UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported): | October 16, 2017 |
GREY CLOAK TECH INC.
(Exact name of registrant as specified in its charter)
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Nevada (State or other jurisdiction of incorporation) |
333-202542 (Commission File Number) |
47-2594704 (I.R.S. Employer Identification No.) |
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10300 W. Charleston Las Vegas, NV 89135 (Address of principal executive offices) (zip code) |
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(702) 201-6450 (Registrant’s telephone number, including area code) |
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| (Former name or former address, if changed since last report.) | ||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company [X]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [_]
Section 1 – Registrant’s Business and Operations
| Item 1.01 | Entry into a Material Definitive Agreement. |
Acquisition of Eqova Life Sciences and the Share Exchange Agreement
On October 17, 2017, Grey Cloak Tech Inc. (the “ Company ” also referred to herein as “ us ,” “ we ” and “ our ”), entered into a Share Exchange Agreement by and among the Company, Eqova Life Sciences, a Nevada corporation, Patrick Stiles, and Patrick Stiles in his capacity as the Selling Members’ Representative, whereby we issued and exchanged 1,100,000 shares of our Series A Convertible Preferred Stock for all of the outstanding securities of Eqova Life Sciences. Through this exchange of securities pursuant to the Exchange Agreement (the “ Exchange ”), Eqova Life Sciences is now our wholly-owned subsidiary. The shares of Series A Convertible Preferred Stock issued in this transaction are convertible into an aggregate number of shares that would equal 66% of our outstanding common stock after conversion. Each Share of our Series A Convertible Preferred Stock is convertible into 0.00006% of our outstanding common stock as of the date of conversion.
Per a Shareholders Agreement, dated October 17, 2017, by and among the Company, Fred Covely, William Bossung, Patrick Stiles and the Eqova Life Sciences Shareholders, only one-half of the shares issued in the Exchange to the Eqova Life Sciences Shareholders are fully vested. The other half will vest upon the earliest date of Eqova Life Sciences’ achievement of one of the following: (i) $100,000 of gross sales per month for three consecutive months, or (ii) $300,000 of gross sales in any calendar quarter. Any shares that remain unvested on October 17, 2019 will be repurchased by the Company at a price of $0.01 per share. We agreed not to issue any shares of Series A Convertible Preferred Stock without the consent of a majority of the Series A Convertible Preferred Stockholders.
The Share Exchange Agreement contains customary representations and warranties made by the Company and by Eqova Life Sciences. Eqova Life Sciences will indemnify us for losses resulting from its breach of the Share Exchange Agreement. The Share Exchange Agreement and the Shareholders Agreement also contain other certain terms and conditions which are common in such agreements, and reference is made herein to the text of those agreements which will be filed in our next Quarterly Report on Form 10-Q.
As part of the Exchange, we have brought on Eqova Life Sciences’ President and Director, Patrick Stiles, to serve as our President and Chief Executive Officer and as a Director on our Board of Directors.
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A press release issued on October 23, 2017 announcing the acquisition of Eqova Life Sciences is attached hereto as Exhibit 99.1 and is incorporated herein by this reference.
Stiles Employment Agreement
On October 17, 2017, we entered into an Employment Agreement with Patrick Stiles, President of Eqova Life Sciences. Pursuant to Mr. Stiles’ Employment Agreement, we have agreed to pay Mr. Stiles an annual base salary of $140,000, and he may receive employee stock options as determined by the Board of Directors. Mr. Stiles’ employment is “at will” and either party may terminate the agreement at any time.
If terminated without Cause or as a result of Constructive Termination, Mr. Stiles will receive severance equal to three months’ pay at his most recent Base Salary. If Mr. Stiles is terminated for Cause, Disability or death, or voluntarily resigns, he will not receive any severance, only unpaid salary as of the date of termination and vested benefits. The Employment Agreement includes non-compete and non-solicitation provisions that apply during the term of the Employment Agreement and for a period of one year after Mr. Stiles’ termination. Capitalized terms in this section not defined herein have the meaning given to such terms in the Employment Agreement.
