Issuer CIK | 0001021282 |
Issuer CCC | XXXXXXXX |
DOS File Number | |
Offering File Number | |
Is this a LIVE or TEST Filing? | ☒ LIVE ☐ TEST |
Would you like a Return Copy? | ☐ |
Notify via Filing Website only? | ☐ |
Since Last Filing? | ☐ |
Name | |
Phone | |
E-Mail Address |
Exact name of issuer as specified in the issuer's charter | Quantum Medical Transport, Inc. |
Jurisdiction of Incorporation / Organization |
DELAWARE
|
Year of Incorporation | 1993 |
CIK | 0001021282 |
Primary Standard Industrial Classification Code | SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN |
I.R.S. Employer Identification Number | 81-2726762 |
Total number of full-time employees | 1 |
Total number of part-time employees | 0 |
Address 1 | 14090 Southwest Frwy |
Address 2 | Suite 300 |
City | Sugar Land |
State/Country |
TEXAS
|
Mailing Zip/ Postal Code | 77478 |
Phone | 832-521-1880 |
Name | John E. Lux, Esq. |
Address 1 | |
Address 2 | |
City | |
State/Country | |
Mailing Zip/ Postal Code | |
Phone |
Industry Group (select one) | ☐ Banking ☐ Insurance ☒ Other |
Cash and Cash Equivalents |
$
12846.00 |
Investment Securities |
$
0.00 |
Total Investments |
$
|
Accounts and Notes Receivable |
$
40800.00 |
Loans |
$
|
Property, Plant and Equipment (PP&E): |
$
26875.00 |
Property and Equipment |
$
|
Total Assets |
$
1331667.00 |
Accounts Payable and Accrued Liabilities |
$
225000.00 |
Policy Liabilities and Accruals |
$
|
Deposits |
$
|
Long Term Debt |
$
445000.00 |
Total Liabilities |
$
699400.00 |
Total Stockholders' Equity |
$
632267.00 |
Total Liabilities and Equity |
$
1331667.00 |
Total Revenues |
$
498756.00 |
Total Interest Income |
$
|
Costs and Expenses Applicable to Revenues |
$
65345.00 |
Total Interest Expenses |
$
|
Depreciation and Amortization |
$
0.00 |
Net Income |
$
10761.00 |
Earnings Per Share - Basic |
$
0.00 |
Earnings Per Share - Diluted |
$
0.00 |
Name of Auditor (if any) | none |
Name of Class (if any) Common Equity | Common Stock |
Common Equity Units Outstanding | 10076298915 |
Common Equity CUSIP (if any): | 000891107 |
Common Equity Units Name of Trading Center or Quotation Medium (if any) | DRWN |
Preferred Equity Name of Class (if any) | none |
Preferred Equity Units Outstanding | 0 |
Preferred Equity CUSIP (if any) | 00000none |
Preferred Equity Name of Trading Center or Quotation Medium (if any) | none |
Debt Securities Name of Class (if any) | none |
Debt Securities Units Outstanding | 0 |
Debt Securities CUSIP (if any): | 00000none |
Debt Securities Name of Trading Center or Quotation Medium (if any) | none |
Check this box to certify that all of the following statements are true for the issuer(s)
☒
Check this box to certify that, as of the time of this filing, each person described in Rule 262 of Regulation A is either not disqualified under that rule or is disqualified but has received a waiver of such disqualification.
☒
Check this box if "bad actor" disclosure under Rule 262(d) is provided in Part II of the offering statement.
☐
Check the appropriate box to indicate whether you are conducting a Tier 1 or Tier 2 offering | ☒ Tier1 ☐ Tier2 |
Check the appropriate box to indicate whether the financial statements have been audited | ☒ Unaudited ☐ Audited |
Types of Securities Offered in this Offering Statement (select all that apply) |
☒Equity (common or preferred stock) |
Does the issuer intend to offer the securities on a delayed or continuous basis pursuant to Rule 251(d)(3)? | ☒ Yes ☐ No |
Does the issuer intend this offering to last more than one year? | ☐ Yes ☒ No |
Does the issuer intend to price this offering after qualification pursuant to Rule 253(b)? | ☒ Yes ☐ No |
Will the issuer be conducting a best efforts offering? | ☒ Yes ☐ No |
Has the issuer used solicitation of interest communications in connection with the proposed offering? | ☐ Yes ☒ No |
Does the proposed offering involve the resale of securities by affiliates of the issuer? | ☐ Yes ☒ No |
Number of securities offered | 2000000000 |
Number of securities of that class outstanding | 10076298915 |
Price per security |
$
0.0001 |
The portion of the aggregate offering price attributable to securities being offered on behalf of the issuer |
$
2000000.00 |
The portion of the aggregate offering price attributable to securities being offered on behalf of selling securityholders |
$
0.00 |
The portion of the aggregate offering price attributable to all the securities of the issuer sold pursuant to a qualified offering statement within the 12 months before the qualification of this offering statement |
$
0.00 |
The estimated portion of aggregate sales attributable to securities that may be sold pursuant to any other qualified offering statement concurrently with securities being sold under this offering statement |
$
0.00 |
Total (the sum of the aggregate offering price and aggregate sales in the four preceding paragraphs) |
$
2000000.00 |
Underwriters - Name of Service Provider | Underwriters - Fees |
$
| |
Sales Commissions - Name of Service Provider | Sales Commissions - Fee |
$
| |
Finders' Fees - Name of Service Provider | Finders' Fees - Fees |
$
| |
Audit - Name of Service Provider | Audit - Fees |
$
| |
Legal - Name of Service Provider | John E. Lux, Esq. | Legal - Fees |
$
25000.00 |
Promoters - Name of Service Provider | Promoters - Fees |
$
| |
Blue Sky Compliance - Name of Service Provider | John E. Lux, Esq. | Blue Sky Compliance - Fees |
$
2500.00 |
CRD Number of any broker or dealer listed: | |
Estimated net proceeds to the issuer |
$
18000000.00 |
Clarification of responses (if necessary) |
Selected States and Jurisdictions |
CALIFORNIA
COLORADO
|
None | ☒ |
Same as the jurisdictions in which the issuer intends to offer the securities | ☐ |
Selected States and Jurisdictions |
None ☐
As to any unregistered securities issued by the issuer of any of its predecessors or affiliated issuers within one year before the filing of this Form 1-A, state:
(a)Name of such issuer | A Clean Slate, Inc. |
(b)(1) Title of securities issued | Common Stock, $0.0001 par value |
(2) Total Amount of such securities issued | 470000000 |
(3) Amount of such securities sold by or for the account of any person who at the time was a director, officer, promoter or principal securityholder of the issuer of such securities, or was an underwriter of any securities of such issuer. | 0 |
(c)(1) Aggregate consideration for which the securities were issued and basis for computing the amount thereof. | none |
(2) Aggregate consideration for which the securities listed in (b)(3) of this item (if any) were issued and the basis for computing the amount thereof (if different from the basis described in (c)(1)). |
(e) Indicate the section of the Securities Act or Commission rule or regulation relied upon for exemption from the registration requirements of such Act and state briefly the facts relied upon for such exemption | Exempt from registration under Section 3 (1) (10) Securities Act and Rules promulgated thereunder. |
Preliminary Offering Circular dated August 23, 2018
An Offering Statement pursuant to Regulation A relating to these securities has been filed with the Securities and Exchange Commission. Information contained in this Preliminary Offering Circular is subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted before the Offering Statement filed with the Commission is qualified. This Preliminary Offering Circular shall not constitute an offer to sell or the solicitation of an offer to buy nor may there be any sales of these securities in any state in which such offer, solicitation or sale would be unlawful before registration or qualification under the laws of any such state. We may elect to satisfy our obligation to deliver a Final Offering Circular by sending you a notice within two business days after the completion of our sale to you that contains the URL where the Final Offering Circular or the Offering Statement in which such Final Offering Circular was filed may be obtained.
Quantum Medical Transport, Inc.
F/K/A
A CLEAN SLATE, INC.
$2,000,000
2,000,000,000 SHARES OF COMMON STOCK
AT $0.0001 PER SHARE
This is the public offering of securities of Quantum Medical Transport, Inc., a Delaware corporation. We are offering 2,000,000,000 shares of our common stock, par value $0.0001 ("Common Stock"), at an offering price of $0.0001 per share (the "Offered Shares"). This Offering will terminate on twelve months from the day the Offering is qualified, subject to extension for up to thirty (30) days as defined below or the date on which the maximum offering amount is sold (such earlier date, the "Termination Date"). The minimum purchase requirement per investor is 10,000,000 Offered Shares ($1,000); however, we can waive the minimum purchase requirement on a case-by-case basis in our sole discretion.
These securities are speculative securities. Investment in the Company’s stock involves significant risk. You should purchase these securities only if you can afford a complete loss of your investment. See the “Risk Factors” section on page 4 of this Offering Circular.
QUANTUM MEDICAL TRANSPORT, INC. – The corporate name of the Issuer was “A Clean Slate, Inc.” until October 8, 2015, when its name was changed to its present name. Because the change of name has not been implemented with the Financial Industry Regulatory Authority, its shares of common stock continue to trade under its former name.
No Escrow
The proceeds of this offering will not be placed into an escrow account. We will offer our Common Stock on a best efforts basis. As there is no minimum offering, upon the approval of any subscription to this Offering Circular, the Company shall immediately deposit said proceeds into the bank account of the Company and may dispose of the proceeds in accordance with the Use of Proceeds.
Subscriptions are irrevocable and the purchase price is non-refundable as expressly stated in this Offering Circular. The Company, by determination of the Board of Directors, in its sole discretion, may issue the Securities under this Offering for cash, promissory notes, services, and/or other consideration without notice to subscribers. All proceeds received by the Company from subscribers for this Offering will be available for use by the Company upon acceptance of subscriptions for the Securities by the Company.
Sale of these shares will commence within two calendar days of the qualification date and it will be a continuous Offering pursuant to Rule 251(d)(3)(i)(F).
This Offering will be conducted on a “best-efforts” basis, which means our Officers will use their commercially reasonable best efforts in an attempt to offer and sell the Shares. Our Officers will not receive any commission or any other remuneration for these sales. In offering the securities on our behalf, the Officers will rely on the safe harbor from broker-dealer registration set out in Rule 3a4-1 under the Securities Exchange Act of 1934, as amended.
This Offering Circular shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sales of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful, prior to registration or qualification under the laws of any such state.
Our Common Stock is traded in the OTCMarket Pink Open Market under the stock symbol “DRWN.”
Investing in our Common Stock involves a high degree of risk. See "Risk Factors" beginning on page 4 for a discussion of certain risks that you should consider in connection with an investment in our Common Stock.
Per
Share |
Total
Maximum |
|||
Public Offering Price (1)(2) | $0.0001 | $2,000,000.00 | ||
Underwriting Discounts and Commissions (3) | $0.0000 | $0 | ||
Proceeds to Us from this Offering to the Public (Before Expenses (4) | $0.0001 | $2,000,000.00 |
(1) | We are offering shares on a continuous basis. See “Distribution – Continuous Offering. |
(2) | This is a “best efforts” offering. The proceeds of this offering will not be placed into an escrow account. We will offer our Common Stock on a best efforts basis primarily through an online platform. As there is no minimum offering, upon the approval of any subscription to this Offering Circular, the Company shall immediately deposit said proceeds into the bank account of the Company and may dispose of the proceeds in accordance with the Use of Proceeds. See “How to Subscribe.” |
(3) | We are offering these securities without an underwriter. |
(4) | Excludes estimated total offering expenses, including underwriting discount and commissions, will be approximately $400,000 assuming the maximum offering amount is sold. |
Our Board of Directors used its business judgment in setting a value of $0.0001 per share to the Company as consideration for the stock to be issued under the Offering. The sales price per share bears no relationship to our book value or any other measure of our current value or worth.
THE U.S. SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION.
The date of this Offering Circular is August __, 2018.
We are offering to sell, and seeking offers to buy, our securities only in jurisdictions where such offers and sales are permitted. You should rely only on the information contained in this Offering Circular. We have not authorized anyone to provide you with any information other than the information contained in this Offering Circular. The information contained in this Offering Circular is accurate only as of its date, regardless of the time of its delivery or of any sale or delivery of our securities. Neither the delivery of this Offering Circular nor any sale or delivery of our securities shall, under any circumstances, imply that there has been no change in our affairs since the date of this Offering Circular. This Offering Circular will be updated and made available for delivery to the extent required by the federal securities laws.
In this Offering Circular, unless the context indicates otherwise, references to "Quantum Medical Transport", "we", the "Company", "our" and "us" refer to the activities of and the assets and liabilities of the business and operations of Quantum Medical Transport, Inc.
i |
CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING STATEMENTS
Some of the statements under "Summary", "Risk Factors", "Management's Discussion and Analysis of Financial Condition and Results of Operations", "Our Business" and elsewhere in this Offering Circular constitute forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar matters that are not historical facts. In some cases, you can identify forward-looking statements by terms such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "potential", "should", "will" and "would" or the negatives of these terms or other comparable terminology.
You should not place undue reliance on forward looking statements. The cautionary statements set forth in this Offering Circular, including in "Risk Factors" and elsewhere, identify important factors which you should consider in evaluating our forward-looking statements. These factors include, among other things:
· | The speculative nature of the business we intend to develop; |
· | Our reliance on suppliers and joint venture partners; |
· | Our dependence upon external sources for the financing of our operations, particularly given that there are concerns about our ability to continue as a "going concern;" |
· | Our ability to effectively execute our business plan; |
· | Our ability to manage our expansion, growth and operating expenses; |
· | Our ability to finance our businesses; |
· | Our ability to promote our businesses; |
· | Our ability to compete and succeed in highly competitive and evolving businesses; |
· | Our ability to respond and adapt to changes in technology and customer behavior; and |
· | Our ability to protect our intellectual property and to develop, maintain and enhance strong brands. |
Although the forward-looking statements in this Offering Circular are based on our beliefs, assumptions and expectations, taking into account all information currently available to us, we cannot guarantee future transactions, results, performance, achievements or outcomes. No assurance can be made to any investor by anyone that the expectations reflected in our forward-looking statements will be attained, or that deviations from them will not be material and adverse. We undertake no obligation, other than as maybe be required by law, to re-issue this Offering Circular or otherwise make public statements updating our forward-looking statements.
1 |
This summary highlights selected information contained elsewhere in this Offering Circular. This summary is not complete and does not contain all the information that you should consider before deciding whether to invest in our Common Stock. You should carefully read the entire Offering Circular, including the risks associated with an investment in the company discussed in the "Risk Factors" section of this Offering Circular, before making an investment decision. Some of the statements in this Offering Circular are forward-looking statements. See the section entitled "Cautionary Statement Regarding Forward-Looking Statements."
Company Information
The Company, sometimes referred to herein as "we," "us,” “our," and the "Company" and/or "Quantum Medical Transport" The corporate name of the Issuer was “A Clean Slate, Inc.” until October 8, 2015, when its name was changed to its present name. Because the change of name has not been implemented with the Financial Industry Regulatory Authority, its shares of common stock continue to trade under its former name.
Our address is 14090 Southwest Freeway, Suite 300, Sugar Land, TX 77478, Phone: 832-521-1880, Email: info@quantummedicaltransport.com and Website: www.quanth.io. We incorporate the information on or accessible through our website into this Offering Circular, and you should not consider any information on, or that can be accessed through, our website a part of this Offering Circular.
QUANTUM MEDICAL TRANSPORT, INC. DBA Quantum Medical Data Services is a medical technology company. The company is developing a proprietary medical blockchain technology (QuantH V1.0) for secure data storage and data transfer in a HIPAA compliant manner.
Section 15(g) of the Securities Exchange Act of 1934
Our shares are covered by section 15(g) of the Securities Exchange Act of 1934, as amended that imposes additional sales practice requirements on broker/dealers who sell such securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouses). For transactions covered by the Rule, the broker/dealer must make a special suitability determination for the purchase and have received the purchaser's written agreement to the transaction prior to the sale. Consequently, the Rule may affect the ability of broker/dealers to sell our securities and also may affect your ability to sell your shares in the secondary market.
Section 15(g) also imposes additional sales practice requirements on broker/dealers who sell penny securities. These rules require a one page summary of certain essential items. The items include the risk of investing in penny stocks in both public offerings and secondary marketing; terms important to in understanding of the function of the penny stock market, such as bid and offer quotes, a dealers spread and broker/dealer compensation; the broker/dealer compensation, the broker/dealers’ duties to its customers, including the disclosures required by any other penny stock disclosure rules; the customers’ rights and remedies in cases of fraud in penny stock transactions; and, the FINRA’s toll free telephone number and the central number of the North American Administrators Association, for information on the disciplinary history of broker/dealers and their associated persons.
Dividends
The Company has not declared or paid a cash dividend to stockholders since it was organized and does not intend to pay dividends in the foreseeable future. The board of directors presently intends to retain any earnings to finance our operations and does not expect to authorize cash dividends in the foreseeable future. Any payment of cash dividends in the future will depend upon the Company's earnings, capital requirements and other factors.
Trading Market
Our Common Stock trades in the OTC Market Pink Open Market Sheets under the symbol DRWN.
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______
Issuer: | Quantum Medical Transport, Inc. | |
Securities offered: | A maximum of 2,000,000,000 shares of our common stock, par value $0.0001 ("Common Stock") at an offering price of $0.0001 per share (the "Offered Shares"). (See “Distribution.”) | |
Number of shares of Common Stock outstanding before the offering | 10,076,298,915 issued and outstanding as of June 30, 2018. | |
Number of shares of Common Stock to be outstanding after the offering | 12,076,298,915 shares, if the maximum amount of Offered Shares are sold | |
Price per share: | $0.0001 | |
Maximum offering amount: | 2,000,000,000 shares at $0.0001 per share, or $2,000,000 (See “Distribution.”) | |
Trading Market: | Our Common Stock is trading on the OTC Markets Pink Open Market Sheets division under the symbol “DRWN.” |
Use of proceed: | If we sell all of the shares being offered, our net proceeds (after our estimated offering expenses) will be $1,960,000. We will use these net proceeds for working capital and other general corporate purposes. | |
Risk factors: |
Investing in our Common Stock involves a high degree of risk, including:
Immediate and substantial dilution.
Limited market for our stock.
See “Risk Factors.” |
3 |
______
The following is only a brief summary of the risks involved in investing in our Company. Investment in our Securities involves risks. You should carefully consider the following risk factors in addition to other information contained in this Disclosure Document. The occurrence of any of the following risks might cause you to lose all or part of your investment. Some statements in this Document, including statements in the following risk factors, constitute "Forward-Looking Statements."
Risks Related to Our Industry
______
We operate in a highly competitive industry, and if we are not able to compete effectively, our business and operating results will be harmed.
The provision by third parties of services to medical practices has historically been dominated by small service providers who offer highly individualized services and a high degree of specialized knowledge applicable in many cases to a limited medical specialty, a limited set of payers, or a limited geographical area. We anticipate that the software, statistical, and database tools that are available to such service providers will continue to become more sophisticated and effective and that demand for our services could be adversely affected.
Revenue cycle and clinical cycle software for medical practices has historically been dominated by large, well-financed, and technologically sophisticated entities that have focused on software solutions. Some of these entities are now offering “on-demand” services or a “software-as-a-service” model under which software is centrally administered, and these vendors may also provide administrative services. The size, financial strength, and breadth of offerings of the larger entities is increasing as a result of continued consolidation in both the information technology and health care industries. We expect large integrated technology companies to continue to become more active in our markets, both through acquisition and internal investment. As costs fall and technology improves, increased market saturation may change the competitive landscape in favor of competitors with greater scale than we possess. In addition, a few smaller companies have started providing software using a model similar to ours; the offerings of these smaller companies may reduce the perceived competitive advantage of our services and impact our market share. Further, while the market for patient communication and referral management services is growing and is not as yet dominated by a small group of vendors with significant resources, our patient and referral cycle services face competition from a wide variety of market participants. For example, certain health systems have developed their own patient portals or referral management systems. If we fail to distinguish our patient and referral cycle offerings from the other options available to health care providers, the demand for and market share of those offerings may decrease.
Some of our current large competitors, such as Allscripts-Misys Healthcare Solutions, Inc.; Athena Health, Inc.; GE Healthcare; and McKesson Corp., have greater name recognition, longer operating histories, and significantly greater resources than we do. As a result, our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards, or client requirements. In addition, current and potential competitors have established, and may in the future establish, cooperative relationships with vendors of complementary products, technologies, or services to increase the availability of their products to the marketplace. Current or future competitors may consolidate to improve the breadth of their products, directly competing with our integrated offerings. Accordingly, new competitors or alliances may emerge that have greater market share, larger client bases, more widely adopted proprietary technologies, broader offerings, greater marketing expertise, greater financial resources, and larger sales forces than we have, which could put us at a competitive disadvantage. Further, in light of these advantages, even if our services are more effective than the product or service offerings of our competitors, current or potential clients might accept competitive products and services in lieu of purchasing our services. Increased competition is likely to result in pricing pressures, which could negatively impact our sales, profitability, or market share. In addition to new niche vendors, who offer stand-alone products and services, we face competition from existing enterprise vendors, including those currently focused on software solutions, which have information systems in place with clients in our target market. These existing enterprise vendors may now, or in the future, offer or promise products or services with less functionality than our services, but that offer ease of integration with existing systems and that leverage existing vendor relationships.
4 |
The market for our services may not develop substantially further or develop more slowly than we expect, harming the growth of our business.
While medical business services are becoming more accepted, the market for these services remains narrowly based, and it is uncertain whether these services will achieve and sustain the high levels of demand and market acceptance we anticipate. Our success will depend to a substantial extent on the willingness of enterprises, large and small, to increase their use of on-demand business services in general, and for their revenue, clinical, and patient cycles in particular. Many enterprises have invested substantial personnel and financial resources to integrate established enterprise software into their businesses and therefore may be reluctant or unwilling to switch to an on-demand application service. Furthermore, some enterprises may be reluctant or unwilling to use on-demand application services, because they have concerns regarding the risks associated with the security and reliability, among other things, of the technology delivery model associated with these services. If enterprises do not perceive the benefits of our services, then the market for these services may not expand as much or develop as quickly as we expect, either of which would significantly adversely affect our business, financial condition, or operating results.
Changes in the health care industry could affect the demand for our services, cause our existing contracts to terminate, and negatively impact the process of negotiating future contracts.
As the health care industry evolves, changes in our client and vendor bases may reduce the demand for our services, result in the termination of existing contracts, and make it more difficult to negotiate new contracts on terms that are acceptable to us. For example, the current trend toward consolidation of health care providers within hospital systems may cause our existing client contracts to terminate as independent practices are merged into hospital systems. Such larger health care organizations may also have their own practice management services and health IT systems, reducing demand for our services. Similarly, client and vendor consolidation results in fewer, larger entities with increased bargaining power and the ability to demand terms that are unfavorable to us. If these trends continue, we cannot assure you that we will be able to continue to maintain or expand our client base, negotiate contracts with acceptable terms, or maintain our current pricing structure, and our revenues may decrease.
If we do not continue to innovate and provide services that are useful to users, we may not remain competitive, and our revenues and operating results could suffer.
Our success depends on providing services that the medical community uses to improve business performance and quality of service to patients. Our competitors are constantly developing products and services that may become more efficient or appealing to our clients. As a result, we must continue to invest significant resources in research and development in order to enhance our existing services and introduce new high-quality services that clients will want. If we are unable to predict user preferences or industry changes, or if we are unable to modify our services on a timely basis, we may lose clients. Our operating results would also suffer if our innovations are not responsive to the needs of our clients, are not appropriately timed with market opportunity, or are not effectively brought to market. As technology continues to develop, our competitors may be able to offer results that are, or that are perceived to be, substantially similar to or better than those generated by our services. This may force us to compete on additional service attributes and to expend significant resources in order to remain competitive.
Failure to manage our rapid growth effectively could increase our expenses, decrease our revenue, and prevent us from implementing our business strategy.
After funding, we expect to experience a period of rapid growth. To manage our anticipated future growth effectively, we must continue to maintain, and may need to enhance, our information technology infrastructure and financial and accounting systems and controls, as well as manage expanded operations in geographically distributed locations. We also must attract, train, and retain a significant number of qualified sales and marketing personnel, professional services personnel, software engineers, technical personnel, and management personnel. Failure to manage our rapid growth effectively could lead us to over-invest or under-invest in technology and operations; result in weaknesses in our infrastructure, systems, or controls; give rise to operational mistakes, losses, or loss of productivity or business opportunities; and result in loss of employees and reduced productivity of remaining employees. Our growth could require significant capital expenditures and may divert financial resources and management attention from other projects, such as the development of new services. If our management is unable to effectively manage our growth, our expenses may increase more than expected, our revenue could decline or may grow more slowly than expected, and we may be unable to implement our business strategy.
5 |
Our business involves a high degree of risk.
An investment in our common stock is extremely speculative and of exceptionally high risk.
We may be unsuccessful in raising the necessary capital to fund operations and capital expenditures.
Our ability to generate cash flow is dependent upon the success of our ability to market our Automated Billing System. However, we cannot guarantee that the sales of our products and other available cash sources will generate sufficient cash flow to meet our overall cash requirements. If cash flow is not sufficient to meet our business requirements, we will be required to raise additional capital through other financing activities. While we have been successful in raising the necessary funds in the past, there can be no assurance we can continue to do so in the future.
We depend on key employees and face competition in hiring and retaining qualified employees.
Our employees are vital to our success, and our key management and other employees are difficult to replace. We currently do not have employment contracts with our key employees. We may not be able to retain highly qualified employees in the future which could adversely affect our business.
We may experience significant losses from operations.
Even if we do generate operating income in one or more quarters in the future, subsequent developments in our industry, customer base, business or cost structure or an event such as significant litigation or a significant transaction may cause us to again experience operating losses. We may not become profitable for the long-term, or even for any quarter.
Because competition for our target employees is intense, we may not be able to attract and retain the highly skilled employees we need to support our planned growth.
To continue to execute on our growth plan, we must attract and retain highly qualified personnel. Competition for these personnel is intense, especially for senior sales executives and engineers with high levels of experience in designing and developing software and Internet-related services. We may not be successful in attracting and retaining qualified personnel. We have from time to time in the past experienced, and we expect to continue to experience in the future, difficulty in hiring and retaining highly skilled employees with appropriate qualifications. Many of the companies with which we compete for experienced personnel have greater resources than we have. In addition, in making employment decisions, particularly in the Internet and high-technology industries, job candidates often consider the value of the equity awards they are to receive in connection with their employment. Volatility in the price of our stock or failure to obtain stockholder approval for increases in the number of shares available for grant under our equity plans may, therefore, adversely affect our ability to attract or retain key employees. Furthermore, the requirements to expense equity awards may discourage us from granting the size or type of equity awards that job candidates require to join our company. If we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects could be severely harmed.
If we acquire companies or technologies in the future, they could prove difficult to integrate, disrupt our business, dilute stockholder value, and adversely affect our operating results and the value of our common stock.
As part of our business strategy, we may acquire, enter into joint ventures with, or make investments in complementary companies, services, and technologies in the future. Acquisitions and investments involve numerous risks, including:
· | difficulties in identifying and acquiring products, technologies, or businesses that will help our business; |
· | difficulties in integrating operations, technologies, services, and personnel; |
· | diversion of financial and managerial resources from existing operations; |
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· | the risk of entering new markets in which we have little to no experience; |
· | risks related to the assumption of known and unknown liabilities; |
· | the risk of write-offs and the amortization of expenses related to purchased intangible assets; and |
· | delays in client purchases due to uncertainty and the inability to maintain relationships with clients of the acquired businesses. |
As a result, if we fail to properly evaluate acquisitions or investments, we may not achieve the anticipated benefits of any such acquisitions, we may incur costs in excess of what we anticipate, and management resources and attention may be diverted from other necessary or valuable activities.
We may choose to expand by strategic acquisitions. Completion of the any proposed acquisition is subject to various closing conditions, involves significant costs, and will require considerable attention from our management. Failure to complete the acquisition could adversely affect our stock price and our future business and operations.
The completion of the any proposed acquisition is subject to the satisfaction of various closing conditions, including the approval by target stockholders, and we cannot assure you that such conditions will be satisfied and that the acquisition will be successfully completed. In the event that the acquisition is not consummated, we will have spent considerable time and resources, and incurred substantial costs, including costs related to the acquisition, many of which must be paid even if the merger is not completed. If the acquisition is not consummated, our reputation in our industry and in the investment community could be damaged and, as a result, the market price of our common stock could decline.
We may fail to realize the anticipated benefits of the any acquisition.
The success of any acquisition will depend on, among other things, our ability to combine our businesses in a manner that does not materially disrupt existing relationships and that allows us to achieve operational synergies and capitalize on the increased brand recognition and customer base of the combined company. If we are not able to achieve these objectives, the anticipated benefits of the acquisition may not be realized fully or at all or may take longer to realize than expected. In particular, the acquisition may not be accretive or accelerate sales in near or long term.
The integration process could result in the loss of key employees; the disruption of our ongoing businesses; or inconsistencies in standards, controls, procedures, or policies that could adversely affect our ability to maintain relationships with third parties and employees or to achieve the anticipated benefits of the acquisition. Integration efforts between the two companies will also divert management’s attention from our core business and other opportunities that could have been beneficial to our shareholders. An inability to realize the full extent of, or any of, the anticipated benefits of the acquisition, as well as any delays encountered in the integration process, could have an adverse effect on our business and results of operations, which may affect the value of the shares of our common stock after the completion of the acquisition.
Further, the actual integration may result in additional and unforeseen expenses. Operational improvements and actual cost synergies, if achieved at all, may be lower than we expect and may take longer to achieve than we anticipate. If we are not able to adequately address these challenges, we may be unable to realize the anticipated benefits of the integration of any acquisition.
Financial Risks
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We will need additional financing.
Our development schedule could be delayed if we are unable to fund our activities. We believe we will need to raise additional funds to achieve full commercial operation. We do not know whether we will be able to secure additional funding, or funding on terms acceptable to us.
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We face financial risk, including the risk of high leverage.
Our development and operation will entail uncertain cash flows. We may spend relatively large amounts on marketing and other expenses. All of these factors and more will result in substantial financial risk. See "Business."
We may be subject to the risks normally associated with debt financing, including the risk that payments of principal and interest on borrowings may leave us with insufficient cash to operate or to pay distributions.
We intend to make use of a very high degree of financial leverage. We could become more highly leveraged because our organizational documents contain no limitation on the amount of debt we may incur.
The use of a high degree of leverage will increase our sensitivity to increases in interest rates. Increases in interest rates may increase our interest expense and adversely affect our cash flow and our ability to service our indebtedness and make distributions to our stockholders.
There are doubts about our ability to continue as a going concern.
