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): May 29, 2019
NanoVibronix, Inc.
(Exact name of registrant as specified in its charter)
|
Delaware |
001-36445 |
01-0801232 |
||
|
(State or other jurisdiction
of incorporation) |
(Commission File Number) |
(IRS Employer
Identification No.) |
||
|
525 Executive Boulevard Elmsford, New York |
10523 |
|
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (914) 233-3004
| (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 ☒
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. ☐
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock, par value $0.001 per share | NAOV | Nasdaq Capital Market |
| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Resignation of Chief Financial Officer
On May 29, 2019, Stephen Brown, Chief Financial Officer of NanoVibronix, Inc. (the “ Company ”), tendered his resignation to the Company’s Board of Directors (the “ Board ”), effective as of the close of business on May 31, 2019. Mr. Brown did not resign as a result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. It is expected that an affiliate of Mr. Brown and the Company will enter into a consulting agreement, pursuant to which Mr. Brown will serve as a consultant and will work with the Company’s executive management, finance and accounting teams to ensure an orderly transition of the responsibilities of the Chief Financial Officer.
Appointment of Chief Financial Officer
On May 31, 2019, the Company appointed Mr. James S. Cardwell as Chief Financial Officer. In connection therewith, the Company entered into a one-year CFO Consulting Agreement (the “ Consulting Agreement ”) with Mr. Cardwell, pursuant to which Mr. Cardwell will receive $15,000 per year, payable in equal monthly amounts.
James Cardwell, age 59, has more than 35 years of experience in, among other things, U.S. Securities and Exchange Commission (“ SEC ”) reporting and compliance, financial reporting and tax research and compliance. Since July 2015, Mr. Cardwell has served as Chief Operating Officer and Senior Associate of The CFO Squad LLC, a company which provides chief financial officer support services including, but not limited to, pre-audit services, SEC and tax compliance and financial reporting services to both international and domestic private and public companies. From August 2018 until December 2018, Mr. Cardwell served as interim Chief Financial Officer of Newgioco Group, Inc. From January 2018 until May 2018, Mr. Cardwell served as interim Chief Financial Officer of VerifyMe, Inc. Mr. Cardwell graduated from Illinois State University with a bachelor of science degree in accounting. Upon graduation, Mr. Cardwell began his career at Arthur Andersen & Co and served as Senior Tax Consultant. For over 30 years, Mr. Cardwell served in various capacities for public and private companies in the entertainment industry including serving as the Chief Financial Officer of S2BN Entertainment, Inc.; the Deputy Director of the National Jazz Museum in Harlem, New York; the Chief Financial Officer of Sibling Entertainment, Inc.; the Chief Executive Officer and director of Good Galaxy Entertainment, Inc.; the Associate Producer of Nunsense Theatrical Company LP and the founder and President of Cardwell Productions. Mr. Cardwell is a certified public accountant in the State of New York.
There is no arrangement or understanding between Mr. Cardwell and any other persons pursuant to which Mr. Cardwell was selected as an officer.
There are no family relationships between Mr. Cardwell and any director, executive officer or person nominated or chosen by the Company to become a director or executive officer of the Company within the meaning of Item 401(d) of Regulation S-K under the U.S. Securities Act of 1933 (“Regulation S-K”).
Since the beginning of the Company’s last fiscal year, the Company has not engaged in any transaction in which Mr. Cardwell had a direct or indirect material interest within the meaning of Item 404(a) of Regulation S-K.
The description of the Consulting Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, the Consulting Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits: |
| 10.1 | CFO Consulting Agreement, dated as of June 1, 2019, between NanoVibronix Inc. and James S. Cardwell. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| NanoVibronix, Inc. | |||
| Date: June 4, 2019 | By: | /s/ Brian Murphy | |
|
Name: Brian Murphy
Title: Chief Executive Officer |
|||
Exhibit 10.1
CFO CONSULTING AGREEMENT
CFO CONSULTING AGREEMENT dated as of June 1, 2019 (this “Agreement”), between NanoVibronix Inc, a Delaware Corporation, (the “ Company ”), and James S. Cardwell (the “ Consultant ”).