Mr. Stiles’ Employment Agreement also requires that certain proprietary information of the Company be kept confidential. The Company will be the owner of certain intellectual property conceived or made by Mr. Stiles prior to termination of the Employment Agreement. Mr. Stiles’ Employment Agreement also contains other certain terms and conditions which are common in such agreements, and reference is made herein to the text of the Employment Agreement which will be filed in our next Quarterly Report on Form 10-Q.
Bossung Employment Agreement
On October 17, 2017, we entered into an Employment Agreement with William Bossung, our Chief Financial Officer. Pursuant to Mr. Bossung’s Employment Agreement, we have agreed to pay Mr. Bossung an annual base salary of $140,000, and he may receive employee stock options as determined by the Board of Directors. Mr. Bossung’s employment is “at will” and either party may terminate the agreement at any time.
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If terminated without Cause or as a result of Constructive Termination, Mr. Bossung will receive severance equal to three months’ pay at his most recent Base Salary. If Mr. Bossung is terminated for Cause, Disability or death, or voluntarily resigns, he will not receive any severance, only unpaid salary as of the date of termination and vested benefits. The Employment Agreement includes non-compete and non-solicitation provisions that apply during the term of the Employment Agreement and for a period of one year after Mr. Bossung’s termination. Capitalized terms in this section not defined herein have the meaning given to such term in the Employment Agreement.
Mr. Bossung’s Employment Agreement also requires that certain proprietary information of the Company be kept confidential. The Company will be the owner of certain intellectual property conceived or made by Mr. Bossung prior to termination of the Employment Agreement. Mr. Bossung’s Employment Agreement also contains other certain terms and conditions which are common in such agreements, and reference is made herein to the text of the Employment Agreement which will be filed in our next Quarterly Report on Form 10-Q.
Section 3 – Securities and Trading Markets
| Item 3.02 | Unregistered Sale of Equity Securities. |
The disclosure in Item 1.01 above regarding the issuance of securities in the Exchange is incorporated herein by reference.
On October 17, 2017, we issued a Convertible Promissory Note, in the amount of $30,000, and a Warrant to purchase 1,200,000 shares of our common stock, to Fred Covely to satisfy obligations owed to Mr. Covely by the Company. The Convertible Promissory Note has a maturity date of October 17, 2018 and is convertible into shares of our common stock at a conversion price equal to fifty percent (50%) of the average of the closing trading price for our common stock during the three trading day period ending on the last trading day prior to the conversion date. The warrants have an exercise price of $0.25 per share, may be exercised immediately and expire on October 17, 2020. The Convertible Promissory Note and Warrant also contain other certain terms and conditions which are common in such agreements, and reference is made herein to the text of these agreements which will be filed in our next Quarterly Report on Form 10-Q.
On October 17, 2017, we issued 41,403 and 146,330 shares of Series A Convertible Preferred Stock, restricted in accordance with Rule 144, to Fred Covely and William Bossung, respectively.
The shares of common and preferred stock issued pursuant to the Share Exchange Agreement and in the transactions listed above were offered and sold in reliance on an exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation D. The investors have represented that each is an accredited investor, as defined in Regulation D, and has acquired the securities for investment purposes only and not with a view to, or for sale in connection with, any distribution thereof. The securities were not issued through any general solicitation or advertisement.
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Section 5 – Corporate Governance and Management
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On October 17, 2017, Patrick Stiles, age 33, was appointed to our Board of Directors and as our Chief Executive Officer and President. Mr. Stiles has been the Chief Executive Officer and Co-Founder of Eqova Life Sciences since August 2017, overseeing product development, supply chain and technology. Eqova Life Sciences, located in Denver, Colorado, develops clinical grade Full Spectrum Hemp Oil products, sold exclusively via partnerships with licensed medical practitioners to use with their patients. Mr. Stiles has also served as the Chief Executive Officer of Vidalytics, LLC since August 2016, and he has overseen product development and marketing. Since September 2010, Mr. Stiles has been the Chief Executive Officer of Zen Life Supplements, LLC, focusing on product development, marketing, customer service and technology.