As shown in the accompanying financial statements, the Company incurred losses from operations resulting in 2017. As of December 31, 2016 the Company’s current liabilities exceeded its liquid current assets and the Company has notes that are due and is unable to pay. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
The Company will require substantial additional funding for continuing expansion and to implement its business plans. There is no assurance that the Company will be able to obtain sufficient additional funds when needed, or that such funds, if available, will be obtainable on terms satisfactory to the Company. The accompanying financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
Legal Risks
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We may be unable to adequately protect, and we may incur significant costs in enforcing, our intellectual property and other proprietary rights.
Our success depends in part on our ability to enforce our intellectual property and other proprietary rights. We rely upon a combination of trademark, trade secret, copyright, patent, and unfair competition laws, as well as license and access agreements and other contractual provisions, to protect our intellectual property and other proprietary rights. In addition, we attempt to protect our intellectual property and proprietary information by requiring certain of our employees and consultants to enter into confidentiality, noncompetition, and assignment of inventions agreements. Our attempts to protect our intellectual property may be challenged by others or invalidated through administrative process or litigation.
Agreement terms that address non-competition are difficult to enforce in many jurisdictions and may not be enforceable in any particular case. To the extent that our intellectual property and other proprietary rights are not adequately protected, third parties might gain access to our proprietary information, develop and market products or services similar to ours, or use trademarks similar to ours, each of which could materially harm our business. Existing U.S. federal and state intellectual property laws offer only limited protection. Moreover, the laws of other countries in which we now or may in the future conduct operations or contract for services may afford little or no effective protection of our intellectual property. Further, our platform incorporates open source software components that are licensed to us under various public domain licenses. While we believe that we have complied with our obligations under the various applicable licenses for open source software that we use, there is little or no legal precedent governing the interpretation of many of the terms of certain of these licenses, and therefore the potential impact of such terms on our business is somewhat unknown. The failure to adequately protect our intellectual property and other proprietary rights could materially harm our business.
In addition, if we resort to legal proceedings to enforce our intellectual property rights or to determine the validity and scope of the intellectual property or other proprietary rights of others, the proceedings could be burdensome and expensive, even if we were to prevail. Any litigation that may be necessary in the future could result in substantial costs and diversion of resources and could have a material adverse effect on our business, operating results, or financial condition.
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We may be sued by third parties for alleged infringement of their proprietary rights.
The software and Internet industries are characterized by the existence of a large number of patents, trademarks, and copyrights and by frequent litigation based on allegations of infringement or other violations of intellectual property rights. Moreover, our business involves the systematic gathering and analysis of data about the requirements and behaviors of payers and other third parties, some or all of which may be claimed to be confidential or proprietary. We may receive in the future, communications from third parties claiming that we have infringed on the intellectual property rights of others. Our technologies may not be able to withstand such third-party claims of rights against their use. Any intellectual property claims, with or without merit, could be time-consuming and expensive to resolve, divert management attention from executing our business plan, and require us to pay monetary damages or enter into royalty or licensing agreements. In addition, many of our contracts contain warranties with respect to intellectual property rights, and some require us to indemnify our clients for third-party intellectual property infringement claims, which would increase the cost to us of an adverse ruling on such a claim.
Moreover, any settlement or adverse judgment resulting from such a claim could require us to pay substantial amounts of money or obtain a license to continue to use the technology or information that is the subject of the claim, or otherwise restrict or prohibit our use of the technology or information. There can be no assurance that we would be able to obtain a license on commercially reasonable terms, if at all, from third parties asserting an infringement claim; that we would be able to develop alternative technology on a timely basis, if at all; or that we would be able to obtain a license to use a suitable alternative technology to permit us to continue offering, and our clients to continue using, our affected services. Accordingly, an adverse determination could prevent us from offering our services to others. In addition, we may be required to indemnify our clients for third-party intellectual property infringement claims, which would increase the cost to us of an adverse ruling for such a claim.
Current and future litigation against us could be costly and time-consuming to defend and could result in additional liabilities.
We may from time to time be subject to legal proceedings and claims that arise in the ordinary course of business, such as claims brought by our clients in connection with commercial disputes and employment claims made by our current or former employees. Claims may also be asserted by or on behalf of a variety of other parties, including government agencies, patients of our physician clients, or stockholders. For example, we have entered into a purchase and sale agreement for the property on which our corporate headquarters are located. This property is a former Superfund site, and our ownership of it, or any of our other properties, could expose us to liability under applicable environmental laws. Any litigation involving us may result in substantial costs and may divert management’s attention and resources, which may seriously harm our business, overall financial condition, and operating results. Insurance may not cover existing or future claims, be sufficient to fully compensate us for one or more of such claims, or continue to be available on terms acceptable to us. A claim brought against us that is uninsured or underinsured could result in unanticipated costs, thereby reducing our operating results and leading analysts or potential investors to reduce their expectations of our performance resulting in a reduction in the trading price of our stock.
Errors or illegal activity on the part of our clients may result in claims against us.
We require our clients to provide us with accurate and appropriate data and directives for our actions. We also rely upon our clients as users of our system to perform key activities in order to produce proper claims for reimbursement. Failure of our clients to provide these data and directives or to perform these activities may result in claims against us alleging that our reliance was misplaced or unreasonable or that we have facilitated or otherwise participated in submission of false claims.
If participants in our channel marketing and sales lead programs do not maintain appropriate relationships with current and potential clients, our sales accomplished with their help or data may be unwound and our payments to them may be deemed improper.
We maintain a series of relationships with third parties that we term “channel relationships.” These relationships take different forms under different contractual language. Some relationships help us identify sales leads. Other relationships permit third parties to act as value-added resellers or as independent sales representatives for our services. In some cases, for example in the case of some membership organizations, these relationships involve endorsement of our services as well as other marketing activities. In each of these cases, we require contractually that the third party disclose information to and limit their relationships with potential purchasers of our services for regulatory compliance reasons. If these third parties do not comply with these regulatory requirements or if our requirements are deemed insufficient, sales accomplished with the data or help that they have provided, as well as the channel relationships themselves, may not be enforceable, may be unwound, and may be deemed to violate relevant laws or regulations. Third parties that, despite our requirements, exercise undue influence over decisions by current and prospective clients, occupy positions with obligations of fidelity or fiduciary obligations to current and prospective clients, or who offer bribes or kickbacks to current and prospective clients or their employees may be committing illegal acts that could render any resulting contract between us and the client unenforceable or in violation of relevant laws or regulations. Any misconduct by these third parties with respect to current or prospective clients, any failure to follow contractual requirements, or any insufficiency of those contractual requirements may result in allegations that we have encouraged or participated in illegal behavior and that payments to such third parties under our channel contracts are improper. This misconduct could subject us to civil or criminal claims and liabilities, require us to change or terminate some portions of our business, require us to refund portions of our services fees, and adversely affect our revenue and operating margin. Even an unsuccessful challenge of our activities could result in adverse publicity, require costly response from us, impair our ability to attract and maintain clients, and lead analysts or investors to reduce their expectations of our performance, resulting in reduction in the market price of our stock.
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Risks Inherent in the Company
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We are indemnifying our officers and directors.
Our By-Laws provide for the indemnification of officers and directors relating to their activities for the Company to the fullest extent permitted under the Delaware General Corporation Code. These provisions may have the effect of providing indemnity in connection with suits brought by parties other than the Company against an officer or director who has been grossly negligent, though he acted in good faith and in the Company’s interests. See "Indemnification.”
We rely upon a few officers.
At present, we are wholly dependent on the personal abilities of one officer in order to develop and conduct our operations. Our success will be largely dependent on the personal efforts of our key officers and directors. The loss of the services of any of these officers would have a material adverse effect on our business and prospects. Our success also may be dependent, in part, upon our ability to hire and retain additional qualified sales and marketing personnel. There can be no assurance that we will be able to hire or retain such necessary personnel. See "Management."
Our present shareholders will retain control.
Our present control shareholders own 79.2% of the outstanding Common Stock. As a result of this percentage of ownership, the existing shareholders will be able to control our management at least for the foreseeable future. Investors will not have the right to elect our directors and the Company's control will stay with the current shareholders. This shareholder will have full voting control of the Company and the Board of Directors. See "Management," "Principal Shareholders" and "Description of Securities."
The liability of our directors and officers is limited.
Our Articles of Incorporation include provisions to eliminate, to the full extent permitted by Delaware corporate law as in effect from time to time, the personal liability of our directors for monetary damages arising from a breach of their fiduciary duties as directors. The Articles of Incorporation also includes provisions to the effect that (subject to certain exceptions) the Company shall, to the maximum extent permitted from time to time under Delaware law, indemnify, and upon request shall advance expenses to, any director or officer to the extent that such indemnification and advancement of expenses is permitted under such law, as it may from time to time be in effect. In addition, our By-Laws require us to indemnify, to the full extent permitted by law, any of our directors, officers, employees or agents for acts which such person reasonably believes are not in violation of our corporate purposes as set forth in the Articles of Incorporation. As a result of such provisions in the Articles of Incorporation and the By-Laws, stockholders may be unable to recover damages against our directors and officers for actions taken by them which constitute negligence, gross negligence or a violation of their fiduciary duties, which may reduce the likelihood of stockholders instituting derivative litigation against directors and officers and may discourage or deter stockholders from suing our directors, officers, employees and agents for breaches of their duty of care, even though such action, if successful, might otherwise benefit us and our stockholders. See "Indemnification."
Our Board of Directors may unilaterally implement changes in our investment and financing policies that may affect the interests of our stockholders.
Our investment and financing policies, and our policies with respect to other activities, including growth, debt, capitalization, and operating policies, are determined by the Board of Directors. Although the Board of Directors has no present intention to do so, these policies may be amended or revised from time to time at the discretion of the Board of Directors without notice to stockholders or a vote of our stockholders. Accordingly, stockholders have no direct control over changes in our policies and changes in our policies may affect them.
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The loss of key executive officers could have an adverse effect on us.
We are dependent on the efforts of our President, Ricky Bernard. The loss of his services could have an adverse effect on our operations. We do not currently maintain or contemplate obtaining any “key man” life insurance on, our executive officers. See “Management.”
We are dependent on external sources of capital.
In order to achieve our business plan and to grow, we will need constant infusions of additional capital. We will need to fund our future capital needs, including capital for property development and acquisitions, from sources other than income from operations. We therefore will have to rely on third-party sources of debt and equity capital financing, which may or may not be available on favorable terms or at all. Our access to third party sources of capital depends on a number of things, including conditions in the capital markets generally and the market’s perception of our growth potential and our current and potential future earnings. Additional equity offerings may result in substantial dilution of stockholders’ interests, and additional debt financings may substantially increase our leverage. Further, there has been substantial turmoil in the financial markets and there is no assurance that we will be able to successfully access capital.
Risks in the Securities
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You may experience dilution if we issue additional securities.
If we issue additional shares, you may find your holdings diluted, which if it occurs, means that you will own a smaller percentage of our company. Further, any issuance of additional securities to various persons or entities in lieu of cash payments will lead to further dilution.
We do not expect to pay dividends on our Common Stock.
We have never paid any dividends on our Common Stock. We have no plans to pay dividends on our Common Stock in the foreseeable future. Furthermore, the Company may issue Preferred Stock or other securities senior to the Common Stock, under terms which provide that no dividends shall be payable to holders of Common Stock unless and until all accrued cash dividends through the most recent past annual dividend payment date have been paid in full to holders of such senior securities. See "Dividend Policy."
Our operating results have in the past fluctuated and may continue to fluctuate significantly, and if we fail to meet the expectations of analysts or investors, our stock price and the value of an investment in our common stock could decline substantially.
Our operating results are likely to fluctuate, and if we fail to meet or exceed the expectations of securities analysts or investors, the trading price of our common stock could decline. Moreover, our stock price may be based on expectations of our future performance that may be unrealistic or that may not be met. Some of the important factors that could cause our revenues and operating results to fluctuate from quarter to quarter include:
· | the extent to which our services achieve or maintain market acceptance; |
· | our ability to introduce new services and enhancements to our existing services on a timely basis; |
· | new competitors and the introduction of enhanced products and services from new or existing competitors; |
· | the length of our contracting and implementation cycles; |
· | changes in client days in accounts receivable; |
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· | seasonal declines in the use of physician services, generally in the late summer and during the holiday season, which lead to a decline in collections by our physician clients about 30 to 50 days later; |
· | the financial condition of our current and future clients; |
· | changes in client budgets and procurement policies; |
· | the amount and timing of our investment in research and development activities; |
· | the amount and timing of our investment in sales and marketing activities; |
· | technical difficulties or interruptions in our services; |
· | our ability to hire and retain qualified personnel and maintain an adequate rate of expansion of our sales force; |
· | changes in the regulatory environment related to health care; |
· | regulatory compliance costs; |
· | the timing, size, and integration success of potential future acquisitions; and |
· | unforeseen legal expenses, including litigation and settlement costs. |
Many of these factors are not within our control, and the occurrence of one or more of them might cause our operating results to vary widely. As such, we believe that quarter-to-quarter comparisons of our revenues and operating results may not be meaningful and should not be relied upon as an indication of future performance.
A significant portion of our operating expense is relatively fixed in nature, and planned expenditures are based in part on expectations regarding future revenue and profitability. Accordingly, unexpected revenue shortfalls, lower-than-expected revenue increases as a result of planned expenditures, and longer-than-expected impact on profitability and margins as a result of planned revenue expenditures may decrease our gross margins and profitability and could cause significant changes in our operating results from quarter to quarter. In addition, our future quarterly operating results may fluctuate and may not meet the expectations of securities analysts or investors. If this occurs, the trading price of our common stock could fall substantially, either suddenly or over time.
If the revenue of our clients decreases, or if our clients cancel or elect not to renew their contracts, our revenue will decrease.
Under most of our client contracts, we base our charges on subscription pay services such as access to cloud based data management service or custom software development on a negotiated scope of work basis. Many factors may lead to decreases in client revenue, including:
· | interruption of client access to our system for any reason; |
· | our failure to provide services in a timely or high-quality manner; |
· | failure of our clients to adopt or maintain effective business practices; |
· | actions by third-party payers of medical claims to reduce reimbursement; |
· | government regulations and government or other payer actions or inaction reducing or delaying reimbursement; and |
· | reduction of client revenue resulting from increased competition or other changes in the marketplace for physician services. |
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The current economic situation may give rise to several of these factors. For example, patients who have lost health insurance coverage due to unemployment or who face increased deductibles imposed by financially struggling employers or insurers could reduce the number of visits those patients make to our physician clients. Patients without health insurance or with reduced coverage may also default on their payment obligations at a higher rate than patients with coverage. Added financial stress on our clients could lead to their acquisition or bankruptcy, which could cause the termination of some of our service relationships. Further, despite the cost benefits that we believe our services provide, prospective clients may wish to delay contract decisions due to implementation costs or be reluctant to make any material changes in their established business methods in the current economic climate. With a reduction in tax revenue, state and federal government health care programs, including reimbursement programs such as Medicaid, may be reduced or eliminated, which could negatively impact the payments that our clients receive. Also, although we currently estimate our expected customer life to be twelve years, this is only an estimate, and there can be no assurance that our clients will elect to renew their contracts for this period of time. Our clients typically purchase one-year contracts that, in most cases, may be terminated on 90 days notice without cause. If our clients’ revenue decreases for any of the above or other reasons, or if our clients cancel or elect not to renew their contracts, our revenue will decrease.
As a result of our variable sales and implementation cycles, we may be unable to recognize revenue to offset expenditures, which could result in fluctuations in our quarterly results of operations or otherwise harm our future operating results.
The sales cycle for our services can be variable, typically ranging from three to five months from initial contact to contract execution, although this period can be substantially longer. During the sales cycle, we expend time and resources, and we do not recognize any revenue to offset such expenditures. Our implementation cycle is also variable, typically ranging from three to five months from contract execution to completion of implementation, although some of our new-client set-up projects—especially those for larger clients—are complex and require a lengthy delay and significant implementation work. Each client’s situation is different, and unanticipated difficulties and delays may arise as a result of failure by us or by the client to meet our respective implementation responsibilities. During the implementation cycle, we expend substantial time, effort, and financial resources implementing our services, but accounting principles do not allow us to recognize the resulting revenue until the service has been implemented, at which time we begin recognition of implementation revenue over an expected attribution period of the longer of the estimated expected customer life, currently twelve years, or the contract term.
Even if implementation has begun, there can be no assurance that we will recognize revenue on a timely basis or at all from our efforts. Implementation for a given client may be canceled, as our contracts typically provide that they can be terminated for any reason or no reason on 90 days notice. Despite the fact that we typically require a deposit in advance of implementation, some clients have canceled before our services have been started. In addition, implementation may be delayed, or the target dates for completion may be extended into the future, for a variety of reasons, including the needs and requirements of the client, delays with payer processing, and the volume and complexity of the implementations awaiting our work. If implementation periods are extended, our provision of the revenue cycle, clinical cycle, or patient cycle services upon which we realize most of our revenues will be delayed, and our financial condition may be adversely affected. In addition, cancellation of any implementation after it has begun may involve loss to us of time, effort, and expenses invested in the canceled implementation process and lost opportunity for implementing paying clients in that same period of time.
These factors may contribute to substantial fluctuations in our quarterly operating results, particularly in the near term and during any period in which our sales volume is relatively low. As a result, in future quarters our operating results could fall below the expectations of securities analysts or investors, in which event our stock price would likely decrease.
Risks Related to Our Products and Services
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We are subject to the effect of payer and provider conduct that we cannot control and that could damage our reputation with clients and result in liability claims that increase our expenses.
We offer certain electronic claims submission services for which we rely on content from clients, payers, and others. While we have implemented certain features and safeguards designed to maximize the accuracy and completeness of claims content, these features and safeguards may not be sufficient to prevent inaccurate claims data from being submitted to payers. Should inaccurate claims data be submitted to payers, we may experience poor operational results and may be subject to liability claims, which could damage our reputation with clients and result in liability claims that increase our expenses.
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If our services fail to provide accurate and timely information, or if our content or any other element of any of our services is associated with faulty clinical decisions or treatment, we could have liability to clients, clinicians, or patients, which could adversely affect our results of operations.
Our software, content, and services are used to assist clinical decision-making and provide information about patient medical histories and treatment plans. If our software, content, or services fail to provide accurate and timely information or are associated with faulty clinical decisions or treatment, then clients, clinicians, or their patients could assert claims against us that could result in substantial costs to us, harm our reputation in the industry, and cause demand for our services to decline.
The assertion of such claims and ensuing litigation, regardless of its outcome, could result in substantial cost to us, divert management’s attention from operations, damage our reputation, and decrease market acceptance of our services. We attempt to limit by contract our liability for damages and to require that our clients assume responsibility for medical care and approve key system rules, protocols, and data. Despite these precautions, the allocations of responsibility and limitations of liability set forth in our contracts may not be enforceable, be binding upon patients, or otherwise protect us from liability for damages.
We intend to maintain general liability and insurance coverage, but this coverage may not continue to be available on acceptable terms or may not be available in sufficient amounts to cover one or more large claims against us. In addition, the insurer might disclaim coverage as to any future claim. One or more large claims could exceed our available insurance coverage.
Our proprietary software may contain errors or failures that are not detected until after the software is introduced or updates and new versions are released. It is challenging for us to test our software for all potential problems because it is difficult to simulate the wide variety of computing environments or treatment methodologies that our clients may deploy or rely upon. From time to time we have discovered defects or errors in our software, and such defects or errors can be expected to appear in the future. Defects and errors that are not timely detected and remedied could expose us to risk of liability to clients, clinicians, and patients and cause delays in introduction of new services, result in increased costs and diversion of development resources, require design modifications, or decrease market acceptance or client satisfaction with our services.
If any of these risks occur, they could materially adversely affect our business, financial condition, or results of operations.
We may be liable for use of incorrect or incomplete data that we provide, which could harm our business, financial condition, and results of operations.
We may store and display data for use by health care providers in treating patients. Our clients or third parties provide us with most of these data. If these data are incorrect or incomplete or if we make mistakes in the capture or input of these data, adverse consequences, including death, may occur and give rise to product liability and other claims against us. In addition, a court or government agency may take the position that our storage and display of health information exposes us to personal injury liability or other liability for wrongful delivery or handling of health care services or erroneous health information. While we maintain insurance coverage, we cannot assure that this coverage will prove to be adequate or will continue to be available on acceptable terms, if at all. Even unsuccessful claims could result in substantial costs and diversion of management resources. A claim brought against us that is uninsured or under-insured could harm our business, financial condition, and results of operations.
Regulatory Risks
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Government regulation of health care creates risks and challenges with respect to our compliance efforts and our business strategies.
The health care industry is highly regulated and is subject to changing political, legislative, regulatory, and other influences. Existing and new laws and regulations affecting the health care industry could create unexpected liabilities for us, cause us to incur additional costs, and restrict our operations. Many health care laws are complex, and their application to specific services and relationships may not be clear. In particular, many existing health care laws and regulations, when enacted, did not anticipate the health care information services that we provide, and these laws and regulations may be applied to our services in ways that we do not anticipate. Our failure to accurately anticipate the application of these laws and regulations, or our other failure to comply, could create liability for us, result in adverse publicity, and negatively affect our business. Some of the risks we face from health care regulation are described below:
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False or Fraudulent Claim Laws. There are numerous federal and state laws that forbid submission of false information, or the failure to disclose information, in connection with submission and payment of physician claims for reimbursement. In some cases, these laws also forbid abuse in connection with such submission and payment. Any failure of our services to comply with these laws and regulations could result in substantial liability (including, but not limited to, criminal liability), adversely affect demand for our services, and force us to expend significant capital, research and development, and other resources to address the failure. Errors by us or our systems with respect to entry, formatting, preparation, or transmission of claim information may be determined or alleged to be in violation of these laws and regulations. Any determination by a court or regulatory agency that our services violate these laws could subject us to civil or criminal penalties, invalidate all or portions of some of our client contracts, require us to change or terminate some portions of our business, require us to refund portions of our services fees, cause us to be disqualified from serving clients doing business with government payers, and have an adverse effect on our business.
In most cases where we are permitted to do so, we calculate charges for our services based on a percentage of the collections that our clients receive as a result of our services. To the extent that violations or liability for violations of these laws and regulations require intent, it may be alleged that this percentage calculation provides us or our employees with incentive to commit or overlook fraud or abuse in connection with submission and payment of reimbursement claims. The U.S. Centers for Medicare and Medicaid Services has stated that it is concerned that percentage-based billing services may encourage billing companies to engage in or overlook fraudulent or abusive practices.
In addition, we may contract with third parties that offer software relating to the selection or verification of codes used to identify and classify the services for which reimbursement is sought. Submission of codes that do not accurately reflect the services provided or the location or method of their provision may constitute a violation of false or fraudulent claims laws. Our ability to comply with these laws depends on the coding decisions made by our clients and the accuracy of our vendors’ software and services in suggesting possible codes to our clients and verifying that proper codes have been selected.
HIPAA and other Health Privacy Regulations. There are numerous federal and state laws related to patient privacy. In particular, the Health Insurance Portability and Accountability Act of 1996, or HIPAA, includes privacy standards that protect individual privacy by limiting the uses and disclosures of individually identifiable health information and implementing data security standards that require covered entities to implement administrative, physical, and technological safeguards to ensure the confidentiality, integrity, availability, and security of individually identifiable health information in electronic form. HIPAA also specifies formats that must be used in certain electronic transactions, such as claims, payment advice, and eligibility inquiries. Because we translate electronic transactions to and from HIPAA-prescribed electronic formats and other forms, we are considered a clearinghouse and, as such, a covered entity subject to HIPAA. In addition, our clients are also covered entities and are mandated by HIPAA to enter into written agreements with us—known as business associate agreements—that require us to safeguard individually identifiable health information. Business associate agreements may include:
· | a description of our permitted uses of individually identifiable health information; |
· | a covenant not to disclose that information except as permitted under the agreement and to make our subcontractors, if any, subject to the same restrictions; |
· | assurances that appropriate administrative, physical, and technical safeguards are in place to prevent misuse of that information; |
· | an obligation to report to our client any use or disclosure of that information other than as provided for in the agreement; |
· | a prohibition against our use or disclosure of that information if a similar use or disclosure by our client would violate the HIPAA standards; |
· | the ability of our clients to terminate the underlying support agreement if we breach a material term of the business associate agreement and are unable to cure the breach; |
· | the requirement to return or destroy all individually identifiable health information at the end of our support agreement; and |
· | access by the Department of Health and Human Services to our internal practices, books, and records to validate that we are safeguarding individually identifiable health information. |
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We may not be able to adequately address the business risks created by HIPAA implementation. Furthermore, we are unable to predict what changes to HIPAA or other laws or regulations might be made in the future or how those changes could affect our business or the costs of compliance. For example, the provisions of the HITECH Act and the regulations issued under it have provided clarification of certain aspects of both the Privacy and Security Rules, expansion of the disclosure requirements for a breach of the Security Rule, and strengthening of the civil and criminal penalties for failure to comply with HIPAA. In addition, ONCHIT is coordinating the ongoing development of standards to enable interoperable health information technology infrastructure nationwide based on the widespread adoption of electronic health records in the health care sector. We are unable to predict what, if any, impact the changes in such standards will have on our compliance costs or our services.
In addition, some payers and clearinghouses with which we conduct business interpret HIPAA transaction requirements differently than we do. Where clearinghouses or payers require conformity with their interpretations as a condition of effecting transactions, and their interpretations are no less stringent than ours, we seek to comply with their interpretations.
The HIPAA transaction standards include proper use of procedure and diagnosis codes. Since these codes are selected or approved by our clients, and since we do not verify their propriety, some of our capability to comply with the transaction standards is dependent on the proper conduct of our clients.
Among our services, we provide telephone reminder services to patients, Internet- and telephone-based access to medical test results, pager and email notification to practices of patient calls, and patient call answering services. We believe that reasonable efforts to prevent disclosure of individually identifiable health information have been and are being taken in connection with these services, including the use of multiple-password security. However, any failure of our clients to provide accurate contact information for their patients or physicians or any breach of our telecommunications systems could result in a disclosure of individually identifiable health information.
In addition to the HIPAA Privacy and Security Rules and the HITECH Act requirements, most states have enacted patient confidentiality laws that protect against the disclosure of confidential medical and other personally identifiable information, and many states have adopted or are considering further legislation in this area, including privacy safeguards, security standards, and data security breach notification requirements. Such state laws, if more stringent than HIPAA and HITECH Act requirements, are not preempted by the federal requirements, and we are required to comply with them.
Failure by us to comply with any of the federal and state standards regarding patient privacy may subject us to penalties, including civil monetary penalties and, in some circumstances, criminal penalties. In addition, such failure may injure our reputation and adversely affect our ability to retain clients and attract new clients.
In addition to false claims and HIPAA requirements, we are subject to a variety of other regulatory schemes, including:
· | Anti-Kickback and Anti-Bribery Laws. There are federal and state laws that govern patient referrals, physician financial relationships, and inducements to health care providers and patients. For example, the federal health care programs’ anti-kickback law prohibits any person or entity from offering, paying, soliciting, or receiving anything of value, directly or indirectly, for the referral of patients covered by Medicare, Medicaid, and other federal health care programs or the leasing, purchasing, ordering, or arranging for or recommending the lease, purchase, or order of any item, good, facility, or service covered by these programs. Many states also have similar anti-kickback laws that are not necessarily limited to items or services for which payment is made by a federal health care program. Moreover, both federal and state laws forbid bribery and similar behavior. Any determination by a state or federal regulatory agency that any of our activities or those of our clients, vendors, or channel partners violate any of these laws could subject us to civil or criminal penalties, require us to change or terminate some portions of our business, require us to refund a portion of our service fees, disqualify us from providing services to clients doing business with government programs, and have an adverse effect on our business. As the recipients of those orders will in certain instances pay us for the submission of accurate, complete, and readable orders instead of the handwritten and often incomplete orders traditionally submitted, our service could potentially be seen as providing referrals to the order recipients in exchange for payment. Although the Office of Inspector General issued an Advisory Opinion in November 2011 stating that our receipt of payments in such instances would not violate federal anti-kickback laws, we cannot predict whether changes in the law or our services might lead to a challenge of the legality of those services by government regulators. Even an unsuccessful challenge by regulatory authorities of our activities could result in adverse publicity and could require a costly response from us. |
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· | Anti-Referral Laws. There are federal and state laws that forbid payment for patient referrals, patient brokering, remuneration of patients, or billing based on referrals between individuals or entities that have various financial, ownership, or other business relationships with health care providers. In many cases, billing for care arising from such actions is illegal. These vary widely from state to state, and one of the federal laws—called the Stark Law—is very complex in its application. Any determination by a state or federal regulatory agency that any of our clients violate or have violated any of these laws may result in allegations that claims that we have processed or forwarded are improper. This could subject us to civil or criminal penalties, require us to change or terminate some portions of our business, require us to refund portions of our services fees, and have an adverse effect on our business. Even an unsuccessful challenge by regulatory authorities of our activities could result in adverse publicity and could require a costly response from us. |
· | Corporate Practice of Medicine Laws and Fee-Splitting Laws. Many states have laws forbidding physicians from practicing medicine in partnership with non-physicians, such as business corporations. In some states, including New York, these take the form of laws or regulations forbidding splitting of physician fees with non-physicians or others. In some cases, these laws have been interpreted to prevent business service providers from charging their physician clients on the basis of a percentage of collections or charges. We have varied our charge structure in some states to comply with these laws, which may make our services less desirable to potential clients. Any determination by a state court or regulatory agency that our service contracts with our clients violate these laws could subject us to civil or criminal penalties, invalidate all or portions of some of our client contracts, require us to change or terminate some portions of our business, require us to refund portions of our services fees, and have an adverse effect on our business. Even an unsuccessful challenge by regulatory authorities of our activities could result in adverse publicity and could require a costly response from us. |
• | Anti-Assignment Laws. There are federal and state laws that prohibit or limit assignment of claims for reimbursement from government-funded programs. In some cases, these laws have been interpreted in regulations or policy statements to limit the manner in which business service companies may handle checks or other payments for such claims and to limit or prevent such companies from charging their physician clients on the basis of a percentage of collections or charges. Any determination by a state court or regulatory agency that our service contracts with our clients violate these laws could subject us to civil or criminal penalties, invalidate all or portions of some of our client contracts, require us to change or terminate some portions of our business, require us to refund portions of our service fees, and have an adverse effect on our business. Even an unsuccessful challenge by regulatory authorities of our activities could result in adverse publicity and could require a costly response from us. |
· | Prescribing Laws. The use of our software by physicians to perform a variety of functions relating to prescriptions, including electronic prescribing, electronic routing of prescriptions to pharmacies, and dispensing of medication, is governed by state and federal law, including fraud and abuse laws, drug control regulations, and state department of health regulations. States have differing prescription format requirements, and, due in part to recent industry initiatives, federal law and the laws of all 50 states now provide a regulatory framework for the electronic transmission of prescription orders. Regulatory authorities such as the U.S. Department of Health and Human Services’ Centers for Medicare and Medicaid Services may impose functionality standards with regard to electronic prescribing and EHR technologies. Any determination that we or our clients have violated prescribing laws may expose us to liability, loss of reputation, and loss of business. These laws and requirements may also increase the cost and time necessary to market new services and could affect us in other respects not presently foreseeable. |
· | Electronic Health Records Laws. A number of federal and state laws govern the use and content of electronic health record systems, including fraud and abuse laws that may affect how such technology is provided. As a company that provides EHR functionality, our systems and services must be designed in a manner that facilitates our clients’ compliance with these laws. Because this is a topic of increasing state and federal regulation, we expect additional and continuing modification of the current legal and regulatory environment. We cannot predict the content or effect of possible future regulation on our business activities. Department of Health and Human Services (HHS). The 2011/2012 criteria support the Stage 1 meaningful use measures required to qualify eligible providers and hospitals for funding under the HITECH Act. While we believe that our system is well designed in terms of function and interoperability, we cannot be certain that it will meet future requirements. |
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· | Claims Transmission Laws. Our services include the manual and electronic transmission of our client’s claims for reimbursement from payers. Federal and various state laws provide for civil and criminal penalties for any person who submits, or causes to be submitted, a claim to any payer (including, without limitation, Medicare, Medicaid, and any private health plans and managed care plans) that is false or that overbills or bills for items that have not been provided to the patient. Although we do not determine what is billed to a payer, to the extent that such laws apply to a service that merely transmits claims on behalf of others, we could be subject to the same civil and criminal penalties as our clients. |
· | Prompt Pay Laws. Laws in many states govern prompt payment obligations for health care services. These laws generally define claims payment processes and set specific time frames for submission, payment, and appeal steps. They frequently also define and require clean claims. Failure to meet these requirements and time frames may result in rejection or delay of claims. Failure of our services to comply may adversely affect our business results and give rise to liability claims by clients. |
· | Medical Device Laws. The U.S. Food and Drug Administration (FDA) has promulgated a draft policy for the regulation of computer software products as medical devices under the 1976 Medical Device Amendments to the Federal Food, Drug and Cosmetic Act. In addition, in February 2011 the FDA issued a final rule regarding regulation of Medical Device Data Systems (MDDSs), which are systems that are intended to transfer, store, convert, or display medical device data. While EHRs are expressly exempted from the final rule, it is possible that future changes in our services could involve the transfer, storage, conversion, or display of medical device data. In addition, a report, due by early 2014 from the FDA, ONCHIT, and the Federal Communications Commission, is expected to propose a regulatory framework for health information technology for the purpose of promoting innovation, protecting patient safety, and avoiding regulatory duplication. To the extent that our software is considered a medical device under the policy or an MDDS under the final rule, or is the subject of additional regulation promulgated as a result of the report, we, as a provider of application functionality, could be required, depending on the functionality, to: |
o | register and list our products with the FDA; |
o | notify the FDA and demonstrate substantial equivalence to other products on the market before marketing our functionality; or |
o | obtain FDA approval by demonstrating safety and effectiveness before marketing our functionality. |
The FDA can impose extensive requirements governing pre- and post-market conditions, such as service investigation and others relating to approval, labeling, and manufacturing. In addition, the FDA can impose extensive requirements governing development controls and quality assurance processes.
