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): July 30, 2018
(Exact
name of registrant as specified in its charter)
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Delaware
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000-55709
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47-1685128
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(State
or Other Jurisdiction of Incorporation)
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(Commission
File Number)
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(IRS
Employer Identification Number)
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4400
Route 9 South, Suite 3100, Freehold, New Jersey 07728
(Address
of principal executive offices) (zip code)
646-762-4517
(Registrant’s
telephone number, including area code)
Copies
to:
Stephen
M. Fleming, Esq.
Fleming
PLLC
30
Wall Street, 8
th
Floor
New
York, New York 10005
Phone:
(516) 833-5034
Fax:
(516) 977-1209
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 (see General Instruction A.2. below):
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☐
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐
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Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
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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).
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☒
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Emerging
growth company
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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. ☐
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Item 1.01
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Entry into a Material Definitive Agreement
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Item 3.02
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Unregistered Sales of Equity Securities
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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
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On July 30, 2018, Steven A.
Sanders was appointed to the Board of Directors of Avalon GloboCare Corp. (the “Company”) to serve as a director of
the Company. In addition, the Company expects to appoint Mr. Sanders as a member of Audit Committee and Nominating and Corporate
Governance Committee upon formation. Mr. Sanders entered into an agreement pursuant to which he will serve as a director. The director
agreement provides that he will receive options to acquire 40,000 shares of common stock per year commencing January 1, 2019 at
an exercise price equal to the closing price on December 31st of the prior year. The options shall vest in equal amounts quarterly
and shall be exercisable for a period of five years. For 2018, the Company granted Mr. Sanders options to acquire 20,000 shares
of common stock at an exercise price of $2.80 for a term of five years with 10,000 options vesting immediately and the balance
vesting October 1, 2018. In addition, Mr. Sanders will receive $5,000 per quarter for serving as a member of the Audit Committee
and Nominating and Corporate Governance Committee commencing upon formation.
There
is no understanding or arrangement between Mr. Sanders and any other person pursuant to which he was appointed as director. Mr.
Sanders does not have any family relationship with any director, executive officer or person nominated or chosen by us to become
a director or an executive officer. Mr. Sanders has not had direct or indirect material interest in any transaction or proposed
transaction, in which the Company was or is a proposed participant, exceeding $120,000.
Since January 2017, Mr. Sanders
has been Of Counsel to the law firm of Ortoli Rosenstadt LLP. From July 2007 until January 2017, Mr. Sanders was a Senior Partner
of Ortoli Rosenstadt LLP. From January 1, 2004 until June 30, 2007, he was of counsel to the law firm of Rubin, Bailin, Ortoli,
LLP. From January 1, 2001 to December 31, 2003, he was counsel to the law firm of Spitzer & Feldman PC. Mr. Sanders also serves
as a Director of Helijet International, Inc. and Electrameccanica Vehicles Corp. Additionally, he has been a director at the American
Academy of Dramatic Arts since October 2013 and has been a director of the Bay Street Theater since February 2015. Mr. Sanders
received his JD from Cornell University and his BBA from The City College of New York.
On July 30, 2018, Steven P.
Sukel resigned as a director of the Company.
The foregoing information is a summary of each of the agreements involved in the transactions
described above, is not complete, and is qualified in its entirety by reference to the full text of those agreements, each of
which is attached an exhibit to this Current Report on Form 8-K. Readers should review those agreements for a complete
understanding of the terms and conditions associated with this transaction.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
SIGNATURES
Pursuant
to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
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AVALON
GLOBOCARE CORP.
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Dated:
July 31, 2018
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By:
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/s/ Luisa
Ingargiola
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Name:
Luisa Ingargiola
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Title:
Chief Financial Officer
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Exhibit 10.1
Avalon
GloboCare Corp.