Mr. Stiles started his career in sales and finance and held insurance licenses in Colorado. He graduated Summa Cum Laude with a Bachelor’s in Finance and a minor in Business Management from Regis University in Denver, Colorado in December of 2010.
On October 17, 2017, Fred Covely was appointed as our Chief Technology Officer. Information with respect to Mr. Covely can be found in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on April 14, 2017, under the heading “Item 10 - Directors, Executive Officers and Corporate Governance,” and this disclosure with respect to Mr. Covely is incorporated herein by reference.
See Item 1.01, above, for a description of the terms of our employment agreement with Mr. Stiles, which description is incorporated herein by reference.
See Item 1.01, above, for a description of the terms of our employment agreement with Mr. Bossung, which description is incorporated herein by reference.
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| Item 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
In connection with the Exchange, our Board of Directors amended the terms of our preferred stock, Series A Convertible Preferred Stock, par value $0.001 per shares (the “ Series A Preferred Stock ”), and on October 16, 2017, we filed an Amended and Restated Certificate of Designation of the Rights, Preferences, Privileges and Restrictions of the Series A Convertible Preferred Stock (the “ Amended Certificate ”) with the Secretary of State of the State of Nevada. The Amended Certificate reduces the number of preferred shares designated as Series A Preferred Stock from 25,000,000 shares to 1,333,334 shares. The Amended Certificate also changes the conversion and voting rights of the Series A Preferred Stock. The Series A Preferred Stock is now convertible into the number of shares of our common stock equal to 0.00006% of our outstanding common stock upon conversion. The voting rights of the Series A Preferred Stock are now equal to the number of shares of common stock into which the Series A Preferred Stock may convert. The other material terms of the Amended Certificate remain the same as the original Certificate of Designation and are set forth below.
The holders of Series A Preferred Stock shall receive noncumulative dividends on an as-converted basis at the same time and in the same form as any dividends paid out on shares of our common stock. Other than as set forth in the previous sentence, the Amended Certificate provides that no other dividends shall be paid on Series A Preferred Stock. Dividends on the Series A Preferred Stock are not mandatory or cumulative. There are no sinking fund provisions applicable to the Series A Preferred Stock and the Series A Preferred Stock is not redeemable.
In the event of any liquidation, dissolution or winding up of the Company, the Series A Preferred Stock will be paid prior and in preference to any payment or distribution on any shares of common stock, or subsequent series of preferred stock, an amount per share equal to the Original Issue Price of the Series A Preferred Stock and the amount of any accrued or declared but unpaid dividends. The Original Issue Price is set at $0.50 per share for the Series A Preferred Stock. The holders of the Series A Preferred Stock will then receive distributions along with the holders of the common stock on a pari passu basis according to the number of shares of common stock the Series A Preferred holders would be entitled if they converted their shares of Series A Convertible Preferred Stock at the time of such distribution.
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As long as any shares of Series A Preferred Stock remain outstanding, the Amended Certificate provides that the Company shall not, without the affirmative vote of holders of a majority of the then-outstanding Series A Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Series A Preferred Stock or alter or amend the Amended Certificate, (b) increase the number of authorized shares of Series A Preferred Stock or (c) effect a stock split or reverse stock split of the Series A Preferred Stock or any like event.
Each share of Series A Preferred Stock is convertible at any time at the holder's option into the number of fully paid and nonassessable shares of our common stock that is equal to 0.00006% of our outstanding common stock upon conversion. Each share is subject to adjustment for stock splits, stock dividends, distributions, subdivisions, capital reorganization, reclassification and combinations.
Each share of Series A Preferred Stock is entitled to the number of votes equal to the number of shares that the shareholder may receive upon conversion of all Series A Preferred Stock, for all matters to which the shareholders of the Company are entitled or required to vote. The holders of the Series A Preferred Stock are entitled to vote on all matters on which the holders of common stock are entitled to vote.