Potential health care reform and new regulatory requirements placed on our software, services, and content could impose increased costs on us, delay or prevent our introduction of new services types, and impair the function or value of our existing service types.
Our services may be significantly impacted by health care reform initiatives and will be subject to increasing regulatory requirements, either of which could affect our business in a multitude of ways. If substantive health care reform or applicable regulatory requirements are adopted, we may have to change or adapt our services and software to comply. Reform or changing regulatory requirements may also render our services obsolete or may block us from accomplishing our work or from developing new services. This may in turn impose additional costs upon us to adapt to the new operating environment or to further develop services or software. Such reforms may also make introduction of new service types more costly or more time-consuming than we currently anticipate. Such changes may even prevent introduction by us of new services or make the continuation of our existing services unprofitable or impossible.
Potential additional regulation of the disclosure of health information outside the United States may adversely affect our operations and may increase our costs.
Federal or state governmental authorities may impose additional data security standards or additional privacy or other restrictions on the collection, use, transmission, and other disclosures of health information. Legislation has been proposed at various times at both the federal and the state level that would limit, forbid, or regulate the use or transmission of medical information outside of the United States. Such legislation, if adopted, may render our use of our off-shore partners, such as our data-entry and customer service providers, for work related to such data impracticable or substantially more expensive. Alternative processing of such information within the United States may involve substantial delay in implementation and increased cost.
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Due to the particular nature of certain services we provide or the manner in which we provide them, we may be subject to government regulation unrelated to health care.
While our services are primarily subject to government regulations pertaining to health care, certain aspects of those services may require us to comply with regulatory schemes from other areas. Examples of such regulatory schema include:
Antitrust Laws. Our national cloud-based network allows us access to cost and pricing data for a large number of providers in most regional markets, as well as to the contracted rates for third-party payers. To the extent that our services enable providers to compare their cost and pricing data with those of their competitors, those providers could collude to increase the pricing for their services, to reduce the compensation they pay their employees, or to collectively negotiate agreements with third parties. Similarly, if payers are able to compare their contracted rates of payment to providers, those payers may seek to reduce the amounts they might otherwise pay. Such actions may be deemed to be anti-competitive and a violation of federal antitrust laws. To the extent that we are deemed to have enabled such activities, we could be subject to fines and penalties imposed by the U.S. Department of Justice or the Federal Trade Commission and be required to curtail or terminate the services that permitted such collusion.
Debt Collection Laws. As a billing service that offers patient communication and registration services, our employees or those of our service providers may from time to time come into contact with patients who owe our clients outstanding amounts. Communications with patients that relate to amounts owed may be deemed to subject us or our service providers to federal or state debt collection laws and regulations. Such laws and regulations, if deemed to apply to us, could require registration with government agencies and compliance with significant administrative obligations (e.g., to maintain an in-state office with local employees), which could result in increased expenses and subject us to fines and penalties for violation. Following the disclosure in 2012 of the methods used by debt collector Accretive Health to obtain payment of amounts owed by patients to one of its hospital clients, heightened focus on debt collection practices may lead to additional regulation and greater scrutiny of existing debt collection practices.
Subsidy of services similar to ours may reduce client demand if we do not participate in such programs.
In the past few years, entities such as the Massachusetts Healthcare Consortium have offered to subsidize adoption by physicians of EHR technology. In addition, federal regulations have been changed to permit such subsidy from additional sources, subject to certain limitations, and the current administration passed the HITECH Act, which provides federal support for EHR initiatives. While we have qualified for and participated in many of such subsidy programs, we cannot guarantee that we will be able to do so in the future. To the extent that we do not participate in such programs, demand for our services may be reduced, which may decrease our revenues.
The price of our common stock may continue to be volatile.
The trading price of our common stock has been and is likely to remain highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control or unrelated to our operating performance. In addition to the factors discussed in this “Risk Factors” section and elsewhere, these factors include: the operating performance of similar companies; the overall performance of the equity markets; the announcements by us or our competitors of acquisitions, business plans, or commercial relationships; threatened or actual litigation; changes in laws or regulations relating to the provision of health care or the sale of health insurance; any major change in our board of directors or management; publication of research reports or news stories about us, our competitors, or our industry or positive or negative recommendations or withdrawal of research coverage by securities analysts; large volumes of sales of our shares of common stock by existing stockholders; and general political and economic conditions.
In addition, the stock market in general, and the market for Internet-related companies in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies securities This litigation, if instituted against us, could result in very substantial costs; divert our management’s attention and resources; and harm our business, operating results, and financial condition.
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Delaware law might discourage, delay, or prevent a change of control of our company or changes in our management and, therefore, depress the trading price of our common stock.
Delaware law may discourage, delay, or prevent a merger, acquisition, or other change in control that stockholders may consider favorable, including transactions in which they might otherwise receive a premium for their shares of our common stock. These provisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. These provisions include: limitations on the removal of director; advance notice requirements for stockholder proposals and nominations; inability of stockholders to act by written consent or call special meetings; and the ability of our board of directors to make, alter or repeal our by-laws.
Delaware General Corporation Law prohibits a publicly held Delaware corporation from engaging in a business combination with an interested stockholder (generally an entity that, together with its affiliates, owns, or within the last three years has owned, 15% or more of our voting stock) for a period of three years after the date of the transaction in which the entity became an interested stockholder, unless the business combination is approved in a prescribed manner.
The existence of the foregoing provisions and anti-takeover measures could limit the price that investors might be willing to pay in the future for shares of our common stock. They could also deter potential acquirers of our company, thereby reducing the likelihood that stockholders could receive a premium for their common stock in an acquisition.
Risks Associated with Investing in our Common Stock
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If we obtain additional financing, existing investor interests may be diluted. We may need to raise additional funds in the near future to fund our operations, deliver, expand, or enhance our products and services, finance acquisitions and respond to competitive pressures or perceived opportunities. If we raise additional funds by issuing equity or convertible debt securities, the percentage ownership of our investors will be diluted. Furthermore, we cannot assure you that additional financing will be available when and to the extent we require it or that, if available, it will be on acceptable terms.
Because we may be subject to the “penny stock” rules, you may have difficulty in selling our common stock. Because our stock price is less than $5.00 per share, our stock may be subject to the SEC’s penny stock rules, which impose additional sales practice requirements and restrictions on broker-dealers that sell our stock to persons other than established customers and institutional accredited investors. The application of these rules may affect the ability of broker-dealers to sell our common stock and may affect your ability to sell any common stock you may own.
According to the SEC, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Additionally, we may be subject to short selling, manipulation by others, and the regulations of the Pink Sheets OTC markets, all of which may be outside our control.
The volatility of and limited trading market in our common stock may make it difficult for you to sell our common stock for a positive return on your investment. The public market for our common stock has historically been very volatile. Any future market price for our shares is likely to continue to be very volatile. Further, our common stock is not actively traded, which may amplify the volatility of our stock. These factors may make it more difficult for you to sell shares of common stock.
The registration and potential sale, either pursuant to a prospectus or pursuant to Rule 144, by certain of our selling stockholders of a significant number of shares could encourage short sales by third parties. There may be significant downward pressure on our stock price caused by the sale or potential sale of a significant number of shares by certain of our selling stockholders pursuant to this prospectus, which could allow short sellers of our stock an opportunity to take advantage of any decrease in the value of our stock. The presence of short sellers in our common stock may further depress the price of our common stock.
If the selling stockholders sell a significant number of shares of common stock, the market price of our common stock may decline. Furthermore, the sale or potential sale of the offered shares pursuant to a prospectus and the depressive effect of such sales or potential sales could make it difficult for us to raise funds from other sources.
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Our listing in the “Pink Sheets” limits the marketability of our stock. We are traded in the Pink Sheets. Companies in this market generally are disadvantaged in attracting investor interest.
Because we do not intend to pay any dividends on our common shares, investors seeking dividend income or liquidity should not purchase our shares. We do not currently anticipate declaring and paying dividends to our shareholders in the near future. It is our current intention to apply net earnings, if any, in the foreseeable future to increasing our working capital. Prospective investors seeking or needing dividend income or liquidity should, therefore, not purchase our common stock. We currently have no revenues and a history of losses, so there can be no assurance that we will ever have sufficient earnings to declare and pay dividends to the holders of our shares, and in any event, a decision to declare and pay dividends is at the sole discretion of our board of directors, who currently do not intend to pay any dividends on our common shares for the foreseeable future.
As an issuer of “penny stock” the protection provided by the federal securities laws relating to forward looking statements does not apply to us. Although the federal securities law provide a safe harbor for forward-looking statements made by a public company that files reports under the federal securities laws, this safe harbor is not available to issuers of penny stocks. As a result, if we are a penny stock we will not have the benefit of this safe harbor protection in the event of any based upon an claim that the material provided by us contained a material misstatement of fact or was misleading in any material respect because of our failure to include any statements necessary to make the statements not misleading.
The volatility of and limited trading market in our common stock may make it difficult for you to sell our common stock for a positive return on your investment. The public market for our common stock has historically been very volatile. Any future market price for our shares is likely to continue to be very volatile. Further, our common stock is not actively traded, which may amplify the volatility of our stock. These factors may make it more difficult for you to sell shares of common stock.
Statements Regarding Forward-looking Statements
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This Disclosure Statement contains various "forward-looking statements." You can identify forward-looking statements by the use of forward-looking terminology such as "believes," "expects," "may," "will," "would," "could," “should," "seeks," "approximately," "intends," "plans," "projects," "estimates" or "anticipates" or the negative of these words and phrases or similar words or phrases. You can also identify forward-looking statements by discussions of strategy, plans or intentions. These statements may be impacted by a number of risks and uncertainties.
The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance taking into account all information currently available to us. These beliefs, assumptions and expectations are subject to risks and uncertainties and can change as a result of many possible events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements. You should carefully consider these risks before you make an investment decision with respect to our Securities. For a further discussion of these and other factors that could impact our future results, performance or transactions, see the section entitled "Risk Factors."
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If we sell all of the shares being offered, our net proceeds (after our estimated offering expenses of ($40,000.00) will be $1,960,000.00. We will use these net proceeds for the following.
Percentage of
Offering Sold |
Offering
Proceeds |
Approximate
Offering Expenses |
Total Net
Offering Proceeds |
Principal Uses
of Net Proceeds |
Utility Patent & R&D 300,000 | ||||
Working capital 160,000 | ||||
25.00% | $500,000 | 40,000.00 | $460,000.00 | $460,000.00 |
If 50% of the Shares offered are sold:
Percentage of
Offering Sold |
Offering
Proceeds |
Approximate
Offering Expenses |
Total Net
Offering Proceeds |
Principal Uses
of Net Proceeds |
Utility Patent & R&D 800,000 | ||||
Working capital 160,000 | ||||
50.00% | $1,000,000 | $40,000.00 | $960,000 | $960,000 |
If 75% of the Shared offered are sold:
Percentage of
Offering Sold |
Offering
Proceeds |
Approximate
Offering Expenses |
Total Net
Offering Proceeds |
Principal Uses
of Net Proceeds |
Utility Patent & R&D 800,000 | ||||
Working capital 160,000 | ||||
Acquisition EHR/EMR 500,000 | ||||
75.00% | $1,500,000 | $40,000.00 | $1,460,000 | $1,460,000 |
If 100% of the Shares offered are sold:
Percentage of
Offering Sold |
Offering
Proceeds |
Approximate
Offering Expenses |
Total Net
Offering Proceeds |
Principal Uses
of Net Proceeds |
Utility Patent & R&D 800,000 | ||||
Working capital 160,000 | ||||
Acquisition EHR/EMR 1,000,000 | ||||
100.00% | $2,000,000 | $40,000.00 | $1,960,000.00 | $1,960,000.00 |
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The precise amounts that we will devote to each of the foregoing items, and the timing of expenditures, will vary depending on numerous factors.
As indicated in the table above, if we sell only 75%, or 50%, or 25% of the shares offered for sale in this offering, we would expect to use the resulting net proceeds for the same purposes as we would use the net proceeds from a sale of 100% of the shares, and in approximately the same proportions, until such time as such use of proceeds would leave us without working capital reserve. At that point we would expect to modify our use of proceeds by limiting our expansion, leaving us with the working capital reserve indicated.
The expected use of net proceeds from this offering represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve and change. The amounts and timing of our actual expenditures, specifically with respect to working capital, may vary significantly depending on numerous factors. The precise amounts that we will devote to each of the foregoing items, and the timing of expenditures, will vary depending on numerous factors. As a result, our management will retain broad discretion over the allocation of the net proceeds from this offering.
In the event we do not sell all of the shares being offered, we may seek additional financing from other sources in order to support the intended use of proceeds indicated above. If we secure additional equity funding, investors in this offering would be diluted. In all events, there can be no assurance that additional financing would be available to us when wanted or needed and, if available, on terms acceptable to us.
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If you purchase shares in this offering, your ownership interest in our Common Stock will be diluted immediately, to the extent of the difference between the price to the public charged for each share in this offering and the net tangible book value per share of our Common Stock after this offering.
Our historical net tangible book value as of June 30, 2018 of $(632,267) and or $(0.0000) per then-outstanding share of our Common Stock. Historical net tangible book value per share equals the amount of our total tangible assets less total liabilities, divided by the total number of shares of our Common Stock outstanding, all as of the date specified.
The following table illustrates the per share dilution to new investors discussed above, assuming the sale of, respectively, 100%, 75%, 50% and 25% of the shares offered for sale in this offering (after deducting estimated offering expenses of $40,000):
Percentage of shares offered that are sold | 100% | 75% | 50% | 25% | ||||||||||||
Price to the public charged for each share in this offering | 0.0001 | 0.0000 | 0.0001 | 0.0001 | ||||||||||||
Historical net tangible book value per share as of June 30, 2017 (1) | 0.0000 | 0.0000 | 0.0000 | 0.0001 | ||||||||||||
Increase in net tangible book value per share attributable to new investors in this offering (2) | 0.0002 | 0.0001 | 0.0001 | 0.0000 | ||||||||||||
Net tangible book value per share, after this offering | 0.0001 | 0.0001 | 0.0001 | 0.0000 | ||||||||||||
Dilution per share to new investors | 0.0000 | 0.0000 | 0.0001 | 0.0001 |
(1) | Based on net tangible book value as of June 30, 2018 of $(632,267) and 10,076,298,915 issued and outstanding shares of Common Stock as of June 30, 2018. |
(2) | After deducting estimated offering expenses of $40,000. |
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This Offering Circular is part of an Offering Statement that we filed with the SEC, using a continuous offering process. Periodically, as we have material developments, we will provide an Offering Circular supplement that may add, update or change information contained in this Offering Circular. Any statement that we make in this Offering Circular will be modified or superseded by any inconsistent statement made by us in a subsequent Offering Circular supplement. The Offering Statement we filed with the SEC includes exhibits that provide more detailed descriptions of the matters discussed in this Offering Circular. You should read this Offering Circular and the related exhibits filed with the SEC and any Offering Circular supplement, together with additional information contained in our annual reports, semi-annual reports and other reports and information statements that we will file periodically with the SEC. See the section entitled “Additional Information” below for more details.
Pricing of the Offering
Prior to the Offering, there has been a limited public market for the Offered Shares. The initial public offering price was determined by negotiation between us and the Underwriter. The principal factors considered in determining the initial public offering price include:
· | the information set forth in this Offering Circular and otherwise available; |
· | our history and prospects and the history of and prospects for the industry in which we compete; |
· | our past and present financial performance; |
· | our prospects for future earnings and the present state of our development; |
· | the general condition of the securities markets at the time of this Offering; |
· | the recent market prices of, and demand for, publicly traded common stock of generally comparable companies; and |
· | other factors deemed relevant by us. |
Offering Period and Expiration Date
This Offering will start on or after the Qualification Date and will terminate if the Minimum Offering is not reached or, if it is reached, on the Termination Date.
Procedures for Subscribing
When you decide to subscribe for Offered Shares in this Offering, you should:
Go to our website, click on the "Invest Now" button and follow the procedures as described.
1. | Electronically receive, review, execute and deliver to us a subscription agreement; and |
2. | Deliver funds directly by wire or electronic funds transfer via ACH to the specified account maintained by us. |
Any potential investor will have ample time to review the subscription agreement, along with their counsel, prior to making any final investment decision. We shall only deliver such subscription agreement upon request after a potential investor has had ample opportunity to review this Offering Circular.
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Right to Reject Subscriptions. After we receive your complete, executed subscription agreement and the funds required under the subscription agreement have been transferred to the escrow account, we have the right to review and accept or reject your subscription in whole or in part, for any reason or for no reason. We will return all monies from rejected subscriptions immediately to you, without interest or deduction.
Acceptance of Subscriptions. Upon our acceptance of a subscription agreement, we will countersign the subscription agreement and issue the shares subscribed at closing. Once you submit the subscription agreement and it is accepted, you may not revoke or change your subscription or request your subscription funds. All accepted subscription agreements are irrevocable.
No Escrow
The proceeds of this offering will not be placed into an escrow account. We will offer our Common Stock on a best efforts basis. As there is no minimum offering, upon the approval of any subscription to this Offering Circular, the Company shall immediately deposit said proceeds into the bank account of the Company and may dispose of the proceeds in accordance with the Use of Proceeds.
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AND ANALYSIS OR PLAN OF OPERATION
This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this prospectus. These forward-looking states are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or out predictions.
PLAN OF OPERATION
We currently operate in Sugar land, Texas providing medical blockchain data management services via Oracle Autonomous Blockchain Cloud Service.
We have embarked upon new growth opportunities in the blockchain technology space as user friendly medical records data storage. We see this as a subscription service provider in which our current customers and other medical professionals within our marketplace can utilize our encrypted blockchain data technology to interface with patients, shares records and data between providers and insurers. We brought on development expert Aurablocks, LLC a Oracle Silver Partner in blockchain open source code participants as partners and operators to develop this technology for product launch. Our mission is to improve quality of care through getting real time patient information to healthcare professionals in a safe, secure HIPPA compliant manner, thus saving time and reducing the overall cost of healthcare.
Liquidity and Capital
The company recognized $498,756 revenue for the period ended June 30, 2018. As of June 30, 2018 the company had liquid capital consisting of $40,800 accounts receivables, and $12,846 Cash in bank.
The company has sufficient liquidity and working capital to continue operations as a going concern.
Resources - Assets and Liabilities
The Company had accumulated deficit of $612,191 for the period as of June 30, 2018. The company recognized $498,756 revenue for the period ended June 30, 2018. As of June 30, 2018 the company had consolidated assets consisting of $40,800 accounts receivables, $26,875 fixed assets, $12,846 Cash in bank, and $1,200,000 in Goodwill. Management values the company’s goodwill at $1.2 Million based upon intangibles such as intellectual property of provisional patent, long term contracts and receivables.
Off-Balance Sheet Arrangements
We are not currently a party to, or otherwise involved with, any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. Item 3. Quantitative and Qualitative Disclosure about Market Risk Not applicable. Item 4. Controls and Procedures (a) Evaluation of Disclosure Controls and Procedures.
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Quantitative and Qualitative Disclosure about Market Risk
Not applicable.
Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures and determined that our disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report. The evaluation considered the procedures designed to ensure that the information required to be disclosed by us in reports filed or submitted under the OTC Markets Rules is recorded, processed, summarized and reported within the time periods specified in the OTC Markets rules and forms and communicated to our management as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
During the period covered by this Report, there was no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations of Disclosure Controls and Internal Controls over Financial Reporting
Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. Projections of any evaluation or effectiveness to future periods are subject to risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Quantum Medical Transport, Inc.
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Quantum Medical Transport, Inc. – Our Company
QUANTUM MEDICAL TRANSPORT, INC. DBA Quantum Medical Data Services is a medical blockchain data services company. The company is developing a proprietary medical blockchain technology for secure data storage and data transfer in a HIPAA compliant manner. The technology is called QuantH V1.0. The company has a provisional patent and is in the process of developing its product proof of concept user interface model and completing utility patent.
We see a significant opportunity for growth in our industry. We have embarked upon new growth opportunities in the blockchain technology space as user friendly medical records data storage and transport provider. We see this as a subscription service provider in which our current customers and other medical professionals within our marketplace can utilize our encrypted blockchain data technology to interface with patients, shares records and data between providers and insurers. We will be brining on experts in blockchain open source code participants as partners and operators to develop this technology for product launch. Our mission is to improve quality of care through getting real time patient information to healthcare professionals in a safe, secure HIPAA compliant manner, thus saving time and reducing the overall cost of healthcare.
QuantH leading the path toward Blockchain-based medical records secure storage and sharing implementation of a patient controlled, blockchain-based system for clinical record maintenance and sharing. To understand how blockchain technology can improve the security and efficiency of electronic health data storage and sharing, it is first necessary to provide an overview of blockchain technology and its benefits.
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Blockchain technology rests on three foundational principles. First, data is stored in a public, indestructible transaction ledger that anyone can read. Because the transactions can never be deleted or changed, there is always a complete and irrefutable record of all transactions. Second, blockchains are implemented in a decentralized network of computing nodes, which makes them robust against failures and attacks. Decentralization also means that no entity owns or controls the blockchain. Third, the metadata describing each transaction is available to everyone on the system, but that does not mean the data stored within the blockchain is readable. Blockchain relies on pseudoanonymity (replacing names with identifiers) and public key infrastructure (PKI), which allows the blockchain’s contents to be encrypted in a way that is prohibitively expensive to crack. When applying blockchain technology to health data, each of these foundational principles apply.
Distributed Healthcare Transaction Ledger
Healthcare providers, payers and patients would contribute encrypted data, which would reference a patient ID, to a public blockchain. This could include clinical data that is stored in EHR systems today; claims history and gaps in care from payers; and family history and device readings from patients. This information would be encrypted and stored in the blockchain and could only be decrypted by parties that have the patient’s private key.
Because the ledger is indestructible, no one can erase or alter the record. Updates include metadata records of the date, time, location and entity making the update. In this way, a blockchain-based medical record will be self-auditing.
Public Key Cryptography is an encryption system that uses pairs of keys: a “public key” available to everyone and a “private key” that is known only to its holder. Either key may be used to encrypt a message, but the other key must decrypt the message. Practically speaking, there are two use cases involving public and private keys. First, a sender can encode a message with a public key and be sure that only the holder of the private key can decrypt it. Second, a message or document can be encrypted with a private key. If the message makes sense when it is decrypted using the corresponding public key, it’s guaranteed that the holder of the private key is the party that encrypted the message. This is sometimes called “signing” a message12 because it is analogous to someone putting his unique signature on a document.
Blockchain also supports a concept called M-of-N signatures or “multisig,” meaning that there are a total of N cryptographic keys, and at least M of them have to be present in order to decrypt the data. In this way, the patient can provide keys to authorized caregivers, doctors and others to grant access without the patient’s specific key. This is useful when the patient is incapacitated and cannot provide consent to access the data.
Public Key Cryptography is an important concept for blockchain. All transactions are signed with private keys as a way of establishing the participants’ identities. In the context of storing healthcare data in a blockchain, cryptography would have the additional role of encrypting the contents of the message, so that only intended users can read its contents.
Currently in the ecosystem of health records, each hospital or health system serves as its own central authority to provide record keeping and transmission services.
The traditional, centralized transaction infrastructure is a natural solution to the problem. While it has many advantages, there are also drawbacks. A centralized infrastructure is vulnerable to hackers using ransom ware, failure, corruption and attack. This architecture causes the information silos that are prevalent in healthcare today to be significantly vulnerable.
Blockchain replaces the centralized infrastructure with a distributed one. The blockchain software is running on thousands of nodes distributed across an entire network globally. To process a transaction, it is distributed to all the network nodes, and the transaction is cleared when the nodes have reached a consensus to accept the new transaction into the common ledger.
The process is technologically sophisticated, but it replaces entire record keeping and transaction processing institutions. This lowers transaction overhead in terms of price and execution time. It also means there is no single point of failure, providing a more robust, safer infrastructure.
Implementation of the QuantH Blockchain Solution
To implement a blockchain-based healthcare record system, EHRs and other record keeping systems would encrypt and send a transaction containing patient care documents – encounter notes, prescriptions, family histories, etc. – into the public healthcare blockchain. The transaction would include a digital signature from the contributor to trace provenance and the patient’s blockchain ID as the recipient of the transaction.
After the documents are stored in the blockchain, patients would use a web-based or mobile application to view their blockchain contents and to grant or revoke access to specific parties via their private key.
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The distributed blockchain system has a number of advantages over current methods of record keeping:
1. | Patients become the platform, owning and controlling access to their healthcare data. This removes all obstacles to patients acquiring copies of their healthcare records or transferring them to another healthcare provider. |
2. | Because data is stored on a decentralized network, there is no single institution that can be robbed or hacked to obtain a large number of patient records. |
3. | Data is encrypted in the blockchain and can only be decrypted with the patient’s private key. Even if the network is infiltrated by a malicious party, there is no practical way to read patient data. |
4. | The infrastructure itself provides auditing and non-repudiation capabilities. The methods used to add the data to the blockchain also include tamperproof timestamps, account IDs, and methods of determining if the contents have been altered. |
A blockchain-based method of storing healthcare data includes all the expected criteria of a medical record keeping system, and it goes beyond what a traditional, centralized system can do because it improves patients’ access to their records and strengthens security against data breaches.
The proposed solution begins with today’s health IT systems, primarily EHRs, but also potentially includes laboratory information systems, radiology systems, payer databases, medical devices and consumer devices. These systems will continue to operate as they do today, storing data in their proprietary databases. In addition to storing its own copy of the data, each system will also transmit a copy to the blockchain-based PHR.
All EHR systems that are Meaningful Use compliant must provide the ability for patients to view, download and transmit their health information in human readable as well as machine readable format15. The document format is C-CDA, a machine-readable XML format. By applying a style sheet to the C-CDA document, it becomes an HTML file that can be read by a human using a web browser.
Many health systems satisfy the view/download/transmit criterion by making C-CDA documents available to the patient on a patient portal. From there, the patient can download or forward the document to the destination of their choice. Some EHR systems also offer other methods of transmission that do not require a patient portal.
There are three options for connecting an EHR’s view/download/transmit function to a blockchain-based PHR:
Option 1: EHR vendors implement a blockchain client within their EHR software that communicates health information directly and automatically to the blockchain-based PHR. (See Figure 4 below.) This would be the preferred option, but it requires effort and cooperation on the part of EHR vendors and is unlikely to occur without regulation or incentive.
Option 2: EHR vendors use existing protocols, such as REST, SOAP or Direct Messaging to send health information to a blockchain-based PHR, which is equipped to receive data according to these standards. This would mean that the blockchain-based PHR would need to be able to handle these communication protocols and configured to receive documents from various sources. Such functionality is somewhat heavyweight for a blockchain-based system, which is conceived as a simple electronic transaction ledger.
Option 3: Patients continue to receive their health information through existing patient portals and then forward or upload the documents to the blockchain-based PHR. The lowest common denominator method will work in all cases, but it relies on the extra, manual step of the patient acting as an intermediary. In a worst-case scenario, this will result in incomplete records if the patient does not complete the manual step.
Option 3 is the simplest scenario and the easiest to implement. The feasibility of the other two options depends on the willingness of EHR vendors.
For systems other than EHRs, the situation is somewhat less clear. Conceptually, there are ways to split the stream of data coming out of these systems and send a copy to the blockchain-based PHR; however, the economics and regulatory issues involved may complicate and delay the implementation of these efforts.
