock
     
  ● Between December 10 and 15 of 2021, the Company sold an aggregate of 12,146,349 units to twelve (12) accredited investors at a price per unit of $0.041 or an aggregate of $498,000. Each unit consisted of (i) one (1) share of Common Stock (ii) a warrant to purchase one (1) share of Common Stock with an exercise price of $0.09 per share, and (iii) one (i) warrant to purchase one (1) share of Common Stock with an exercise price of $0.15 per share. The warrants have a term of three (3) years. As a result of the offering, the Company issued 12,146,349 shares of Common Stock and warrants to purchase 24,292,698 shares of Common Stock.
     
  ● On January 14, 2022, the Board granted 1,000,000 shares of common stock valued at $51,750 to Paul Michaels and Options to purchase an aggregate of 7,456,500 shares of common stock at exercise prices of $0.05175 each to Barry Ginsberg, Richard Garr, and another employee. Each of the three option grants were valued at $51,750.
     
  ● On March 4, 2022, the Company issued a secured convertible promissory note to Puritan Partners, LLC, an institutional investor, in aggregate principal of $1,142,857.14 for $1,000,000 in gross proceeds. The Note has a maturity date of March 2, 2023, accrues interest at 12.5% annually, with payments to be made monthly. The investor received a first priority lien on substantially all of the Company’s assets. The Company also issued a warrant to purchase 22,857,143 shares of Common Stock at an exercise price of $0.0001 and a term of five (5) years. The Company paid its placement agent $102,500 upon completion of the transaction. On August 18, 2022, pursuant to an amendment of the terms of the March 4, 2022, convertible promissory note and associated transaction documents, the Company increased the number of shares of common stock underlying the warrant by 1,904,762.

 

Item 16. Exhibits.

 

See Exhibit Index beginning on page II-7 of this Registration Statement.

 

Item 17. Undertakings.

 

The undersigned registrant hereby undertakes:

 

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

 

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act;

 

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

 

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

 

Provided, however, that paragraphs (1)(i), (ii) and (iii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in this registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.

 

(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

II-4
 


 

(4) That, for the purpose of determining liability under the Securities Act to any purchaser:

 

(i) if the registrant is relying on Rule 430B:

 

(A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

 

(B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or

 

(ii) if the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

 

(5) That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

 

(i) any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

 

(ii) any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

 

(iii) the portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

 

(iv) any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

 

(6) That:

 

  (i) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
     
  (ii) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

II-5
 

 

SIGNATURES

 

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints I Richard Garr, acting alone, with full power of substitution and resubstitution and full power to act, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Registration Statement, and all documents in connection therewith (including all post-effective amendments and any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act), with the SEC, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

 

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

 

SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities indicated on September 9, 2022.

 

Signature   Title   Date
         
/S/ I Richard Garr   Chief Executive Officer, Chief Financial Officer   September 9, 2022
I Richard Garr   (Principal Executive Officer)
(Principal Financial and Accounting Officer)		    
         
/S/ Paul Michaels   President, Director   September 9, 2022
Paul Michaels        
         
/S/ Dr. Barry Ginsberg   Chief Strategy Officer, Director   September 9, 2022
Dr. Barry Ginsberg        
         
/S/ Michael Fish   Director   September 9, 2022
Michael Fish        
         
/S/ Cary Sucoff   Director   September 9, 2022
Cary Sucoff        
         
/S/ Lawrence Zaslow   Director   September 9, 2022
Lawrence Zaslow        

 

II-6
 

 

INDEX TO EXHIBITS

 

            Incorporated by Reference
        Filed/                
Exhibit       Furnished       Exhibit       Filing
No.   Description   Herewith   Form   No.   File No.   Date
                         
1.01   Form of Underwriter Agreement  

  S-1   1.01   333-264339  

8/1/22

3.01(i)   Fourth Amended and Restated Articles of Incorporation dated January 27, 2021       S-1   3.01(i)   333-264339   4/15/22
3.02(ii)   Amended and Restated Bylaws of Curative Biotechnology, Inc. dated March 29, 2021   *                
4.01   Specimen of Common Stock Certificate       S-1   4.01   333-264339   4/15/22
4.02   Specimen Series A Preferred Stock     S-1   4.02   333-264339   4/15/22
4.03   Specimen of Series B Preferred Stock     S-1   4.03   333-264339   4/15/22
4.04   Specimen of Series C Preferred Stock     S-1   4.04   333-264339   4/15/22
4.05   Form of Common Stock Purchase Warrant issued to Certain Consultants in May 2021     S-1   4.05   333-264339   4/15/22
4.06   Form of Common Stock Purchase Warrant issued to Investors in August 2021     S-1   4.06   333-264339   4/15/22
4.07   Form of Warrant issued to investors on May 21, 2021     S-1   4.07   333-264339   4/15/22
4.08   Form of Warrant issued to Investors in Note Offering from November 2020 through January 2021     S-1   4.08   333-264339   4/15/22
4.09   Form of Common Stock Purchase warrant issued to Consultant on December 3, 2020     S-1   4.09   333-264339   4/15/22
4.10   Form of Consultant Warrants issued between December 2020 and January 2021     S-1   4.10   333-264339   4/15/22
4.11   Form of Common Stock Purchase Warrant issued to Paul Michaels on June 11, 2021     S-1   4.11   333-264339   4/15/22
4.12   Form of Common Stock Purchase Warrant issued to Marc Drimer on July 14, 2021     S-1   4.12   333-264339   4/15/22
4.13   Form of Common Stock Purchase Option issued to Catherine Sohn pursuant to Consulting Agreement dated September 27, 2021   †        
4.14**   2021 Equity Incentive Plan     S-1   4.14   333-264339   4/15/22
4.15   Form of Stock Option Grant for 2021 Equity Incentive Plan     S-1   4.15   333-264339   4/15/22
4.16**   Form of Restricted Stock Award Agreement for 2021 Equity Incentive Plan     S-1   4.16   333-264339   4/15/22
4.17   Form of Restricted Stock Unit Agreement for 2021 Equity Incentive Plan     S-1   4.17   333-264339   4/15/22
4.18   Form of Common Stock Purchase Warrant issued in Aegis Capital Underwritten Offering     S-1   4.18   333-264339   8/1/22
4.19   Form of Warrant Agent Agreement between Curative Biotechnology and Issuer Direct Corporation     S-1   4.19   333-264339   8/1/22
4.20   Form of Underwriter Warrant  

  S-1   4.20   333-264339   8/1/22
5.01   Opinion of Silvestre Law Group, P.C.  

*

                
10.01   Form of Subscription Agreement for Investor Offerings in August 2021     S-1   10.01   333-264339   4/15/22
10.02   Form of Subscription Agreement for Investor Offerings on May 21, 2021     S-1   10.02   333-264339   4/15/22
10.03   Form of Note Issued to Investors between November 2020 and January 2021     S-1   10.03   333-264339   4/15/22
10.04   Settlement Agreement dated August 9, 2021   *                
10.05   Consulting Agreement dated September 27, 2021   *                
10.06**   Employment Agreement with Richard Garr dated October 1, 2020     S-1   10.06   333-264339   4/15/22
10.07**   Employment Agreement with Barry Ginsberg dated October 1, 2020     S-1   10.07   333-264339   4/15/22
10.08**   Employment Agreement with Paul Michaels dated October 1, 2020     S-1   10.08   333-264339   4/15/22
10.09   License, Funding and Operational Agreement dated October 1, 2021 between Curative Biotechnology, Inc., David Horn, LLC, and Mid-Atlantic BioTherapeutics, Inc.   *                
10.10   Exclusive Option Agreement for Purchase of Patent Rights dated September 30, 2020 between Curative Biotechnology (fka Connectyx Technologies Holdings Group) and IEM Inc.     S-1   10.10   333-264339   4/15/22

 

II-7
 

 

10.11   Patent License Agreement dated February 2, 2021 between National Institute of Health and Curative Biotechnology, Inc. (fka Connectyx Technologies Holdings Group)     S-1   10.11   333-264339   4/15/22
10.12   Patent License Agreement -Exclusive Evaluation Option License dated October 15, 2020 between National Institute of Health and Curative Biotechnology, Inc. (fka Connectyx Technologies Holdings Group)   *                
10.13   License, Funding and Operational Agreement dated September 30, 2020 between Mid-Atlantic BioTherapeutics, Inc., David Horn, LLC, and Curative Biotechnology, Inc. (fka Connectyx Technologies Holdings Group)   *                
10.14   First Amendment to License, Funding and Operational Agreement dated December 30, 2021 between Mid-Atlantic BioTherapeutics and Curative Biotechnology, Inc.   *                
10.15   First Amendment to License, Funding and Operational Agreement dated December 31, 2021 between Mid-Atlantic BioTherapeutics, Inc. and Curative Biotechnology, Inc.   *                
10.16   Securities Purchase Agreement for March 2022 Offering   *                
10.17   Secured Convertible Promissory Note for March 2022 Offering   *                
10.18   Security Agreement for March 2022 Offering   *                
10.19   Intellectual Property Security Agreement for March 2022 Offering   *                
10.20   Warrant for March 2022 Offering   *                
10.21   Form of Lock Up Agreement for March 2022 Offering   *                
10.22***   Cooperative Research and Development Agreement for Intramura-PhS Clinical Research     S-1/A   10.22   333-264339   4/25/22
10.23   Amendment to March 2022 Convertible Note Transaction Documents   *                
14.01   Code of Ethics and Business Conduct     S-1/A   14.01   333-264339   4/25/22
23.01   Consent of Daszkal Bolton LLP   *                
23.02   Consent of Silvestre Law Group (contained in Exhibit 5.01 hereto)   *                
24.01   Power of Attorney   *                
99.01   Audit Committee Charter    

S-1/A

  

99.01

  

333-264339

   8/10/22
99.02   Compensation Committee Charter     S-1/A  

99.02

  

333-264339

   8/10/22
99.03   Governance and Nominating Committee Charter     S-1/A   99.03   333-264339   8/10/22
107   Registration Fee Table   *                
101.INS   XBRL Instance Document   *                
101.SCH   XBRL Taxonomy Extension Schema   *                
101.CAL   XBRL Taxonomy Extension Calculation Linkbase   *                
101.DEF   XBRL Taxonomy Extension Definition Linkbase   *                
101.LAB   XBRL Taxonomy Extension Label Linkbase   *                
101.PRE   XBRL Taxonomy Extension Presentation Linkbase   *                

 

* Filed herein

** Management contracts or compensation plans or arrangements in which directors or executive officers are eligible to participate.

*** Certain portions of this exhibit (indicated by “[***]”) have been omitted as we have determined (i) the omitted information is not material and (ii) the omitted information would likely cause harm to us if publicly disclosed.

† To be added by Amendment

 

II-8

 

Exhibit 3.02(ii)

 

AMENDED AND RESTATED BYLAWS

 

OF

 

CURATIVE BIOTECHNOLOGY, INC.

 

(amended and restated on March 29, 2021)

 

ARTICLE I

CORPORATE OFFICES

 

1.1 REGISTERED OFFICE.

 

The registered office of Curative Biotechnology, Inc. shall be as designated in its certificate of incorporation, as may be amended and restated (“Certificate”) and as may be amended or changed by the corporation’s board of directors from time to time.

 

1.2 OTHER OFFICES.

 

The corporation’s Board of Directors (the “Board”) may at any time establish other offices at any place or places where the corporation is qualified to do business.

 

ARTICLE II

MEETINGS OF STOCKHOLDERS

 

2.1 PLACE OF MEETINGS.

 

Meetings of stockholders shall be held at any place within or outside the State of Florida as designated by the Board. The Board may, in its sole discretion, determine that a meeting of stockholders shall not be held at any place, but may instead be held solely by means of remote communication as authorized by the Florida Business Corporation (the “FBCA”). In the absence of any such designation or determination, stockholders’ meetings shall be held at the corporation’s principal executive office.

 

2.2 ANNUAL MEETING.

 

The annual meeting of stockholders shall be held each year on a date and at a time designated by the Board. At the annual meeting, directors shall be elected and any other proper business may be transacted.

 

2.3 SPECIAL MEETING.

 

Unless otherwise required by law or the Certificate, special meetings of the stockholders may be called at any time, for any purpose or purposes, only by (i) the Board, (ii) the Chairman of the Board, (iii) the chief executive officer (or, in the absence of a chief executive officer, the president) of the corporation, or (iv) holders of more than twenty percent (20%) of the total voting power of the outstanding shares of capital stock of the corporation then entitled to vote.

 

 

 

 

If any person(s) other than the Board calls a special meeting, the request shall:

 

  (i) be in writing;
     
  (ii) specify the general nature of the business proposed to be transacted; and
     
  (iii) be delivered personally or sent by registered mail or by facsimile transmission to the secretary of the corporation.

 

Upon receipt of such a request, the Board shall determine the date, time and place of such special meeting, which must be scheduled to be held on a date that is within ninety (90) days of receipt by the secretary of the request therefor, and the secretary of the corporation shall prepare a proper notice thereof. No business may be transacted at such special meeting other than the business specified in the notice to stockholders of such meeting.

 

2.4 NOTICE OF STOCKHOLDERS’ MEETINGS.

 

All notices of meetings of stockholders shall be sent or otherwise given in accordance with either Section 2.5 or Section 8.1 of these bylaws not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting, except as otherwise required by applicable law. The notice shall specify the place, if any, date and hour of the meeting, the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Any previously scheduled meeting of stockholders may be postponed, and, unless the Certificate provides otherwise, any special meeting of the stockholders may be cancelled by resolution duly adopted by a majority of the Board members then in office upon public notice given prior to the date previously scheduled for such meeting of stockholders.

 

Whenever notice is required to be given, under the FBCA, the Certificate or these bylaws, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting which shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that the action taken by the corporation is such as to require the filing of a certificate with the Secretary of State of Florida, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.

 

Whenever notice is required to be given, under any provision of the FBCA, the Certificate or these bylaws, to any stockholder to whom (a) notice of two (2) consecutive annual meetings, or (b) all, and at least two (2) payments (if sent by first-class mail) of dividends or interest on securities during a twelve (12) month period, have been mailed addressed to such person at such person’s address as shown on the records of the corporation and have been returned undeliverable, the giving of such notice to such person shall not be required. Any action or meeting which shall be taken or held without notice to such person shall have the same force and effect as if such notice had been duly given. If any such person shall deliver to the corporation a written notice setting forth such person’s then current address, the requirement that notice be given to such person shall be reinstated. In the event that the action taken by the corporation is such as to require the filing of a certificate with the Secretary of State of Florida, the certificate need not state that notice was not given to persons to whom notice was not required to be given pursuant to the FBCA.

 

The exception in subsection (a) of the above paragraph to the requirement that notice be given shall not be applicable to any notice returned as undeliverable if the notice was given by electronic transmission.

 

2

 

 

2.5 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE.

 

Notice of any meeting of stockholders shall be given:

 

  (i) if mailed, when deposited in the United States mail, postage prepaid, directed to the stockholder at his or her address as it appears on the corporation’s records;
     
  (ii) if electronically transmitted, as provided in Section 8.1 of these bylaws; or
     
  (iii)  otherwise, when delivered.

 

An affidavit of the secretary or an assistant secretary of the corporation or of the transfer agent or any other agent of the corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

 

Notice may be waived in accordance with Section 7.13 of these bylaws.

 

2.6 QUORUM

 

Unless otherwise provided in the Certificate or required by law, stockholders representing a third of the voting power of the issued and outstanding capital stock of the corporation, present in person or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of the stockholders. If such quorum is not present or represented at any meeting of the stockholders, then the chairman of the meeting, or the stockholders representing a majority of the voting power of the capital stock at the meeting, present in person or represented by proxy, shall have power to adjourn the meeting from time to time until a quorum is present or represented. At such adjourned meeting at which a quorum is present or represented, any business may be transacted that might have been transacted at the meeting as originally noticed. The stockholders present at a duly called meeting at which quorum is present may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.

 

2.7 ADJOURNED MEETING; NOTICE

 

When a meeting is adjourned to another time or place, unless these bylaws otherwise require, notice need not be given of the adjourned meeting if the time, place if any thereof, and the means of remote communications if any by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At the continuation of the adjourned meeting, the corporation may transact any business that might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting in accordance with the provisions of Section 2.4 and 2.5 of these bylaws.

 

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2.8 ADMINISTRATION OF THE MEETING

 

Meetings of stockholders shall be presided over by the chairman of the Board or, in the absence thereof, by such person as the chairman of the Board shall appoint, or, in the absence thereof or in the event that the chairman shall fail to make such appointment, any officer of the corporation elected by the Board. In the absence of the secretary of the corporation, the secretary of the meeting shall be such person as the chairman of the meeting appoints.

 

The Board shall, in advance of any meeting of stockholders, appoint one (1) or more inspector(s), who may include individual(s) who serve the corporation in other capacities, including without limitation as officers, employees or agents, to act at the meeting of stockholders and make a written report thereof. The Board may designate one (1) or more persons as alternate inspector(s) to replace any inspector, who fails to act. If no inspector or alternate has been appointed or is able to act at a meeting of stockholders, the chairman of the meeting shall appoint one (1) or more inspector(s) to act at the meeting. Each inspector, before discharging his or her duties, shall take and sign an oath to faithfully execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspector(s) or alternate(s) shall have the duties prescribed pursuant to the FBCA or other applicable law.

 

The Board shall be entitled to make such rules or regulations for the conduct of meetings of stockholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations, if any, the chairman of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all acts as, in the judgment of such chairman, are necessary, appropriate or convenient for the proper conduct of the meeting, including without limitation establishing an agenda of business of the meeting, rules or regulations to maintain order, restrictions on entry to the meeting after the time fixed for commencement thereof and the fixing of the date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at a meeting (and shall announce such at the meeting).

 

2.9 VOTING.

 

The stockholders entitled to vote at any meeting of stockholders shall be determined in accordance with the provisions of Section 2.11 of these bylaws and the FBCA.

 

Except as otherwise provided in the provisions of the FBCA (relating to the fixing of a date for determination of stockholders of record) or these bylaws, each stockholder shall be entitled to that number of votes for each share of capital stock held by such stockholder as set forth in the Certificate.

 

In all matters, other than the election of directors and except as otherwise required by law, the Certificate or these bylaws, the affirmative vote of a majority of the voting power of the shares present or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders. Directors shall be elected by a plurality of the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors.

 

The stockholders of the corporation shall not have the right to cumulate their votes for the election of directors of the corporation.

 

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2.10 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING.

 

Unless otherwise restricted by the certificate of incorporation, any action required or permitted to be taken at any annual or special meeting of the stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office, its principal place of business, or an officer or agent of the corporation having custody of the book in which minutes of proceedings of stockholders are recorded. Delivery made to the corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall, to the extent required by law, be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the corporation.

 

2.11 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS.

 

In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted and which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other such action.

 

If the Board does not fix a record date in accordance with these bylaws and applicable law:

 

  (i)   The record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.

 

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  (ii)   The record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board is necessary, shall be the first day on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation.
       
  (iii)   The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.

 

A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting.

 

2.12 PROXIES.

 

Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for such stockholder by proxy authorized by an instrument in writing or by a transmission permitted by law and filed with the secretary of the corporation, but no such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. A stockholder may also authorize another person or persons to act for him, her or it as proxy in the manner(s) provided under the FBCA or as otherwise provided under Florida law. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of the FBCA.

 

2.13 LIST OF STOCKHOLDERS ENTITLED TO VOTE.

 

The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. The corporation shall not be required to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of at least ten (10) days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the corporation’s principal place of business.

 

In the event that the corporation determines to make the list available on an electronic network, the corporation may take reasonable steps to ensure that such information is available only to stockholders of the corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.

 

2.14 ADVANCE NOTICE OF STOCKHOLDER BUSINESS

 

Only such business shall be conducted as shall have been properly brought before a meeting of the stockholders of the corporation. To be properly brought before an annual meeting, business must be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board, (b) otherwise properly brought before the meeting by or at the direction of the Board, or (c) a proper matter for stockholder action under the FBCA that has been properly brought before the meeting by a stockholder (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section 2.14 and on the record date for the determination of stockholders entitled to vote at such annual meeting and (ii) who complies with the notice procedures set forth in this Section 2.14. For such business to be considered properly brought before the meeting by a stockholder such stockholder must, in addition to any other applicable requirements, have given timely notice in proper form of such stockholder’s intent to bring such business before such meeting. To be timely, such stockholder’s notice must be delivered to or mailed and received by the secretary of the corporation at the principal executive offices of the corporation not later than the close of business on the 90 th day, nor earlier than the close of business on the 120 th day, prior to the anniversary date of the immediately preceding annual meeting; provided, however, that in the event that no annual meeting was held in the previous year or the annual meeting is called for a date that is not within thirty (30) days before or after such anniversary date, notice by the stockholder to be timely must be so received not later than the close of business on the tenth (10 th ) day following the day on which such notice of the date of the meeting was mailed or public disclosure of the date of the meeting was made, whichever occurs first.

 

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To be in proper form, a stockholder’s notice to the secretary shall be in writing and shall set forth:

 

  (i) the name and record address of the stockholder who intends to propose the business and the class or series and number of shares of capital stock of the corporation which are owned beneficially or of record by such stockholder;
     
  (ii) any proxy, contract, arrangement, understanding, or relationship pursuant to which such stockholder or beneficial owner, if any, has a right to vote any shares of any security of the corporation:
     
  (iii) a description of all agreements, arrangements and understandings between such stockholder and beneficial owner, if any, and any other person or persons (including their names) in connection with the proposal of such business by such stockholder,
     
  (iv) a representation that the stockholder is a holder of record of stock of the corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to introduce the business specified in the notice;
     
  (v) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting;
     
  (vi) any material interest of the stockholder in such business; and
     
  (vii) any other information that is required to be provided by the stockholder pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “ Exchange Act”).

 

Notwithstanding the foregoing, in order to include information with respect to a stockholder proposal in the proxy statement and form of proxy for a stockholder’s meeting, stockholders must provide notice as required by, and otherwise comply with the requirements of, the Exchange Act and the regulations promulgated thereunder.

 

No business shall be conducted at the annual meeting of stockholders except business brought before the annual meeting in accordance with the procedures set forth in this Section 2.14. The chairman of the meeting may refuse to acknowledge the proposal of any business not made in compliance with the foregoing procedure.

 

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2.15 ADVANCE NOTICE OF DIRECTOR NOMINATIONS

 

Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the corporation, except as may be otherwise provided in the Certificate with respect to the right of holders of Preferred Stock of the corporation to nominate and elect a specified number of directors. To be properly brought before an annual meeting of stockholders, or any special meeting of stockholders called for the purpose of electing directors, nominations for the election of director must be (a) specified in the notice of meeting (or any supplement thereto), (b) made by or at the direction of the Board (or any duly authorized committee thereof) or (c) made by any stockholder of the corporation (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section 2.15 and on the record date for the determination of stockholders entitled to vote at such meeting and (ii) who complies with the notice procedures set forth in this Section 2.15.

 

In addition to any other applicable requirements, for a nomination to be made by a stockholder, such stockholder must have given timely notice thereof in proper written form to the secretary of the corporation. To be timely, a stockholder’s notice to the secretary must be delivered to or mailed and received at the principal executive offices of the corporation, in the case of an annual meeting, in accordance with the provisions set forth in Section 2.14, and, in the case of a special meeting of stockholders called for the purpose of electing directors, not later than the close of business on the tenth (10th) day following the day on which notice of the date of the special meeting was mailed or public disclosure of the date of the special meeting was made, whichever first occurs.

 

To be in proper written form, a stockholder’s notice to the secretary must set forth:

 

  (a) as to each person whom the stockholder proposes to nominate for election as a director (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class or series and number of shares of capital stock of the corporation which are owned beneficially or of record by the person, (iv) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nominations are to be made by the stockholder, and (v) any other information relating to such person that is required to be disclosed in solicitations of proxies for elections of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including without limitation such person’s written consent to being named in the proxy statement, if any, as a nominee and to serving as a director if elected); and
  (b) as to such stockholder giving notice, the information required to be provided pursuant to Section 2.14.

 

Subject to the rights of any holders of Preferred Stock of the corporation, no person shall be eligible for election as a director of the corporation unless nominated in accordance with the procedures set forth in this Section 2.15. If the chairman of the meeting properly determines that a nomination was not made in accordance with the foregoing procedures, the chairman shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded.

 

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2.16 DISCLOSURE BY STOCKHOLDERS OF HEDGED POSITIONS.

 

A notice submitted by a stockholder under Section 2.14 or 2.15 must describe, with respect to the stockholder and any Stockholder Associated Person, (i) any Derivative Instrument directly or indirectly beneficially owned by the stockholder or a Stockholder Associated Person, or any other direct or indirect opportunity for the stockholder or Stockholder Associated Person to profit or share in any profit derived from any increase or decrease in the value of shares of the corporation, (ii) any proportionate interest in shares of the corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which the stockholder or Stockholder Associated Person is a general partner or, directly or indirectly, beneficially owns an interest in a general partner, (iii) any short interest in any security of the corporation (for purposes of this By-law a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security), (iv) any performance-related fees (other than an asset-based fee) that such stockholder or any Stockholder Associated Person is entitled to based on any increase or decrease in the value of shares of the corporation or Derivative Instruments, if any, and (v) any hedging or other transaction or series of transactions that has been entered into by or on behalf of, or any other agreement, arrangement or understanding (including, without limitation, any put, short position or any borrowing or lending of shares) that has been made, the effect or intent of which is to mitigate loss to or manage risk of share price changes for, or to increase or decrease the voting power of, the stockholder or any Stockholder Associated Person with respect to any share of the corporation.

 

Definitions. As used in this Section 2.16 the following terms have the meanings indicated:

 

“Derivative Instrument” means an option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the corporation or with a value derived in whole or in part from the value of any class or series of shares of the corporation, whether or not such instrument or right is subject to settlement in the underlying class or series of shares of the corporation or otherwise.

 

“Stockholder Associated Person” of a stockholder means (i) any person controlling, controlled by, under common control with, or acting in concert with, the stockholder, (ii) any beneficial owner of shares of the corporation owned of record or beneficially by the stockholder, and (iii) any person controlling, controlled by or under common control with, a person that is a Stockholder Associated Person pursuant to clause (ii) of this definition.

 

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ARTICLE III

DIRECTORS

 

3.1 POWERS.

 

Subject to the provisions of the FBCA and any limitations in the Certificate, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board.

 

3.2 NUMBER OF DIRECTORS.

 

Subject to the rights of the holders of any series of Preferred Stock to elect directors under specified circumstances, the authorized number of directors shall be determined from time to time by resolution of the Board, provided the Board shall consist of at least three (3) members. No reduction of the authorized number of directors shall have the effect of removing any director before that director’s term of office expires.

 

3.3 ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS.

 

Except as provided in Section 3.4 and Section 3.13 of these bylaws, directors shall be elected at each annual meeting of stockholders to hold office until the next annual meeting. Directors need not be stockholders unless so required by the Certificate or these bylaws. The Certificate or these bylaws may prescribe other qualifications for directors. Each director, including a director elected to fill a vacancy, shall hold office until such director’s successor is elected and qualified or until such director’s earlier death, resignation or removal.

 

All elections of directors shall be by written ballot or by written consent of the shareholders as provided for in Section 2.10 of these bylaws, unless otherwise provided in the Certificate. If authorized by the Board, such requirement of a written ballot shall be satisfied by a ballot submitted by electronic transmission, provided that any such electronic transmission must be either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized.

 

3.4 RESIGNATION AND VACANCIES.

 

Any director may resign at any time upon written notice or by electronic transmission to the corporation.

 

Subject to the rights of the holders of any series of Preferred Stock of the corporation then outstanding and unless the Board otherwise determines, newly created directorships resulting from any increase in the authorized number of directors, or any vacancies on the Board resulting from the death, resignation, retirement, disqualification, removal from office or other cause shall, unless otherwise required by law, be filled by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board, or by a sole remaining director. When one or more directors resigns and the resignation is effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as provided in this Section 3.4 in the filling of other vacancies.

 

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3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE.

 

The Board may hold meetings, both regular and special, either within or outside the State of Florida.

 

Unless otherwise restricted by the Certificate or these bylaws, members of the Board, or any committee designated by the Board, may participate in a meeting of the Board, or any committee, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

 

3.6 REGULAR MEETINGS.

 

Regular meetings of the Board may be held without notice of the date, time, place, or purpose of the meeting.

 

3.7 SPECIAL MEETINGS; NOTICE.

 

Special meetings of the Board for any purpose or purposes may be called at any time by the chairman of the Board, the chief executive officer, a president, the secretary or any two directors. The person(s) authorized to call special meetings of the Board may fix the place and time of the meeting.

 

Special meetings of the Board may be held om twenty four (24) hours notice containing the date, time and place of the meeting but need not include purpose.Notice of the time and place of special meetings shall be:

 

  (i) delivered personally by hand, by courier or by telephone;
     
  (ii) sent by United States first-class mail, postage prepaid;
     
  (iii) sent by facsimile; or
     
  (iv) sent by electronic mail,

 

directed to each director at that director’s address, telephone number, facsimile number or electronic mail address, as the case may be, as shown on the corporation’s records.

 

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3.8 QUORUM.

 

Except as otherwise required by law or the Certificate, at all meetings of the Board, a majority of the authorized number of directors (as determined pursuant to Section 3.2 of these bylaws) shall constitute a quorum for the transaction of business, except to adjourn as provided in Section 3.11 of these bylaws. The vote of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board, except as may be otherwise specifically provided by statute, the Certificate or these bylaws.

 

A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the directors present at that meeting.

 

3.9 WAIVER OF NOTICE

 

Whenever notice is required to be given under any provisions of the FBCA, the Certificate or these bylaws, a written waiver thereof, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting solely for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the directors, or members of a committee of directors, need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the Certificate or these bylaws.

 

3.10 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING.

 

Unless otherwise restricted by the Certificate or these bylaws, any action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

 

3.11 ADJOURNED MEETING; NOTICE.

 

If a quorum is not present at any meeting of the Board, then a majority of the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.

 

3.12 FEES AND COMPENSATION OF DIRECTORS.

 

Unless otherwise restricted by the Certificate or these bylaws, the Board shall have the authority to fix the compensation of directors.

 

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3.13 REMOVAL OF DIRECTORS.

 

Subject to the rights of the holders of any series of Preferred Stock then outstanding, any director or the entire Board may be removed from office at any time, with or without cause, by the affirmative vote of the holders of at least a majority of the voting power of the issued and outstanding shares of capital stock of the corporation then entitled to vote in the election of directors.

 

3.14 CORPORATE GOVERNANCE COMPLIANCE.

 

Without otherwise limiting the powers of the Board set forth in Section 3.1 and provided that shares of capital stock of the corporation are listed for trading on either The American Stock Exchange (“AMEX”), The Nasdaq National Market (“NASDAQ”) or the New York Stock Exchange (“NYSE”), the corporation shall comply with the corporate governance rules and requirements of the AMEX, NASDAQ or the NYSE, as applicable.

 

ARTICLE IV

COMMITTEES

 

4.1 COMMITTEES OF DIRECTORS.

 

The Board may designate one or more committees, each committee to consist of one or more of the directors of the corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board or in these bylaws, shall have and may exercise such lawfully delegable powers and duties as the Board may confer. Each committee will comply with all applicable provisions of: the Sarbanes-Oxley Act of 2002, the rules and regulations of the Securities and Exchange Commission, and the rules and requirements of AMEX, NASDAQ or NYSE, as applicable, and will have the right to retain independent legal counsel and other advisers at the corporation’s expense.

 

4.2 COMMITTEE MINUTES.

 

Each committee shall keep regular minutes of its meetings and report to the Board when required.

 

4.3 MEETINGS AND ACTION OF COMMITTEES.

 

Meetings and actions of committees shall be governed by, and held and taken in accordance with, the provisions of:

 

  (i) Section 3.5 (place of meetings and meetings by telephone);
     
  (ii) Section 3.6 (regular meetings);
     
  (iii) Section 3.7 (special meetings and notice);
     
  (iv) Section 3.8 (quorum);
     
  (v) Section 3.9 (waiver of notice);
     
  (vi) Section 3.10 (action without a meeting); and
     
  (vii) Section 3.11 (adjournment and notice of adjournment).

 

with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the Board and its members.

 

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Notwithstanding the foregoing:

 

  (i) the time of regular meetings of committees may be determined either by resolution of the Board or by resolution of the committee;
     
  (ii) special meetings of committees may also be called by resolution of the Board; and
     
   (iii) notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee. The Board may adopt rules for the government of any committee not inconsistent with the provisions of these bylaws.

 

4.4 AUDIT COMMITTEE

 

The Board shall establish an Audit Committee whose principal purpose will be to oversee the corporation’s and its subsidiaries’ accounting and financial reporting processes, internal systems of control, independent auditor relationships and audits of consolidated financial statements of the corporation and its subsidiaries. The Audit Committee will also determine the appointment of the independent auditors of the corporation and any change in such appointment and ensure the independence of the corporation’s auditors. In addition, the Audit Committee will assume such other duties and responsibilities as the Board may confer upon the committee from time to time. In the event of any inconsistency between this Section 4.4 and the Certificate, the terms of the Certificate will govern.

 

4.5 CORPORATE GOVERNANCE AND NOMINATING COMMITTEE

 

The Board shall establish a Corporate Governance and Nominating Committee whose principal duties will be to assist the Board by identifying individuals qualified to become Board members consistent with criteria approved by the Board, to recommend to the Board for its approval the slate of nominees to be proposed by the Board to the stockholders for election to the Board, to develop and recommend to the Board the governance principles applicable to the corporation, as well as such other duties and responsibilities as the Board may confer upon the committee from time to time.

 

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4.6 COMPENSATION COMMITTEE

 

The Board shall establish a Compensation Committee whose principal duties will be to review employee compensation policies and programs as well as the compensation of the chief executive officer and other executive officers of the corporation, to recommend to the Board a compensation program for outside Board members, as well as such other duties and responsibilities as the Board may confer upon the committee from time to time. In the event of any inconsistency between this Section 4.6 and the Certificate, the terms of the Certificate will govern.

 

ARTICLE V

OFFICERS

 

5.1 OFFICERS

 

The officers of the corporation shall be a chief executive officer, one or more presidents (at the discretion of the Board), a chairman of the Board and a secretary. The corporation may also have, at the discretion of the Board, a vice chairman of the Board, a chief financial officer, a treasurer, one or more vice presidents, one or more assistant vice presidents, one or more assistant treasurers, one or more assistant secretaries, and any such other officers as may be appointed in accordance with the provisions of these bylaws. Any number of offices may be held by the same person,

 

5.2 APPOINTMENT OF OFFICERS

 

The Board shall appoint the officers of the corporation, except such officers as may be appointed in accordance with the provisions of Sections 5.3 of these bylaws, subject to the rights, if any, of an officer under any contract of employment. Each officer shall hold office until his or her successor is elected and qualified or until his or her earlier resignation or removal. A failure to elect officers shall not dissolve or otherwise affect the corporation.

 

5.3 SUBORDINATE OFFICERS

 

The Board may appoint, or empower the chief executive officer and/or one or more presidents of the corporation, to appoint, such other officers and agents as the business of the corporation may require. Each of such officers and agents shall hold office for such period, have such authority, and perform such duties as are provided in these bylaws or as the Board may from time to time determine.

 

5.4 REMOVAL AND RESIGNATION OF OFFICERS.

 

Any officer may be removed, either with or without cause, by an affirmative vote of the majority of the Board, or a Committee thereof, at any regular or special meeting of the Board or, except in the case of an officer appointed by the Board, by any officer upon whom such power of removal may be conferred by the Board.

 

 

Any officer may resign at any time by giving written notice to the corporation. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice. Unless otherwise specified in the notice of resignation, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the corporation under any contract to which the officer is a party.

 

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5.5 VACANCIES IN OFFICES.

 

Any vacancy occurring in any office of the corporation shall be filled by the Board or as provided in Section 5.2.

 

5.6 CHAIRMAN OF THE BOARD.

 

The Chairman of the Board shall be chosen from among the Directors. The Chairman of the Board shall have the power to call special meetings of the stockholders and of the Directors for any purpose or purposes, and he shall preside at all meetings of the Board of Directors, unless he shall be absent or unless he shall, at his election, designate the Vice Chairman, if one is elected, to preside in his stead. The Chairman of the Board shall advise and counsel the Chief Executive Officer and other officers of the Corporation and shall exercise such powers and perform such duties as shall be assigned to or required by him from time to time by the Board of Directors.

 

5.7 CHIEF EXECUTIVE OFFICER.

 

Subject to the control of the Board and any supervisory powers the Board may give to the chairman of the Board, the chief executive officer shall, together with the president or presidents of the corporation, have general supervision, direction, and control of the business and affairs of the corporation and shall see that all orders and resolutions of the Board are carried into effect. The chief executive officer shall, together with the president or presidents of the corporation, also perform all duties incidental to this office that may be required by law and all such other duties as are properly required of this office by the Board of Directors. The chief executive officer shall serve as chairman of and preside at all meetings of the stockholders. In the absence of the chairman of the Board, the chief executive officer shall preside at all meetings of the Board.

 

5.8 PRESIDENTS.

 

Subject to the control of the Board and any supervisory powers the Board may give to the chairman of the Board, the president or presidents of the corporation shall, together with the chief executive officer, have general supervision, direction, and control of the business and affairs of the corporation and shall see that all orders and resolutions of the Board are carried into effect. A president shall have such other powers and perform such other duties as from time to time may be prescribed for him or her by the Board, these bylaws, or the chairman of the Board.

 

5.9 VICE PRESIDENTS.

 

In the absence or disability of any president, the vice presidents, if any, in order of their rank as fixed by the Board or, if not ranked, a vice president designated by the Board, shall perform all the duties of a president. When acting as a president, the appropriate vice president shall have all the powers of, and be subject to all the restrictions upon, that president. The vice presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the Board, these bylaws, the chairman of the Board, the chief executive officer or, in the absence of a chief executive officer, one of more of the presidents.

 

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5.10 SECRETARY.

 

The secretary, which may be appointed solely for the duration of any meeting, shall keep or cause to be kept at the principal executive office of the corporation or such other place as the Board may direct, a book of minutes of all meetings and actions of directors, committees of directors, and stockholders. The minutes shall show:

 

  (i) the time and place of each meeting;
     
  (ii) whether regular or special (and, if special, how authorized and the notice given);
     
  (iii) the names of those present at directors’ meetings or committee meetings;
     
  (iv) the number of shares present or represented at stockholders’ meetings; and
     
     
  (v) the proceedings thereof.

 

The secretary shall keep, or cause to be kept, at the principal executive office of the corporation or at the office of the corporation’s transfer agent or registrar, as determined by resolution of the Board, a share register, or a duplicate share register showing:

 

  (i) the names of all stockholders and their addresses;
     
  (ii) the number and classes of shares held by each;
     
  (iii) the number and date of certificates evidencing such shares; and
     
  (iv) the number and date of cancellation of every certificate surrendered for cancellation.

 

The secretary shall give, or cause to be given, notice of all meetings of the stockholders and of the Board required to be given by law or by these bylaws. The secretary shall keep the seal of the corporation, if one be adopted, in safe custody and shall have such other powers and perform such other duties as may be prescribed by the Board or by these bylaws.

 

5.11 CHIEF FINANCIAL OFFICER

 

The chief financial officer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings and shares. The books of account shall at all reasonable times be open to inspection by any director.

 

The chief financial officer shall deposit all moneys and other valuables in the name and to the credit of the corporation with such depositories as the Board may designate. The chief financial officer shall disburse the funds of the corporation as may be ordered by the Board, shall render to the chief executive officer or, in the absence of a chief executive officer, any president and directors, whenever they request it, an account of all his or her transactions as chief financial officer and of the financial condition of the corporation, and shall have other powers and perform such other duties as may be prescribed by the Board or these bylaws.

 

The chief financial officer may be the treasurer of the corporation.

 

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5.12 TREASURER.

 

The treasurer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings and shares. The books of account shall at all reasonable times be open to inspection by any director.

 

The treasurer shall deposit all moneys and other valuables in the name and to the credit of the corporation with such depositories as the Board may designate. The treasurer shall disburse the funds of the corporation as may be ordered by the Board, shall render to the chief executive officer or, in the absence of a chief executive officer, one or more of the presidents and directors, whenever they request it, an account of all his or her transactions as treasurer and of the financial condition of the corporation, and shall have other powers and perform such other duties as may be prescribed by the Board or these bylaws.

 

5.13 ASSISTANT SECRETARY.

 

The assistant secretary, or, if there is more than one, the assistant secretaries in the order determined by the Board (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of the secretary’s inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as may be prescribed by the Board or these bylaws.

 

5.14 ASSISTANT TREASURER.

 

The assistant treasurer, or, if there is more than one, the assistant treasurers, in the order determined by the Board (or if there be no such determination, then in the order of their election), shall, in the absence of the chief financial officer or treasurer or in the event of the chief financial officer’s or treasurer’s inability or refusal to act, perform the duties and exercise the powers of the chief financial officer or treasurer, as applicable, and shall perform such other duties and have such other powers as may be prescribed by the Board or these bylaws.

 

5.15 REPRESENTATION OF SHARES OF OTHER CORPORATIONS.

 

The chairman of the Board, the chief executive officer, any president, any vice president, the treasurer, the secretary or assistant secretary of this corporation, or any other person authorized by the Board, the chief executive officer, a president or a vice president, is authorized to vote, represent, and exercise on behalf of this corporation all rights incident to any and all shares or other equity interests of any other corporation or entity standing in the name of this corporation. The authority granted herein may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by such person having the authority.

 

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5.16 AUTHORITY AND DUTIES OF OFFICERS.

 

In addition to the foregoing authority and duties, all officers of the corporation shall respectively have such authority and perform such duties in the management of the business of the corporation as may be designated from time to time by the Board.

 

ARTICLE VI

RECORDS AND REPORTS

 

6.1 MAINTENANCE AND INSPECTION OF RECORDS.

 

The corporation shall, either at its principal executive office or at such place or places as designated by the Board, keep a record of its stockholders listing their names and addresses and the number and class of shares held by each stockholder, a copy of these bylaws, as may be amended to date, minute books, accounting books and other records.

 

Any such records maintained by the corporation may be kept on, or by means of, or be in the form of, any information storage device or method, provided that the records so kept can be converted into clearly legible paper form within a reasonable time. The corporation shall so convert any records so kept upon the request of any person entitled to inspect such records pursuant to the provisions of the FBCA. When records are kept in such manner, a clearly legible paper form produced from or by means of the information storage device or method shall be admissible in evidence, and accepted for all other purposes, to the same extent as an original paper form accurately portrays the record.

 

Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the corporation’s stock ledger, a list of its stockholders, and its other books and records and to make copies or extracts therefrom. A proper purpose shall mean a purpose reasonably related to such person’s interest as a stockholder. In every instance where an attorney or other agent is the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing that authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the corporation at its registered office in Florida or at its principal executive office.

 

6.2 INSPECTION BY DIRECTORS.

 

Any director shall have the right to examine the corporation’s stock ledger, a list of its stockholders, and its other books and records for a purpose reasonably related to his or her position as a director.

 

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ARTICLE VII

GENERAL MATTERS

 

7.1 CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS.

 

From time to time, the Board shall determine by resolution which person or persons may sign or endorse all checks, drafts, other orders for payment of money, notes or other evidences of indebtedness that are issued in the name of or payable to the corporation, and only the persons so authorized shall sign or endorse those instruments.

 

7.2 EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS.

 

Except as otherwise provided in these bylaws, the Board, or any officers of the corporation authorized thereby, may authorize any officer or officers, or agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the corporation; such authority may be general or confined to specific instances.

 

7.3 STOCK CERTIFICATES; PARTLY PAID SHARES.

 

The shares of the corporation shall be represented by certificates, provided that the Board may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the corporation. Notwithstanding the adoption of such a resolution by the Board, every holder of stock represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the corporation by the chairman or vice-chairman of the Board, or a president or vice-president, and by the treasurer or an assistant treasurer, or the secretary or an assistant secretary of such corporation representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue.

 

The corporation may issue the whole or any part of its shares as partly paid and subject to call for the remainder of the consideration to be paid therefor. Upon the face or back of each stock certificate issued to represent any such partly paid shares, and upon the books and records of the corporation in the case of uncertificated partly paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated. Upon the declaration of any dividend on fully paid shares, the corporation shall declare a dividend upon partly paid shares of the same class, but only upon the basis of the percentage of the consideration actually paid thereon.

 

7.4 SPECIAL DESIGNATION ON CERTIFICATES.

 

If the corporation is authorized to issue more than one class of stock or more than one series of any class, then the powers, designations, preferences, and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate that the corporation shall issue to represent such class or series of stock; provided , however , that, except as otherwise provided in the FBCA, in lieu of the foregoing requirements there may be set forth on the face or back of the certificate that the corporation shall issue to represent such class or series of stock a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences, and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

 

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7.5 LOST CERTIFICATES.

 

Except as provided in this Section 7.6, no new certificates for shares shall be issued to replace a previously issued certificate unless the latter is surrendered to the corporation and cancelled at the same time. The corporation may issue a new certificate of stock or uncertificated shares in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the corporation may require the owner of the lost, stolen or destroyed certificate, or such owner’s legal representative, to give the corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.

 

7.6 CONSTRUCTION; DEFINITIONS.

 

Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the FBCA shall govern the construction of these bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the term “person” includes both a corporation and a natural person.

 

7.7 DIVIDENDS.

 

The Board, subject to any restrictions contained in either (i) the FBCA, or (ii) the Certificate, may declare and pay dividends upon the shares of its capital stock. Dividends may be paid in cash, in property, or in shares of the corporation’s capital stock.

 

The Board may set apart out of any of the funds of the corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve.

 

7.8 FISCAL YEAR.

 

The fiscal year of the corporation shall be fixed by resolution of the Board and may be changed by the Board.

 

7.9 SEAL.

 

The corporation may adopt a corporate seal, which shall be adopted and which may be altered by the Board. The corporation may use the corporate seal by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.

 

7.10 TRANSFER OF STOCK.

 

Transfers of stock shall be made only upon the transfer books of the corporation kept at an office of the corporation or by transfer agents designated to transfer shares of the stock of the corporation. Except where a certificate is issued in accordance with Section 7.5 of these bylaws, an outstanding certificate for the number of shares involved shall be surrendered for cancellation before a new certificate is issued therefore. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate, and record the transaction in its books.

 

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7.11 STOCK TRANSFER AGREEMENTS.

 

The corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes or series of stock of the corporation to restrict the transfer of shares of stock of the corporation of any one or more classes or series owned by such stockholders in any manner not prohibited by the FBCA.

 

7.12 REGISTERED STOCKHOLDERS.

 

The corporation:

 

  (i) shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and to vote as such owner;
     
  (ii) shall be entitled to hold liable for calls and assessments on partly paid shares the person registered on its books as the owner of shares; and
     
  (iii) shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of another person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Florida.

 

7.13 WAIVER OF NOTICE.

 

Whenever notice is required to be given under any provision of the FBCA, the Certificate or these bylaws, a written waiver, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting solely for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the Certificate or these bylaws.

 

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7.14 CHARITABLE FOUNDATION.

 

The establishment by the corporation of a charitable foundation will require Board approval, as will contributions by the corporation to the foundation and disbursements by the foundation. The Board may delegate authority over the foundation to one or more persons who are not directors of the corporation with the approval of two-thirds of the members of the Board.

 

ARTICLE VIII

NOTICE BY ELECTRONIC TRANSMISSION

 

8.1 NOTICE BY ELECTRONIC TRANSMISSION.

 

Without limiting the manner by which notice otherwise may be given effectively to stockholders pursuant to the FBCA, the Certificate or these bylaws, any notice to stockholders given by the corporation under any provision of the FBCA, the Certificate or these bylaws shall be effective if given by a form of electronic transmission consented to by the stockholder to whom the notice is given. Any such consent shall be revocable by the stockholder by written notice to the corporation. Any such consent shall be deemed revoked if:

 

  (i) the corporation is unable to deliver by electronic transmission two consecutive notices given by the corporation in accordance with such consent; and
     
  (ii) such inability becomes known to the secretary or an assistant secretary of the corporation or to the transfer agent, or other person responsible for the giving of notice.

 

However, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.

 

Any notice given pursuant to the preceding paragraph shall be deemed given:

 

  (i) if by facsimile telecommunication, when directed to a number at which the stockholder has consented to receive notice;
     
  (ii) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice;
     
  (iii) if by a posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and
     
  (iv) if by any other form of electronic transmission, when directed to the stockholder.

 

An affidavit of the secretary or an assistant secretary or of the transfer agent or other agent of the corporation that the notice has been given by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

 

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8.2 DEFINITION OF ELECTRONIC TRANSMISSION.

 

An “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.

 

8.3 INAPPLICABILITY.

 

Notice by a form of electronic transmission shall not apply to the extend not allowed by the by the FBCA.

 

ARTICLE IX

INDEMNIFICATION OF DIRECTORS AND OFFICERS

 

9.1 POWER TO INDEMNIFY IN ACTIONS, SUITS OR PROCEEDINGS OTHER THAN THOSE BY OR IN THE RIGHT OF THE CORPORATION.

 

Subject to Section 9.3 of this Article IX, the corporation shall indemnify, to the fullest extent permitted by the FBCA, as now or hereafter in effect, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that such person (or the legal representative of such person) is or was a director or officer of the corporation or any predecessor of the corporation, or is or was a director or officer of the corporation serving at the request of the corporation as a director or officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person’s conduct was unlawful.

 

9.2 POWER TO INDEMNIFY IN ACTIONS, SUITS OR PROCEEDINGS BY OR IN THE RIGHT OF THE CORPORATION

 

Subject to Section 9.3 of this Article IX, the corporation shall indemnify, to the fullest extent permitted by the FBCA, as now or hereafter in effect, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person (or the legal representative of such person) is or was a director or officer of the corporation or any predecessor of the corporation, or is or was a director or officer of the corporation serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that a court of competent jurisdiction in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper.