Without the approval of a majority of the holders of the outstanding Series A Preferred Stock, we may not (i) alter or change the rights, preferences, or privileges of the Series A Convertible Preferred Stock, (ii) increase or decrease the number of authorized shares of Series A Convertible Preferred Stock, or (iii) authorize the issuance of securities having a preference over or on par with the Series A Preferred Stock.
This foregoing description of the Amended Certificate does not purport to be complete and is qualified in its entirety by reference to the complete text of such certificate, a copy of which is filed herewith as Exhibit 3.1.
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Section 9 – Financial Statements and Exhibits
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| 3.1 | Amended and Restated Certificate of Designation of the Series A Convertible Preferred Stock, dated October 16, 2017. | |
| 99.1 | Press release of Grey Cloak Tech Inc., dated October 23, 2017. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Grey Cloak Tech Inc. | |
| Dated: October 23, 2017 | /s/ William Bossung |
| By: William Bossung | |
| Its: Chief Financial Officer and Secretary |
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EXHIBIT INDEX
AMENDED AND RESTATED
CERTIFICATE OF DESIGNATION
OF THE RIGHTS, PREFERENCES, PRIVILEGES
AND RESTRICTIONS, WHICH HAVE NOT BEEN SET
FORTH IN THE CERTIFICATE OF INCORPORATION
OR IN ANY AMENDMENT THERETO,
OF THE
SERIES A CONVERTIBLE PREFERRED STOCK
OF
GREY CLOAK TECH INC.
The undersigned, William Bossung, does hereby certify that:
A. He is a Director and the Secretary of Grey Cloak Tech Inc., a Nevada corporation (the “ Company ”).
B. The Certificate of Incorporation of the Company, as amended, authorizes a class of stock designated as Preferred Stock, with a par value of $0.001 per share (the “ Preferred Class ”), comprising seventy five million (75,000,000) shares, and provides that the Board of Directors of the Company may fix the terms, including any dividend rights, dividend rates, conversion rights, voting rights, rights and terms of any redemption, redemption, redemption price or prices, and liquidation preferences, if any, of the Preferred Class;
C. On April 6, 2017, the Company filed a Certificate of Designation to create, designate and authorize a new series of preferred stock, the “ Series A Convertible Preferred Stock ” having certain rights, preferences, privileges and restrictions as set forth therein;
D. The Board of Directors believes it in the best interests of the Company to (i) amend and restate the Certificate of Designation for the Series A Convertible Preferred Stock, and (ii) to reduce the authorized shares designated as Series A Convertible Preferred Stock from twenty five million (25,000,000) shares to one million three hundred thirty three thousand three hundred thirty four (1,333,334) shares, having certain rights, preferences, privileges, restrictions and other terms relating to the Series A Convertible Preferred Stock as set forth herein; and
E. None of the Series A Convertible Preferred Stock are issued or outstanding.
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby fix and determine the rights, preferences, privileges, restrictions and other matters relating do the Series A Convertible Preferred Stock as follows:
1. Definitions . For purposes of this Certificate of Designation, the following definitions shall apply:
1.1 “ Available Funds and Assets ” shall have the meaning set forth in Section 3 hereof.
1.2 “ Board ” shall mean the Board of Directors of the Company.
1.3 “ Company ” shall mean Grey Cloak Tech Inc., a Nevada corporation.
1.4 “ Common Stock ” shall mean the Common Stock, $0.001 par value per share, of the Company.
1.5 “ Common Stock Dividend ” shall mean a stock dividend declared and paid on the Common Stock that is payable in shares of Common Stock.
1.6 “ Conversion Date ” shall have the meaning set forth in Section 4.2 .
1.7 “ Distribution ” shall mean the transfer of cash or property by the Company to one or more of its stockholders without consideration, whether by dividend or otherwise (except a dividend in shares of Company's stock).
1.8 “ Original Issue Date ” shall mean the date on which the first share of Series A Preferred Stock is issued by the Company.
1.9 “ Original Issue Price ” shall mean Fifty Cents ($0.50) per share for the Series A Convertible Preferred Stock.