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Patient Granting Access
• | Patient A grants access to EHR to Practitioner A |
• | Practitioner A’s ID is added to Patient A’s authorized asset on the ledger |
• | Patient A’s ID is added to Practitioner A’s authorized asset on the ledger |
• | The Symmetric key for the EHR is decrypted with Patient A’s private key |
• | Symmetric key is then encrypted with Practitioner A’s public key |
Patient Revoking Access
• | Patient A revokes access from Practitioner A |
• | Practitioner A’s ID is removed from Patient A’s authorized asset |
• | Patient A’s ID is removed from Practitioner A’s authorized asset |
• | Patient A’s private key is used to decrypt Symmetric key for EHR which is used to decrypt the EHR |
• | The EHR is encrypted with a new Symmetric key |
• | The new Symmetric key is encrypted with Patient A’s public key and the public keys of all the remaining ID’s that have permission |
Practitioner Referring Patient
• | Practitioner A updates the permissions to allow Practitioner B to access the Patient’s EHR. |
• | Chaincode will check that the Practitioner A has permission on the EHR. |
• | Practitioner A uses its private key to decrypt the EHR’s symmetric key |
• | Practitioner B’s public key is used to encrypt the Symmetric key |
• | Practitioner B’s ID is added to Patient A’s authorized asset |
• | Patient A’s ID is added to Practitioner B’s authorized asset |
In essence, the blockchain is a shared database. Unlike a traditional database, however, there is no central ownership. Instead, data is managed through the consensus of participants in a network, who work together (with the help of cryptography) to decide what gets added, while each participant maintains an identical, full copy of all transactions. The network can be public (like bitcoin, open to anyone) or private (restricted to certain members). When new information needs to be added, every computer on the network is notified and updates its copy accordingly. The result is an expansive and distributed source of truth — built not from trust, but through cryptographically enforced consensus. Yet blockchain’s most important attribute is its immutability: once something has been added, it is permanent — stored across thousands of computers, cryptographically locked in history.
The technical details of how this is done are somewhat complex, but involve public/private key encryption (for anonymity), proof-of-work (for agreement on what gets added to the ledger), longest-chain rule (for resolving conflict), and peer-to-peer networks (for communication).
How Will QuantH Blockchain Technology Be Applied to Health Care?
Our primary platform use will be health care is data exchange. Take medication prescribing as an example. A patient’s medications are frequently prescribed and filled by different entities — hospitals, provider offices, pharmacies, etc. Each one maintains its own “source of truth” of medications for a patient, frequently with outdated or simply wrong information. As a result, providers in different networks, or on different EHRs, may not see one another’s prescriptions. Additionally, electronic prescriptions must be directed to specific pharmacies, and paper prescriptions can be duplicated or lost.
To counter these difficulties, a medication prescription blockchain could be a shared source of truth. Every prescription event would be known and shared by those authorized to see it. This would allow, for example, prescriptions to be written electronically without specifying a pharmacy, or prescriptions to be partially filled (and “fully” filled at a later date, by a different pharmacy). Since the QuantH blockchain would be the source of truth, each pharmacy would see all events surrounding that prescription — and could act accordingly. Most importantly, all health care providers could have an immediate view into a patient’s current medications, ensuring accuracy and fidelity.
Here are some of the other ways that QuantH blockchain platform may benefit health care:
· | Clinical data sharing. Advance directives, genetic studies, allergies, problem lists, imaging studies, and pathology reports are just some of the data elements that could be distributed. Alternately, instead of storing actual patient data, blockchain could be used to store access controls — like who a patient has authorized to see their health data — even if the clinical data itself is stored by the EHR. |
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· | Public health. A shared, immutable stream of de-identified patient information could more readily identify pandemics, independent of governmental bodies currently aggregating this data — for example, an influenza reporting system. |
· | Research and clinical trials. Distributing patient consent or trial results could foster data sharing, audit trials, and clinical safety analyses. |
· | Administrative and financial information. Insurance eligibility and claims processing workflows could benefit from blockchain and have decreased transactional costs. |
· | Patient and provider identity. National (or international) patient or provider identities could be secured in the blockchain, providing the basis for health data portability and security. |
· | Patient-generated data. Personal health devices, “wearables,” “Internet of Things” (IOT) devices, and patient-reported outcomes are just some examples of patient-generated data that could leverage the blockchain for security and sharing. |
The greatest potential of QuantH blockchain technology is the empowering of patients to own and gather their own data. Our health information technology framework — directly disrupts the siloed, centralized data stores that dominate health care data today.
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Regulation
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Although we generally do not contract with U.S., state or local government entities, the services that we provide are subject to a complex array of federal and state laws and regulations, including regulation by the Centers for Medicare and Medicaid Services, or CMS, of the U.S. Department of Health and Human Services, as well as additional regulation.
Government Regulation of Health Information
HIPAA Privacy and Security Rules. The Health Insurance Portability and Accountability Act of 1996, as amended, and the regulations that have been issued under it (collectively, “HIPAA”) contain substantial restrictions and requirements with respect to the use and disclosure of individuals’ protected health information. These are embodied in the Privacy Rule and Security Rule portions of HIPAA. The HIPAA Privacy Rule prohibits a covered entity from using or disclosing an individual’s protected health information unless the use or disclosure is authorized by the individual or is specifically required or permitted under the Privacy Rule. The Privacy Rule imposes a complex system of requirements on covered entities for complying with this basic standard. Under the HIPAA Security Rule, covered entities must establish administrative, physical, and technical safeguards to protect the confidentiality, integrity, and availability of electronic protected health information maintained or transmitted by them or by others on their behalf.
The HIPAA Privacy and Security Rules apply directly to covered entities, such as health care providers who engage in HIPAA-defined standard electronic transactions, health plans, and health care clearinghouses. Because we translate electronic transactions to and from the HIPAA-prescribed electronic forms and other forms, we are considered a clearinghouse, and as such are a covered entity. In addition, our clients are also covered entities. In order to provide clients with services that involve the use or disclosure of protected health information, the HIPAA Privacy and Security Rules require us to enter into business associate agreements with our clients. Such agreements must, among other things, provide adequate written assurances:
· | as to how we will use and disclose the protected health information; |
· | that we will implement reasonable administrative, physical, and technical safeguards to protect such information from misuse; |
· | that we will enter into similar agreements with our agents and subcontractors that have access to the information; |
· | that we will report security incidents and other inappropriate uses or disclosures of the information; and |
· | that we will assist the client in question with certain of its duties under the Privacy Rule. |
HIPAA Transaction Requirements. In addition to the Privacy and Security Rules, HIPAA also requires that certain electronic transactions related to health care billing be conducted using prescribed electronic formats. For example, claims for reimbursement that are transmitted electronically to payers must comply with specific formatting standards, and these standards apply whether the payer is a government or a private entity. As a covered entity subject to HIPAA, we must meet these requirements, and moreover, we must structure and provide our services in a way that supports our clients’ HIPAA compliance obligations.
HITECH Act. The HITECH Act, which became law in February 2009, and the regulations issued under it, have provided, among other things, clarification of certain aspects of both the Privacy and Security Rules, expansion of the disclosure requirements for a breach of the Security Rule, and strengthening of the civil and criminal penalties for failure to comply with HIPAA. As these additional requirements become effective, we will be required to comply with them.
State Laws. In addition to the HIPAA Privacy and Security Rules and the requirements imposed by the HITECH Act, most states have enacted patient confidentiality laws that protect against the disclosure of confidential medical information, and many states have adopted or are considering further legislation in this area, including privacy safeguards, security standards, and data security breach notification requirements. Such state laws, if more stringent than HIPAA and HITECH Act requirements, are not preempted by the federal requirements, and we must comply with them. For example, the Massachusetts Office of Consumer Affairs and Business Regulations issued final data security regulations, which became effective in March 2010 and establish minimum standards for protecting and storing personal information about Massachusetts residents contained in paper or electronic format.
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Government Regulation of Reimbursement
Our clients are subject to regulation by a number of governmental agencies, including those that administer the Medicare and Medicaid programs. Accordingly, our clients are sensitive to legislative and regulatory changes in, and limitations on, the government health care programs and changes in reimbursement policies, processes, and payment rates. During recent years, there have been numerous federal legislative and administrative actions that have affected government programs, including adjustments that have reduced or increased payments to physicians and other health care providers and adjustments that have affected the complexity of our work. It is possible that the federal or state governments will implement future reductions, increases, or changes in reimbursement under government programs that adversely affect our client base or our cost of providing our services.
Fraud and Abuse
A number of federal and state laws, loosely referred to as “fraud and abuse laws,” are used to prosecute health care providers, physicians, and others that make, offer, seek, or receive referrals or payments for products or services that may be paid for through any federal or state health care program and, in some instances, any private program. Given the breadth of these laws and regulations, they are potentially applicable to our business; the transactions that we undertake on behalf of our clients; and the financial arrangements through which we market, sell, and distribute our services. These laws and regulations include:
Anti-Kickback Laws. There are numerous federal and state laws that govern patient referrals, physician financial relationships, and inducements to health care providers and patients. The federal health care programs’ anti-kickback law prohibits any person or entity from offering, paying, soliciting, or receiving anything of value, directly or indirectly, for the referral of patients covered by Medicare, Medicaid, and other federal health care programs or the leasing, purchasing, ordering, or arranging for or recommending the lease, purchase, or order of any item, good, facility, or service covered by these programs. Courts have construed this anti-kickback law to mean that a financial arrangement may violate this law if any one of the purposes of one of the arrangements is to encourage patient referrals or other federal health care program business, regardless of whether there are other legitimate purposes for the arrangement. There are several limited exclusions known as safe harbors that may protect some arrangements from enforcement penalties. These safe harbors have very limited application. Penalties for federal anti-kickback violations are severe, and include imprisonment, criminal fines, civil money penalties with triple damages, and exclusion from participation in federal health care programs. Many states have similar anti-kickback laws, some of which are not limited to items or services for which payment is made by a government health care program.
False or Fraudulent Claim Laws. There are numerous federal and state laws that forbid submission of false information, or the failure to disclose information, in connection with the submission and payment of physician claims for reimbursement. In some cases, these laws also forbid abuse in connection with such submission and payment, for example, by systematic over treatment or duplicate billing for the same services to collect increased or duplicate payments. These laws and regulations may change rapidly, and it is frequently unclear how they apply to our business. For example, one federal false claim law forbids knowing submission to government programs of false claims for reimbursement for medical items or services. Under this law, knowledge may consist of willful ignorance or reckless disregard of falsity. How these concepts apply to services such as ours that rely substantially on automated processes has not been well defined in the regulations or relevant case law. As a result, our errors with respect to the formatting, preparation, or transmission of such claims and any mishandling by us of claims information that is supplied by our clients or other third parties may be determined to, or may be alleged to, involve willful ignorance or reckless disregard of any falsity that is later determined to exist.
In most cases where we are permitted to do so, we charge our clients a percentage of the collections that they receive as a result of our services. To the extent that liability under fraud and abuse laws and regulations requires intent, it may be alleged that this percentage calculation provides us or our employees with incentive to commit or overlook fraud or abuse in connection with submission and payment of reimbursement claims. CMS has stated that it is concerned that percentage-based billing services may encourage billing companies to commit or to overlook fraudulent or abusive practices.
PPACA. In addition to the provisions relating to health care access and delivery, the Patient Protection and Affordable Care Act made changes to health care fraud and abuse laws. The PPACA expands false claim laws, amends key provisions of other anti-fraud and abuse statutes, provides the government with new enforcement tools and funding for enforcement, and enhances both criminal and administrative penalties for noncompliance. The PPACA may result in increased anti-fraud enforcement activities.
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Stark Law and Similar State Laws. The Ethics in Patient Referrals Act, known as the Stark Law, prohibits certain types of referral arrangements between physicians and health care entities. Physicians are prohibited from referring patients for certain designated health services reimbursed under federally funded programs to entities with which they or their immediate family members have a financial relationship or an ownership interest, unless such referrals fall within a specific exception. Violations of the statute can result in civil monetary penalties and/or exclusion from the Medicare and Medicaid programs. Furthermore, reimbursement claims for care rendered under forbidden referrals may be deemed false or fraudulent, resulting in liability under other fraud and abuse laws.
Laws in many states similarly forbid billing based on referrals between individuals and /or entities that have various financial, ownership, or other business relationships. These laws vary widely from state to state.
Corporate Practice of Medicine Laws, Fee-Splitting Laws, and Anti-Assignment Laws
In many states, there are laws that prohibit non-licensed practitioners from practicing medicine, prevent corporations from being licensed as practitioners, and prohibit licensed medical practitioners from practicing medicine in partnership with non-physicians, such as business corporations. In some states, these prohibitions take the form of laws or regulations forbidding the splitting of physician fees with non-physicians or others. In some cases, these laws have been interpreted to prevent business service providers from charging their physician clients on the basis of a percentage of collections or charges.
There are also federal and state laws that forbid or limit assignment of claims for reimbursement from government-funded programs. Some of these laws limit the manner in which business service companies may handle payments for such claims and prevent such companies from charging their physician clients on the basis of a percentage of collections or charges. In particular, the Medicare program specifically requires that billing agents who receive Medicare payments on behalf of medical care providers must meet the following requirements:
· | the agent must receive the payment under an agreement between the provider and the agent; |
· | the agent’s compensation may not be related in any way to the dollar amount billed or collected; |
· | the agent’s compensation may not depend upon the actual collection of payment; |
· | the agent must act under payment disposition instructions, which the provider may modify or revoke at any time; and |
· | in receiving the payment, the agent must act only on behalf of the provider, except insofar as the agent uses part of that payment to compensate the agent for the agent’s billing and collection services. |
Medicaid regulations similarly provide that payments may be received by billing agents in the name of their clients without violating anti-assignment requirements if payment to the agent is related to the cost of the billing service, not related on a percentage basis to the amount billed or collected, and not dependent on collection of payment.
Electronic Prescribing Laws
States have differing prescription format and signature requirements. Many existing laws and regulations, when enacted, did not anticipate the methods of e-commerce now being developed. However, due in part to recent industry initiatives, federal law and the laws of all 50 states now permit the electronic transmission of prescription orders. In addition, on November 7, 2005, the Department of Health and Human Services published its final E-Prescribing and the Prescription Drug Program regulations, referred to below as the E-Prescribing Regulations. These regulations are required by the Medicare Prescription Drug Improvement and Modernization Act of 2003 (“MMA”) and became effective beginning on January 1, 2006. The E-Prescribing Regulations consist of detailed standards and requirements, in addition to the HIPAA standards discussed previously, for prescription and other information transmitted electronically in connection with a drug benefit covered by the MMA’s Prescription Drug Benefit. These standards cover not only transactions between prescribers and dispensers for prescriptions but also electronic eligibility and benefits inquiries and drug formulary and benefit coverage information. The standards apply to prescription drug plans participating in the MMA’s Prescription Drug Benefit. Aspects of our services are affected by such regulation, as our clients need to comply with these requirements.
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Anti-Tampering Laws
For certain prescriptions that cannot or may not be transmitted electronically from physician to pharmacy, both federal and state laws require that the written forms used exhibit anti-tampering features. For example, the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act of 2007 has since April 2008 required that most prescriptions covered by Medicaid must demonstrate security features that prevent copying, erasing, or counterfeiting of the written form. Because our clients will, on occasion, need to use printed forms, we must take these laws into consideration.
Electronic Health Records Certification Requirements
The HITECH Act directs the Office of the National Coordinator for Health Information Technology, or ONCHIT, to support and promote meaningful use of certified EHR technology nationwide through the adoption of standards, implementation specifications, and certification criteria as well as the establishment of certification programs for EHR technology. In January 2011, HHS issued a final rule to establish a permanent certification program for EHR technology, including how organizations can become ONC-Authorized Testing and Certification Bodies (ONC-ATCBs). ONC-ATCBs are required to test and certify that EHR technology is compliant with the standards, implementation specifications, and certification criteria adopted by the Secretary and meet the definition of “certified EHR technology.” In July 2010, the Secretary published the final rule that adopted standards, implementation specifications, and certification criteria for EHR technology. While we believe our system is well designed in terms of function and interoperability, we cannot be certain that it will meet future requirements.
United States Food and Drug Administration
The U.S. Food and Drug Administration (“FDA”) has promulgated a draft policy for the regulation of computer software products as medical devices and a proposed rule for reclassification of medical device data systems under the Federal Food, Drug and Cosmetic Act, as amended, or FDCA. The FDA has stated that health information technology software is a medical device under the FDCA, and we expect that the FDA is likely to become increasingly active in regulating computer software intended for use in health care settings regardless of whether the draft policy or proposed rule is finalized or changed. We anticipate additional guidance on this subject by early 2014, in the form of a report to be issued by the FDA, ONCHIT, and the Federal Communications Commission. This report would propose a regulatory framework for health information technology that promotes innovation, protects patient safety, and avoids regulatory duplication.
If our computer software functionality is considered a medical device under the FDCA, we could be subject to additional regulatory requirements. Under the FDCA, medical devices include any instrument, apparatus, machine, contrivance, or other similar or related article that is intended for use in the diagnosis of disease or other conditions or in the cure, mitigation, treatment, or prevention of disease. FDA regulations govern, among other things, product development, testing, manufacture, packaging, labeling, storage, clearance or approval, advertising and promotion, sales and distribution, and import and export. FDA requirements with respect to devices that are determined to pose lesser risk to the public include:
· | establishment registration and device listing with the FDA; |
· | the Quality System Regulation, or QSR, which requires manufacturers, including third-party or contract manufacturers, to follow stringent design, testing, control, documentation, and other quality assurance procedures during all aspects of manufacturing; |
· | labeling regulations and FDA prohibitions against the advertising and promotion of products for uncleared, unapproved off-label uses and other requirements related to advertising and promotional activities; |
· | medical device reporting regulations, which require that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur; |
· | corrections and removal reporting regulations, which require that manufacturers report to the FDA any field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health; and |
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· | post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device. |
Non-compliance with applicable FDA requirements can result in, among other things, public warning letters, fines, injunctions, civil penalties, recall or seizure of products, total or partial suspension of production, failure of the FDA to grant marketing approvals, withdrawal of marketing approvals, a recommendation by the FDA to disallow us from entering into government contracts, and criminal prosecutions. The FDA also has the authority to request repair, replacement, or refund of the cost of any device.
Intellectual Property
We may rely on a combination of patent, trademark, copyright, and trade secret laws in the United States as well as confidentiality procedures and contractual provisions to protect our proprietary technology, databases, and our brand. Despite these reliance’s, we believe the following factors are more essential to establishing and maintaining a competitive advantage:
· | the statistical and technological skills of our service operations and research and development teams; |
· | the health care domain expertise and payer rules knowledge of our service operations and research and development teams; |
· | the real-time connectivity of our service offerings; |
· | the continued expansion of our proprietary Rules Engine; and |
· | a continued focus on the improved financial results of our clients. |
We have a policy of requiring key employees and consultants to execute confidentiality agreements upon the commencement of an employment or consulting relationship with us. Our employee agreements also require relevant employees to assign to us all rights to any inventions made or conceived during their employment with us. In addition, we have a policy of requiring individuals and entities with which we discuss potential business relationships to sign non-disclosure agreements. Our agreements with clients include confidentiality and non-disclosure provisions.
Seasonality
There is moderate seasonality in the activity level of medical practices. Typically, discretionary use of physician services declines in the late summer and during the holiday season, which leads to a decline in collections by our physician clients about 30 to 50 days later. In addition, as further explained in “Risk Factors,” our revenues and operating results may fluctuate from quarter to quarter depending on a host of factors including, but not limited to, the severity, length, and timing of seasonal and pandemic illness.
Legal Proceedings
We may from time to time be involved in various claims and legal proceedings of a nature we believe are normal and incidental to temporary employee staffing business. These matters may include product liability, intellectual property, employment, personal injury cause by our employees, and other general claims. We accrue for contingent liabilities when it is probable that a liability has been incurred and the amount can be reasonably estimated. We are not presently a party to any legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
The Company was sued by Northbridge Financial as a result of acquiring $810,000 of debt owed by the company and the parties reached a settlement through a 3(a)10 proceeding in which Northbridge Financial received stock in exchange for the debt. We subsequently terminated the arrangement with Northbridge Financial by mutual agreement. The Company’s debt was acquired by CF3 Enterprises, LLC who sued the company over $1,455,000 debt and a settlement was reached between the parties through a 3(a)10 equity exchange for debt.
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Employees
As of June 30, 2017, we had one employee, including officers and directors after spinning off the ambulance business which had 26 employees. We currently used contracted service providers until the company raises sufficient capital to hire permanent employees. We believe we will be successful in attracting experienced and capable personnel. All of our employees have entered into agreements with us requiring them not to compete or disclose our proprietary information. Our employees are not represented by any labor union. We believe that relations with our employees are excellent. Usually the number of total employees and number of full-time employees will vary.
Description of Property
The Company currently leases a virtual office space located 14090 Southwest Freeway, Sugar Land, TX. 77478.
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______
The following table sets forth information regarding our executive officers, directors and significant employees, including their ages as of December 31, 2017:
Name and Principal Position |
Age |
Term of Office |
Approximate hours per week for part-time employees |
||
Ricky Bernard, Chairman | 40 | May 2016 |
Ricky Bernard is the company CEO/President, Sole Officer and Director age 40, majority shareholder with 4,600,000,000 shares common stock and 10,000,000 Preferred shares restricted. Mr. Bernard has owned and operated Quantum Medical Holdings, Inc. since inception in May 2016. Mr. Bernard owned and operated R and G Transportation, Inc. a Texas Non-Emergency Medical Transportation company form inception in 2007 until 2016. Mr. Bernard acquired controlling interest in Quantum Medical Transport, Inc. f/k/a/ A Clean Slate, Inc. in 2015. Mr. Bernard was managing member of United Ambulance, LLC from 2017- May 2018 until divesting interest in the company. Mr. Bernard has owned and operated several business enterprises with 20 years business management experience as a serial entrepreneur. Education: Texas Southern University, undergraduate Business Administration.
None of our officers or directors in the last five years has been the subject of any conviction in a criminal proceeding or named as a defendant in a pending criminal proceeding (excluding traffic violations and other minor offenses), the entry of an order, judgment, or decree, not subsequently reversed, suspended or vacated, by a court of competent jurisdiction that permanently or temporarily enjoined, barred, suspended or otherwise limited such person’s involvement in any type of business, securities, commodities, or banking activities; a finding or judgment by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission, the Commodity Futures Trading Commission, or a state securities regulator of a violation of federal or state securities or commodities law, which finding or judgment has not been reversed, suspended, or vacated; or the entry of an order by a self-regulatory organization that permanently or temporarily barred, suspended or otherwise limited such person’s involvement in any type of business or securities activities.
There are no family relationships among and between our directors, officers, persons nominated or chosen by the Company to become directors or officers, or beneficial owners of more than five percent (5%) of the any class of the Company’s equity securities.
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______
Employment Agreements
Mr. Bernard has entered into an employment agreement with the Company for a term of five years. Pursuant to this employment agreement, they have agreed to devote a substantial portion of their business and professional time and efforts to our business. The employment agreement provides that each employee shall receive a salary determined by the Board of Directors commensurate with the development of the Company. He may be entitled to receive, at the sole discretion of our Board of Directors or a committee thereof, bonuses based on the achievement (in whole or in part) by the Company of our business plan and achievement by the employee of fixed personal performance objectives.
The following table represents information regarding the total compensation our officers and directors of the Company as of December 31, 2017:
Cash Compensation | Annual Bonus Available |
Other
Compensation |
Total
Compensation |
|||||||||||||
Name and Principal Position | ||||||||||||||||
Ricky Bernard, Chairman, CEO | $ | 18,000 | – | – | $ | 18,000 | ||||||||||
TOTAL | $ | 18,000 | $ | 18,000 |
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
During the last two full fiscal years and the current fiscal year or any currently proposed transaction, there is no transaction involving the Company, in which the amount involved exceeds the lesser of $120,000 or one percent of the average of the Company’s total assets at year-end for its last three fiscal years other than as follows:
The amount of notes payable owed to Ricky Bernard is $29,400 as of March 31, 2018. The Company paid $40,000 deposit for its merger, which was financed by third party debt on behalf of Ricky Bernard, to cover the expense of the merger agreement between Quantum Medical Holdings, Inc. and Quantum Medical Transport, Inc., formerly A Clean Slate, Inc.
Disclosure of Conflicts of Interest
There are no conflicts of interest between the Company and any of its officers or directors
Stock Options
The Company's stockholders have approved a 2018 Stock Option Plan, as previously adopted by our Board of Directors (the "Plan"). Under this Plan, our officers, directors, and/or key employees and/or consultants can receive incentive stock options and non-qualified stock options to purchase shares of our Common Stock. To date, no options have been issued.
With respect to incentive stock options, the Plan provides that the exercise price of each such option must be at least equal to 100% of the fair market value of the Common Stock on the date that such option is granted. The Plan requires that all such options have an expiration date not later than that date which is one day before the tenth anniversary of the date of the grant of such options (or the fifth anniversary of the date of grant in the case of 10% stockholders). However, with certain limited exceptions, in the event that the option holder ceases to be associated with the Company, or engages in or is involved with any business similar to ours, such option holder's incentive options immediately terminate.
Pursuant to the provisions of the Plan, the aggregate fair market value, determined as of the date(s) of grant, for which incentive stock options are first exercisable by an option holder during any one calendar year cannot exceed $100,000. No such options have yet been issued.
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Bonus Plan for Executive Officers
The Company's Board of Directors has established an annual Bonus Plan for Executive Officers (the “Bonus Plan.”) Under the Bonus Plan, a Committee of the Board of Directors sets performance targets for key employees who are or may become executive officers. Such executives are eligible for a bonus only if they meet the performance standards set in advance by the Committee. Aggregate bonuses may not exceed ten percent of income before taxes and bonuses may not exceed $1 million per employee.
Management Stock Bonus Plan
The Plan provides that the Company shall establish a reserve of shares of Common Stock to be awarded to eligible salaried officers and directors. The Management Stock Bonus Plan Committee, composed of not less than three members, administers the Plan. The Board of Directors must review actions of the Committee. The Plan awards restricted stock to key executives. During the restricted period, the owner of the stock may not transfer the stock without first offering the Company the opportunity to buy back the stock at its issue price. In the first year of the restriction period, the Company has the right to buy back all of the awarded stock. In the second year, the Company has the right to buy back 75% of the awarded stock. After two years and until the end of the restriction period, a maximum of three years, the Company has the right to buy back 50% of the awarded stock.
Indemnification Agreements
We have entered into indemnification agreements with each of our directors, executive officers and other key employees. The indemnification agreements and our amended and restated By-Laws will require us to indemnify our directors to the fullest extent permitted by Delaware law.
Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the Securities Act), may be permitted to directors, executive officers or persons controlling us, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Review, Approval or Ratification of Transactions with Related Parties
We have adopted a related-party transactions policy under which our executive officers, directors, nominees for election as a director, beneficial owners of more than 5% of any class of our Common Stock, and any members of the immediate family of any of the foregoing persons are not permitted to enter into a related-party transaction with us without the consent of our audit committee. If the related party is, or is associated with, a member of our audit committee, the transaction must be reviewed and approved by another independent body of our Board of Directors, such as our governance committee. Any request for us to enter into a transaction with a related party in which the amount involved exceeds $120,000 and such party would have a direct or indirect interest must first be presented to our audit committee for review, consideration and approval. If advance approval of a related-party transaction was not feasible or was not obtained, the related-party transaction must be submitted to the audit committee as soon as reasonably practicable, at which time the audit committee shall consider whether to ratify and continue, amend and ratify, or terminate or rescind such related-party transaction. All of the transactions described above were reviewed and considered by, and were entered into with the approval of, or ratification by, our Board of Directors.
During the last two full fiscal years and the current fiscal year or any currently proposed transaction, there are transactions involving the issuer, in which the amount involved exceeds the lesser of $120,000 or one percent of the average of the issuer’s total assets at year-end for its last three fiscal years, except compensation awarded to executives.
Disclosure of Conflicts of Interest
There are no conflicts of interest between the Company and any of its officers or directors.
Legal/Disciplinary History
None of Quantum Medical Transport, Inc.’s Officers or Directors have been the subject of any criminal proceeding or named as a defendant in a pending criminal proceeding (excluding traffic violations and other minor offenses);
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None of Quantum Medical Transport, Inc.’s Officers or Directors have been the subject of any entry of an order, judgment, or decree, not subsequently reversed, suspended or vacated, by a court of competent jurisdiction that permanently or temporarily enjoined, barred, suspended or otherwise limited such person’s involvement in any type of business, securities, commodities, or banking activities;
None of Quantum Medical Transport, Inc.’s Officers or Directors have been the subject of any finding or judgment by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission, the Commodity Futures Trading Commission, or a state securities regulator of a violation of federal or state securities or commodities law, which finding or judgment has not been reversed, suspended, or vacated; or
None of Quantum Medical Transport, Inc.’s Officers or Directors has been the subject of any entry of an order by a self-regulatory organization that permanently or temporarily barred, suspended or otherwise limited such person’s involvement in any type of business or securities activities.
Board Composition
Our board of directors currently consists of four members. Each director of the Company serves until the next annual meeting of stockholders and until his successor is elected and duly qualified, or until his earlier death, resignation or removal. Our board is authorized to appoint persons to the offices of Chairman of the Board of Directors, President, Chief Executive Officer, one or more vice presidents, a Treasurer or Chief Financial Officer and a Secretary and such other offices as may be determined by the board.
We have no formal policy regarding board diversity. In selecting board candidates, we seek individuals who will further the interests of our stockholders through an established record of professional accomplishment, the ability to contribute positively to our collaborative culture, knowledge of our business and understanding of our prospective markets.
Board Leadership Structure and Risk Oversight
The board of directors oversees our business and considers the risks associated with our business strategy and decisions. The board currently implements its risk oversight function as a whole. Each of the board committees when established will also provide risk oversight in respect of its areas of concentration and reports material risks to the board for further consideration.
Code of Business Conduct and Ethics
Prior to one year from the date of this Offering's qualification, we will be adopting a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer or controller, or persons performing similar functions. We will post on our website a current copy of the code and all disclosures that are required by law or market rules in regard to any amendments to, or waivers from, any provision of the code.
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______
The following table sets forth certain information known to us regarding beneficial ownership of our capital stock as of December 31, 2017 for (i) all executive officers and directors as a group and (ii) each person, or group of affiliated persons, known by us to be the beneficial owner of more than ten percent (10%) of our capital stock. The percentage of beneficial ownership in the table below is based on 487,793,986 shares of common stock deemed to be outstanding as of December 31, 2017.
The following table gives information on ownership of our securities as of February 28, 2018. The following lists ownership of our Common Stock and Preferred Stock by each person known by us to be the beneficial owner of over 5% of the outstanding Common and Preferred Stock, and by our officers and directors:
(1) Based on a total of 10,076,298,915 shares outstanding as of June 30, 2018.
(2) Assumes all shares offered are sold.
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______
The Common Stock
We are authorized to issue 20,000,000,000 shares of Common Stock, $0.000001 par value. The holders of Common Stock are entitled to equal dividends and distributions, with respect to the Common Stock when, as, and if declared by the Board of Directors from funds legally available for such dividends. No holder of Common Stock has any preemptive right to subscribe for any of our stock nor are any shares subject to redemption. Upon our liquidation, dissolution or winding up, and after payment of creditors and any amounts payable to senior securities, the assets will be divided pro rata on a share-for-share basis among the holders of the shares of Common Stock. All shares of Common Stock now outstanding upon completion of this Offering and conversion of any Preferred Stock, are, and will be, fully paid, validly issued and non-assessable.