 

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9.3 AUTHORIZATION OF INDEMNIFICATION

 

Any indemnification under this Article IX (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director or officer is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 9.1 or Section 9.2 of this Article IX, as the case may be. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (i) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (ii) by a committee of such directors designated by a majority vote of such directors, even though less than a quorum, or (iii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion or (iv) by the stockholders (but only if a majority of the directors who are not parties to such action, suit or proceeding, if they constitute a quorum of the board of directors, presents the issue of entitlement to indemnification to the stockholders for their determination). Such determination shall be made, with respect to former directors and officers, by any person or persons having the authority to act on the matter on behalf of the corporation. To the extent, however, that a present or former director or officer of the corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding described above, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith, without the necessity of authorization in the specific case.

 

9.4 GOOD FAITH DEFINED

 

For purposes of any determination under Section 9.3 of this Article IX, to the fullest extent permitted by applicable law, a person shall be deemed to have acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe such person’s conduct was unlawful, if such person’s action is based on the records or books of account of the corporation or another enterprise, or on information supplied to such person by the officers of the corporation or another enterprise in the course of their duties, or on the advice of legal counsel for the corporation or another enterprise or on information or records given or reports made to the corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the corporation or another enterprise. The term “another enterprise” as used in this Section 9.4 shall mean any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise of which such person is or was serving at the request of the corporation as a director, officer, employee or agent. The provisions of this Section 9.4 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct set forth in Section 9.1 or 9.2 of this Article IX, as the case may be.

 

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9.5 INDEMNIFICATION BY A COURT

 

Notwithstanding any contrary determination in the specific case under Section 9.3 of this Article IX, and notwithstanding the absence of any determination thereunder, any director or officer may apply to the courts in the State of Florida for indemnification to the extent otherwise permissible under Sections 9.1 and 9.2 of this Article IX. The basis of such indemnification by a court shall be a determination by such court that indemnification of the director or officer is proper in the circumstances because such person has met the applicable standards of conduct set forth in Section 9.1 or 9.2 of this Article IX, as the case may be. Neither a contrary determination in the specific case under Section 9.3 of this Article IX nor the absence of any determination thereunder shall be a defense to such application or create a presumption that the director or officer seeking indemnification has not met any applicable standard of conduct. Notice of any application for indemnification pursuant to this Section 9.5 shall be given to the corporation promptly upon the filing of such application. If successful, in whole or in part, the director or officer seeking indemnification shall also be entitled to be paid the expense of prosecuting such application.

 

9.6 EXPENSES PAYABLE IN ADVANCE

 

To the fullest extent not prohibited by the FBCA, or by any other applicable law, expenses incurred by a person who is or was a director or officer in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding; provided, however, that if the FBCA requires, an advance of expenses incurred by any person in his or her capacity as a director or officer (and not in any other capacity) shall be made only upon receipt of an undertaking by or on behalf of such person to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this Article IX.

 

9.7 NONEXCLUSIVITY OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES

 

The indemnification and advancement of expenses provided by or granted pursuant to this Article IX shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the Certificate, any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office, it being the policy of the corporation that indemnification of the persons specified in Sections 9.1 and 9.2 of this Article IX shall be made to the fullest extent permitted by law. The provisions of this Article IX shall not be deemed to preclude the indemnification of any person who is not specified in Section 9.1 or 9.2 of this Article IX but whom the corporation has the power or obligation to indemnify under the provisions of the FBCA, or otherwise. The corporation is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not prohibited by the FBCA, or by any other applicable law.

 

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9.8 INSURANCE

 

To the fullest extent permitted by the FBCA or any other applicable law, the corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was a director, officer, employee or agent of the corporation serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power or the obligation to indemnify such person against such liability under the provisions of this Article IX.

 

9.9 CERTAIN DEFINITIONS

 

For purposes of this Article IX, references to “the corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors or officers, so that any person who is or was a director or officer of such constituent corporation, or is or was a director or officer of such constituent corporation serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, shall stand in the same position under the provisions of this Article IX with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. For purposes of this Article IX, references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the corporation” shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director or officer with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this Article IX.

 

9.10 SURVIVAL OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES

 

The rights to indemnification and advancement of expenses conferred by this Article IX shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors, administrators and other personal and legal representatives of such a person.

 

9.11 LIMITATION ON INDEMNIFICATION

 

Notwithstanding anything contained in this Article IX to the contrary, except for proceedings to enforce rights to indemnification (which shall be governed by Section 9.5 hereof), the corporation shall not be obligated to indemnify any director or officer in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the board of directors of the corporation.

 

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9.12 INDEMNIFICATION OF EMPLOYEES AND AGENTS

 

The corporation may, to the extent authorized from time to time by the board of directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the corporation similar to those conferred in this Article IX to directors and officers of the corporation.

 

9.13 EFFECT OF AMENDMENT OR REPEAL

 

Neither any amendment or repeal of any Section of this Article IX, nor the adoption of any provision of the Certificate or the bylaws inconsistent with this Article IX, shall adversely affect any right or protection of any director, officer, employee or other agent established pursuant to this Article IX existing at the time of such amendment, repeal or adoption of an inconsistent provision, including without limitation by eliminating or reducing the effect of this Article IX, for or in respect of any act, omission or other matter occurring, or any action or proceeding accruing or arising (or that, but for this Article IX, would accrue or arise), prior to such amendment, repeal or adoption of an inconsistent provision.

 

ARTICLE X

FORUM FOR ADJUDICATION OF DISPUTES

 

Unless the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the FBCA or the Certificate of Incorporation or Bylaws (as either may be amended from time to time), or (iv) any action asserting a claim governed by the internal affairs doctrine shall be the State of Florida.

 

If any action the subject matter of which is within the scope of the preceding sentence is filed in a court other than a court located within the State of Flordia (a “Foreign Action”) in the name of any stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the State of Florida in connection with any action brought in any such court to enforce the preceding sentence and (ii) having service of process made upon such stockholder in any such action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.

 

28

 

 

ARTICLE XI

MISCELLANEOUS

 

11.1 PROVISIONS OF CERTIFICATE GOVERN

 

In the event of any inconsistency between the terms of these bylaws and the Certificate, the terms of the Certificate will govern.

 

11.2 AMENDMENT

 

The bylaws of the corporation may be adopted, amended or repealed by the corporation’s Board. The fact that such power has been so conferred upon the Board shall not divest the stockholders of the power, nor limit their power to adopt, amend or repeal bylaws.

 

[Remainder of Page Intentionally Left Blank]

 

29

 

 

CURATIVE BIOTECHNOLOGY, INC.

 

a Florida corporation

 

CERTIFICATE OF ADOPTION OF AMENDED AND RESTATED BYLAWS

 

The undersigned hereby certifies that he or she is the duly elected, qualified, and acting Chief Executive Officer of CURATIVE BIOTECHNOLOGY, INC., a Florida corporation and that the foregoing amended and restated bylaws, comprising twenty-nine (29) pages, were adopted as the corporation’s bylaws on March 29, 2021 by the corporation’s board of directors as provided for in the corporation’s certificate of incorporation filed with the Florida secretary of state.

 

IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 29th day of March 2021.

 

  /s/ Richard Garr

I. Richard Garr

Chief Executive Officer

 

30

 

 

Exhibit 5.01

 

SILVESTRE LAW GROUP, P.C.

 

 

2629 Townsgate Road #215

Westlake Village, CA 91361

(818) 597-7552

Fax (805) 553-9367

 

September 9, 2022

 

Curative Biotechnology, Inc.

1825 NW Corporate Blvd. Suite 110

Boca Raton, FL 33431

 

  Re: Registration Statement on Form S-1 (File No. 333-264339)

 

Ladies and Gentlemen:

 

We have acted as counsel to Curative Biotechnology, Inc., a Florida corporation (the “Company”), in connection with the filing of a Registration Statement on Form S-1 (the “Registration Statement”) with the Securities and Exchange Commission, including a related prospectus included in the Registration Statement (the “Prospectus”) covering an underwritten public offering of up to 1,142,857 units (the “Units”), each consisting of (i) one (1) share of the Company’s common stock (“Common Stock”), par value $0.0001 per share (the “Common Shares”) and (ii) one (1) warrant to purchase one (1) share of Common Stock (the “Common Warrants”).The Registration Statement also covers the issuance of warrants to purchase up to 65,713 shares of Common Stock being issued to Aegis Capital Corp., the underwriter for the offering (the “Representative Warrant”) and the shares of Common Stock issuable upon exercise thereof. The Common Warrants and the Representative Warrant are collectively referred to herein as the “Warrants” and the shares of Common Stock issuable upon exercise of the Warrants are referred to as the “Warrants Shares.” The Units, the Shares, and the Warrants are to be sold by the Company as described in the Registration Statement and Prospectus. The Units, the Shares, the Warrants, the Representative Warrant, and the Warrant Shares are collectively referred to as the “Securities”.

 

In connection with this opinion, we have (i) examined and relied upon the Registration Statement and the Prospectus, the Company’s articles of incorporation and bylaws, each as currently in effect, the underwriting agreement filed as an exhibit to the Registration Statement, the form of the Warrants filed as exhibits to the Registration Statement, and such other documents, records, certificates, memoranda and other instruments as in our judgment are necessary or appropriate to enable us to render the opinion expressed below, and (ii) assumed that the securities offered pursuant to the Registration Statement will be sold on pricing terms established by the Board of Directors of the Company or a duly authorized committee thereof. We have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to originals of all documents submitted to us as copies, the accuracy, completeness and authenticity of certificates of public officials, and the due authorization, execution and delivery of all documents by all persons other than the Company where authorization, execution and delivery are prerequisites to the effectiveness thereof. As to certain factual matters, we have relied upon a certificate of an officer of the Company and have not independently verified such matters.

 

Our opinion is expressed only with respect to the General Corporation Law of the State of Delaware and the laws of the State of California. We express no opinion to the extent that any other laws are applicable to the subject matter hereof and express no opinion and provide no assurance as to compliance with any federal or state securities law, rule or regulation.

 

We express no opinion to the extent that future issuances of securities of the Company, including the Warrant Shares, and/or antidilution adjustments to outstanding securities of the Company, cause the Warrants to be exercisable for more shares of the Common Stock than the number that remain available for issuance under the then effective articles of incorporation of the Company. Further, we have assumed that the exercise price of the Warrants at the time of exercise is equal to or greater than the par value of the Common Stock.

 

 

 

 

SILVESTRE LAW GROUP, P.C.

 

 

With regard to our opinion concerning the Warrants constituting valid and binding obligations of the Company:

 

  (i) our opinion is subject to, and may be limited by, (a) applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance, debtor and creditor, and similar laws which relate to or affect creditors’ rights generally, and (b) general principles of equity (including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing) regardless of whether considered in a proceeding in equity or at law;
     
  (ii) our opinion is subject to the qualification that (a) the enforceability of provisions for indemnification or limitations on liability may be limited by applicable law and by public policy considerations, and (b) the availability of specific performance, an injunction or other equitable remedies is subject to the discretion of the court before which the request is brought;
     
  (iii) we express no opinion with respect to any provision of the Warrants that: (a) relates to the subject matter jurisdiction of any federal court of the United States of America or any federal appellate court to adjudicate any controversy related to the Warrants; (b) specifies provisions may be waived in writing, to the extent that an oral agreement or implied agreement by trade practice or course of conduct has been created that modifies such provision; (c) contains a waiver of an inconvenient forum; (d) provides for liquidated damages, buy-in damages, default interest, late charges, monetary penalties, prepayment or make-whole payments or other economic remedies; (e) relates to advance waivers of claims, defenses, rights granted by law, or notice, opportunity for hearing, evidentiary requirements, statutes of limitations, trial by jury, service of process or procedural rights; (f) restricts non-written modifications and waivers; (g) provides for the payment of legal and other professional fees where such payment is contrary to law or public policy; (h) relates to exclusivity, election or accumulation of rights or remedies; or (i) provides that provisions of the Warrants are severable to the extent an essential part of the agreed exchange is determined to be invalid and unenforceable; and
     
  (iv) we express no opinion as to whether a state court outside of the State of New York or a federal court of the United States would give effect to the choice of New York law provided for in the Warrants.

 

On the basis of the foregoing, and in reliance thereon, we are of the opinion that

 

  (i) The Shares have been duly authorized and, when issued and delivered as part of the Units against payment therefor in accordance with the Registration Statement and the Prospectus, will be validly issued, fully paid and nonassessable,
     
  (ii) The Common Warrants and Representative Warrant have been duly authorized by the Board of Directors of the Company and, when executed on behalf of the Company and issued and delivered, in the case of the Common Warrants as part of the Units against payment therefor, in accordance with the Registration Statement and the Prospectus, will be valid and binding obligations of the Company in accordance with their respective terms
     
  (iii) The Warrant Shares, when issued and delivered upon exercise of the Common Warrants or Representative Warrant, in accordance with the respective terms thereof, will be duly authorized, validly issued, fully paid and nonassessable
     
  (iv) The Units have been duly authorized by the Board of Directors of the Company and, when issued and delivered against payment therefor in accordance with the Registration Statement and the Prospectus, will be valid and binding obligations of the Company.

 

The opinions expressed in this opinion letter are as of the date of this opinion letter only and as to laws covered hereby only as they are in effect on that date, and we assume no obligation to update or supplement such opinion to reflect any facts or circumstances that may come to our attention after that date or any changes in law that may occur or become effective after that date. The opinions herein are limited to the matters expressly set forth in this opinion letter, and no opinion or representation is given or may be inferred beyond the opinions expressly set forth in this opinion letter.

 

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference made to this firm in the Prospectus under the caption “Legal Matters.” In giving such consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Securities Act or the rules and regulations thereunder.

 

   Very truly yours,
   
  /s/ SILVESTRE LAW GROUP, PC

 

2

 

 

Exhibit 10.04

 

SETTLEMENT AGREEMENT AND RELEASE

 

THIS SETTLEMENT AGREEMENT AND RELEASE (the “Settlement Agreement”), is made and entered into as of this 9th day of August 2021 by and between: (i) FORTIFIED MANAGEMENT GROUP, LLC (“Fortified”) and JODY R. SAMUELS (“Samuels”) on the one hand; and CURATIVE BIOTECHNOLOGY, INC. f/k/a CONNECTYX TECHNOLOGIES HOLDINGS GROUP, INC., on the other hand (“Curative” and together with Fortified and Samuels, the “Parties”).

 

RECITALS

 

WHEREAS, on May 4, 2021, Fortified and Samuels sued Curative via the suit styled Fortified Management Group, LLC and Jody R. Samuels v. Curative Biotechnology, Inc. f/k/a Connectyx Technologies Holdings Group, Inc., Case No. 502021CA005665XXXXMB pending in the Circuit Court of The Fifteenth Judicial Circuit, In And For Miami-Dade County, Florida (the “Lawsuit”); and

 

WHEREAS, although none of the Parties admit to liability or fault, all are amenable to resolving the disputes related to the Lawsuit.

 

NOW, THEREFORE, in consideration of the foregoing promises and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Parties, the Parties agree as follows:

 

1.Recitals. The foregoing Recitals are true and correct and are incorporated by reference herein.

 

2.Governing Law. This Settlement Agreement shall be governed by the laws of the State of Florida, regardless of Florida’s conflict of laws principles.

 

3.Purpose. The Parties agree that the purposes of this Settlement Agreement are to: (i) conclusively, fully, and finally resolve the Lawsuit and any other currently existing claims or disputes between Curative, on the one hand, and either Fortified or Samuels on the other, and; (ii) irrevocably extinguish, relinquish, surrender, and completely abandon any and all right, title and interest (contingent or otherwise) that either Fortified, Samuels, their affiliates, or assignees have in that certain Convertible Promissory Note dated April 23, 2013 in the principal amount of Ninety Seven Thousand Five Hundred Dollars ($97,500.00), a copy of which is attached hereto and incorporated by reference hereby as Exhibit A (the “Note”).

 

4.Effective Date. The “Effective Date” shall be the latest of following events (i) the date the final party executes this Settlement Agreement and (ii) the date Mark Migdal & Hayden c/o Yaniv Adar, Esq., 80 S.W. 8th Street, Suite 1999, Miami, Florida 33130 (“Mark Migdal”) provides a W9 and wire instructions to its trust account to Curative.

 

5.The Note and Assignments. On the Effective Date, Fortified and Samuels shall deliver a lost note affidavit in the form attached hereto as Exhibit B (the “Lost Note Affidavit”) to Rennert Vogel Mandler & Rodriguez, P.A., c/o Thomas S. Ward, Esq., 100 S.E. Second Street, Suite 2900, Miami, Florida 33131 (“Rennert Vogel”).

 

 
Settlement Agreement and Release
Page 2 of 13

 

6.The Settlement Payment. As consideration for this settlement, Fortified and Samuels have agreed to jointly accept $100,000.00 in cash to be divided among them as they deem fit (the “Settlement Payment”). On the Effective Date—after Rennert Vogel has received the Lost Note Affidavit—Curative shall pay the Settlement Payment by wire to the Mark Migdal & Hayden Trust Account c/o Yaniv Adar, Esq., 80 S.W. 8th Street, Suite 1999, Miami, Florida 33130 (“Mark Migdal”).

 

7.(i) The Settlement Shares. Also as consideration for this settlement, Fortified and Samuels have agreed to jointly accept 2,000,000 restricted shares of Curative’s Common Stock, which have piggyback registration rights, as set forth below. On the Effective Date—after Rennert Vogel has received the Lost Note Affidavit—Curative shall forthwith deliver to its transfer agent a written instruction to deliver to Fortified and Samuels: (i) one (1) certificate i/n/o Fortified Management Group, LLC, evidencing ownership of 1,700,000 shares of Common Stock, par value $0.0001 per share, of Curative (the “Fortified Shares”); and (ii) one (1) certificate i/n/o Jody Samuels, evidencing ownership of 300,000 shares of Common Stock, par value $0.0001 per share, of Curative (the “Samuels Shares,” and together with the Fortified Shares, the “Settlement Shares”). The transfer agent should be directed to deliver the Fortified Shares to Fortified c/o Thomas Scipione at 135 El Camino Loop, Staten Island, New York 10309. The transfer agent should be directed to deliver the Samuels Shares to Samuels at 121 Wilson Terrace, Staten Island, New York 10304.

 

The Settlement Shares are “restricted securities” as such term is defined under the Securities Act of 1933, as amended (the “Securities Act”) and all certificates evidencing the Settlement Shares shall bear the following legend:

 

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT COVERING THE TRANSFER OR PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN OPINON OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

(ii) Piggyback Registrations.

 

(a) Piggyback Registrations. Curative will notify Fortified and Samuels (each a “Holder” and together the “Holders”) in writing at least thirty (30) days prior to filing any registration statement under the Securities Act for purposes of effecting a public offering of securities of Curative (including, but not limited to, registration statements relating to secondary offerings of securities of Curative and selling securityholder resale registration statement, but excluding a Registration Statement on Form S-4 or S-8 or any successor form) and will afford each such Holder an opportunity to include in such registration statement all or any part of the Settlement Shares (also referenced herein as the “Registrable Securities”) then held by such Holder. Each Holder desiring to include in any such registration statement all or any part of the Registrable Securities held by such Holder will, within twenty (20) days after receipt of the above- described notice from Curative, so notify Curative in writing, and in such notice will inform Curative of the number of Registrable Securities such Holder wishes to include in such registration statement. If a Holder decides not to include all of its Registrable Securities in any registration statement thereafter filed by Curative, such Holder will nevertheless continue to have the right to include any Registrable Securities in any subsequent registration statement or registration statements as may be filed by Curative with respect to offerings of its securities, all upon the terms and conditions set forth herein.

 

 
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(b) Underwriting. If a registration statement under which Curative gives notice under this Section 7(ii) is for an underwritten offering, then Curative will so advise the Holders of Registrable Securities. In such event, the right of any such Holder’s Registrable Securities to be included in a registration pursuant to this Section 7(ii) will be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their Registrable Securities through such underwriting will enter into an underwriting agreement in customary form with the managing underwriter or underwriter(s) selected for such underwriting. Notwithstanding any other provision of this Agreement, if the managing underwriter(s) determine(s) in good faith that marketing factors require a limitation of the number of shares to be underwritten, then the managing underwriter(s) may exclude shares (including Registrable Securities) from the registration and the underwriting, and the number of shares that may be included in the registration and the underwriting will be allocated, first, to Curative, and second, to each of the Holders requesting inclusion of their Registrable Securities in such registration statement on a pro rata basis based on the total number of Registrable Securities then held by each such Holder. If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw therefrom by written notice to Curative and the underwriter, delivered at least ten (10) business days prior to the effective date of the registration statement. Any Registrable Securities excluded or withdrawn from such underwriting will be excluded and withdrawn from the registration. For any Holder which is a partnership or corporation, the partners, retired partners and shareholders of such Holder, or the estates and family members of any such partners and retired partners and any trusts for the benefit of any of the foregoing persons will be deemed to be a single “Holder,” and any pro rata reduction with respect to such “Holder” will be based upon the aggregate amount of shares carrying registration rights owned by all entities and individuals included in such “Holder,” as defined in this sentence.

 

(c) Expenses. All expenses incurred in connection with a registration pursuant to this Section 7(ii) (excluding underwriters’ and brokers’ discounts and commissions), including, without limitation all federal and “blue sky” registration and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for Curative and the reasonable fees and disbursements of one (1) counsel for the selling Holder or Holders will be borne by Curative.

 

(iii) Obligations of Curative. Whenever required to effect the registration of any Registrable Securities under this Agreement, Curative will, as expeditiously as reasonably possible:

 

(a) Furnish to the Holders such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of the Registrable Securities owned by them that are included in such registration;

 

 
Settlement Agreement and Release
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(b) Use commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as will be reasonably requested by the Holders, provided Curative will not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions;

 

(c) In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of such offering (it being understood and agreed, as a condition to Curative’s obligations under this clause (e), each Holder participating in such underwriting will also enter into and perform its obligations under such an agreement);

 

(d) Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing; and

 

(e) Furnish, at the request of any Holder requesting registration of Registrable Securities, on the date such Registrable Securities are delivered to the underwriters for sale, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the date the registration statement with respect to such securities becomes effective, (i) an opinion, dated as of such date, of the counsel representing Curative for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering and reasonably satisfactory to a majority in interest of the Holders requesting registration, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities and (ii) a “comfort” letter dated as of such date, from the independent certified public accountants of Curative, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering and reasonably satisfactory to a majority in interest of the Holders requesting registration, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities.

 

(iv) Furnish Information. It will be a condition precedent to the obligations of Curative to take any action pursuant to Section 7(ii) hereof that the selling Holders will furnish to Curative such information regarding themselves, the Registrable Securities held by them and the intended method of disposition of such securities as will be required to timely effect the registration of their Registrable Securities.

 

(v) Expiration. Notwithstanding anything contained herein, the Holders’ rights under this Section 7(ii), (iii), and (iv) shall terminate and shall be of no further force and effect on the date the Registerable Securities are available for resale pursuant to an exemption from registration under the Securities Act.

 

 
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8.Dismissing the Lawsuit With Prejudice. On the Effective Date—after Curative has made the Settlement Payment and delivered written instructions to issue the Settlement Shares— Fortified and Samuels shall file an unconditional dismissal with prejudice of the Lawsuit, which states that all parties agree to bear their own respective attorneys’ fees and costs (the “Dismissal Filing”). Notwithstanding Fortified and Samuels’ filing of the Dismissal Filing on the Effective Date, Curative agrees that it will owe a one-time $50,000.00 liquidated damages penalty in favor of Fortified and Samuels jointly (i.e., not $50,000.00 for Fortified and another $50,000.00 to Samuels, but rather a single $50,000.00 penalty owed jointly to Fortified and Samuels) if the Settlement Shares are not issued within 72 hours of Curative’s issuing the instructions to the settlement agent.

 

9.Releasing From Trust. Upon Mark Migdal’s filing the Dismissal Filing (i) Mark Migdal shall be entitled to release from trust the Settlement Payment and deliver it to Fortified and Samuels and (ii) Rennert Vogel shall be entitled to release from trust the Lost Note Affidavit and deliver it to Curative.

 

10.Attorneys’ Fees and Costs; Exception. The Parties agree to bear their own attorneys’ fees and costs incurred in connection with the Lawsuit, including those associated with negotiating, papering, and complying with this Settlement Agreement. The prevailing party in any subsequent litigation to enforce this Settlement Agreement is entitled to recover its reasonable attorneys’ fees and costs at all levels.

 

11.Fortified and Samuel’s General Release of Curative. Effective immediately upon the filing of the Dismissal Filing, Samuels and Fortified (and its respective successors, members, officers, directors, agents, assigns, attorneys, and affiliates) jointly remit, release, acquit and forever discharge Curative (and its respective successors, members, officers, directors, agents, assigns, attorneys, and affiliates) from all currently existing claims, counterclaims, defenses, damages, actions and causes of action, suits, controversies, debts, dues, sums of money, accounts, specialties, losses, judgments, proceedings, rights, remedies, obligations, covenants, warranties, representations, contracts, agreements, promises, liabilities, costs, attorneys’ fees and demands that Samuels and/or Fortified (and its respective successors, members, officers, directors, agents, assigns, attorneys, and affiliates) have asserted or could have asserted against Curative (and its respective successors, members, officers, directors, agents, assigns, attorneys, and affiliates) from the beginning of time through the execution of this Agreement. This release does not release Curative from performing any obligations it has to Samuels and Fortified under this Settlement Agreement or any future claims Samuels or Fortified may have against Curative.

 

 
Settlement Agreement and Release
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12.Curative’s General Release of Fortified and Samuels. Effective immediately upon the filing of the Dismissal Filing, Curative (and its respective successors, members, officers, directors, agents, assigns, attorneys, and affiliates) jointly remit, release, acquit and forever discharge Samuels and Fortified (and its respective successors, members, officers, directors, agents, assigns, attorneys, and affiliates) from all currently existing claims, counterclaims, defenses, damages, actions and causes of action, suits, controversies, debts, dues, sums of money, accounts, specialties, losses, judgments, proceedings, rights, remedies, obligations, covenants, warranties, representations, contracts, agreements, promises, liabilities, costs, attorneys’ fees and demands that Curative (and its respective successors, members, officers, directors, agents, assigns, attorneys, and affiliates) have asserted or could have asserted against Samuels and/or Fortified (and its respective successors, members, officers, directors, agents, assigns, attorneys, and affiliates) from the beginning of time through the execution of this Agreement. This release does not release Samuels and Fortified from performing any obligations it has to Curative under this Settlement Agreement or any future claims Curative may have against Fortified and/or Samuels.

 

13.Indemnification. Fortified and Samuels shall indemnify, hold harmless, and defend Curative (and its respective successors, members, officers, directors, agents, assigns, attorneys, and affiliates) on a joint and several basis, of and from and against any losses, action, claim, demand or liability, including reasonable attorney’s fees and costs, arising from or relating to the Note and its underlying debt and obligations asserted by any other person or entity.

 

14.Legal Counsel and Additional Representations. The Parties represent and acknowledge that: (i) they read and write English; (ii) they have all either obtained or had the opportunity to obtain independent legal counsel before signing this Agreement; (iii) they have all been fully advised that this Agreement is legally binding on all of them; (iv) there are no representations or promises made to any of them by the other Party that are not contained in this Settlement Agreement; (v) all Parties are authorized to sign this Settlement Agreement either on their own behalf or on behalf of the entity for which they are signing and for all persons, firms and entities claim by, through or under them; (vi) all corporate action of the undersigned entities or individuals has been taken to make this Settlement Agreement legal and fully binding upon all of them; (vii) the only people or entities with any interest in the Note are Fortified and Samuels; and (viii) neither Fortified nor Samuels have assigned or have promised to assign any right, title, or interest in the Note to any other person or entity except the assignment to Samuels as described in the complaint filed in the Lawsuit.

 

15.Enforceability. This Settlement Agreement and its enforceability shall not be affected by the filing of bankruptcy of any of the Parties or any of their members, shareholders, officers, agents or directors.

 

16.Entire Agreement. This Settlement Agreement contains the entire agreement between the Parties with respect to the matters addressed herein and no prior representations, inducements, promises, or agreements, oral or written, between the Parties in respect thereof, shall be of any force or effect if not expressly embodied in writing herein.

 

17.Amendments. This Settlement Agreement may not be amended or modified except in a writing duly signed by an authorized representative of all Parties.

 

18.Counterparts. The Parties acknowledge and agree that this Settlement Agreement may be executed in multiple counterparts, and transmitted via facsimile or e-mail, each such counterpart (whether transmitted via facsimile or e-mail), when executed, shall constitute an integral part of one and the same Agreement between the parties.

 

 
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19.Time of the Essence. Time is of the essence as to all terms of this Settlement Agreement.

 

20.Severability. Without limiting the generality of the foregoing, it is the Parties’ mutual desire and intention that all provisions of this Settlement Agreement be given full effect and be enforceable strictly in accordance with their terms. If, however, any part of this Settlement Agreement is declared to be not enforceable in accordance with its terms or would render other parts of this Settlement Agreement, in its entirety, unenforceable, the unenforceable part or parts are to be judicially modified, if at all possible, to come as close as possible to the expressed intent of such part or parts (and still be enforceable without jeopardy to other parts of this Settlement Agreement), and then are to be enforced as so modified. If the unenforceable part or parts cannot be so modified, such part or parts will be unenforceable and considered null and void in order that the mutual paramount goal (that this Settlement Agreement is to be enforced to the maximum extent possible strictly in accordance with its terms) can be achieved.

 

21.Further Assurances. The Parties agree to execute such further and additional documents, instruments and writings as may be necessary to fully effectuate the terms and provisions of this Settlement Agreement.

 

22.Joint Preparation of Agreement. This Settlement Agreement shall not be construed against any of the Parties, but shall be construed as if it were prepared jointly by all Parties, and any uncertainty or ambiguity, or both, shall not be interpreted against any Party.

 

23.Tax Advice. The Parties understand and agree that their counsel has not provided any tax or legal advice and has not made any representations regarding tax obligations or consequences, if any, in connection with this Settlement Agreement. Each Party is responsible for its own tax consequences that may arise as a result of the execution of this Settlement Agreement.

 

24.Confidentiality. The Parties agree that the terms and conditions of this Settlement Agreement and of the settlement represented hereby shall be kept strictly confidential and none of the Parties shall make any statements to third parties regarding the specific terms of this Settlement Agreement, except: (a) as may be necessary in connection with the Parties’ legal requirements, including legal, accounting, or securities reporting interests; (b) to enforce the terms hereof; or (c) as otherwise required by law or court order. The Parties acknowledge and agree that they have received consideration in exchange for their agreement to this confidentiality provision. The Parties agree that this confidentiality provision is an important term of this Settlement Agreement, that any breach of it constitutes a substantial violation of this Settlement Agreement and that in in addition to any and all other rights and remedies that may be available to the Parties 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 bond).

 

 
Settlement Agreement and Release
Page 8 of 13

 

IN WITNESS WHEREOF, the Parties have executed this Settlement Agreement as evidenced by the Parties’ signature pages, which follow forthwith. 

 

[SIGNATURE PAGES IMMEDIATELY FOLLOW]

 

 
Settlement Agreement and Release
Page 9 of 13

 

FORTIFIED MANAGEMENT GROUP, LLC      
         
Signature: /s/ Thomas Scipione   Date: August 9, 2021
         
Name: Thomas Scipione      
         
Title: President      
         
JODY R. SAMUELS      
         
Signature:   Date: August 9. 2021

 

 
Settlement Agreement and Release
Page 10 of 13

 

Jody Signature P…

 

FORTIFll:0 MANAGEMENT GROUP, LLC

      
         
Signature:     Date: August 19 2021
         
Name: Thomas Scipione      
         
Title: President      
         
JODY R. SAMUELS      
         
Signature:   Date: August 19 2021

 

 
Settlement Agreement and Release
Page 11 of 13

 

CURATIVE BIOTECHNOLOGY, INC. f/k/a CONNECTYX TECHNOLOGIES HOLDINGS GROUP, INC.

 

Signature: /s/ Richard Garr Date: August 9, 2021
         
Name: I. Richard Garr      
         
Title: CEO      

 

 
Settlement Agreement and Release
Page 12 of 13

 

AGREED AND ACKNOWLEDGED:      
       
RENNERT VOGEL MANDLER & RODRIGUEZ, P.A.      
         
Signature:   Date: August 9, 2021
         
Name: Thomas S. Ward, Esg.      
         
MARK MIGDAL & HAYDEN, P.A.      
         
Signature:   Date: August 9, 2021
         
Name: Yaniv Adar, Esq.      

 

 
Settlement Agreement and Release
Page 13 of 13

 

AGREED AND ACKNOWLEDGED:      
       
RENNERT VOGEL MANDLER & RODRIGUEZ, P.A.      
         
Signature:   Date: August 9, 2021
         
Name: Thomas S. Ward, Esq.       
         
MARK MIGDAL & HAYDEN, P.A.      
       
Signature:     Date: August 9, 2021
         
Name: Yaniv Adar, Esq.      

 

 

 

 

 

Exhibit 10.05

 

 

Sohn Health Strategies

SPECIAL ADVISOR TO THE BOARD OF DIRECTORS AND THE CEO AGREEMENT

 

THIS AGREEMENT is made and entered into effective as of SEPTEMBER 27, 2021, (the “Effective Date”), by and between Curative Biotechnology Inc., a Florida corporation (the “Company”) with its principal place of business located at 1825 NW Corporate Blvd #110 Boca Raton, Florida , and Sohn Health Strategies LLC, a New Jersey limited liability company (“Advisor”) with a principal place of business at 5 Hidden Acres Drive, Voorhees, NJ 08043.

 

1) Term

 

This Agreement shall continue for a period of two (2) years from the Effective Date. It may be renewed for a successive one-year term upon 30 days’ notice prior to the scheduled date of termination under mutually agreeable terms.

 

2) Position and Responsibilities

 

a) Position. The Board of Directors hereby appoints the Advisor to serve as a special advisor to the Board and the CEO for her term or until her earlier resignation, removal or death. The advisor shall perform such duties and responsibilities in accordance with Company’s bylaws and applicable law, and as described below. Advisor hereby agrees to use commercially reasonable efforts to provide the Services. Advisor shall comply with the statutes, rules, regulations and orders of any governmental or quasi-governmental authority, which are applicable to the Company and the performance of the Services, and Company’s rules, regulations, and practices as they may from time-to-time be adopted or modified.

 

Duties:

 

Monthly: one day review sessions with CEO

 

Quarterly: Time to prep for two Joint Steering Committee (“JSC”) meetings (objectives to be pre-agreed with CEO, assist CEO to prepare agenda for distribution to all JSC members)

 

Chair and participate in the infectious disease (“ID”) Joint Steering Committee meetingand the National EYE Institute (“NEI”) Joint Steering Committee meeting (or upon the request of the Company, serve as one of Company’s representatives at such meetings)

 

Quarterly: Attend and prepare minutes for both ID and NEI Joint Steering Committee Meetings

 

Attend key scientific meetings as a representative of the Company, as requested/approved by CEO and agreed with Advisor. Ad Hoc availability for calls with CEO, Chairman, other advisors, and NIH investigators on a reasonable schedule agreed with Advisor.

 

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b) No Conflict. Advisor will not engage in any activity that creates an actual or perceived conflict of interest with Company without the Company’s consent such consent not to be unreasonably withheld.

 

3) Compensation

 

a) Advisor’s Fee. In consideration of the services to be rendered under this Agreement, Company shall pay Advisor with an issuance on each annual anniversary of the Effective Date during the term of this Agreement 250,000 shares of unregistered common stock of the Company (the “Common Stock”), with appropriate legend with a basis of eleven cents/share, the closing price of the stock on the effective date of this agreement. In addition, the Company shall make a one-time grant to the Advisor of stock options at eleven cents/share, the number of options equal to 1% of the issued and outstanding capital stock of the Company on a fully-diluted basis as of the Effective Date. The parties agree and acknowledge that a reverse split is likely prior to an anticipated “uplisting” of the Company’s stock to an exchange, accompanying a capital raise of at least $5,000,000 (the “Capital Raise”); and that after such reverse split and Capital Raise, the Company shall issue to Advisor a sufficient number of stock options of Common Stock required to restore Advisor’s stock ownership to the nuber options equaling 1% of issued and outstanding capital stock of the Company on a fully-diluted basis. The initial 1% equity stake shall vest in two equal parts; 50% upon execution of this Agreement and 50% upon the first annual anniversary of the Effective Date. Shares issued in connection with any “uplisting” or capital raise shall vest immediately.

 

b) In addition, Advisor shall be paid $250,000 per year in cash as a consulting fee, to be paid monthly or quarterly at Advisor’s discretion. The Company shall begin making the cash payment on the first business day after the Capital Raise has been completed. Any amount “accrued” between the Effective Date and the completion of the raise shall be prorated and paid monthly over the remaining months of the first year of the Agreement.

 

c) All vestings subsequent to the initial vesting are contingent upon this Agreement still being in effect at the time. Notwithstanding the foregoing, if the Advisor terminates this Agreement for “good reason” as generally understood in the industry, or the Company terminates this Agreement without “cause” as generally understood in the industry, all as yet unvested stock compensation shall immediately become vested.

 

d) Expenses. The Company shall reimburse Director for all reasonable business expenses incurred in the performance of the Services in accordance with Company’s expense reimbursement guidelines, including necessary or requested travel expenses. Company shall reimburse Advisor for such travel on business class, or first class if business class is not available.

 

 

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e) Indemnification. Company will indemnify and defend Advisor and hold Advisor harmless from and against any liability incurred in the performance of the Services to the fullest extent permitted by applicable law. Further, Company shall indemnify and defend Advisor and hold Advisor harmless from and against any third-party claims arising from any source whatsoever.

 

f) Insurance. During the term of this Agreement and for a period of six years thereafter, Company shall, at its own expense, maintain and carry such types of insurance with financially sound and reputable insurers, in full force and effect that includes, but is not limited to, commercial general liability in an amount as is consistent with industry norms and is otherwise reasonable for a company in a development phase similar to that of the Company. Upon Advisor’s request, Company shall provide Advisor with a certificate of insurance from Company’s insurer evidencing the insurance coverage specified in this Agreement. The certificate of insurance shall name Advisor as an additional insured. Company shall provide Advisor with at least 30 days’ advance written notice in the event of a cancellation or material change in Company’s insurance policy. Except where prohibited by law, Company shall require its insurer to waive all rights of subrogation against Advisor’s insurers and Advisor.

 

4) Termination

 

a) Right to Terminate. At any time, Advisor may be removed “for cause” and only for cause; as it is reasonably understood in the industry. Such termination for cause would end all Company obligations for further Compensation under the Agreement but would have no effect on vested or paid compensation or upon expenses incurred but not yet reimbursed.

 

b) Voluntary Termination . Upon voluntary termination via resignation of Advisor prior to the completion of the term of the Agreement this agreement will terminate. In such case Company shall pay to Advisor all compensation and expenses to which Advisor is entitled up through the date of termination; and Advisor shall be entitled to its rights under any other applicable law. Thereafter, all of Company’s obligations under this Agreement shall cease.

 

c) Survival’ Notwithstanding anything to the contrary set forth in this Agreement, the provisions in the third sentence of Paragraph 3(a), the last sentence of Paragraph 3(b) and all of Paragraphs 3(c), (d) (as to as yet unreimbursed amounts), (e) and (f) shall survive expiration or termination of this Agreement. Paragraph 5 shall survive any such expiration or termination for a period of three years.

 

 

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5) Nondisclosure Obligations

 

Advisor shall maintain in confidence and shall not, directly or indirectly, disclose or use, either during or after the term of this Agreement, any Proprietary Information (as defined below), confidential information, or trade secrets belonging to Company, whether or not it is in written or permanent form, except to the extent necessary to perform the Services, as required by a lawful government order or subpoena, or as authorized in writing by Company. “Proprietary Information” means all information pertaining in any manner to the business of Company, unless (i) the information is or becomes publicly known through lawful means; (ii) the information was part of Advisor’s general knowledge prior to its relationship with Company; or (iii) the information is disclosed to Advisor without restriction by a third party who rightfully possesses the information and, This Agreement constitut)es the entire understanding between the parties hereto superseding all prior and contemporaneous agreements or understandings among the parties hereto concerning the Agreement. to the knowledge of Advisor, did not learn of it from Company.

 

6) Entire Agreement

 

This Agreement constitutes the entire understanding between the parties hereto superseding all prior and contemporaneous agreements or understandings among the parties hereto concerning the Agreement.

 

7) Amendments; Waivers

 

This Agreement may be amended, modified, superseded or canceled, and any of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by the parties or, in the case of a waiver, by the party to be charged. Any amendment or waiver by the Company must be approved by the Company’s Board of Directors and executed on behalf of the Company by its Chief Executive Officer.

 

8) Assignment

 

This Agreement shall not be assignable by Advisor without Company’s consent at Company’s total discretion.

 

9) Severability

 

If any provision of this Agreement shall be held by a court to be invalid, unenforceable, or void, such provision shall be enforced to fullest extent permitted by law, and the remainder of this Agreement shall remain in full force and effect. In the event that the time period or scope of any provision is declared by a court of competent jurisdiction to exceed the maximum time period or scope that such court deems enforceable, then such court shall reduce the time period or scope to the maximum time period or scope permitted by law.

 

10) Governing Law

 

This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.

 

 

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11) Interpretation

 

This Agreement shall be construed as a whole, according to its fair meaning, and not in favor of or against any party. Captions are used for reference purposes only and should be ignored in the interpretation of the Agreement.

 

12) Binding Agreement

 

Each party represents and warrants to the other that the person(s) signing this Agreement below has authority to bind the party to this Agreement and that this Agreement will legally bind both Company and Advisor. To the extent that the practices, policies, or procedures of Company, now or in the future, are inconsistent with the terms of this Agreement, the provisions of this Agreement shall control. Any subsequent mutually agreed change in Advisor’s duties or compensation will not affect the validity or scope of the remainder of this Agreement.

 

13) Advisor Acknowledgment

 

Advisor acknowledges Advisor has had the opportunity to consult legal counsel concerning this Agreement, that Advisor has read and understands the Agreement, that Advisor is fully aware of its legal effect, and that Advisor has entered into it freely based on its own judgment and not on any representations or promises other than those contained in this Agreement.

 

14) Counterparts

 

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

15) Date of Agreement

 

The parties have duly executed this Agreement as of the Effective Date.

 

Curative Biotechnology Inc.   Sohn Health Strategies LLC
         
By: /s/ Richard Garr.   By: /s Catherine Sohn.
  I Richard Garr, CEO   Catherine Angell Sohn, Pharm.D., President
  1825 NW Corporate Blvd #110   [Address]
  Boca Raton, FL 33431   Cell: [*] |
      Office: [*]

 

 

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Exhibit 10.09

 

LICENSE, FUNDING AND OPERATIONAL AGREEMENT

 

This License Agreement (this “Agreement”) is made and is effective this 1st day of October 2021, (the “Effective Date”) between Mid-Atlantic BioTherapeutics, Inc (hereinafter MABT), a Delaware corporation (“Licensor”) and Curative Biotechnology, Inc. (hereinafter CUBT), a Delaware corporation (“Licensee”), and David Horn, LLC as Licensor to MABT, and their respective legitimate successors and/or assigns. Licensors and Licensee are each referred to as a “Party” and collectively referred to as the “Parties.”

 

WHEREAS, Licensor owns the Licensed Patent Rights and Licensed Know-How, as defined herein;

 

WHEREAS, Licensee desires to obtain a license to develop Licensed Products in the Field of Use on the terms and conditions set forth in this Agreement; and

 

WHEREAS, Licensor is willing to grant Licensee such license on the terms and conditions set forth in this Agreement; and

 

WHEREAS, Licensee has agreed to use its best efforts to raise the funding needed to accomplish the goals set forth herein;

 

NOW THEREFORE, in consideration of the premises and the mutual covenants set forth herein, the receipt and sufficiency of which are hereby acknowledged, Licensor and Licensee agree as follows:

 

1. Definitions.

 

1.1 “Affiliate” means, with respect to a Party, any Person that controls, is controlled by, or is under common control with such Party. For purposes of this Section 1.1, “control” shall refer to (a) in the case of a Person that is a corporate entity, direct or indirect ownership of fifty percent (50%) or more of the stock or shares having the right to vote for the election of directors of such Person and (b) in the case of a Person that is not a corporate entity, the possession, directly or indirectly, of the power to direct, or cause the direction of, the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

 

1.2 “Competitive Infringement” shall have the meaning set forth in Section 5.2(a).

 

1.3 “Confidential Information” means any confidential or proprietary information furnished by one Party to the other Party in connection with this Agreement, provided that such information is specifically designated as “confidential”, “proprietary” or the like. Confidential Information includes, without limitation:

 

(a) non-public information disclosed by either Party in reports submitted by Licensee or Licensor pursuant to Section 3.4(a) and through audits conducted by either Party pursuant to Section 3.4(b); and the Licensed Know-How.

 

1.4 “Cover,” “Covering” or “Covered” means, with respect to a product, that, in the absence of ownership of or a license granted under a Valid Claim, the manufacture, use, offer for sale, sale or importation of such product would infringe such Valid Claim (or, with respect to a patent application, would infringe such Valid Claim if the patent application were to issue as a patent).

 

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1.5 “Field of Use” means the rights for the development and commercialization of MABT’s COVID-19 vaccine composed of recombinant S1 and S2 proteins from SARS-CoV-2 plus IMT504 adjuvant.

 

1.6 “IMT504” means (i) the pharmaceutical compound known as IMT504 described in the Licensed Patent Rights and (ii) any compounds other than IMT504 that are Covered by the Licensed Patent Rights.

 

1.7 “IND” means an investigational new drug application in the United States, including any successor application thereof, and any comparable application in any country or regulatory jurisdiction outside the United States.

 

1.8 “License” means the license granted to Licensee in Section 2.1.

 

1.9 “Licensed Know-How” means the documented information, techniques, technology, practices, trade secrets, inventions, data, results and records in Licensor’s possession and control as of the Effective Date or at any time during the Term relating to the inventions claimed or described in the Licensed Patent Rights.

 

1.10 “Licensed Patent Rights” means the patent rights set forth on Exhibit A as intended for the Field of Use, and any other patents subsequently filed by Licensor which apply to the Field of Use and are required to develop Licensed Product.

 

1.11 “Licensed Product” means MABT’s COVID-19 vaccine composed of recombinant S1 and S2 proteins from SARS-CoV-2 plus IMT504 adjuvant.

 

1.12 “Licensee Improvement” means any and all developments, derivatives, enhancements, modifications, inventions patents and patent rights or discoveries relating to Licensed Product and developed, or created by or on behalf of Licensee, or any of its subsidiaries or its sublicensees at any time during the Term, whether patentable or not, including developments, inventions and discoveries intended to enhance the safety, efficacy, delivery and bioavailability of Licensed Product.

 

1.13 “Licensee Improvement Know-How” means the documented information, techniques, technology, practices, trade secrets, inventions, data, results and records in Licensee’s possession and control at any time during the Term relating to a Licensee.

 

1.14 “Net Profits, with respect to a Licensed Product, shall be determined from the books and records of Licensee, Licensor and their Affiliates and Sublicensees and all interpretations and calculations hereunder shall be computed according to Generally Accepted Accounting Principles, consistently applied.

 

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In the event the Licensed Product is sold as part of a Combination Product, such “Combination Product” means a combination of a Licensed Product with another product (including in the case of a drug, another active ingredient) which is not a Licensed Product, the Net Profits from the Combination Product, for the purposes of determining royalty payments, shall be determined by multiplying the Net Profits (as determined above) of the Combination Product, during the applicable royalty reporting period, by the fraction, A/A+B, where A is the average sale price of the Licensed Product when sold separately in finished form and B is the average sale price of the other product included in the Combination Product when sold separately in finished form, in each case during the applicable royalty reporting period or, if sales of both the Licensed Product and the other product did not occur in such period, then in the most recent royalty reporting period in which sales of both occurred. In the event that such average sale price cannot be determined for both the Licensed Product and all other products included in such Combination Product, Net Profits for the purposes of determining royalty payments shall be calculated by multiplying the Net Profits of the Combination Product by the fraction of C/C+D where C is the fair market value of the Licensed Product and D is the fair market value of all other products included in the Combination Product. In such event, Licensee shall in good faith make a determination of the respective fair market values of the Licensed Product and all other products included in the Combination Product and shall notify Licensor of such determination and provide Licensor with data to support such determination. Licensor shall have the right to review such determination of fair market values and, if Licensor disagrees with such determination, to notify Licensee of such disagreement within sixty (60) days after Licensee notifies Licensor of such determination. If Licensor notifies Licensee that Licensor disagrees with such determination within such sixty (60) day period and if thereafter the Parties are unable to agree in good faith as to such respective fair market values, then such matter shall be resolved as provided in Section 10.10. If Licensor does not notify Licensee that Licensor disagrees with such determination within such sixty (60) day period, such determination shall be conclusive and binding on the Parties.

 

1.15 “Person” means any natural person or any corporation, company, partnership, joint venture, firm or other entity, including without limitation a Party.

 

1.16 “Regulatory Approval” means the approvals (including any applicable governmental price and reimbursement approvals), licenses, registrations or authorizations of Regulatory Authorities necessary for the development, manufacture, use, offer for sale, sale or importation of a product in a country or territory.

 

1.17 “Regulatory Authority” means a federal, national, multinational, state, provincial or local regulatory agency, department, bureau or other governmental entity with authority over the testing, manufacture, use, storage, import, promotion, marketing or sale of a product in a Territory.

 

1.18 “Term” shall have the meaning set forth in Section 12.1.

 

1.19 “Territory” means the entire world.

 

1.20 “Third Party” means any Person other than a Party or any of its Affiliates.

 

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1.21 “Valid Claim” means (a) a claim of an issued patent in the U.S. or in a jurisdiction outside the U.S., as applicable, that has not expired, lapsed, been cancelled or abandoned, or been dedicated to the public, disclaimed, or held unenforceable, invalid, revoked or cancelled by a court or administrative agency of competent jurisdiction in an order or decision from which no appeal has been or can be taken, including through opposition, reexamination, reissue or disclaimer; or (b) a claim of a pending patent application that has not been finally abandoned or finally rejected or expired and which has been pending for no more than seven (7) years from the date of filing of the earliest priority patent application to which such pending patent application is entitled to claim benefit.