1.10 “ Person ” shall mean an individual, a corporation, a partnership, an association, a limited liability company, an unincorporated business organization, a trust or other entity or organization, and any government or political subdivision or any agency or instrumentality thereof.
1.11 “ Series A Preferred Stock ” shall mean the Series A Convertible Preferred Stock, $0.001 par value per share, of the Company.
1.12 “ Subsidiary ” shall mean any corporation or limited liability corporation of which at least fifty percent (50%) of the outstanding voting stock or membership interests, as the case may be, is at the time owned directly or indirectly by the Company or by one or more of such subsidiary corporations.
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2. Dividend Rights .
2.1 In each calendar year, the holders of the then outstanding Series A Convertible Preferred Stock shall be entitled to receive, when, as and if declared by the Board, out of any funds and assets of the Corporation legally available therefore, noncumulative dividends in an amount equal to any dividends or other Distribution on the Common Stock in such calendar year (other than a Common Stock Dividend). No dividends (other than a Common Stock Dividend) shall be paid, and no Distribution shall be made, with respect to the Common Stock unless dividends in such amount shall have been paid or declared and set apart for payment to the holders of the Series A Convertible Preferred Stock simultaneously. Dividends on the Series A Convertible Preferred Stock shall not be mandatory or cumulative, and no rights or interest shall accrue to the holders of the Series A Convertible Preferred Stock by reason of the fact that the Corporation shall fail to declare or pay dividends on the Series A Convertible Preferred Stock, except for such rights or interest that may arise as a result of the Corporation paying a dividend or making a Distribution on the Common Stock in violation of the terms of this Section 2 .
2.2 Common Stock Dividend Participation Rights . After the dividends required by Section 2.1 have been paid, any additional dividends shall be declared pro rata on the Common Stock and the Series A Convertible Preferred Stock on a pari passu basis according to the number of shares of Common Stock held by such holders, where each holder of shares of Series A Convertible Preferred Stock is to be treated for this purpose as holding the number of shares of Common Stock to which the holders thereof would be entitled if they converted their shares of Series A Convertible Preferred Stock at the time of such dividend in accordance with Section 4 hereof.
2.3 Non-Cash Dividends . Whenever a dividend or Distribution provided for in this Section 2 shall be payable in property other than cash (other than a Common Stock Dividend), the value of such dividend or Distribution shall be deemed to be the fair market value of such property as determined in good faith by the Board.
3. Liquidation Rights . In the event of any liquidation, dissolution or winding up of the Company; whether voluntary or involuntary, the funds and assets of the Company that may be legally distributed to the Company's shareholders (the “ Available Funds and Assets ”) shall be distributed to shareholders in the following manner:
3.1 Series A Convertible Preferred Stock . The holders of each share of Series A Preferred Stock then outstanding shall be entitled to be paid, out of the Available Funds and Assets, and prior and in preference to any payment or distribution (or any setting apart of any payment or distribution) of any Available Funds and Assets on any shares of Common Stock or subsequent series of preferred stock, an amount per share equal to the Original Issue Price of the Series A Convertible Preferred Stock plus the sum of all dividends accrued but unpaid pursuant to Section 2.1 above and all declared but unpaid dividends on the Series A Convertible Preferred Stock. If upon any liquidation, dissolution or winding up of the Company, the Available Funds and Assets shall be insufficient to permit the payment to holders of the Series A Convertible
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Preferred Stock of their full preferential amount as described in this subsection, then all of the remaining Available Funds and Assets shall be distributed among the holders of the then outstanding Series A Convertible Preferred Stock pro rata, according to the number of outstanding shares of Series A Convertible Preferred Stock held by each holder thereof.
3.2 Participation Rights . If there are any Available Funds and Assets remaining after the payment or distribution (or the setting aside for payment or distribution) to the holders of the Series A Convertible Preferred Stock of their full preferential amounts described above in this Section 3 , then all such remaining Available Funds and Assets shall be distributed among the holders of the then outstanding Common Stock and the Series A Convertible Preferred Stock on a pari passu basis according to the number of shares of Common Stock held by such holders, where each holder of shares of Series A Convertible Preferred Stock is to be treated for this purpose as holding the number of shares of Common Stock to which the holders thereof would be entitled if they converted their shares of Series A Convertible Preferred Stock at the time of such dividend in accordance with Section 4 .