Holders of our Common Stock do not have cumulative voting rights, so that the holders of more than 50% of the shares voting for the election of directors will be able to elect 100% of the directors if they choose to do so, and in that event, the holders of the remaining shares will not be able to elect any members to the Board of Directors.
The Company has never paid any dividends to shareholders of our Common Stock. The declaration in the future of any cash or stock dividends will depend upon our capital requirements and financial position, general economic conditions, and other pertinent factors. We presently intend not to pay any cash or stock dividends in the foreseeable future. Management intends to reinvest earnings, if any, in the development and expansion of our business. No dividend may be paid on the Common Stock until all Preferred Stock dividends are paid in full.
Preferred Stock
We are authorized by our Articles of Incorporation to issue a maximum of 10,000,000 shares of Preferred Stock, $0.00001 par value. This Preferred Stock may be in one or more series and containing such rights, privileges and limitations, including voting rights, conversion privileges and/or redemption rights, as may, from time to time, be determined by our Board of Directors. Preferred stock may be issued in the future in connection with acquisitions, financings or such other matters as the Board of Directors deems to be appropriate. In the event that any such shares of Preferred Stock shall be issued, a Certificate of Designation, setting forth the series of such Preferred Stock and the relative rights, privileges and limitations with respect thereto, shall be filed. The effect of such Preferred Stock is that our Board of Directors alone, within the bounds and subject to the federal securities laws and the Delaware Law, may be able to authorize the issuance of Preferred Stock which could have the effect of delaying, deferring or preventing a change in control of our Company without further action by the stockholders and might adversely affect the voting and other rights of holders of Common Stock. The issuance of Preferred Stock with voting and conversion rights also may adversely affect the voting power of the holders of Common Stock, including the loss of voting control to others. To date, no such Preferred Stock has been issued.
______
We have never declared or paid cash dividends on our capital stock. We currently intend to retain any future earnings for use in the operation of our business and do not intend to declare or pay any cash dividends in the foreseeable future. Any further determination to pay dividends on our capital stock will be at the discretion of our Board of Directors, subject to applicable laws, and will depend on our financial condition, results of operations, capital requirements, general business conditions, and other factors that our Board of Directors considers relevant.
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______
Current Offering
Quantum Medical Transport, Inc. (“Quantum Medical Transport, Inc.,” “We,” or the “Company”) is offering up to $2,000,000 total of Securities, consisting of Common Stock, $0.0001 par value (the “Common Stock” or collectively the “Securities”).
Transfer Agent
Our transfer agent is Pacific Stock Transfer Company, 4045 South Spencer Street, Suite 403, Las Vegas, NV 89119, Phone Number (702) 361-3033. The transfer agent is registered under the Exchange Act.
SHARES ELIGIBLE FOR FUTURE SALE
_____
Prior to this Offering, there has been a limited market for our Common Stock. Future sales of substantial amounts of our Common Stock, or securities or instruments convertible into our Common Stock, in the public market, or the perception that such sales may occur, could adversely affect the market price of our Common Stock prevailing from time to time. Furthermore, because there will be limits on the number of shares available for resale shortly after this Offering due to contractual and legal restrictions described below, there may be resales of substantial amounts of our Common Stock in the public market after those restrictions lapse. This could adversely affect the market price of our Common Stock prevailing at that time.
Upon completion of this Offering, assuming the maximum amount of shares of Common Stock offered in this Offering are sold, there will be 10,076,298,915 +++ shares of our Common Stock outstanding.
Rule 144
In general, a person who has beneficially owned restricted shares of our Common Stock for at least twelve months, in the event we are a reporting company under Regulation A, or at least six months, in the event we have been a reporting company under the Exchange Act for at least 90 days before the sale, would be entitled to sell such securities, provided that such person is not deemed to be an affiliate of ours at the time of sale or to have been an affiliate of ours at any time during the 90 days preceding the sale. A person who is an affiliate of ours at such time would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of shares that does not exceed the greater of the following:
· | 1% of the number of shares of our Common Stock then outstanding; or |
· | the average weekly trading volume of our Common Stock during the four calendar weeks preceding the filing by such person of a notice on Form 144 with respect to the sale; |
provided that, in each case, we are subject to the periodic reporting requirements of the Exchange Act for at least 90 days before the sale. Rule 144 trades must also comply with the manner of sale, notice and other provisions of Rule 144, to the extent applicable.
_____
Certain legal matters with respect to the shares of common stock offered hereby will be passed upon by John E. Lux, Esq. of Washington, D.C. Mr. Lux owns 20,500,000 shares of our Common Stock.
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______
The consolidated financial statements of the Company appearing elsewhere in this Offering Circular have been prepared by management and have not been reviewed by an independent accountant.
WHERE YOU CAN FIND MORE INFORMATION
______
We have filed with the SEC a Regulation A Offering Statement on Form 1-A under the Securities Act with respect to the shares of common stock offered hereby. This Offering Circular, which constitutes a part of the Offering Statement, does not contain all of the information set forth in the Offering Statement or the exhibits and schedules filed therewith. For further information about us and the common stock offered hereby, we refer you to the Offering Statement and the exhibits and schedules filed therewith. Statements contained in this Offering Circular regarding the contents of any contract or other document that is filed as an exhibit to the Offering Statement are not necessarily complete, and each such statement is qualified in all respects by reference to the full text of such contract or other document filed as an exhibit to the Offering Statement. Upon the completion of this Offering, we will be required to file periodic reports, proxy statements, and other information with the SEC pursuant to the Securities Exchange Act of 1934. You may read and copy this information at the SEC's Public Reference Room, 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet website that contains reports, proxy statements and other information about issuers, including us, that file electronically with the SEC. The address of this site is www.sec.gov.
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FINANCIAL STATEMENTS
Quantum Medical Transport, Inc.
For the Quarter Ended June 30, 2018 (UNAUDITED) | |
Consolidated Balance Sheet as of of June 30, 2018 | F-2 |
Consolidated Profit and Loss | F-3 |
Statement of Cash Flows | F-4 |
Notes to Financial Statements | F-5 |
DECEMBER 31, 2017 AND 2016 (UNAUDITED) | |
Consolidated Balance Sheet as of December 31, 2017 | F-8 |
Consolidated Profit and Loss | F-10 |
Statement of Cash Flows | F-11 |
Notes to Financial Statements | F-12 |
F-1 |
Quantum Medical Transport, Inc.
Consolidated Balance Sheet
As of June 30, 2018
F-2 |
Quantum Medical Transport, Inc.
Profit and Loss
(Unaudited)
Consolidated for the Period Ending June 30, 2018
2018 | ||||
Revenue | $ | 498,756 | ||
OPERATING EXPENSES | ||||
COGS | 65,345 | |||
G&A | 422,650 | |||
TOTAL EXPENSES | 487,995 | |||
NET OPERATING INCOME (LOSS) | $ | 10,761 |
F-3 |
Quantum Medical Transport, Inc.
(Unaudited)
Ending June 30, 2018
Total | ||||
CASH FLOW FROM OPERATING ACTIVITIES | ||||
Net Income | $ | 10,761 | ||
Net Cash Provided by Operating activities | 10,761 | |||
CASH FLOW FROM FINANCING ACTIVITIES | ||||
Net Cash Provided by investing activities | – | |||
CASH FLOW FROM FINANCING ACTIVITIES | ||||
Equity (common shares) | – | |||
Line of Credit | – | |||
Borrowing on related party debt | – | |||
Net Cash Provided by Financing activities | – | |||
NET INCREASE IN CASH | (13,923 | ) | ||
CASH AT BEGINNING OF PERIOD | 26,769 | |||
CASH AT END OF PERIOD | $ | 12,846 |
F-4 |
(Unaudited)
NOTE 1 – BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America.
In the opinion of management, the accompanying financial statements contain all adjustments, consisting only of normal recurring accruals, necessary for a fair presentation of the Company’s financial position as of June 30, 2018 and the results of its operations and cash flows as of June 30, 2018.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investment purchased with an original maturity of three months or less to be cash equivalents. No cash equivalent as of June 30, 2018.
REVENUE RECOGNITION
The Company considers revenue recognizable when persuasive evidence of an arrangement exists, the price is fixed or determinable, goods or services have been delivered, and collectability is reasonable assured. The company recognized operating revenue of $498,756 as of June 30, 2018.
USE OF ESTIMATES
The preparation of the Company’s financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.
FAIR VALUE MEASUREMENT
The Company adopted FASB ASC 820-Fair Value Measurements and Disclosures, or ASC 820, for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company's financial position or operating results, but did expand certain disclosures. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.
The Company did not have any Level 2 or Level 3 assets or liabilities as of June 30, 2018.
F-5 |
Cash is considered to be highly liquid and easily tradable as of June 30, 2018 and therefore classified as Level 1 within our fair value hierarchy.
In addition, FASB ASC 825-10-25 Fair Value Option, or ASC 825-10-25, was effective for January 1, 2008. ASC 825-10-25 expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments.
INCOME TAXES
The Company uses the asset and liability method of accounting for income taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of certain assets and liabilities. Deferred income tax assets and liabilities are computed annually for the difference between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period, plus or minus the change during the period in deferred tax assets and liabilities.
Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of the assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. The Company had no significant deferred tax items arise during any of the periods presented.
CONCENTRATION OF CREDIT RISK
The Company does not have any concentration of related financial credit risk.
RECENT ACCOUNTING PRONOUNCEMENTS
The Company does not expect the adoption of any recent accounting pronouncements to have a material impact on its financial statements.
NOTE 3 – GOING CONCERN
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The company has sufficient revenue and assets to continue as a going concern. As shown in the accompanying financial statements, the Company had accumulated deficit of $612,191 for the period as of June 30, 2018. The company recognized $498,756 revenue for the period ended June 30, 2018. As of June 30, 2018 the company had consolidated assets of consisting of $40,800 accounts receivables, $26,875 fixed assets, $12,846 Cash in bank, and $1,200,000 in Goodwill. Management values the company’s goodwill at $1.2 Million based upon intangibles such as intellectual property of pending patent application, long term contracts and receivables.
NOTE 4 – RELATED PARTY
The amount of notes payable owed to Ricky Bernard is $29,400 as of June 30, 2018 . The company paid $40,000 deposit for its merger, which was financed by third party debt on behalf of Ricky Bernard, to cover the expense of the merger agreement between Quantum Medical Holdings, Inc. and Quantum Medical Transport, Inc. formerly A Clean Slate, Inc. (DRWN).
NOTE 5 – CONVERTIBLE DEBT
The company notes consist of two convertible notes in the amount of $40,000 each outstanding. The company paid $40,000 deposit for its merger, which was financed by third party debt on behalf of Ricky Bernard, to cover the expense of the merger agreement between Quantum Medical Holdings, Inc. and Quantum Medical Transport, Inc. formerly A Clean Slate, Inc. (DRWN). The company received an additional $40,000 to cover operating expenses. The company has a note in the amount of $360,000 owed to seller of A Clean Slate, Inc. Northbridge Financial still holds debt in the amount of $2,000 with a reserve of 40 Million shares remaining.
F-6 |
NOTE 6 – EQUITY
The company had authorized shares 20,000,000,000 a/o June 30, 2018 . We had outstanding common shares of 10,076,298,915. The company had 5,841,642,932 restricted shares of which 4.7 Billion are held by the founder Ricky Bernard. The public float consisted of 4,124,655,983 common shares. The company repurchased 110 Million common shares from shareholder and retired the shares to the treasury in the first quarter. The company issued 375 Million restricted common shares to a vendor in lieu of cash. The company issued 1.5 Billion shares to Northbridge Financial as part of their debt conversion rights. The company entered into a settlement agreement with Northbridge Financial to restructure the company debt through a 3(a)10 lawsuit that was filed by Northbridge, in which Northbridge received stock in exchange for the debt. The company mutually terminated its 3(a)10 settlement agreement with Northbridge Financial. The company had a settlement with CF3 Enterprises, LLC a New York private equity firm that acquired the company’s debt of $455,000 through a 3(a)10 settlement. CF3 Enterprises had previously released $700,000 of debt to Northbridge Financial, which has subsequently been terminated. The company by mutual agreement has terminated its 3(a)10 debt with CF3 Enterprises, LLC as well and returned the debt to the original debt holders. The debt has been removed from the company books. The parties have no further obligation of debt conversions to these parties under the 3(a)10.
NOTE 7 – SUBSEQUENT EVENTS
N/A
F-7 |
Quantum Medical Transport, Inc.
As of December 31, 2017
Total | ||||
ASSETS | ||||
Current Assets | ||||
Bank Accounts | ||||
BBVA Compass Checking | $ | 3,775 | ||
Checking Account | 23,151 | |||
Savings Account | 5,579 | |||
Savings II | 25 | |||
Total Bank Accounts | 32,530 | |||
Accounts Receivable | ||||
AR - Wheelchair | 30,470 | |||
Billing | – | |||
Contractual Adj - Ambulance | – | |||
Total Accounts Receivable | 30,470 | |||
Other Current Assets | ||||
Total Other Current Assets | – | |||
Total Current Assets | 63,000 | |||
Fixed Assets | ||||
Ambulance | 38,214 | |||
Office Improvements | 28,250 | |||
Wheel Chair Van | 49,175 | |||
Total Fixed Assets | 115,639 | |||
Other Assets | ||||
Accumulated Depreciation | (80,075 | ) | ||
Goodwill | 1,200,000 | |||
Total Other Assets | 1,119,925 | |||
TOTAL ASSETS | $ | 1,298,563 |
F-8 |
LIABILITIES AND EQUITY | ||||
Liabilities | ||||
Current Liabilities | ||||
Accounts Payable | ||||
Accounts Payable | $ | 398,485 | ||
Total Accounts Payable | 398,485 | |||
Other Current Liabilities | ||||
Direct Deposit Liabilities | 883 | |||
Direct Deposit Payable | – | |||
Short Term Loan | 7,400 | |||
Notes to Related Parties | 29,400 | |||
Notes Payable | 1,061,000 | |||
On Deck | – | |||
Payroll Liabilities | 972 | |||
0013209310141827 | – | |||
00132530472016CI0328 | ||||
Euresti0599192191 | (587 | ) | ||
Euresti2015EM505570 | (530 | ) | ||
Federal Taxes (941/944) | 7,719 | |||
Federal Unemployment (940) | 209 | |||
Schiwart 0013036186140445 | (1,153 | ) | ||
TX Unemployment Tax | 222 | |||
Total Payroll Liabilities | 6,851 | |||
Total Other Current Liabilities | 1,105,533 | |||
Total Current Liabilities | 1,504,018 | |||
Total Liabilities | 1,504,018 | |||
Equity | ||||
Stockholders' Deficit | ||||
Series A Preferred Stock, $0.000001 par value, 10,000,000 shares authorized; none issued and outstanding | – | |||
Series B Preferred Stock, $0.000001 par value, 10,000 shares authorized; none issued and outstanding | – | |||
Common Stock, $0.000001 par value, 10,000,000,000 shares authorized; 7,780,898,915 shares issued and outstanding | 7,781 | |||
Additional paid in capital | – | |||
Accumulated deficit | (197,674 | ) | ||
Total Stockholders’ Deficit | (205,455 | ) | ||
TOTAL LIABILITIES AND EQUITY | $ | 1,298,563 |
F-9 |
Quantum Medical Transport, Inc.
Profit and Loss
(Unaudited)
Consolidated for the Period Ending December 31, 2017
2017 | ||||
Revenue | $ | 1,310,140 | ||
OPERATING EXPENSES | ||||
COGS | 212,534 | |||
G&A | 874,762 | |||
TOTAL EXPENSES | 1,087,296 | |||
NET OPERATING INCOME (LOSS) | 222,844 | |||
$ | 222,844 |
F-10 |
Quantum Medical Transport,
Inc.
Statement of Cash Flows
(Unaudited)
Ending December 31, 2017
CASH FLOW FROM OPERATING ACTIVITIES | Total | |||
Net Income | $ | 10,309 | ||
Net Cash Provided by Operating activities | 10,309 | |||
CASH FLOW FROM INVESTING ACTIVITIES | ||||
Net Cash Provided by investing activities | – | |||
CASH FLOW FROM FINANCING ACTIVITIES | ||||
Equity (common shares) | –0 | |||
Borrowing on related party debt | – | |||
Net Cash Provided by Financing activities | – | |||
NET INCREASE IN CASH | 6,051 | |||
CASH AT BEGINNING OF PERIOD | 26,481 | |||
CASH AT END OF PERIOD | $ | 32,530 |
F-11 |
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 – BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America.
In the opinion of management, the accompanying financial statements contain all adjustments, consisting only of normal recurring accruals, necessary for a fair presentation of the Company’s financial position as of December 31, 2017 and the results of its operations and cash flows as of December 31, 2017.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investment purchased with an original maturity of three months or less to be cash equivalents. No cash equivalent as of December 31, 2017.
REVENUE RECOGNITION
The Company considers revenue recognizable when persuasive evidence of an arrangement exists, the price is fixed or determinable, goods or services have been delivered, and collectability is reasonable assured. The company recognized operating revenue of $1,310,000 as of December 31, 2017 compared to $1.2 Million same period last year.
USE OF ESTIMATES
The preparation of the Company’s financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.. Actual results could differ from these estimates.
FAIR VALUE MEASUREMENT
The Company adopted FASB ASC 820-Fair Value Measurements and Disclosures, or ASC 820, for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company's financial position or operating results, but did expand certain disclosures. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
F-12 |
Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.
The Company did not have any Level 2 or Level 3 assets or liabilities as of December 31, 2017.
Cash is considered to be highly liquid and easily tradable as of December, 2017 and therefore classified as Level 1 within our fair value hierarchy.
In addition, FASB ASC 825-10-25 Fair Value Option, or ASC 825-10-25, was effective for January 1, 2008. ASC 825-10-25 expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments.
INCOME TAXES
The Company uses the asset and liability method of accounting for income taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of certain assets and liabilities. Deferred income tax assets and liabilities are computed annually for the difference between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period, plus or minus the change during the period in deferred tax assets and liabilities.
Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of the assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. The Company had no significant deferred tax items arise during any of the periods presented.
CONCENTRATION OF CREDIT RISK
The Company does not have any concentration of related financial credit risk.
RECENT ACCOUNTING PRONOUNCEMENTS
The Company does not expect the adoption of any recent accounting pronouncements to have a material impact on its financial statements.
NOTE 3 – GOING CONCERN
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The company has sufficient revenue and assets to continue as a going concern. As shown in the accompanying financial statements, the Company had accumulated deficit of -$205,455 for the period as of December 31, 2017. The company recognized $1,310,000 revenue for the period ended December 31, 2017. As of December 31, 2017 the company had consolidated assets of consisting of $30,469 wheel chair receivables, $220,000 insurance claims receivables, $115,638 fixed assets, $32,530 Cash in bank, and $1,200,000 in Goodwill. The company owns 4-ambulances and 7-wheel chair lift vans. Management values the company’s goodwill at $1.2 Million based upon 1times revenue including intangibles such as long term contracts and receivables. The company valued its total assets at $1,298,563 due to invoice adjustments in insurance claims processing for its ambulance services.
F-13 |
NOTE 4 – RELATED PARTY
The amount of notes payable owed to Ricky Bernard is $29,400 as of December 31, 2017. The company paid $40,000 deposit, which was financed by related party debt from Ricky Bernard, to cover the expense of the merger agreement with Quantum Medical Transport, Inc. formerly A Clean Slate, Inc (DRWN). The company had previous related party debt in the form of a note payable to the seller in the amount of $594,031 plus $54,315 interest accrued from a debt the company owed him in 2013. The seller exchanged the $594,031 debt plus $54,315 interest accrued and received a new note of $360,000 as part of the merger agreement. The seller’s debt has been subsequently acquired by CF3 Enterprises, LLC.
NOTE 5 – COMMISSION ON ACQUISITION
No commission was paid to any party.
NOTE 6 – EQUITY
Quantum Medical Holdings, Inc. had 10 million shares common stock issued and outstanding to our company CEO Ricky Bernard for $1,000 cash. Our CEO owned 100% of the merger sub company (Quantum Medical Holdings, Inc) outstanding common shares; no preferred stock had been issued or authorized for that company. The company had an obligation to issue 4,700,000,000 restricted common shares to Ricky Bernard in exchange for his shares in Quantum Medical Holdings, Inc. The company increased its authorized shares to 10 Billion, then issued the 4,700,000,000 control restricted common shares to Ricky Bernard. The company entered into a settlement agreement with Northbridge Financial to restructure the company debt through a 3(a)10 lawsuit that was filed by Northbridge, in which Northbridge received stock in exchange for the debt. The $810,000 debt was incurred as a result of the acquisition of United Ambulance, LLC. The company mutually terminated its 3(a)10 settlement agreement with Northbridge Financial and entered into a settlement with CF3 Enterprises, LLC a New York private equity firm that acquired the company’s total outstanding debt of $1,455,000 through a 3(a)10 settlement.
The company received 1,407,000,000 common shares were retired back to treasury thus reducing the number of outstanding shares.
NOTE 7 – SUBSEQUENT EVENTS
The company mutually terminated its 3(a)10 settlement agreement with Northbridge Financial and entered into a settlement with CF3 Enterprises, LLC a New York private equity firm that acquired the company’s total outstanding debt of $1,455,000 through a 3(a)10 settlement. The company received 1,407,000,000 common shares were retired back to treasury thus reducing the number of outstanding shares.
F-14 |
PART III—EXHIBITS
Index to Exhibits
Exhibit
Number |
Exhibit Description |
2.1 | Amended Articles of Incorporation filed with the State of Delaware on January 15, 2016 |
2.2 | Articles of Incorporation filed with the State of Delaware on April 5, 2018 |
2.3 | Bylaws |
3.1 | Specimen Stock Certificate |
4.1 | Subscription Agreement |
6.1 | Incentive Stock Option Plan |
6.2 | Management Stock Bonus Plan |
6.3 | Performance Bonus Plan |
6.4 | Employment Agreement of Ricky Bernard |
6.5 | Indemnification Agreement of Rick Bernard |
11.1 | Consent of Lux Law, P.A. (included in Exhibit 12.1) |
12.1 | Opinion of Lux Law, P.A. |
III-1 |
SIGNATURES
Pursuant to the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this Offering Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Sugarland, State of Texas, on August 23, 2018.
(Exact name of issuer as specified in its charter): |
Quantum Medical Transport, Inc. |
By: /s/ Ricky Bernard | |
Ricky Bernard, Chief Executive Officer (Principal Executive Officer) |
This Offering Statement has been signed by the following persons in the capacities and on the dates indicated.
By (Signature and Title): |
/s/ Ricky Bernard |
|
Ricky Bernard, Chief Executive Officer (Principal Executive Officer) |
(Date): August 23, 2018
/s/ Ricky Bernard |
||
Ricky Bernard, Chief Financial Officer (Principal Financial Officer, Principal Accounting Officer). |
(Date): August 23, 2018
SIGNATURES OF DIRECTORS:
/s/ Richard Bernard |
August 23, 2018 |
||
Chairman | Date |
III-2 |
EX1A-2A CHARTER
Exhibit 2.1
Delaware | Page 1 | |
The First State |
I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF AMENDMENT OF CORRECTION OF "QUANTUM
MEDICAL TRANSPORT, INC.” FILED IN THIS OFFICE ON THE FIFTEENTH DAY OF
JANUARY, A.D. 2016, AT 10:40 O'CLOCK A.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE
NEW CASTLE COUNTY RECORDER OF DEEDS.
1 |
STATE OF DELAWARE
CERTIFICATE OF CORRECTION
OF
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION,
FILED ON OCTOBER 8, 2015, OF
QUANTUM MEDICAL TRANSPORT, INC.
QUANTUM MEDICAL TRANSPORT, INC., a corporation organized and existing under the General Corporation Law, DOES HEREBY CERTIFY that:
FIRST: On October 8. 2015, the Corporation filed with the Secretary of State a certificate of amendment of its certificate of incorporation. Among other things, Article First of said amendment purported to replace Article VI of the Corporation's certificate of incorporation in its entirety.
SECOND: Article First of the certificate of amendment set forth an inaccurate record of the corporate action therein referred to, in that the last paragraph of Article VI, as so amended, incorrectly set forth the terms of the reverse stock split that was approved by the Board of Directors and adopted by the stockholders.
THIRD: The entire instrument, are so corrected, reads as follows:
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT
OF THE CERTIFICATE OF INCORPORATION
OF A CLEAN SLATE, INC.
2 |
A CLEAN SLATE, INC., a corporation organized and existing under the General Corporation Law, DOES HEREBY CERTIFY that:
FIRST: The Board of Directors adopted resolutions setting forth proposed amendments to the Certificate of Incorporation, declaring said amendments to be advisable, recommending them for approval to the stockholders and submitting them to said stockholders for consideration thereof. The resolutions setting forth the proposed amendments are as follows;
RESOLVED, that Article I of the certificate of incorporation be amended to read as follows:
ARTICLE I
NAME
The name of the corporation is QUANTUM MEDICAL TRANSPORT, INC.
RESOLVED, that Article VI of the certificate of incorporation be amended in its entirety to read as follows:
ARTICLE VI
CAPITAL STOCK
The total number of shares of stock which the Corporation shall be authorized to issue is 6,010,000,000, of which 6,000,000,000 shares shall become common stock. par value $0.000001 per share ("Common Stock"), and 10,000,000 shares shall be preferred stock, par value $0.000001 per share.
The Board of Directors of the Corporation is authorized to fix by resolution or resolutions the designations and the powers, preferences and rights, and the qualifications, limitations or restrictions thereof, which are permitted by section 151 of the General Corporation Law in respect of any series of preferred stock.
There being no shares of the Corporation's Series A Preferred Stock and Series B Preferred Stock issued and outstanding, such series are eliminated and the shares comprising such series are returned to the status of authorized : and undesignated shares of preferred stock.
A total of 1,000,000 shares of preferred stock is hereby designated as Series C Convertible Preferred Stock (the "Series C Stock") and shall have the following powers. preferences and rights, and the following qualifications, limitations and restrictions thereof:
1. Rank. The Series C Stock shall, with respect to dividends, redemption, liquidation, dissolution or winding-up of the affairs of the Corporation, rank equally with the Common Stock, such that in each case, a Holder shall be entitled to receive with respect to his shares of Series C Stock the payment or property that he would receive if he were the holder, on the date of the declaration or determination of the persons entitled to receive such payment or property, of their number of shares of Common Stock into which the shares of Series C Stock held by him are convertible on such date.
2. Redempton. The Series C Stock shall not be redeemable at the option of the Corporation or any Holder.
3 |
3. Conversion.
(a) | Each Holder shall have the right, at any time and from time to time to convert all or any portion of the shares of Series C Stock held by him into shares of Common Stock, such that each share of Series C Stock that such Holder elects so to convert shall be converted into one (l) share of Common Stock. |
(b) | As promptly as practicable after the surrender (as herein provided) of shares of Series C Stock for conversion, the Corporation shall deliver or cause to be delivered to or upon the written order of the Holder, certificates representing the number of fully paid and nonassessable shares of Common Stock into which his shares of Series C Stock shall have been converted. Subject to the following provisions of this Subsection (b), such conversion shall be deemed to have been made at the close of business on the date on which such shares of Series C Stock shall have been surrendered for conversion as provided in Subsection of this Section 3, and the rights of the Holder with respect to his shares of Series C Stock as such (to the extent that shares thereof are converted) shall cease at such time and the person or persons entitled to receive shares of Common Stock upon conversion of shares of Series C Stock shall be treated for all purposes as having become the record holder or holders of such shares of Common Stock at such time; provided however that no such surrender on any date when the stock transfer books of the Corporation shall be closed shall be effective to constitute the person or persons entitled to receive shares of Common Stock upon such conversion as the record holder or holders of such shares of Common Stock on such date, but such surrender shall be effective to constitute the person or persons entitled to receive such shares of Common Stock as the record holder or holders thereof for all purposes at the close of business on the next succeeding day on which such stock transfer books are open or the Corporation is required to convert the shares of Series C Stock. |
If the day on which conversion rights are exercised shall not be a Business Day, then such conversion rights will be deemed to 1 be exercised on the next succeeding day which is a Business Day.
No adjustment in respect of dividends shall be made upon conversion of the Series C Stock, except that the Corporation shall pay all declared and unpaid dividends on shares of the Series C Stock so converted which have accrued to (but not including) the date upon which such conversion is deemed to have been effected in accordance with this Subsection (b).