 

2. Grant of License; Diligence.

 

2.1 License. Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee an exclusive, non-transferable (except as set forth in Section 13.3), right and license, under the Licensed Patent Rights and Licensed Know-How, to make, have made, use, offer for sale, sell and import in the Territory, Licensed Products solely in the Field of Use.

 

In the event that Licensor, MABT, defaults on provisions of the License Agreement between David Horn, LLC and MABT, such default shall not impair the rights and obligations of the Parties to this Agreement, and David Horn, LLC, shall fulfill the obligations under this Agreement to Licensee. David Horn, LLC, in such event, shall assume the rights of Licensor under this Agreement.

 

2.2 Sublicensing. Licensee shall have the right to grant sublicenses under the License with the prior written approval of Licensor, which shall not be unreasonably withheld, conditioned or delayed.

 

2.3 Diligence. Licensee shall use commercially reasonable efforts to develop and commercialize Licensed Products in the Field of Use,

 

2.4 No Additional Rights. Nothing in this Agreement shall be construed to confer any rights upon Licensee by implication, estoppel or otherwise as to any technology or Patent Rights of Licensor or any other entity other than the Licensed Patent Rights, regardless of whether such technology or Patent Rights shall be dominant or subordinate to any Licensed Patent Rights.

 

2.5 Grant to Licensor of License to Licensee Improvements. Licensee hereby grants to Licensor an unrestricted, fully paid-up, non-royalty-bearing, perpetual, exclusive, worldwide right and license, under the Licensee Improvement and Licensee Improvement Know-How, for any and all patents ultimately required to develop Licensed Product in the Field of Use, whether currently included in Exhibit A or not; with the right to grant sublicenses, to practice Licensee Improvements and to make, have made, use, offer for sale, sell and import in the Territory and to otherwise exploit Licensee Improvements.

 

3. Payments.

 

3.1 Equity Payments. As partial consideration for the License and other acts of Licensor required hereunder, Licensee shall issue to Licensor Milestone Payments through the issue of its unregistered securities as set forth below in Section 3.2.

 

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3.2 Milestone Payments. Licensee shall pay to Licensor, within ten (10) days after achievement of the corresponding milestone, each of the following one-time, non-refundable milestone equity payments by the issuance of the following amount of Licensee’s securities:

 

Milestone Event   Milestone Payment
     
1. Execution of this agreement   12.5 million shares of Licensees common stock
     
2. Successful Investigational New Drug Application (“IND”) to FDA; “Successful” means FDA acceptance for the Parties to proceed to human testing   17.5 million shares of Licensees common stock

 

3.3 Profit Sharing from Sale of Licensed Products. On a Licensed Product-by-Licensed Product and country-by-country basis, all Net Profits from the sale of any Licensed Product shall be payable 50% to Licensor and 50% to Licensee, with only one exception. In the event that the agreed upon budget is funded in full by CUBT and more funding is required, and CUBT or MABT provides that funding, CUBT or MABT shall be entitled to a distribution of Net Profits equal to a simple interest annual return of 5% on that excess funding, in addition to the return of the amount of the excess funding, prior to the 50/50 distribution anticipated by this provision.

 

3.4 Reports and Accounting.

 

(a) Reports and Payments. Licensee and Licensor shall provide to the other Party, within thirty (30) days after the end of each calendar quarter, reasonably detailed written accountings of Net Profit of the Licensed Products for such calendar quarter. Such quarterly reports shall indicate (i) gross sales and Net Profit on a Licensed Product-by-Licensed Product and country-by-country basis, and (ii) the calculation of Net Profit. When either Party delivers such accounting to the other Party such report, the reporting Party shall also deliver all amounts due under Section 3.3 to the other Party for the calendar quarter.

 

(b) Audits by the Parties. Each Party shall keep, and shall require its Affiliates and Sublicensees to keep, records of the latest three (3) years relating to gross sales, Net Profit, and all information relevant under Section 3.3. For the sole purpose of verifying amounts payable to the other Party, each Party shall have the right no more than once each calendar year, at the reviewing Party’s expense, to review, together with its accountants, such records in the location(s) where such records are maintained by the other Party and its Affiliates and Sublicensees upon reasonable notice and during regular business hours. Results of such review shall be made available to the reviewed Party. If the review reflects an underpayment to the other Party, such underpayment shall be promptly remitted to other Party together with 5% interest.

 

3.5 Taxes.

 

(a) Any amounts to be paid hereunder are stated before value added tax, goods and services tax, sales, export or import duties or any similar tax or duties, which will be paid by Licensee at the rate and in the manner from time to time prescribed by applicable law.

 

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(b) Each Party shall be solely responsible for any tax imposed on or measured by the net or gross income of such Party or its Affiliates.

 

4. Regulatory Approvals. Licensor shall be solely responsible for obtaining and maintaining any and all Regulatory Approvals necessary for the development, manufacture, use, offer for sale, sale or importation of Licensed Products by or on behalf of Licensee or its Affiliates. Licensor at all times shall comply with all laws, regulations and ordinances, whether federal, state, provincial, county, municipal, or otherwise, with respect to its and its Affiliates activities with respect to Licensed Products. Licensor will not be responsible for obtaining and maintaining any and all Regulatory Approvals necessary for the development, manufacture, use, offer for sale, sale or importation of Licensed Products by or on behalf of any of Licensee’s Sublicensees or their Affiliates.

 

5. Prosecution and Enforcement of Licensed Patent Rights.

 

5.1 Prosecution. Licensor shall retain the first right to prepare, file, prosecute and maintain the Licensed Patent Rights. Licensor shall provide Licensee with reasonable opportunities to review and comment on substantive patent prosecution matters with respect to the Licensed Patent Rights listed on Exhibit A, and shall reasonably consider timely comments thereon provided by Licensee to Licensor to the extent related to the Field of Use.

 

5.2 Enforcement of Licensed Patent Rights and Licensed Know-How.

 

(a) Notice. Each Party shall promptly report in writing to the other Party during the Term any (i) known or suspected infringement of any issued claims within the Licensed Patent Rights by a Third Party, or (ii) any known or suspected misappropriation of any of the Licensed Know-How by a Third Party. In the event such known or suspected infringement or misappropriation involves the manufacture, sale, offer for sale, use, or importation in the Territory of a compound or product in the Field of Use that is competitive with any Licensed Product (“Competitive Infringement”), the reporting Party shall provide the evidence in its possession regarding such Competitive Infringement to the other Party. Promptly after receipt of a notice of Competitive Infringement, the Parties shall discuss in good faith the Competitive Infringement and appropriate actions that could be taken to end the Competitive Infringement.

 

(b) Competitive Infringement. Licensee shall have the first right to initiate a suit or take other appropriate action that it believes necessary to end any Competitive Infringement, at Licensee’s sole control and expense. If Licensee fails to initiate a suit or take other appropriate action that it has the initial right to initiate or take to end such Competitive Infringement within sixty (60) days (or such shorter period specified below in this Section 5.2(b)) after becoming aware of the basis for such suit or action, then Licensor may, in its discretion, initiate a suit or take other appropriate action that it believes necessary to end such Competitive Infringement. The sixty (60) day period in the immediately preceding sentence shall be shortened as reasonably necessary to enable Licensor to initiate a suit or take other appropriate action if, in the absence of such shortening, a loss of rights with respect to such suit or other action would occur (e.g., if a generic pharmaceutical maker files an abbreviated new drug application or analogous application for which the reference listed drug is a Licensed Product and, in order to obtain an automatic stay from the applicable Regulatory Authority with respect to the approval of such application, a patent infringement suit must be brought within a shorter period of time). The Party filing any such suit or taking any such action shall be responsible for all costs in connection therewith and, therefore, shall control all decision-making related to any such suit or action.

 

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(c) Infringement or Misappropriation other than Competitive Infringement. Licensor shall have the sole right to initiate a suit or take other appropriate action, at its sole expense and without any duty to account to Licensee therefor, that it believes necessary to end any infringement or misappropriation of the Licensed Patent Rights or Licensed Know-How other than a Competitive Infringement.

 

(d) Conduct of Actions. The Party initiating suit or action shall have the sole and exclusive right to select counsel for any suit initiated by it referred to in Section 5.2(b) above. If required under applicable law in order for the initiating Party to initiate or maintain such suit or action, the other Party shall join as a party to the suit or action. Such other Party shall offer reasonable assistance to the initiating Party in connection therewith at no charge to the initiating Party except for reimbursement of reasonable out-of-pocket expenses incurred in rendering such assistance. The Party filing any such suit or taking any such action shall provide the other Party with an opportunity to make suggestions and comments regarding such suit or action. Thereafter, the Party filing any such suit or taking any such action shall, to the extent permitted by applicable law, keep the other Party promptly informed, and shall from time to time consult with such other Party regarding the status of any such suit or action and shall provide such other Party with copies of all material documents (i.e., complaints, answers, counterclaims, material motions, orders of the court, memoranda of law and legal briefs, interrogatory responses, depositions, material pre-trial filings, expert reports, affidavits filed in court, transcripts of hearings and trial testimony, trial exhibits and notices of appeal) filed in, or otherwise relating to, such suit or action. The Party not initiating such suit or action shall cooperate with the Party initiating such suit or action to the extent reasonably requested, and shall have the right to participate and be represented in any such suit by its own counsel at its own expense.

 

(e) Recoveries. With respect to any suit or action to protect Licensed Patent Rights or Licensed Know-How referred to in Section 5.2(b) above, any recovery obtained as a result of any such proceeding, by settlement or otherwise, shall be applied in the following order of priority:

 

(i) first, the Party initiating the suit or action with respect to Licensed Patent Rights or Licensed Know-How shall be reimbursed for all out-of-pocket costs and expenses in connection with such proceeding paid by such Party and not otherwise recovered; and

 

(ii) second, any remainder shall be paid fifty percent (50%) to each Party.

 

6. Confidentiality

 

6.1 Confidential Information. All Confidential Information disclosed by a Party to the other Party during the Term shall not be used by the receiving Party except in connection with the activities contemplated by this Agreement, shall be maintained in confidence by the receiving Party and shall not otherwise be disclosed by the receiving Party to any other Person, firm, or agency, governmental or private, without the prior written consent of the disclosing Party, except to the extent that the Confidential Information:

 

(a) was known or used by the receiving Party prior to its date of disclosure to the receiving Party;

 

-7-
 

 

(b) either before or after the date of the disclosure to the receiving Party is lawfully disclosed to the receiving Party by sources other than the disclosing Party rightfully in possession of the Confidential Information;

 

(c) either before or after the date of the disclosure to the receiving Party becomes published or generally known to the public through no fault or omission on the part of the receiving Party;

 

(d) is independently developed by or for the receiving Party without reference to or reliance upon the Confidential Information; or

 

(e) is required to be disclosed by the receiving Party to comply with applicable laws or regulations, to defend or prosecute litigation or to comply with legal process, provided that the receiving Party provides prior written notice of such disclosure to the disclosing Party to the extent permissible, only discloses Confidential Information of the other Party to the extent necessary for such legal compliance or litigation purpose, and seeks a protective order, confidential treatment or the like with respect to the Confidential Information so disclosed.

 

6.2 Employee, Consultant and Advisor Obligations. Licensee and Licensor each agree that such Party and its Affiliates shall provide Confidential Information received from the other Party only to the receiving Party’s respective employees, consultants and advisors, and to the employees, consultants and advisors of the receiving Party’s Affiliates and Sublicensees, who have a need to know such Confidential Information to assist the receiving Party in fulfilling its obligations under this Agreement; provided that Licensee and Licensor shall each remain responsible for any failure by such Party and its Affiliates’ respective employees, consultants and advisors to treat such Confidential Information as required under Section 6.1.

 

6.3 Survival. All obligations of confidentiality imposed under this Section 6 shall survive the termination or expiration of this Agreement and shall expire ten (10) years following such termination or expiration.

 

7. Structure and Governance. The development and commercialization of the Licensed Products (the “Commercialization”) and the administration of the projects referenced herein (the “Projects”) shall be administered as follows.

 

7.1 Joint Steering Committee. The administration of the Projects shall be overseen by a Joint Steering Committee (the “JSC”). The JSC shall be comprised of six members, three from each company: Dr. David Horn, Dr. David Jobes, Dr. JP Gagnon from MABT and Curative Medical Lead (to be determined), Michael Grace, Ronald Bordens from CUBT. Each member of the JSC shall have one vote for any matter to come before its consideration; provided, however, that in the event of a draw in the vote, the Chair shall cast the deciding vote. Dr. Catherine Sohn to be the outside chair of the steering committee.

 

-8-
 

 

7.2 Duties of JSC. The purpose of the JSC is to ensure continued alignment and communication among the parties. The JSC shall perform the following functions, including, but not limited to the approval of an annual budget, the development of a sales and marketing plan, the disbursement of all funds, the development and commercialization of the Licensed Products, and the general governance and development of the Projects. The Parties agree that within thirty (30) days of final execution of this Agreement they will meet and agree on an initial annual budget to be substantially in concert with the preliminary budget attached hereto, labeled Exhibit B and incorporated by reference herein. The JSC shall meet no less than quarterly to provide a detailed status report on budget compliance and progress in general. The JSC shall also agree internally on a mutually agreeable schedule for disbursement of the funds to be spent in the annual budget.

 

7.3 Vacancy of JSC Member. In the event of the withdrawal or resignation of any member of the JSC, the vacancy shall be filled by the Party who first appointed such Member.

 

8.0 Project Funding. It shall be the sole responsibility of Licensee to raise funding for the development of the Projects and the Commercialization of the Licensed Products discussed herein, under the direction of the Licensor and overseen by the JSC, as described above in Section 7 and below in Section 9. ALL OBLIGATIONS OF LICENSOR HEREUNDER SHALL BE CONTINGENT ON LICENSEE’S OBTAINING CAPITAL TO ACCOMPLISH THE OBJECTIVES SET FORTH HEREIN including a minimum of $10 million within 90 days of the SEC declaring Licensees S-1 Registration Statement effective. In addition, Licensee will use its best efforts to raise additional funds as guided by JSC’s best budgetary estimates; provided, however, that the failure of Licensee’s best efforts to raise additional funds shall not constitute a material breach of this agreement.

 

9.0 Responsibilities of Parties. The following Responsibilities represent the basic framework for the collaboration and may be amended from time to time and as needed according to the Joint Steering Committee. For clarity, the Licensee’s responsibilities for funding the collaboration, and for paying for any penalties, fines, fees for failing to meet vendor obligations (Sections 8 and 9.2) shall not be amended by the JSC and will remain the sole responsibilities of the Licensee.

 

9.1 Responsibilities of Licensor. The principal responsibilities of Licensor, in addition to issuing the License hereunder shall be to oversee the development and commercialization of the Licensed Product, including, but not be limited to, the following: (a) the development of Good Manufacturing Practice for manufacturing the Licensed Product; (b) the completion of non-clinical (GLP) studies to support an IND filing; and (c) the preparation and filing of an Investigational New Drug application (the “IND”). Additional funding will be required to complete the necessary clinical trials for FDA approval, for filing of a Biologics License Application (the “BLA”) for the Licensed Products to the FDA and the marketing of the Licensed Products in the U.S

 

9.2 Responsibilities of Licensee. The responsibilities of Licensee include, but are not limited to: (a) providing the funding per Section 8; (b) issuing shares of Licensee’s common stock per the schedule on Section 3.2; (c) providing marketing and business development in mutually agreed upon areas, such as China and the U.S. Military; and (d) working with Licensor to accomplish the goals of this Agreement. Licensee is responsible for paying any penalties, fines or fees for failing to meet vendor (including but not limited to contract manufacturers and contract research organizations) obligations due to lack of funding to be provided by Licensee.

 

-9-
 

 

10. Representations and Warranties

 

10.1 Representations of Authority. Each Party represents and warrants to the other Party that, as of the Effective Date, it has full right, power and authority to enter into this Agreement and to perform its respective obligations under this Agreement.

 

10.2 Consents. Each Party represents and warrants to the other Party that, as of the Effective Date, all necessary consents, approvals, Regulatory Approvals and authorizations of all Regulatory Authorities and other Persons required to be obtained by such Party in connection with execution, delivery and performance of this Agreement have been obtained

 

10.3 No Conflict. Each Party represents and warrants to the other Party that, as of the Effective Date, the execution and delivery of this Agreement and the performance of such Party’s obligations hereunder (a) do not conflict with or violate any requirement of applicable laws or regulations and (b) do not conflict with, violate or breach or constitute a default of, or require any consent under, any contractual obligations of such Party, except such consents as have been obtained as of the Effective Date. In addition, Licensee represents, warrants and covenants to Licensor that Licensee shall comply with all applicable laws or regulations with respect to the Agreement or the use of any Licensed Products.

 

10.4 No Warranties. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, THE PARTIES MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT. WITHOUT LIMITING THE FOREGOING, LICENSOR DOES NOT MAKE, AND HEREBY DISCLAIMS, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, REGARDING THE DESIGN, MANUFACTURABILITY, MERCHANTABILITY OR FITNESS FOR ANY PURPOSE OF ANY LICENSED PRODUCT.

 

11. Indemnification

 

11.1 By Licensee. Licensee agrees to defend Licensor, its Affiliates and its or their respective directors, officers, employees or agents at Licensee’s cost and expense, and shall indemnify and hold harmless Licensor and its Affiliates and its or their respective directors, officers, employees or agents, from and against any liabilities, losses, costs, damages, fees or expenses arising out of any Third Party claim to the extent arising from (i) any breach by Licensee of any of its representations or warranties pursuant to this Agreement, (ii) the development, manufacture, use, offer for sale, sale or importation of any Licensed Product by or on behalf of Licensee or any of its Affiliates or (iii) personal injury, property damage or other damage resulting from the development, manufacture, use or commercialization of a Licensed Product by or on behalf of Licensee or its Affiliates or any of their customers. Licensee will indemnify Licensor in the event that Licensor incurs, penalties, fines or fees for failing to meet vendor (including but not limited to contract manufacturers and contract research organizations) obligations due to lack of funding to be provided by Licensee.

 

-10-
 

 

11.2 By Licensor. Licensor agrees to defend Licensee, its Affiliates and its or their respective directors, officers, employees or agents at Licensor’s cost and expense, and shall indemnify and hold harmless Licensee and its Affiliates and its or their respective directors, officers, employees or agents, from and against any liabilities, losses, costs, damages, fees or expenses arising out of any Third Party claim to the extent such Third Party claim arises from (i) any breach by Licensor of any of its representations or warranties pursuant to this Agreement, (ii) the development, manufacture, use, offer for sale, sale or importation of any Licensed Product by or on behalf of Licensor or any of its Affiliates or (iii) personal injury, property damage or other damage resulting from the development, manufacture, use or commercialization of a Licensed Product by or on behalf of Licensor or its Affiliates or any of their customers.

 

11.3 Procedures. A Person entitled to indemnification under this Section 11 (an “Indemnified Party”) shall give prompt written notification to the Party from whom indemnification is sought (the “Indemnifying Party”) of any claim for which indemnification is sough under this Agreement. Within thirty (30) days after delivery of such notification, the Indemnifying Party may, upon written notice thereof to the Indemnified Party, assume control of the defense of such claim with counsel reasonably satisfactory to the Indemnified Party. If the Indemnifying Party does not assume control of such defense, the Indemnified Party shall control such defense. The Party not controlling such defense may participate therein at its own expense; provided that the Indemnified Party shall have the right to retain its own counsel, at the expense of the Indemnifying Party, if representation of such Indemnified Party by the counsel retained by the Indemnifying Party would be inappropriate because of actual or potential differences in the interests of such Indemnified Party and any other party represented by such counsel. The Indemnified Party shall not agree to any settlement of such claim without the prior written consent of the Indemnifying Party, which shall not be unreasonably withheld, delayed or conditioned.

 

11.4 Insurance. Licensee and Licensor shall have and maintain such types and amounts of insurance covering its development, manufacture, use, offer for sale, sale and importation of License Products as is (i) normal and customary in the pharmaceutical products industries generally for parties similarly situated and (ii) otherwise required by applicable law. Upon request by Licensor, Licensee shall provide to Licensor evidence of its insurance coverage. The insurance policies shall be under an occurrence form, but if only a claims-made form is available to Licensee or Licensor, then both shall continue to maintain such insurance after the expiration or termination of this Agreement for a period of five (5) years.

 

12. Term and Termination. Licensor shall have the right to terminate this agreement as of January 31, 2022 if Licensee shall have failed to provide $10,000,000 to Licensor by January 31, 2022, unless an extension is agreed to by both Parties.

 

12.1 Term. This Agreement shall become effective as of the Effective Date, may be terminated as set forth in this Section 12, and otherwise shall remain in effect for so long as the Licensed Products are sold.

 

-11-
 

 

12.2 Termination for Material Breach. Upon any material breach of this Agreement by either Party, the other Party may terminate this Agreement by providing sixty (60) days’ written notice to the breaching Party, specifying the material breach. The termination shall become effective at the end of the sixty (60) day period unless the breaching Party cures such breach during such sixty (60) day period.

 

12.3 Effects of Termination. Upon termination of this Agreement prior to the end of the Term, as a result of the material breach of CUBT (but not upon expiration of this Agreement at the end of the Term):

 

(a) Licensee shall immediately assign and transfer to Licensor all Licensed Product-specific trademarks used in association with Licensed Product(s) or interests therein;

 

(b) Licensee shall immediately assign and transfer to Licensor all regulatory documents if any filed by Licensee, its representatives or manufacturers to the extent relating to IMT504 or Licensed Product(s);

 

(c) Licensee shall immediately assign and transfer to Licensor all regulatory approvals for Licensed Product(s) held in the name of Licensee or any of its subsidiaries in each country in the Territory; and

 

(d) The License granted to Licensor in Section 2.5 shall expand to include the Field of Use.

 

Upon termination of this Agreement as the result of a material uncured breach by Licensor, which breach remains uncured for 30 days after notice from Licensee, Licensor shall have the same obligations to Licensee as provided for in 12.3 (a), (b), (c) and (d) directly above; and shall reaffirm the License granted in sections 2.1 and 2.5 above for the Field of Use as stated above. Licensee shall take over the development of the Licensed Product. The JSC shall be dissolved. All other terms and conditions shall survive as written.

 

12.4 Survival. The following provisions shall survive the expiration or termination of this Agreement in accordance with their terms: Sections 2.5, 3.2, 3.3, 3.4, 3.5, 6, 10.4, 11, 12.3, 12.4 and 13.

 

13. Miscellaneous Provisions

 

13.1 Governing Law. This Agreement and all disputes arising out of or related to this Agreement shall be construed and the respective rights of the Parties determined in accordance with the laws of the Commonwealth of Pennsylvania, notwithstanding the provisions thereof governing conflicts of laws.

 

-12-
 

 

13.2 Notice. Any notices required or permitted by this Agreement shall be in writing, shall specifically refer to this Agreement, and shall be sent by hand, recognized national overnight courier, confirmed facsimile transmission, confirmed electronic mail, or registered or certified mail, postage prepaid, return receipt requested, to the following address or facsimile number of the parties:

 

If to Licensor:
   
  Mid-Atlantic BioTherapeutics, Inc.
  Attn: Dr. David Horn
  3805 Old Easton Road
  Doylestown, PA 18902
  215-266-2301
  dhorn@mid-atlanticbio.com
   
If to Licensee:
   
  Curative Biotechnology, Inc
  Attn: I Richard Garr
  1825 NW Corporate Blvd., Suite 101
  Boca Raton, FL 33431
  561-418-7725
  irgarr@curativebiotech.com

 

All notices under this Agreement shall be deemed effective upon receipt. A party may change its contact information immediately upon written notice to the other party in the manner provided in this Section.

 

13.3 Assignment. This Agreement is personal to Licensee and no rights or obligations may be assigned by Licensee without the prior written consent of Licensor, except any Party may assign this Agreement to an Affiliate of such Party or in connection with the sale or transfer of all or substantially all of the business or assets of such Party relating to the subject matter of this Agreement.

 

13.4 Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to its subject matter and supersedes all prior agreements or understandings between the Parties relating to its subject matter.

 

13.5 Amendment and Waiver. This Agreement may be amended, supplemented, or otherwise modified only by means of a written instrument signed by both Parties. Any waiver of any right or failure to act in a specific instance shall related only to such instance and shall not be construed as an agreement to waive any right or fail to act in any other instance, whether or not similar.

 

13.6 Severability. In the event that any provision of this Agreement shall be held invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect any other provision of this Agreement. The Parties shall consult one another and use reasonable efforts to agree upon a valid and enforceable provision that is a reasonable substitute for the invalid or unenforceable provision.

 

-13-
 

 

13.7 EXCLUSION OF CONSEQUENTIAL DAMAGES. OTHER THAN IN CONNECTION WITH A PARTY’S INDEMNIFICATION OBLIGATIONS HEREUNDER AS TO THIRD PARTY CLAIMS IN ACCORDANCE WITH SECTION 11, NEITHER PARTY HERETO WILL BE LIABLE FOR INCIDENTAL, CONSEQUENTIAL, SPECIAL, EXEMPLARY, PUNITIVE OR OTHER INDIRECT DAMAGES ARISING OUT OF THIS AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER, OR FOR LOST PROFITS ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES.

 

13.8 Counterparts. This Agreement may be executed in counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original, and all of which counterparts, taken together, shall constitute one and the same instrument.

 

13.9 Force Majeure. Neither party will be responsible for delays resulting from causes beyond the reasonable control of such party, which may include without limitation fire, explosion, flood, war, strike or riot, provided that the nonperforming party uses commercially reasonable efforts to avoid or remove such causes of nonperformance and continues performance under this Agreement with reasonable dispatch whenever such causes are removed.

 

13.10 Dispute Resolution.

 

(a) Alternative Dispute Resolution. Any dispute arising out of or relating to this Agreement shall be resolved through binding arbitration as follows:

 

(i) A Party may submit such dispute to arbitration by notifying the other Party, in writing, of such dispute. Within thirty (30) days after receipt of such notice, the Parties shall designate in writing a single arbitrator to resolve the dispute; provided, however, that if the Parties cannot agree on an arbitrator within such 30-day period, the arbitrator shall be selected by the Philadelphia, Pennsylvania office of the American Arbitration Association (the “AAA”). The arbitrator shall not be an Affiliate, employee, consultant, officer, director or stockholder of any Party.

 

(ii) Within thirty (30) days after the designation of the arbitrator, the arbitrator and the Parties shall meet, at which time the Parties shall be required to set forth in writing all disputed issues and a proposed ruling on the merits of each such issue.

 

(iii) The arbitrator shall set a date for a hearing, which shall be no later than forty-five (45) days after the submission of written proposals pursuant to Section 13.10(a)(ii), to discuss each of the issues identified by the Parties. The Parties shall have the right to be represented by counsel. Except as provided herein, the arbitration shall be governed by the Commercial Arbitration Rules of the AAA; provided, however, that the Federal Rules of Evidence shall apply with regard to the admissibility of evidence and the arbitration shall be conducted by a single arbitrator. The arbitration shall be in English.

 

(iv) The arbitrator shall use his or her best efforts to rule on each disputed issue within thirty (30) days after the completion of the hearings described in Section 13.10(a)(iii). The determination of the arbitrator as to the resolution of any dispute shall be binding and conclusive upon all Parties. All rulings of the arbitrator shall be in writing and shall be delivered to the Parties.

 

(v) The attorneys’ fees of the Parties in any arbitration, fees of the arbitrator, and costs and expenses of the arbitration shall be borne by the Parties as determined by the arbitrator.

 

(vi) Any arbitration pursuant to this Section 13.10 shall be conducted in Philadelphia, Pennsylvania. Any arbitration award may be entered in and enforced by any court of competent jurisdiction.

 

(b) No Limitation. Nothing in Section 13.10 shall be construed as limiting in any way the right of a Party to seek an injunction or other equitable relief with respect to any actual or threatened breach of this Agreement or to bring an action in aid of arbitration. Should any Party seek an injunction or other equitable relief, or bring an action in aid of arbitration, then for purposes of determining whether to grant such injunction or other equitable relief, or whether to issue any order in aid of arbitration, the dispute underlying the request for such injunction or other equitable relief, or action in aid of arbitration, may be heard by the court in which such action or proceeding is brought.

 

-14-
 

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first set forth above.

 

Mid-Atlantic BioTherapeutics, Inc.   Curative Biotechnology, Inc.
                      
By: /s/ David Horn   By: /s/ Richard Garr
         
Name: David Horn, M.D.   Name: I Richard Garr
         
Title: CEO   Title: CEO
         
David Horn, LLC      
         
By: /s/ David Horn      
         
Name: David Horn, M.D.      
         
Title: Principal      

 

-15-
 

 

Exhibit A

Licensed Patent Rights

 

PATENT PORTFOLIO SUMMARY CHART

Updated October 29, 2019

 

Title: Immunostimulatory Oligonucleotides and Uses Thereof

 

NOTE: ANY SUBLICENSE TO CHINA OR ANY OTHER TERRITORY NOT INCLUDED IN THE TABLE BELOW, OR ANY COMPANY DOMESTICATED IN CHINA OR ANY OTHER TERRITORY NOT INCLUDED IN THE TABLE BELOW, WILL REQUIRE PRIOR WRITTEN APPROVAL OF LICENSOR

 

Country   Appl. No./ Patent No.   Filing Date/ Issue Date   Recorded Owner   Status   Next Action Due   Comments
U.S.  

10/309,775

7,038,029

  

04-Dec-2002

02-May-2006

   David Horn, LLC   Issued   No further action; All maintenance fees have been paid   Standard expiration Apr. 1, 2023 (+ 118 day PTA)
U.S.  

11/178,086

7,381,807

  

08-Jul-2005

03-Jun-2008

   David Horn, LLC   Issued   Third and final maintenance fee to be paid before Jun. 3, 2020 (Payment window opened on Jun. 3, 2019 and surcharge period runs from Dec. 4, 2019 to Jun. 3, 2020)   Standard expiration Nov. 25, 2023 (+ 356 days PTA)
U.S.   12/111,006 7,943,316   28-Apr-2008 17-May-2011   David Horn, LLC   Issued   Third and final maintenance fee to be paid before May 5, 2023 (Payment window opens on May 17, 2022 and surcharge period runs from November 18, 2022 to May 17, 2023)   Standard expiration Dec. 4, 2022 (+ 0 days PTA)
U.S.   13/099,778 8,871,436   03-May-2011 28-Oct-2014   David Horn, LLC   Issued   Second maintenance fee to be paid before Oct 28, 2022 (Payment window opens on Oct 28, 2021, and surcharge period runs from Apr. 29, 2022 to Oct 28, 2022)   Standard Expiration June 28, 2024 (+ 572 days PTA)
Australia  

2003250334

2003250334

  

30-May-2003

25-Nov-2004

   David Horn, LLC   Issued   May 30, 2020 – Renewal fees due    

 

-16-
 

 

Country   Appl. No./ Patent No.   Filing Date/ Issue Date   Recorded Owner   Status   Next Action Due   Comments
European Patent Convention  

03755959.8

1511845

  

30-May-2003

09-Mar-2005

   David Horn, LLC   Issued  

May 30, 2020 – annuities due in:

 

BE Belgium

CH/LI Switzerland/ Liechtenstein

DE Germany

DK Denmark

FI Finland FR France GB United Kingdom GR Greece HU Hungary IE Ireland NL Netherlands PT Portugal SE Sweden TR Turkey CY Cyprus ES Spain IT Italy

 

 

  

Status of each validated country:

 

Confirmed 2019 annuity paid in (next annuity due 2020):

BE Belgium

CH/LI Switzerland/ Liechtenstein

DE Germany DK Denmark ES Spain FI Finland FR France GR Greece HU Hungary IE Ireland IT Italy PT Portugal SE Sweden TR Turkey CY Cyprus

 

Status of current validated country:

 

2020 annuity paid:

 

DE Germany

 

ES Spain

 

FR France

 

IT Italy

 

GB Great Britain

 

 

India   3773/DLNP72004 252038   29-Nov-2004 23-Apr-2012   David Horn, LLC   Issued   May 30, 2020 – Next annuity payment due   Statement of working will also be due May 30, 2020
Mexico   2004/011937   30-Nov-2004   David Horn, LLC   Issued   May 30, 2020 – Next annuity payment due    
New Zealand   20030536962 536962   25-Nov-2004 11-Jan-2007   David Horn, LLC   Issued   May 30, 2020 – renewal fees due    

 

U.S. Provisional Application No. 63/107,641

 

Title: IMMUNOSTIMULATORY OLIGONUCLEOTIDES FOR
  THE PREVENTION AND TREATMENT OF COVID-19
   
Filed: October 30, 2020

 

Troutman Pepper Ref. No.: 258157.000100

 

-17-
 

 

Exhibit B

Preliminary COVID-19 Vaccine Development Budget Estimates

 

Budget Item  Months 1-3 (Year 1)   Months 4-6 (Year 1)   Months 7-9 (Year 1)   Months 10-12 (Year 1)   Months 1-3 (Year 2)   Months 4-6 (Year 2)   Months 7-9 (Year 2)   Months 10-12 (Year 2)   Totals 
CURRENT SCENARIO                                             
GMP mfg  $7,765,000   $780,000   $1,630,000   $2,100,000   $705,000   $750,000   $0   $0   $13,730,000 
Preclinical/IND studies  $0   $50,000   $1,000,000   $250,000   $500,000   $500,000   $500,000   $500,000   $3,300,000 
Regulatory  $100,000   $100,000   $100,000   $50,000   $50,000   $50,000   $50,000   $50,000   $550,000 
Personnel  $150,000   $150,000   $150,000   $150,000   $150,000   $150,000   $150,000   $150,000   $1,200,000 
G&A  $50,000   $50,000   $50,000   $50,000   $50,000   $50,000   $50,000   $50,000   $400,000 
License Fees  $400,000                                      $400,000 
   $8,465,000   $1,130,000   $2,930,000   $2,600,000   $1,455,000   $1,500,000   $750,000   $750,000   $19,580,000 
                                       Overall Total:   $19,580,000 
         1-year cumulative total   $15,125,000                          
         9-month cumulative total   $12,525,000                          

 

Notes:

 

1) The Halix estimates for GMP mfg were in Euros so we converted at the current (27SEP21) ratio of 0.85 Euro/Dollar and rounded up

2) The first three months in Year 1 include a 50% start up payment for GMP manufacturing

3) Preclinical/IND studies will take 10-12 months so we need to initiate those in Year 1

 

OPTIMISTIC SCENARIO                                
GMP mfg  $6,765,000   $780,000   $1,630,000   $2,100,000   $705,000   $750,000   $0   $0   $12,730,000 
Preclinical/IND studies  $0   $50,000   $500,000   $250,000   $500,000   $500,000   $500,000   $500,000   $2,800,000 
Regulatory  $100,000   $100,000   $100,000   $50,000   $50,000   $50,000   $50,000   $50,000   $550,000 
Personnel  $150,000   $150,000   $150,000   $150,000   $150,000   $150,000   $150,000   $150,000   $1,200,000 
G&A  $50,000   $50,000   $50,000   $50,000   $50,000   $50,000   $50,000   $50,000   $400,000 
License Fees  $250,000                                 $250,000   $500,000 
   $7,315,000   $1,130,000   $2,430,000   $2,600,000   $1,455,000   $1,500,000   $750,000   $1,000,000   $18,180,000 
                                       Overall Total:   $18,180,000 
         1-year cumulative total   $13,475,000                          
         9-month cumulative total   $10,875,000                          

 

Notes:

1) Use of Rodent species vs. NHP model

  

-18-

 

Exhibit 10.12

 

PUBLIC HEALTH SERVICE

 

PATENT LICENSE AGREEMENT – EXCLUSIVE EVALUATION OPTION LICENSE

 

This Agreement is based on the model Patent License Exclusive Agreement adopted by the U.S. Public Health Service (“PHS”) Technology Transfer Policy Board for use by components of the National Institutes of Health (“NIH”), the Centers for Disease Control and Prevention (“CDC”), and the Food and Drug Administration (“FDA”), which are agencies of the PHS within the Department of Health and Human Services (“HHS”).

 

This Cover Page identifies the Parties to this Agreement:

 

The U.S. Department of Health and Human Services, as represented by

 

National Cancer Institute

 

an Institute or Center (hereinafter referred to as the “IC”) of the

 

NIH

 

and

 

Connectyx Technologies Holdings Group

 

hereinafter referred to as the “Licensee”,

 

having offices at 1825 NW Corporate Boulevard, Suite 110, Boco Raton, FL 33431,

 

created and operating under the laws of Florida.

 

Tax ID No.: 26-1412177

 

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For the IC internal use only:

 

License Number:

 

License Application Number: A-449-2020

 

Serial Number(s) of Licensed Patent(s) or Patent Application(s):

 

HHS Ref. No. E-221-2015-0

 

Entitled: “ANTIBODY - DRUG CONJUGATES FOR TARGETING CD56 - POSITIVE TUMORS”

 

Inventors: Dimiter S. Dimitrov, Yang Feng, and Zhongyu Zhu (NCI), and John M. Maris, Robyn Tovah Sussman (Children’s Hospital of Philadelphia “CHOP”).

 

I.U.S. Provisional Patent Application No. 62/119,707 filed July 31, 2015. HHS Ref No. E-221-2015-0-US-01

 

II.PCT Application No. PCT/US2016/044777 filed 07/29/2016. HHS Ref. No. E-221-2015-0-PCT-02

 

III.US Patent No. 10,548,987 issued February 02, 2020 (Patent Application No. 15/747,620 filed January 25, 2018). HHS Ref. No. E-221-2015-0-US-03.

 

Cooperative Research and Development Agreement (CRADA) Number (if a subject invention): NA

 

Additional Remarks:

 

Public Benefit(s): Development of an anti-CD56 antibody drug conjugate for the treatment of glioblastoma.

 

This Patent License Agreement, hereinafter referred to as the “Agreement”, consists of this Cover Page, an attached Agreement, a Signature Page, Appendix A (List of Patent(s) or Patent Application(s)), Appendix B (Fields of Use and Territory), Appendix C (Royalties), Appendix D (Benchmarks and Performance), Appendix E (Commercial Development Plan), Appendix F (Royalty Payment Option), and Appendix G (Shipping Information).

 

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The IC and the Licensee agree as follows:

 

1.BACKGROUND

 

1.1In the course of conducting biomedical and behavioral research, the IC investigators made inventions that may have commercial applicability.

 

1.2By assignment of rights from IC employees and other inventors, HHS, on behalf of the Government, owns intellectual property rights claimed in any United States or foreign patent applications or patents corresponding to the assigned inventions. HHS also owns any tangible embodiments of these inventions actually reduced to practice by the IC.

 

1.3The Secretary of HHS has delegated to the IC the authority to enter into this Agreement for the licensing of rights to these inventions.

 

1.4The IC desires to transfer these inventions to the private sector through commercialization licenses to facilitate the commercial development of products and processes for public use and benefit.

 

1.5The Licensee desires to acquire commercialization rights to certain of these inventions in order to develop processes, methods, or marketable products for public use and benefit.

 

2.DEFINITIONS

 

2.1“Affiliate(s)” means a corporation or other business entity, which directly or indirectly is controlled by or controls, or is under common control with the Licensee. For this purpose, the term “control” shall mean ownership of more than fifty percent (50%) of the voting stock or other ownership interest of the corporation or other business entity, or the power to elect or appoint more than fifty percent (50%) of the members of the governing body of the corporation or other business entity.

 

2.2“Benchmarks” mean the performance milestones that are set forth in Appendix D.

 

2.3“Commercial Evaluation Plan” means the written evaluation plan attached as Appendix E, submitted to the IC by the Licensee that describes plans for initial development of the Licensed Products or Licensed Processes within the scope of the Licensed Patent Rights and the Licensed Field(s) of Use under the terms of this Agreement.

 

2.4“Commercial Development Plan” means a written commercialization plan, to be submitted to the IC upon Licensee’s exercise of the option under the terms of this Agreement, that describes plans for complete development and achievement of “practical application”, as defined in 35 U.S.C, § 201(f), of subject matter relevant to the Licensed Patent Rights.

 

2.5“Commercial Purpose” means the sale, lease, license, distribution in lieu of purchase, or any other transfer of the Licensed Products, excluding transfers to contractors or non-profit collaborators for internal evaluation or internal research. Commercial Purpose shall also include uses of the Licensed Products to perform contract research, to screen libraries, to produce or manufacture products for general sale, or to conduct activities that result in any direct or indirect sale, lease, license, or transfer of the Licensed Products.

 

2.6“CRADA” means a Cooperative Research and Development Agreement.

 

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2.7“Effective Date” means the date when the last party to sign has executed this Agreement.

 

2.8“Extraordinary Expenditures” means expenses arising from actions beyond the norms of typical preparation, filing, and prosecution of the Licensed Patent Rights, including, without limitation, interferences, reexaminations, reissues, oppositions, and defense.

 

2.9“FDA” means the Food and Drug Administration.

 

2.10“Government” means the Government of the United States of America.

 

2.11“Licensed Fields of Use” means the fields of use identified in Appendix B.

 

2.12“Licensed Patent Rights” shall mean:

 

  (a) Patent applications (including provisional patent applications and PCT patent applications) or patents listed in Appendix A, all divisions and continuations of these applications, all patents issuing from these applications, divisions, and continuations, and any reissues, reexaminations, and extensions of these patents;
     
  (b) to the extent that the following contain one or more claims directed to the invention or inventions disclosed in 2.12(a):

 

  (i) continuations-in-part of 2.12(a);
     
  (ii) all divisions and continuations of these continuations-in-part;
     
  (iii) all patents issuing from these continuations-in-part, divisions, and continuations;
     
  (iv) priority patent application(s) of 2.12(a); and
     
  (v) any reissues, reexaminations, and extensions of these patents;

 

  (c) to the extent that the following contain one or more claims directed to the invention or inventions disclosed in 2.12(a): all counterpart foreign and U.S. patent applications and patents to 2.12(a) and 2.12(b), including those listed in Appendix A; and
     
  (d) Licensed Patent Rights shall not include 2.12(b) or 2.12(c) to the extent that they contain one or more claims directed to new matter which is not the subject matter disclosed in 2.12(a).

 

2.13“Licensed Processes” means processes which, in the course of being practiced, would be within the scope of one or more claims of the Licensed Patent Rights that have not been held unpatentable, invalid or unenforceable by an unappealed or unappealable judgment of a court of competent jurisdiction.

 

2.14“Licensed Products” means tangible materials which, in the course of manufacture, use, sale, or importation, would be within the scope of one or more claims of the Licensed Patent Rights that have not been held unpatentable, invalid or unenforceable by an unappealed or unappealable judgment of a court of competent jurisdiction.

 

2.15“Licensed Territory” means the geographical area identified in Appendix B.

 

2.16“Materials” means tangible materials provided to the Licensee by IC, as available, including all progeny, subclones and unmodified derivatives thereof, if applicable, as described in Appendix A.

 

2.17“Net Sales” means the total gross receipts for sales of Licensed Products or practice of Licensed Processes by or on behalf of the Licensee or its sublicensees, and from leasing, renting, or otherwise making the Licensed Products available to others without sale or other dispositions, whether invoiced or not, less returns and allowances, packing costs, insurance costs, freight out, taxes or excise duties imposed on the transaction (if separately invoiced), and wholesaler and cash discounts in amounts customary in the trade to the extent actually granted. No deductions shall be made for commissions paid to individuals, whether they are with independent sales agencies or regularly employed by the Licensee, or sublicensees, and on its payroll, or for the cost of collections.

 

2.18“Practical Application” means to manufacture in the case of a composition or product, to practice in the case of a process or method, or to operate in the case of a machine or system; and in each case, under these conditions as to establish that the invention is being utilized and that its benefits are to the extent permitted by law or Government regulations available to the public on reasonable terms.

 

2.19“Research License” means a nontransferable, nonexclusive license to make and to use the Licensed Products or the Licensed Processes as defined by the Licensed Patent Rights for purposes of research and not for purposes of commercial manufacture or distribution or in lieu of purchase.

 

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2.20“Third Party Contractor(s)” means a third-party organization, acting with, on behalf and for the benefit of Licensee limited to the development of the Licensed Products for consideration.

 

3.GRANT OF RIGHTS

 

3.1The IC hereby grants to the Licensee an exclusive evaluation license, for evaluation purposes only, to make and use, but not to sell, the Materials or Licensed Products or inventions within the scope of the Licensed Patent Rights within the Licensed Fields of Use and in the Licensed Territory, and to practice Licensed Processes within the Licensed Fields of Use and in the Licensed Territory. The rights provided herein are provided for the evaluation of commercial applications only and not for a Commercial Purpose.

 

3.2The Licensee is entitled to transfer Materials to Third-Party Contractor(s) and to authorize its Third-Party Contractor(s) to make, have made and to use, but not to sell Materials and Licensed Products on Licensee’s behalf solely in the Licensed Fields of Use and in the Licensed Territory. Licensee shall ensure that such Third-Party Contractors comply with the terms and obligations of this Agreement with respect to their use of the Materials and/or the Licensed Products.

 

3.3To exercise the exclusive option, Licensee must submit a written notice to the IC one (1) month prior to the termination or expiration of this Agreement. The written notice must include an updated License Application and a Commercial Development Plan and will initiate a negotiation period that expires three (3) months after the exercise of the option. In the absence of Licensee’s exercise of the option to an exclusive license, the IC will be free to license the Licensed Patent Rights within or outside the Licensed Fields of Use to others. These time periods may be extended at the sole discretion of IC upon written request and a showing of good cause by Licensee. Licensee agrees that the continued use of the Materials, Licensed Products, or Licensed Patent Rights after expiration or termination of this Agreement will occur only pursuant to a separate license agreement. The continued use of the Materials, Licensed Products, or Licensed Patent Rights after expiration or termination of this Agreement without the exercise of the exclusive option or the execution of a separate license agreement granting such rights will be considered a material breach of this Agreement.

 

3.4For the avoidance of doubt, the Licensed Fields of Use provided in this Agreement is only applicable for the Exclusive Evaluation Option License. The licensed field of use for any subsequent Exclusive Commercial Patent License Agreement shall be commensurate in scope with the Commercial Development Plan provided at the time of negotiation of any such license and subject to IC’s review and approval, and the Licensee acknowledges that it may be narrowed for the subsequent Exclusive Commcercial Patent License Agreement.

 

3.5This Agreement confers no license or rights by implication, estoppel, or otherwise under any patent applications or patents of the IC other than the Licensed Patent Rights regardless of whether these patents are dominant or subordinate to the Licensed Patent Rights.

 

3.6The Licensee represents that it and Third Party Contractor(s) have the facilities, personnel, and expertise to evaluate the commercial applications of the Materials, Licensed Products, Licensed Processes, or inventions within the scope of the Licensed Patent Rights within the Licensed Fields of Use as outlined in the Commercial Evaluation Plan.

 

4.SUBLICENSING

 

4.1Under this Agreement, sublicensing is not permitted.

 

5.STATUTORY AND NIH REQUIREMENTS AND RESERVED GOVERNMENT RIGHTS

 

5.1The IC reserves on behalf of the Government an irrevocable, nonexclusive, nontransferable, royalty-free license for the practice of all inventions licensed under the Licensed Patent Rights throughout the world by or on behalf of the Government and on behalf of any foreign government or international organization pursuant to any existing or future treaty or agreement to which the Government is a signatory.

 

5.2The Licensee acknowledges that the IC may enter into future CRADAs under the Federal Technology Transfer Act of 1986 that relate to the subject matter of this Agreement. The Licensee agrees not to unreasonably deny requests for a Research License from future collaborators with the IC when acquiring these rights is necessary in order to make a CRADA project feasible. The Licensee may request an opportunity to join as a party to the proposed CRADA.

 

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5.3The IC reserves the right to grant Research Licenses directly or to require the Licensee to grant Research Licenses on reasonable terms. The purpose of these Research Licenses is to encourage basic research, whether conducted at an academic or corporate facility. To safeguard the Licensed Patent Rights, however, the IC shall consult with the Licensee before granting to commercial entities a Research License or providing to them research samples of materials made through the Licensed Processes.

 

5.4If Licensee executes an exclusive or non-exclusive commercialization license after the expiration of this Agreement, as per in Paragraph 3.3, Licensee agrees that products used or sold in the United States embodying the Licensed Products or produced through use of the Licensed Processes shall be manufactured substantially in the United States, unless a written waiver is obtained in advance from the IC.

 

6.ROYALTIES AND REIMBURSEMENT

 

6.1In consideration of the grant in Paragraph 3.1, the Licensee agrees to pay the IC a non-creditable, non-refundable, license issue royalty as set forth in Appendix C within sixty (60) days of the Effective Date of this Agreement, and a second non-creditable, non-refundable, patent reimbursement royalty on the one-year anniversary of the Effective Date of this Agreement. These royalties shall be paid in U.S. dollars in accordance with the payment schedule listed in Appendix C. For conversion of foreign currency to U.S. dollars, the conversion rate shall be the New York foreign exchange rate quoted in The Wall Street Journal on the day that the payment is due. Any loss of exchange, value, taxes, or other expenses incurred in the transfer or conversion to U.S. dollars shall be paid entirely by the Licensee.

 

6.2As described below in Paragraph 7.2, when the IC has approved Licensee’s request for additional patent filings or additional prosecution actions beyond those taken by the IC, the Licensee shall be wholly responsible to the law firm employed by the IC for direct payment of all expenses resulting from such approved requests. In this event, the IC and not the Licensee shall be the client of the law firm, and the Licensee acknowledges that the IC will not provide privileged attorney-client communications or work product to the Licensee.

 

7.PATENT FILING, PROSECUTION, AND MAINTENANCE

 

7.1Except as otherwise provided in this Article 7, the IC agrees to take responsibility for the prosecution and maintenance of the patent applications or patents listed in Appendix A, which are the Licensed Patent Rights on the Effective Date of this Agreement. If the IC anticipates the possibility of any Extraordinary Expenditures, the IC will send prior written notice to Licensee, and the IC will not be required to incur such Extraordinary Expenditures. At the IC’s sole option, the IC may elect to abandon the patent rights associated with such Extraordinary Expenditures. In such event, the Licensee may request that the IC incur such Extraordinary Expenditures at the Licensee’s expense, which shall require approval by IC. In addition, the Licensee may request further prosecution actions beyond those taken by the IC. Such actions shall be at the sole expense of the Licensee and shall require approval by the IC.