3.3 Merger or Sale of Assets . A reorganization or any other consolidation or merger of the Company with or into any other corporation, or any other sale of all or substantially all of the assets of the Company, shall not be deemed to be a liquidation, dissolution or winding up of the Company within the meaning of this Section 3 , and the Series A Convertible Preferred Stock shall be entitled only to (i) the right provided in any agreement or plan governing the reorganization or other consolidation, merger or sale of assets transaction, (ii) the rights contained in the Nevada Revised Statutes and (iii) the rights contained in other Sections hereof.
3.4 Non-Cash Consideration . If any assets of the Company distributed to shareholders in connection with any liquidation, dissolution or winding up of the Company are other than cash, then the value of such assets shall be their fair market value as determined by the Board.
4. Conversion Rights .
4.1 Conversion of Preferred Stock . Each share of Series A Convertible Preferred Stock shall be convertible, at the option of the holder thereof, at any time after the issuance of such shares, into shares of fully paid and nonassessable shares of Common Stock of the Company equal to 0.00006% of the outstanding Common Stock of the Company upon conversion.
4.2 Procedures for Exercise of Conversion Rights . The holders of any shares of Series A Convertible Preferred Stock may exercise their conversion rights as to all such shares or any part thereof by delivering to the Company during regular business hours, at the office of any transfer agent of the Company for the Series A Convertible Preferred Stock, or at the principal office of the Company or at such other place as may be designated by the Company, the certificate or certificates for the shares to be
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converted, duly endorsed for transfer to the Company (if required by the Company), accompanied by written notice stating that the holder elects to convert such shares. Conversion shall be deemed to have been effected on the date when such delivery is made, and such date is referred to herein as the “ Conversion Date .” As promptly as practicable after the Conversion Date, but not later than five (5) business days thereafter, the Company shall issue and deliver to or upon the written order of such holder, at such office or other place designated by the Company, a certificate or certificates for the number of full shares of Common Stock to which such holder is entitled and a check for cash with respect to any fractional interest in a share of Common Stock as provided in Section 4.3 below. The holder shall be deemed to have become a shareholder of record on the Conversion Date. Upon conversion of only a portion of the number of shares of Series A Convertible Preferred Stock represented by a certificate surrendered for conversion, the Company shall issue and deliver to or upon the written order of the holder of the certificate so surrendered for conversion, at the expense of the Company, a new certificate covering the number of shares of Series A Convertible Preferred Stock representing the unconverted portion of the certificate so surrendered.
4.3 No Fractional Shares . No fractional shares of Common Stock or scrip shall be issued upon conversion of shares of Series A Convertible Preferred Stock. If more than one share of Series A Convertible Preferred Stock shall be surrendered for conversion at any one time by the same holder, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of Series A Convertible Preferred Stock so surrendered. Instead of any fractional shares of Common Stock which would otherwise be issuable upon conversion of any shares of Series A Convertible Preferred Stock, the Company shall pay a cash adjustment in respect of such fractional interest equal to the fair market value of such fractional interest as determined by the Company’s Board of Directors.
4.4 Payment of Taxes for Conversions . The Company shall pay any and all issue and other taxes that may be payable in respect of any issue or delivery of shares of Common Stock on conversion pursuant hereto of Series A Convertible Preferred Stock. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock in a name other than that in which the shares of Series A Convertible Preferred Stock so converted were registered, and no such issue or delivery shall be made unless and until the person requesting such issue has paid to the Company the amount of any such tax, or has established, to the satisfaction of the Company, that such tax has been paid.
4.5 Reservation of Common Stock . The Company shall at all times reserve and keep available, out of its authorized but unissued Common Stock, solely for the purpose of effecting the conversion of the Series A Convertible Preferred Stock, the full number of shares of Common Stock deliverable upon the conversion of all shares of all series of preferred stock from time to time outstanding.