WHEREAS, the Board of Directors of the Company desires to engage Consultant to provide consulting services, upon the terms and subject to the conditions hereinafter set forth; and
WHEREAS, the Consultant has agreed to provide such consulting services, upon the terms and subject to the conditions hereinafter set forth;
WHEREAS, the Company has agreed to and entered into a separate consulting service agreement for pre-audit services and SEC compliance services with The CFO Squad LLC dated April 29, 2019 (the “CFO Squad Agreement”);
NOW, THEREFORE, in consideration of the above premises and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties hereto agree as follows:
| 1. | Independent Consultant. The Company, through the action of its Board of Directors (the “ Board ”), hereby engages the Consultant, and the Consultant will serve the Company, as a consultant. During the term of this Agreement, the Consultant will serve as the non-employee chief financial officer (“CFO”) of the Company on a part-time basis. The Company confirms that the Consultant has been duly appointed as the CFO of the Company and will remain as an executive officer of the Company during the term of this Agreement. |
| 2. | Duties, Term, and Compensation. The Consultant’s duties, term of engagement, compensation and provisions for payment thereof are detailed in the attached Exhibit A, which may be amended in writing from time to time by the Consultant and agreed to by the Company, and which collectively are hereby incorporated by reference. |
| 3. | Expenses. During the term of this Agreement, the Consultant shall bill and the Company shall reimburse the Consultant for all reasonable and approved out-of-pocket expenses which are incurred in connection with the performance of the duties hereunder. |
| 4. | Confidentiality. The Consultant acknowledges that during the engagement he will have access to and become acquainted with various trade secrets, inventions, innovations, processes, information, records and specifications owned or licensed by the Company and/or used by the Company in connection with the operation of its business including, without limitation, the Company’s business and product processes, methods, customer lists, accounts and procedures. The Consultant agrees that he will not disclose any of the aforesaid, directly or indirectly, or use any of them in any manner, either during the term of this Agreement or at any time thereafter, except as required in the course of this engagement with the Company. All files, records, documents, blueprints, specifications, information, letters, notes, media lists, original artwork/creative, notebooks, and similar items relating to the business of the Company, whether prepared by the Consultant or otherwise coming into his possession, shall remain the exclusive property of the Company. The Consultant shall not retain any copies of the foregoing without the Company’s prior written permission. Upon the expiration or earlier termination of this Agreement, or whenever requested by the Company, the Consultant shall immediately deliver to the Company all such files, records, documents, specifications, information, and other items in his possession or under his control. |
| 5. | Conflicts of Interest; Non-hire Provision. The Consultant represents that he is free to enter into this Agreement, and that this engagement does not violate the terms of any agreement between the Consultant and any third party. Further, the Consultant, in rendering his duties shall not utilize any invention, discovery, development, improvement, innovation, or trade secret in which he does not have a proprietary interest. During the term of this agreement, the Consultant shall devote as much of his productive time, energy and abilities to the performance of his duties hereunder as is necessary to perform the required duties in a timely and productive manner. The Company acknowledges that this Agreement only obligates the Consultant to serve a limited percent of his working time with the Company, that the Consultant has numerous other commitments. The Consultant is expressly free to perform services for other parties while performing services for the Company and is permitted to be employed by The CFO Squad LLC. |
1 | Page
NanoVibronix Inc and James S. Cardwell Consulting Agreement – June 1, 2019
| 6. | Indemnification and D&O Insurance: The Company agrees to defend, indemnify (including, without limitation, by providing for the advancement of expenses and reasonable attorneys’ fees) and hold harmless the Consultant for any and all acts taken or omitted to be taken by the Consultant hereunder (except for bad faith, gross negligence or willful misconduct) as if the Consultant was an officer of the Company as provided in the charter and bylaws of the Company in accordance with the same terms, conditions, limitations, standards, duties, rights and obligations as an officer. The provisions of this Section shall survive any termination of this Agreement. In addition, until the five (5) year anniversary of the termination or expiration of this Agreement, the Company shall maintain in effect D&O liability insurance coverage for the Consultant (as an insured person) with respect to his service under this Agreement, on the same or more favorable terms and conditions (from the perspective of the Consultant) as under the liability insurance policies of the Company in effect as of the date of this Agreement. |
| 7. | Merger. This Agreement shall automatically terminate upon the merger or consolidation of the Company into or with any other entity. |
| 8. | Termination. Either party may terminate this Agreement at any time by thirty (30) days written notice by either party, but shall automatically terminate after thirty (30) days if for any reason the Company has terminated its CFO Squad Agreement for Pre-Audit Services and SEC Compliance Services. |
| 9. | Independent Consultant. This Agreement shall not render the Consultant an employee, partner, agent of, or joint venturer with the Company for any purpose. The Consultant is and will remain an independent Consultant in his relationship to the Company. The Company shall not be responsible for withholding taxes with respect to the Consultant’s compensation hereunder. The Consultant shall have no claim against the Company hereunder or otherwise for vacation pay, sick leave, retirement benefits, social security, worker’s compensation, health or disability benefits, unemployment insurance benefits, or employee benefits of any kind. |