 

7.2The IC will not be required to prepare, file, prosecute, or maintain additional patents or patent applications outside of those listed in Appendix A. The Licensee may request filing of future, related patent applications beyond those listed in Appendix A, which shall require approval by IC and will not be unreasonably denied without cause. However, in this event, the Licensee shall render direct payment for all related expenses resulting from Licensee’s requests in the manner described above in Paragraph 6.2.

 

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7.3Each party shall promptly inform the other as to all matters that come to its attention that may affect the preparation, filing, prosecution, or maintenance of the Licensed Patent Rights and any related patent applications or patents. The IC shall consult with the Licensee on the prosecution and maintenance of the Licensed Patent Rights, and permit Licensee to provide comments and suggestions with respect to the preparation, filing, prosecution, and maintenance of Licensed Patent Rights and related patent applications or patents, which shall be considered by the IC. The IC shall furnish copies of relevant patent-related documents to the Licensee upon request.

 

8.MATERIALS

 

8.1If IC Materials are provided under this Agreement, they shall be specified in Appendix A. Following receipt and verification of payment of the license issue royalty, as required by Paragraph 6.1 of this Agreement, IC shall provide the Licensee with samples of the Materials, as available, and to replace the Materials, as available, in the event of their unintentional destruction. For the avoidance of doubt, IC shall provide Materials to the Licensee solely at the Licensee’s expense as specified in Appendix G.

 

8.2The Licensee agrees to retain control over any Materials if provided, and the Licensed Products, and not to distribute them to third parties including Affiliate(s), but except Third Party Contractor(s) as provided in Paragraph 3.2 without the prior written consent of the IC.

 

9.REPORTS ON PROGRESS, BENCHMARKS, COMMERCIAL EVALUATION PLAN

 

9.1The Licensee shall provide written annual reports outlining results of its evaluation of the Licensed Patent Rights, the Licensed Products, Materials, and/or the Licensed Processes provided by this Agreement at the following times:

 

(a)by no later than thirty (30) days prior to the end of the first anniversary of the Effective Date of this Agreement; and

 

(b)within thirty (30) days following the second anniversary of the Effective Date of this Agreement, or termination of this Agreement, whichever occurs earlier.

 

9.2These reports shall describe Licensee’s efforts and progress in adhering to the Commercial Evaluation Plan for each of the Licensed Field(s) of Use. These reports shall also identify all Third-Party Contractor(s) who have received Materials or Licensed Products under this Agreement. The Licensee shall submit the report to the IC at the Mailing Address for Agreement notices indicated on the Signature Page.

 

9.3The Licensee’s annual written reports shall include, but not be limited to, a description of the Benchmarks achieved and described in Appendix D that occurred during the preceding calendar year:

 

9.4The Licensee agrees to provide sufficiently detailed information in these reports to allow the IC to reasonably evaluate Licensee’s performance and its reasonable commercial efforts, as defined in Paragraph 9.2, required under this Agreement. If requested, the Licensee agrees to provide any additional information reasonably required by the IC to evaluate the Licensee’s performance and its reasonable commercial efforts. The IC encourages these reports to include information on any of the Licensee’s public service activities that relate to the Licensed Patent Rights.

 

9.5All plans and reports required by this Article 10 and marked “confidential” by the Licensee shall, to the extent permitted by law, be treated by the NIH as commercial and financial information obtained from a person and as privileged and confidential, and any proposed disclosure of these records by the IC under the Freedom of Information Act (FOIA), 5 U.S.C. §552 shall be subject to the predisclosure notification requirements of 45 C.F.R. §5.65(d).

 

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10.LICENSEE PEFFORMANCE

 

10.1A Commercial Evaluation Plan for this Agreement is provided in Appendix E. Based on this Commercial Evaluation Plan, performance Benchmarks are determined as specified in Appendix D.

 

10.2The Licensee agrees to use reasonable commercial efforts to develop the Licensed Products and the Licensed Processes. The phrase “reasonable commercial efforts” for the purposes of this and subsequent Paragraphs shall include adherence to the Commercial Evaluation Plan in Appendix E and performance of the Benchmarks by the requisite deadlines in Appendix D.

 

10.3If the Licensee is in default in the performance of any material obligation under this Agreement, including but not limited to, adherence to the Commercial Evaluation Plan in Appendix E and/or performance of the Benchmarks by the requisite deadlines in Appendix D, Licensee shall provide the IC with written notice within thirty (30) days of the default. Upon written approval that shall not be unreasonably withheld by the IC, the Licensee may be permitted to remedy the default within sixty (60) days after the date of written notice. The IC may terminate this Agreement by written notice if the Licensee has not reasonably remedied the default within ninety (90) days after the date of Licensee’s default.

 

10.4The Licensee is encouraged to publish the results of its research projects using the Licensed Patent Rights, Licensed Processes, Licensed Products or the Materials. In all oral presentations or written publications concerning the Licensed Patent Rights, Licensed Processes, Licensed Products or the Materials, the Licensee shall acknowledge the contribution by the named inventors of the Licensed Patent Rights, Licensed Processes, Licensed Products or the Materials, unless requested otherwise by the IC or the named inventors.

 

11.INFRINGEMENT AND PATENT ENFORCEMENT

 

11.1The IC and the Licensee agree to notify each other promptly of each infringement or possible infringement of the Licensed Patent Rights, as well as, any facts which may affect the validity, scope, or enforceability of the Licensed Patent Rights of which either party becomes aware.

 

11.2Pursuant to this Agreement and the provisions of 35 U.S.C. Chapter 29, the Licensee may:

 

(a)bring suit in its own name, at its own expense, and on its own behalf for infringement of presumably valid claims in the Licensed Patent Rights;

 

(b)in any suit, enjoin infringement and collect for its use, damages, profits, and awards of whatever nature recoverable for the infringement; or

 

(c)settle any claim or suit for infringement of the Licensed Patent Rights provided, however, that the IC and appropriate Government authorities shall have the first right to take such actions; and

 

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(d)if the Licensee desires to initiate a suit for patent infringement, the Licensee shall notify the IC in writing. If the IC does not notify the Licensee of its intent to pursue legal action within ninety (90) days, the Licensee shall be free to initiate suit. The IC shall have a continuing right to intervene in the suit. The Licensee shall take no action to compel the Government either to initiate or to join in any suit for patent infringement. The Licensee may request the Government to initiate or join in any suit if necessary to avoid dismissal of the suit. Should the Government be made a party to any suit, the Licensee shall reimburse the Government for any costs, expenses, or fees which the Government incurs as a result of the motion or other action, including all costs incurred by the Government in opposing the motion or other action. In all cases, the Licensee agrees to keep the IC reasonably apprised of the status and progress of any litigation. Before the Licensee commences an infringement action, the Licensee shall notify the IC and give careful consideration to the views of the IC and to any potential effects of the litigation on the public health in deciding whether to bring suit.

 

11.3In the event that a declaratory judgment action alleging invalidity or non-infringement of any of the Licensed Patent Rights shall be brought against the Licensee or raised by way of counterclaim or affirmative defense in an infringement suit brought by the Licensee under Paragraph 11.2, pursuant to this Agreement and the provisions of 35 U.S.C. Chapter 29 or other statutes, the Licensee may:

 

(a)defend the suit in its own name, at its own expense, and on its own behalf for presumably valid claims in the Licensed Patent Rights;

 

(b)in any suit, ultimately to enjoin infringement and to collect for its use, damages, profits, and awards of whatever nature recoverable for the infringement; and

 

(c)settle any claim or suit for declaratory judgment involving the Licensed Patent Rights-provided, however, that the IC and appropriate Government authorities shall have the first right to take these actions and shall have a continuing right to intervene in the suit; and

 

(d)if the IC does not notify the Licensee of its intent to respond to the legal action within a reasonable time, the Licensee shall be free to do so. The Licensee shall take no action to compel the Government either to initiate or to join in any declaratory judgment action. The Licensee may request the Government to initiate or to join any suit if necessary to avoid dismissal of the suit. Should the Government be made a party to any suit by motion or any other action of the Licensee, the Licensee shall reimburse the Government for any costs, expenses, or fees, which the Government incurs as a result of the motion or other action. If the Licensee elects not to defend against the declaratory judgment action, the IC, at its option, may do so at its own expense. In all cases, the Licensee agrees to keep the IC reasonably apprised of the status and progress of any litigation. Before the Licensee commences an infringement action, the Licensee shall notify the IC and give careful consideration to the views of the IC and to any potential effects of the litigation on the public health in deciding whether to bring suit.

 

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11.4In any action under Paragraphs 11.2 or 11.3 the expenses including costs, fees, attorney fees, and disbursements, shall be paid by the Licensee. The value of any recovery made by the Licensee through court judgment or settlement shall be treated as Net Sales and subject to earned royalties.

 

11.5The IC shall cooperate fully with the Licensee in connection with any action under Paragraphs 11.2 or 11.3. The IC agrees promptly to provide access to all necessary documents and to render reasonable assistance in response to a request by the Licensee.

 

12.NEGATION OF WARRANTIES AND INDEMNIFICATION

 

12.1The IC offers no warranties other than those specified in Article 1.

 

12.2The IC does not warrant the validity of the Licensed Patent Rights and makes no representations whatsoever with regard to the scope of the Licensed Patent Rights, or that the Licensed Patent Rights may be exploited without infringing other patents or other intellectual property rights of third parties.

 

12.3THE IC MAKES NO WARRANTIES, EXPRESS OR IMPLIED, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ANY SUBJECT MATTER DEFINED BY THE CLAIMS OF THE LICENSED PATENT RIGHTS OR TANGIBLE MATERIALS RELATED THERETO.

 

12.4The IC does not represent that it shall commence legal actions against third parties infringing the Licensed Patent Rights.

 

12.5The Licensee shall indemnify and hold the IC, its employees, students, fellows, agents, and consultants harmless from and against all liability, demands, damages, expenses, and losses, including but not limited to death, personal injury, illness, or property damage in connection with or arising out of:

 

(a)the use by or on behalf of the Licensee, its sublicensees, directors, employees, or third parties of any Licensed Patent Rights; or

 

(b)the design, manufacture, distribution, or use of any Licensed Products, Licensed Processes or materials by the Licensee, or other products or processes developed in connection with or arising out of the Licensed Patent Rights.

 

12.6The Licensee agrees to maintain a liability insurance program consistent with sound business practice.

 

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13.TERM, TERMINATION, AND MODIFICATION OF RIGHTS

 

13.1This Agreement shall become effective as of the Effective Date unless the provisions of Paragraph 14.16 are not fulfilled and shall expire twenty-four (24) months from its Effective Date. Within sixty (60) days of the termination or expiration of this Agreement, unless an IC Exclusive or Non-exclusive Commercial Patent License has been executed for the Licensed Patent Rights in the Licensed Field(s) of Use, as stipulated in Paragraph 3.3 of this Agreement, the Licensee shall return all Materials and Licensed Products to the IC or provide the IC with written certification of their destruction. The Licensee further agrees that it shall be responsible for the destruction of any remaining Materials and Licensed Products from the Third Party Contractor(s) to the Licensee, and the Licensee shall obtain written certification from the Third Party Contractor(s) that any remaining Materials or Licensed Products in their possession have been destroyed and to provide IC with a copy of said written notification within sixty (60) days of the termination or expiration of this Agreement.

 

13.2The IC reserves the right according to 35 U.S.C. §209(d)(3) to terminate or modify this Agreement if it determines that this action is necessary to meet the requirements for public use specified by federal regulations issued after the date of the license and these requirements are not reasonably satisfied by the Licensee.

 

13.3The IC shall specifically have the right to terminate or modify this Agreement, at its sole option, if the IC determines that the Licensee:

 

(a)has not adhered to the Commercial Evaluation Plan in Appendix E, as may be amended by mutual agreement of the parties;

 

(b)has not performed or has not exercised reasonable commercial efforts towards performance of the Benchmarks by the requisite deadlines specified in Appendix D, as may be modified under Paragraph 10.3;

 

(c)has willfully made a false statement or willfully omitted a material fact in the license application or in any report required by this Agreement;

 

(d)has committed a material breach of a covenant or agreement contained in this Agreement; or

 

(e)cannot reasonably satisfy unmet health and safety needs.

 

13.4Within thirty (30) days of receipt of written notice of the IC’s unilateral decision to modify or terminate this Agreement, the Licensee may, consistent with the provisions of 37 C.F.R. §404.11, appeal the decision by written submission to the designated IC official or designee. The decision of the designated IC official or designee shall be the final agency decision. The Licensee may thereafter exercise all administrative or judicial remedies that may be accessible.

 

13.5The Licensee shall have a unilateral right to terminate this Agreement or any licenses in any country or territory by giving the IC sixty (60) days written notice to that effect.

 

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13.6Within thirty (30) days of expiration or termination of this Agreement under this Article 13, a final written report shall be submitted by the Licensee in accordance with Paragraph 9.1. The Licensee may not be granted additional IC licenses if this final reporting requirement is not fulfilled. Any royalty payments, including those incurred but not yet paid, and those related to patent expenses, due to the IC shall become immediately due and payable upon termination or expiration.

 

14.GENERAL PROVISIONS

 

14.1Neither party may waive or release any of its rights or interests in this Agreement except in writing. The failure of the Government to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right by the Government or excuse a similar subsequent failure to perform any of these terms or conditions by the Licensee.

 

14.2This Agreement constitutes the entire agreement between the parties relating to the subject matter of the Licensed Patent Rights, the Licensed Products and the Licensed Processes, and all prior negotiations, representations, agreements, and understandings are merged into, extinguished by, and completely expressed by this Agreement.

 

14.3The provisions of this Agreement are severable, and in the event that any provision of this Agreement shall be determined to be invalid or unenforceable under any controlling body of law, this determination shall not in any way affect the validity or enforceability of the remaining provisions of this Agreement.

 

14.4If either party desires a modification to this Agreement, the parties shall, upon reasonable notice of the proposed modification by the party desiring the change, confer in good faith to determine the desirability of the modification. No modification shall be effective until a written amendment is signed by the signatories to this Agreement or their designees.

 

14.5The construction, validity, performance, and effect of this Agreement shall be governed by Federal law as applied by the Federal courts in the District of Columbia.

 

14.6All Agreement notices required or permitted by this Agreement shall be given by prepaid, first class, registered or certified mail or by an express/overnight delivery service provided by a commercial carrier, properly addressed to the other party at the address designated on the following Signature Page, or to another address as may be designated in writing by the other party. Agreement notices shall be considered timely if the notices are received on or before the established deadline date or sent on or before the deadline date as verifiable by U.S. Postal Service postmark or dated receipt from a commercial carrier. Parties should request a legibly dated U.S. Postal Service postmark or obtain a dated receipt from a commercial carrier or the U.S. Postal Service. Private metered postmarks shall not be acceptable as proof of timely mailing.

 

14.7This Agreement shall not be assigned or otherwise transferred (including any transfer by legal process or by operation of law, and any transfer in bankruptcy or insolvency, or in any other compulsory procedure or order of court) except to the Licensee’s Affiliate(s) without the prior written consent of the IC. The parties agree that the identity of the parties is material to the formation of this Agreement and that the obligations under this Agreement are nondelegable. In the event that the IC approves a proposed assignment, the Licensee shall pay the IC, as an additional royalty, one percent (1%) of the fair market value of any consideration received for any assignment of this Agreement within sixty (60) days of the assignment.

 

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14.8The Licensee agrees in its use of any IC-supplied materials to comply with all applicable statutes, regulations, and guidelines, including NIH and HHS regulations and guidelines. The Licensee agrees not to use the Materials for research involving human subjects or clinical trials.

 

14.9By entering into this Agreement, the IC does not directly or indirectly endorse any product or service provided, or to be provided, by the Licensee whether directly or indirectly related to this Agreement. The Licensee shall not state or imply that this Agreement is an endorsement by the Government, the IC, any other Government organizational unit, or any Government employee. Additionally, the Licensee shall not use the names of the IC, the FDA or the HHS or the Government or their employees in any advertising, promotional, or sales literature without the prior written approval of the IC.

 

14.10The parties agree to attempt to settle amicably any controversy or claim arising under this Agreement or a breach of this Agreement, except for appeals of modifications or termination decisions provided for in Article 13. The Licensee agrees first to appeal any unsettled claims or controversies to the designated IC official, or designee, whose decision shall be considered the final agency decision. Thereafter, the Licensee may exercise any administrative or judicial remedies that may be available.

 

14.11Nothing relating to the grant of a license, nor the grant itself, shall be construed to confer upon any person any immunity from or defenses under the antitrust laws or from a charge of patent misuse, and the acquisition and use of rights pursuant to 37 C.F.R. Part 404 shall not be immunized from the operation of state or Federal law by reason of the source of the grant.

 

14.12Any formal recordation of this Agreement required by the laws of any Licensed Territory as a prerequisite to enforceability of the Agreement in the courts of any foreign jurisdiction or for other reasons shall be carried out by the Licensee at its expense, and appropriately verified proof of recordation shall be promptly furnished to the IC.

 

14.13Paragraphs 9, 10.4, 12, 13.4, 13.6, 14.10 and 14.13 of this Agreement shall survive termination of this Agreement.

 

14.14The terms and conditions of this Agreement shall, at the IC’s sole option, be considered by the IC to be withdrawn from the Licensee’s consideration and the terms and conditions of this Agreement, and the Agreement itself to be null and void, unless this Agreement is executed by the Licensee and a fully executed original is received by the IC within sixty (60) days from the date of the IC’s signature found at the Signature Page.

 

SIGNATURES BEGIN ON NEXT PAGE

 

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NIH PATENT LICENSE AGREEMENT – EXCLUSIVE

 

SIGNATURE PAGE

 

For the IC:

 

/s/ Richard Rodriguez   _______________
Richard U. Rodriguez   Date

Associate Director

Technology Transfer Center

National Cancer Institute

National Institute of Health

 

Mailing Address or E-mail Address for Agreement notices and reports:

 

Chief, Monitoring & Enforcement Branch

Office of Technology Transfer

National Institutes of Health

6011 Executive Boulevard, Suite 325

Rockville, Maryland 20852-3804 U.S.A.

 

E-mail: LicenseNotices_Reports@mail.nih.gov

 

For the Licensee (upon information and belief, the undersigned expressly certifies or affirms that the contents of any statements of the Licensee made or referred to in this document are truthful and accurate):

 

by:    
     
/s/ Paul Michaels    
Signature of Authorized Official   Date
     
Paul Michaels    
Printed Name    
     
Chief Executive Officer    
Title    

 

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  I. Official and Mailing Address for Agreement notices:  
         
    Paul Michaels  
    Name    
    Chief Executive Officer  
    Title    
         
    Mailing Address    
         
    Connectyx Technologies Holdings Group  
    1825 NW Corporate Boulevard, Suite 110  
    Boca Raton, FL 33431  
       
         
    Email Address: pmichaels@connectyx.com  
         
    Phone: 561-418-7725  
         
    Fax: 561-418-7724  

 

  II. Official and Mailing Address for Financial notices (the Licensee’s contact person for royalty payments)
         
    Paul Michaels  
    Name    
         
    Chief Executive Officer  
    Title    
         
    Mailing Address:    
         
    Connectyx Technologies Holdings Group  
    1825 NW Corporate Boulevard, Suite 110  
    Boca Raton, FL 33431  
       
         
         
    Email Address: pmichaels@connectyx.com  
         
    Phone: 561-418-7725  
         
    Fax: 561-418-7724  

 

Any false or misleading statements made, presented, or submitted to the Government, including any relevant omissions, under this Agreement and during the course of negotiation of this Agreement are subject to all applicable civil and criminal statutes including Federal statutes 31 U.S.C. §§3801-3812 (civil liability) and 18 U.S.C. §1001 (criminal liability including fine(s) or imprisonment).

 

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APPENDIX A – Patent(s) or Patent Application(s)

 

HHS Ref. No. E-221-2015-0

 

Entitled: “ANTIBODY - DRUG CONJUGATES FOR TARGETING CD56 - POSITIVE TUMORS”

 

Inventors: Dimiter S. Dimitrov, Yang Feng, and Zhongyu Zhu (NCI), and John M. Maris, Robyn Tovah Sussman (Children’s Hospital of Philadelphia “CHOP”).

 

IV.U.S. Provisional Patent Application No. 62/119,707 filed July 31, 2015. HHS Ref No. E-221-2015-0-US-01

 

V.PCT Application No. PCT/US2016/044777 filed 07/29/2016. HHS Ref. No. E-221-2015-0-PCT-02

 

VI.US Patent No. 10,548,987 issued February 04, 2020 (Patent Application No. 15/747,620 filed January 25, 2018). HHS Ref. No. E-221-2015-0-US-03.

 

Materials:

 

1.purified CD56 antibody: 5mg of m906 and 0.6 mg m900

 

2.m906 production CHO cell line: 1 vial

 

3.plasmids for m900 and m906: 10 ug of each

 

4.m906-PBD: 0.5mg

 

Additional materials may be provided under a separate license agreement.

 

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APPENDIX B – Licensed Fields of Use and Territory

 

I.Licensed Field(s) of Use: The use of the anti-CD56 to develop an antibody-drug conjugate (“ADC”) to target glioblastoma either alone or in combination with other potential immuno-oncology drugs.

 

II.Licensed Territory: Worldwide

 

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APPENDIX C – Royalties

 

Royalties:

 

I.The Licensee agrees to pay to the IC a non-creditable, non-refundable license issue royalty according to the following schedule:

 

(a)Five thousand US dollars ($5,000.00 USD) within sixty (60) days of the Effective Date of this Agreement.

 

II.The Licensee agrees to pay to the IC a non-creditable, non-refundable patent reimbursement royalty according to the following schedule:

 

(a)Five thousand US dollars ($5,000.00 USD) on the one-year anniversary of the Effective Date of this Agreement.

 

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APPENDIX D – Benchmarks and Performance

 

The Licensee agrees to the following Benchmarks for its performance under this Agreement and, within thirty (30) days of achieving a Benchmark, shall notify the IC that the Benchmark has been achieved.

 

I.Initiate preclinical IND-enabling studies within six (6) months of the Effective Date of the Agreement.

 

II.Select at least one lead ADC candidate within eighteen (18) months of the Effective Date of the Agreement.

 

III.Raise at least at total of $500,000.00 within twenty-two (22) months of the Effective Date of the Agreement.

 

IV.IND Submission within twenty-four (24) months of the Effective Date of the Agreement.

 

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APPENDIX E – Commercial EVALUATION Plan

 

The company will initially be virtual, relying heavily on contract vendors to conduct nonclinical studies required for IND submission. Both m900 and m906 linked to PBD will be evaluated to further characterize the ADCs and to determine their stability, solubility, etc. as shown in the two figures below. Depending on the nonclinical data and outcomes, the company will use the nonclinical data to tailor their clinical trials to enable rapid transition from safety to pivotal using the fewest subjects possible. The plan is to select one of the two antibodies for further development and select one or two leads for IND consideration by the expiration of this Agreement. Additional evaluation and development plan detailed the application.

 

 

 

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Appendix F – Royalty Payment Options

 

New Payment Options Effective March 2018

 

The License Number MUST appear on payments, reports and correspondence.

 

Credit and Debit Card Payments: Credit and debit card payments can be submitted for amounts up to $24,999. Submit your payment through the U.S. Treasury web site located at: https://www.pay.gov/public/form/start/28680443.

 

Automated Clearing House (ACH) for payments through U.S. banks only

 

The IC encourages its licensees to submit electronic funds transfer payments through the Automated Clearing House (ACH). Submit your ACH payment through the U.S. Treasury web site located at: https://www.pay.gov/public/form/start/28680443. Please note that the IC “only” accepts ACH payments through this U.S. Treasury web site.

 

Electronic Funds Wire Transfers: The following account information is provided for wire payments. In order to process payment via Electronic Funds Wire Transfer sender MUST supply the following information within the transmission:

 

Drawn on a U.S. bank account via FEDWIRE:

 

Please provide the following instructions to your Financial Institution for the remittance of Fedwire payments to the NIH ROYALTY FUND.

 

Fedwire Field Tag   Fedwire Field Name   Required Information
         
{1510}   Type/Subtype   1000
{2000}   Amount   (enter payment amount)
{3400}   Receiver ABA routing number*   021030004
{3400}   Receiver ABA short name   TREAS NYC
{3600}   Business Function Code   CTR (or CTP)
{4200}   Beneficiary Identifier (account number)  

(enter 12 digit gateway account #)

875080031006

{4200}   Beneficiary Name  

(enter agency name associated with the Beneficiary Identifier)

DHHS / NIH (75080031)

{5000}   Originator  

(enter the name of the originator of the payment)

COMPANY NAME

{6000}   Originator to Beneficiary Information – Line 1  

(enter information to identify the purpose of the payment)

ROYALTY

{6000}   Originator to Beneficiary Information – Line 2  

(enter information to identify the purpose of the payment)

 

LICENSE NUMBER

{6000}   Originator to Beneficiary Information – Line 3  

(enter information to identify the purpose of the payment)

INVOICE NUMBER

{6000}   Originator to Beneficiary Information – Line 4   (enter information to identify the purpose of the payment)

 

Notes:

*The financial institution address for Treasury’s routing number is 33 Liberty Street, New York, NY 10045.

 

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Agency Contacts: Office of Technology Transfer (OTT) (301) 496-7057 OTT-Royalties@mail.nih.gov

 

Drawn on a foreign bank account via FEDWIRE:

 

The following instructions pertain to the Fedwire Network. Deposits made in US Dollars (USD).

 

Should your remitter utilize a correspondent US domestic bank in transferring electronic funds, the following Fedwire instructions are applicable.

 

Fedwire Field Tag   Fedwire Field Name   Required Information
         
{1510}   Type/Subtype   1000
{2000}   Amount   (enter payment amount)
{3100}   Sender Bank ABA routing number   (enter the US correspondent bank’s ABA routing number)
{3400}   Receiver ABA routing number*   021030004
{3400}   Receiver ABA short name   TREAS NYC
{3600}   Business Function Code   CTR (or CTP)
{4200}   Beneficiary Identifier (account number)**  

(enter 12 digit gateway account #)

875080031006

{4200}   Beneficiary Name  

(enter agency name associated with the Beneficiary Identifier)

DHHS / NIH (75080031)

{5000}   Originator  

(enter the name of the originator of the payment)

COMPANY’S NAME

{6000}   Originator to Beneficiary Information – Line 1  

(enter information to identify the purpose of the payment)

ROYALTY

{6000}   Originator to Beneficiary Information – Line 2  

(enter information to identify the purpose of the payment)

LICENSE NUMBER

{6000}   Originator to Beneficiary Information – Line 3  

(enter information to identify the purpose of the payment)

INVOICE NUMBER

{6000}   Originator to Beneficiary Information – Line 4   (enter information to identify the purpose of the payment)

 

Notes:

*The financial institution address for Treasury’s routing number is 33 Liberty Street, New York, NY 10045.

**Anything other than the 12 digit gateway account # will cause the Fedwire to be returned – SWIFT CODE: FRNYUS33

 

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Agency Contacts:

 

Office of Technology Transfer (OTT) (301) 496-7057 OTT-Royalties@mail.nih.gov

 

Checks

 

All checks should be made payable to “NIH Patent Licensing”

 

Checks drawn on a U.S. bank account and sent by US Postal Service should be sent directly to the following address:

 

National Institutes of Health

P.O. Box 979071

St. Louis, MO 63197-9000

 

Checks drawn on a U.S. bank account and sent by overnight or courier should be sent to the following address:

 

US Bank

Government Lockbox SL-MO-C2GL

1005 Convention Plaza

St. Louis, MO 63101

Phone: 314-418-4087

 

Checks drawn on a foreign bank account should be sent directly to the following address:

 

National Institutes of Health

Office of Technology Transfer

License Compliance and Administration

Royalty Administration

6011 Executive Boulevard

Suite 325, MSC 7660

Rockville, Maryland 20852

 

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APPENDIX G – SHIPPING INFORMATION

 

The Licensee’s Shipping Contact: information or questions regarding shipping should be directed to the Licensee’s Shipping Contact at:

 

       
Shipping Contact’s Name     Title  
           
Phone: () Fax: () E-mail:  

 

Shipping Address: Name & Address to which Materials should be shipped (please be specific):

 

 ____________________________________

Company Name & Department

 

Address:

 _________________________________

 

 _________________________________

 

 _________________________________

 

 _________________________________

 

The Licensee’s shipping carrier and account number to be used for shipping purposes:

 

__________________________________________________________________

 

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Exhibit 10.13

 

LICENSE, FUNDING AND OPERATIONAL AGREEMENT

 

This License Agreement (this “Agreement”) is made and is effective this 30th day of September, 2020, (the “Effective Date”) between Mid-Atlantic BioTherapeutics, Inc (hereinafter MABT), a Delaware corporation (“Licensor”) and Connectyx (hereinafter CTYX) Technologies Holdings Group, Inc., a Florida corporation (“Licensee”), and David Horn, LLC as Licensor to MABT, and their respective legitimate successors and/or assigns. Licensors and Licensee are each referred to as a “Party” and collectively referred to as the “Parties.”

 

WHEREAS, Licensor owns the Licensed Patent Rights and Licensed Know-How, as defined herein;

 

WHEREAS, Licensee desires to obtain a license to develop Licensed Products in the Field of Use on the terms and conditions set forth in this Agreement; and

 

WHEREAS, Licensor is willing to grant Licensee such license on the terms and conditions set forth in this Agreement; and

 

WHEREAS, Licensee has agreed to use its best efforts to raise the funding needed to accomplish the goals set forth herein;

 

NOW THEREFORE, in consideration of the premises and the mutual covenants set forth herein, the receipt and sufficiency of which are hereby acknowledged, Licensor and Licensee agree as follows:

 

1. Definitions.

 

1.1 “Affiliate” means, with respect to a Party, any Person that controls, is controlled by, or is under common control with such Party. For purposes of this Section 1.1, “control” shall refer to (a) in the case of a Person that is a corporate entity, direct or indirect ownership of fifty percent (50%) or more of the stock or shares having the right to vote for the election of directors of such Person and (b) in the case of a Person that is not a corporate entity, the possession, directly or indirectly, of the power to direct, or cause the direction of, the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

 

1.2 “Competitive Infringement” shall have the meaning set forth in Section 5.2(a).

 

1.3 “Confidential Information” means any confidential or proprietary information furnished by one Party to the other Party in connection with this Agreement, provided that such information is specifically designated as “confidential”, “proprietary” or the like. Confidential Information includes, without limitation:

 

(a) non-public information disclosed by either Party in reports submitted by Licensee or Licensor pursuant to Section 3.4(a) and through audits conducted by either Party pursuant to Section 3.4(b); and the Licensed Know-How.

 

1.4 “Cover,” “Covering” or “Covered” means, with respect to a product, that, in the absence of ownership of or a license granted under a Valid Claim, the manufacture, use, offer for sale, sale or importation of such product would infringe such Valid Claim (or, with respect to a patent application, would infringe such Valid Claim if the patent application were to issue as a patent).

 

-1-
 

 

1.5 “Field of Use” means the rights for the development of IMT504 as immunotherapy for symptomatic rabies.

 

1.6 “IMT504” means (i) the pharmaceutical compound known as IMT504 described in the Licensed Patent Rights and (ii) any compounds other than IMT504 that are Covered by the Licensed Patent Rights.

 

1.7 “IND” means an investigational new drug application in the United States, including any successor application thereof, and any comparable application in any country or regulatory jurisdiction outside the United States.

 

1.8 “License” means the license granted to Licensee in Section 2.1.

 

1.9 “Licensed Know-How” means the documented information, techniques, technology, practices, trade secrets, inventions, data, results and records in Licensor’s possession and control as of the Effective Date or at any time during the Term relating to the inventions claimed or described in the Licensed Patent Rights.

 

1.10 “Licensed Patent Rights” means the patent rights set forth on Exhibit A as intended for the Field of Use.

 

1.11 “Licensed Product” means a product that comprises or contains IMT504.

 

1.12 “Licensee Improvement” means any and all developments, derivatives, enhancements, modifications, inventions patents and patent rights or discoveries relating to IMT504 or a Licensed Product and developed, or created by or on behalf of Licensee or any of its subsidiaries or its sublicensees at any time during the Term, whether patentable or not, including developments, inventions and discoveries intended to enhance the safety, efficacy, delivery and bioavailability of IMT504 or a Licensed Product.

 

1.13 “Licensee Improvement Know-How” means the documented information, techniques, technology, practices, trade secrets, inventions, data, results and records in Licensee’s possession and control at any time during the Term relating to a Licensee.

 

1.14 “Net Profits, with respect to a Licensed Product, shall be determined from the books and records of Licensee, Licensor and their Affiliates and Sublicensees and all interpretations and calculations hereunder shall be computed according to Generally Accepted Accounting Principles, consistently applied.

 

-2-
 

 

In the event the Licensed Product is sold as part of a Combination Product, such “Combination Product” means a combination of a Licensed Product with another product (including in the case of a drug, another active ingredient) which is not a Licensed Product, the Net Profits from the Combination Product, for the purposes of determining royalty payments, shall be determined by multiplying the Net Profits (as determined above) of the Combination Product, during the applicable royalty reporting period, by the fraction, A/A+B, where A is the average sale price of the Licensed Product when sold separately in finished form and B is the average sale price of the other product included in the Combination Product when sold separately in finished form, in each case during the applicable royalty reporting period or, if sales of both the Licensed Product and the other product did not occur in such period, then in the most recent royalty reporting period in which sales of both occurred. In the event that such average sale price cannot be determined for both the Licensed Product and all other products included in such Combination Product, Net Profits for the purposes of determining royalty payments shall be calculated by multiplying the Net Profits of the Combination Product by the fraction of C/C+D where C is the fair market value of the Licensed Product and D is the fair market value of all other products included in the Combination Product. In such event, Licensee shall in good faith make a determination of the respective fair market values of the Licensed Product and all other products included in the Combination Product and shall notify Licensor of such determination and provide Licensor with data to support such determination. Licensor shall have the right to review such determination of fair market values and, if Licensor disagrees with such determination, to notify Licensee of such disagreement within sixty (60) days after Licensee notifies Licensor of such determination. If Licensor notifies Licensee that Licensor disagrees with such determination within such sixty (60) day period and if thereafter the Parties are unable to agree in good faith as to such respective fair market values, then such matter shall be resolved as provided in Section 10.10. If Licensor does not notify Licensee that Licensor disagrees with such determination within such sixty (60) day period, such determination shall be conclusive and binding on the Parties.

 

1.15 “Person” means any natural person or any corporation, company, partnership, joint venture, firm or other entity, including without limitation a Party.

 

1.16 “PRV” shall mean a Priority Review Voucher, as issued by the U.S. Food and Drug Administration (“FDA”) and based on the Licensed Patent Rights.

 

1.17 “Regulatory Approval” means the approvals (including any applicable governmental price and reimbursement approvals), licenses, registrations or authorizations of Regulatory Authorities necessary for the development, manufacture, use, offer for sale, sale or importation of a product in a country or territory.

 

1.18 “Regulatory Authority” means a federal, national, multinational, state, provincial or local regulatory agency, department, bureau or other governmental entity with authority over the testing, manufacture, use, storage, import, promotion, marketing or sale of a product in a Territory.

 

1.19 “Term” shall have the meaning set forth in Section 12.1.

 

1.20 “Territory” means the entire world.

 

1.21 “Third Party” means any Person other than a Party or any of its Affiliates.

 

1.22 “Valid Claim” means (a) a claim of an issued patent in the U.S. or in a jurisdiction outside the U.S., as applicable, that has not expired, lapsed, been cancelled or abandoned, or been dedicated to the public, disclaimed, or held unenforceable, invalid, revoked or cancelled by a court or administrative agency of competent jurisdiction in an order or decision from which no appeal has been or can be taken, including through opposition, reexamination, reissue or disclaimer; or (b) a claim of a pending patent application that has not been finally abandoned or finally rejected or expired and which has been pending for no more than seven (7) years from the date of filing of the earliest priority patent application to which such pending patent application is entitled to claim benefit.

 

-3-
 

 

2. Grant of License; Diligence.

 

2.1 License. Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee an exclusive, non-transferable (except as set forth in Section 13.3), right and license, under the Licensed Patent Rights and Licensed Know-How, to make, have made, use, offer for sale, sell and import in the Territory, Licensed Products solely in the Field of Use.

 

In the event that Licensor, MABT, defaults on provisions of the License Agreement between David Horn, LLC and MABT, such default shall not impair the rights and obligations of the Parties to this Agreement, and David Horn, LLC, shall fulfill the obligations under this Agreement to Licensee. David Horn, LLC, in such event, shall assume the rights of Licensor under this Agreement.

 

2.2 Sublicensing. Licensee shall have the right to grant sublicenses under the License with the prior written approval of Licensor, which shall not be unreasonably withheld, conditioned or delayed.

 

2.3 Diligence. Licensee shall use commercially reasonable efforts to develop and commercialize Licensed Products in the Field of Use,

 

2.4 No Additional Rights. Nothing in this Agreement shall be construed to confer any rights upon Licensee by implication, estoppel or otherwise as to any technology or Patent Rights of Licensor or any other entity other than the Licensed Patent Rights, regardless of whether such technology or Patent Rights shall be dominant or subordinate to any Licensed Patent Rights.

 

2.5 Grant to Licensor of License to Licensee Improvements. Licensee hereby grants to Licensor an unrestricted, fully paid-up, non-royalty-bearing, perpetual, exclusive, worldwide right and license, under the Licensee Improvement and Licensee Improvement Know-How, with the right to grant sublicenses, to practice Licensee Improvements and to make, have made, use, offer for sale, sell and import in the Territory and to otherwise exploit Licensee Improvements.

 

3. Payments.

 

3.1 Equity Payments. As partial consideration for the License and other acts of Licensor required hereunder, Licensee shall issue to Licensor Milestone Payments through the issue of its unregistered securities as set forth below in Section 3.2.

 

3.2 Milestone Payments. Licensee shall pay to Licensor, within ten (10) days after achievement of the corresponding milestone, each of the following one-time milestone equity payments by the issuance of the following number of Licensee’s securities equal to 20,000,000 shares of Licensees common stock.

 

-4-
 

 

Milestone Event   Milestone Payment
     

1. Execution of this Agreement

   7,000,000 shares
     
2. Submission of an Investigational New Drug Application (“IND”) to the FDA   6,500,000 shares
     
3. Successful completion of the first rabies clinical trial conducted under the IND referred to directly above.   6,500,000 shares

 

3.3 Profit Sharing from Sale of Licensed Products. On a Licensed Product-by-Licensed Product and country-by-country basis, all Net Profits from the sale of any Licensed Product shall be payable 50% to Licensor and 50% to Licensee, with only one exception. In the event that the agreed upon budget is funded in full by CTYX and more funding is required, and CTYX provides that funding, CTYX shall be entitled to a distribution of Net Profits equal to a simple interest annual return of 5% on that excess funding, in addition to the return of the amount of the excess funding, prior to the 50/50 distribution anticipated by this provision.

 

3.4 Reports and Accounting.

 

(a) Reports and Payments. Licensee and Licensor shall provide to the other Party, within thirty (30) days after the end of each calendar quarter, reasonably detailed written accountings of Net Profit of the Licensed Products for such calendar quarter. Such quarterly reports shall indicate (i) gross sales and Net Profit on a Licensed Product-by-Licensed Product and country-by-country basis, and (ii) the calculation of Net Profit. When either Party delivers such accounting to the other Party such report, the reporting Party shall also deliver all amounts due under Section 3.3 to the other Party for the calendar quarter.

 

(b) Audits by the Parties. Each Party shall keep, and shall require its Affiliates and Sublicensees to keep, records of the latest three (3) years relating to gross sales, Net Profit, and all information relevant under Section 3.3. For the sole purpose of verifying amounts payable to the other Party, each Party shall have the right no more than once each calendar year, at the reviewing Party’s expense, to review, together with its accountants, such records in the location(s) where such records are maintained by the other Party and its Affiliates and Sublicensees upon reasonable notice and during regular business hours. Results of such review shall be made available to the reviewed Party. If the review reflects an underpayment to the other Party, such underpayment shall be promptly remitted to other Party together with 5% interest.

 

3.5 Taxes.

 

(a) Any amounts to be paid hereunder are stated before value added tax, goods and services tax, sales, export or import duties or any similar tax or duties, which will be paid by Licensee at the rate and in the manner from time to time prescribed by applicable law.

 

(b) Each Party shall be solely responsible for any tax imposed on or measured by the net or gross income of such Party or its Affiliates.

 

-5-
 

 

4. Regulatory Approvals. Licensor shall be solely responsible for obtaining and maintaining any and all Regulatory Approvals necessary for the development, manufacture, use, offer for sale, sale or importation of Licensed Products by or on behalf of Licensee or its Affiliates. Licensor at all times shall comply with all laws, regulations and ordinances, whether federal, state, provincial, county, municipal, or otherwise, with respect to its and its Affiliates activities with respect to Licensed Products. Licensor will not be responsible for obtaining and maintaining any and all Regulatory Approvals necessary for the development, manufacture, use, offer for sale, sale or importation of Licensed Products by or on behalf of any of Licensee’s Sublicensees or their Affiliates.

 

5. Prosecution and Enforcement of Licensed Patent Rights.

 

5.1 Prosecution. Licensor shall retain the first right to prepare, file, prosecute and maintain the Licensed Patent Rights. Licensor shall provide Licensee with reasonable opportunities to review and comment on substantive patent prosecution matters with respect to the Licensed Patent Rights listed on Exhibit A, and shall reasonably consider timely comments thereon provided by Licensee to Licensor to the extent related to the Field of Use.

 

5.2 Enforcement of Licensed Patent Rights and Licensed Know-How.

 

(a) Notice. Each Party shall promptly report in writing to the other Party during the Term any (i) known or suspected infringement of any issued claims within the Licensed Patent Rights by a Third Party, or (ii) any known or suspected misappropriation of any of the Licensed Know-How by a Third Party. In the event such known or suspected infringement or misappropriation involves the manufacture, sale, offer for sale, use, or importation in the Territory of a compound or product in the Field of Use that is competitive with any Licensed Product (“Competitive Infringement”), the reporting Party shall provide the evidence in its possession regarding such Competitive Infringement to the other Party. Promptly after receipt of a notice of Competitive Infringement, the Parties shall discuss in good faith the Competitive Infringement and appropriate actions that could be taken to end the Competitive Infringement.

 

(b) Competitive Infringement. Licensee shall have the first right to initiate a suit or take other appropriate action that it believes necessary to end any Competitive Infringement, at Licensee’s sole control and expense. If Licensee fails to initiate a suit or take other appropriate action that it has the initial right to initiate or take to end such Competitive Infringement within sixty (60) days (or such shorter period specified below in this Section 5.2(b)) after becoming aware of the basis for such suit or action, then Licensor may, in its discretion, initiate a suit or take other appropriate action that it believes necessary to end such Competitive Infringement. The sixty (60) day period in the immediately preceding sentence shall be shortened as reasonably necessary to enable Licensor to initiate a suit or take other appropriate action if, in the absence of such shortening, a loss of rights with respect to such suit or other action would occur (e.g., if a generic pharmaceutical maker files an abbreviated new drug application or analogous application for which the reference listed drug is a Licensed Product and, in order to obtain an automatic stay from the applicable Regulatory Authority with respect to the approval of such application, a patent infringement suit must be brought within a shorter period of time). The Party filing any such suit or taking any such action shall be responsible for all costs in connection therewith and, therefore, shall control all decision-making related to any such suit or action.

 

(c) Infringement or Misappropriation other than Competitive Infringement. Licensor shall have the sole right to initiate a suit or take other appropriate action, at its sole expense and without any duty to account to Licensee therefor, that it believes necessary to end any infringement or misappropriation of the Licensed Patent Rights or Licensed Know-How other than a Competitive Infringement.

 

(d) Conduct of Actions. The Party initiating suit or action shall have the sole and exclusive right to select counsel for any suit initiated by it referred to in Section 5.2(b) above. If required under applicable law in order for the initiating Party to initiate or maintain such suit or action, the other Party shall join as a party to the suit or action. Such other Party shall offer reasonable assistance to the initiating Party in connection therewith at no charge to the initiating Party except for reimbursement of reasonable out-of-pocket expenses incurred in rendering such assistance. The Party filing any such suit or taking any such action shall provide the other Party with an opportunity to make suggestions and comments regarding such suit or action. Thereafter, the Party filing any such suit or taking any such action shall, to the extent permitted by applicable law, keep the other Party promptly informed, and shall from time to time consult with such other Party regarding the status of any such suit or action and shall provide such other Party with copies of all material documents (i.e., complaints, answers, counterclaims, material motions, orders of the court, memoranda of law and legal briefs, interrogatory responses, depositions, material pre-trial filings, expert reports, affidavits filed in court, transcripts of hearings and trial testimony, trial exhibits and notices of appeal) filed in, or otherwise relating to, such suit or action. The Party not initiating such suit or action shall cooperate with the Party initiating such suit or action to the extent reasonably requested, and shall have the right to participate and be represented in any such suit by its own counsel at its own expense.

 

(e) Recoveries. With respect to any suit or action to protect Licensed Patent Rights or Licensed Know-How referred to in Section 5.2(b) above, any recovery obtained as a result of any such proceeding, by settlement or otherwise, shall be applied in the following order of priority:

 

(i) first, the Party initiating the suit or action with respect to Licensed Patent Rights or Licensed Know-How shall be reimbursed for all out-of-pocket costs and expenses in connection with such proceeding paid by such Party and not otherwise recovered; and

 

(ii) second, any remainder shall be paid fifty percent (50%) to each Party.

 

-6-
 

 

6. Confidentiality

 

6.1 Confidential Information. All Confidential Information disclosed by a Party to the other Party during the Term shall not be used by the receiving Party except in connection with the activities contemplated by this Agreement, shall be maintained in confidence by the receiving Party and shall not otherwise be disclosed by the receiving Party to any other Person, firm, or agency, governmental or private, without the prior written consent of the disclosing Party, except to the extent that the Confidential Information:

 

(a) was known or used by the receiving Party prior to its date of disclosure to the receiving Party;

 

(b) either before or after the date of the disclosure to the receiving Party is lawfully disclosed to the receiving Party by sources other than the disclosing Party rightfully in possession of the Confidential Information;

 

(c) either before or after the date of the disclosure to the receiving Party becomes published or generally known to the public through no fault or omission on the part of the receiving Party;

 

(d) is independently developed by or for the receiving Party without reference to or reliance upon the Confidential Information; or

 

(e) is required to be disclosed by the receiving Party to comply with applicable laws or regulations, to defend or prosecute litigation or to comply with legal process, provided that the receiving Party provides prior written notice of such disclosure to the disclosing Party to the extent permissible, only discloses Confidential Information of the other Party to the extent necessary for such legal compliance or litigation purpose, and seeks a protective order, confidential treatment or the like with respect to the Confidential Information so disclosed.

 

6.2 Employee, Consultant and Advisor Obligations. Licensee and Licensor each agree that such Party and its Affiliates shall provide Confidential Information received from the other Party only to the receiving Party’s respective employees, consultants and advisors, and to the employees, consultants and advisors of the receiving Party’s Affiliates and Sublicensees, who have a need to know such Confidential Information to assist the receiving Party in fulfilling its obligations under this Agreement; provided that Licensee and Licensor shall each remain responsible for any failure by such Party and its Affiliates’ respective employees, consultants and advisors to treat such Confidential Information as required under Section 6.1.

 

6.3 Survival. All obligations of confidentiality imposed under this Section 6 shall survive the termination or expiration of this Agreement and shall expire ten (10) years following such termination or expiration.

 

-7-
 

 

7. Structure and Governance. The development and commercialization of the Licensed Products (the “Commercialization”) and the administration of the projects referenced herein (the “Projects”) shall be administered as follows.

 

7.1 Joint Steering Committee. The administration of the Projects shall be overseen by a Joint Steering Committee (the “JSC”). The JSC shall be comprised of six members, three from each company: Dr. David Horn (“Chairman”), Dr. David Jobes, JP Gagnon, Paul Michaels and two additional members from CTYX, to be determined. Each member of the JSC shall have one vote for any matter to come before its consideration; provided, however, that in the event of a draw in the vote, the Chairman shall cast the deciding vote.

 

7.2 Duties of JSC. The purpose of the JSC is to ensure continued alignment and communication among the parties. The JSC shall perform the following functions, including, but not limited to the approval of an annual budget, the development of a sales and marketing plan, the disbursement of all funds, the development and commercialization of the Licensed Products, and the general governance and development of the Projects. The Parties agree that within 30 days of final execution of this Agreement they will meet and agree on an initial annual budget to be substantially in concert with the preliminary budget attached hereto, labeled Exhibit B and incorporated by reference herein. The JSC shall meet no less than quarterly to provide a detailed status report on budget compliance and progress in general. The JSC shall also agree internally on a mutually agreeable schedule for disbursement of the funds to be spent in the annual budget.

 

7.3 Vacancy of JSC Member. In the event of the withdrawal or resignation of any member of the JSC, the vacancy shall be filled by the Party who first appointed such Member.

 

8.0 Project Funding. It shall be the sole responsibility of Licensee to raise no less than $6,500,000 to fund the development of the Projects and the Commercialization of the Licensed Products discussed herein, under the direction of the Licensor and overseen by the JSC, as described above in Section 7 and below in Section 9. ALL OBLIGATIONS OF LICENSOR HEREUNDER SHALL BE CONTINGENT ON LICENSEE’S OBTAINING $6,500,000 IN CAPITAL TO ACCOMPLISH THE OBJECTIVES SET FORTH HEREIN including a minimum of $1 million within 45 days of the SEC declaring Licensees Reg A document qualified, $3 million within 90 days of SEC qualification of the Reg A document, and the remaining anticipated $2.5 million within one year of the date on which the SEC declares the Reg A document qualified.