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4.6 Registration or Listing of Shares of Common Stock . If any shares of Common Stock to be reserved for the purpose of conversion of shares of Series A Convertible Preferred Stock require registration or listing with, or approval of, any governmental authority, stock exchange or other regulatory body under any federal or state law or regulation or otherwise, before such shares may be validly issued or delivered upon conversion, the Company will in good faith and as expeditiously as possible endeavor to secure such registration, listing or approval, as the case may be.
4.7 Status of Common Stock Issued Upon Conversion . All shares of Common Stock which may be issued upon conversion of the shares of Series A Convertible Preferred Stock will upon issuance by the Company be validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issuance thereof.
4.8 Status of Converted Preferred Stock . In case any shares of Series A Convertible Preferred Stock shall be converted pursuant to this Section 4 , the shares so converted shall be canceled and shall not be re-issuable by the Company.
5. Redemption . The Series A Convertible Preferred Stock shall not be redeemable.
6. Reorganization .
6.1 General Provisions . In case, at any time after the date hereof, of any capital reorganization, or any reclassification of the stock of the Company (other than a change in par value or as a result of a stock dividend or subdivision, split-up or combination of shares), or the consolidation or merger of the Company with or into another person (other than a consolidation or merger in which the Company is the continuing entity and which does not result in any change in the Common Stock), or of the sale or other disposition of all or substantially all the properties and assets of the Company as an entirety to any other person, the shares of Series A Convertible Preferred Stock shall, after such reorganization, reclassification, consolidation, merger, sale or other disposition, be convertible into the kind and number of shares of stock or other securities or property of the Company or of the entity resulting from such consolidation or surviving such merger or to which such properties and assets shall have been sold or otherwise disposed to which such holder would have been entitled if immediately prior to such reorganization, reclassification, consolidation, merger, sale or other disposition it had converted its shares of Series A Convertible Preferred Stock into Common Stock. The provisions of this Section 6.1 shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales or other dispositions.
6.2 No Impairment . The Company will not, through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, including amending this Certificate of Designation, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith
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assist in the carrying out of all the provisions of this Section 6 and in the taking of all such action as may be necessary or appropriate in order to protect the conversion rights of the holders of Series A Convertible Preferred Stock against impairment. This provision shall not restrict the Company from amending its Articles of Incorporation in accordance with the Nevada Revised Statutes and the terms hereof.
7. Voting Provisions . Each outstanding share of Series A Convertible Preferred Stock shall be entitled to a number of votes per share equal to the number of shares of Common Stock to which the holders thereof would be entitled if they converted their shares of Series A Convertible Preferred Stock as of the record date for such vote, on all matters to which the shareholders of the Corporation are entitled or required to vote. Except as otherwise expressly provided herein or as required by law, the holders of Preferred Stock and the holders of Common Stock shall vote together and not as separate classes. The holders of shares of the Preferred Stock shall be entitled to vote on all matters on which the Common Stock shall be entitled to vote. Fractional votes shall not, however, be permitted and any fractional voting rights shall be disregarded.
8. Protective Provisions . The Company may not take any of the following actions without the approval of a majority of the holders of the outstanding Series A Convertible Preferred Stock: (i) alter or change the rights, preferences, or privileges of the Series A Convertible Preferred Stock, (ii) increase or decrease the number of authorized shares of Series A Convertible Preferred Stock, or (iii) authorize the issuance of securities having a preference over or on par with the Series A Convertible Preferred Stock.
[remainder of page intentionally left blank; signature page to follow]
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We further declare under penalty of perjury under the laws of the State of Nevada that the matters set forth in this certificate are true and correct of our own knowledge.
Executed on October 16, 2017.
| /s/ William Bossung _________ |
| William Bossung, Director and Secretary |
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Grey Cloak Tech Completes Acquisition of Eqova Life Sciences
LAS VEGAS, NV -- (Marketwired) -- 10/23/17 -- Grey Cloak Tech Inc. (OTCQB: GRCK) announced today that it has acquired 100% in an all-stock transaction Eqova Life Sciences, a medically-focused CBD company .