(c) | The number of shares of Common Stock into which each share of Series C Stock shall be convertible shall be subject to adjustment as follows: |
(i) | If the Corporation at any time hereafter subdivides (by any stock split, stock dividend, recapitalization, reorganization, reclassification or otherwise) the outstanding shares of Common Stock into a greater number of shares, then, after the record date for such subdivision, the number of shares of Common Stock into which a share of Series C Stock is convertible immediately prior to such subdivision shall be proportionately increased; and if the Corporation, at any time hereafter, combines (by reverse stock split (other than the reverse stock split provided for in the amendment to the certificate of incorporation of which this designation is a part), recapitalization, reorganization, reclassification or otherwise) the outstanding shares of Common Stock into a smaller number of shares, then, after the of record date for such combination, the number of shares of Common Stock into which a share of Series C Stock is convertible immediately prior to such subdivision shall be proportionately decreased. |
(ii) | If the Corporation shall declare or make any distribution of cash or any other property (or rights to acquire such property) to holders of Common Stock not provided for Section l of this designation, the Corporation shall deliver to each Holder, at the same time that it makes such distribution to its stockholders at the same amount and type of cash or other property being distributed as he would receive if he were a holder, on the date of the declaration or determination of the persons entitled to receive such payment or property of the number of shares of Common Stock into which the shares of Series C Stock held by him are convertible on such date. |
4 |
(iii) | In the event of a Major Transaction, as that term is defined is below, the Corporation will cause the surviving entity (or, in the event of a sale of assets, the purchasing entity) to assume the obligations of the Corporation with respect to the Series C Stock. Furthermore, in case of any Major Transaction, each share of Series C Stock shall thereafter be convertible into the number of shares of stock or other securities or property to which a holder of the number of shares of Common Stock of the Corporation deliverable upon conversion of his shares of Series C Stock would have been entitled upon the consummation of such Major Transaction if such shares of Series C Stock had been converted to shares of Common Stock immediately prior to the date on which the persons entitled to receive such shares of stock or other securities or property was determined. In any such case, appropriate adjustment (as deter mined by the Board of Directors in good faith} shall be· made in the application of the provisions set forth herein with respect to the rights and interest thereafter of the Holders, to the end that these provisions shall thereafter be applicable, as nearly as reasonably may be practicable, in relation to any shares of stock or other property thereafter deliverable upon the conversion of the Series C Stock. "Major Transaction" means, with respect to the Corporation, (x) a merger, consolidation, business combination, tender offer, exchange of shares, recapitalization, reorganization, redemption or other similar event, as a result of which shares of Common Stock shall be changed into the same or a different number of shares of the same or another class or classes of stock or securities or other assets of the Corporation or another entity, (y) the sale by the Corporation of all or substantially all of its assets, or (z) the issuance by the Corporation of warrants or securities directly or indirectly exchangeable for, convertible into or other wise granting the right to acquire equity securities of the Corporation. |
(iv) | No adjustment in the number of shares of Common Stock into which a shares of Series C Stock shall be required to be made unless such adjustment would require an increase or decrease of at least one percent (l % ) in such number, provided, however, that any adjustments which by reason of this Subsection (iv) are not required to be made shall be carried forward and taken into account in any subsequent adjustment All calculations under this Section 3(c) shall be made to the nearest one hundredth (1/100) of one share. |
(v) | Whenever an adjustment is made as provided in this Section 3, the Corporation will promptly mail to the Holders a certificate of the Corporation's Treasurer or Chief Financial Officer setting forth the adjustment made and a brief statement of facts accounting for such adjustment. |
(iv) | Irrespective of any adjustment or change and the number of shares of Common Stock actually issuable upon conversion of Series C Stock, certificates representing Series C Stock issued in replacement of certificates representing Series C Stock surrendered upon the partial conversion may continue to express the number of shares of Common Stock issuable upon conversion set forth in the certificates representing shares of Series C Stock when initially issued. |
(d) | The Corporation shall pay any and all taxes that may be payable upon conversion of the Series C Stock, provided that the Corporation shall not 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 C 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 Corporation the amount of any such tax or has established to the satisfaction of the Corporation, that such tax has been paid. |
(e) | No fractional shares or scrip representing fractional shares of Common Stock shall be issued upon the conversion of Series C Stock nor shall any payment shall be made for any fractional shares of Common Stock, but in lieu thereof each such fractional share shall be rounded up to the next full share. If more than one share of Series C Stock shall be surrendered for conversion at one time by the same Holder the number of full shares that shall be issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of Series C Stock so surrendered. |
(f) | The written determination of the Board of Directors shall be conclusive as to the correctness of any computation made under this Section 3 in the absence of manifest error. |
(g) | If in any case a state of facts occurs wherein in the opinion of the Board of Directors the other provisions of this Section 3 are not strictly applicable, or if strictly applicable, would not fairly protect the rights of the Holders in the event of conversion in accordance with the essential intent and principles of such pro visions, the Board of Directors may make an adjustment in accordance with such essential intent and principles so as to protect such rights, which adjustment shall be final. |
5 |
(h) All shares of Series C Stock that are at any time converted pursuant to Section 3 or otherwise reacquired by the Corporation and subsequently canceled by the Board of Directors shall not be subject to reissuance as shares of Series C Stock, but shall be restored to the status of authorized but undesignated shares of preferred stock.
4. Voting. The Holders shall have the following voting rights and no others:
(a) | Each Holder of shares of Series C Stock shall have the right with respect to each question or matter that is presented to the stockholders for their consideration at a meeting of stockholders or that is the subject of a consent of stockholders in lieu of such meeting, to cast at such meeting or to vote by such consent, as a single class comprising all of the stockholders entitled so vote thereon, a number of votes, rounded up to the next full vote, equal to the number of votes that could be cast at such meeting or voted by such consent by the holders, other than the Holders of all of the shares of the Corporation's capital stock entitled to vote at such meeting or to sign such consent, multiplied by a fraction, the numerator of which shall be the number of shares of Series C Stock held by such Holder entitled to vote at such meeting or sign such consent and the denominator of which shall be the number of shares of Series C Stock entitled to vote at such meeting or sign such consent; provided, however, that the Holders may not vote together with the holders of shares of any class or series on any question or matter on which the holders of such class or series are entitled by the GCL or otherwise to vote separately as a class or series, but may vote on such question or matter in the manner provided above to the extent it is also presented for the consideration of any other class or series, together with such class or series. |
(b) | The favorable vote of a majority of the outstanding shares of Series C Stock, voting separately as a class, shall be required (i) on any question or matter on which they are entitled by the GCL to vote separately as a series, irrespective of whether the Holders also entitled are entitled to vote 'With one or more other classes or series on such question or matter pursuant to Subsection (a) of this section 4, (ii) for the simultaneous existence of more than one class or series of the Common Stoc (iii) for the liquidation or dissolution of the Corporation, (iv) fora reclassification of the Common Stock, other than a subdivision or combination thereto or (v) for a consolidation of the Corporation with, or a merger of the Corporation with, any other corporation, other than the merger of a wholly owned subsidiary of the Corporation with and into the Corporation. |
5. Prohibition. The Corporation shall not, without the favorable vote of the Holders, voting separately as a class, file a certificate of designations or an amendment thereof that provides that a series or preferred stock may vote separately on any matter except for a matter on which it may or is required to vote separately under the GCL.
6. Certain Definitions. As used in this Certificate of Designations, the following terms shall have the following respective meanings:
"Business Day" shall mean any day except a Saturday, Sunday or day on which banking institutions are legally authorized to close in Miami, Florida, or the city in which the Corporation's transfer agent is located.
“GCL” means the General Corporation Law of the State of Delaware.
"Holder" means a holder of shares of Series C Stock, all of such holders together being the "Holders."
At 5:00 p.m. local time in Miami, Florida, on a date not later than March 31, 2016, to be determined by the Board of Directors, every ten thousand (10,000) issued and outstanding shares of the Corporation's Common Stock, par value $0.000001 per share (the "Old Common Stock"), shall be reclassified and converted into one (1) validly issued, fully paid and non assessable shares of Common Stock, par value $0.00001 per share (the "New Common Stock"). Each certificate representing shares of Old Common Stock shall thereafter represent the number of shares of New Common Stock into which the shares of Old Common Stock represented by such certificate were reclassified and converted by virtue of said conversion and reclassification. Any fractional share that would otherwise be issuable as a result of said conversion and reclassification shall be rounded up to the rest whole share in lieu of any payment for such fractional share. If the Board of Directors shall fail to determine such date by March 31, 2016, the aforesaid reclassification shall not occur.
SECOND: Pursuant to Section 228 of the General Corporation Law, consents in writing adopting the resolutions set forth in Section FIRST of this Certificate of Amendment were signed by the holders of shares of the Corporation's capital 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 the n were present and voted and such consents were delivered to the Corporation by delivery to its officer having custody of the book in which proceedings of meetings of stockholders are recorded.
THIRD: Said amendments were duly adopted in accordance with the provisions of Section 242 of the General Corporation Law.
6 |
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be duly executed on its behalf by its President, thereunto duly authorized this seventh day of October 2015.
A CLEAN SLATE, INC.
By: /s/ Richard S. Astrom
Richard S. Astrom
President
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Correction to be signed on its behalf this thirteenth day of January 2015 by its officer thereunder duly authorized.
QUANTUM MEDICAL TRANSPORT, INC.
By: /s/ Richard S. Astrom
Richard S. Astrom
President
7 |
Exhibit 2.2
Delaware | Page 1 | |
The First State |
I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND
CORRECT COPY OF THE CERTIFICATE OF AMENDMENT OF
"QUANTUM MEDICAL TRANSPORT, INC.” FILED IN THIS OFFICE ON
THE FIFTH DAY OF APRIL, A.D. 2018, AT 4:29 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO
THE NEW CASTLE COUNTY RECORDER OF DEEDS.
. -'
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
QUANTUM MEDICAL TRANSPORT, INC.
QUANTUM MEDICAL TRANSPORT, INC., a corporation organized and existing under the General Corporation Law, DOES HEREBY CERTIFY that:
FIRST: The Board of Directors adopted resolutions setting forth proposed amendments to the Certificate of Incorporation, declaring said amendments to be advisable, recommending them for approval to the stockholders and submitting them to said stockholders for consideration thereof. The resolutions setting forth the proposed amendments are as follows:
RESOLVED, that Article VI of the certificate of incorporation be amended in its entirety to read as follows:
ARTICLE VI
CAPITAL STOCK
The total number of shares of stock which the Corporation shall be authorized to issue is twenty billion ten million (20,010,000,000), of which twenty billion (20,000,000,000) shares shall be common stock, par value $0.000001 per share "Common Stock"), and ten million (10,000,000) shares shall be preferred stock, par value $0.000001 per share.
The preferred stock shall be issuable in series. The Board of Directors of the Corporation is authorized to fix by resolution or resolutions the designations and the powers, preferences and rights, and the qualifications, limitations or restrictions thereof which are permitted by section 151 of the General Corporation Law in respect of any series of preferred stock.
There being no shares of the series of preferred stock designated "Series C Preferred Stock" issued and outstanding, such series is eliminated and the shares comprising such series are returned to the status of authorized and undesignated shares of preferred stock.
2 |
SECOND: Pursuant to Section 228 of the General Corporation Law, consents in writing adopting the resolutions set forth in Section FIRST of this Certificate of Amendment were signed by the holders of shares of the Corporation's capital 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 such consents were delivered to the Corporation by delivery to its officer having custody of the book in which proceedings of meetings of stockholders are recorded.
THIRD: Said amendments were duly adopted in accordance with the provisions of Section 242 of the General Corporation Law.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be duly executed on its behalf by its President, thereunto duly authorized, this 02 day of April 2018.
QUANTUM MEDICAL TRANSPORT, INC.
By: /s/ Ricky Bernard
Ricky E. Bernard
President
3 |
Exhibit 2.3
BY-LAWS OF
DARWIN RESOURCES, INC.
ARTICLE I
MEETINGS OF STOCKHOLDERS
Section 1. The Annual Meeting. The annual meeting of the stockholders of DARWIN RESOURCES, INC. (the "Corporation") for the election of directors and for the transaction of such other business as may come before the meeting shall be held within one hundred and fifty days after the close of the Corporation's Fiscal Year at such date, time, and location as the Board of Directors shall designate.
Section 2. Special Meetings. Special meetings of the stockholders, unless otherwise prescribed by statute, may be called at any time by the Board of Directors or the President and shall be called by the President or Secretary at the request in writing of stockholders of record owning at least twenty five per centum (25%) of the shares of stock of the Corporation outstanding and entitled to vote.
Section 3. Notice of Meetings. Notice of the place, date and time of the holding of each annual and special meeting of the stockholders and, in the case of a special meeting, the purpose or purposes thereof, shall be given personally or by mail in a postage prepaid envelope to each stockholder entitled to vote at such meeting, not less than ten nor more than sixty days before the date of such meeting, and, if mailed, shall be directed to such stockholder at his address as it appears on the records of the Corporation, unless he shall have filed with the Secretary of the Corporation a written request that notices to him be mailed to some other address, in which case it shall be directed to him at such other address. Notice of any meeting of stockholders shall not be required to be given to any stockholder who shall attend such meeting in person or by proxy and shall not, at the beginning of such meeting, object to the transaction of any business because the meeting is not lawfully called or convened, or who shall, either before or after the meeting, submit a signed waiver of notice, in person or by proxy. Unless the Board of Directors shall fix, after the adjournment, a new record date for an adjourned meeting, notice of such adjourned meeting need not be given if the time and place to which the meeting shall be adjourned were announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty 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.
Section 4. Place of Meetings. Meetings of the stockholders may be held at such place, within or without the State of Delaware, as the Board of Directors or the officer calling the same shall specify in the notice of such meeting, or in a duly executed waiver of notice hereof.
Section 5. Quorum. At all meetings of the stockholders the holders of a majority of the votes of the shares of stock of the Corporation issued and outstanding and entitled to vote shall be present in person or by proxy to constitute a quorum for the transaction of any business, except as otherwise provided by statute or in the Certificate of Incorporation. In the absence of a quorum, the holders of a majority of the shares of stock present in person or by proxy and entitled to vote, or if no stockholder entitled to vote is present, then any officer of the Corporation may adjourn the meeting. At any such adjourned meeting at which a quorum may be present, any business may be transacted which might have been transacted at the meeting as originally called.
Section 6. Organization. At each meeting of the stockholders, the President, or in his absence or inability to act, any person chosen by a majority of those stockholders present, in person or by proxy and entitled to vote, shall act as chairman of the meeting. The Secretary, or in his absence or inability to act, any person appointed by the chairman of the meeting, shall act as secretary of the meeting and keep the minutes thereof.
Section 7. Order of Business. The order of business at all meetings of the stockholders shall be as determined by the chairman of the meeting.
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Section 8. Voting. Except as otherwise provided by statute, by the Certificate of Incorporation, or by any certificate duly filed in the State of Delaware pursuant to Section 151 of the Delaware General Corporation Law, each holder of record of shares of stock of the Corporation having voting power shall be entitled at each meeting of the stockholders to one vote for every share of such stock standing in his name on the record of stockholders of the Corporation on the date fixed by the Board of Directors as the record date for the determination of the stockholders who shall be entitled to notice of and to vote at such meeting; or if such record date shall not have been so fixed, then at the close of business on the day next preceding the date on which notice thereof shall be given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; or each stockholder entitled to vote at any meeting of stockholders may authorize another person or persons to act for him by a proxy signed by such stockholder or his attorney-in-fact. Any such proxy shall be delivered to the secretary of such meeting at or prior to the time designated in the order of business for so delivering such proxies. No proxy shall be valid after the expiration of three years from the date thereof, unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the stockholder executing it, except in those cases where an irrevocable proxy is permitted by law. Except as otherwise provided by statute, these By-Laws, or the Certificate of incorporation, any corporate action to be taken by vote of the stockholders shall be authorized by a majority of the total votes, cast at a meeting of stockholders by the holders of shares present in person or represented by proxy and entitled to vote on such action. Unless required by statute, or determined by the chairman of the meeting to be advisable, the vote on any question need not be by written ballot. On a vote by written ballot, each ballot shall be signed by the stockholder voting, or by his proxy, if there be such proxy, and shall state the number of shares voted.
Section 9. List of Stockholders. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten 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. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. The list shall also 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.
Section 10. Action by Written Consent. Any action which is required to be or may be taken at any annual or special meeting of stockholders of the Corporation may be taken without a meeting, without prior notice to stockholders and without a vote if consents in writing, setting forth the action so taken, shall have been signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or to take such action at a meeting at which all shares entitled to vote thereon were present and voted.
Section 11. Duration and Revocation of Consents. Consents to corporate action shall be valid for a maximum of sixty (60) days after the date of the earliest dated consent delivered to the Corporation in the manner provided in Section 228(c) of the Delaware General Corporation Law. Consents may be revoked by written notice (i) to the Corporation, (ii) to the stockholder or stockholders soliciting consents or soliciting revocations in opposition to action by consent proposed by the Corporation (the "Soliciting Stockholders"), or (iii) to a proxy solicitor or other agent designated by the Corporation or the Soliciting Stockholders.
Section 12. Notice of Action by Consent. The Corporation shall give prompt notice of the taking of corporate action without a meeting by less than unanimous written consent to 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 stockholders to take the Action were delivered to the Corporation in the manner provided in Section 228(c) of the Delaware General Corporation Law.
ARTICLE II
BOARD OF DIRECTORS
Section 1. General Powers. The business and affairs of the Corporation shall be managed by the Board of Directors. The Board of Directors may exercise all such authority and powers of the Corporation and do all such lawful acts and things as are not by statute or the Certificate of Incorporation directed or required to be exercised or done by the stockholders.
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Section 2. Number, Qualifications, Election, and Term of Office. The number of directors of the Corporation shall be as determined by vote of a majority of the entire Board of Directors. All of the directors shall be of full age. Directors need not be stockholders. Except as otherwise provided by statute or these By-Laws, the directors shall be elected at the annual meeting of the stockholders for the election of directors at which a quorum is present, and the persons receiving a plurality of the votes cast at such election shall be elected. Each director shall hold office until the next annual meeting of the stockholders and until his successor shall have been duly elected and qualified or until his death, or until he shall have resigned, or have been removed, as hereinafter provided in these By-Laws, or as otherwise provided by statute or the Certificate of Incorporation.
Section 3. Place of Meeting. Meetings of the Board of Directors may be held at such place, within or without the State of Delaware, as the Board of Directors may from time to time determine or shall be specified in the notice or waiver of notice of such meeting.
Section 4. First Meeting. The Board of Directors shall meet for the purpose of organization, the election of the officers of the Corporation, and the transaction of other business, as soon as practicable after each annual meeting of the stockholders. Notice of such meeting need not be given. Such meeting may be held at any other time or place (within or without the State of Delaware) which shall be specified in a notice thereof given as hereinafter Provided in Section 7 of this Article II.
Section 5. Regular Meetings. Regular meetings of the Board of Directors shall be held at such time and at such place as the Board of Directors may from time to time determine. If any day fixed for a regular meeting shall be a legal holiday at the place where the meeting is to be held, then the meeting which would otherwise be held on that day shall be held at the same hour on the next succeeding business day. Notice of regular meetings of the Board of Directors need not be given except as otherwise required by statute or these By-Laws.
Section 6. Special Meetings. Special meetings of the Board of Directors may be called by one or more directors of the Corporation or by the President.
Section 7. Notice of Meetings. Notice of each special meeting of the Board of Directors (and of each regular meeting for which notice shall be required) shall be given by the Secretary as hereinafter provided in this Section 7, in which notice shall be stated the time and place of the meeting. Notice of each such meeting shall be delivered to each director either personally or by telephone, telegraph cable or wireless, at least twenty-four hours before the time at which such meeting is to be held or by first-class ail, postage prepaid, addressed to him at his residence, or usual place of business, at least three days before the day on which such meeting is to beheld. Notice of any such meeting need not be given to any director who shall, either before or after the meeting, submit a signed waiver of notice or who shall attend such meeting without protesting, prior to or at its commencement, the lack of notice to him. Except as otherwise specifically required by these By-Laws, a notice or waiver of notice of any regular or special meeting need not state the purpose of such meeting.
Section 8. Quorum and Manner of Acting. A majority of the entire Board of Directors shall be present in person at any meeting of the Board of Directors in order to constitute a quorum for the transaction of business at such meeting, and, except as otherwise expressly required by statute or the Certificate of Incorporation, the act of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board of Directors. In the absence of a quorum at any meeting of the Board of Directors, a majority of the directors present thereat, or if no director be present, the Secretary may adjourn such meeting to another time and place, or such meeting, unless it be the first meeting of the Board of Directors, need not be held. At any adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally called. Except as provided in Article III of these By-Laws, the directors shall act only as a Board and the individual directors shall have no power as such.
Section 9. Organization. At each meeting of the Board of Directors, the President, or, in his absence or inability to act, another director chosen by a majority of the directors present shall act as chairman of the meeting and preside thereat. The Secretary (or, in his absence or inability to act any person appointed by the chairman) shall act as secretary of the meeting and keep the minutes thereof.
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Section 10. Resignations. Any director of the Corporation may resign at any time by giving written notice of his resignation to the Board of Directors or the President or the Secretary. Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, immediately upon its receipt; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
Section 11. Vacancies. Vacancies may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced . If there are no directors in office, then an election of directors may be held in the manner provided by statute. If , at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole Board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or holders of at least ten percent of the votes of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office. Except as otherwise provided in these By-Laws, when one or more directors shall resign from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have the 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 in the filling of other vacancies.
Section 12. Removal of Directors. Except as otherwise provided in the Certificate of Incorporation or in these By-Laws, any director may be removed, either with or without cause, at any time, by the affirmative vote of a majority of the votes of the issued and outstanding stock entitled to vote for the election of directors of the Corporation given at a special meeting of the stockholders called and held for the purpose; and the vacancy in the Board of Directors caused by any such removal may be filled by such stockholders at such meeting, or, if the stockholders shall fail to fill such vacancy, as in these By-Laws provided.
Section 13. Compensation. The Board of Directors shall have authority to fix the compensation, including fees and reimbursement of expenses , of directors for services to the Corporation in any capacity, provided no such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.
Section 14. Action Without Meeting Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all members of the Board of Directors or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee.
ARTICLE III
COMMITTEES
Section 1. Committees. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board of Directors 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 the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member. Any such committee, to the extent permitted by law and to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it.
Section 2. Committee Rules. Unless the Board of Directors otherwise provides, each committee designated by the Board of Directors may make, alter and repeal rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to Article III of these by-laws.
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ARTICLE IV
OFFICERS
Section 1. Number and Qualifications. The officers of the Corporation shall be the President, Secretary, and Treasurer. Any two or more offices may be held by the same person. Such officers shall be elected from time to time by the Board of Directors, each to hold office until the meeting of the Board of Directors following the next annual meeting of the stockholders, or until his successor shall have been duly elected and shall have qualified, or until his death, or until he shall have resigned, or have been removed, as hereinafter provided in these By-Laws. The Board of Directors may from time to time elect, or the President may appoint, such other officers (including, but not limited to, one or more Vice Presidents, Assistant Vice Presidents, Assistant Secretaries, and Assistant Treasurers), and such agents, as may be necessary or desirable for the business of the Corporation. Such other officers and agents shall have such duties and shall hold their offices for such terms as may be prescribed by the Board of Directors or by the appointing authority.
Section 2. Resignations. Any officer of the Corporation may resign at any time by giving written notice of his resignation to the Board of Directors, the President or the Secretary. Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, immediately upon its receipt; and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
Section 3. Removal. Any officer or agent of the Corporation may be removed, either with or without cause, at any time, by the vote of the majority of the entire Board of Directors at any meeting of the Board of Directors, or, except in the case of an officer or agent elected or appointed by the Board of Directors, by the President. Such removal shall be without prejudice to the contractual rights, if any, of the person so removed.
Section 4. Vacancies. A vacancy in any office, whether arising from death, resignation, removal or any other cause, may be filled for the unexpired portion of the term of the office which shall be vacant, in the manner prescribed in these By-Laws for the regular election or appointment of such office.
Section 5. Officers' Bonds or Other Security. If required by the Board of Directors, any officer of the Corporation shall give a bond or other security for the faithful performance of his duties, in such amount and with such surety or sureties as the Board of Directors may require.
Section 6. Compensation. The compensation of the officers of the Corporation for their services as such officers shall be fixed from time to time by the Board of Directors; provided, however, that the Board of Directors may delegate to the President the power to fix the compensation of officers and agents appointed by the President. An officer of the Corporation shall not be prevented from receiving compensation by reason of the fact that he is also a director of the Corporation.
Section 7. President. The President shall be the Chief Executive Officer of the Corporation and shall have the general and active management of the business of the Corporation and general and active supervision and direction over the other officers, agents and employees and shall see that their duties are properly performed. He shall, if present, preside at each meeting of the stockholders and of the Board of Directors and shall be an ex-officio member of all committees of the Board of Directors. He shall perform all duties incident to the office of President and Chief Executive Officer and such other duties as may from time to time be assigned to him by the Board of Directors.
Section 8. Secretary. The Secretary shall:
(a) Keep or cause to be kept in one or more books provided for that purpose, the minutes of the meetings of the Board of Directors, the committees of the Board of Directors and the stockholders;
(b) See that all notices are duly given in accordance with the provisions of these By-Laws and as required by law;
(c) Be custodian of the records and the seal of the Corporation and affix and attest the seal to all stock certificates of the Corporation (unless the seal of the Corporation on such certificates shall be a facsimile, as hereinafter provided) and affix and attest the seal to all other documents to be executed on behalf of the Corporation under its seal;
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(d) See that the books, reports, statements, certificates and other documents and records required by law to be kept and filed are properly kept and filed; and
(e) In general, perform all the duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Board of Directors or the President.
Section 9. Treasurer. The Treasurer shall be the chief financial officer of the Corporation and shall exercise general supervision over the receipt, custody, and disbursements of corporate funds. The Treasurer shall sign, make and indorse in the name of the corporation, all checks, drafts, warrants and orders for the payment of money, and pay out and dispose of same and receipts for such, and, in general, perform all the duties incident to the office of Treasurer. He shall have such further powers and duties as may be conferred upon him from time to time by the President or the Board of Directors.
ARTICLE V
INDEMNIFICATION
To the fullest extent permitted by law, the Corporation shall indemnify any director or officer of the Corporation who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suitor proceeding, whether civil, criminal, administrative or investigative by reason of the fact that he is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, officer, agent or employee of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) , liability, loss, judgment, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceedings, had no reasonable cause to believe his conduct was unlawful. The termination of any action, upon a plea of nolo contendere or equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect of any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.
Such indemnity shall inure to the benefit of the heirs, executors and administrators of any director or officer so indemnified pursuant to this Article. The right to indemnification under this Article shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its disposition; provided however, that, if the Delaware General Corporation Law requires, the payment of such expenses incurred in advance of the final disposition of a proceeding shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such director or officer to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Article or otherwise. Such indemnification and advancement of expenses shall be in addition to any other rights to which those directors and officers seeking indemnification and advancement of expenses may be entitled under any law, agreement, vote of stockholders, or otherwise.
Any repeal or amendment of this Article by the stockholders of the Corporation or by changes in applicable law shall, to the extent permitted by applicable law, be prospective only, and shall not adversely affect any right to indemnification or advancement of expenses of a director or officer of the Corporation existing at the time of such repeal or amendment. In addition to the foregoing, the right to indemnification and advancement of expenses shall be to the fullest extent permitted by the General Corporation Law of the State of Delaware or any other applicable law and all amendments to such laws as hereafter enacted from time to time.
ARTICLE VI
STOCK
Section 1. Certificates. Every holder of stock shall be entitled to have a certificate signed by or in the name of the Corporation by the Chairman of the Board of Directors, if any, or the President, and by the Secretary or an Assistant Secretary, of the Corporation, certifying the number of shares owned by him in the Corporation. Any of or all 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 shall have 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 were such officer, transfer agent, or registrar at the date of issue.
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Section 2. Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates. The Corporation may issue a new certificate of stock 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 his 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.
ARTICLE VII
MISCELLANEOUS
Section 1. Fiscal Year. The fiscal year of the Corporation shall begin on the first day of January of each year and end on the last day of December of each year.
Section 2. Seal. The Board of Directors shall provide a corporate seal, which shall be in the form of the name of the Corporation and the words and figures "Corporate Seal, DARWIN RESOURCES, INC., Delaware 2007''.
Section 3. Waiver of Notice of Meetings of Stockholders, Directors and Committees. Any written waiver of notice, signed 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 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, directors, or members of a committee of directors need be specified in any written waiver of notice.
Section 4. Interested Directors; Quorum. No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other Corporation, partnership, association, or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because his or their votes are counted for such purpose, if: (1) the material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (2) the material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (3) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof, or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.
Section 5. Form of Records. Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or be in the form of, punch cards, magnetic tape, photographs, microphotographs, or any other information storage device, provided that the records so kept can be converted into clearly legible form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect the same.
Section 6. Amendments. These By-Laws may be amended or repealed, or new By-Laws may be adopted, (1) at any annual or special meeting of the stockholders, by a majority of the total votes of the stockholders, present or in person or represented by proxy and entitled to vote on such action; provided, however, that the notice of such meeting shall have been given as provided in these By-Laws, which notice shall mention that amendment or repeal of these By-Laws, or the adoption of new By-Laws, is one of the purposes of such meeting; (2) by written consent of the stockholders pursuant to Section 10 of Article I; or (3) by action of the Board of Directors.
I, the undersigned, Secretary of the Corporation, do hereby certify that the foregoing is a true, complete, and accurate copy of the By-laws of DARWIN RESOURCES, INC., duly adopted by unanimous written consent of the Board of Directors on the 28th day of September, 2007, and I do further certify that these By-laws have not since been altered, amended, repealed, or rescinded, and are now in full force and effect.
/s/ Mark Rentschler
Board of Directors
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Exhibit 3.1
Exhibit 4.1
Quantum Medical Transport, Inc.
14090 Southwest Freeway, Suite 300
Sugar Land, TX 77478
SUBSCRIPTION AGREEMENT
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. THIS INVESTMENT IS SUITABLE ONLY FOR PERSONS WHO CAN BEAR THE ECONOMIC RISK FOR AN INDEFINITE PERIOD OF TIME AND WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. FURTHERMORE, INVESTORS MUST UNDERSTAND THAT SUCH INVESTMENT IS ILLIQUID AND IS EXPECTED TO CONTINUE TO BE ILLIQUID FOR AN INDEFINITE PERIOD OF TIME. NO PUBLIC MARKET EXISTS FOR THE SECURITIES, AND NO PUBLIC MARKET IS EXPECTED TO DEVELOP FOLLOWING THIS OFFERING.
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES OR BLUE SKY LAWS AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND STATE SECURITIES OR BLUE SKY LAWS. ALTHOUGH AN OFFERING STATEMENT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”), THAT OFFERING STATEMENT DOES NOT INCLUDE THE SAME INFORMATION THAT WOULD BE INCLUDED IN A REGISTRATION STATEMENT UNDER THE ACT. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON THE MERITS OF THIS OFFERING OR THE ADEQUACY OR ACCURACY OF THE SUBSCRIPTION AGREEMENT OR ANY OTHER MATERIALS OR INFORMATION MADE AVAILABLE TO SUBSCRIBER IN CONNECTION WITH THIS OFFERING THROUGH THE WEBSITE MAINTAINED BY THE COMPANY OR THROUGH WEALTHFORGE SECURITIES, LLC (THE “BROKER”). ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
INVESTORS WHO ARE NOT “ACCREDITED INVESTORS” (AS THAT TERM IS DEFINED IN SECTION 501 OF REGULATION D PROMULGATED UNDER THE ACT) ARE SUBJECT TO LIMITATIONS ON THE AMOUNT THEY MAY INVEST, AS SET OUT IN SECTION 4. THE COMPANY IS RELYING ON THE REPRESENTATIONS AND WARRANTIES SET FORTH BY EACH SUBSCRIBER IN THIS SUBSCRIPTION AGREEMENT AND THE OTHER INFORMATION PROVIDED BY SUBSCRIBER IN CONNECTION WITH THIS OFFERING TO DETERMINE THE APPLICABILITY TO THIS OFFERING OF EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT.
PROSPECTIVE INVESTORS MAY NOT TREAT THE CONTENTS OF THE SUBSCRIPTION AGREEMENT, THE OFFERING CIRCULAR OR ANY OF THE OTHER MATERIALS RELATING TO THE OFFERING AND PRESENTED TO INVESTORS ON THE COMPANY’S WEBSITE OR PROVIDED BY THE BROKER (COLLECTIVELY, THE “OFFERING MATERIALS”) OR ANY PRIOR OR SUBSEQUENT COMMUNICATIONS FROM THE COMPANY OR ANY OF ITS OFFICERS, EMPLOYEES OR AGENTS (INCLUDING “TESTING THE WATERS” MATERIALS) AS INVESTMENT, LEGAL OR TAX ADVICE. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY AND THE TERMS OF THIS OFFERING, INCLUDING THE MERITS AND THE RISKS INVOLVED. EACH PROSPECTIVE INVESTOR SHOULD CONSULT THE INVESTOR’S OWN COUNSEL, ACCOUNTANT AND OTHER PROFESSIONAL ADVISOR AS TO INVESTMENT, LEGAL, TAX AND OTHER RELATED MATTERS CONCERNING THE INVESTOR’S PROPOSED INVESTMENT.