 

9.0 Responsibilities of Parties; Sale of PRV

 

9.1 Responsibilities of Licensor. The principal responsibilities of Licensor, in addition to issuing the License hereunder shall be to oversee the development and commercialization of the Licensed Product, including, but not be limited to, the following: (a) the development of Good Manufacturing Practice for manufacturing the Licensed Product; (b) the conduct, submission and defense of (i) necessary clinical trials to register the Licensed Products with the FDA for marketing in the United States (“U.S.”); (ii) the preparation and filing of a New Drug Application (the “NDA”) or Biologics License Application (the “BLA”) for the Licensed Products to the FDA; (iii) the preparation and submission of applications to the FDA for all regulatory pathways for IMT504 (e.g., Orphan Drug Application, Fast Track, Breakthrough Therapy designation, Priority Review, etc.) as agreed to by the JSC; (iv) the marketing of the Licensed Products in the U.S., (v) the use of all commercially reasonable efforts to market the Licensed Products; and (vi) to work with Licensee to accomplish the goals of this Agreement.

 

-8-
 

 

9.2 Responsibilities of Licensee. The responsibilities of Licensee include, but are not limited to: (a) providing the funding per Section 8; (b) issuing shares of Licensee’s shares of stock per the schedule on Section 3.2; (c) providing marketing and business development in mutually agreed upon areas, such as China and the U.S. Military; and (d) working with Licensor to accomplish the goals of this Agreement.

 

9.3 Sale of PRV. A principal goal of this Agreement is to obtain and sell the PRV referenced above. The Parties agree to work together in good faith to do so. The Parties shall comply with all applicable laws, regulations and rules regarding the obtaining and the sale of the PRV. Upon the sale of the PRV, each of the Parties shall receive 50% of the proceeds from any such sale. Should the JSC not be able to agree to the market value at which they should attempt to sell the PRV, the Parties agree to binding arbitration, as defined below, to determine the fair market value of the PRV.

 

10. Representations and Warranties

 

10.1 Representations of Authority. Each Party represents and warrants to the other Party that, as of the Effective Date, it has full right, power and authority to enter into this Agreement and to perform its respective obligations under this Agreement.

 

10.2 Consents. Each Party represents and warrants to the other Party that, as of the Effective Date, all necessary consents, approvals, Regulatory Approvals and authorizations of all Regulatory Authorities and other Persons required to be obtained by such Party in connection with execution, delivery and performance of this Agreement have been obtained. For clarity, this does not mean that CTYX has already filed and had approved any registration statement or like requirement for raising the capital anticipated by this agreement.

 

10.3 No Conflict. Each Party represents and warrants to the other Party that, as of the Effective Date, the execution and delivery of this Agreement and the performance of such Party’s obligations hereunder (a) do not conflict with or violate any requirement of applicable laws or regulations and (b) do not conflict with, violate or breach or constitute a default of, or require any consent under, any contractual obligations of such Party, except such consents as have been obtained as of the Effective Date. In addition, Licensee represents, warrants and covenants to Licensor that Licensee shall comply with all applicable laws or regulations with respect to the Agreement or the use of any Licensed Products.

 

10.4 No Warranties. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, THE PARTIES MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT. WITHOUT LIMITING THE FOREGOING, LICENSOR DOES NOT MAKE, AND HEREBY DISCLAIMS, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, REGARDING THE DESIGN, MANUFACTURABILITY, MERCHANTABILITY OR FITNESS FOR ANY PURPOSE OF ANY LICENSED PRODUCT.

 

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11. Indemnification

 

11.1 By Licensee. Licensee agrees to defend Licensor, its Affiliates and its or their respective directors, officers, employees or agents at Licensee’s cost and expense, and shall indemnify and hold harmless Licensor and its Affiliates and its or their respective directors, officers, employees or agents, from and against any liabilities, losses, costs, damages, fees or expenses arising out of any Third Party claim to the extent arising from (i) any breach by Licensee of any of its representations or warranties pursuant to this Agreement, (ii) the development, manufacture, use, offer for sale, sale or importation of any Licensed Product by or on behalf of Licensee or any of its Affiliates or (iii) personal injury, property damage or other damage resulting from the development, manufacture, use or commercialization of a Licensed Product by or on behalf of Licensee or its Affiliates or any of their customers.

 

11.2 By Licensor. Licensor agrees to defend Licensee, its Affiliates and its or their respective directors, officers, employees or agents at Licensor’s cost and expense, and shall indemnify and hold harmless Licensee and its Affiliates and its or their respective directors, officers, employees or agents, from and against any liabilities, losses, costs, damages, fees or expenses arising out of any Third Party claim to the extent such Third Party claim arises from (i) any breach by Licensor of any of its representations or warranties pursuant to this Agreement, (ii) the development, manufacture, use, offer for sale, sale or importation of any Licensed Product by or on behalf of Licensor or any of its Affiliates or (iii) personal injury, property damage or other damage resulting from the development, manufacture, use or commercialization of a Licensed Product by or on behalf of Licensor or its Affiliates or any of their customers.

 

11.3 Procedures. A Person entitled to indemnification under this Section 11 (an “Indemnified Party”) shall give prompt written notification to the Party from whom indemnification is sought (the “Indemnifying Party”) of any claim for which indemnification is sough under this Agreement. Within thirty (30) days after delivery of such notification, the Indemnifying Party may, upon written notice thereof to the Indemnified Party, assume control of the defense of such claim with counsel reasonably satisfactory to the Indemnified Party. If the Indemnifying Party does not assume control of such defense, the Indemnified Party shall control such defense. The Party not controlling such defense may participate therein at its own expense; provided that the Indemnified Party shall have the right to retain its own counsel, at the expense of the Indemnifying Party, if representation of such Indemnified Party by the counsel retained by the Indemnifying Party would be inappropriate because of actual or potential differences in the interests of such Indemnified Party and any other party represented by such counsel. The Indemnified Party shall not agree to any settlement of such claim without the prior written consent of the Indemnifying Party, which shall not be unreasonably withheld, delayed or conditioned.

 

-10-
 

 

11.4 Insurance. Licensee and Licensor shall have and maintain such types and amounts of insurance covering its development, manufacture, use, offer for sale, sale and importation of License Products as is (i) normal and customary in the pharmaceutical products industries generally for parties similarly situated and (ii) otherwise required by applicable law. Upon request by Licensor, Licensee shall provide to Licensor evidence of its insurance coverage. The insurance policies shall be under an occurrence form, but if only a claims-made form is available to Licensee or Licensor, then both shall continue to maintain such insurance after the expiration or termination of this Agreement for a period of five (5) years.

 

12. Term and Termination. Licensor shall have the right to terminate this agreement as of December 31, 2020 if Licensee shall have failed to raise $1,000,000 by December 31, 2020, unless an extension is agreed to by both Parties.

 

12.1 Term. This Agreement shall become effective as of the Effective Date, may be terminated as set forth in this Section 12, and otherwise shall remain in effect until the sale of the PRV and for so long as the Licensed Products are sold.

 

12.2 Termination for Material Breach. Upon any material breach of this Agreement by either Party, the other Party may terminate this Agreement by providing sixty (60) days’ written notice to the breaching Party, specifying the material breach. The termination shall become effective at the end of the sixty (60) day period unless the breaching Party cures such breach during such sixty (60) day period.

 

The Parties acknowledge and agree that it shall constitute a material breach if Licensor or Licensee shall, through an action related to either Party’s development of IMT504 that would make IMT504 ineligible for the Priority Review Voucher, which is the focus of this development agreement. In that event, as stipulated damages, the following will take place.

 

  a. The Parties will within 15 days of such an occurrence mutually agree to a dollar amount which represents the “lost” 50% of the sales proceeds that likely would have been obtained. The Parties will also agree to the structure and amounts of a milestone and royalty payment plan from one Party to the other to repay that amount from proceeds from the Party, which caused the breach. If the Parties cannot mutually agree on these items they shall be subjected to binding arbitration as described below.
     
  b. For clarity, this provision anticipates but is not limited to a situation where IMT504 reaches a regulatory point anywhere in the world, for an indication other than that which is the Field of Use for this agreement, and through an action related to Licensor’s development of IMT504, where such regulatory point makes IMT504 ineligible for the FDA Priority Review Voucher.
     
  c. For additional clarity, if Licensee elects to sublicense its rights under Section 2.2, and the Sublicensee files for and/or obtains regulatory approval prior to Licensor’s regulatory filings or approval, Licensor will not be subject to Termination for Breach, nor will Licensor be subject to any penalties or damages as a result of Licensee’s actions to sublicense. In this situation, Licensor will be eligible to collect the lost 50% of sales from the PRV as stated in 12.2 (a) above.

 

-11-
 

 

12.3 Effects of Termination. Upon termination of this Agreement prior to the end of the Term, as a result of the material breach of CTYX (but not upon expiration of this Agreement at the end of the Term):

 

(a) Licensee shall immediately assign and transfer to Licensor all Licensed Product-specific trademarks used in association with Licensed Product(s) or interests therein;

 

(b) Licensee shall immediately assign and transfer to Licensor all regulatory documents if any filed by Licensee, its representatives or manufacturers to the extent relating to IMT504 or Licensed Product(s);

 

(c) Licensee shall immediately assign and transfer to Licensor all regulatory approvals for Licensed Product(s) held in the name of Licensee or any of its subsidiaries in each country in the Territory; and

 

(d) The License granted to Licensor in Section 2.5 shall expand to include the Field of Use.

 

Upon termination of this Agreement as the result of a material uncured breach by Licensor, which breach remains uncured for 30 days after notice from Licensee, Licensor shall have the same obligations to Licensee as provided for in 12.3 (a), (b), (c) and (d) directly above; and shall reaffirm the License granted in sections 2.1 and 2.5 above for the Field of Use as stated above. Licensee shall take over the development of the Licensed Product. The JSC shall be dissolved. All other terms and conditions shall survive as written.

 

12.4 Survival. The following provisions shall survive the expiration or termination of this Agreement in accordance with their terms: Sections 2.5, 3.2, 3.3, 3.4, 3.5, 6, 10.4, 11, 12.3, 12.4 and 13.

 

13. Miscellaneous Provisions

 

13.1 Governing Law. This Agreement and all disputes arising out of or related to this Agreement shall be construed and the respective rights of the Parties determined in accordance with the laws of the Commonwealth of Pennsylvania, notwithstanding the provisions thereof governing conflicts of laws.

 

13.2 Notice. Any notices required or permitted by this Agreement shall be in writing, shall specifically refer to this Agreement, and shall be sent by hand, recognized national overnight courier, confirmed facsimile transmission, confirmed electronic mail, or registered or certified mail, postage prepaid, return receipt requested, to the following address or facsimile number of the parties:

 

If to Licensor:

 

Mid-Atlantic BioTherapeutics, Inc.

 

Attn: Dr. David Horn

 

3805 Old Easton Road

 

Doylestown, PA 18902

 

dhorn@mid-atlanticbio.com

 

-12-
 

 

If to Licensee:

 

Connectyx Technologies Holdings, Inc

1825 NW Corporate Blvd, Suite 101

Boca Raton, Florida 33431

561-418-7725

 

All notices under this Agreement shall be deemed effective upon receipt. A party may change its contact information immediately upon written notice to the other party in the manner provided in this Section.

 

13.3 Assignment. This Agreement is personal to Licensee and no rights or obligations may be assigned by Licensee without the prior written consent of Licensor, except any Party may assign this Agreement to an Affiliate of such Party or in connection with the sale or transfer of all or substantially all of the business or assets of such Party relating to the subject matter of this Agreement.

 

13.4 Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to its subject matter and supersedes all prior agreements or understandings between the Parties relating to its subject matter.

 

13.5 Amendment and Waiver. This Agreement may be amended, supplemented, or otherwise modified only by means of a written instrument signed by both Parties. Any waiver of any right or failure to act in a specific instance shall related only to such instance and shall not be construed as an agreement to waive any right or fail to act in any other instance, whether or not similar.

 

13.6 Severability. In the event that any provision of this Agreement shall be held invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect any other provision of this Agreement. The Parties shall consult one another and use reasonable efforts to agree upon a valid and enforceable provision that is a reasonable substitute for the invalid or unenforceable provision.

 

13.7 EXCLUSION OF CONSEQUENTIAL DAMAGES. OTHER THAN IN CONNECTION WITH A PARTY’S INDEMNIFICATION OBLIGATIONS HEREUNDER AS TO THIRD PARTY CLAIMS IN ACCORDANCE WITH SECTION 11, NEITHER PARTY HERETO WILL BE LIABLE FOR INCIDENTAL, CONSEQUENTIAL, SPECIAL, EXEMPLARY, PUNITIVE OR OTHER INDIRECT DAMAGES ARISING OUT OF THIS AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER, OR FOR LOST PROFITS ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES.

 

-13-
 

 

13.8 Counterparts. This Agreement may be executed in counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original, and all of which counterparts, taken together, shall constitute one and the same instrument.

 

13.9 Force Majeure. Neither party will be responsible for delays resulting from causes beyond the reasonable control of such party, which may include without limitation fire, explosion, flood, war, strike or riot, provided that the nonperforming party uses commercially reasonable efforts to avoid or remove such causes of nonperformance and continues performance under this Agreement with reasonable dispatch whenever such causes are removed.

 

13.10 Dispute Resolution.

 

(a) Alternative Dispute Resolution. Any dispute arising out of or relating to this Agreement shall be resolved through binding arbitration as follows:

 

(i) A Party may submit such dispute to arbitration by notifying the other Party, in writing, of such dispute. Within thirty (30) days after receipt of such notice, the Parties shall designate in writing a single arbitrator to resolve the dispute; provided, however, that if the Parties cannot agree on an arbitrator within such 30-day period, the arbitrator shall be selected by the Philadelphia, Pennsylvania office of the American Arbitration Association (the “AAA”). The arbitrator shall not be an Affiliate, employee, consultant, officer, director or stockholder of any Party.

 

(ii) Within thirty (30) days after the designation of the arbitrator, the arbitrator and the Parties shall meet, at which time the Parties shall be required to set forth in writing all disputed issues and a proposed ruling on the merits of each such issue.

 

(iii) The arbitrator shall set a date for a hearing, which shall be no later than forty-five (45) days after the submission of written proposals pursuant to Section 13.10(a)(ii), to discuss each of the issues identified by the Parties. The Parties shall have the right to be represented by counsel. Except as provided herein, the arbitration shall be governed by the Commercial Arbitration Rules of the AAA; provided, however, that the Federal Rules of Evidence shall apply with regard to the admissibility of evidence and the arbitration shall be conducted by a single arbitrator. The arbitration shall be in English.

 

(iv) The arbitrator shall use his or her best efforts to rule on each disputed issue within thirty (30) days after the completion of the hearings described in Section 13.10(a)(iii). The determination of the arbitrator as to the resolution of any dispute shall be binding and conclusive upon all Parties. All rulings of the arbitrator shall be in writing and shall be delivered to the Parties.

 

(v) The attorneys’ fees of the Parties in any arbitration, fees of the arbitrator, and costs and expenses of the arbitration shall be borne by the Parties as determined by the arbitrator.

 

(vi) Any arbitration pursuant to this Section 13.10 shall be conducted in Philadelphia, Pennsylvania. Any arbitration award may be entered in and enforced by any court of competent jurisdiction.

 

(b) No Limitation. Nothing in Section 13.10 shall be construed as limiting in any way the right of a Party to seek an injunction or other equitable relief with respect to any actual or threatened breach of this Agreement or to bring an action in aid of arbitration. Should any Party seek an injunction or other equitable relief, or bring an action in aid of arbitration, then for purposes of determining whether to grant such injunction or other equitable relief, or whether to issue any order in aid of arbitration, the dispute underlying the request for such injunction or other equitable relief, or action in aid of arbitration, may be heard by the court in which such action or proceeding is brought.

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first set forth above.

 

Mid-Atlantic BioTherapeutics, Inc.   Connectyx Technologies Holdings Group, Inc.
         
By: /s/ David Horn   By: /s/ Paul Michaels
Name: David Horn, M.D.   Name: Paul Michaels
Title: CEO   Title: CEO
         
David Horn, LLC      
         
By: /s/ David Horn      
Name: David Horn, M.D.      
Title: Principal      

 

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Exhibit A

 

Licensed Patent Rights

 


PATENT PORTFOLIO SUMMARY CHART

 

Updated October 29, 2019

 

Title: Immunostimulatory Oligonucleotides and Uses Thereof

 

NOTE: ANY SUBLICENSE TO CHINA OR ANY OTHER TERRITORY NOT INCLUDED IN THE TABLE BELOW, OR ANY COMPANY DOMESTICATED IN CHINA OR ANY OTHER TERRITORY NOT INCLUDED IN THE TABLE BELOW, WILL REQUIRE PRIOR WRITTEN APPROVAL OF LICENSOR

 

 

Country   Appl. No./ Patent No.   Filing Date/ Issue Date   Recorded Owner   Status   Next Action Due   Comments
U.S.   10/309,775 7,038,029   04-Dec-2002 02-May-2006   David Horn, LLC   Issued   No further action; All maintenance fees have been paid   Standard expiration Apr. 1, 2023 (+ 118 day PTA)
                         
U.S.   11/178,086 7,381,807   08-Jul-2005 03-Jun-2008   David Horn, LLC   Issued   Third and final maintenance fee to be paid before Jun. 3, 2020 (Payment window opened on Jun. 3, 2019 and surcharge period runs from Dec. 4, 2019 to Jun. 3, 2020)   Standard expiration Nov. 25, 2023 (+ 356 days PTA)
                         
U.S.   12/111,006 7,943,316   28-Apr-2008 17-May-2011   David Horn, LLC   Issued   Third and final maintenance fee to be paid before May 5, 2023 (Payment window opens on May 17, 2022 and surcharge period runs from November 18, 2022 to May 17, 2023)   Standard expiration Dec. 4, 2022 (+ 0 days PTA)
                         
U.S.   13/099,778 8,871,436   03-May-2011 28-Oct-2014   David Horn, LLC   Issued   Second maintenance fee to be paid before Oct 28, 2022 (Payment window opens on Oct 28, 2021, and surcharge period runs from Apr. 29, 2022 to Oct 28, 2022)   Standard Expiration June 28, 2024 (+ 572 days PTA)

 

-16-
 

 

Country   Appl. No./ Patent No.   Filing Date/ Issue Date   Recorded Owner   Status   Next Action Due   Comments
                         
Australia   2003250334 2003250334   30-May-2003 25-Nov-2004   David Horn, LLC   Issued   May 30, 2020 – Renewal fees due    
                         
European Patent Convention   03755959.8 1511845   30-May-2003 09-Mar-2005   David Horn, LLC   Issued  

May 30, 2020 – annuities due in:

 

BE Belgium CH/LI Switzerland/ Liechtenstein DE Germany DK Denmark FI Finland FR France GB United Kingdom GR Greece HU Hungary IE Ireland NL Netherlands PT Portugal SE Sweden TR Turkey CY Cyprus ES Spain IT Italy

 

 

  

Status of each validated country:

 

Confirmed 2019 annuity paid in (next annuity due 2020): BE Belgium CH/LI Switzerland/ Liechtenstein DE Germany DK Denmark ES Spain FI Finland FR France GR Greece HU Hungary IE Ireland IT Italy PT Portugal SE Sweden TR Turkey CY Cyprus

 

Status of current validated country:

 

2020 annuity paid:

 

DE Germany

 

ES Spain

 

FR France

 

IT Italy

 

GB Great Britain

                         
India   3773/DLNP72004 252038   29-Nov-2004 23-Apr-2012   David Horn, LLC   Issued   May 30, 2020 – Next annuity payment due   Statement of working will also be due May 30, 2020
                         
Mexico   2004/011937   30-Nov-2004   David Horn, LLC   Issued   May 30, 2020 – Next annuity payment due    
                         
New Zealand   20030536962 536962   25-Nov-2004 11-Jan-2007   David Horn, LLC   Issued   May 30, 2020 – renewal fees due    

 

European Countries (17):

 

Belgium, Cyprus, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Netherlands, Portugal, Spain, Sweden, Switzerland, Turkey, United Kingdom

 

-17-
 

 

Exhibit B

 

Preliminary Rabies Development Budget

 

MidAtlantic BioTherapeutics, Inc

 

2020-2023 Financial Plan

 

10/1/2020

 

   Forecast   Forecast   Forecast   Forecast     
   Full Year   Full Year   Full Year   Full Year     
   2020   2021   2022   2023   Total 
                     
Profit and Loss Statement                         
                          
Commerical Sales  $-   $-   $1,196,484   $113,681,934   $114,878,418 
Cost of Good Sold   -    -    55,404    787,635    843,039 
Gross Profit   -    -    1,141,080    112,894,298    114,035,379 
Cost of Sales (Distribution Costs)   -    -    (598,242)   (6,840,967)   (7,439,209)
Net Sales  $-   $-   $542,838   $106,053,331   $106,596,170 
                          
General, Selling and Admin. Expense                         
                          
Personnel Expense (See Personnel Schedule)  $54,958   $803,067   $1,006,959   $1,050,186   $2,915,170 
                          
Research and Development Expense (See R&D Schedule)   -    2,650,000    1,600,000    -    4,250,000 
                          
Marketing Expense (See G&A Schedule)   -    -    110,500    174,000    284,500 
                          
Other G,S & A Expense (See G&A Schedule)   19,603    208,917    237,733    215,814    682,067 
                          
Total G, S & A Expense   74,561    3,661,984    2,955,192    1,440,000    8,131,737 
                          
Operating Income (Loss)  $(74,561)  $(3,661,984)  $(2,412,354)  $104,613,331   $98,464,433 
                          
Other Income/Expense                         
                          
Interest Inc/(Exp), Net   -    -    -    -    - 
Other Inc/(Exp)   -    -    -    -    - 
Total Other Inc (Exp)   -    -    -    -    - 
                          
Pre-Tax Income (Loss)  $(74,561)  $(3,661,984)  $(2,412,354)  $104,613,331   $98,464,433 
                          
Funding Milestones                         
                          
Cash Balance   6,432,878    3,041,803    370,982    104,981,741    - 
Series A Financing   -    -    -    -    - 
Series B Financing   -    -    -    -    - 

 

-18-
 

 

   Forecast   Forecast   Forecast   Forecast 
Balance Sheet  Full Year   Full Year   Full Year   Full Year 
   2020   2021   2022   2023 
                 
Assets                    
                     
Cash  $6,432,878   $3,041,803   $370,982   $104,981,741 
Account Receivable   -    -    -    - 
Inventory   -    -    -    - 
Other Current Assets   -    -    -    - 
                     
Total Current Assets  $6,432,878   $3,041,803   $370,982   $104,981,741 
                     
Long Term Assets                    
Furniture, Equipment, Intellectual Property  $12,500    12,500    12,500    12,500 
Less: Accumulated Depreciation and Amortization   (336)   (4,369)   (8,403)   (12,117)
                     
Total Assets  $6,445,042   $3,049,933   $375,079   $104,982,124 
                     
Liabilities                    
                     
Accounts Payable  $19,603    286,478    23,978    17,692 
Accrued Bonuses   -    -    -    - 
                     
Total Liabilities  $19,603   $286,478   $23,978   $17,692 
                     
Net Worth                    
                     
Common Units  $-   $-   $-   $- 
Series A Preferred   6,500,000    6,500,000    6,500,000    6,500,000 
Series B Preferred   -    -    -    - 
Retained Earnings (Loss)   (74,561)   (3,736,545)   (6,148,899)   98,464,433 
                     
Total Equity  $6,425,439    2,763,455    351,101   $104,964,433 
                     
Total Liabilities and Net Worth  $6,445,042   $3,049,933   $375,079   $104,982,124 

 

   Forecast   Forecast   Forecast   Forecast     
   Full Year   Full Year   Full Year   Full Year     
Statement of Cash Flows  2020   2021   2022   2023   Total 
                     
Operating Activities                         
Net Income  $(74,561)  $(3,661,984)  $(2,412,354)  $104,613,331   $98,464,433 
Add: Depreciation and Amortization   336    4,033    4,033    3,714    12,117 
Changes in Working Capital                         
Accounts Receivable - (Inc)/Dec   -    -    -    -    - 
Inventory - (Inc)/Dec   -    -    -    -    - 
Accounts Payable - (Dec)/Inc.   19,603    266,875    (262,500)   (6,286)   17,692 
Accrued Bonus - Inc./(Dec)   -    -    -    -    - 
Other Short Term Assets (Inc)/Dec.   -    -    -    -    - 
                          
Investing Activities                         
Purchase of Capital Assets   (12,500)   -    -    -    (12,500)
                          
Financing Activities                         
Series A Financing   6,500,000    -    -    -    6,500,000 
Series B Financing   -    -    -    -    - 
         -                
Net Cash (Used)/Generated during Period  $6,432,878   $(3,391,076)  $(2,670,821)  $104,610,759   $104,981,741 
                          
Beginning Cash  $-   $6,432,878   $3,041,803   $370,982   $- 
Ending Cash  $6,432,878   $3,041,803   $370,982   $104,981,741   $104,981,741 

 

-19-

 

 

Exhibit 10.14

 

FIRST AMENDMENT TO

 

LICENSE, FUNDING AND OPERATIONAL AGREEMENT

 

THIS IS THE FIRST AMENDMENT (the “Amendment”) to the License, Funding and Operational Agreement for rabies immunotherapy (the “Agreement”) between Mid-Atlantic BioTherapeutics, Inc. (“Licensor”) and Curative Biotechnology, Inc., formerly Connectyx, (“Licensee”) originally executed September 30th, 2020.

 

WITNESSETH:

 

WHEREAS, the Licensor and Licensee have executed the Agreement referred to above;

 

and

 

WHEREAS, in the Agreement Sections 8 and 12 refer to the obligation of Licensee to raise money to fund the rabies immunotherapy program and also includes a termination date if a minimum amount of money has not been raised; and

 

WHEREAS, the method and timing for raising that money has changed and the parties wish to update the Agreement to reflect that;

 

WHEREAS, the Licensor and Licensee wish to amend the Agreement as set forth herein,

 

NOW, THEREFORE, Licensor and Licensee amend the Agreement as follows:

 

8. Project Funding. Section 8 is amended to state that all obligations of the Licensor shall be contingent upon Licensee raising at least $6.5 million dollars within 180 days of Licensee’s S1 going effective.

 

12. Term and Termination. The termination date of December 31, 2020, is amended to March 30, 2022.

 

IN WITNESS WHEREOF, the Parties have executed this First Amendment this 30thth day of December, 2021.

 

LICENSOR   LICENSEE
     
Mid-Atlantic BioTherapeutics, Inc.   Curative Biotechnology, Inc.
     
/s/ David Horn   /s/ Richard Garr
By: David Horn, M.D.   Richard Garr

 

 

 

 

Exhibit 10.15

 

FIRST AMENDMENT TO

 

LICENSE, FUNDING AND OPERATIONAL AGREEMENT

 

THIS FIRST AMENDMENT (the “Amendment”) to the License, Funding and Operational Agreement between Mid-Atlantic BioTherapeutics, Inc. (“Licensor”) and Curative Biotechnology, Inc. (“Licensee”) executed October 1, 2021 for a COVID-19 Vaccine (the “Agreement”), is made by Licensor and Licensee,

 

WITNESSETH:

 

WHEREAS, the Licensor and Licensee previously executed the Agreement; and

 

WHEREAS, the Licensor and Licensee wish to amend the Agreement as set forth herein,

 

NOW, THEREFORE, Licensor and Licensee amend the Agreement as follows:

 

  1. Amendments to the Agreement. The following Sections of the Agreement are amended and restated as follows:

 

  a. Section 12 of the Agreement entitled “Term and Termination”, shall be deleted in its entirety and replaced with the following:

 

“Initial Funding. Licensee shall provide Licensor $10,000,000 for the initial funding of the Project which is the subject of this Agreement in a reasonable time frame to accomplish the initiation of the Project in a timely fashion.”

 

  2. Additional Changes. All other provisions of this Agreement, including Sections 12.1, 12.2, 12.3 and 12.4 shall remain unchanged and in full force and effect except as is necessary to amend in order to effect the transactions contemplated herein, which such changes are hereby approved by all Parties.

 

  3. Final Agreement. This Amendment represents the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements. There are no unwritten oral agreements between the parties.

 

IN WITNESS WHEREOF, the Parties have executed this Amendment this 31st day of December, 2021.

 

LICENSOR   LICENSEE
     
Mid-Atlantic BioTherapeutics, Inc.   Curative Biotechnology, Inc.
     
/s/ David Horn   /s/ Richard Garr
By: David Horn, M.D.   Richard Garr

 

 

 

Exhibit 10.16

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”) is dated as March 2, 2022, among Curative Biotechnology, Inc, a Florida corporation whose principal place of business is located at 1825 NW Corporate Blvd., Suite 110 Boca Raton, FL 33431 (the “Company”) and the Purchaser identified on the signature pages hereto (including their successors and assigns, the “Purchaser”).

 

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 promulgated thereunder, the Company desires to issue and sell to the Purchaser, and each Purchaser desires to purchase from the Company, securities of the Company as more fully described in this Agreement.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser, severally and not jointly, agrees as set forth below.

 

ARTICLE I

DEFINITIONS

 

1.1 Definitions. In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Notes and Warrants (as defined herein), and (b) the following terms have the meanings set forth in this Section 1.1:

 

“Action” shall have the meaning ascribed to such term in Section 3.1(j).

 

“Affidavit of Confession of Judgment” means the Affidavit of Confession of Judgment dated the date hereof, executed by the Company.

 

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 144 under the Securities Act.

 

“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 New York are authorized or required by law or other government action to close.

 

“Change of Control” means the occurrence of any of (i) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) other than a group including Paul M. Michaels, Barry A. Ginsberg, Michael J. Grace, Ronald Bordens and Richard Garr of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of 50% of the voting securities of the Company, or (ii) the Company merges into or consolidates with any other Person, or any Person merges into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction own less than 50% of the aggregate voting power of the Company or the successor entity of such transaction, or (iii) the Company sells or transfers all or substantially all of its assets to another Person and the stockholders of the Company immediately prior to such transaction own less than 50% of the aggregate voting power of the acquiring entity immediately after the transaction, (iv) a replacement at one time or within a three year period of more than one-half of the members of the Company’s board of directors which is not approved by a majority of those individuals who are members of the board of directors on the date hereof (or by those individuals who are serving as members of the board of directors on any date whose nomination to the board of directors was approved by a majority of the members of the board of directors on the date hereof), or (v) either Richard Garr, or Paul Michaels are terminated by the Company without cause (as that term will be described in their respective employment agreements or are otherwise no longer employed by the Company on a full time basis as Chief Executive Officer or Chairman of the Board and President, respectively, on a full time basis, (vi) the execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events set forth above in (i) through (v) above.

 

Page 1 of 32
 

 

“Closing” means the closing of the purchase and sale of the Securities pursuant to Section 2.1.

 

“Closing Date” means the Business Day when all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchaser’ obligations to pay the Subscription Amount and (ii) the Company’s obligations to deliver the Securities have been satisfied or waived.

 

“Commission” means the United States Securities and Exchange Commission.

 

“Common Stock” means the common stock of the Company, par value $.0001 per share.

 

“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

 

“Company Counsel” means Silvestre Law Group, P.C.

 

“Disclosure Schedules” shall have the meaning ascribed to such term in Section 3.1 hereof.

 

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

 

“Exempt Issuance” means the issuance of (a) options, not to exceed 10% of the Company’s issued and outstanding Common Stock in any one year, to purchase shares of Common Stock to employees, officers, directors or consultants of the Company, pursuant to any stock or option plan duly adopted by the Board of Directors of the Company or a majority of the members of a committee of non-employee directors established for such purpose, (b) shares of Common Stock issuable upon exercise, conversion or pursuant to the terms of the Securities, or convertible securities, options or warrants issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, (c) shares issued to unaffiliated third parties for legal, financial or other services provided to the Company, and (d) securities issued pursuant to acquisitions or strategic transaction, provided that any such issuance shall only be to a person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receive benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.

 

Page 2 of 32
 

 

“GAAP” shall have the meaning ascribed to such term in Section 3.1(h) hereof.

 

“IP Security Agreement” means the Intellectual Property Security Agreement, dated as of the date hereof, by and between the Company and the Purchaser.

 

“Liens” means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

“Lock-up Agreements” means the lock-up agreements executed by management and certain significant shareholders of the Company.

 

“Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b) hereof.

 

“Material Permits” shall have the meaning ascribed to such term in Section 3.1(m).

 

“Notes” means the 12.5% Senior Secured Notes due March 2, 2023 in aggregate principal amount of $1,142,857.14 issued by the Company to the Purchaser hereunder, in substantially the same form as contained in Exhibit A hereto.

 

“OFAC” shall mean the United States Department of the Treasury’s Office of Foreign Assets Control.

 

“OFAC Regulations” shall mean the regulations promulgated by OFAC, as amended from time to time.

 

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

 

“Qualified Offering” means a debt (including convertible debt) or equity financing of either the Company or its Subsidiary’s securities resulting in aggregate gross proceeds to the Company of at least $10,000,000. For purposes of clarity, to qualify as a Qualified Offering, the gross proceeds must be raised in one (1) offering (which may have one or several closings) and the proceeds of multiple offerings of securities with different terms will not be aggregated together.

 

Page 3 of 32
 

 

“Registrable Securities” means, as of any date of determination, (a) all shares of Common Stock then issued and issuable upon conversion in full of the Notes (assuming Event of Default) and (b) all shares of Common Stock issuable upon exercise of the Warrants (assuming on such date the Warrants are exercised in full without regard to any exercise limitations therein), and (c) any securities issued or then issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing; provided, however, that any such Registrable Securities shall cease to be Registrable Securities (and the Company shall not be required to file a registration statement pursuant to Section 4.17 (with respect thereto) for so long as (a) a Registration Statement with respect to the sale of such Registrable Securities is declared effective by the Commission under the Securities Act and such Registrable Securities have been disposed of by the Purchaser in accordance with an effective registration statement, (b) such Registrable Securities have been previously sold in accordance with Rule 144, or (c) such securities become eligible for resale without volume or manner-of-sale restrictions and without current public information pursuant to Rule 144 as set forth in a written opinion letter to such effect, addressed, delivered and acceptable to the Transfer Agent and the Purchaser (assuming that such securities and any securities issuable upon exercise, or conversion of which, such securities were issued or are issuable, were at no time held by any Affiliate of the Company, and all Warrants are exercised by “cashless exercise” as provided in Section 2(c) of each of the Warrants.

 

“Registration Statement” means a registration statement that registers the resale of all shares of Common Stock which are issuable upon conversion or exercise of the Note and/or Warrants that names the Purchaser as a “selling stockholder” therein.

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“Securities” means the Note, the Warrants the and the shares of common underlying the Notes (upon an Event of Default) and Warrants.

 

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

 

“Security Agreement” means the Security Agreement, dated the date hereof, between the Company, the Purchaser.

 

“Security Documents” means the Security Agreement and the IP Security Agreement and any other documents and filings required thereunder (all UCC-1 and IP filing receipts) in order to grant the Purchaser a perfected first priority security interest on all of the current and future assets of the Company and its Subsidiaries.

 

“Shares” shares of common stock of the Company.

 

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include locating and/or borrowing shares of Common Stock).

 

“Subscription Amount” means, as to the Purchaser, the aggregate amount to be paid for Notes and Warrants purchased hereunder as specified below such Purchaser’ name on the signature page of this Agreement and next to the heading “Subscription Amount”, in United States Dollars and in immediately available funds.

 

“Subsidiary” means any direct or indirect subsidiary of the Company as set forth on Schedule 3.1(a).

 

“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).

 

Page 4 of 32
 

 

“Transaction Documents” means this Agreement, the Notes, the Warrants, the Security Agreement, the IP Security Agreement, the Affidavit of Confession of Judgment, the Lock-up Agreements, the Transfer Agent Instructions, and any other documents or agreements executed in connection with the transactions contemplated hereunder.

 

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:00 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

“Warrants” means the Common Stock purchase warrants to purchase up to 22,857,143 shares of Common Stock and having a term of five (5) years and an exercise price of $0.0001, in substantially the same form as Exhibit C.

 

ARTICLE II

PURCHASE AND SALE

 

2.1 Closing. Subject to the terms and conditions set forth herein, Purchaser agrees to purchase from the Company and the Company agrees to sell to Purchaser the aggregate principal amount of Notes and number of Warrants, in each case set forth opposite the name of the Purchaser on the signature page hereto, for the purchase price set forth on such page, which purchase price shall aggregate $1,000,000 which shall be payable to the Company at the Closing by wire transfer of immediately available funds. The Notes shall be issued with an original issue discount of 12.5% (i.e., face amount is the gross proceeds/.875). In addition, upon closing, the Purchaser will receive the Warrant as provided for in Section 2.2(a). At the Closing, Purchaser shall deliver to the Company via wire transfer immediately available funds equal to its Subscription Amount and the Company shall deliver to each Purchaser its Note and the Warrants and the other items set forth in Section 2.2 issuable at the Closing. Upon satisfaction of the conditions set forth in Section 2.2, the Closing shall occur at the offices of the Company, or such other location as the parties shall mutually agree.

 

2.2 Deliveries.

 

a) On the Closing Date, the Company shall deliver to each Purchaser the following and shall have satisfied the following conditions, as the case may be:

 

(i) this Agreement, duly executed by the Company;

 

Page 5 of 32
 

 

(ii) a duly executed Note with a principal amount equal to the amount such set forth on the signature page hereto, registered in the name of such Purchaser, substantially in the form of Exhibit A hereto;

 

(iii) the Warrant, registered in the name of such Purchaser, substantially in the form of Exhibit B hereto;

 

(iv) the Security Agreement, duly executed by the Company, substantially in the form of Exhibit C hereto;

 

(v) the Affidavit of Confession of Judgment, substantially in the form of Exhibit D hereto, duly executed by the Company;

 

(vi) a legal opinion of Company Counsel satisfactory in form and substance to the Purchaser, substantially in the form of Exhibit E hereto;

 

(vii) the Lock-up Agreements, executed by management and certain significant shareholders of the Company substantially in the form of Exhibit F hereto;

 

(viii) Certificates of the CEO and Secretary of the Company, in the form of Exhibit G, certifying as to (a) copies of the Certificate of Incorporation and bylaws of the Company, as amended and restated as of the date hereof, (b) all actions taken and consents made by such party and its officers and shareholders as applicable to authorize the transactions provided by the Transaction Documents, (c) the names of the officers of such party authorized to sign the Transaction Documents , together with a sample of the true signature of such Person, (d) all conditions set forth in this Section 2.2 have been met by such party, and (e) no event has occurred or such party anticipates occurring that has resulted in an Event of Default under the Notes or with the passage of time would result in an Event of Default under the Notes;

 

(ix) Certificates of good standing for the Company in the jurisdictions of its incorporation, in the principal places in which it conducts business and in the places where it owns real estate;

 

(xiii) Transfer Agent Instructions, executed by the Company and the Transfer Agent, substantially in the form of Exhibit H hereto; and

 

(xiv) the IP Security Agreement, substantially in the form of Exhibit I hereto, by and between the Company and the Purchaser.

 

b) On the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company the following:

 

(i) this Agreement duly executed by the Purchaser;

 

(ii) the Purchaser’ Subscription Amount by wire transfer to the account of the Company;

 

(iii) the Security Agreement, duly executed by the Purchaser; and

 

(iv) the IP Security Agreement, duly executed by the Purchaser;

 

Page 6 of 32
 

 

2.3 Closing Conditions.

 

a) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

 

(i) the accuracy in all material respects when made and on the Closing Date of the representations and warranties of the Purchaser contained herein;

 

(ii) all obligations, covenants and agreements of the Purchaser required to be performed at or prior to the Closing Date shall have been performed; and

 

(iii) the delivery by the Purchaser of the items set forth in Section 2.2(b) of this Agreement.

 

b) The obligations of the Purchaser hereunder in connection with the Closing are subject to the following conditions being met:

 

(i) the accuracy in all material respects when made and on the Closing Date of the representations and warranties of the Company contained herein;

 

(ii) all obligations, covenants and agreements of the Company and its Subsidiaries required to be performed at or prior to the Closing Date shall have been performed;

 

(iii) the Purchaser shall be reasonably satisfied with the results of its due diligence investigation of the Company;

 

(iv) the Purchaser shall be reasonably satisfied with the quality and amount of the collateral;

 

(v) no statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents;

 

(vi) the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;

 

(vii) Since the date of execution of this Agreement, no event or series of events shall have occurred that reasonably could be expected to have or result in a Material Adverse Effect with respect to the Company;

 

(viii) no banking moratorium have been declared either by the United States or New York State authorities, no suspension of trading shall have been declared on the New York Stock Exchange or the NASDAQ Stock Market, nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial markets which, in each case, in the reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Note and Warrants at the Closing;

 

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(ix) the Company shall have no outstanding Indebtedness other than as contained on Schedule 3.1(g) or pursuant to the Note; and no other securities of the Company outstanding after the Closing Date hereof (i) shall be in default or (ii) shall reset (or shall have exercised any rights to convert into the Securities by virtue of a most favored nations or otherwise) as a result of the issuance of the Securities.

 

(x) The Company has engaged Aegis Capital Corporation on a firm commitment basis to consummate a Qualified Offering of equity securities;

 

(xi) The Company shall have public current information as defined in Rule 144; and

 

(xii) The officers and directors of the company shall have agreed in writing to convert all of their preferred stock into common stock prior to the Qualified Offering.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

3.1 Representations and Warranties of the Company. Except as set forth in the Disclosure Schedule, which shall be deemed a part hereof, the Company hereby makes the representations and warranties set forth below to the Purchaser.

 

a) Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth in Schedule 3.1(a) hereto. The Company owns, directly or indirectly, all of the capital stock or other equity of each Subsidiary free and clear of any Liens, other than the Lien granted to the Purchaser, and all the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.

 

b) Organization and Qualification. Each of the Company and the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation or default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in (i) a material adverse effect on the legality, validity or enforceability of any Transaction Documents, (ii) a material adverse effect on the results of operations, assets, business or financial condition of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s or its Subsidiaries’ ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

 

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c) Authorization; Enforcement. The Company and each of its Subsidiaries has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its respective obligations thereunder. The execution and delivery of each of the Transaction Documents by the Company and each of its Subsidiaries and the consummation by it of the transactions contemplated thereby have been duly authorized by all action on the part of the Company and each of its Subsidiaries and no further action is required by the Company and each of its Subsidiaries in connection therewith. Each Transaction Document has been (or upon delivery will have been) duly executed by the Company and each of its Subsidiaries and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company and such Subsidiaries enforceable against the Company and such Subsidiaries in accordance with its terms except (i) as limited by general equitable principals and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

d) No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and each of its Subsidiaries and the consummation by the Company and each of its Subsidiaries of the other transactions contemplated thereby do not and will not: (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing indebtedness of the Company or any of its Subsidiaries or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii) subject to the Required Approvals, to the Company’s knowledge, such as could not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.

 

e) Filings, Consents and Approvals. Except as set forth in Schedule 3.1 (e) hereto, neither the Company, its Subsidiaries is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company or such Subsidiaries of the Transaction Documents, other than the filing of Form D with the Commission and such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).

 

f) Issuance of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens other than restrictions on transfer provided for in the Transaction Documents. The Common Stock issuable: (i) upon conversion of the Notes (upon an Event of Default) and (ii) the exercise of the Warrants, when issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and non-assessable, free and clear of all Liens imposed by the Company, and its Subsidiaries. The Company has reserved from its duly authorized capital stock a number of shares of Common Stock for issuance of at least equal to the amount required to satisfy the conversion of the Note (upon an Event of Default) and exercise of the Warrants.

 

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g) Capitalization. The capitalization of the Company and its Subsidiaries is as set forth on Schedule 3.1(g). Other than as set forth on Schedule 3.1(g), the Company and the Subsidiaries have no indebtedness for money borrowed. Except as set forth on Schedule 3.1(g), the Company has not issued any capital stock since January 1, 2022. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as set forth on Schedule 3.1(g), as a result of the purchase and sale of the Securities, there are no outstanding options, warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of common stock of the Company, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of common stock, of the Company or securities or rights convertible or exchangeable into shares of common stock of the Company or its Subsidiaries. Except as set forth on Schedule 3.1(g), the issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue shares of Common Stock of the Company or any Subsidiary or other securities to any Person (other than the Purchaser) and will not result in a right of the Company’s or any of its Subsidiaries’ securities to adjust the exercise, conversion, exchange or reset price under such securities. All of the outstanding shares of capital stock in the Company and its Subsidiaries are validly issued, fully paid and nonassessable, have been issued in material compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board of Directors of the Company or any of its Subsidiaries or others is required for the issuance and sale of the Securities. There are no stockholders’ agreements, voting agreements or other similar agreements with respect to Company’s or any of its Subsidiaries’ capital stock to which the Company or any of its Subsidiaries is a party or, to the knowledge of the Company or such Subsidiary, between or among any of the Company’s stockholders or any stockholder of its Subsidiaries.

 

h) Financial Statements. Except as set forth on Schedule 3.1(h), the financial statements of the Company and its Subsidiaries, including those financial statements for each of the years ended December 31, 2021 and 2020 and the three, six and nine months periods ended March 30, June 30 and September 30, 2021 comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto. Such financial statements of the Company and its Subsidiaries have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated subsidiaries as of and for the dates thereof and the results of operations for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

 

i) Material Changes. Since December 31, 2021, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) except as set forth on Schedule 3.1(i), each of the Company and its Subsidiaries has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s, its Subsidiaries’ financial statements pursuant to GAAP or required to be disclosed in filings made with the Commission, (iii) each of the Company and its Subsidiaries has not altered its method of accounting, (iv) each of the Company and its Subsidiaries has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) each of the Company and its Subsidiaries has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing stock option plans.

 

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j) Litigation. To the Company’s knowledge after due inquiry, other than as set forth in Schedule 3.1(j) hereto, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, threatened against or affecting the Company, any Subsidiary, or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor to the Company’s knowledge after due inquiry, any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company or any Subsidiary, there is not pending or contemplated, any investigation by the Commission involving the Company or any Subsidiary or any current or former director or officer of the Company or any Subsidiary.

 

k) Labor Relations. No material labor dispute exists or, to the knowledge of the Company or Subsidiary, is imminent with respect to any of the employees of the Company or any Subsidiary which could reasonably be expected to result in a Material Adverse Effect.

 

l) Compliance, Material Contracts. To the Company’s knowledge after due inquiry, except as set forth on Schedule 3.1(l) hereto, neither the Company nor any Subsidiary (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement, services, marketing or processing agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body, or (iii) is or has been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws applicable to its business except in each case as could not have a Material Adverse Effect. Except as set forth on Schedule 3.1(l), each material contract is in full force and effect and is enforceable in accordance with its terms, and no material defaults enforceable against the Company or any Subsidiary exist thereunder. Neither the Company nor any Subsidiary has received notice from any party to any material contract stating that it intends to terminate or amend such contract.

 

m) Regulatory Permits and Licenses. The Company and the Subsidiaries possess all certificates, authorizations, memberships, sponsorships and permits issued by the appropriate federal, state, local or foreign regulatory authorities or other Person necessary to conduct their respective businesses and are in good standing under all such certificates, authorizations, memberships, sponsorship and permits, except where the failure to possess such permits could not have or reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.

 

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n) Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them that is material to the business of the Company and the Subsidiaries and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and Liens for the payment of federal, state or other taxes, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases of which the Company and the Subsidiaries are in compliance except where failure to do so could not reasonably be expected to have a Material Adverse Effect.

 

o) Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights as necessary or required for use in connection with their respective businesses and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). Schedule 3.1(o) sets forth all Intellectual Property Rights necessary, to the Company’s knowledge, to conduct the Company’s business as currently conducted or as presently proposed to be conducted. The Company owns or has the right to use under the agreements or upon the terms described on Schedule 3.1(o), to all of the Intellectual Property Rights and has taken all actions reasonable in light of its financial position to protect the Intellectual Property Rights. Except as set forth on Schedule 3.1(o), the Company does not require any license or other agreement to use any of the Intellectual Property Rights, except for licenses or agreements that can be obtained in the ordinary course of business without unreasonable effort, delay, cost, or expense. With respect to each item of the Company’s Intellectual Property Rights that any third party owns and that the Company uses pursuant to license, sublicense, agreement or permission: (i) the license, as it relates to the Company is legal, valid, binding, enforceable, and in full force and effect in all material respects; (ii) the Company is not, and to the Company’s knowledge, no other party to the license, sublicense, agreement or permission is in material breach or default, and no event has occurred which with notice or lapse of time or both would constitute a material breach or default or permit termination, modification or acceleration thereunder; (iii) the Company has not, and to the Company’s knowledge, no other party to the license, sublicense, agreement or permission has repudiated any material provision thereof; and (iv) the Company has not granted any sublicense or similar right with respect to the license, sublicense, agreement or permission other than as expressly permitted by such license, sublicense, agreement or permission. Except as set forth on Schedule 3.1(o), to the Company’s knowledge, no director, officer, or stockholder of the Company owns any rights in any Intellectual Property Rights directly or indirectly competitive with those owned or to be used by the Company or derived from or in connection with the conduct of the Company’s business. Except as set forth on Schedule 3.1(o), to the Company’s knowledge it is not now necessary to use any inventions or works of authorship of its employees made outside of their employment by the Company. Except as set forth on Schedule 3.1(o), the Company has obtained from all of the Company’s current and former officers, employees and consultants assignments to all inventions developed or conceived during their association with the Company and relating to its business. The Company has not granted rights to manufacture, produce, assemble, license, market, or sell its products to any other person. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights of others. Neither the Company nor any Subsidiary has received a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

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p) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged. To the best of the Company’s knowledge, such insurance contracts and policies are accurate and complete. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

 

q) Transactions With Affiliates and Employees. To the Company’s knowledge, other than as set forth on Schedule 3.1(q) hereof, none of the officers, directors or employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company or any Subsidiary, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner, in each case in excess of $50,000 other than (i) for payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company or any Subsidiary and (iii) for other employee benefits, including stock option agreements under any stock option plan of the Company or any Subsidiary.

 

r) Certain Fees. Except as set forth on Schedule 3.1(r), no brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Agreement. The Purchaser shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by this Agreement.

 

s) Private Placement. Assuming the accuracy of the Purchaser representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securities by the Company and its Subsidiaries to the Purchaser as contemplated hereby.