4400
Route 9 South, Suite 3100
Freehold,
New Jersey 07728
July 30, 2018
Steven
A. Sanders
Letter
of Appointment – Board of Directors
Dear
Mr. Sanders:
We
are pleased to offer you the role as a director of the Board of Directors (the “Board”) of Avalon GloboCare Corp.
(the “Company”). In addition, we expect to appoint you as a member of the Audit Committee and the Nominating and Corporate
Governance Committee (the “Committees”) upon formation. This letter contains the terms of your appointment as a director
of the Board of Directors of the Company and as a member of the Committees upon formation. This letter will be effective from
the date of the signing of this letter.
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a)
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You
will be expected to attend all meetings (either in person or by teleconference) of the
Board of the Company and the Committees, of which we expect to hold approximately four
per annum for the Board and Committee as well as sign all written consents if you deem
appropriate. In addition, you will be expected to perform such other duties as are reasonably
contemplated by your holding office as a director of the Company, member of the Committees
or which may reasonably be assigned to you by the Board from time to time.
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b)
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As
a director and member of the Committees you will:
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i)
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Perform
to the best of your abilities and knowledge the duties reasonably assigned to you by
the Board and the Committees from time to time, whether during or outside business hours
and at such places as the Board reasonably requires;
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ii)
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Use
all reasonable efforts to promote the interests of the Company;
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iii)
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Attend
directors’ meetings and committee meetings;
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iv)
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Act
in the best interests of the Company; and
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v)
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Work
closely with the Board of Directors and the Chief Executive Officer.
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c)
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As
you will appreciate, however, your time commitment will ultimately be a product of the
matters confronting the Company from time to time and matters properly requiring your
attention as a director of the Company.
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On
January 1 of each year, the Company shall grant you options to purchase 40,000 shares of the Company’s common stock on an
annual basis at exercise price equal to the closing price on December 31st. The options will vest 25% at the beginning of each
quarter and have a term of five years. As your service as a director will commence on the date set forth above, the option for
this year shall be pro-rated. As a result, for 2018, you shall receive a stock option to acquire 20,000 shares of common stock
at an exercise price of $2.80 per share for a term of five years vesting immediately with respect to 10,000 shares of common stock
and 10,000 shares of common stock vesting October 1, 2018.
In
addition, you will receive $5,000 per quarter for serving as a member of the Committees commencing upon formation.
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3.
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Expenses:
Subject to you providing the Company with receipts or other evidence of payment, the
Company will pay for or reimburse you for all travelling, hotel and other expenses reasonably
incurred by you in connection with attending and returning from Board, Committees, Company,
meetings or otherwise in connection with the Company’s business. Reasonable travel
and out of pocket expenses used in connection with the business of the Group shall include:
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b)
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Domestic
and international travel (economy class under 4 hours and business class over 4 hours);
and
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4.
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Termination
of Appointment:
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a)
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Your
appointment as the Director may be terminated at any time by the vote of the stockholders
of the Company in accordance with the certificate of incorporation and bylaws of the
Company.
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b)
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You
acknowledge and agree that if the shareholders of the Company terminate your appointment,
you will have no claim of any kind against the Company by reason of the termination.
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c)
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You
are at liberty to terminate the appointment at any time by notice in writing to the Company.
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5.
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What
happens after termination of appointment?
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If your
appointment is terminated for any reason or you resign for any reason:
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a)
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The
Company may set off any amounts you owe the Company against any amounts the Company owes
to you as a Director at the date of termination except for amounts the Company is not
entitled by law to set off;
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b)
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You
must return all the Company’s property (including property leased by the Company)
to the Company on termination including all written or machine readable material, software,
computers, credit cards, keys and vehicles; and
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c)
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You
must not record any confidential information in any form after termination.
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6.
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Prohibited
Activities:
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a)
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You
undertake to the Company that you will not during the term of your appointment engage
in a business or an activity that would place you in a position of conflict in respect
of the performance of your duties.