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THE OFFERING MATERIALS MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO THE COMPANY’S MANAGEMENT. WHEN USED IN THE OFFERING MATERIALS, THE WORDS “ESTIMATE,” “PROJECT,” “BELIEVE,” “ANTICIPATE,” “INTEND,” “EXPECT” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS, WHICH CONSTITUTE FORWARD LOOKING STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO REVISE OR UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER SUCH DATE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.
THE COMPANY MAY NOT BE OFFERING THE SECURITIES IN EVERY STATE. THE OFFERING MATERIALS DO NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY STATE OR JURISDICTION IN WHICH THE SECURITIES ARE NOT BEING OFFERED.
THE INFORMATION PRESENTED IN THE OFFERING MATERIALS WAS PREPARED BY THE COMPANY SOLELY FOR THE USE BY PROSPECTIVE INVESTORS IN CONNECTION WITH THIS OFFERING. NO REPRESENTATIONS OR WARRANTIES ARE MADE AS TO THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED IN ANY OFFERING MATERIALS, AND NOTHING CONTAINED IN THE OFFERING MATERIALS IS OR SHOULD BE RELIED UPON AS A PROMISE OR REPRESENTATION AS TO THE FUTURE PERFORMANCE OF THE COMPANY.
THE COMPANY RESERVES THE RIGHT IN ITS SOLE DISCRETION AND FOR ANY REASON WHATSOEVER TO MODIFY, AMEND AND/OR WITHDRAW ALL OR A PORTION OF THE OFFERING AND/OR ACCEPT OR REJECT IN WHOLE OR IN PART ANY PROSPECTIVE INVESTMENT IN THE SECURITIES OR TO ALLOT TO ANY PROSPECTIVE INVESTOR LESS THAN THE AMOUNT OF SECURITIES SUCH INVESTOR DESIRES TO PURCHASE. EXCEPT AS OTHERWISE INDICATED, THE OFFERING MATERIALS SPEAK AS OF THEIR DATE. NEITHER THE DELIVERY NOR THE PURCHASE OF THE SECURITIES SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THAT DATE.
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Ladies and Gentlemen:
1. Subscription.
(a) The undersigned (“Subscriber”) hereby irrevocably subscribes for and agrees to purchase Common Stock (the “Securities”), of Quantum Medical Transport, Inc., a Delaware corporation (the “Company”), at a purchase price of $0.0001 per share of Common Stock (the “Per Security Price”), upon the terms and conditions set forth herein.
(b) Subscriber understands that the Securities are being offered pursuant to an offering circular (the “Offering Circular”) filed with the SEC as part of the Offering Statement. By executing this Subscription Agreement, Subscriber acknowledges that Subscriber has received this Subscription Agreement, copies of the Offering Circular and Offering Statement, including exhibits thereto, and any other information required by the Subscriber to make an investment decision.
(c) The Subscriber’s subscription may be accepted or rejected in whole or in part, at any time prior to a Closing Date (as hereinafter defined), by the Company at its sole discretion. In addition, the Company, at its sole discretion, may allocate to Subscriber only a portion of the number of Securities Subscriber has subscribed for. The Company will notify Subscriber whether this subscription is accepted (whether in whole or in part) or rejected. If Subscriber’s subscription is rejected, Subscriber’s payment (or portion thereof if partially rejected) will be returned to Subscriber without interest and all of Subscriber’s obligations hereunder shall terminate.
(d) The aggregate number of Securities sold shall not exceed 2,000,000,000 shares (the “Maximum Offering”). The Company may accept subscriptions until the termination date given in the Offering Circular, unless otherwise extended by the Company in its sole discretion in accordance with applicable SEC regulations for such other period required to sell the Maximum Offering (the “Termination Date”). The Company may elect at any time to close all or any portion of this offering, on various dates at or prior to the Termination Date (each a “Closing Date”).
(e) In the event of rejection of this subscription in its entirety, or in the event the sale of the Securities (or any portion thereof) is not consummated for any reason, this Subscription Agreement shall have no force or effect, except for Section 5 hereof, which shall remain in force and effect.
2. Purchase Procedure.
(a) Payment. The purchase price for the Securities shall be paid simultaneously with the execution and delivery to the Company of the signature page of this Subscription Agreement. Subscriber shall deliver a signed copy of this Subscription Agreement (which may be executed and delivered electronically), along with payment for the aggregate purchase price of the Securities by ACH electronic transfer or wire transfer to an account designated by the Company, or by any combination of such methods.
(b) No Escrow. The proceeds of this offering will not be placed into an escrow account. As there is no minimum offering, upon the approval of any subscription to this Offering Circular, the Company shall immediately deposit said proceeds into the bank account of the Company and may dispose of the proceeds in accordance with the Use of Proceeds.
3. Representations and Warranties of the Company.
The Company represents and warrants to Subscriber that the following representations and warranties are true and complete in all material respects as of the date of each Closing Date, except as otherwise indicated. For purposes of this Agreement, an individual shall be deemed to have “knowledge” of a particular fact or other matter if such individual is actually aware of such fact. The Company will be deemed to have “knowledge” of a particular fact or other matter if one of the Company’s current officers has, or at any time had, actual knowledge of such fact or other matter.
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(a) Organization and Standing. The Company is a corporation duly formed, validly existing and in good standing under the laws of the State of Delaware. The Company has all requisite power and authority to own and operate its properties and assets, to execute and deliver this Subscription Agreement and any other agreements or instruments required hereunder. The Company is duly qualified and is authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature of its activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to do so would not have a material adverse effect on the Company or its business.
(b) Issuance of the Securities. The issuance, sale and delivery of the Securities in accordance with this Subscription Agreement have been duly authorized by all necessary corporate action on the part of the Company. The Securities, when so issued, sold and delivered against payment therefor in accordance with the provisions of this Subscription Agreement, will be duly and validly issued, fully paid and non-assessable.
(c) Authority for Agreement. The execution and delivery by the Company of this Subscription Agreement and the consummation of the transactions contemplated hereby (including the issuance, sale and delivery of the Securities) are within the Company’s powers and have been duly authorized by all necessary corporate action on the part of the Company. Upon full execution hereof, this Subscription Agreement shall constitute a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except (i) as limited by 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) with respect to provisions relating to indemnification and contribution, as limited by considerations of public policy and by federal or state securities laws.
(d) No filings . Assuming the accuracy of the Subscriber’s representations and warranties set forth in Section 4 hereof, no order, license, consent, authorization or approval of, or exemption by, or action by or in respect of, or notice to, or filing or registration with, any governmental body, agency or official is required by or with respect to the Company in connection with the execution, delivery and performance by the Company of this Subscription Agreement except (i) for such filings as may be required under Regulation A or under any applicable state securities laws, (ii) for such other filings and approvals as have been made or obtained, or (iii) where the failure to obtain any such order, license, consent, authorization, approval or exemption or give any such notice or make any filing or registration would not have a material adverse effect on the ability of the Company to perform its obligations hereunder.
(e) Capitalization. The authorized and outstanding securities of the Company immediately prior to the initial investment in the Securities is as set forth in “Securities Being Offered” in the Offering Circular. Except as set forth in the Offering Circular, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), or agreements of any kind (oral or written) for the purchase or acquisition from the Company of any of its securities.
(f) Financial statements. Complete copies of the Company’s financial statements consisting of the balance sheets of the Company given in the Offering Circular and the related statements of income, stockholders’ equity and cash flows for the two-year period then ended (the “Financial Statements”) have been made available to the Subscriber and appear in the Offering Circular. The Financial Statements are based on the books and records of the Company and fairly present in all material respects the financial condition of the Company as of the respective dates they were prepared and the results of the operations and cash flows of the Company for the periods indicated.
(g) Proceeds. The Company shall use the proceeds from the issuance and sale of the Securities as set forth in “Use of Proceeds to issuer” in the Offering Circular.
(h) Litigation. There is no pending action, suit, proceeding, arbitration, mediation, complaint, claim, charge or investigation before any court, arbitrator, mediator or governmental body, or to the Company’s knowledge, currently threatened in writing (a) against the Company or (b) against any consultant, officer, manager, director or key employee of the Company arising out of his or her consulting, employment or board relationship with the Company or that could otherwise materially impact the Company.
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4. Representations and Warranties of Subscriber. By executing this Subscription Agreement, Subscriber (and, if Subscriber is purchasing the Securities subscribed for hereby in a fiduciary capacity, the person or persons for whom Subscriber is so purchasing) represents and warrants, which representations and warranties are true and complete in all material respects as of such Subscriber’s respective Closing Date(s):
(a) Requisite Power and Authority. Such Subscriber has all necessary power and authority under all applicable provisions of law to execute and deliver this Subscription Agreement and other agreements required hereunder and to carry out their provisions. All action on Subscriber’s part required for the lawful execution and delivery of this Subscription Agreement and other agreements required hereunder have been or will be effectively taken prior to the Closing Date. Upon their execution and delivery, this Subscription Agreement and other agreements required hereunder will be valid and binding obligations of Subscriber, enforceable in accordance with their terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights and (b) as limited by general principles of equity that restrict the availability of equitable remedies.
(b) Investment Representations. Subscriber understands that the Securities have not been registered under the Securities Act of 1933, as amended (the “Securities Act”). Subscriber also understands that the Securities are being offered and sold pursuant to an exemption from registration contained in the Securities Act based in part upon Subscriber’s representations contained in this Subscription Agreement.
(c) Illiquidity and Continued Economic Risk. Subscriber acknowledges and agrees that there is a limited public market for the Securities and that there is no guarantee that a market for their resale will ever exist. Subscriber must bear the economic risk of this investment indefinitely and the Company has no obligation to list the Securities on any market or take any steps (including registration under the Securities Act or the Securities Exchange Act of 1934, as amended) with respect to facilitating trading or resale of the Securities. Subscriber acknowledges that Subscriber is able to bear the economic risk of losing Subscriber’s entire investment in the Securities. Subscriber also understands that an investment in the Company involves significant risks and has taken full cognizance of and understands all of the risk factors relating to the purchase of Securities.
(d) Company Information. Subscriber understands that the Company is subject to all the risks that apply to early-stage companies, whether or not those risks are explicitly set out in the Offering Circular. Subscriber has had such opportunity as it deems necessary (which opportunity may have presented through online chat or commentary functions) to discuss the Company’s business, management and financial affairs with managers, officers and management of the Company and has had the opportunity to review the Company’s operations and facilities. Subscriber has also had the opportunity to ask questions of and receive answers from the Company and its management regarding the terms and conditions of this investment. Subscriber acknowledges that except as set forth herein, no representations or warranties have been made to Subscriber, or to Subscriber’s advisors or representative, by the Company or others with respect to the business or prospects of the Company or its financial condition.
(e) Valuation. The Subscriber acknowledges that the price of the Securities was set by the Company on the basis of the Company’s internal valuation and no warranties are made as to value. The Subscriber further acknowledges that future offerings of Securities may be made at lower valuations, with the result that the Subscriber’s investment will bear a lower valuation.
(f) Domicile. Subscriber maintains Subscriber’s domicile (and is not a transient or temporary resident) at the address shown on the signature page.
(g) No Brokerage Fees. There are no claims for brokerage commission, finders’ fees or similar compensation in connection with the transactions contemplated by this Subscription Agreement or related documents based on any arrangement or agreement binding upon Subscriber.
(h) Issuer-Directed Offering; No Underwriter. Subscriber understands that the offering is being conducted by the Company directly (issuer-directed) and the Company has not engaged a selling agent such as an underwriter or placement agent.
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(i) Foreign Investors. If Subscriber is not a United States person (as defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended), Subscriber hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Securities or any use of this Subscription Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Securities, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Securities. Subscriber’s subscription and payment for and continued beneficial ownership of the Securities will not violate any applicable securities or other laws of the Subscriber’s jurisdiction.
5. Survival of Representations. The representations, warranties and covenants made by the Subscriber herein shall survive the Termination Date of this Agreement.
7. Governing Law; Jurisdiction. This Subscription Agreement shall be governed and construed in accordance with the laws of the State of Delaware.
8. Notices. Notice, requests, demands and other communications relating to this Subscription Agreement and the transactions contemplated herein shall be in writing and shall be deemed to have been duly given if and when (a) delivered personally, on the date of such delivery; or (b) mailed by registered or certified mail, postage prepaid, return receipt requested, in the third day after the posting thereof; or (c) emailed, telecopied or cabled, on the date of such delivery to the address of the respective parties as follows:
If to the Company, to: Quantum Medical Transport, Inc. 14090 Southwest Freeway, Suite 300 Sugar Land, TX 77478 |
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If to a Subscriber, to Subscriber’s address as shown on the signature page hereto |
or to such other address as may be specified by written notice from time to time by the party entitled to receive such notice. Any notices, requests, demands or other communications by telecopy or cable shall be confirmed by letter given in accordance with (a) or (b) above.
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9. Miscellaneous.
(a) All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or persons or entity or entities may require.
(b) This Subscription Agreement is not transferable or assignable by Subscriber.
(c) The representations, warranties and agreements contained herein shall be deemed to be made by and be binding upon Subscriber and its heirs, executors, administrators and successors and shall inure to the benefit of the Company and its successors and assigns.
(d) None of the provisions of this Subscription Agreement may be waived, changed or terminated orally or otherwise, except as specifically set forth herein or except by a writing signed by the Company and Subscriber.
(e) In the event any part of this Subscription Agreement is found to be void or unenforceable, the remaining provisions are intended to be separable and binding with the same effect as if the void or unenforceable part were never the subject of agreement.
(f) The invalidity, illegality or unenforceability of one or more of the provisions of this Subscription Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Subscription Agreement in such jurisdiction or the validity, legality or enforceability of this Subscription Agreement, including any such provision, in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.
(g) This Subscription Agreement supersedes all prior discussions and agreements between the parties with respect to the subject matter hereof and contains the sole and entire agreement between the parties hereto with respect to the subject matter hereof.
(h) The terms and provisions of this Subscription Agreement are intended solely for the benefit of each party hereto and their respective successors and assigns, and it is not the intention of the parties to confer, and no provision hereof shall confer, third-party beneficiary rights upon any other person.
(i) The headings used in this Subscription Agreement have been inserted for convenience of reference only and do not define or limit the provisions hereof.
(j) This Subscription Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.
(k) If any recapitalization or other transaction affecting the stock of the Company is effected, then any new, substituted or additional securities or other property which is distributed with respect to the Securities shall be immediately subject to this Subscription Agreement, to the same extent that the Securities, immediately prior thereto, shall have been covered by this Subscription Agreement.
(l) No failure or delay by any party in exercising any right, power or privilege under this Subscription Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
[SIGNATURE PAGE FOLLOWS]
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Quantum Medical Transport, Inc.
SUBSCRIPTION AGREEMENT SIGNATURE PAGE
The undersigned, desiring to purchase Common Stock of Quantum Medical Transport, Inc., by executing this signature page, hereby executes, adopts and agrees to all terms, conditions and representations of the Subscription Agreement.
___________________________________________
(print name of owner or joint owners)
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Exhibit 6.1
A CLEAN SLATE, INC., INC.
INCENTIVE STOCK OPTION PLAN
Plan Summary
______
The plan provides that an aggregate of up to 100,000,000 shares of the Company’s Common Stock may be optioned to officers and other key employees. The plan provides authority for a Stock Option Plan Committee to select the employees of the Company, and its subsidiaries, to whom incentive stock options will be granted. No person may be granted any option unless he agrees to remain an employee of the Company for at least two years. There are approximately three officers and directors of the Company plus other key employees eligible to receive options under the plan. All officers may participate in the plan.
Following the statutory requirements of new Code 422A, the plan provides that the Committee may establish the purchase price of the stock at the time the option is granted. However, the purchase price may not be less than 100 percent of the fair market value of the Company’s Common Stock. The aggregate fair market value of the stock for which any employee may be granted options in any calendar year shall not exceed $100,000 plus any unused limit carried over (as defined in Plan 3(d)) to such year from any prior calendar year beginning on or after April 1, 2018 .
The plan terminates ten years from its effective date. All new options to be granted are nontransferable. The Company is to receive no cash consideration for granting options under the plan. However, when an option is exercise, the holder is required to pay the option price, in cash or certified bank check, shares of the Company’s Common Stock or in any combination of the above, for the number of shares of stock to be issued on exercise of the option unless the holder elects to receive cash or stock by exercise of stock appreciation rights.
Under the plan, a Stock Appreciation Right (SAR) permits the holder of an option to elect to receive cash or a lesser amount of stock without payment, upon exercise of an option. The amount of cash receivable is the difference between the option price stated in the option and the fair market value of the Common Stock on the date of the exercise. The lesser number of shares receivable is the number of shares which could be purchased with the cash receivable. An important distinction between the exercise of an incentive stock option and the exercise of a SAR is that, upon the exercise of an SAR, the option holder need not pay the option price in cash. The shares or cash received by an optionee upon exercising an SAR, however, are subject to tax under Section 83.
1. Purpose of the Plan
This Incentive Stock Option Plan (hereinafter called the “Plan”) for Prize Poker Tournaments (hereinafter called the “Company”) is intended to advance the interests of the Company by providing officers and other key employees who have substantial responsibility for the direction and management of the Company with additional incentive to promote the success of the business, to increase their proprietary interest in the success of the Company, and to encourage them to remain in its employ. The above aims will be effectuated through the granting of certain stock options. It is intended that options issued under the Plan and designated by the Committee under Section 3(b) will qualify as Incentive Stock Options (hereinafter called “ISOs”) under Section 422A of the Internal Revenue Code and the terms of the Plan shall be interpreted in accordance with this intention.
2. Administration of the Plan
The Board of Directors shall appoint a Stock Option Plan Committee (hereinafter called the “Committee”) which shall consist of not less than three (3) members, at least one of whom shall be a Director of the Company. Subject to the provisions of the Plan, the Committee shall have plenary authority, in its discretion: (a) to determine the employees of the Company and its subsidiaries (from among the class of employees eligible under Section 3 to receive options under the Plan) to whom options shall be granted; (b) to determine the time or times at which options shall be granted; (c) to determine the option price of the shares subject to each option, which price shall not be less than the minimum specified in Section 5; (d) to determine (subject to Section 7) the time or times when each option shall become exercisable and the duration of the exercise period; and (e) to interpret the Plan and to prescribe, amend, and rescind rules and regulations relating to it. The Board may from time to time appoint members of the Committee in substitution for members previously appointed and may fill vacancies, however caused, in the Committee; provided, however, that at all times at least one member shall be a Director of the Company. The Committee shall select one of its members as its Chairman and shall hold its meetings at such times and places as it shall deem advisable. All action of the Committee shall be taken by unanimous vote of its members. Any action may be taken by a written instrument signed by all the members of the Committee, and action so taken shall be fully as effective as if it had been taken by a unanimous vote of the members at a meeting duly called and held. The Committee may appoint a secretary to keep minutes of its meetings and shall make rules and regulations for the conduct of its business, as it shall deem advisable.
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3. Eligibility and Limitations on Options Granted Under the Plan
(a) Options will be granted only to persons who are key employees of the Company or a subsidiary corporation of the Company who agree, in writing, to remain in the employ of, and render services to, the Company or a subsidiary corporation of the Company for a period of at least two (2) years from the date of the granting of the option. The term “key employees” shall include officers, directors, executives, and supervisory personnel, as well as other employees of the Company or a subsidiary corporation of the Company. The term “Subsidiary Corporation” shall, for the purposes of this Plan be defined in the same manner as such term is defined in Section 425 (f) of the Internal Revenue Code.
(b) At the time of the grant of each option under this Plan, the Committee shall determine whether such option is to be designated as an ISO. If an option is to be so designated as an ISO, then the provisions of Section 7(d) of this Plan shall be made applicable to such option. In addition, no option granted to any employee, who at the time of such grant, owns stock possessing more than 10 percent of the total combined voting power of all classes of stock of the Company or any of its subsidiaries, may be designated as an ISO, unless at the time of such grant, the option price is fixed at not less than 110 percent of the fair market value of the stock subject to the option, and exercise of such option is prohibited by its terms after the expiration of five (5) years from the date such is granted.
(c) The aggregate fair market value of the stock for which any employee may be granted options designated as ISOs in any calendar year (under this or any other stock option plan established by the Company or a subsidiary corporation of the Company) shall not exceed $100,000 plus any unused limit carryover (as defined in 3(d) hereof) to such year from any prior calendar year beginning on or after April 1, 2018.
(d) The unused limit carryover from any such calendar year shall be one-half of any excess of $100,000 over the aggregate fair market value of the stock for which an employee was granted options that qualify (whether from their issuance or as a result of subsequent amendment and election by the Company) as ISOs in any such calendar year (under this and all other stock option plans established by the Company or a subsidiary corporation of the Company). The unused limit for any calendar year shall be carried forward for three (3) years. ISOs granted in any year shall be applied against the current year limitation first and then against the remaining unused limit carryovers to such year in the order of the calendar year in which the carryovers arose.
4. Shares of Stock Subject to the Plan
There will be reserved for use upon the exercise or options to be granted from time to time under the Plan (subject to the provisions of Section 12) an aggregate of 100,000,000 shares of the Common Stock of the $.0.0001 par value common stock (hereinafter called the “Common Stock”) of the Company, which shares may be in whole or in part, as the Board of Directors of the Company (hereinafter called the “Board”) shall from time to time determine, authorized but unissued shares of the Common Stock or issued shares of the Common Stock which shall have been reacquired by the Company. Any shares subject to an option under the Plan, which option for any reason expires or is terminated unexercised as to such shares, may again be subject to an option under the Plan.
5. Option Price
The purchase price under each option issued shall be determined by the Committee at the time the option is granted, but in no event shall such purchase price be less than 100 percent of the fair market value of the Company’s Common Stock on the date of grant.
The term “fair market value” shall be defined as either the average of the highest offer and lowest bid market price of said Common Stock on any public market if the stock of the Company is publicly traded, as of the date of the grant of the option, or, if there be no sales on such date, on the most recent date upon which such stock was traded, or if there is no market for the Common Stock of the Company, the book value of the Common Stock as of the end of the most recent preceding month as given on the books of the Company applying generally accepted accounting principles on a consistent basis giving effect to all accruals.
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6. Dilutions or Other Agreement
In the event that additional shares of Common Stock are issued pursuant to a stock split or a stock dividend, the number of shares of Common Stock then covered by each outstanding option granted hereunder shall be increased proportionately with no increase in the total purchase price of the shares then so covered, and the number of shares of Common Stock reserved for the purpose of the Plan shall be increased by the same proportion. In the event that the shares of Common Stock of the Company from time to time issued and outstanding are reduced by a combination of shares, the number of shares of Common Stock then covered by each outstanding option granted hereunder shall be reduced proportionately with no reduction in the total price of the shares then so covered, and the number of shares of Common Stock reserved for the purposes of the Plan shall be reduced by the same proportion. In the event that the Company should transfer assets to another corporation and distribute the stock of such other corporation without the surrender of Common Stock of the Company, and if such distribution is not taxable as a dividend and no gain or loss is recognized by reason of Section 355 of the Internal Revenue Code of 1954, or some similar section, then the total purchase price of the shares covered by each outstanding option shall be reduced by an amount which bears the same ratio to the total purchase price then in effect as the market value of the stock distributed in respect of a share of the Common Stock of the Company, immediately following the distribution, bears to the aggregate of the market value at such time of a share of the Common Stock of the Company and the stock distributed in respect thereof. All such adjustments shall be made by the Committee, whose determination upon the same shall be final and binding upon the optionees. No fractional shares shall be issued, and any fractional shares resulting from the computations pursuant to this Section 6 shall be eliminated from the respective option. No adjustment shall be made for cash dividends or the issuance to stockholders of rights to subscribe for additional Common Stock or other securities.
7. Period of Option and Certain Limitations on Right to Exercise
(a) All options issued under the Plan shall be for such period, as the Committee shall determine, but for not more than ten (10) years from the date of grant thereof.
(b) The period of the option, once it is granted, may be reduced only as provided for in Section 9 in connection with the termination of employment or death of the optionee or in Section 7(c) in the case of less than satisfactory performance.
(c) Each option granted under this Plan shall become exercisable only after two (2) years continued employment of the optionee with the Company or a subsidiary corporation of the Company immediately following the date the option is granted. Any option designated as an ISO shall be exercisable in full, or as to any part thereof, at any time after the expiration of two (2) years following the date such option is granted, but only if the optionee chooses to exercise such option and to pay for such option in the manner set forth in Section 7(e) hereof (i.e., in cash or certified check or shares of the Company’s Common Stock, or any combination of the foregoing in an amount equal to the full option price of the shares being purchased). Any option not designated as an ISO and any option designated as an ISO that the optionee chooses to exercise in any manner other than that permitted in the preceding sentence, shall be exercisable only to the extent of one-fifth of the total number of optioned shares after the expiration of two (2) years following the date the option is granted only to the extent of two-fifths of the total number of optioned shares after the expiration of three (3) years following the date the option is granted, only to the extent of three-fifths of the total number of optioned shares after the expiration of four (4) years following the date the option is granted, only to the extent of four-fifths of the total number of optioned shares after the expiration of five (5) years following the date the option is granted, and in full only after the expiration of six (6) years following the date the option is granted, such limitations being calculated, in the case of any resulting fraction, to the nearest lower number of shares.
Notwithstanding the foregoing, the Committee may, in its sole discretion, (i) prescribe longer time periods and additional requirements with respect to the exercise of an option and (ii) terminate in whole or in part such portion of any option as has yet become exercisable at the time of termination if it determines that the optionee is not performing satisfactorily the duties to which he was assigned on the date the option was granted or duties of at least equal responsibility. No option may be exercised unless the optionee is at the time of such exercise in the employ of the Company or of a subsidiary corporation of the Company and shall have been continuously so employed since the grant of his option. Absence or leave approved by the management of the Company shall not be considered an interruption of employment for any purpose under the Plan.
(d) No option granted by the Committee as an ISO may be exercised while there is outstanding in the hands of the optionee any ISO (whether granted under this Plan or any other stock option plan established by the Company or a subsidiary of the Company) which was granted before the granting of the ISO hereunder sought to be exercised. For purposes of this Section 7(d), any ISO shall be treated as outstanding until exercised in full or expired.
(e) Subject to the alternative settlement methods set forth in Section 7(h) hereof, the exercise of any option shall also be contingent upon receipt by the Company of cash or certified check to its order, shares of the Company’s Common Stock, or any combination of the foregoing in an amount equal to the full option price of the shares being purchased. For purposes of this paragraph, shares of the Company’s Common Stock that are delivered in payment of the option price shall be valued at their fair market value determined under the method set forth in Section 5 of this Plan applied as of the date of the exercise of the option. However, in order to facilitate the accumulation of funds to enable employees to exercise their option, they will have the right, if they so elect, to direct the Company or a subsidiary corporation of the Company to withhold from their compensation regular amounts to be applied toward the exercise of the options. Funds credited to the stock option accounts will be under the control of the Company until applied to the payment of the option price at the direction of the employee or returned to the employee in the event the amount is not used for purchase of shares under option, and all funds received or held by the Company under the Plan may be used for any corporate purpose, and no interest shall be payable to a participant on account of any amount held. Such amounts may be withdrawn by the participant at any time, in whole or in part, for any purpose.
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(f) No optionee or his legal representative or distributees, as the case may be, will be deemed to be a holder of any share subject to an option unless and until certificates for such shares are issued to him or them under the terms of the Plan. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued.
(g) In no event may an option be exercised after the expiration of its term.
(h) As an alternative to payment in full by the optionee for the number of shares of Common Stock in respect of which an option is exercised, the Committee may provide alternative settlement methods as follows:
(i) The Committee, in its discretion, may provide in the initial grant of any option, that the optionee may elect either of the alternative settlement methods set forth in subsection (ii) below.
(ii) The alternative settlement methods are for the optionee, upon exercise of the option, to receive from the Company: (1) cash in an amount equal to the excess of the value of one share over the option price times the number of shares as to which the option is exercised; or
(2) the number of whole shares of Common Stock having an aggregate value not greater than the cash amount calculated under Section 7(h)(ii)(1). For purposes of determining an alternative settlement, the value per share shall be the “Fair market value” determined under the method set forth in Section 5 hereof, applied as of the date of the exercise of the option, or such other price as the Committee shall determine to be the fair market value of the Common Stock on the date of exercise.
(i) An election of any of the alternative settlement methods provided for under Section 7 (h)(ii) shall be binding on the optionee, when made. The optionee may elect to what extent the alternative settlement method elected shall be paid in cash, in Common Stock, or partially in Common Stock, provided that the aggregate value of the payments shall not be greater than the cash amount calculated under Section 7 (h)(ii)(1). No fractional shares of Common Stock shall be issued, and the Committee shall determine whether cash shall be paid in lieu of such fractional share interest or whether such fractional share interest shall be eliminated.
(j) The alternative settlement methods provided above in Section 7(h)(ii) shall not be available unless the cash amount calculated thereunder shall be positive, i.e. when the value of one share shall exceed the option price per share.
(k) Exercise of an option in any manner, including an exercise involving an election of an alternative settlement method with respect to an option, shall result in a decrease in the manner of shares of Common Stock which thereafter may be available under the Plan by the number of shares as to which the option is exercised.
(1) To the extent that the exercise of options by one of the alternative settlement methods provided for in Section (h)(ii) results in compensation income to the optionee, the Company will withhold from the amount due to the optionee utilizing such alternative settlement method, an appropriate amount for federal, state and local taxes.
8. Assignability
Each option granted under this Plan shall be transferable only by will or the laws of descent and distribution and shall be exercisable, during his lifetime, only by the employee to whom the option is granted. Except as permitted by the preceding sentence, no option granted under the Plan or any of the rights and privileges thereby conferred shall be transferred, assigned, pledged, or hypothecated in any way (whether by operation of law or otherwise), and no such option, right, or privilege shall be subject to execution, attachment, or similar process. Upon any attempt to so transfer, assign, pledge, hypothecate, or otherwise dispose of the option, or of the right or privilege conferred thereby, contrary to the provisions hereof, or upon the levy of any attachment or similar process upon such option, right of privilege, the option and such rights and privileges shall immediately become null and void.
9. Effect of Termination of Employment. Death or Disability
(a) In the event of the termination of employment if an optionee during the two (2) year period after the date of issuance of an option to him either by reason of (i) a discharge for cause or (ii) voluntary separation on the part of the optionee and without consent of his employing company or companies, any option or options theretofore granted to him under this Plan to the extent not theretofore exercised by him shall forthwith terminate.