 

t) Investment Company. The Company, its Subsidiaries is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company, its Subsidiaries shall conduct its business in a manner so that it will not become subject to the Investment Company Act.

 

u) Registration Rights. Except as contemplated by the Transactions Documents or as set forth on Schedule 3.1(u), no Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company.

 

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v) Application of Takeover Protections. The Company’s and its Subsidiaries’ Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s or any of the Subsidiaries’ Certificate of Incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchaser as a result of the Purchaser’s and the Company’s, its Subsidiaries’ fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Securities and the Purchaser’s ownership of the Securities.

 

w) Disclosure. As of the Closing Date, unless another date is specified, all disclosure provided to the Purchaser regarding each of the Company, its Subsidiaries, its business and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, furnished by or on behalf of the Company, its Subsidiaries with respect to the representations and warranties made herein are true and correct with respect to such representations and warranties and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The Company and its Subsidiaries acknowledge and agree that the Purchaser makes no nor has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.

 

w) No Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, neither the Company, nor any of its Subsidiaries or Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company or its Subsidiaries for purposes of the Securities Act or any applicable shareholder approval provisions.

 

y) Solvency. For purposes of the representation made in this Section 3.1(y), the term the “Company” shall include all of its Subsidiaries. Based on the financial condition of the Company as of the Closing Date after giving effect to the receipt by the Company and its Subsidiaries of the proceeds from the sale of the Securities hereunder and the application of the proceeds thereof, (i) the Company’s fair saleable value of its assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature; (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business for the current fiscal year as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company’s, and projected capital requirements and capital availability thereof; and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets at market value, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its debt when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. Schedule 3.1(g) sets forth all outstanding secured and unsecured Indebtedness of the Company, its Subsidiaries or for which any such party has commitments. For the purposes of this Agreement, “Indebtedness” shall mean (a) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of Indebtedness of others, whether or not the same are or should be reflected in such party’s balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (c) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

 

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z) Environmental Matters. To the Company’s knowledge, the Company and each of its Subsidiaries (a) is in compliance with any and all Environmental Laws (as herein defined), (b) has received all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct its respective businesses and (c) is in compliance with all terms and conditions of any such permit, license or approval, in each case except to the extent such noncompliance or non-receipt would not reasonably be expected to result in a Material Adverse Effect. The term “Environmental Laws” means all applicable federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.

 

aa) Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and each Subsidiary has filed all necessary federal, state and foreign income and franchise tax returns and has paid or accrued all taxes shown as due thereon (except for those contested in good faith), and the Company have no knowledge of a tax deficiency which has been asserted or threatened against the Company or any Subsidiary.

 

bb) No General Solicitation. Neither the Company, nor any person acting on behalf of the Company has offered or sold any of the Securities by any form of general solicitation or general advertising. The Company has offered the Securities for sale only to the Purchaser and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.

 

cc) Foreign Corrupt Practices; Patriot Act, etc. For purposes of this representation, the term the “Company” shall include all of its Subsidiaries. Neither the Company, nor to the knowledge of the Company, any agent or other person acting on behalf of the Company, has (i) directly or indirectly, used any corrupt funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended. The Company and its Subsidiaries are in compliance, in all material respects, with (a) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (b) the USA Patriot Act (Title III of Pub. L. 107-56, signed into law October 26, 2001) (the “Act”). No part of the proceeds of the Note will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended. None of the Company or any of its Subsidiaries is a Person named on a list published by OFAC or a Person with whom dealings are prohibited under any OFAC Regulations.

 

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dd) Seniority. As of the Closing Date, no Indebtedness or other claim against the Company is senior or pari-passu to the Notes in right of payment, whether with respect to interest or upon liquidation or dissolution, or otherwise, other than indebtedness secured by purchase money security interests (which is senior only as to underlying assets covered thereby) and capital lease obligations (which is senior only as to the property covered thereby), in each case as set forth in Schedule 3.1 (dd) hereof.

 

ee) No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated by the Company or any Subsidiary to arise, between the accountants and lawyers formerly or presently employed by the Company or any Subsidiary and, except as set forth on Schedule 3.1(ee), the Company and each Subsidiary is current with respect to any fees owed to its accountants and lawyers. By making this representation, each of the Company and its Subsidiaries does not, in any manner, waive the attorney/client privilege or the confidentiality of the communications between the Company and its Subsidiaries and its lawyers. The Company’s accountants are set forth on Schedule 3.1(ee) of the Disclosure Schedule. To the knowledge of the Company, such accountants, who have expressed their opinion with respect to the financial statements for the year ended December 31, 2021, are a registered public accounting firm as required by the Securities Act.

 

ff) Acknowledgment Regarding Purchaser’s Purchase of Securities. The Company and its Subsidiaries acknowledge and agree that the Purchaser is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby. The Company and its Subsidiaries further acknowledge that the Purchaser is not acting as a financial advisor or fiduciary of the Company and its Subsidiaries (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any advice given by the Purchaser or any of its representatives or agents in connection with this Agreement and the transactions contemplated hereby is merely incidental to the Purchaser’s purchase of the Securities. The Company and its Subsidiaries further represent to the Purchaser that the Company’s and its Subsidiaries’ decision to enter into this Agreement has been based solely on the independent evaluation of the transactions contemplated hereby by the Company, and their representatives.

 

gg) Rule 506(d) Bad Actor Disqualification Representations and Covenants.

 

(i) No Disqualification Events. Neither the Company, nor any of its predecessors affiliates, any manager, executive officer, other officer of the Company or such Subsidiary participating in the offering, any beneficial owner (as that term is defined in Rule 13d-3 under the Exchange Act) of 20% or more of the Company’s or such Subsidiaries’ outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company or such Subsidiary in any capacity as of the date of this Agreement and on the Closing Date (each, a “Company Covered Person” and, together, “Company Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company and its Subsidiaries has exercised reasonable care to determine (i) the identity of each person that is a Company Covered Person; and (ii) whether any Company Covered Person is subject to a Disqualification Event. The Company and its Subsidiaries will comply with its disclosure obligations under Rule 506(e).

 

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(ii) Other Covered Persons. None of the Company and its Subsidiaries is aware of any person (other than any Company Covered Person) that has been or will be paid (directly or indirectly) remuneration in connection with the Note that is subject to a Disqualification Event (each an “Other Covered Person”).

 

(iii) Reasonable Notification Procedures. With respect to each Company Covered Person, the Company and its Subsidiaries has established procedures reasonably designed to ensure that they receive notice from each such Company Covered Person of (i) any Disqualification Event relating to that Company Covered Person, and (ii) any event that would, with the passage of time, become a Disqualification Event relating to that Company Covered Person; in each case occurring up to and including the Closing Date.

 

(iv) Notice of Disqualification Events. The Company will notify the Purchaser immediately in writing upon becoming aware of (i) any Disqualification Event relating to any Company Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any Company Covered Person and/or Other Covered Person.

 

hh) Acknowledgment Regarding Purchaser’s Purchase of Securities. The Company and its Subsidiaries acknowledge and agree that each Purchaser is acting solely in the capacity of an arm’s length purchaser with respect to this Agreement and the other Transaction Documents and the transactions contemplated hereby and thereby and that the Purchaser is not (i) an officer or director of the Company or the Subsidiaries, (ii) an Affiliate of the Company or the Subsidiaries or (iii) to the knowledge of the Company or such Subsidiaries , a “beneficial owner” of more than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the 1934 Act. The Company and the Subsidiaries further acknowledge that the Purchaser is not acting as a financial advisor or fiduciary of the Company or its Subsidiaries (or in any similar capacity) with respect to this Agreement or the other Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by the Company or the Subsidiaries or any of its representatives or agents in connection with this Agreement or the other Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to such Purchaser’s purchase of the Notes and Warrants.

 

ii) Sarbanes-Oxley; Internal Accounting Controls. Each of the Company and its Subsidiaries is in material compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it as of the Closing Date. The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Each of the Company and its Subsidiaries has established disclosure controls and procedures for the Company and its Subsidiaries to ensure it can meet its current public information obligations by making “publicly available” the information specified in Exchange Act Rule 15c2-11(a)(5)(i) to (xiv) and (xvi).

 

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jj) Variable Rate Securities. The Company has not directly and/or indirectly entered into, nor has any agreement, intention and/or obligation to enter into any Variable Rate Transaction.

 

3.2 Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows:

 

a) Organization; Authority. The Purchaser is an entity duly organized under the laws of the jurisdiction of its organization with full right, corporate, limited liability company or partnership power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations thereunder. The execution, delivery and performance by such Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate or similar action on the part of the Purchaser. Each Transaction Document to which it is a party has been duly executed by the Purchaser, and when delivered by the Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of the Purchaser, enforceable against it in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

b) Purchaser Representation. The Purchaser understands that the Securities are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account and not with a view to or for distributing or reselling such Securities or any part thereof, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable securities laws and has no arrangement or understanding with any other persons regarding the distribution of such Securities (this representation and warranty not limiting the Purchaser’s right to sell the Securities pursuant to a registration statement or otherwise in compliance with applicable federal and state securities laws). Nothing contained herein shall be deemed a representation or warranty by such Purchaser to hold Securities for any period of time.

 

c) Purchaser Status. At the time such Purchaser was offered the Securities, it was, and at the date hereof it is, and on each date on which it converts any of the Notes into shares of Common Stock it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.

 

d) Experience of the Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.

 

e) General Solicitation. Such Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

 

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f) Own Account. Such Purchaser understands that the Securities are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting such Purchaser’s right to sell the Securities pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws). Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business.

 

g) Access to Information. Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits and schedules thereto) and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. No Person or Affiliate has made or makes any representation as to the quality of the Securities.

 

h) Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. Other than to other Persons party to this Agreement or to such Purchaser’s representatives, including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty against, or a prohibition of, any actions with respect to the borrowing of, arrangement to borrow, identification of the availability of, and/or securing of, securities of the Company in order for such Purchaser (or its broker or other financial representative) to effect Short Sales or similar transactions in the future.

 

The Company and its Subsidiaries acknowledge and agree that the Purchaser does not make or have not made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Section 3.2.

 

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ARTICLE IV

OTHER AGREEMENTS OF THE PARTIES

 

4.1 Transfer Restrictions.

 

a) The Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities other than pursuant to an effective registration statement or Rule 144, to the Company or any Subsidiary or to an affiliate of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company may, at its expense, require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights of a Purchaser under this Agreement.

 

b) The Purchaser agrees to the imprinting, so long as is required by this Section 4.1(b), of a legend on any of the Securities in the following form:

 

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [EXERCISABLE] [CONVERTIBLE] 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 THESE SECURITIES AND THE SECURITIES ISSUABLE UPON [EXERCISE] [CONVERSION] OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

c) Certificates evidencing the Common Shares underlying the Note and the Warrant shall not contain any legend (including the legend set forth in Section 4.1(b) hereof): (i) while a registration statement covering the resale of such security is effective under the Securities Act, or (ii) following any sale of such Common Shares pursuant to Rule 144 , or (iii) if such Common Shares are eligible for sale under Rule 144, or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission). The Company shall, at its expense, cause its counsel to issue a legal opinion to the Company’s transfer agent promptly after the Effective Date if required by the Company’s transfer agent to effect the removal of the legend hereunder. If all or any portion of a Note is converted or Warrant is exercised at a time when there is an effective registration statement to cover the resale of the common shares, or if such common shares may be sold under Rule 144or if such legend is not otherwise required under applicable requirements of the Securities Act (including judicial interpretations thereof and pronouncements issued by the staff of the Commission) then such common shares shall be issued free of all legends. The Company agrees that following the effective date of any registration statement providing for the resale of the Securities or at such time as such legend is no longer required under this Section 4.1(c), it will, no later than two Business Days following the delivery by a Purchaser to the Company or the Company’s transfer agent of a certificate representing common shares issued with a restrictive legend (such second Business Day, the “Legend Removal Date”), deliver or cause to be delivered to such Purchaser a certificate representing such shares that is free from all restrictive and other legends. Neither the Company may make any notation on its records or give instructions to any transfer agent of the Company that enlarge the restrictions on transfer set forth in this Section. Certificates for common shares subject to the legend removal hereunder shall be transmitted by the transfer agent of the Company to the Purchaser by crediting the account of the Purchaser’ prime broker with the DTC.

 

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d) In addition to the Purchaser’s other available remedies, the Company shall pay to Purchaser, in cash, as partial liquidated damages and not as a penalty, $1000 per Trading Day for each Trading Day after the Legend Removal Date until such certificate is delivered without a legend. Nothing herein shall limit each Purchaser’ right to pursue actual damages for the Company’s failure to deliver certificates representing any Securities as required by the Transaction Documents, and each Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.

 

e) The Purchaser agrees that the removal of the restrictive legend from certificates representing Securities as set forth in this Section 4.1 is predicated upon the Company’s reliance that such Purchaser will sell any Securities pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom.

 

4.2 Acknowledgment of Dilution. The Company and its Subsidiaries acknowledge that the issuance of the Securities may result in dilution of the outstanding shares of Common Stock, which dilution may be substantial under certain market conditions. The Company and its Subsidiaries further acknowledge that its obligations under the Transaction Documents, including without limitation its obligation to issue the Common Shares underlying the Notes (upon Event of Default) pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company or its Subsidiaries may have against any Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company and its Subsidiaries.

 

4.3 Furnishing of Information Rule 144 Availability.

 

a) As long as any Purchaser owns Securities, if the Company is not required to file reports pursuant to the Exchange Act, it will prepare and furnish to such Purchaser and make publicly available in accordance with Rule 144(c) such information as is required for such Purchaser to sell the Securities under Rule 144. The Company further covenants that it will take such further action as any holder of Securities may reasonably request, all to the extent required from time to time to enable such Person to sell such Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144.

 

b) At any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time that all of the Securities may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current public information requirement under Rule 144(c) or (ii) has ever been an issuer described in Rule 144 (i)(1)(i) or becomes an issuer in the future, and Company shall fail to take such action as is reasonably requested by the Purchaser to enable the Purchasers to sell any of the shares received in connection with the Notes or Warrants pursuant to Rule 144 under the Securities Act (including, without limitation, delivering all such legal opinions, consents, certificates, resolutions and instructions to the Company’s transfer agent as may be reasonably requested from time to time by the Purchaser and otherwise fully cooperate with Purchasers and each Purchaser’s broker to effect such sale of the shares of common stock received in connection with the Notes or Warrants pursuant to Rule 144 under the Securities Act) (a “Process Failure”) satisfy any then, in addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the Securities, an amount in cash equal to two percent (2.0%) of the aggregate principal amount of such Purchaser’s Securities on the day of a Public Information Failure or Process Failure, as applicable, and on every thirtieth (30th) day (pro rated for periods totaling less than thirty days) thereafter until (a) in the case of a Process Failure, the date such Process Failure is cured, or (b) in the case of a Public Information Failure, the date such Public Information Failure is cured. Notwithstanding anything to the contrary provided herein, liquidated damages for each Process Failure or Public Information Failure shall not commence to accrue for a period of 5 days from the date of any such Process Failure and/or Public Information. The payments to which a Purchaser shall be entitled pursuant to this Section 4.3(b) are referred to herein as “ Rule 144 Failure Payments.” Rule 144 Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during which such Rule 144 Failure Payments are incurred and (ii) the third (3rd) Business Day after the event or failure giving rise to the Rule 144 Failure Payments is cured. In the event the Company fails to make Rule 144 Failure Payments in a timely manner, such Rule 144 Failure Payments shall bear interest at the rate of 1.5% per month (prorated for partial months) until paid in full. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Process Failure or Public Information Failure, and such Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.

 

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4.4 Integration. The Company shall not, and shall use its best efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities to the Purchaser or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market.

 

4.5 Securities Laws Disclosure; Publicity. The Company shall by 9:00 a.m. (New York City time) on the Trading Day immediately following the date hereof file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the SEC. From and after the issuance of such press release, the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon the issuance of such press release, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, shall terminate. The Company and the Purchaser shall consult with each other in issuing any press releases with respect to the transactions contemplated hereby. Notwithstanding the foregoing, the Company shall not publicly disclose the name of the Purchaser, or include the name of the Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of the Purchaser, except (i) as required by federal or state securities law and (ii) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide such Purchaser with notice of such disclosure permitted under subclause (i) or (ii).

 

4.6 Shareholder Rights Plan. No claim will be made or enforced by the Company or its Subsidiaries or, to the knowledge of any such party, any other Person that any Purchaser is an “Acquiring Person” under any shareholder rights plan or similar plan or arrangement in effect or hereafter adopted by the Company or its Subsidiaries, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company any of its Subsidiaries and any Purchaser. The Company and its Subsidiaries shall conduct its business in a manner so that it will not become subject to the Investment Company Act.

 

4.7 Use of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder to satisfy the obligations on Schedule 4.7 hereof and to pay fees and expenses (in each case satisfactory to the Investor) incurred in connection herewith. The Company may not use funds at any time to repay indebtedness, lend money, give credit or make advances to any officers, directors, employees, affiliates or debtholders of the Company or its Subsidiaries.

 

4.8 Reimbursement. Except to the extent finally judicially determined to have been caused by Purchaser’s gross negligence or willful misconduct, if Purchaser becomes involved in any capacity in any Proceeding by or against any Person who is a stockholder of the Company or its Subsidiaries (except as a result of sales, pledges, margin sales and similar transactions by the Purchaser to or with any current stockholder), solely as a result of such Purchaser’ acquisition of the Securities under this Agreement, the Company and its Subsidiaries will reimburse such Purchaser for its reasonable legal and other expenses (including the cost of any investigation preparation and travel in connection therewith) incurred in connection therewith, as such expenses are incurred. The reimbursement obligations of the Company and its Subsidiaries under this paragraph shall be in addition to any liability which the Company or such Subsidiaries may otherwise have, shall extend upon the same terms and conditions to any Affiliates of the Purchaser who are actually named in such action, proceeding or investigation, and partners, directors, agents, employees and controlling persons (if any), as the case may be, of such Purchaser and any such Affiliate, and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Company, its Subsidiaries, the Purchaser and any such Affiliate and any such Person. The Company and its Subsidiaries also agree that neither the Purchasers nor any such Affiliates, partners, directors, agents, employees or controlling persons shall have any liability to the Company, its Subsidiaries, or any Person asserting claims on behalf of or in right of the Company, its Subsidiaries, solely as a result of acquiring the Securities under this Agreement.

 

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4.9 Indemnification of Purchasers. Subject to the provisions of this Section 4.9, the Company and its Subsidiaries will indemnify and hold the Purchaser and its directors, officers, shareholders, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees of such Person (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any Purchaser Party may suffer or incur as a result of, arising from, or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company and its Subsidiaries in this Agreement or in the other Transaction Documents or (b) any action instituted against a Purchaser, or any of them or their respective Affiliates, by any stockholder of the Company or its Subsidiaries or who is not an Affiliate of such Purchaser, with respect to any of the transactions contemplated by the Transaction Documents (in each case unless such action is based upon a breach of such Purchaser’ representation, warranties or covenants under the Transaction Documents or any agreements or understandings any Purchaser may have with any such stockholder or any violations by such Purchaser of state or federal securities laws or any conduct by such Purchaser which constitutes fraud, gross negligence or willful misconduct). If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, the Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of the Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of such separate counsel, a material conflict on any material issue between the position of the Company and the position of the Purchaser Party. The Company will not be liable to any Purchaser Party under this Agreement (i) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (ii) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by the Purchaser in this Agreement or in the other Transaction Documents.

 

4.10 Reservation and Listing of Securities. At all times and as long as any of the Purchaser owns any Securities, the Company shall take all action necessary (and/or reasonably requested by the Purchaser) to at all times have authorized, and reserved out of its authorized but unissued shares of Common Stock for the purpose of issuance to the Purchaser upon conversions of the Note (upon an Event of Default) and upon exercise or in respect of the Warrants by the Purchaser, no less than the sum of : (i) 150% of the maximum number of shares of Common Stock issuable upon exercise of the Warrants and (ii) 5 times the number of shares of Common Stock issuable upon conversion of the Note (including interest and original issue discount, and without taking into account any limitations on the issuance thereof) (upon an Event of Default) (collectively the “Required Reserved Amount”). If at any time the number of shares of Common Stock authorized and reserved for issuance is not sufficient to meet the Required Reserved Amount, the Company will promptly take all corporate action necessary to authorize and reserve a sufficient number of shares, including, without limitation, calling a special meeting of stockholders to authorize additional shares to meet the Company’s obligations under this Agreement and the Transaction Documents, in the case of an insufficient number of authorized shares, obtain stockholder approval of an increase in such authorized number of shares, and voting the management shares of the Company in favor of an increase in the authorized shares of the Company to ensure that the number of authorized shares is sufficient to meet the Required Reserved Amount. The Company shall initially reserve the Required Reserve Amount on its own books and records (the “Reserve”) for the issuance of shares underlying the Notes (upon an Event of Default) and Warrants and any other shares of Common Stock required to be issued by the Company to the Purchaser pursuant to the Transaction Documents, which initial reservation shall be authorized by the unanimous written consent of the Company’s Board of Directors delivered at Closing. From and after the date of this Agreement through and including the date all of the Company’s and each of its Subsidiaries’ Indebtedness and all other obligations owed to the Purchasers pursuant to this Agreement and the other Transaction Documents, including, but not limited to, the Note is paid and performed in full and the Warrant is exercised in full, confirmation of which must be obtained by in writing from the Purchaser, the Company shall issue or cause its Transfer Agent to issue the shares received on conversion or exercise or in respect of interest and all other shares of Common Stock required to be issued to such Purchaser or its broker from the Reserve. The Company agrees to increase the amount of shares of Common Stock in the Reserve upon receipt of written notice, which may be in email form, by such Purchaser (and/or its assigns) in order to ensure that the Reserve contains the Required Reserve Amount and/or at any time the number of shares in the Reserve is less than the Required Reserve Amount Notwithstanding to the contrary provided herein or elsewhere, if at any time the number of shares of Common Stock in the Reserve, is less than the Required Reserved Amount, such Purchaser may send written notice to the Company’s then Transfer Agent to increase out of the Borrower’s authorized but unissued shares of Common Stock in such number of additional shares of Common Stock so the Reserve consists of at least the Required Reserve Amount. The Company agrees that the Common Stock in the Reserve shall never be decreased below the Required Reserve Amount or used for any other purposes other than for issue to the holder thereof upon each conversion by such Purchaser of the Notes and each exercise by such Purchaser of the Warrants into shares of common stock. As a condition to Closing, all actions required by the Company in this Section shall be approved by the unanimous written consent of the Company’s Board of Directors which shall be delivered to the Purchasers at Closing.

 

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4.11 Subsequent Equity Sales. In addition to the limitations set forth herein, from the date hereof until the later of (i) the twelve (12) month anniversary of the Closing Date and (ii) the date there are no Notes outstanding, the Company shall be prohibited from effecting or entering into an agreement to effect any Subsequent Financing involving a “Variable Rate Transaction”. The term “Variable Rate Transaction” shall mean a transaction in which the Company issues or sells (i) any debt, equity securities or Common Stock Equivalents either (A) at a conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into any agreements, including but not limited to an equity line of credit, whereby the Company may sell securities at a future determined price tied to the market price of the Common Stock or (iii) the Company issues or sells any securities, for cash, in a capital raising transaction or series of related capital raising transactions which grants to an investor the right to receive additional shares based upon future transactions of the Company on terms more favorable than those granted to such investor in such offering. Any Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages. Notwithstanding the foregoing, this Section 4.11 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall be an Exempt Issuance.

 

4.12 Equal Treatment of Purchasers. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration is also offered to all of the parties to the Transaction Documents. For clarification purposes, this provision constitutes a separate right granted to Purchaser by the Company and negotiated separately by Purchaser.

 

4.13 Form D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof, promptly upon request of any Purchaser. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchasers at the Closing under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly upon request of any Purchaser.

 

4.14 Most Favored Nations. Until such time as the Company has consummated a Qualified Offering which results in the Company’s Common Stock becoming listed on a national exchange (NASDAQ or NYSE American), if the Company engages in any future capital raising transactions pursuant to which it sells debt or equity securities for cash, with a third-party investor, the Company will provide the Holder with written notice (the “MFN Notice”) thereof promptly but in no event less than 10 days prior to closing any such transactions. Included with the MFN Notice shall be a copy of all documentation relating to such financing transaction and shall include, upon written request of the Holder, any additional information related to such subsequent investment as may be reasonably requested by the Holder. In the event the Holder determines that any of the terms of the subsequent investment are preferable in any respect to any the terms of the Securities of the Company issued to the Holder pursuant to the terms of the Purchase Agreement (eg. conversion price, exercise price, warrant coverage, bonus shares, etc.), the Holder shall have ten (10) days after receipt of the MFN Notice to notify the Company in writing thereof. Promptly after receipt of such written notice from the Holder, the Company agrees to amend and restate any Securities then held by Purchaser, and, as necessary, adjust the number of shares or exercise price or conversion price or warrant coverage, to include the preferable term contained in the instruments evidencing the subsequent investment and any shares or warrants issued in connection therewith. For purposes of clarity, such adjustments will only be made with regard to Securities still owned by Purchaser. If Purchaser previously exercised all of its Warrants, Purchaser will not be entitled to any adjustment to warrant coverage or exercise.

 

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4.15. Right of Participation.

 

a) At any time prior to the 18 months anniversary of the Closing Date, upon any issuance by the Company or any of its Subsidiaries of debt, equity or Common Stock Equivalents for cash consideration, indebtedness or a combination thereof (a “Subsequent Financing”), the Purchaser shall have the right to participate in up to Purchaser’s initial investment amount in the Note, but not more than 15% of the Subsequent Financing (the “Participation Maximum”) on the same terms, conditions and price provided for in the Subsequent Financing. At least five (5) Business Days prior to the closing of the Subsequent Financing, the Company shall deliver to each Purchaser a written notice of its intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask the Purchaser if it wants to review the details of such financing (such additional notice, a “Subsequent Financing Notice”). Upon the request of a Purchaser, and only upon a request by such Purchaser, for a Subsequent Financing Notice, the Company shall promptly, but no later than one (1) Business Day after such request, deliver a Subsequent Financing Notice to such Purchaser. The Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder and the Person or Persons through or with whom such Subsequent Financing is proposed to be effected and shall include a term sheet or similar document relating thereto as an attachment.

 

b) If a Purchaser desires to participate in such Subsequent Financing it must provide written notice to the Company by not later than 5:30 p.m. (New York City time) on the fifth (5th) Business Day after the Purchaser has received the Pre-Notice that such Purchaser is willing to participate in the Subsequent Financing, the amount of such Purchaser’s participation, and representing and warranting that such Purchaser has such funds ready, willing, and available for investment on the from the Purchaser as of such fifth (5th) Business Day, the Purchaser shall be deemed to have notified the Company that it does not elect to participate.

 

c) If by 5:30 p.m. (New York City time) on the fifth (5th) Business Day after a Purchaser has received the Pre-Notice, notifications by the Purchasers of their willingness to participate in the Subsequent Financing (or to cause their designees to participate) is, in the aggregate, less than the total amount of the Subsequent Financing, then the Company may effect the remaining portion of such Subsequent Financing on the terms and with the Persons set forth in the Subsequent Financing Notice.

 

d) If by 5:30 p.m. (New York City time) on the fifth (5th) Business Day after the Purchaser has received the Pre-Notice, the Company receives responses to a Subsequent Financing Notice from Purchaser seeking to purchase more than the aggregate amount of the Participation Maximum, the Purchaser shall have the right to purchase its pro rata portion of the Participation Maximum.

 

e) The Company must provide the Purchaser with a second Subsequent Financing Notice, and the Purchasers will again have the right of participation set forth above in this Section 4.15, if the Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within thirty (30) Business Days after the date of the initial Subsequent Financing Notice.

 

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f) The Company and the Purchasers agree that if any Purchaser elects to participate in the Subsequent Financing, the transaction documents related to the Subsequent Financing shall not include any term or provision whereby such Purchaser shall be required to agree to any restrictions on trading as to any of the Securities purchased hereunder or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in terms set forth in the Subsequent Financing Notice.

 

g) Notwithstanding the foregoing, this Section 4.15 shall not apply in respect of an Exempt Issuance.

 

4.16 Directors’ and Officers’ Insurance. For so long as any of the Note is outstanding, the Company shall retain directors’ and officers’ insurance in amounts and on terms customary for companies in the same industry of similar size as the Company.

 

4.17 Piggyback Registration Rights. At any time while there are any Registrable Securities outstanding:

 

a) if the Company determines to register any of its securities, either for its own account or the account of a security holder or holders, other than (i) a registration statement relating solely to employee benefit plans on Form S-8 (or any successor form) or (ii) a registration statement relating solely to a Commission Rule 145 transaction on Form S-4 (or any successor form), the Company will:

 

(i) promptly give to the Purchaser written notice thereof, and

 

(ii) include in such registration statement (and any related qualification under blue sky laws or other compliance), and in any underwriting involved therein, all the Registrable Securities specified in a written request or requests, made within 5 Business Days after delivery of such written notice from the Company.

 

b) If the registration statement of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the Purchaser as a part of the written notice described above.

 

(i) If the managing underwriter determines in good faith that marketing factors (including pricing) require a limitation of the number of shares to be underwritten, the underwriter may exclude some or all of the Registrable Securities from such registration and underwriting. The Company shall so advise Purchaser, and the number of Registrable Securities to be included in such registration shall be allocated as follows: first, for the account of the Company, all shares proposed to be sold by the Company; second, for the account of the Purchaser and any other unaffiliated investor that has been granted registration rights with respect to shares on the terms and conditions of any agreement pertaining to such registration rights prior to the Closing Date, pro-rata; and third, any affiliated investor of that has been granted registration rights with respect to shares on the terms and conditions of any agreement pertaining to such registration rights on or after the Closing Date.

 

(ii) If the Purchaser disapproves of the terms of any such underwriting, the Purchaser may elect to withdraw by written notice to the Company and the managing underwriter. Any shares excluded or withdrawn from such underwriting shall be withdrawn from such registration statement.

 

(iii) The Company shall have the right to terminate or withdraw any registration initiated by it prior to the effectiveness of such registration, whether or not the Investor has elected to include any or all of the Shares in such registration.

 

c) All Expenses incurred in connection with any registration, filing, qualification, legal and other third party retained by the Company, or compliance pursuant to this Section 4.17 shall be borne by the Company.

 

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ARTICLE V

MISCELLANEOUS

 

5.1 Termination. This Agreement may be terminated by the Purchaser, as to such Purchaser’s obligation hereunder by written notice to the other parties, if the Closing has not been consummated on or before March 31, 2022; provided that no such termination will affect the right of any party to sue for any breach by the other party (or parties).

 

5.2 Fees. At the Closing, the Company has agreed to reimburse Purchaser (i) $25,000 (less any amounts previously received; such balance may be treated as proceeds advanced and added to the face of the Note) for legal expenses incurred in connection with the transaction, and (ii) all other costs and expenses incurred in connection with the due diligence and documentation of the transaction by the Purchaser (e.g., background checks (to the extent not provided to Purchaser), lien searches, UCC and IP filings (including legal expenses of third parties), etc. The Company shall pay all transfer agent fees, stamp taxes and other taxes and duties levied in connection with the issuance of any Securities.

 

5.3 Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been incorporated into such documents, exhibits and schedules.

 

5.4 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via email or facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a Business Day, (b) the next Business Day after the date of transmission, if such notice or communication is delivered via email or facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Business Day or later than 5:30 p.m. (New York City time) on any Business Day, (c) the second Business Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.

 

5.5 Amendments; Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed, in the case of amendments, by the Company, and the Purchaser or, in the case of a waiver, by the party against whom enforcement of any such waiver is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.

 

5.6 Construction. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

 

5.7 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder. Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Securities, provided such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions hereof that apply to such “Purchaser.”

 

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5.8 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.9.

 

5.9 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. The parties hereby waive all rights to a trial by jury. If the Purchaser shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then it shall be reimbursed by the Company for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

5.10 Survival. The representations and warranties contained herein shall survive for a period of 6 months following the Closing, the delivery of the Note and Warrants and the conversion or payment of the Notes.

 

5.11 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page or data file were an original thereof.

 

5.12 Severability. If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

 

5.13 Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company and its Subsidiaries does not timely perform their related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company , any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.

 

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5.14 Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company and its Subsidiaries shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity, if requested. The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Securities.

 

5.15 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchaser and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agrees to waive in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

 

5.16 Payment Set Aside. To the extent that the Company or its Subsidiaries makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, such Subsidiary, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

 

5.17 Usury. To the extent it may lawfully do so, the Company and its Subsidiaries hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time hereafter in force, in connection with any claim, action or proceeding that may be brought by any Purchaser in order to enforce any right or remedy under any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction Document, it is expressly agreed and provided that the total liability of the Company and its Subsidiaries under the Transaction Documents for payments in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”), and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the nature of interest that the Company may be obligated to pay under the Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental action subsequent to the date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to the Transaction Documents from the effective date forward, unless such application is precluded by applicable law. If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company or any Purchaser to any Purchaser with respect to indebtedness evidenced by the Transaction Documents, such excess shall be applied by the Purchaser to the unpaid principal balance of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at the Purchaser’s election.

 

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5.18 Liquidated Damages. The Company’s and its Subsidiaries obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents is a continuing obligation of the Company and its Subsidiaries and shall not terminate until all unpaid partial liquidated damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due and payable shall have been canceled.

 

5.19 Independent Nature of Purchaser’s Obligations and Rights. The obligations of the Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by the Purchaser pursuant thereto, shall be deemed to constitute the Purchaser as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchaser is in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Purchaser shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any Purchaser to be joined as an additional party in any proceeding for such purpose. Purchaser has been represented by its own separate legal counsel in their review and negotiation of the Transaction Documents. The Company has elected to provide the Purchaser with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by the Purchasers.

 

5.20 Customer Identification - USA Patriot Act Notice; OFAC and Bank Secrecy Act. Purchaser hereby notifies the Company that pursuant to the requirements of the Act and such Purchaser’s policies and practices, each Purchaser is required to obtain, verify and record certain information and documentation that identifies the Company, which information includes the name and addresses of Borrower and such other information that will allow the Purchaser to identify the Company in accordance with the Act. In addition, the Company shall (a) ensure that no person who owns a controlling interest in or otherwise controls the Company is or shall be listed on the Specially Designated Nationals and Blocked Person List or other similar lists maintained by OFAC, the Department of the Treasury or included in any Executive Orders, (b) not use or permit the use of the proceeds of the Note to violate any of the foreign asset control regulations of OFAC or any enabling statute or Executive Order relating thereto, and (c) comply, and cause any of its Subsidiaries to comply, with all applicable Bank Secrecy Act (“BSA”) laws and regulations, as amended.

 

(Signature Pages Follow)

 

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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

 

CURATIVE BIOTECHNOLOGY CORPORATION, INC.   Address for Notice:
       
      1825 NW Corporate Blvd.
      Suite 110
      Boca Raton, FL 33431
       
By: /s/ Richard Garr   Telephone:
Name: Richard Garr   Email:
Title: CEO    

 

With a copy to (which shall not constitute notice):  
   
Telephone:  
Email:  

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

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[PURCHASER SIGNATURE PAGES TO COMPANY, SECURITIES PURCHASE AGREEMENT]

 

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

 

Name of Investing Entity: ___ Puritan Partners LLC ____________________________________

Signature of Authorized Signatory of Investing Entity: ___ /s/ Richard Smithline _____________

Name of Authorized Signatory: ___ Richard Smithline __________________________________

Title of Authorized Signatory: ___ Managing Member __________________________________

Email Address of Authorized Entity:_______________________________________________

 

Address for Notice of Investing Entity:  
   
   
Address for Delivery of Securities for Investing Entity (if not same as above):  
   
   
Subscription Amount: $ 1,000,000
Principal Amount of Notes: $ 1,142,857.14
Warrants: 22,857,143

 

Page 32 of 32

 

Exhibit 10.17

 

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE 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 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. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

Original Issue Date: March 2, 2022  
   
  $ 1,142,857.14

 

12.5% ORIGINAL ISSUE DISCOUNT SENIOR SECURED NOTE

 

Due March 2, 2023

 

THIS 12.5% ORIGINAL ISSUE DISCOUNT SENIOR SECURED NOTE is one of a series of duly authorized and validly issued 12.5% Original Issue Discount Senior Secured Notes of Curative Biotechnology, Inc., a Florida corporation (the “Company”), having its principal place of business at 1825 NW Corporate Blvd., Suite 110 Boca Raton, FL 33431, designated as its 12.5% Original Issue Discount Senior Secured Note due March 2, 2023 (this Note, the “ Note “ and, collectively with the other Notes of such series, the “ Notes”). The Notes shall be convertible into shares of common stock of in the Company in accordance with the terms of the Notes.

 

FOR VALUE RECEIVED, the Company promises to pay to Puritan Partners LLC, a New York company, or its registered assigns (the “ Holder “), or shall have paid pursuant to the terms hereunder, the principal sum of $ 1,142,857.14 on March 2, 2023 (the “ Maturity Date “) or such earlier date as this Note is required or permitted to be repaid as provided hereunder, and to pay interest to the Holder on the aggregate then outstanding principal amount of this Note in accordance with the provisions hereof. This Note is subject to the following additional provisions:

 

Section 1. Definitions. For the purposes hereof, in addition to the terms defined elsewhere in this Note, (a) capitalized terms not otherwise defined herein shall have the meanings set forth in the Purchase Agreement, and (b) the following terms shall have the following meanings below.

 

“Bankruptcy Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or any Significant Subsidiary thereof , (b) there is commenced against the Company or any Significant Subsidiary thereof any such case or proceeding that is not dismissed within 60 days after commencement, (c) the Company or any Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e) the Company or any Significant Subsidiary thereof or makes a general assignment for the benefit of creditors, (f) the Company or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts or (g) the Company or any Significant Subsidiary thereof , by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.

 

-1-
 

 

“Beneficial Ownership Limitation” shall have the meaning set forth in Section 4(c)(ii).

 

“Business Day” means any day except any Saturday, any Sunday, any day which shall be a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

 

“Buy-In” shall have the meaning set forth in Section 4(d)(v).

 

“Closing Bid Price” means on any particular date (a) the last reported closing bid price per share of Common Stock on such date on the Trading Market (as reported by Bloomberg L.P. at 4:15 p.m. (New York City time)), or (b) if there is no such price on such date, then the closing bid price on the Trading Market on the date nearest preceding such date (as reported by Bloomberg L.P. at 4:15 p.m. (New York City time)), or (c) if the Common Stock is not then listed or quoted on a Trading Market and if prices for the Common Stock are then reported in the “pink sheets” published by Pink Sheets LLC (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) if the shares of Common Stock are not then publicly traded the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company .

 

“Conversion Date” shall have the meaning set forth in Section 4(a).

 

“Conversion Shares” means, collectively, the shares of common stock, of the Company issuable upon conversion of this Note in accordance with the terms hereof.

 

“Effective Date” means the date on which a Registration Statement becomes effective related to the resale of the shares of Common Stock underlying the Securities.

 

“Event of Default” shall have the meaning set forth in Section 7(a).

 

“Interest Payment Date” shall have the meaning set forth in Section 2(a).
 

“Late Fees” shall have the meaning set forth in Section 2(d).

 

“Mandatory Default Amount” means the sum of (a) 125% of the then outstanding principal amount of the Note, (b) accrued but unpaid interest through the Maturity Date and (c) all liquidated damages and other amounts due in respect of the Note.

 

“Monthly Redemption” means the redemption of this Note pursuant to Section 5(b) hereof.

 

“Monthly Redemption Amount” means, as to a Monthly Redemption, one seventh of the original principal amount at 110% of such principal amount, plus accrued but unpaid interest, liquidated damages and any other amounts then owing to the Holder in respect of this Note.

 

“Monthly Redemption Date” means the second of each month, commencing immediately upon September 2, 2022 and terminating upon the full redemption of this Note.

 

“New York Courts” shall have the meaning set forth in Section 8(d).

 

“Note Register” shall have the meaning set forth in Section 2(b).

 

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“Notice of Conversion” shall have the meaning set forth in Section 4(a).

 

“Optional Redemption” shall have the meaning set forth in Section 5(a).

 

“Optional Redemption Amount” means at 125% of the principal amount thereof plus any unpaid accrued interest to the date of repayment, plus all other liquidated and other amounts due in respect of the Note.

 

“Optional Redemption Date” shall have the meaning set forth in Section 5(a).

 

“Optional Redemption Notice” shall have the meaning set forth in Section 5(a).

 

“Optional Redemption Notice Date” shall have the meaning set forth in Section 5(a).

 

“Optional Redemption Period” shall have the meaning set forth in Section 5(a).

 

“Original Issue Date” means the date of the first issuance of the Notes, regardless of any transfers of any Note and regardless of the number of instruments which may be issued to evidence such Notes.

 

“Permitted Indebtedness” means (a) the indebtedness evidenced by the Notes (excluding any Notes issued pursuant to most favored nations or similar provisions), (b) lease obligations and purchase money indebtedness of up to $50,000 in the aggregate incurred in connection with the acquisition of capital assets and lease obligations with respect to newly acquired or leased assets, (c) indebtedness related to directors and officers insurance premium financing and (d) unsecured indebtedness that is expressly subordinate to the Notes pursuant to a written subordination agreement with the Holder that is acceptable to Holder in its sole and absolute discretion,

 

“Permitted Lien” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Company) have been established in accordance with GAAP; (b) Liens imposed by law which were incurred in the ordinary course of the Company’s business, such as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising in the ordinary course of the Company’s business, and which (x) do not individually or in the aggregate materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business of the Company or (y) are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien; and (c) Liens incurred in connection with Permitted Indebtedness under clauses (a), and (b) thereunder, provided in the case of clause (b) that such Liens are not secured by assets of the Company other than the assets so acquired or leased

 

“Purchase Agreement” means the Securities Purchase Agreement, dated as of March 2, 2022 between the Company, and the original Holder, as amended, modified or supplemented from time to time in accordance with its terms.

 

“Share Delivery Date” shall have the meaning set forth in Section 4(d)(ii).

 

“Subsidiary” shall have the meaning set forth in the Purchase Agreement.

 

“Trading Day” means a day on which the New York Stock Exchange is open for business.

 

“Warrants Shares” means shares of common stock of the Company issuable upon exercise of the Warrants in accordance with the terms hereof.

 

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Section 2. Interest.

 

a) Payment of Interest in Cash. The Company shall pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Note at the rate of 12.5% per annum, payable monthly, commencing on the 2nd calendar day of each calendar month beginning on April 2, 2022 on each Monthly Redemption Date (as to that principal amount then being redeemed), each Optional Redemption Date (as to that principal amount then being redeemed) and on the Maturity Date (each such date, an “Interest Payment Date”) (if any Interest Payment Date is not a Business Day, then the applicable payment shall be due on the next succeeding Business Day), in cash.

 

b) Interest Calculations. Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods, and shall accrue daily commencing on the Original Issue Date until payment in full of the outstanding principal, together with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made. Interest hereunder will be paid to the Person in whose name this Note is registered on the records of the Company regarding registration and transfers of this Note (the “Note Register”).

 

c) Late Fee. In addition to all other amounts required to be paid to Holder hereunder, all overdue accrued and unpaid principal and interest to be paid hereunder shall entail a late fee at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law (the “Late Fees”) which shall accrue daily from the date such principal and interest is due hereunder through and including the date of actual payment in full.

 

Section 3. Registration of Transfers and Exchanges.

 

a) Different Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer or exchange.

 

b) Investment Representations. This Note has been issued subject to certain investment representations of the original Holder set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal and state securities laws and regulations.

 

c) Reliance on Note Register. Prior to due presentment for transfer to the Company of this Note, the Company and any agent of the Company may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

 

Section 4. Holder’s Conversion Option Upon an Event of Default. The provisions of this Section 4 shall only apply to Holder’s option to conversion during an Event of Default.

 

a) Voluntary Conversion Upon an Event of Default. This Note shall be convertible, in whole or in part, into shares of Common Stock of the Company (the “Common Stock”) at the option of the Holder, at such time and from time to time (subject to the conversion limitations set forth in Section 4(c) hereof). The Holder shall effect conversions by delivering to the Company a Notice of Conversion, after an Event of Default and in the form of which is attached hereto as Annex A (each, a “Notice of Conversion”), specifying therein the principal amount of this Note to be converted and the date on which such conversion shall be effected (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder. To effect conversions hereunder, the Holder shall not be required to physically surrender this Note to the Company unless the entire principal amount of this Note, plus all accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion. The Holder and the Company shall maintain records showing the principal amount(s) converted and the date of such conversion(s). The Company may deliver an objection to any Notice of Conversion within 1 Business Day of delivery of such Notice of Conversion. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof.

 

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b) Conversion Price. The conversion price per share of any conversions pursuant to this Note upon an Event of Default shall be 70% of the lowest closing price of the Company’s Common Stock on the Trading Market for the 20 prior Trading Days.

 

c) Conversion Limitations. The Company shall not effect any conversion of this Note, and a Holder shall not have the right to convert any portion of this Note, unless there is an Event of Default or to the extent that after giving effect to the conversion set forth on the applicable Notice of Conversion, the Holder (together with the Holder’s Affiliates, and any other person or entity acting as a group together with the Holder or any of the Holder’s Affiliates) 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 shall include the number of shares of Common Stock issuable upon conversion of this Note with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon (A) conversion of the remaining, unconverted principal amount of this Note beneficially owned by the Holder or any of its Affiliates and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein (including, without limitation, any other Notes) beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 4(c), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained in this Section 4(c) applies, the determination of whether this Note is convertible (in relation to other securities owned by the Holder together with any Affiliates) and of which principal amount of this Note is convertible shall be in the sole discretion of the Holder, and the submission of a Notice of Conversion shall be deemed to be the Holder’s determination of whether this Note may be converted (in relation to other securities owned by the Holder together with any Affiliates) and which principal amount of this Note is convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction, the Holder will be deemed to represent to the Company each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph 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 4(c), in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (A) the Company’s most recent periodic or annual report, as the case may be; (B) a more recent public announcement by the Company; or (C) a more recent notice by the Company or the Company’s 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 Note, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Note held by the Holder. The Holder, upon not less than 61 days’ prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 4(c), 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 conversion of this Note held by the Holder and the Beneficial Ownership Limitation provisions of this Section 4(c) shall continue to apply. Any such increase or decrease will not be effective until the 61st day after such notice is delivered to the Company. The Beneficial Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 4(c) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Note.

 

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d) Mechanics of Conversion.

 

i. Conversion Shares Issuable Upon Conversion of Principal Amount. Subject to Section 4(d)(vii), the number of Conversion Shares issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note to be converted by (y) the Conversion Price.

 

ii. Delivery of Certificate Upon Conversion. Not later than two (2) Trading Days after each Conversion Date (the “Share Delivery Date”), the Company shall deliver, or cause to be delivered, to the Holder (A) a certificate or certificates representing the Conversion Shares which, on or after the earlier of (i) the six month anniversary of the Original Issue Date or (ii) the Effective Date, shall be free of restrictive legends and trading restrictions (other than those which may then be required by the Purchase Agreement ) representing the number of Conversion Shares being acquired upon the conversion of this Note and (B) a bank check in the amount of accrued and unpaid interest. On or after the earlier of (i) the six-month anniversary of the Original Issue Date or (ii) the Effective Date, the Company shall use its best efforts to deliver any certificate or certificates required to be delivered by the Company under this Section 4(d) electronically through the Depository Trust Company or another established clearing corporation performing similar functions.

 

iii. Failure to Deliver Certificates. If in the case of any Notice of Conversion such certificate or certificates are not delivered to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Company at any time on or before its receipt of such certificate or certificates, to rescind such Conversion, in which event the Company shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly return to the Common Stock certificates representing the principal amount of this Note unsuccessfully tendered for conversion to the Company.

 

iv. Obligation Absolute; Partial Liquidated Damages. If the Company fails for any reason to deliver to the Holder such certificate or certificates pursuant to Section 4(d)(ii) by the Share Delivery Date, the Company shall pay to such Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of principal amount being converted, $10 per Trading Day (increasing to $20 per Trading Day on the fifth (5th) Trading Day after such liquidated damages begin to accrue) until such certificates are delivered or holder rescinds the Notice of Conversion. The Company’s obligations to issue and deliver the Conversion Shares upon conversion of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder. In the event a Holder of this Note shall elect to convert any or all of the outstanding principal amount hereof, the Company may not refuse conversion based on any claim that the Holder or any one associated or affiliated with the Holder of has been engaged in any violation of law, agreement or for any other reason, unless, an injunction from a court, on notice, restraining and or enjoining conversion of all or part of this Note shall have been sought and obtained and the Company posts a surety bond for the benefit of the Holder in the amount of 150% of the principal amount of this Note outstanding, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the dispute and the proceeds of which shall be payable to such Holder to the extent it obtains judgment. In the absence of an injunction precluding the same, the Company shall issue Conversion Shares or, if applicable, cash, upon a properly noticed conversion. Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 8 herein for the Company’s failure to deliver Conversion Shares by the Share Delivery Date and such Holder shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holders from seeking to enforce damages pursuant to any other Section hereof or under applicable law.

 

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v. Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available to the Holder, if the Company fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery Date pursuant to Section 4(d)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase (in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the conversion relating to such Share Delivery Date (a “Buy-In”), then the Company shall (A) pay in cash to the Holder (in addition to any other remedies available to or elected by the Holder) the amount by which (x) the Holder’s total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that the Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of the Holder, either reissue (if surrendered) this Note in a principal amount equal to the principal amount of the attempted conversion or deliver to the Holder the number of shares of Common Stock that would have been issued if the Company had timely complied with its delivery requirements under Section 4(d)(ii). For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of this Note with respect to which the actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence, the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon conversion of this Note as required pursuant to the terms hereof.

 

vi. Reservation of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Note, as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Notes), not less than five times the aggregate number of shares of the Common Stock as shall (subject to the terms and conditions set forth in the Purchase Agreement) issuable (taking into account the adjustments and restrictions thereunder ) upon the conversion of the outstanding principal amount of this Note and payment of interest hereunder The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable and, if the Registration Statement is then effective under the Securities Act, shall be registered for public sale in accordance with such Registration Statement.