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b)
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The
terms of your appointment do not restrict you from accepting appointment as a director
of any other company outside of the Company’s industry, providing consulting services
or any other business or other activity whatsoever. The Company acknowledges and accepts
your current roles as a director. You recognize that the services to be performed
by you under the Agreement are special, unique and extraordinary. The parties confirm
that it is reasonably necessary for the protection of the Company’s goodwill that
you agree, and accordingly, you do hereby agree and covenant, that during your term as
director, you will not, directly or indirectly, except for the benefit of the Company:
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i.
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become
an officer, director, more than 2% stockholder, partner, associate, employee, owner,
proprietor, agent, creditor, independent contractor, co-venturer or otherwise, or be
interested in or associated with any other corporation, firm or business engaged in the
same or any similar business competitive with that of the Company (including the Company’s
present and future subsidiaries and affiliates) (the “Business”); or
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ii.
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solicit,
cause or authorize, directly or indirectly, to be solicited for or on behalf of himself
or third parties from parties who were customers of the Company (including its present
and future subsidiaries and affiliates) at any time during your term, any business similar
to the business transacted by the Company with such customer; or
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iii.
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accept
or cause or authorize, directly or indirectly, to be accepted for or on behalf of your
or third parties, business from any such customers of the Company (including its present
and future subsidiaries and affiliates); or
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iv.
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solicit,
or cause or authorize, directly or indirectly, to be solicited for employment for or
on behalf of you or third parties, any persons who were at any time during your term
hereunder, employees of the Company (including its present and future subsidiaries and
affiliates); or
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v.
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employ
or cause or authorize, directly or indirectly, to be employed for or on behalf of yourself
or third parties, any such employees of the Company (including its present and future
subsidiaries and affiliates); or
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vi.
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use
the tradenames, trademarks, or trade dress of any of the products of the Company (including
its present and future subsidiaries and affiliates); or any substantially similar tradename,
trademark or trade dress likely to cause, or having the effect of causing, confusion
in the minds of manufacturers, customers, suppliers and retail outlets and the public
generally.
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You
acknowledge the intention that the Company shall have the broadest possible protection of the value of its business consistent
with public policy, and it will not violate the intent of the parties if any court should determine that, consistent with established
precedent of the forum state, the public policy of such state requires a more limited restriction in geographical area or duration
of the aforesaid covenant not to compete, contained in an appropriate decree.
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c)
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Except
as permitted in this Agreement or as approved by the Company, you will not (i) use any
Confidential Information (as defined below) or (ii) disseminate or in any way disclose
the Confidential Information to any person, firm, business or governmental agency or
department. You may use the Confidential Information to perform your Duties for the benefit
of Company. You shall treat all Confidential Information with the same degree of care
as you accord to your own confidential information, but in no case shall you use less
than reasonable care. You shall immediately give notice to Company of any unauthorized
use or disclosure of the Confidential Information. You shall assist Company in remedying
any the unauthorized use or disclosure of the Confidential Information. You agree not
to communicate any information to Company in violation of the proprietary rights of any
third party.
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“Confidential
Information” means (a) any technical and non-technical information related to the Company’s business and current,
future and proposed products and services of Company, including for example and without limitation, Company innovations, intellectual
property, and information concerning research, development, design details and specifications, financial information, procurement
requirements, engineering and manufacturing information, customer lists, business forecasts, sales information, marketing plans
and business plans, and provided, in each case, that each is marked as “confidential” or “proprietary”
and (b) any information that Company has received from others that may be made known to you and that Company is obligated to treat
as confidential or proprietary, and provided, in each case, that each is marked as “confidential” or “proprietary”.
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7.
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Notices
and Other Communications:
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A notice,
demand, consent, approval or communication under this letter (collectively a “Notice”) must be:
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i)
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In
writing and in English directed to the address advised by the recipient for notices,
as varied by any notice; and
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ii)
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Hand
delivered or sent by prepaid post or facsimile to that address.