| 10. | Successors and Assigns. All of the provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, if any, successors, and assigns. |
| 11. | Choice of Law. The laws of the state of New York shall govern the validity of this Agreement, the construction of its terms and the interpretation of the rights and duties of the parties hereto. |
| 12. | Arbitration. Any controversies arising out of the terms of this Agreement or its interpretation shall be settled in New York, New York in accordance with the rules of the American Arbitration Association, and the judgment upon award may be entered in any court having jurisdiction thereof. |
| 13. | Headings. Section headings are not to be considered a part of this Agreement and are not intended to be a full and accurate description of the contents hereof. |
| 14. | Waiver. Waiver by one party hereto of breach of any provision of this Agreement by the other shall not operate or be construed as a continuing waiver. |
| 15. | Assignment. The Consultant shall not assign any of his rights under this Agreement, or delegate the performance of any of his duties hereunder, without the prior written consent of the Company. |
| 16. | Notices. Any and all notices, demands, or other communications required or desired to be given hereunder by any party shall be in writing and shall be validly given or made to another party if personally served, or if deposited in the United States mail, certified or registered, postage prepaid, return receipt requested. If such notice or demand is served personally, notice shall be deemed constructively made at the time of such personal service. If such notice, demand or other communication is given by mail, such notice shall be conclusively deemed given five days after deposit thereof in the United States mail addressed to the party to whom such notice, demand or other communication is to be given as follows: |
| If to the Consultant: |
James
S. Cardwell
Peconic, NY 11958 JCardwell@CFOSquad.com |
NanoVibronix Inc and James S. Cardwell Consulting Agreement – June 1, 2019
| With a courtesy copy to: |
The
CFO Squad LLP
46 Main Street, Suite 119 Monsey, NY 10952 jhimy@cfosquad.com |
| NanoVibronix Inc |
If to the Company: c/o Brian Murphy, CEO 525 Executive Boulevard, Elmsford, N.Y. 10523 bmurphy@nanovibronix.com |
|
| With a courtesy copy to: |
Any party hereto may change its address for purposes of this paragraph by written notice given in the manner provided above.
| 17. | Modification or Amendment. No amendment, change or modification of this Agreement shall be valid unless in writing signed by the parties hereto. |
| 18. | Entire Understanding. This document and any exhibit attached constitute the entire understanding and agreement of the parties, and any and all prior agreements, understandings, and representations are hereby terminated and canceled in their entirety and are of no further force and effect. |
| 19. | Unenforceability of Provisions. If any provision of this Agreement, or any portion thereof, is held to be invalid and unenforceable, then the remainder of this Agreement shall nevertheless remain in full force and effect. |
IN WITNESS WHEREOF the undersigned have executed this Agreement as of the day and year first written above. The parties hereto agree that facsimile signatures shall be as effective as if originals.
| NanoVibronix Inc | James S. Cardwell | ||||||
| By: | /s/ Brian Murphy | By: | /s/ James S. Cardwell | ||||
| Brian Murphy, CEO | |||||||
| Date: | June 1, 2019 | Date: | JUNE 1, 2019 | ||||
NanoVibronix Inc and James S. Cardwell Consulting Agreement – June 1, 2019
SCHEDULE A
DUTIES, TERM, AND COMPENSATION
| DUTIES: | The Consultant will perform all duties typically required of a Chief Financial Officer, including, but not limited to accounting oversight for the preparation of quarterly and annual financial statements to be filed with the SEC, filings required on Forms 8-K, 10-Q and 10-K and such other filings as may be required that are prepared by The CFO Squad LLC pursuant to CFO Squad Agreement with NanoVibronix Inc’s independent public accountants with respect to quarterly reviews and annual audits. |
He will report directly to Brian Murphy, CEO and to any other party designated by Brian Murphy in connection with the performance of the duties under this Agreement and shall fulfill any other duties reasonably requested by the Company and agreed to by the Consultant.
The Company will accept and maintain all responsibility for its day-to-day accounting and bookkeeping functions and the Company and its subsidiaries and further warrants that it is in full compliance with any and all its corporate income taxes and/or payroll tax requirement and/or filings and will continue to provide for and will timely make any and all future tax payments required by the Company and/or its subsidiaries.
| TERM: | This engagement shall commence upon execution of this Agreement and shall continue in full force and effect for a period of one (1) year. The agreement may only be extended thereafter by mutual agreement, unless terminated earlier by operation of and in accordance with this Agreement. This Agreement will automatically terminate if for any reason the CFO Squad Agreement is terminated, or expires without renewal and/or upon termination, lapse or failure to obtain and/or maintain the Company’s D&O insurance policy. |
COMPENSATION:
As compensation for the services rendered pursuant to this Agreement, Company shall pay Consultant a minimum of Twelve Hundred Fifty ($1,250) dollars upon signing and for each every per month for up to five (5) hours thereafter payable on the first business day of each month provided the Company has engaged and continues to engage The CFO Squad LLC under the CFO Squad Agreement to provide Pre-Audit Services and SEC Compliance services. Any additional hours in excess of five (5) hours during any single month, if any, shall be included, billed separately either 1) billed and paid pursuant to the CFO Squad Agreement if incurred on a weekday during normal working business hours, or 2) billed separately by the Consultant if incurred during any other time of day or week.