 

vii. Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Note. As to any fraction of a share which Holder would otherwise be entitled to purchase upon such conversion, 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 Conversion Price or round up to the next whole share.

 

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viii. Transfer Taxes. The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificates, provided that, the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this Note so converted and the Company shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. The Company shall be responsible for all charges of the Transfer Agent in connection with the conversion of the Notes as well as charges incurred for legal opinions in connection with such conversions.

 

Section 5. Redemptions.

 

a) Optional Redemption at Election of Company. Subject to the provisions of this Section 5(a), at any time after the Original Issue Date, the Company may, deliver a written notice to the Holder (an “Optional Redemption Notice” and the date such notice is deemed delivered hereunder, the “Optional Redemption Notice Date”) of its irrevocable election to redeem all of the then outstanding principal amount of this Note for cash in an amount equal to the Optional Redemption Amount on the 5th Trading Day following the Optional Redemption Notice Date (such date, the “Optional Redemption Date”, such 5 Trading Day period, the “Optional Redemption Period” and such redemption, the “Optional Redemption”). The Optional Redemption Amount is payable in full on the Optional Redemption Date. The Company’s determination to pay an Optional Redemption in cash shall be applied ratably to all of the holders of the then outstanding Notes based on their (or their predecessor’s) initial purchases of Notes pursuant to the Purchase Agreement.

 

b) Monthly Redemption. On each Monthly Redemption Date, the Company shall redeem a portion of the Note equal to the Monthly Redemption Amount (the “Monthly Redemption”) at 110% of the principal amount thereof plus accrued and unpaid interest and all other amounts to the redemption date. The Monthly Redemption Amount payable on each Monthly Redemption Date shall be paid in cash.

 

c) Redemption Procedure. The payment of cash pursuant to an Optional Redemption or a Monthly Redemption shall be payable on the Optional Redemption Date and Monthly Redemption Date, as applicable. If any portion of the payment pursuant to an Optional Redemption or Monthly Redemption shall not be paid by the Company by the applicable due date, an Event of Default shall be deemed to have occurred under this Note.

 

d) Mandatory Prepayment. The Company shall be required to offer to prepay in cash the aggregate principal amount of the Notes at 125% of the principal amount thereof plus any unpaid accrued interest to the prepayment date on the sale of all or substantially all of the assets or the Company, upon a Change of Control, on upon a Qualified Offering, on the Maturity Date (unless all payments required to have been made under Section 5(b) hereof have been made as required under Section 5(b), in which case such payment shall be made in accordance with that section) and at any time after the Maturity Date. Such payment shall be made on the date of each of the events specified above and in each case the Company shall have provided five (5) days’ notice to Holder.

 

Section 6. Negative Covenants. As long as any portion of this Note remains outstanding, unless the Holder shall have otherwise given prior written consent, the Company shall not, and shall not permit any of its Subsidiaries (whether or not a Subsidiary on the Original Issue Date) to, directly or indirectly:

 

a) other than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money of any kind, including, but not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

 

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b) other than Permitted Liens, enter into, create, incur, assume or suffer to exist any Liens of any kind, on or with respect to any of its property or assets (including its intellectual property) now owned either individually or jointly or hereafter acquired or any interest therein or any income or profits therefrom;

 

c) amend its charter documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that materially and adversely affects any rights of the Holder;

 

d) repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its Common Stock or Common Stock Equivalents of the Company or its Subsidiaries other than as to (i) the Conversion Shares as permitted or required under the Transaction Documents and (ii) repurchases of Common Stock or Common Stock Equivalents of Company departing officers and directors of the Company, provided that such repurchases shall not exceed an aggregate of $100,000 for all officers and directors during the term of this Note;

 

e) repay, repurchase or offer to repay, repurchase or otherwise acquire, or make any principal, interest or amortization payment on any Indebtedness, other than the Note, other than: (a) payments made to trade creditors, vendors or consultants in the ordinary course of business or (b) payments made on Permitted Indebtedness, provided that such payments shall not be permitted if, at such time, or after giving effect to such payment, any Event of Default exist or occur;

 

f) pay cash dividends or distributions on any equity securities of the Company or its subsidiaries;

 

g) enter into any transaction with any Affiliate of the Company, unless such transaction is made on an arm’s-length basis and expressly approved by a majority of the disinterested directors of the Company (even if less than a quorum otherwise required for board approval); provided, that any transaction in excess of $50,000 shall require the approval of the Holder; or or

 

h) enter into any agreement with respect to any of the foregoing.

 

Section 7. Events of Default.

 

a) “Event of Default” means, wherever used herein, any of the following events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

 

i. any default in the payment of (A) the principal amount of any Note or (B) interest, liquidated damages and other amounts owing to a Holder on any Note, as and when the same shall become due and payable (whether on a Redemption Date or the Maturity Date or by acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B) above, is not cured within 5 Trading Days;

 

ii. the Company, any of its Subsidiaries shall fail to observe or perform any other covenant or agreement contained in the Notes (other than a breach by the Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in clause (x) below) which failure is not cured, if possible to cure, within the earlier to occur of (A) 5 Trading Days after notice of such failure is sent by the Holder to the Company and (B) 10 Trading Days after the Company has become or should have become aware of such failure;

 

iii. a default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument) shall occur under (A) any of the Transaction Documents, or (B) any other material agreement, lease, document or instrument to which the Company or any Subsidiary is obligated (and not covered by clause (vi) below;

 

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iv. any representation or warranty made in this Note, any other Transaction Documents, any written statement pursuant hereto or thereto or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or incorrect in any material respect as of the date when made or deemed made;

 

v. the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy Event;

 

vi. the Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that involves an obligation greater than $100,000, whether such indebtedness now exists or shall hereafter be created and such default is not cured, if possible to cure, 5 Trading Days after the Company has become or should have become aware of such failure and (ii) 10 Trading Days after such default;

 

vii. after the Qualified Offering, the Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume listing or quotation for trading thereon within five (5) Trading Days;

 

viii. the Company shall be a party to any Change of Control or Fundamental Transaction or shall agree to sell or dispose of all or in excess of 50% of its assets in one transaction or a series of related transactions (whether or not such sale would constitute a Change of Control);

 

ix. the Company does not meet the current public information requirements under Rule 144 for a period of five (5) consecutive Trading Days;

 

x. the Company shall fail for any reason to deliver certificates to a Holder prior to the tenth (10th) Trading Day after a Conversion Date pursuant to Section 4(d) or the Company provides, at any time, notice to the Holder, including by way of public announcement, of the Company’s intention to not honor requests for conversions of the Note in accordance with the terms hereof;

 

xii. any monetary judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary, or any of their respective property or other assets for more than $100,000, and such judgment, writ or similar final process shall remain unvacated, unbonded or unstayed for a period of 45 calendar days. or

 

xiii. any of the National Institute of Health license agreements or the Mid-Atlantic BioTherapeutics, Inc. license agreements shall have been modified in a manner materially adversely to the Holder.

 

Section 8. Remedies Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Note, plus accrued but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder’s election, immediately due and payable in cash at the Mandatory Default Amount. Commencing 5 days after the occurrence of any Event of Default that results in the eventual acceleration of this Note, the interest rate on this Note shall accrue at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted under applicable law. At Holder’s option, it shall be entitled to be paid all such amounts due including late fees, if any, in cash or from time to time in common stock with the conversion price of the common stock equal to a 30% discount to the lowest closing price of the common stock for the 20 prior Trading Days. Upon the payment in full of the Mandatory Default Amount, the Holder shall promptly surrender this Note to or as directed by the Company. In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 7(b). No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

 

-10-
 

 

Section 9. Miscellaneous.

 

a) Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service, addressed to the Company at the address set forth above, or such other facsimile or electronic mail number or address as the Company may specify for such purpose by notice to the Holder delivered in accordance with this Section 8(a). Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile or electronic mail, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number, electronic mail address, or physical address of the Holder appearing on the books of the Company, or if no such facsimile number, electronic mail address or physical address appears, at the principal place of business of the Holder. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile or electronic mail at the facsimile number or email address, as applicable, specified on the signature page prior to 5:30 p.m. (New York City time), (ii) the date immediately following the date of transmission, if such notice or communication is delivered via facsimile or electronic mail at the facsimile number or email address, as applicable, specified on the signature page between 5:30 p.m. (New York City time) and 11:59 p.m. (New York City time) on any date, (iii) the second Business Day following the date of mailing, if sent by nationally recognized overnight courier service or (iv) upon actual receipt by the party to whom such notice is required to be given.

 

b) 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, liquidated damages and accrued interest, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company.

 

c) 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, reasonably satisfactory to the Company.

 

d) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby. If the Holder shall commence an action or proceeding to enforce any provisions of this Note, then it shall be reimbursed by the Company for its attorney’s fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

 

-11-
 

 

e) Waiver; Amendment. Any waiver by the Company, or the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Company, or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note. Any waiver by the Company, or the Holder must be in writing. No provision of this Agreement may be waived or amended except in a written instrument signed, in the case of amendments, by the Company and the Holder or, in the case of a waiver, by the party against whom enforcement of any such waiver is sought.

 

f) 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 the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law. 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 indenture, 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 Holder, but will suffer and permit the execution of every such as though no such law has been enacted.

 

g) Next Business Day. 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.

 

h) 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.

 

i) Assumption. Any successor to the Company or any surviving entity in a Fundamental Transaction shall (i) assume, prior to such Fundamental Transaction, all of the obligations of the Company under this Note and the other Transaction Documents pursuant to written agreements in form and substance satisfactory to the Holder (such approval not to be unreasonably withheld or delayed) and (ii) issue to the Holder a new Note of such successor entity evidenced by a written instrument substantially similar in form and substance to this Note, including, without limitation, having a principal amount and interest rate equal to the principal amount and the interest rate of this Note and having similar ranking to this Note, which shall be satisfactory to the Holder (any such approval not to be unreasonably withheld or delayed). The provisions of this Section 8(i) shall apply similarly and equally to successive Fundamental Transactions and shall be applied without regard to any limitations of this Note.

 

j) Senior Secured Obligation. This Note will be senior to all obligations of the Company. The obligations of the Company under this Note are secured by a first lien on all of the current and future assets of the Company, in each case pursuant to the Security Agreement, dated as of the date hereof between the Company and Holder and the IP Security Agreement between the Company and the Holder.

 

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

 

(Signature Pages Follow)

 

-12-
 

 

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

 

 

  CURATIVE BIOTECHNOLOGY, INC.
     
  By: /s/ Richard Garr
     
  Name: Richard Garr
  Title: CEO
     
  Facsimile No. for delivery of Notices:

 

-13-
 

 

ANNEX A

 

NOTICE OF CONVERSION

 

The undersigned hereby elects to convert principal under the 12.5% Senior Secured Note of Curative Biotechnology, Inc., a Florida corporation (the “Company”), due on March 2, 2023, into shares of common stock, of the Company (the “Common Stock”), according to the conditions hereof, as of the date written below. If shares are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any.

 

By the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common Stock does not exceed the amounts determined in accordance with Section 13(d) of the Exchange Act, specified under Section 4(c) of this Note.

 

The undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the aforesaid shares of Common Stock.

 

Conversion calculations:

 

  Date to Effect Conversion:
   
  Principal Amount of Notes to be Converted:
   
  Payment of Interest in Common Stock __ yes __ no
     
  If yes, $_____________of Interest Accrued on Account of Conversion at Issue.
     
  Number of shares of Common Stock to be issued:
     
  Signature:  
     
  Name:  
     
  Address:  
     
  Delivery Instructions:  

 

-1-
 

 

Schedule 1

 

CONVERSION SCHEDULE

 

The 12.5% Original Issue Discount Senior Secured Note due on March 2, 2023 in the original principal amount of $1,142,857.14 is issued by Curative Biotechnology, Inc., a Florida corporation. This Conversion Schedule reflects conversions made under Section 4 of the above referenced Note.

 

Dated:

 

Date of Conversion (or for first entry, Original Issue Date)   Amount of
Conversion 		   Aggregate Principal
Amount Remaining
Subsequent To
Conversion (or original
Principal Amount)		   Company Attest
             
             

 

-2-

 

Exhibit 10.18

 

SECURITY AGREEMENT

 

SECURITY AGREEMENT, dated as of March 2, 2022 (this “Agreement”), between Curative Biotechnology, Inc., a Florida limited liability company (the “Company” or the “Debtor” and collectively with any other Debtor from time to time hereunder, the “Debtors”) and the holders of the Company’s 12.5% Senior Secured Note due March 2, 2023 in aggregate principal amount of $1,142,857.14 (the “Note”), signatory hereto, its endorsees, transferees and assigns (individually referred to as, the “Secured Party” and collectively referred to as, the “Secured Party”). Any terms not defined herein shall have the definition ascribed to them in the Purchase Agreement and Note.

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the Purchase Agreement the Secured Party agreed to extend the loan to the Company as evidenced by the Note;

 

WHEREAS, in order to induce the Secured Party to extend the loan evidenced by the Note, the Debtor has agreed to execute and deliver to the Secured Party this Agreement and to grant the Secured Party a perfected security interest in all of Debtor’s property to secure the prompt payment, performance and discharge in full of all of the Debtors’ obligations under the Note and the other Transaction Documents and the documents entered into in connection therewith;

 

NOW, THEREFORE, in consideration of the agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

 

1. Certain Definitions. As used in this Agreement, the following terms shall have the meanings set forth in this Section 1. Terms used but not otherwise defined in this Agreement that are defined in Article 9 of the UCC (such as “account”, “chattel paper”, “commercial tort claim”, “deposit account”, “document”, “equipment”, “fixtures”, “general intangibles”, “goods”, “instruments”, “inventory”, “investment property”, “letter-of-credit rights”, “proceeds” and “supporting obligations”) shall have the respective meanings given such terms in Article 9 of the UCC.

 

(a) “Collateral” means the collateral in which the Secured Party is granted a security interest by this Agreement and which shall include the following personal property of the Debtor, whether presently owned or existing or hereafter acquired or coming into existence, wherever situated, and all additions and accessions thereto and all substitutions and replacements thereof, and all proceeds, products and accounts thereof, including, without limitation, all proceeds from the sale or transfer of the Collateral and of insurance covering the same and of any tort claims in connection therewith, and all dividends, interest, cash, notes, securities, equity interest or other property at any time and from time to time acquired, receivable or otherwise distributed in respect of, or in exchange for, any or all of the Pledged Securities (as defined below):

 

(i) All goods, including, without limitations, (A) all machinery, equipment, computers, motor vehicles, trucks, tanks, boats, ships, appliances, furniture, special and general tools, fixtures, test and quality control devices and other equipment of every kind and nature and wherever situated, together with all documents of title and documents representing the same, all additions and accessions thereto, replacements therefor, all parts therefor, and all substitutes for any of the foregoing and all other items used in connection with any Debtor’s businesses and all improvements thereto; and (B) all inventory;

 

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(ii) All contract rights and other general intangibles, including, without limitation, all partnership interests, stock or other securities, rights under any of the Organizational Documents, agreements related to the Pledged Securities, licenses, distribution and other agreements, computer software (whether “off-the-shelf”, licensed from any third party or developed by any Debtor), computer software development rights, leases, franchises, customer lists, quality control procedures, grants and rights, goodwill, trademarks, service marks, trade styles, trade names, patents, patent applications, copyrights, Intellectual Property, and income tax refunds;

 

(iii) All accounts, together with all instruments, all documents of title representing any of the foregoing, all rights in any merchandising, goods, equipment, motor vehicles and trucks which any of the same may represent, and all right, title, security and guaranties with respect to each account, including any right of stoppage in transit;

 

(iv) All documents, letter-of-credit rights, instruments and chattel paper;

 

(v) All commercial tort claims or other litigation claims of any Debtor of any type, including against parties covered by directors’ and officers’ insurance of any Debtor;

 

(vi) All deposit accounts and all cash (whether or not deposited in such deposit accounts);

 

(vii) All investment property;

 

(viii) All supporting obligations;

 

(ix) All files, records, books of account, business papers, and computer

 

programs;

 

(x) All accounts receivable; and

 

(xi) the products and proceeds of all the foregoing Collateral set forth in clauses (i)-(x) above.

 

Without limiting the generality of the foregoing, the “Collateral” shall include all investment property and general intangibles respecting ownership and/or other equity interests in the Company and each Subsidiary, including, without limitation, the shares of capital stock and the other equity interests (including LLC interests) listed on Schedule H hereto (as the same may be modified from time to time pursuant to the terms hereof), and any other shares of capital stock and/or other equity interests (including LLC interests) of any other direct or indirect subsidiary of any Debtor obtained in the future, and, in each case, all certificates representing such shares and/or equity interests and, in each case, all rights, options, warrants, stock, other securities and/or equity interests (including LLC interests) that may hereafter be received, receivable or distributed in respect of, or exchanged for, any of the foregoing (all of the foregoing being referred to herein as the “Pledged Securities”) and all rights arising under or in connection with the Pledged Securities, including, but not limited to, all dividends, interest and cash.

 

Page 2 of 30
 

 

Notwithstanding the foregoing, nothing herein shall be deemed to constitute an assignment of any asset which, in the event of an assignment, becomes void by operation of applicable law or the assignment of which is otherwise prohibited by applicable law (in each case to the extent that such applicable law is not overridden by Sections 9-406, 9-407 and/or 9-408 of the UCC or other similar applicable law); provided, however, that to the extent permitted by applicable law, this Agreement shall create a valid security interest in such asset and, to the extent permitted by applicable law, this Agreement shall create a valid security interest in the proceeds of such asset.

 

(b) “Intellectual Property” means the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, (i) all copyrights arising under the laws of the United States, any other country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished, all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, all registrations, recordings and applications in the United States Copyright Office, (ii) all letters patent of the United States, any other country or any political subdivision thereof, all reissues and extensions thereof, and all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof, (iii) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade dress, service marks, logos, domain names and other source or business identifiers, and all goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise, and all common law rights related thereto, (iv) all trade secrets arising under the laws of the United States, any other country or any political subdivision thereof, (v) all rights to obtain any reissues, renewals or extensions of the foregoing, (vi) all licenses for any of the foregoing, and (vii) all causes of action for infringement of the foregoing.

 

(c) “Necessary Endorsement” shall mean undated stock powers endorsed in blank or other proper instruments of assignment duly executed and such other instruments or documents as the Secured Party may reasonably request.

 

(d) “Obligations” means all of the Debtors’ obligations under this Agreement, the other Transaction Documents and any other instruments, agreements or other documents executed and/or delivered in connection herewith or therewith, in each case, whether now or hereafter existing, voluntary or involuntary, direct or indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly owed with others, and whether or not from time to time decreased or extinguished and later increased, created or incurred, and all or any portion of such obligations or liabilities that are paid, to the extent all or any part of such payment is avoided or recovered directly or indirectly from the Secured Party as a preference, fraudulent transfer or otherwise as such obligations may be amended, supplemented, converted, extended or modified from time to time. Without limiting the generality of the foregoing, the term “Obligations” shall include, without limitation: (i) principal of, and interest on the Notes and the loans extended pursuant thereto; (ii) any and all other fees, indemnities, costs, obligations and liabilities of the Debtor from time to time under or in connection with this Agreement, the other Transaction Documents and any other instruments, agreements or other documents executed and/or delivered in connection herewith or therewith; and (iii) all amounts (including but not limited to post-petition interest) in respect of the foregoing that would be payable but for the fact that the obligations to pay such amounts are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving any Debtor.

 

Page 3 of 30
 

 

(e) “Organizational Documents” means with respect to any Debtor, the documents by which such Debtor was organized (such as a certificate of incorporation, certificate of limited partnership or articles of organization, and including, without limitation, any certificates of designation for preferred stock or other forms of preferred equity) and which relate to the internal governance of such Debtor (such as bylaws, a partnership agreement or an operating, limited liability or members’ agreement).

 

(f) “UCC” means the Uniform Commercial Code of the State of New York and or any other applicable law of any state or states which has jurisdiction with respect to all, or any portion of, the Collateral or this Agreement, from time to time. It is the intent of the parties that defined terms in the UCC should be construed in their broadest sense so that the term “Collateral” will be construed in its broadest sense. Accordingly, if there are, from time to time, changes to defined terms in the UCC that broaden the definitions, they are incorporated herein and if existing definitions in the UCC are broader than the amended definitions, the existing ones shall be controlling.

 

2. Grant of Security Interest. As an inducement for the Secured Party to extend the loan as evidenced by the Note and to secure the complete and timely payment, performance and discharge in full, as the case may be, of all of the Obligations, each Debtor hereby unconditionally and irrevocably pledges, grants and hypothecates to the Secured Party a continuing and (upon making of the requisite filings described below) perfected first priority security interest, subject to the third party’s right of termination in the event of an assignment, transfer or encumbrance set forth on Schedule F hereto, in and to, a lien upon and a right of set-off against all of Debtors’ respective right, title and interest of whatsoever kind and nature in and to, the Collateral (the “Security Interest”).

 

3. Delivery of Certain Collateral. Contemporaneously or prior to the execution of this Agreement, each Debtor shall deliver or cause to be delivered to the Secured Party (a) any and all certificates and other instruments representing or evidencing the Pledged Securities, and (b) any and all certificates and other instruments or documents representing any of the other Collateral, in each case, together with all Necessary Endorsements. The Debtors are, contemporaneously with the execution hereof, delivering to the Secured Party, or have previously have delivered to the Secured Party a true and correct copy of each Organizational Document governing any of the Pledged Securities

 

4. Representations, Warranties, Covenants and Agreements of the Debtors. Each Debtor represents and warrants to, and covenants and agrees with, the Secured Party as follows:

 

(a) Each Debtor has the requisite corporate, partnership, limited liability company or other power and authority to enter into this Agreement and otherwise to carry out its obligations hereunder. The execution, delivery and performance by each Debtor of this Agreement and the filings contemplated therein have been duly authorized by all necessary action on the part of such Debtor and no further action is required by such Debtor. This Agreement has been duly executed by each Debtor. This Agreement constitutes the legal, valid and binding obligation of each Debtor, enforceable against each Debtor in accordance with its terms except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization and similar laws of general application relating to or affecting the rights and remedies of creditors and by general principles of equity.

 

(b) The Debtors have no place of business or offices where their respective books of account and records are kept (other than temporarily at the offices of its attorneys or accountants) or places where Collateral is stored or located, except as set forth on Schedule A attached hereto. Except for Permitted Liens and as set forth on Schedule A, each Debtor is the record owner, or has lawful possession, of the real property where such Collateral is located. Except as disclosed on Schedule A, none of such Collateral is in the possession of any consignee, bailee, warehouseman, agent or processor.

 

Page 4 of 30
 

 

(c) Except for Permitted Liens and except as set forth on Schedule B attached hereto, and to the best of Debtors’ knowledge after due inquiry, the Debtors are the sole owner of the Collateral, free and clear of any liens, security interests, encumbrances, rights or claims, and are fully authorized to grant the Security Interest. Except for Permitted Liens and as set forth on Schedule B, there is not on file in any governmental or regulatory authority, agency or recording office an effective financing statement, security agreement, license or transfer or any notice of any of the foregoing (other than those that will be filed in favor of the Secured Party pursuant to this Agreement) covering or affecting any of the Collateral. So long as this Agreement shall be in effect, the Debtors shall not execute and shall not knowingly permit to be on file in any such office or agency any such financing statement or other document or instrument (except to the extent filed or recorded as of the date hereof or in favor of the Secured Party pursuant to the terms of this Agreement).

 

(d) No written claim has been received that any Collateral or Debtor’s use of any Collateral violates the rights of any third party. There has been no adverse decision to any Debtor’s claim of ownership rights in or exclusive rights to use the Collateral in any jurisdiction or to any Debtor’s right to keep and maintain such Collateral in full force and effect, and there is no proceeding involving said rights pending or, to the best knowledge of any Debtor, threatened before any court, judicial body, administrative or regulatory agency, arbitrator or other governmental authority.

 

(e) Each Debtor shall at all times maintain its books of account and records relating to the Collateral at its principal place of business and its Collateral at the locations set forth on Schedule A attached hereto and may not relocate such books of account and records or tangible Collateral unless it delivers to the Secured Party at least 30 days prior to such relocation (i) written notice of such relocation and the new location thereof (which must be within the United States) and (ii) evidence that appropriate financing statements under the UCC and other necessary documents have been filed and recorded and other steps have been taken to perfect the Security Interest to create in favor of the Secured Party a valid, perfected and continuing perfected lien in the Collateral.

 

(f) This Agreement (after making the required filings set forth below) creates in favor of the Secured Party a valid first priority security interest in the Collateral, subject only to Permitted Liens securing the payment and performance of the Obligations. Upon making the filings described in the immediately following paragraph, all security interests created hereunder in any Collateral which may be perfected by filing Uniform Commercial Code financing statements and requisite Intellectual Property filings shall have been duly perfected. Except for the filing of the Uniform Commercial Code financing statements referred to in the immediately following paragraph and the recordation of the Intellectual Property Security Agreement, the execution and delivery of deposit account control agreements satisfying the requirements of Section 9-104(a)(2) of the UCC with respect to each deposit account of the Debtors and the delivery of the certifications and other instruments provided in Section 3, filings, no action is necessary to create, perfect or protect the security interests created hereunder. Without limiting the generality of the foregoing, except for the filing of said financing statements and the other items referred to in the prior sentence, no consent of any third parties and no authorization, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for (i) the execution, delivery and performance of this Agreement, (ii) the creation or perfection of the Security Interest created hereunder in the Collateral or (iii) the enforcement of the rights of the Secured Party hereunder.

 

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(g) Each Debtor hereby authorizes the Secured Party to file one or more financing statements under the UCC, with respect to the Security Interest and to make the requisite Intellectual Property filings with the proper filing and recording agencies in any jurisdiction deemed proper by them.

 

(h) Except with respect to third parties termination rights in the event of an assignment, transfer or encumbrance of certain Collateral set forth on Schedule F hereto, the execution, delivery and performance of this Agreement by the Debtors does not (i) violate any of the provisions of any Organizational Documents of any Debtor or any judgment, decree, order or award of any court, governmental body or arbitrator or any applicable law, rule or regulation applicable to any Debtor or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing any Debtor’s debt or otherwise) or other understanding to which any Debtor is a party or by which any property or asset of any Debtor is bound or affected. Any required consents (including, without limitation, from stockholders or creditors of any Debtor) necessary for any Debtor to enter into and perform its obligations hereunder have been obtained.

 

(i) The capital stock and other equity interests or member interests listed on Schedule H hereto represent all of the capital stock and other equity of the Company and its Subsidiaries, and represents all capital stock and other equity interests owned, directly or indirectly, by the Company. All of the Pledged Securities are validly issued, fully paid and nonassessable, the Company is the legal and beneficial owner of the Pledged Securities, free and clear of any lien, security interest or other encumbrance except for the security interests created by this Agreement and other Permitted Liens.

 

(j) The ownership and other equity interests in partnerships and limited liability companies (if any) included in the Collateral (the “Pledged Interests”) by their express terms do not provide that they are securities governed by Article 8 of the UCC and are not held in a securities account or by any financial intermediary.

 

(k) Each Debtor shall at all times maintain the liens and Security Interest provided for hereunder as valid and perfected first priority liens and security interests in the Collateral in favor of the Secured Party until this Agreement and the Security Interest hereunder shall be terminated pursuant to Section 11 hereof. Each Debtor hereby agrees to defend the same against the claims of any and all persons and entities. Each Debtor shall safeguard and protect all Collateral for the account of the Secured Party. At the request of the Secured Party, each Debtor will sign and deliver to the Secured Party at any time or from time to time one or more financing statements pursuant to the UCC and the requisite Intellectual Property filings in form reasonably satisfactory to the Secured Party and will pay the cost of filing the same in all public offices wherever filing is, or is deemed by the Secured Party to be, necessary or desirable to effect the rights and obligations provided for herein. Without limiting the generality of the foregoing, each Debtor shall pay all fees, taxes and other amounts necessary to maintain the Collateral and the Security Interest hereunder, and each Debtor shall obtain and furnish to the Secured Party from time to time, upon demand, such releases and/or subordinations of claims and liens which may be required to maintain the priority of the applicable Security Interest hereunder.

 

(l) No Debtor will transfer, pledge, hypothecate, encumber, license, sell or otherwise dispose of any of the Collateral without the prior written consent of the Secured Party.

 

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(m) Each Debtor shall keep and preserve its equipment, inventory and other tangible Collateral in good condition, repair and order (ordinary wear and tear excepted) and shall not operate or locate any such Collateral (or cause to be operated or located) in any area excluded from insurance coverage.

 

(n) Each Debtor shall maintain with financially sound and reputable insurers, insurance with respect to the Collateral against loss or damage of the kinds and in the amounts customarily insured against by entities of established reputation having similar properties similarly situated and in such amounts as are customarily carried under similar circumstances by other such entities and otherwise as is prudent for entities engaged in similar businesses but in any event sufficient to cover the full replacement cost thereof. Each Debtor shall cause each insurance policy issued in connection herewith to provide, and the insurer issuing such policy to certify to the Secured Party that (a) the Secured Party will be named as lender loss payee and additional insured under each such insurance policy; (b) if such insurance be proposed to be cancelled or materially changed for any reason whatsoever, such insurer will promptly notify the Secured Party and such cancellation or change shall not be effective as to the Secured Party for at least thirty (30) days after receipt by the Secured Party of such notice, unless the effect of such change is to extend or increase coverage under the policy; and (c) the Secured Party will have the right (but no obligation) at its election to remedy any default in the payment of premiums within thirty (30) days of notice from the insurer of such default. If no Event of Default (as defined in the Note) exists and if the proceeds arising out of any claim or series of related claims do not exceed $50,000, loss payments in each instance will be applied by the applicable Debtor to the repair and/or replacement of property with respect to which the loss was incurred to the extent reasonably feasible, and any loss payments or the balance thereof remaining, to the extent not so applied, shall be payable to the applicable Debtor, provided, however, that payments received by any Debtor after an Event of Default occurs and is continuing or in excess of $50,000 for any occurrence or series of related occurrences shall be paid to the Secured Party and, if received by such Debtor, shall be held in trust for and immediately paid over to the Secured Party unless otherwise directed in writing by the Secured Party. Copies of such policies or the related certificates, in each case, naming the Secured Party as lender loss payee and additional insured shall be delivered to the Secured Party at least annually and at the time any new policy of insurance is issued.

 

(o) Each Debtor shall, upon obtaining knowledge thereof, advise the Secured Party in sufficient detail, of any material adverse change in the Collateral, and of the occurrence of any event which would have a material adverse effect on the value of the Collateral or on the Secured Party’s security interest therein.

 

(p) Each Debtor shall promptly execute and deliver to the Secured Party such further deeds, mortgages, assignments, security agreements, financing statements or other instruments, documents, certificates and assurances and take such further action as the Secured Party may from time to time request and may in its sole discretion deem necessary to perfect, protect or enforce its security interest in the Collateral including, without limitation, if applicable, the execution and delivery of a separate security agreement with respect to (i) each Debtor’s Intellectual Property (“Intellectual Property Security Agreement”) and (ii) Accounts (“Account Control Agreement”), in which the Secured Party have been granted a security interest hereunder, substantially in a form acceptable to the Secured Party, which Intellectual Property Security Agreement and Account Control Agreement, other than as stated therein, shall be subject to all of the terms and conditions hereof.

 

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(q) Each Debtor shall permit the Secured Party and their representatives and agents to, inspect the Collateral at any time during normal business hours, upon at least five (5) Business Days prior written notice and at Debtor’s primary business location, and to make copies of records pertaining to the Collateral as may be requested by a Secured Party from time to time; .

 

(r) Each Debtor shall take all steps reasonably necessary to diligently pursue and seek to preserve, enforce and collect any rights, claims, causes of action and accounts receivable in respect of the Collateral.

 

(s) Each Debtor shall promptly notify the Secured Party in sufficient detail upon becoming aware of any attachment, garnishment, execution or other legal process levied against any Collateral and of any other information received by such Debtor that may materially affect the value of the Collateral, the Security Interest or the rights and remedies of the Secured Party hereunder.

 

(t) All information heretofore, herein or hereafter supplied to the Secured Party by or on behalf of any Debtor with respect to the Collateral is accurate and complete in all material respects as of the date furnished.

 

(u) The Debtors shall at all times preserve and keep in full force and effect their respective valid existence and good standing and any rights and franchises material to its business.

 

(v) No Debtor will change its name, type of organization, jurisdiction of organization, organizational identification number (if it has one), legal or corporate structure, or identity, or add any new fictitious name unless it provides at least 30 days prior written notice to the Secured Party of such change and, at the time of such written notification, such Debtor provides any financing statements or fixture filings necessary to perfect and continue perfected the perfected security Interest granted and evidenced by this Agreement.

 

(w) No Debtor may consign any of its Inventory or sell any of its Inventory on bill and hold, sale or return, sale on approval, or other conditional terms of sale without the consent of the Secured Party which shall not be unreasonably withheld, except to the extent such consignment or sale does not exceed 15% of the total value of all of the Debtor’s finished goods in Inventory.

 

(x) No Debtor may relocate its chief executive office to a new location without providing 30 days’ prior written notification thereof to the Secured Party and so long as, at the time of such written notification, such Debtor provides any financing statements or fixture filings necessary to perfect and continue perfection of the Security Interest granted and evidenced by this Agreement.

 

(y) Each Debtor was organized and remains organized solely under the laws of the state set forth next to such Debtor’s name in Schedule D attached hereto. Schedule D attached hereto sets forth each Debtor’s organizational identification number or, if any Debtor does not have one, states that one does not exist.

 

(z) (i) The actual name of each Debtor is the name set forth in the preamble above; (ii) no Debtor has any trade names except as set forth on Schedule E attached hereto; (iii) no Debtor has used any name other than that stated in the preamble hereto or as set forth on Schedule E for the preceding five years; and (iv) no entity has merged into any Debtor or been acquired by any Debtor within the past five years except as set forth on Schedule E.

 

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(aa) At any time and from time to time that any Collateral consists of instruments, certificated securities or other items that require or permit possession by the secured party to perfect the security interest created hereby, the applicable Debtor shall deliver such Collateral to the Secured Party.

 

(bb) Each Debtor, in its capacity as issuer, hereby agrees to comply with any and all orders and instructions of the Secured Party regarding the Pledged Interests consistent with the terms of this Agreement without the further consent of any Debtor as contemplated by Section 8-106 (or any successor section) of the UCC. Further, each Debtor agrees that it shall not enter into a similar agreement (or one that would confer “control” within the meaning of Article 8 of the UCC) with any other person or entity.

 

(cc) Each Debtor shall cause all tangible chattel paper constituting Collateral to be delivered to the Secured Party, or, if such delivery is not possible, then to cause such tangible chattel paper to contain a legend noting that it is subject to the security interest created by this Agreement. To the extent that any Collateral consists of electronic chattel paper, the applicable Debtor shall cause the underlying chattel paper to be “marked” within the meaning of Section 9-105 of the UCC (or successor section thereto).

 

(dd) If there is any investment property or deposit account included as Collateral that can be perfected by “control” through an account control agreement, the applicable Debtor shall cause such an account control agreement, in form and substance in each case satisfactory to the Secured Party, to be entered into and delivered to the Secured Party.

 

(ee) To the extent that any Collateral consists of letter-of-credit rights, the applicable Debtor shall cause the issuer of each underlying letter of credit to consent to an assignment of the proceeds thereof to the Secured Party.

 

(ff) To the extent that any Collateral is in the possession of any third party, the applicable Debtor shall join with the Secured Party in notifying such third party of the Secured Party’s security interest in such Collateral and shall use its best efforts to obtain an acknowledgement and agreement from such third party with respect to the Collateral, in form and substance reasonably satisfactory to the Secured Party.

 

(gg) If any Debtor shall at any time hold or acquire a commercial tort or other claim, such Debtor shall promptly notify the Secured Party in a writing signed by such Debtor of the particulars thereof and grant to the Secured Party in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance satisfactory to the Secured Party.

 

(hh) Each Debtor shall immediately provide written notice to the Secured Party of any and all accounts which arise out of contracts with any governmental authority and, to the extent necessary to perfect or continue the perfected status of the Security Interest in such accounts and proceeds thereof, shall execute and deliver to the Secured Party an assignment of claims for such accounts and cooperate with the Secured Party in taking any other steps required, in their judgment, under the Federal Assignment of Claims Act or any similar federal, state or local statute or rule to perfect or continue the perfected status of the Security Interest in such accounts and proceeds thereof.

 

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(ii) Each Debtor shall cause each subsidiary of such Debtor to immediately become a party hereto (an “Additional Debtor”), by executing and delivering an Additional Debtor Joinder in substantially the form of Annex A attached hereto and comply with the provisions hereof applicable to the Debtors. Concurrent therewith, the Additional Debtor shall deliver replacement schedules for, or supplements to all other schedules to (or referred to in) this Agreement, as applicable, which replacement schedules shall supersede, or supplements shall modify, the schedules then in effect. The Additional Debtor shall also deliver such opinions of counsel, authorizing resolutions, good standing certificates, incumbency certificates, organizational documents, financing statements and other information and documentation as the Secured Party may reasonably request. Upon delivery of the foregoing to the Secured Party, the Additional Debtor shall be and become a party to this Agreement with the same rights and obligations as the Debtors, for all purposes hereof as fully and to the same extent as if it were an original signatory hereto and shall be deemed to have made the representations, warranties and covenants set forth herein as of the date of execution and delivery of such Additional Debtor Joinder, and all references herein to the “Debtors” shall be deemed to include each Additional Debtor.

 

(jj) Each Debtor shall vote the Pledged Securities to comply with the covenants and agreements set forth herein and in the Notes.

 

(kk) Each Debtor shall register the pledge of the applicable Pledged Securities on the books of such Debtor. Each Debtor shall notify each issuer of Pledged Securities to register the pledge of the applicable Pledged Securities in the name of the Secured Party on the books of such issuer. Further, except with respect to certificated securities delivered to the Secured Party, the applicable Debtor shall deliver to the Secured Party an acknowledgement of pledge (which, where appropriate, shall comply with the requirements of the relevant UCC with respect to perfection by registration) signed by the issuer of the applicable Pledged Security, which acknowledgement shall confirm that: (a) it has registered the pledge on its books and records; and (b) at any time directed by the Secured Party during the continuation of an Event of Default, such issuer will transfer the record ownership of such Pledged Security into the name of any designee of the Secured Party, will take such steps as may be necessary to effect the transfer, and will comply with all other instructions of the Secured Party regarding such Pledged Securities without the further consent of the applicable Debtor.

 

(ll) In the event that, upon an occurrence of an Event of Default, the Secured Party shall sell all or any of the Pledged Securities to another party or parties (herein called the “Transferee”) or shall purchase or retain all or any of the Pledged Securities, each Debtor shall, to the extent applicable: (i) deliver to the Secured Party or the Transferee, as the case may be, the articles of incorporation, bylaws, minute books, stock certificate books, corporate seals, deeds, leases, indentures, agreements, evidences of indebtedness, books of account, financial records and all other Organizational Documents and records of the Debtors and their direct and indirect subsidiaries; (ii) use its best efforts to obtain resignations of the persons then serving as officers and directors of the Debtors and their direct and indirect subsidiaries, if so requested; and (iii) use its best efforts to obtain any approvals that are required by any governmental or regulatory body in order to permit the sale of the Pledged Securities to the Transferee or the purchase or retention of the Pledged Securities by the Secured Party and allow the Transferee or the Secured Party to continue the business of the Debtors and their direct and indirect subsidiaries.

 

(mm) Without limiting the generality of the other obligations of the Debtors hereunder, each Debtor shall promptly (i) cause to be registered at the United States Copyright Office all of its material copyrights, (ii) cause the security interest contemplated hereby with respect to all Intellectual Property registered at the United States Copyright Office or United States Patent and Trademark Office to be duly recorded at the applicable office, and (iii) give the Secured Party notice whenever it acquires (whether absolutely or by license) or creates any additional material Intellectual Property.

 

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(nn) Each Debtor will from time to time, at the joint and several expense of the Debtors, promptly execute and deliver all such further instruments and documents, and take all such further action as may be necessary or desirable, or as the Secured Party may reasonably request, in order to perfect and protect any security interest granted or purported to be granted hereby or to enable the Secured Party to exercise and enforce their rights and remedies hereunder and with respect to any Collateral or to otherwise carry out the purposes of this Agreement.

 

(oo) Schedule F attached hereto lists all of the patents, patent applications, trademarks, trademark applications, registered copyrights, and domain names owned by any of the Debtors as of the date hereof. Schedule F lists all material licenses in favor of any Debtor for the use of any patents, trademarks, copyrights and domain names as of the date hereof. All material patents and trademarks of the Debtors have been duly recorded at the United States Patent and Trademark Office and all material copyrights of the Debtors have been duly recorded at the United States Copyright Office.

 

(pp) Except as set forth on Schedule G attached hereto, none of the account debtors or other persons or entities obligated on any of the Collateral is a governmental authority covered by the Federal Assignment of Claims Act or any similar federal, state or local statute or rule in respect of such Collateral.

 

5. Effect of Pledge on Certain Rights. If any of the Collateral subject to this Agreement consists of nonvoting equity or ownership interests (regardless of class, designation, preference or rights) that may be converted into voting equity or ownership interests upon the occurrence of certain events (including, without limitation, upon the transfer of all or any of the other stock or assets of the issuer), it is agreed that the pledge of such equity or ownership interests pursuant to this Agreement or the enforcement of any of the Secured Party’s rights hereunder shall not be deemed to be the type of event which would trigger such conversion rights notwithstanding any provisions in the Organizational Documents or agreements to which any Debtor is subject or to which any Debtor is party.

 

6. Defaults. The following events shall be “Events of Default”:

 

(a) The occurrence of an Event of Default (as defined in the Note);

 

(b) Any representation or warranty of any Debtor in this Agreement shall prove to have been incorrect in any material respect when made;

 

(c) The failure by any Debtor to observe or perform any of its obligations hereunder for five (5) Business Days after delivery to such Debtor of written notice describing such failure by or on behalf of a Secured Party unless such default is capable of cure but cannot be cured within such time frame and such Debtor is using best efforts to cure same in a timely fashion; or

 

(d) If any provision of this Agreement shall at any time for any reason be declared to be null and void, or the validity or enforceability thereof shall be contested by any Debtor, or a proceeding shall be commenced by any Debtor, or by any governmental authority having jurisdiction over any Debtor, seeking to establish the invalidity or unenforceability thereof, or any Debtor shall deny that any Debtor has any liability or obligation purported to be created under this Agreement.

 

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7. Duty To Hold In Trust.

 

(a) Upon the occurrence of any Event of Default and at any time thereafter, each Debtor shall, upon receipt of any revenue, income, dividend, interest or other sums subject to the Security Interest, whether payable pursuant to the Notes or otherwise, or of any check, draft, note, trade acceptance or other instrument evidencing an obligation to pay any such sum, hold the same in trust for the Secured Party and shall forthwith endorse and transfer any such sums or instruments, or both, to the Secured Party .

 

(b) If any Debtor shall become entitled to receive or shall receive any securities or other property (including, without limitation, shares of Pledged Securities or instruments representing Pledged Securities acquired after the date hereof, or any options, warrants, rights or other similar property or certificates representing a dividend, or any distribution in connection with any recapitalization, reclassification or increase or reduction of capital, or issued in connection with any reorganization of such Debtor or any of its direct or indirect subsidiaries) in respect of the Pledged Securities (whether as an addition to, in substitution of, or in exchange for, such Pledged Securities or otherwise), such Debtor agrees to (i) accept the same as the agent of the Secured Party; (ii) hold the same in trust on behalf of and for the benefit of the Secured Party; and (iii) to deliver any and all certificates or instruments evidencing the same to the Secured Party on or before the close of business on the fifth business day following the receipt thereof by such Debtor, in the exact form received together with the Necessary Endorsements, to be held by the Secured Party subject to the terms of this Agreement as Collateral.

 

8. Rights and Remedies Upon Default.

 

(a) Upon the occurrence of any Event of Default and at any time thereafter, the Secured Party, acting through any agent appointed by them for such purpose, shall have the right to exercise all of the remedies conferred hereunder and under the Notes, and the Secured Party shall have all the rights and remedies of a secured party under the UCC. Without limitation, the Secured Party shall have the following rights and powers:

 

(i) The Secured Party shall have the right to take possession of the Collateral and, for that purpose, enter, with the aid and assistance of any person, any premises where the Collateral, or any part thereof, is or may be placed and remove the same, and each Debtor shall assemble the Collateral and make it available to the Secured Party at places which the Secured Party shall reasonably select, whether at such Debtor’s premises or elsewhere, and make available to the Secured Party, without rent, all of such Debtor’s respective premises and facilities for the purpose of the Secured Party taking possession of, removing or putting the Collateral in saleable or disposable form.

 

(ii) Upon notice to the Debtors by the Secured Party, all rights of each Debtor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise and all rights of each Debtor to receive the dividends and interest which it would otherwise be authorized to receive and retain, shall cease. Upon such notice, the Secured Party shall have the right to receive any interest, cash dividends or other payments on the Collateral and, at the option oft, to exercise in such the Secured Party’s discretion all voting rights pertaining thereto. Without limiting the generality of the foregoing, the Secured Party shall have the right (but not the obligation) to exercise all rights with respect to the Collateral as it were the sole and absolute owners thereof, including, without limitation, to vote and/or to exchange, at its sole discretion, any or all of the Collateral in connection with a merger, reorganization, consolidation, recapitalization or other readjustment concerning or involving the Collateral or any Debtor or any of its direct or indirect subsidiaries.

 

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(iii) The Secured Party shall have the right to operate the business of each Debtor using the Collateral and shall have the right to assign, sell, lease or otherwise dispose of and deliver all or any part of the Collateral, at public or private sale or otherwise, either with or without special conditions or stipulations, for cash or on credit or for future delivery, in such parcel or parcels and at such time or times and at such place or places, and upon such terms and conditions as the Secured Party may deem commercially reasonable, all without (except as shall be required by applicable statute and cannot be waived) advertisement or demand upon or notice to any Debtor or right of redemption of a Debtor, which are hereby expressly waived. Upon each such sale, lease, assignment or other transfer of Collateral, the Secured Party may, unless prohibited by applicable law which cannot be waived, purchase all or any part of the Collateral being sold, free from and discharged of all trusts, claims, right of redemption and equities of any Debtor, which are hereby waived and released.

 

(iv) The Secured Party shall have the right (but not the obligation) to notify any account debtors and any obligors under instruments or accounts to make payments directly to the Secured Party and to enforce the Debtors’ rights against such account debtors and obligors.

 

(v) The Secured Party may (but are not obligated to) direct any financial intermediary or any other person or entity holding any investment property to transfer the same to the Secured Party or their designee.

 

(vi) The Secured Party may (but are not obligated to) transfer any or all Intellectual Property registered in the name of any Debtor at the United States Patent and Trademark Office and/or Copyright Office into the name of the Secured Party or any designee or any purchaser of any Collateral.

 

(b) The Secured Party may comply with any applicable law in connection with a disposition of Collateral and such compliance will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral. The Secured Party may sell the Collateral without giving any warranties and may specifically disclaim such warranties. If the Secured Party sells any of the Collateral on credit, the Debtors will only be credited with payments actually made by the purchaser. In addition, each Debtor waives any and all rights that it may have to a judicial hearing in advance of the enforcement of any of the Secured Party’s rights and remedies hereunder, including, without limitation, its right following an Event of Default to take immediate possession of the Collateral and to exercise its rights and remedies with respect thereto.

 

(c) For the purpose of enabling the Secured Party to further exercise rights and remedies under this Section 8 or elsewhere provided by agreement or applicable law, each Debtor hereby grants to the Secured Party an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to such Debtor) to use, license or sublicense following an Event of Default, any Intellectual Property now owned or hereafter acquired by such Debtor, and wherever the same may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof.

 

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9. Applications of Proceeds. The proceeds of any such sale, lease or other disposition of the Collateral hereunder, or from payments made on account of any insurance policy insuring any portion of the Collateral, shall be applied first, to the expenses of retaking, holding, storing, processing and preparing for sale, selling, and the like (including, without limitation, any taxes, fees and other costs incurred in connection therewith) of the Collateral, to the reasonable attorneys’ fees and expenses incurred by the Secured Party in enforcing their rights hereunder and in connection with collecting, storing and disposing of the Collateral, and then to satisfaction of the Obligations, and to the payment of any other amounts required by applicable law, after which the Secured Party shall pay to the applicable Debtor any surplus proceeds. If, upon the sale, license or other disposition of the Collateral, the proceeds thereof are insufficient to pay all amounts to which the Secured Party is legally entitled, the Debtors will be liable for the deficiency, together with interest thereon, at the rate of 18% per annum or the lesser amount permitted by applicable law (the “Default Rate”), and the reasonable fees of any attorneys employed by the Secured Party to collect such deficiency. To the extent permitted by applicable law, each Debtor waives all claims, damages and demands against the Secured Party arising out of the repossession, removal, retention or sale of the Collateral, unless due solely to the gross negligence or willful misconduct of the Secured Party as determined by a final judgment (not subject to further appeal) of a court of competent jurisdiction.

 

10. Securities Law Provision. Each Debtor recognizes that the Secured Party may be limited in its ability to effect a sale to the public of all or part of the Pledged Securities by reason of certain prohibitions in the Securities Act of 1933, as amended, or other federal or state securities laws (collectively, the “Securities Laws”), and may be compelled to resort to one or more sales to a restricted group of purchasers who may be required to agree to acquire the Pledged Securities for their own account, for investment and not with a view to the distribution or resale thereof. Each Debtor agrees that sales so made may be at prices and on terms less favorable than if the Pledged Securities were sold to the public, and that the Secured Party has no obligation to delay the sale of any Pledged Securities for the period of time necessary to register the Pledged Securities for sale to the public under the Securities Laws. Each Debtor shall cooperate with the Secured Party in its attempt to satisfy any requirements under the Securities Laws (including, without limitation, registration thereunder if requested by the Secured Party) applicable to the sale of the Pledged Securities by the Secured Party.