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b)
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Effective
on Receipt: A Notice given in accordance with section 7a takes effect when received (or
at a later time specified in the Notice), and is taken to be received:
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i)
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If
hand delivered, on delivery;
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ii)
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If
sent by prepaid post, two Business Days after the date of posting (or seven Business
Days after the date of posting if posted to or from outside The United States of America);
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iii)
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If
sent by facsimile, when the sender’s facsimile system generates a message confirming
successful transmission of the entire Notice unless, within eight Business Hours after
the transmission, the recipient informs the sender that it has not received the entire
Notice;
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but
if the delivery, receipt or transmission is not on a Business Day or is after 5.00pm on a Business Day, the Notice is taken to
be received at 9.00am on the Business Day after that delivery, receipt or transmission.
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a)
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Alterations:
This letter may be altered only in writing signed by each party.
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b)
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Approvals
and consents: Except where this letter expressly states otherwise, a party may, in its
discretion, give conditionally or unconditionally or withhold any approval or consent
under this letter.
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c)
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Assignment:
This letter may NOT be assigned by either party.
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d)
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Costs:
Each party must pay its own costs of negotiating, preparing and executing this letter.
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e)
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Survival:
Any indemnity in this letter is independent and survives termination of this letter.
Any other provision by its nature intended to survive termination of this letter survives
termination of this letter.
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f)
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Counterparts:
This letter may be executed in counterparts. All executed counterparts constitute one
document.
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g)
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No
Merger: The rights and obligations of the parties under this letter do not merge on completion
of any transaction contemplated by this letter.
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h)
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Entire
Agreement: This letter constitutes the entire agreement between the parties in connection
with its subject matter and supersedes all previous agreements or understandings between
the parties in connection with its subject matter.
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i)
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Further
Action: Each party must do, at its own expense, everything reasonably necessary (including
executing documents) to give full effect to this letter and the transactions contemplated
by it.
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j)
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Waiver:
A party does not waive a right, power or remedy if it fails to exercise or delays in
exercising the right, power or remedy. A single or partial exercise of a right, power
or remedy does not prevent another or further exercise of that or another right, power
or remedy. A waiver of a right, power or remedy must be in writing and signed by the
party giving the waiver.
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k)
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Relationship:
Except where this letter expressly states otherwise, it does not create a relationship
of employment, agency or partnership between the parties.
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l)
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Confidentiality:
A party may only use the confidential information of another party for the purposes of
this letter, and must keep the existence of this letter and the terms of it and the confidential
information of another party confidential information except where:
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i)
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The
information is public knowledge (but not because of a breach of this letter) or the party
has independently created the information; or
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ii)
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Disclosure
is required by law or a regulatory body (including a relevant stock exchange).
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m)
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Announcements:
A public announcement in connection with this letter or a transaction contemplated by
it must be agreed by the parties before it is made, except if required by law or a regulatory
body (including a relevant stock exchange).
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9.
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Insurance:
The Company has directors’ and officers’ liability insurance under which
you are covered in the US and elsewhere for all usual risks during the term of your appointment
as the Director. The Company will maintain that cover for the full term of your appointment.
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10.
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Contract
for Services: This is a contract for services and is not a contract of employment.
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11.
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Governing
Law: This Agreement shall be governed by the laws of the State of Delaware (without giving
effect to choice of law principles or rules thereof that would cause the application
of the laws of any jurisdiction other than the State of Delaware) and the invalidity
or unenforceability of any provision hereof shall in no way affect the validity or enforceability
of any other provision. Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating or affecting the remaining
provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
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Please
sign the attached copy of this letter to indicate that you have read, understood and accept the terms of your appointment.
Yours
Sincerely,
Avalon
GloboCare Corp.
By:/s/
David Jin
Name:
David Jin
Title:
CEO
Agreed
to and accepted by:
/s/ Steven A. Sanders
Steven
A. Sanders