According to The Hemp Business Journal, CBD products marketplace are projected to grow by 700% by 2020 with annual sales reaching $2.1 billion.
Eqova Life Sciences, located in Denver Colorado, develops clinical grade Full Spectrum Hemp Oil products, sold exclusively via partnerships with licensed medical practitioners to use with their patients. To date, no other Hemp Oil company exclusively focuses on the practitioner market, leaving it largely underserved.
Eqova has approximately $150,000 retail value of CBD inventory which is expected to be sold by the end of 2017. Eqova has hundreds of relationships with suppliers, vendors and medical professionals who can carry their products, dozens of independent sales reps who can land sales for Eqova as well as thousands in sales ready to book to GRCK’s income statement.
Eqova anticipates dominating the medical practitioner market with science-backed education and superior products that utilize standardized dosing & unique delivery methods. The exact measures medical professionals demand in order to use Full Spectrum Hemp Oil & CBD more widely in their practices.
Medical professionals do not want counter-culture brands with confusing labels and inconsistent servings in their practice. Eqova is the only company that solves this need for them. This also means Eqova’s products will be used under the care of a medical professionals -- which is one of the safer ways possible to distribute its products.
Eqova’s CEO, Patrick Stiles, is personally responsible for founding and growing more than one nutraceutical brand. His brands have sold millions of dollars in products online through a variety of channels. He is a leading expert in digital marketing, sales copywriting, branding and the nutritional supplement space.
Stiles will serve as President and Chief Executive Officer of Grey Cloak Tech and as a member of the Company’s board of directors. Former CEO, Fred Covely, will serve as the Company’s Chief Technology Officer. He will remain on the Board of Directors, and will continue to oversee the Company’s enterprise software platform.
Grey Cloak Tech acquired Eqova in an all-stock transaction where the shareholders of Eqova received shares of Grey Cloak Tech’s Series A Convertible Preferred Stock in exchange for all the stock of Eqova. Half of the preferred stock received by the former shareholders of Eqova is immediately vested and the other half will vest no earlier than three months and after Eqova achieves a certain level of sales. If vested in full, the former shareholders of Eqova will be able to convert their preferred shares into 66% of Grey Cloak Tech’s outstanding common stock.
Stiles stated, “Today consumers are smarter than ever before. They demand superior products but also want it backed up with education. The days of empty promises are over. This is why we exclusively partner with medical professionals to bring our full spectrum hemp oil products to their patients.”
Stiles continued, “Now that have merged with GRCK, the possibilities for us in the CBD space are endless. Eqova will just be the beginning. We will have the flexibility to enter many other segments of the industry.”
Forward-Looking Statements and Safe Harbor Notice
All statements other than statements of historical facts included in this press release are “forward-looking statements” (as defined in the Private Securities Litigation Reform Act of 1995). Such forward-looking statements include our expectations with regard to the Eqova acquisition, the anticipated commencement of trading on the OTCQB and those statements that use forward-looking words such as “projected,” “expect,” “possibility,” and “anticipate.” The achievement or success of the matters covered by such forward-looking statements involves significant risks, uncertainties, and assumptions. Actual results could differ materially from current projections or implied results. Investors should read the risk factors set forth in the Company’s Annual Report on Form 10-K filed with the SEC on April 17, 2017 and future periodic reports filed with the SEC. All of the Company’s forward-looking statements are expressly qualified by all such risk factors and other cautionary statements.
The Company cautions that statements, and assumptions made in this news release constitute forward-looking statements and makes no guarantee of future performance. Forward-looking statements are based on estimates and opinions of management at the time statements are made. The information set forth herein speaks only as of the date hereof. The Company and its management undertake no obligation to revise these statements following the date of this news release.
For more information, visit http://www.greycloaktech.com. http://www.eqova.com
Contact:
702-201-6450
corp@greycloaktech.com
hi@eqova.com
Source: Grey Cloak Tech Inc.