 

11. Costs and Expenses. Each Debtor agrees to pay all reasonable out-of-pocket fees, costs and expenses incurred in connection with any filing required hereunder, including without limitation, any financing statements pursuant to the UCC, continuation statements, partial releases and/or termination statements related thereto or any expenses of any searches reasonably required by the Secured Party. The Debtors shall also pay all other claims and charges which in the reasonable opinion of the Secured Party might prejudice, imperil or otherwise affect the Collateral or the Security Interest therein. The Debtors will also, upon demand, pay to the Secured Party the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and of any experts and agents, which the Secured Party may incur in connection with (i) the enforcement of this Agreement, (ii) the custody or preservation of, or the sale of, collection from, or other realization upon, any of the Collateral, or (iii) the exercise or enforcement of any of the rights of the Secured Party under the Notes, the other Transaction Documents and the other documents entered into in connection therewith. Until so paid, any fees payable hereunder shall be added to the principal amount of the Notes and shall bear interest at the Default Rate.

 

 

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12. Responsibility for Collateral. The Debtors assume all liabilities and responsibility in connection with all Collateral, and the Obligations shall in no way be affected or diminished by reason of the loss, destruction, damage or theft of any of the Collateral or its unavailability for any reason. Without limiting the generality of the foregoing, (a) no Secured Party (i) has any duty (either before or after an Event of Default) to collect any amounts in respect of the Collateral or to preserve any rights relating to the Collateral, or (ii) has any obligation to clean-up or otherwise prepare the Collateral for sale, and (b) each Debtor shall remain obligated and liable under each contract or agreement included in the Collateral to be observed or performed by such Debtor thereunder. No Secured Party shall have any obligation or liability under any such contract or agreement by reason of or arising out of this Agreement or the receipt by any Secured Party of any payment relating to any of the Collateral, nor shall the any Secured Party be obligated in any manner to perform any of the obligations of any Debtor under or pursuant to any such contract or agreement, to make inquiry as to the nature or sufficiency of any payment received by any Secured Party in respect of the Collateral or as to the sufficiency of any performance by any party under any such contract or agreement, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to any Secured Party may be entitled at any time or times.

 

13. Security Interest Absolute. All rights of the Secured Party and all obligations of the Debtors hereunder, shall be absolute and unconditional, irrespective of: (a) any lack of validity or enforceability of this Agreement, the Notes or any agreement entered into in connection with the foregoing, or any portion hereof or thereof; (b) any change in the time, manner or place of payment or performance of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the Notes or any other agreement entered into in connection with the foregoing; (c) any exchange, release or non-perfection of any of the Collateral, or any release or amendment or waiver of or consent to departure from any other collateral for, or any guaranty, or any other security, for all or any of the Obligations; (d) any action by the Secured Party to obtain, adjust, settle and cancel in its sole discretion any insurance claims or matters made or arising in connection with the Collateral; or (e) any other circumstance which might otherwise constitute any legal or equitable defense available to a Debtor, or a discharge of all or any part of the Security Interest granted hereby. Until the Obligations shall have been paid and performed in full, the rights of the Secured Party shall continue even if the Obligations are barred for any reason, including, without limitation, the running of the statute of limitations or bankruptcy. Each Debtor expressly waives presentment, protest, notice of protest, demand, notice of nonpayment and demand for performance. In the event that at any time any transfer of any Collateral or any payment received by the Secured Party hereunder shall be deemed by final order of a court of competent jurisdiction to have been a voidable preference or fraudulent conveyance under the bankruptcy or insolvency laws of the United States, or shall be deemed to be otherwise due to any party other than the Secured Party, then, in any such event, each Debtor’s obligations hereunder shall survive cancellation of this Agreement, and shall not be discharged or satisfied by any prior payment thereof and/or cancellation of this Agreement, but shall remain a valid and binding obligation enforceable in accordance with the terms and provisions hereof. Each Debtor waives all right to require the Secured Party to proceed against any other person or entity or to apply any Collateral which the Secured Party may hold at any time, or to marshal assets, or to pursue any other remedy. Each Debtor waives any defense arising by reason of the application of the statute of limitations to any obligation secured hereby.

 

14. Term of Agreement. This Agreement and the Security Interest shall terminate on the date on which all payments under the Notes have been indefeasibly paid in full and all other Obligations have been paid or discharged; provided, however, that all indemnities of the Debtors contained in this Agreement shall survive and remain operative and in full force and effect regardless of the termination of this Agreement.

 

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15. Power of Attorney; Further Assurances.

 

(a) Each Debtor authorizes the Secured Party, and does hereby make, constitute and appoint the Secured Party and its respective officers, agents, successors or assigns with full power of substitution, as such Debtor’s true and lawful attorney-in-fact, with power, in the name of the various Secured Party or such Debtor, to, after the occurrence and during the continuance of an Event of Default, (i) endorse any note, checks, drafts, money orders or other instruments of payment (including payments payable under or in respect of any policy of insurance) in respect of the Collateral that may come into possession of the Secured Party; (ii) to sign and endorse any financing statement pursuant to the UCC or any invoice, freight or express bill, bill of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications and notices in connection with accounts, and other documents relating to the Collateral; (iii) to pay or discharge taxes, liens, security interests or other encumbrances at any time levied or placed on or threatened against the Collateral; (iv) to demand, collect, receipt for, compromise, settle and sue for monies due in respect of the Collateral; (v) to transfer any Intellectual Property or provide licenses respecting any Intellectual Property; and (vi) generally, at the option of the Secured Party, and at the expense of the Debtors, at any time, or from time to time, to execute and deliver any and all documents and instruments and to do all acts and things which the Secured Party deems necessary to protect, preserve and realize upon the Collateral and the Security Interest granted therein in order to effect the intent of this Agreement and the Notes and the other Transaction Documents all as fully and effectually as the Debtors might or could do; and each Debtor hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof. This power of attorney is coupled with an interest and shall be irrevocable for the term of this Agreement and thereafter as long as any of the Obligations shall be outstanding. The designation set forth herein shall be deemed to amend and supersede any inconsistent provision in the Organizational Documents or other documents or agreements to which any Debtor is subject or to which any Debtor is a party. Without limiting the generality of the foregoing, after the occurrence and during the continuance of an Event of Default, the Secured Party is specifically authorized to execute and file any applications for or instruments of transfer and assignment of any patents, trademarks, copyrights or other Intellectual Property with the United States Patent and Trademark Office and the United States Copyright Office.

 

(b) On a continuing basis, each Debtor will make, execute, acknowledge, deliver, file and record, as the case may be, with the proper filing and recording agencies in any jurisdiction, including, without limitation, the jurisdictions indicated on Schedule C attached hereto, all such instruments, and take all such action as may reasonably be deemed necessary or advisable, or as reasonably requested by the Secured Party, to perfect the Security Interest granted hereunder and otherwise to carry out the intent and purposes of this Agreement, or for assuring and confirming to the Secured Party the grant or perfection of a perfected security interest in all the Collateral under the UCC.

 

(c) Each Debtor hereby irrevocably appoints the Secured Party as such Debtor’s attorney-in-fact, with full authority in the place and instead of such Debtor and in the name of such Debtor, from time to time in the Secured Party’s discretion, to take any action and to execute any instrument which the Secured Party may deem necessary or advisable to accomplish the purposes of this Agreement, including the filing, in its sole discretion, of one or more financing or continuation statements and amendments thereto, relative to any of the Collateral without the signature of such Debtor where permitted by law, which financing statements may (but need not) describe the Collateral as “all assets” or “all personal property” or words of like import, and ratifies all such actions taken by the Secured Party. This power of attorney is coupled with an interest and shall be irrevocable for the term of this Agreement and thereafter as long as any of the Obligations shall be outstanding.

 

16. Notices. All notices, requests, demands and other communications hereunder shall be subject to the notice provision of the Purchase Agreement (as such term is defined in the Note).

 

Page 16 of 30
 

 

17. Other Security. To the extent that the Obligations are now or hereafter secured by property other than the Collateral or by the guarantee, endorsement or property of any other person, firm, corporation or other entity, then the Secured Party shall have the right, in its sole discretion, to pursue, relinquish, subordinate, modify or take any other action with respect thereto, without in any way modifying or affecting any of the Secured Party’s rights and remedies hereunder.

 

18. RESERVED.

 

19. Miscellaneous.

 

(a) No course of dealing between the Debtors and the Secured Party, nor any failure to exercise, nor any delay in exercising, on the part of the Secured Party, any right, power or privilege hereunder or under the Notes shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or thereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

 

(b) All of the rights and remedies of the Secured Party with respect to the Collateral, whether established hereby or by the Note or by any other agreements, instruments or documents or by law shall be cumulative and may be exercised singly or concurrently.

 

(c) This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and is intended to supersede all prior negotiations, understandings and agreements with respect thereto. Except as specifically set forth in this Agreement, no provision of this Agreement may be modified or amended except by a written agreement specifically referring to this Agreement and signed by the Debtor and the Secured Party.

 

(d) In the event any provision of this Agreement is held to be invalid, prohibited or unenforceable in any jurisdiction for any reason, unless such provision is narrowed by judicial construction, this Agreement shall, as to such jurisdiction, be construed as if such invalid, prohibited or unenforceable provision had been more narrowly drawn so as not to be invalid, prohibited or unenforceable. If, notwithstanding the foregoing, any provision of this Agreement is held to be invalid, prohibited or unenforceable in any jurisdiction, such provision, as to such jurisdiction, shall be ineffective to the extent of such invalidity, prohibition or unenforceability without invalidating the remaining portion of such provision or the other provisions of this Agreement and without affecting the validity or enforceability of such provision or the other provisions of this Agreement in any other jurisdiction.

 

(e) No waiver of any breach or default or any right under this Agreement shall be considered valid unless in writing and signed by the party giving such waiver, and no such waiver shall be deemed a waiver of any subsequent breach or default or right, whether of the same or similar nature or otherwise.

 

(f) This Agreement shall be binding upon and inure to the benefit of each party hereto and its successors and assigns.

 

(g) Each party shall take such further action and execute and deliver such further documents as may be necessary or appropriate in order to carry out the provisions and purposes of this Agreement.

 

Page 17 of 30
 

 

(h) All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each Debtor agrees that all proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and the Notes (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York, Borough of Manhattan. Each Debtor hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such proceeding is improper. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. If any party shall commence a proceeding to enforce any provisions of this Agreement, then the prevailing party in such proceeding shall be reimbursed by the other party for its reasonable attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such proceeding.

 

(i) This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof.

 

(j) All Debtors shall jointly and severally be liable for the obligations of each Debtor to the Secured Party hereunder.

 

(k) Each Debtor shall indemnify, reimburse and hold harmless the Secured Party and their respective partners, members, shareholders, officers, directors, employees and agents

 

(collectively, “Indemnitees”) from and against any and all losses, claims, liabilities, damages, penalties, suits, costs and expenses, of any kind or nature, (including fees relating to the cost of investigating and defending any of the foregoing) imposed on, incurred by or asserted against such Indemnitee in any way related to or arising from or alleged to arise from this Agreement or the Collateral, except any such losses, claims, liabilities, damages, penalties, suits, costs and expenses which result from the gross negligence or willful misconduct of the Indemnitee as determined by a final, non-appealable decision of a court of competent jurisdiction. This indemnification provision is in addition to, and not in limitation of, any other indemnification provision in the Notes, the Purchase Agreement (as such term is defined in the Notes) or any other agreement, instrument or other document executed or delivered in connection herewith or therewith.

 

(l) Nothing in this Agreement shall be construed to subject any Secured Party to liability as a partner in any Debtor or any if its direct or indirect subsidiaries that is a partnership or as a member in any Debtor or any of its direct or indirect subsidiaries that is a limited liability company, nor any Secured Party be deemed to have assumed any obligations under any partnership agreement or limited liability company agreement, as applicable, of any such Debtor or any if its direct or indirect subsidiaries or otherwise, unless and until any such Secured Party exercises its right to be substituted for such Debtor as a partner or member, as applicable, pursuant hereto.

 

(m) To the extent that the grant of the security interest in the Collateral and the enforcement of the terms hereof require the consent, approval or action of any partner or member, as applicable, of any Debtor or any direct or indirect subsidiary of any Debtor or compliance with any provisions of any of the Organizational Documents, the Debtors hereby grant such consent and approval and waive any such noncompliance with the terms of said documents.

 

[SIGNATURE PAGES FOLLOW]

 

Page 18 of 30
 

 

IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be duly executed on the day and year first above written.

 

Curative Biotechnology, Inc.  
     
By: /s/ Richard Garr  
Name: Richard Garr  
Title: CEO  

 

[SIGNATURE PAGE OF HOLDERS FOLLOWS]

 

Page 19 of 30
 

 

[SIGNATURE PAGE OF HOLDER]

 

Name of Investing Entity: ___ Puritan Partners LLC _______________________
Signature of Authorized Signatory of Investing entity: /s/ Richard Smithline ____
Name of Authorized Signatory: Richard Smithline _________________________
 
Title of Authorized Signatory: Managing Member _________________________

 

Page 20 of 30
 

 

SCHEDULE A

 

LOCATION OF COLLATERAL

 

Principal Places of Business of Debtors:

 

Page 21 of 30
 

 

SCHEDULE B

 

EXISTING LIENS ON COLLATERAL

 

Page 22 of 30
 

 

SCHEDULE C

 

JURISDICTIONS IN WHICH COLLATERAL LOCATED

 

Page 23 of 30
 

 

SCHEDULE D

 

ORGANIZATIONAL IDENTIFICATION NUMBERS

 

Page 24 of 30
 

 

SCHEDULE E

 

NAMES; MERGERS AND ACQUISITIONS

 

Page 25 of 30
 

 

SCHEDULE F

 

INTELLECTUAL PROPERTY

 

Page 26 of 30
 

 

SCHEDULE G

 

ACCOUNT DEBTORS

 

Page 27 of 30
 

 

SCHEDULE H

 

PLEDGED SECURITIES

 

Page 28 of 30
 

 

ANNEX A to

SECURITY

AGREEMENT

 

FORM OF ADDITIONAL DEBTOR JOINDER

 

Security Agreement dated as of March 2, 2022 made by Curative Biotechnology, Inc. (“Curative”), and the Purchasers party thereto from time to time, as Debtors to and in favor of the Secured Party identified therein (the “Security Agreement”)

 

Reference is made to the Security Agreement as defined above; capitalized terms used herein and not otherwise defined herein shall have the meanings given to such terms in, or by reference in, the Security Agreement.

 

The undersigned hereby agrees that upon delivery of this Additional Debtor Joinder to the Secured Party referred to above, the undersigned shall (a) be an Additional Debtor under the Security Agreement, (b) have all the rights and obligations of the Debtors under the Security Agreement as fully and to the same extent as if the undersigned was an original signatory thereto and (c) be deemed to have made the representations and warranties set forth therein as of the date of execution and delivery of this Additional Debtor Joinder. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE UNDERSIGNED SPECIFICALLY GRANTS TO THE SECURED PARTY A SECURITY INTEREST IN THE COLLATERAL AS MORE FULLY SET FORTH IN THE SECURITY AGREEMENT AND ACKNOWLEDGES AND AGREES TO THE WAIVER OF JURY TRIAL PROVISIONS SET FORTH THEREIN.

 

Attached hereto are supplemental and/or replacement Schedules to the Security Agreement, as applicable.

 

An executed copy of this Joinder shall be delivered to the Secured Party, and the Secured Party may rely on the matters set forth herein on or after the date hereof. This Joinder shall not be modified, amended or terminated without the prior written consent of the Additional Debtor and the Secured Party.

 

Page 29 of 30
 

 

IN WITNESS WHEREOF, the undersigned has caused this Joinder to be executed in the name and on behalf of the undersigned.

 

  [Name of Additional Debtor]
   
  By:
   
  Name:
   
  Title:
   
  Address:
   
Dated:  

 

Page 30 of 30

 

Exhibit 10.19

 

INTELLECTUAL PROPERTY SECURITY AGREEMENT

 

This Intellectual Property Security Agreement (“IP Security Agreement”) dated as of March 2, 2022, is made and entered into by and among Curative Biotechnology, Inc., a Florida corporation (the “Company”), any subsidiary of the Company that is a signatory hereto either now joined or joined in the future (such subsidiaries, together with the Company, the “Debtors”), and Puritan Partners LLC, as Holder of the 12.5% Senior Secured Notes due March 2, 2023 in aggregate principal amount of $1,142,857.14 (the “Notes”) of the Company.

 

WHEREAS, the Company has entered into a Securities Purchase Agreement, dated as of the date hereof and as may be amended from time to time (the “Securities Purchase Agreement”), [_____] (the “Lender”), and the Company, and the Lender has entered into a Security Agreement dated as of the date hereof and as may be amended from time to time (the “Security Agreement”);

 

WHEREAS, the Lender has purchased or will purchase from the Company, among other things, the Note pursuant to the provisions of the Securities Purchase Agreement; and

 

WHEREAS, under the terms of the Securities Purchase Agreement and the Security Agreement, the Company and the other Debtors have granted to Lender a first priority security interest in, among other Collateral, all Intellectual Property of the Debtors, and the Company has agreed as a condition thereof to execute this IP Security Agreement for recording with the United States Patent and Trademark Office, the United States Copyright and other governmental authorities.

 

NOW, THEREFORE, for good and valuable consideration, both the receipt and sufficiency of which are hereby acknowledged, the Debtors hereby agrees as follows:

 

SECTION 1. Definitions. Any term not defined herein will have the definition ascribed to it in the Securities Purchase Agreement, Security Agreement or Note. The following terms have the meanings set forth below:

 

(a) “Copyrights” means all of the following to the extent now owned or hereafter adopted or acquired by any of the Debtors: (i) all copyrights (whether statutory or common law, whether established or registered in the United States or any other country or political subdivision thereof, whether registered or unregistered and whether published or unpublished), rights and interests in copyrights, works protectable by copyright, and General Intangibles of like nature, all registrations and recordings thereof, and all applications in connection therewith, including all registrations, recordings, and applications in the United States Copyright Office or in any similar office or agency of the United States, any state or territory thereof, or any other country or any political subdivision thereof and all research and development relating to the foregoing, (ii) all reissues, extensions, continuations, and renewals thereof and amendments thereto, (iii) income, fees, royalties, damages, claims, and payments now or hereafter due and/or payable with respect thereto, including damages and payments for past, present and future infringements thereof, (iv) rights corresponding thereto throughout the world and (v) rights to sue for past, present, and future infringements thereof.

 

(b) “Copyright License” means any and all rights to the extent now owned or hereafter acquired by Debtors under any written or oral agreement granting any right to use any Copyright or Copyright registration, in each case to the extent assignable by any of the Debtors; provided, that, the Company has identified on Schedule C attached hereto whether or not any of the Debtors’ Copyrights or Copyright registrations are not assignable.

 

 

 

 

(c) “Patents” shall mean one or all of the following, to the extent now or hereafter owned by any of the Debtors or in which any of the Debtors now has or hereafter acquires any rights: (i) all letters patent of the United States or any other country, all registrations, and recordings thereof, and all applications for letters patent of the United States or any other country, (ii) all reissues, continuations, continuations-in-part, divisions, reexaminations, or extensions of any of the foregoing and (iii) all inventions disclosed in and claimed in the Patents and any and all trade secrets and know-how related thereto.

 

(d) “Patent License” shall mean all of the following to the extent now owned or hereafter acquired by any of the Debtors or in which any of the Debtors now has or hereafter acquires any rights: to the extent assignable or transferable by any Debtor, any written agreement granting any right to make, use, sell, and/or practice any invention or discovery that is the subject matter of a Patent, in each case to the extent assignable or transferable, without third party consent, by any Debtor; provided, that, the Company has identified on Schedule A attached hereto those Patents Licenses that are not assignable or transferable without third party consent.

 

(e) “Trademarks” shall mean one or all of the following, to the extent now owned or hereafter acquired by any of the Debtors or in which any of the Debtors now has or hereafter acquires any rights: (i) all trademarks (whether registered or unregistered), trade names, corporate names, business names, trade styles, service marks, logos, other source or business identifiers, prints, and labels on which any of the foregoing have appeared or appear, designs and general intangibles of like nature, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, registrations, recordings, and applications in the United States Patent and Trademark Office or in any similar office or agency of any State of the United States or any other country or any political subdivision thereof, (ii) all reissues, extensions, or renewals thereof and (iii) the goodwill associated with or symbolized by any of the foregoing.

 

(f) “Trademark License” shall mean all of the following, to the extent now owned or hereafter acquired by any of the Debtors or in which any of the Debtors now has or hereafter acquires any rights: any written agreement granting any right to use any Trademark or Trademark registration, in each case to the extent assignable or transferable, without third party consent, by any Debtor; provided, that, the Company has identified on Schedule B attached hereto those Trademarks or Trademark registrations that are not assignable without third party consent.

 

SECTION 2. Grant of Security. Each of the Debtors hereby grants to Lender, a first priority security interest in all of such Debtor’s right, title, and interest in and to the following (the “Collateral”):

 

  (i) all of its Patents and all Patent Licenses to which it is a party, including, but not limited to, those set forth on Schedule A hereto, subject to the third party’s right to terminate such Patents or Patent Licenses in the event of assignment, transfer or encumbrance set forth on Schedule A;
     
  (ii) all of its Trademarks and all Trademark Licenses to which it is a party, including, but not limited to, those set forth on Schedule B hereto, together with all goodwill of the business connected with the use of, and symbolized by, each Trademark and each Trademark License, subject to the third party’s right to terminate such Trademarks or Trademark Licenses in the event of assignment, transfer or encumbrance set forth on Schedule B;
     
  (iii) all of its Copyrights and all Copyright Licenses to which it is a party, including, but not limited to, those set forth on Schedule C hereto, subject to the third party’s right to terminate such Copyrights or Copyright Licenses in the event of assignment, transfer or encumbrance as set forth on Schedule C;

 

 

 

 

  (iv) all reissues, divisions, continuations, continuations-in-part, extensions, renewals, and reexaminations of any of the foregoing, all rights in the foregoing provided by international treaties or conventions, all rights corresponding thereto throughout the world and all other rights of any kind whatsoever of the Debtors accruing thereunder or pertaining thereto;
     
  (v) any and all of Debtor’s claims for damages and injunctive relief for past, present, and future infringement, dilution, misappropriation, violation, misuse, breach, or injury with respect to any of the foregoing, with the right, but not the obligation, to sue for and collect, or otherwise recover, such damages; and
     
  (vi) any and all products and proceeds of, collateral for, income, royalties, and other payments now or hereafter due and payable with respect to, and supporting obligations relating to, any and all of the Collateral of or arising from any of the foregoing. Except as may be set forth on Schedule D hereto, and subject to the third party’s right of termination upon assignment, transfer or encumbrance set forth on Schedule D, the Debtor is the sole owner of the Collateral, free and clear of any liens, security interests, encumbrances, rights or claims, and is fully authorized to grant the first priority security interest in the Collateral. To the best of Debtor’s knowledge after due inquiry, except as set forth on Schedule D hereto, there is not on file in any governmental or regulatory authority, agency or recording office an effective financing statement, security agreement, license or transfer or any notice of any of the foregoing relating to Debtor (other than those that will be filed in favor of the Secured Party pursuant to this Agreement) covering or affecting the Collateral. So long as this Agreement shall be in effect, the Debtor shall not execute and shall not knowingly permit to be on file in any such office or agency any such financing statement or other document or instrument (except to the extent filed or recorded as of the date hereof or in favor of the Secured Party pursuant to the terms of this Agreement).

 

Notwithstanding the foregoing, nothing herein shall be deemed to constitute an assignment of any asset which, in the event of an assignment, becomes void by operation of applicable law or by its terms or the assignment of which is otherwise prohibited by applicable law or by its terms (in each case to the extent that such applicable law is not overridden by Sections 9-406, 9-407 and/or 9-408 of the UCC or other similar applicable law); provided, however, that, to the extent permitted by applicable law, this Agreement shall create a valid security interest in such asset and, to the extent permitted by applicable law, this IP Security Agreement shall create a valid security interest in the proceeds of such asset.

 

SECTION 3. Security for Obligations. The grant of a first priority security interest, subject to the third party’s right to terminate in the event of an assignment, transfer or encumbrance set forth on any of the Schedules hereto, in the Collateral by the Debtors under this IP Security Agreement secures the prompt and complete payment and performance when due of all of the Obligations, whether direct or indirect, now existing or hereafter arising, absolute or contingent, and whether for principal, reimbursement obligations, interest, premiums, penalties, fees, guarantee obligations, indemnifications, contract causes of action, costs, expenses, or otherwise.

 

SECTION 4. Recordation. Each of the Debtors authorizes and requests that the Register of Copyrights, the Commissioner for Patents, the Commissioner for Trademarks and any other applicable governmental authority record this IP Security Agreement.

 

 

 

 

SECTION 5. Grants, Rights and Remedies. This IP Security Agreement has been entered into in conjunction with the provisions of the Securities Purchase Agreement and the Security Agreement. Each Debtor does hereby acknowledge and confirm that the grant of the first priority security interest, subject to the third party’s right to terminate in the event of an assignment, transfer or encumbrance set forth on any of the Schedules hereto, hereunder and the rights and remedies of, Lender with respect to the Collateral are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated herein by reference as if fully set forth herein.

 

SECTION 6. Future Acquisitions. The Company represents and warrants that Schedules A, B and C attached hereto set forth any and all intellectual property rights in connection to which the Company has registered or filed an application with either the United States Patent and Trademark Office or the United States Copyright Office, as applicable. The Company shall give the Lender prior written notice of no less than five (5) Business Days before filing any additional application for registration of any trademark and prompt notice in writing of any additional trademark registrations, patent registration, or copyright registrations granted therefor after the date hereof. Without limiting the Company’s obligations under this paragraph, each of the Debtors hereby authorizes the Lender unilaterally to modify this IP Security Agreement by amending Schedules A, B, C or D to include any future patents, trademarks, copyrights, licenses thereto or applications therefor of any Debtor. Notwithstanding the foregoing, no failure to so modify this IP Security Agreement or amend Schedules A, B, C or D shall in any way affect, invalidate or detract from Lender’s first priority security interest in all Collateral, whether or not listed on Schedule A, B, C or D.

 

SECTION 7. Remedies. If there occurs an Event of Default, the Lender shall be entitled to exercise any and all remedies available to the Secured Lender under the Security Agreement for the benefit of Lender.

 

SECTION 8. Term of Agreement. This IP Security Agreement shall terminate on the date on which all payments under the Notes have been indefeasibly paid in full. Upon termination of this IP Security Agreement, the Lender shall promptly execute such documents or instruments and take such further actions as the Company or any Debtor may reasonably request for the purposes of releasing the security interests granted herein. Debtor may file any terminations with any applicable office upon such termination date.

 

SECTION 9. Miscellaneous. Section 19 of the Security Agreement is hereby incorporated herein by reference as if fully set forth herein, mutatis mutandis.

 

SECTION 10. Governing Law. This IP Security Agreement shall be governed by, and construed and interpreted in accordance with the internal laws of the State of New York, without giving effect to its choice of law provisions that would require the application of another state’s laws.

 

SECTION 11. Execution in Counterparts. This IP Security Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement

 

 

 

 

IN WITNESS WHEREOF, each Debtor has caused this IP Security Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written.

 

CURATIVE BIOTECHNOLOGY, INC., AS DEBTOR  
   
BY: /s/ Richard Garr  
Richard Garr  
CEO  
     
PURITAN PARTNERS LLC, AS LENDER  
   
BY: /s/ Richard Smithline  
  Richard Smithline  
  Managing Member  

 

 

 

 

SCHEDULE A

PATENTS AND PATENT LICENSES

 

 

 

 

SCHEDULE B

TRADEMARKS AND TRADEMARK LICENSES

 

 

 

 

SCHEDULE C

COPYRIGHTS AND COPYRIGHT LICENSES

 

 

 

 

SCHEDULE D

EXISTING LIENS ON COLLATERAL

 

 

 

 

Exhibit 10.20

 

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 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. 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

 

CURATIVE BIOTECHNOLOGY, INC.

 

Warrant Shares: 22,857,143 Initial Exercise Date: March 2, 2022

 

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, Puritan Partners LLC, or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and on or prior to the close of business on the five (5) year anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from Curative Biotechnology, Inc., a Florida corporation (the “Company”), up to 22,857,143 shares of common stock, of the Company (the “Common Stock”) (subject to adjustment hereunder, the “Warrant Shares”). The purchase price of one Warrant Share under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

 

Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Purchase Agreement”), dated March 2, 2022, between the Company and the Purchaser.

 

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Section 2. Exercise.

 

(a) Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed copy by facsimile or e-mail attachment, of the Notice of Exercise Form annexed hereto. Within two (2) Trading Days following the date said Notice of Exercise is delivered to the Company, the Holder shall deliver 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) below is specified in the applicable Notice of Exercise. Notwithstanding anything herein to the contrary (although the Holder may surrender the Warrant to, and receive a replacement Warrant from, the Company), the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise Form within one (1) Trading Day of delivery of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledges and agrees that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

 

(b) Exercise Price. The exercise price per share of the Common Stock under this Warrant shall be $0.0001, subject to adjustment hereunder (the “Exercise Price”).

 

(c) Cashless Exercise. If at any time after the earlier of (i) the six month anniversary of the date of the Purchase Agreement and (ii) the completion of the then-applicable holding period required by Rule 144, or any successor provision then in effect, there is no effective Registration Statement registering, or no current prospectus available for, the resale of the Warrant Shares by the Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A x B) – (A x C)] by (B), where:

 

  (A) = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise;
       
  (B) = the VWAP for the Trading Day immediately prior to the date on which the Holder makes such “cashless exercise” election; and
       
  (C) = the Exercise Price of this Warrant, as adjusted hereunder, at the time of such exercise.

 

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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 Warrants being exercised may be tacked on to the holding period of the Warrant Shares. The Company agrees not to take any position contrary to this Section 2(c).

 

Notwithstanding anything herein to the contrary, if on the Termination Date (unless the Holder notifies the Company otherwise) if there is no effective Registration Statement covering the resale of the Warrant Shares by the Holder, then this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2 (c).

 

(d) Mechanics of Exercise.

 

(i) Delivery of Certificates Upon Exercise. Warrant Shares purchased hereunder shall be transmitted to the Holder by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s prime broker 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) this Warrant is being exercised via cashless exercise and Rule 144 is available in either case complying with the transfer restrictions set forth in the Purchase Agreement, and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise by the date that is two (2) Trading Days (five (5) Trading Days for addresses outside of the Continental United States) after the latest of (A) the delivery to the Company of the Notice of Exercise and (B) payment of the aggregate Exercise Price as set forth above (unless by cashless exercise, if permitted) (such date, the “Warrant Share Delivery Date”). The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised, with payment to the Company of the Exercise Price (or by cashless exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(vi) prior to the issuance of such shares, having been paid. The Company understands that a delay in the delivery of the Warrant Shares after the Warrant Share Delivery Date could result in economic loss to the Holder. As compensation to the Holder for such loss, the Company agrees to pay (as liquidated damages and not as a penalty) to the Holder for late issuance of Warrant Shares upon exercise of this Warrant the proportionate amount of $10 per trading Day (increasing to $20 per Trading Day after the fifth (5th) Trading Day) after the Warrant Share Delivery Date for each $1,000 of Exercise Price of Warrant Shares for which this Warrant is exercised which are not timely delivered. In no event shall liquidated damages for any one transaction exceed $1,000.00 for the first ten Trading Days. The Company shall pay any payments incurred under this Section 2(d)(i) in immediately available funds upon demand. Furthermore, in addition to any other remedies which may be available to the Holder, in the event that the Company fails for any reason to effect delivery of the Warrant Shares by the Warrant Share Delivery Date, the Holder may revoke all or part of the relevant Warrant exercise by delivery of a notice to such effect to the Company, whereupon the Company and the Holder shall each be restored to their respective positions immediately prior to the exercise of the relevant portion of this Warrant, except that the liquidated damages described above shall be payable through the date notice of revocation or rescission is given to the Company.

 

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(ii) Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the certificate or certificates representing 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 to this Warrant.

 

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

 

(iv) Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to deliver the Warrant Shares, or cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

 

(v) 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.

 

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(vi) Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate including any charges of any clearing firm, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and 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.

 

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

 

(e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates), 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 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 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. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act 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(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) 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 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(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within one Trading Day 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 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 not less than 61 days’ prior notice to the Company, may increase the Beneficial Ownership Limitation provisions of this Section 2(e) solely with respect to the Holder’s Warrant, provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any such increase will not be effective until the 61st day after such notice is delivered to the Company. The Holder may also decrease the Beneficial Ownership Limitation provisions of this Section 2(e) solely with respect to the Holder’s Warrant at any time, which decrease shall be effectively immediately upon delivery of notice to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

 

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Section 3. Certain Adjustments. Except with respect to an Exempt Issuance the following adjustments shall be made to this Warrant:

 

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

 

  (b) Adjustments for Issuance of Additional Securities in a Qualified Offering. In the event that the Company issue or sells additional shares of Common Stock or Common Stock Equivalents in a Qualified Offering at a price per share which multiplied by 75% is less than the Warrant Calculation Price, the number of Warrant Shares issuable upon exercise of this Warrant will increase to be equal to the product obtained by multiplying: (WCP/BP) x (WS) whereby:

 

(WCP) = the Warrant Calculation Price.

 

(BP) = 75% of the price per share sold in the Qualified Offering.

 

(WS) = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant immediately prior to the Qualified Offering if such exercise were by means of a cash exercise rather than a cashless exercise;

 

The term “Warrant Calculation Price” means $0.05

 

(c) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). Notwithstanding the foregoing, no Purchase Rights will be made under this Section 3(c) in respect of an Exempt Issuance.

 

(d) Pro Rata Distributions. If the Company, at any time while this Warrant is outstanding, shall distribute to all holders of Common Stock (and not to the Holder) evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants to subscribe for or purchase any security other than the Common Stock (which shall be subject to Section 3(a)), then in each such case the Holder will be entitled to acquire such evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants to subscribe for or purchase any security other than the Common Stock so distributed the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants to subscribe for or purchase any security other than the Common Stock. In either case the adjustments shall be described in a statement provided to the Holder of the portion of assets or evidences of indebtedness so distributed or such subscription rights applicable to one share of Common Stock. Such adjustment shall be made whenever any such distribution is made and shall become effective immediately after the record date mentioned above.

 

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(e) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation on the exercise of this Warrant), at the option of the Holder 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 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. Notwithstanding anything to the contrary, other than a Fundamental Transaction in which the Company is the surviving entity and the Company’s Common Stock continues to be quoted or listed on a Trading Market, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction, purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the greater of (i) the Black Scholes Value of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction and (ii) the positive difference between the cash per share paid in such Fundamental Transaction minus the then in effect Exercise Price; provided, however, that if the Fundamental Transaction is not within the Company’s control, including not approved by the Company’s Board of Directors, Holder shall only be entitled to receive from the Company or any Successor Entity, as of the date the Fundamental Transaction is consummated, the same type and form of consideration (and in the same proportion), as the greater of (i) the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to the holders of Common Stock in connection with the Fundamental Transaction and (ii) the positive difference between the cash per share paid in such Fundamental Transaction minus the then in effect Exercise Price, whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Stock are given a choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction. “Black Scholes Value” means the value of the unexercised portion of this Warrant based on the Black and Scholes Option Pricing Model obtained from the “OV” function on Bloomberg L.P. determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date,(B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg L.P. as of the Trading Day immediately following the public announcement of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (D) a remaining option time equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant prior to such Fundamental Transaction (without regard to any limitation on the exercise of this Warrant), and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein. Notwithstanding the foregoing, no adjustment shall be made pursuant to this Section 3(f) with respect to an Exempt Issuance (as defined in the Purchase Agreement)

 

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

 

(g) Notice to Holder.

 

(i) Adjustment to Exercise Price. Whenever the Exercise Price or the number of Warrant Shares to be received hereunder is adjusted pursuant to any provision of this Section 3, the Company shall promptly email to the Holder 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. The Holder may supply an email address to the Company and change such address.

 

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

 

Section 4. Transfer of Warrant.

 

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

 

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

 

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

 

Section 5. Miscellaneous.

 

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

 

(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, and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

 

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

 

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

 

Page 9 of 14
 

 

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use best efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

 

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

 

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

 

(f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered or if not exercised on a cashless basis when Rule 144 is available, may have restrictions upon resale imposed by state and federal securities laws.

 

(g) Non-waiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

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

 

Page 10 of 14
 

 

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

 

(j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate or that there is no irreparable harm and not to require the posting of a bond or other security.

 

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

 

(l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and Holder the Warrants issued pursuant to the Purchase Agreement.

 

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

 

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

 

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

 

(Signature Page Follows)

 

Page 11 of 14
 

 

Warrant Signature Page

 

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

 

  CURATIVE BIOTECHNOLOGY, INC.
     
  By: /s/ Richard Garr
  Name: Richard Garr
  Title: Chief Executive Officer

 

Page 12 of 14
 

 

NOTICE OF EXERCISE

 

TO: CURATIVE BIOTECHNOLOGY, INC.

 

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

 

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

 

[  ] in lawful money of the United States; or

 

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

 

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

 

_______________________________

 

(4) After giving effect to this Notice of Exercise, the undersigned will not have exceeded the Beneficial Ownership Limitation.

 

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

 

_______________________________

 

_______________________________

 

_______________________________

 

 

[SIGNATURE OF HOLDER]

 

Name of Investing Entity: ___________________________________________________________________________

 

Signature of Authorized Signatory of Investing Entity: _____________________________________________________

Name of Authorized Signatory: _______________________________________________________________________

Title of Authorized Signatory: ________________________________________________________________________

Date: ___________________________________________________________________________________________

 

Page 13 of 14
 

 

ASSIGNMENT FORM

 

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

 

CURATIVE BIOTECHNOLOGY, INC.

 

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

 

_______________________________________________ whose address is

 

_______________________________________________________________

 

_______________________________________________________________

 

Dated: ______________, _______

 

Holder’s Signature: _____________________________

 

Holder’s Address:  _____________________________

                                                                          

                                                                                   _____________________________

 

Signature Guaranteed: ___________________________________________

 

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

 

Page 14 of 14

 

 

Exhibit 10.21

 

LOCK-UP AGREEMENT

 

March 2, 2022

 

Each Purchaser referenced below:

 

Re:Securities Purchase Agreement, dated as of March 2, 2022 (the “Purchase Agreement”), between Curative Biotechnology, Inc., a Florida corporation (the “Company”), and the purchaser signatory thereto (the “Purchaser”)

 

Ladies and Gentlemen:

 

Defined terms not otherwise defined in this letter agreement (the “Letter Agreement”) shall have the meanings set forth in the Purchase Agreement. Pursuant to the Purchase Agreement and in satisfaction of a condition of the Company’s obligations under the Purchase Agreement, the undersigned irrevocably agrees with the Company that, from the date hereof until the earlier of (i) the Maturity Date of the Notes issued pursuant to the Purchase Agreement or (ii) 6 months from the date of a Qualified Offering (such period, the “Restriction Period”), the undersigned will not offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the undersigned or any Affiliate of the undersigned or any person in privity with the undersigned or any Affiliate of the undersigned), directly or indirectly, including sales pursuant to a registration statement, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act with respect to, any shares of common stock or common stock equivalents of the Company beneficially owned, held or hereafter acquired by the undersigned (the “Securities”); provided however that such restrictions will not apply to: (i) transfers of Securities as bona fide charitable contributions, gifts or donations, (ii) transfers or dispositions of the Securities to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, (iii) transfers or dispositions of the Securities by will, other testamentary document or intestate succession to the legal representative, heir, beneficiary or a member of the immediate family of the undersigned, (iv) transfers of the Securities to stockholders, direct or indirect affiliates (within the meaning set forth in Rule 405 under the Securities Act), current or former partners (general or limited), members or managers of the undersigned, as applicable, or to the estates of any such stockholders, affiliates, partners, members or managers, or to another corporation, partnership, limited liability company or other business entity that controls, is controlled by or is under common control with the undersigned, (v) transfers that occur by operation of law pursuant to a qualified domestic relations order or in connection with a divorce settlement, (vi) transfers or dispositions not involving a change in beneficial ownership, (vii) if the undersigned is a trust, transfers or dispositions to any beneficiary of the undersigned or the estate of any such beneficiary; provided that, in each case (i) through (vii) above, the transferee agrees in writing to be bound by the terms and conditions of this letter agreement and either the undersigned or the transferee provides Purchaser with a copy of such agreement promptly upon consummation of any such transfer, (viii) transfers pursuant to a bona fide third party tender offer, merger, consolidation or other similar transaction made to all holders of the Company’s capital stock involving a change of control of the Company, provided that in the event that such tender offer, merger, consolidation or other such transaction is not completed, the Securities shall remain subject to the restrictions contained in this Letter Agreement or (ix) the undersigned approving and assisting in the preparation of a registration statement on Form S-8 registering the shares of Common Stock subject to the Company’s equity compensation plans, but not selling such shares. For purposes of this Letter Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin.

 

 

 

 

Notwithstanding the restrictions imposed by this Letter Agreement, the undersigned may (a) exercise an option or warrant (including a net or cashless exercise of such option or warrant) to purchase shares of the Company’s Common Stock, provided that any such shares shall continue to be subject to the restrictions on transfer set forth in this letter agreement, (b) Securities to cover tax withholding obligations of the undersigned in connection with any option exercise or the vesting of any restricted stock or restricted stock unit award, provided that any such shares shall continue to be subject to the restrictions on transfer set forth in this letter agreement, or (c) establish a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of the Securities, provided that such plan does not provide for any transfers of Securities during the Restricted Period and provided further, that, no filing under the Exchange Act or other public announcement shall be required or shall be made voluntarily in connection with the establishment of such a plan.

 

The undersigned acknowledges that the execution, delivery and performance of this Letter Agreement is a material inducement to the Purchaser to complete the transactions contemplated by the Purchase Agreement and that the Purchaser (which shall be a third party beneficiary of this Letter Agreement), the Company shall be entitled to specific performance of the undersigned’s obligations hereunder. The undersigned hereby represents that the undersigned has the power and authority to execute, deliver and perform this Letter Agreement, that the undersigned has received adequate consideration therefor and that the undersigned will indirectly benefit from the closing of the transactions contemplated by the Purchase Agreement.

 

This Letter Agreement may not be amended or otherwise modified in any respect without the written consent of each of the Company, the Purchaser and the undersigned. This Letter Agreement shall be construed and enforced in accordance with the laws of the State of New York without regard to the principles of conflict of laws. The undersigned hereby irrevocably submits to the exclusive jurisdiction of the United States District Court sitting in the Southern District of New York and the courts of the State of New York located in Manhattan, for the purposes of any suit, action or proceeding arising out of or relating to this Letter Agreement, and hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that (i) it is not personally subject to the jurisdiction of such court, (ii) the suit, action or proceeding is brought in an inconvenient forum, or (iii) the venue of the suit, action or proceeding is improper. The undersigned hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by receiving a copy thereof sent to the Company at the address in effect for notices to it under the Purchase Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. The undersigned hereby waives any right to a trial by jury. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. The undersigned agrees and understands that this Letter Agreement does not intend to create any relationship between the undersigned Purchaser and that Purchaser is not entitled to cast any votes on the matters herein contemplated and that no issuance or sale of the Securities is created or intended by virtue of this Letter Agreement.

 

[Signature page follows.]

 

-2-

 

 

This Letter Agreement may be executed in two or more counterparts, all of which when taken together may be considered one and the same agreement.

 

   
Signature    
     
   
Print Name    
     
President      
Position in Company    

 

Address for Notice:    
     
1825 NW Corporate Blvd. #110      
     
Boca Raton, FL 33431      

 

 
   
Number of shares of Common Stock

 

   
Number of shares of Common Stock underlying subject to warrants, options, debentures or other convertible securities

 

By signing below, the Company each agrees to enforce the restrictions on transfer set forth in this Letter Agreement.

 

CURATIVE BIOTECHNOLOGY, INC.

 

  
   
By: /s/ Richard Garr  
Name: Richard Garr  
Title: CEO  

 

 

 

 

Exhibit 10.23

 

First Amendment to Transaction Documents

 

This First Amendment to the Transaction (this “Amendment”) is entered into as of August 18, 2022, by and between Puritan Partners LLC, a New York limited liability company (“Puritan Partners”) and Curative Biotechnology, Inc., a Florida corporation (the “Company”), having its principal place of business at 1825 NW Corporate Blvd., Suite 110 Boca Raton, FL 33431, each a “Party” and collectively the “Parties”. Capitalized terms used herein without definition shall have the meanings ascribed to them in the Securities Purchase Agreement, dated as of March 2, 2022, entered into between the Parties (the “Securities Purchase Agreement”)

 

Recitals

 

WHEREAS, pursuant to the Transaction Documents, Puritan Partners purchased a 12.5% Original Issue Discount Senior Secured Note in the principal amount of $1,142,857.14 due March 2, 2023 (the “Note”) and was issued a common stock purchase warrant to purchase 22,857,143 shares of the common stock at $0.0001 exercise price (the “Warrants”);

 

WHEREAS, Puritan Partners and Company are parties to the Transaction Documents and the parties desire to amend the respective Transaction Documents in accordance with the terms of this Amendment.

 

NOW, THEREFORE, in consideration of the following and other consideration, the receipt of which is hereby acknowledged, the parties agree as follows:

 

  (a) Qualified Offering. The definition of “Qualified Offering” set forth in Section 1.1 of the Securities Purchase Agreement (and as referenced in the other Transaction Documents) is deleted in its entirety and hereby replaced with the following:

 

“Qualified Offering” means a debt (including convertible debt) or equity financing of either the Company or its Subsidiary’s securities resulting in aggregate gross proceeds to the Company of at least $ 7,200,000. For purposes of clarity, to qualify as a Qualified Offering, the gross proceeds must be raised in one (1) offering (which may have one or several closings) and the proceeds of multiple offerings of securities with different terms will not be aggregated together.

 

  (b) Monthly Redemption Date. The definition of “Monthly Redemption Date” set forth in Section 1 of the Note is deleted in its entirety and hereby replaced with the following:

 

“Monthly Redemption Date” means the second of each month, commencing immediately upon October 2, 2022 and terminating upon the full redemption of this Note.

 

 

 

 

(c) Monthly Redemption Amount. The definition of “Monthly Redemption Amount” set forth in Section 1 of the Note is deleted in its entirety and hereby replaced with the following:

 

“Monthly Redemption Amount” means, as to a Monthly Redemption, one sixth of the original principal amount at 110% of such principal amount, plus accrued but unpaid interest, liquidated damages and any other amounts then owing to the Holder in respect of this Note.

 

  (c) In further consideration for extending by one month the straight-line amortization payment requirement under the Note, the Company agrees that (i) the number of shares underlying the Warrant shall be increased from 22,857,143 to 24,761,905 shares and (ii) upon the closing of Company’s offering being registered pursuant to the S-1 Registration Statement (Registration. No. 333-264339), the outstanding principal balance, along with any accrued fees or costs, will be repaid, in full pursuant to either the Optional Redemption provisions contained in Section 5(a) of the Note or the Mandatory Prepayment provisions contained in Section 5(d) of the Note, as the case may be.

 

Each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first written above.

 

  CURATIVE BIOTECHNOLOGY, INC.
                            
  By: /s/ Richard Garr
  Name: Richard Garr
  Title: Chief Executive Officer
     
  Puritan Partners LLC
     
  By: /s/ Richard Smithline
  Name: Richard Smithline
  Title: Managing Member

 

 

 

 

Exhibit 23.01

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

Curative Biotechnology, Inc.

Boca Raton, Florida

 

We hereby consent to the incorporation by reference in the Prospectus constituting a part of this Registration Statement on Form S-1 of Curative Biotechnology, Inc. of our report dated March 25, 2022 relating to the financial statements at and for the years ended December 31, 2021 and 2020. Our report contains an explanatory paragraph regarding the Company’s ability to continue as a going concern.

 

We also consent to the reference to us under the caption “Experts” in such Registration Statement.

 

/s/ Daszkal Bolton LLP

 

Boca Raton, Florida

September 9, 2022

 

 

 

 

Exhibit 107

 

Calculation of Filing Fee Tables

 

Form S-1

(Form Type)

 

Curative Biotechnology, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

Table 1: Newly Registered Securities
   Security Type  Security Class Title  Fee Calculation or Carry Forward Rule   Amount Registered   Proposed Maximum Offering Price Per Unit   Maximum Aggregate Offering Price (1)   Fee Rate   Amount of Registration Fee 
Fees to be Paid  Other  Units, each consisting of one share of common stock, par value $0.0001 per share, and one Warrant (4)   457(o)    1,314,285   $7.00   $9,199,995   $0.0000927    853.00 
Fees to be Paid  Equity  Shares of common stock, par value $0.0001 per share, included as part of Units (2)   457(g)    1,314,285   $7.00    (5)   (5)   (5)
Fees to be Paid  Equity  Warrants, included as part of Units   457(g)    1,314,285   $7.00   $9,199,995   $0.0000927    853.00 
Fees to be Paid  Equity  Shares of common stock, par value $0.0001 per share, underlying warrants included in the Units (2)   457(o)    1,314,285   $7.00    (5)   (5)   (5)
Fees to be Paid 

Equity

 

Underwriter’s Warrants (3)

   

457(g

)   

65,713

   $

8.75

   $

574,989

  

$

0.0000927

  

53.30 
                                     
Fees to be Paid  Equity  Shares of common stock, par value $0.0001 per share, underlying the Underwriter’s Warrants (2)   

457(o

)   

65,713

   $

8.75

    

(5

)   

(5

)   

(5

)
                                     
      TOTALS                 $18,974,979        $1,759.30(6)

 

(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended (the “Securities Act”).

(2) Pursuant to Rule 416 under the Securities Act, there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from stock splits, stock dividends or similar transactions.

(3) Represents Underwriter’ warrants to purchase up to the number of shares of Common Stock equal to 5% of the number of shares of Common Stock underlying Units sold in this offering, including the option to purchase over-allotments at an exercise price equal to 125% of the public offering price per Unit.

(4) Includes 171,428 Units that the underwriters have the option to purchase to cover over-allotments, if any.

(5) No separate registration fee required pursuant to Rule 457(g) under the Securities Act.

(6) Registration fee previously paid in full upon filing of S-1/A filed on August 10, 2022 and September 1, 2022.