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(b) In the event of the termination of employment of an optionee (otherwise than by reason of death or retirement of the optionee at his Retirement Date by the Company or by any subsidiary corporation of the Company employing the optionee at such time), any option or options granted to him under the Plan to the extent not theretofore exercised shall be deemed cancelled and terminated forthwith, except that, subject to the provisions of section (a) of this Section, such optionee may exercise any options theretofore granted to him, which have not then expired and which are otherwise exercisable within the provisions of Section 7(c) hereof, within three (3) months after such termination. If the employment of an optionee shall be terminated by reason of the optionee’s retirement at his Retirement Date by the Company or by any subsidiary corporation of the Company employing the optionee at such time, the optionee shall have the right to exercise such option or options held by him to the extent that such options have not expired, at any time within three (3) months after such retirement. The provisions of Section 7(c) to the contrary notwithstanding, upon retirement, all options held by an optionee shall be immediately exercisable in full. The transfer of an optionee from the employ of the Company to a subsidiary corporation of the Company or vice versa, or from one subsidiary corporation of the Company to another, shall not be deemed to constitute a termination of employment for purposes of this Plan.
(c) In the event that an optionee shall die while employed by the Company or any subsidiary corporation of the Company or shall die within three (3) months after retirement at his Retirement Date (by the Company or by any subsidiary corporation of the Company) any option or options granted to him under this Plan and not theretofore exercised by him or expired shall be exercisable by the estate of the optionee or by any person who acquired such option by bequest or inheritance at any time within one (1) year after the death of the optionee. References hereinabove to the optionee shall be deemed to include any person entitled to exercise the option after the death of the optionee under the terms of this Section.
(d) In the event of the termination of employment of an optionee by reason of the optionee’s disability, the optionee shall have the right, notwithstanding the provisions of Section 7(c) hereof, to exercise all options held by him, to the extent that options have not previously expired or been exercised, at any time within one (1) year after such termination. The term “disability” shall, for the purposes of this Plan, be defined in the same manner as such term is defined in Section 105(d)(4) of the Internal Revenue Code of 1954.
(e) For the purposes of this Plan, “Retirement Date” shall mean any date an employee is otherwise entitled to retire under the Company’s retirement plans, if any, and shall include normal retirement at age 65, early retirement at age 62, and retirement at age 60 after 30 years of service.
10. Listing and Registration of Shares
Each option shall be subject to the requirement that if at any time the Stock Option Committee shall determine, in its discretion, that the listing, registration, or qualification of the shares covered thereby upon any securities exchange or under any state or federal law or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the granting of such option or the issue or purchase of shares thereunder, such option may not be exercised in whole or in part unless and until such listing, registration, qualification, consent, or approval shall have been effected or obtained free of any conditions not acceptable to the Committee.
11. Expiration and Termination of the Plan
Options may be granted under the Plan at any time or from time to time as long as the total number of shares optioned or purchased under this Plan does not exceed 900,000,000 shares of Common Stock. The Plan may be abandoned or terminated at any time by the Board of Directors of the Company except with respect to any options then outstanding under the Plan. No option shall be granted pursuant to the Plan after ten (10) years from the effective date of the Plan.
12. Amendment of Plan
The Board of Directors may at any time and from time to time modify and amend the Plan (including such form of option agreement) in any respect; provided, however, that no such amendment shall: (a) increase (except in accordance with Section 6) the maximum number of shares for which options may be granted under the Plan either in the aggregate or to an individual employee; or (b) reduce (except in accordance with Section 6) the minimum option prices which may be established under the Plan; or (c) extend the period or periods during which options may be granted or exercised; or (d) change the provisions relating to the determination of employees to whom options shall be granted and the number of shares to be covered by such options; or (e) change the provisions relating to adjustments to be made upon changes in capitalization; or (f) change the method for selection of the Committee as provided by Section 2 hereof. The termination or any modification or amendment of the Plan shall not, without the consent of an employee, affect his rights under an option theretofore granted to him.
13. Applicability of Plan to Outstanding Stock Options
The Plan shall not affect the terms and conditions of any non-qualified stock options heretofore granted to any employee of the Company or a subsidiary corporation of the Company under any other plan relating to non-qualified stock options; nor shall it affect any of the rights of any employee to whom such a non-qualified stock option was granted.
14. Effective Date of Plan
This Plan shall become effective on the date of its adoption by the Board of Directors or the Company or its approval by the vote of the shareholders of a majority of the outstanding shares of the Company’s common stock. This Plan shall not become effective unless such shareholder approval shall be obtained within twelve (12) months before or after the adoption of the Plan by the Directors.
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A CLEAN SLATE, INC.
PRESIDENT’S LETTER TO STOCKHOLDERS
Dear Stockholder:
I am enclosing this letter with the notice of call of a special meeting of the stockholders of the Corporation as a means of explaining briefly the purpose of the meeting. Your Board of Directors has unanimously recommended that the Corporation adopt a stock option plan allowing the purchase of a limited number of the Corporation’s shares of common stock by key management employees of the Corporation. This proposal has been adopted by the Board of Directors, subject to the approval of the holders of the Corporation’s common stock, and I have been directed to set forth to you the reasons for their action.
In the past several years, plans or programs offering stock participation opportunities to management personnel have become widespread among American businesses. This meaningful trend has come about in response to a realization that the best efforts of the best executives are more surely secured when the executives have a personal stake in the fortunes of their corporate employers. I might add that a number of our major competitors have instituted stock acquisition programs of one type or another for their executive employees, and we in charge of the Corporation are aware of the importance of such programs in attracting and holding employees of the caliber we want in our Corporation.
In judgment of the Directors, your Corporation can best be assured of success in enlisting and retaining top management employees only if these employees are given the opportunity to acquire a proprietary stake in the success of the Corporation. Consequently, the Directors have examined methods of achieving this goal, and have determined that the best approach for the Corporation is that of offering certain stock options known as “Incentive Stock Options,” which satisfy the tests imposed by the Internal Revenue Code for such designation. Specifically, the Directors’ proposal is that a total of 900.000,000 unissued shares of the value common stock of the Corporation be sold to executive employees under options that fix the purchase price at percent of the market price on the date such an option is granted. The particular employees to be given these options, and the number of shares covered by each option, would be left to the decision of the Board of Directors or of a special committee chosen from the Board. However, in no event would the total number of shares placed under option exceed the total of 900,000,000 which would be somewhat less than 10 percent of the total number of common shares to be outstanding once these optioned shares are issued on a fully diluted basis.
The Directors wish to take this step only after full information has been given to all the stockholders affected, and their understanding and approval of this plan has been expressed. For this reason, though I have set forth in this letter what I believe to be a proper summary of the principal points involved, I have instructed the Secretary of the Corporation to mail a copy of the full stock plan and of the relevant Directors’ resolutions to any stockholder requesting it.
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A CLEAN SLATE, INC.
NOTICE OF EXERCISE OF STOCK OPTION AND
RECORD OF STOCK TRANSFER
I hereby exercise my Incentive Stock Option granted by A Clean Slate, Inc., Inc., subject to all the terms and provisions thereof and of the Employee Stock Option Plan referred to therein, and notify you of my desire to purchase shares of Common Stock of the Company which were offered to me pursuant to said Option. Enclosed is my check in the sum of in full payment for such shares.
I hereby represent that the __________ shares of Common Stock to be delivered to me pursuant to the above-mentioned exercise of the Option granted to me on are being acquired by me as an investment and not with a view to, or for sale in connection with, the distribution of any thereof.
DATED: , 20__.
_________________________
Employee’s Signature
Receipt is hereby acknowledged of the delivery to me by A Clean Slate, Inc. on of stock certificates for shares of Common Stock purchased by me pursuant to the terms and conditions of the Employee Stock Option Plan referred to above, which shares were transferred to me on the Company’s stock record books on.
_________________________
Employee
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A CLEAN SLATE, INC.
NOTICE OF GRANT OF INCENTIVE STOCK OPTION
[date]
[name of employee]
Dear ______:
At the direction of the Board of Directors of the Corporation, you are hereby notified that the Board has granted to you an option, pursuant to the Employee Stock Option Plan adopted by the Corporation on June ____, 2018, and ratified and approved by the stockholders of the Corporation on June ___, 2018.
The option granted to you is to purchase ____________ Hundred Thousand (__00,000) shares of the $.0.0001 par Common Stock of the Corporation at the price of per share. The date of grant of this option is the date of this notice, and it is the determination of the Board of Directors that on this date the fair market value of the Corporation’s no par common stock was $0.20 per share.
I enclosed a certified copy of the Incentive Stock Option Plan governing the option granted to you and your attention is invited to all the provisions of the Plan. You will observe that the Plan does not require that you exercise this option as to any particular number of shares at one time, but this option must be exercised, if at all and to the extent exercised, by no later than years from the date of this notice.
Your stock option is in all respects limited and conditioned as provided in the Employee Stock Option Plan, including, but not limited to, the following:
a. Your option may be exercised by you, but only by you, at any time during your lifetime prior to the three months following termination of your employment;
b. Your option is nontransferable, otherwise than as may be occasioned by your death, and then only to your estate or according to the terms of your Will or the provision of applicable laws of descent and distribution;
c. In the event that the right to exercise your option is passed to your estate, or to a person to whom such right devolves by reason of your death, then your option shall be nontransferable in the hands of your executor or administrator or of such person, except that your option may be distributed by your executor or administrator to the distributees of your estate as a part of your estate.
At the time or times when you wish to exercise this option, in whole or in part, please refer to the provisions of the Stock Option Plan dealing with methods and formalities of exercise of your option.
________________________
Secretary
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Exhibit 6.2
Quantum Medical Transport, Inc.
Management Stock Bonus Plan
__________
Quantum Medical Transport, Inc.
Management Stock Bonus Plan
__________
Purpose
This Plan’s purpose is to keep personnel of experience and ability in the employ of Quantum Medical Transport, Inc. (“Quantum Medical Transport, Inc.”) and its subsidiaries and to compensate them for their contributions to the growth and profits of Quantum Medical Transport, Inc. and its subsidiaries and thereby induce them to continue to make such contributions in the future.
1. Definitions
For the purpose of this Plan, the following terms will have the definitions set forth below:
(a) Company – Quantum Medical Transport, Inc.
(b) Subsidiary or Subsidiaries – A corporation or corporations or other entity of which Quantum Medical Transport, Inc. owns, directly or indirectly, shares having a majority of the ordinary voting power for the election of directors.
(c) Board – Quantum Medical Transport, Inc. board of directors.
(d) Committee – The Management Stock Bonus Plan Committee as appointed from time to time by the Board, consisting of not less than three members. No member of the Committee shall be eligible for selection as a person to whom shares may be allocated pursuant to the Plan or to whom stock options may be granted pursuant to any other Plan of the Company or any of its affiliates, at any time while he is serving on the Committee.
(e) Date of Issuance – This term shall have the meaning supplied by Section 6(c) below.
(f) Plan – The Quantum Medical Transport, Inc. Management Stock Bonus Plan.
(g) Bonus Share – The shares of Common Stock of Quantum Medical Transport, Inc. reserved pursuant to Section 3 hereof and any such shares issued to a Recipient pursuant to this Plan.
(h) Recipient – An employee of Quantum Medical Transport, Inc. or a subsidiary to whom shares are allocated under this Plan, or such individual’s designated beneficiary, surviving spouse, estate, or legal representative. For this purpose, however, any such beneficiary, spouse, estate, or legal representative shall be considered as one person with the employee.
(i) Restricted Period – This phrase shall have the meaning supplied by Section 7(e) below.
2. Bonus Share Reserve.
(a) Bonus Share Reserve. Quantum Medical Transport, Inc. will establish a Bonus Share Reserve to which will be credited Nine Hundred Million (900,000,000) shares of the Common Stock of Quantum Medical Transport, Inc., par value $.0.001 per share. Should the shares of the Company’s Common Stock, due to a stock split or dividend or combination of shares or any other change, or exchange for any other securities, by reclassification, merger, consolidation, recapitalization, or otherwise, be increased or decreased, or changed into, or exchanged for, a different number or kind of shares of stock or other securities of Quantum Medical Transport, Inc. or of another corporation or entity, the number of shares then remaining in the Bonus Share Reserve shall be appropriately adjusted to reflect such action. If any such adjustment results in a fractional share, the fraction shall be disregarded.
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(b) Adjustments to Reserve. Upon the allocation of shares hereunder, the reserve will be reduced by the number of shares to be allocated and, upon the failure to make the required payment on the issuance of any Bonus Shares pursuant to Section 6(a) or upon the repurchase thereof pursuant to Section 7(d)(i) or (ii), Section 8 or Section 10 hereof, the reserve shall be increased by such number of shares, and such Bonus Shares may again be the subject of allocation hereunder.
(c) Distributions of Bonus Shares. Distributions of Bonus Shares, as the Board shall, in its sole discretion, determine, may be made from authorized but unissued shares or from treasury shares. All authorized and unissued shares issued as Bonus Shares in accordance with the Plan shall be fully paid and non-assessable shares free from preemptive rights.
2. Eligibility and Making of Allocations.
(a) Eligible Employees. Any salaried executive employee of Quantum Medical Transport, Inc. or any Subsidiary (including officers and, except for person serving as directors only) shall be eligible to receive an allocation of Bonus Shares.
(b) Selection by the Committee. From the employees eligible to receive allocations pursuant to the Plan, the Committee may from time to time select those employees to whom it recommends that the Board make allocations. Such recommendations shall include a recommendation as to the number of Bonus Shares that should be allocated and in determining the number of Bonus Shares it wishes to recommend, the Committee shall consider the position and responsibilities of the eligible employees, the value of their services to Quantum Medical Transport, Inc. and its subsidiaries and such factors as the Committee deems pertinent.
(c) Review by the Board of Committee’s Recommendations. As promptly as practicable after the Committee recommends making allocations pursuant to (b) above, the Board will review the Committee’s recommendations and, in the Board’s discretion, allocate to the employees the Board selects from those employees recommended by the Committee a number of Bonus Shares not in excess of the number recommended for each employee by the Committee. The date of such action by the Board shall be the “date of allocation,” as that term is used in this Plan.
(d) Participation in Other Stock Option Plans. A person who has received options to purchase stock under any stock option plan of Quantum Medical Transport, Inc. or any subsidiary may exercise the same in accordance with their terms, and will not by reason thereof be ineligible to receive Bonus Shares under this Plan. A person who has received Bonus Shares under this Plan shall not, for a period of three years from the date of Issuance thereto of such Bonus Shares, be eligible to, and may not, be granted any option or other rights to purchase Common Stock pursuant to any stock option or stock purchase plan of Quantum Medical Transport, Inc. presently in effect or hereafter adopted, nor shall he or she be eligible during such period to receive any additional allocation of Bonus Shares under this Plan or under any similar plan of Quantum Medical Transport, Inc..
(e) Limit on Number of Shares. The total number of Bonus Shares, which may be allocated pursuant to this Plan, will not exceed the amount of available therefore in the Bonus Share reserve.
3. Form of Allocation.
(a) Number Specified. Each allocation shall specify the number of Bonus Shares subject thereto, subject to the provisions of Section 4.
(b) Notice. When an allocation is made, the Board shall advise the Recipient and Quantum Medical Transport, Inc. thereof by delivery of written notice in the Form of Exhibit A hereto attached.
(c) Public Listing of Stock. Quantum Medical Transport, Inc. shall take such action as shall be necessary to cause any Bonus Shares issued pursuant to this Plan and not previously listed to be listed on a public stock market or exchange on which shares of the same s the Bonus Shares are then listed, if any.
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4. Payment Required of Recipients.
(a) Acceptance of Allocation. Within 15 days from the date of allocation, the Recipient shall, if he desires to accept the allocation, pay to Quantum Medical Transport, Inc. an amount equal to the par value of the Bonus Shares so allocated, in cash, buy certified or bank cashier’s check, or by money order at the office of the Treasurer.
(b) Investment Purpose. Quantum Medical Transport, Inc. may require that in acquiring any Bonus Shares, the Recipient agree with, and represent to, Quantum Medical Transport, Inc. that the Recipient is acquiring such Bonus Shares for the purpose of investment and with no present intent to transfer, sell or otherwise dispose of such shares except for such distribution by a legal representative as shall be required by will or the laws of any jurisdiction in winding up the estate of any Recipient. Such shares shall be transferable thereafter only if the proposed transfer is permitted under the Plan and if, in the opinion of counsel (who shall be satisfactory to Quantum Medical Transport, Inc.), such transfer at such time complies with applicable securities laws.
(c) Written Agreement/Date of Issuance. Concurrently with making payment of the par value of the Bonus Shares pursuant to Section 6(a) the Recipient shall deliver to Quantum Medical Transport, Inc., in duplicate, an agreement in writing, signed by the Recipient, in form and substance as set forth in Exhibit B, below, and Quantum Medical Transport, Inc. will promptly acknowledge the receipt thereof. The date of such delivery and receipt shall be deemed the “Date of Issuance,” as that phrase is used in this Plan, of the Bonus Shares to which the shares relate. The failure to make such payment and delivery within 15 days from the date of allocation shall terminate the allocation of such shares to the Recipient.
5. Restrictions.
(a) Transfer/Issuance. Bonus Shares, after the making of the payment and representations, etc. required by Section 6, will be promptly issued or transferred and a certificate or certificates for such shares shall be issued in the Recipient’s name. As such, the Recipient shall have all of the rights of a shareholder with respect to such shares, including the right to vote them and to receive all dividends and other distributions (subject to Section 7(b)) paid with respect to them, provided, however, that the shares shall be subject to the restrictions in Section 7(d). Stock certificates representing Bonus Shares will be imprinted with a legend stating that the shares represented thereby may not be sold, exchanged, transferred, pledged, hypothecated, or otherwise disposed of except in accordance with this Plan’s terms, and each transfer agent for the Common Stock shall be instructed to like effect in respect of such shares. In aid of such restrictions, the Recipient shall immediately upon receipt of the certificate for such shares, deposit such certificate(s), together with a stock power or other instrument of transfer, appropriately endorsed in blank, with an escrow agent designated by the Committee, under a deposit agreement containing such terms and conditions as the Committee shall approve, the expenses of such escrow to be borne by Quantum Medical Transport, Inc..
(b) Stock Splits, Stock Dividends, Etc. If, due to a stock split, stock dividend, combination of shares, or any other change or exchange for other securities, by reclassification, reorganization, merger, consolidation, recapitalization, or otherwise, the Recipient, as the owner of the Bonus Shares subject to restrictions hereunder, shall be entitled to new, additional, or different shares of stock or securities, the certificate or certificates for, or other evidences of, such new, additional, or different shares or securities, together with a stock power or other instrument of transfer appropriately endorsed, which shares also shall be imprinted with a legend as provided in Section 7(a) and deposited by the Recipient under the above-mentioned deposit agreement. When the event(s) described in the preceding sentence occur, all Plan provisions relating to restrictions and lapse of restrictions will apply to such new, additional or different shares or securities to the extent applicable to the shares with respect to which they were distributed, provided, however, that if the Recipient shall receive rights, warrants or fractional interests in respect of any such Bonus Shares, such rights or warrants may be held, exercised, sold or otherwise disposed of, and such fractional interests may be settled, by the Recipient free and clear of the restrictions hereafter set forth.
(c) Restricted Period. The term “Restricted Period” with respect to restricted Bonus Shares (after with restrictions shall lapse) means a period starting on the Date of Issuance of such shares to the Recipient and ending on such date not less than three (3) years after the Date of Issuance, as the Committee may establish as the time of allocation of shares hereunder.
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(d) Restrictions on Bonus Shares. The restrictions to which restricted Bonus Shares shall be subject are:
(i) During the Restricted Period to such shares and except as otherwise specifically provided in the Plan, none of such shares shall be sold, exchanged, transferred, pledged, hypothecated, or otherwise disposed of unless they first, by written notice have been offered to Quantum Medical Transport, Inc. for repurchase, for the same amount as was paid therefore under Section 6, with appropriate adjustment for any change in the Bonus Shares of the nature described in Section 7(b). If Quantum Medical Transport, Inc. shall not within 30 days following such offer have so repurchased the shares and made payment in full for such shares, unless such purchase is otherwise prohibited by the laws of the State of Delaware currently in effect at the time of an offer of Bonus Shares to Quantum Medical Transport, Inc. for repurchase pursuant to the terms of the Plan, Quantum Medical Transport, Inc. shall repurchase said shares and make payment in full for such shares within thirty (30) days following such offer.
(ii) If a Recipient’s employment is terminated for any reason, including such Recipient’s death or disability, at any time before the Restricted Period ends, Quantum Medical Transport, Inc. shall so notify the escrow agent appointed under Section 7(a). Such termination shall be deemed an offer to Quantum Medical Transport, Inc. as described in Section 7(d)(i) as to:
(A) All such shares issued to the Recipient, if such termination occurs within one year from the Date of Issuance;
(B) 75% of the total number of such shares originally issued (including any other or additional securities issued in respect thereof, as contemplated by Section 7(b) to such Recipient, if such termination occurs more than one year after the Date of Issuance but prior to two years after that date;
(C) 50% of the total number of such shares originally issued (including any other or additional securities issued in respect thereof, as contemplated by Section 7(b) to such Recipient, if such termination occurs on or after two years after the Date of Issuance but prior to the end of the Restricted Period.
(e) Lapse of Restricted Period. The restriction set forth in Section 7(d) hereof, with respect to the Bonus Shares to which such Restricted Period was applicable, will lapse
(i) As to such shares in accordance with the time(s) and number(s) of shares as to which the Retracted Period expires, as described in Section 7(d)(ii), or
(ii) As to any shares which Quantum Medical Transport, Inc. will fail to purchase when they are offered to Quantum Medical Transport, Inc., as described in Section 7(d)(i) upon Quantum Medical Transport, Inc.’s failure to so repurchase.
(f) Transfers Upon Death of Recipient. Nothing in this Plan will preclude the transfer of restricted Bonus Shares on the Recipient’s death, to the Recipient’s legal representatives or estate, or preclude such representatives from transferring any of such shares to the person(s) entitled thereto by will or the laws of descent and distribution; provided, however, that any shares so transferred as to which such restrictions have not lapsed will remain subject to all restrictions and obligations imposed on them by this Plan.
(g) Delivery of Written Notice. All notices in writing required pursuant to this Section 7 will be sufficient only if actually delivered or if sent via registered or certified mail, postage prepaid, to Quantum Medical Transport, Inc., attention Treasurer, and/or escrow agent at its principal office within the City of Clearwater, and will be conclusively deemed given on the date of delivery, if delivered before or on the date first business day following the date of such mailing, if mailed.
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6. Finality of Determination.
The Committee will administer this Plan and construe its provisions. Any determination by the Committee (except insofar as it will make recommendations only) in carrying out, administering, or constructing this Plan will be final and binding for all purposes and upon all interested persons and their heirs, successors and personal representatives.
7. Limitations.
(a) No Right to Allocation. No person will at any time have any prior right to receive an allocation of Bonus Shares hereunder, and no person will have authority to enter into an agreement for the making of an allocation, or any prior right or to make any representation or warranty with respect thereto.
(b) Rights of Recipients. Recipients of allocations will have no rights in respect thereof other than those set forth in this Plan. Except as provided in Section 6(b) or 7(f), such rights may not be assigned or transferred except by will or by the laws of descent or distribution. If any attempt is made to sell, exchange, transfer, pledge, hypothecate, or otherwise dispose of any Bonus Shares held by the Recipient under restrictions which have not yet lapsed, the shares that are the subject of such attempted disposition will be deemed offered to Quantum Medical Transport, Inc. for repurchase, and Quantum Medical Transport, Inc. will repurchase them, as described in Section 7(d)(i) when Quantum Medical Transport, Inc. receives actual notice of such attempted distribution. Before issuance of Bonus Shares, no such shares will be earmarked for the Recipient’s accounts nor will such Recipients have any rights as stockholders with respect to such shares.
(c) No Right to Continued Employment. Neither Quantum Medical Transport, Inc.’s actions in establishing the Plan, nor any action taken by it or by the Board or the Committee under the Plan, nor any provision of the Plan, will be construed as giving to any person the right to be in the employ of Quantum Medical Transport, Inc. or any Subsidiary.
(d) Limitation on Actions. Every right of action by or on behalf of Quantum Medical Transport, Inc. or by any shareholder against any past, present or future member of the Board, the Committee or any officer or employee of Quantum Medical Transport, Inc. arising out of or in connection with this Plan shall, regardless of the place where the action may be brought and regardless of the place of residence of any such director, committee member, officer or employee, cease and be barred by the expiration of three years from the later of:
(i) The date of the act or omission in respect of which such right of action arises;
(ii) The first date upon which there has been made generally available to shareholders an annual report of Quantum Medical Transport, Inc. and a proxy statement for the annual meeting of shareholders following the issuance of such annual report, which annual report and proxy statement alone or together set forth, for the related period, the amount of the allocation.
In addition, any and all right of action by any employee (past, present or future) against Quantum Medical Transport, Inc. or any member of the Committee arising out of or in connection with this Plan will, regardless of the place where action may be brought and regardless of the place of residence of any Committee member, cease and be barred by the expiration of three years from the date of the act or omission in respect of which such right of action arises.
8. Amendment, Suspension or Termination of Plan.
The Board may amend, suspend or terminate the Plan in whole or in part at any time; provided that such amendment will not affect adversely the rights or obligations with respect to allocations previously made; and provided further, that no modifications of the Plan by the Board without approval by the stockholders will (i) increase the maximum number of Bonus Shares reserved pursuant to Section 3; (ii) alter the provisions of Section 4 with respect to the total number of Bonus Shares that may be allocated under the Plan, or (iii) render any member of the Committee eligible to receive an allocation at any time while he is serving on the Committee.
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9. Governing Laws.
This Plan will be governed by the laws of the State of Delaware.
10. Expenses of Administration.
All costs and expenses incurred in the operation and administration of this Plan will be borne by the Company.
11. Registration of Bonus Shares.
(a) Registration Requirement. If Quantum Medical Transport, Inc. determines at any time to register any of its securities under the Securities Act of 1933 (or similar statute then in effect) Quantum Medical Transport, Inc., at its expense, will include among the securities which it then registers all Bonus Shares or other stock or securities issued in respect thereof, or in replacement thereof as to which the Restricted Period has expired. The requirement of the preceding sentence, however, will not apply to the extent that any Recipient at that time has no present intent to sell or distribute the relevant shares. Also, in the case of stock or securities not of Quantum Medical Transport, Inc., Quantum Medical Transport, Inc.’s obligation under this Section 13 will be limited to using its best efforts to effect such registration and shall not be required to register such shares if, in the opinion of Quantum Medical Transport, Inc.’s investment banker, such registration would materially limit the marketability of other securities registered or to be registered by Quantum Medical Transport, Inc..
(b) Written Notification. As to each registration pursuant to this Section 13, Quantum Medical Transport, Inc. will keep the Recipients advised in writing as to their initiation of proceedings for such registration and as to the completion thereof, and at its expense will keep such registration effective for a period of nine months, or until all sales and distributions contemplated in connection therewith are completed, whichever period is shorter. Each Recipient will at his own expense furnish to Quantum Medical Transport, Inc. such information regarding the Recipient and the Recipient’s ownership of Bonus Shares (or other stock or securities) as Quantum Medical Transport, Inc. may reasonably request in writing in connection with any such registration.
(c) Prospectus, Indemnification. Quantum Medical Transport, Inc., at its expense, will furnish to each Recipient such number of prospectuses incident to any such registration as such Recipient from time to time reasonably may request. In addition, Quantum Medical Transport, Inc. will indemnify each such Recipient against all claims, losses, damages, and liabilities caused by any untrue statement of a material fact contained in such prospectus (or in any related registration statement) or by any omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same may have been caused by an untrue statement or omission based upon information furnished in writing to Quantum Medical Transport, Inc. by such Recipient expressly for use therein. Further, as a condition precedent to the obligations of Quantum Medical Transport, Inc. pursuant to Section 1, each Recipient will agree in writing to indemnify Quantum Medical Transport, Inc. against all claims, losses, damages, and liabilities caused by an untrue statement or omission based upon information furnished to Quantum Medical Transport, Inc. by such Recipient expressly for use therein.
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Exhibit I
Quantum Medical Transport, Inc.
Date:
To: , Recipient
From: Treasurer, Quantum Medical Transport, Inc.
This is to advise you that Quantum Medical Transport, Inc.’s Board of Directors has on the date of this Notice allocated to the Recipient above named a total of
Bonus Shares under and pursuant to the Management Stock Bonus Plan.
For these shares to be issued, the Recipient must make payment of $
And deliver to the Treasurer of Quantum Medical Transport, Inc. an agreement in duplicate, in the form of Exhibit II hereto, within 15 days of the date of this Notice.
_______________
For the Board
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Exhibit II
Quantum Medical Transport, Inc.
Management Stock Bonus Plan
To: Treasurer, Quantum Medical Transport, Inc.
Enclosed is the sum of $
Being equal to the par value of
Bonus Shares allocated to and purchased by me pursuant to Quantum Medical Transport, Inc.’s Management Stock Bonus Plan. Upon receipt of these Bonus Shares, I will deposit them together with a stock power duly endorsed in blank with an escrow agent appointed pursuant to Section 7(a) of this Plan.
I represent and agree that I am acquiring these Bonus Shares for investment and that I have no present intention to transfer, sell or otherwise dispose of such shares, except as permitted pursuant to the Plan and in compliance with applicable securities laws. I agree further that I am acquiring these shares in accordance with, and subject to, the terms, provisions, and conditions of said Plan, to all of which I hereby expressly consent. These agreements will bind and inure to the benefit of my heirs, legal representatives, successors and assigns.
My address of record is:
My social security number is:
Receipt of the above, together with the payment referred to, is hereby acknowledged.
Quantum Medical Transport, Inc.
By: ____________________
Date:
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Exhibit 6.3
Quantum Medical Transport, Inc.
ANNUAL BONUS PERFORMANCE PLAN
FOR EXECUTIVE OFFICERS
_____
August ___, 2018
QUANTUM MEDICAL TRANSPORT, INC.
ANNUAL BONUS PERFORMANCE PLAN
FOR EXECUTIVE OFFICERS
______
SECTION 1. PURPOSE OF PLAN
The purpose of the Plan is to promote the success of the Company by providing to participating executives bonus incentives that qualify as performance-based compensation within the meaning of Section 162(m) of the Code.
SECTION 2. DEFINITIONS AND TERMS
2.1 Accounting Terms. Except as otherwise expressly provided or the context otherwise requires, financial and accounting terms are used as defined for purposes of, and shall be determined in accordance with, generally accepted accounting principles, as from time to time in effect, as applied and reflected in the consolidated financial statements of the Comp any, prepared in the ordinary course of business.
2.2 Specific Terms. The following words and phrases as used herein shall have the following meanings unless a different meaning is plainly required by the context:
“Bonus” means a cash payment or a payment opportunity as the context requires.
“Bonus Pool” means the total aggregate of cash payments or payment opportunities in any Year that may be allowed under the Plan.
“Business Criteria” means any one or any combination of Income before Taxes, Net Income, Return on Equity, Return on Assets, Pre-tax Margin, Free Cash Flow, Valuation or EPS.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Committee” means the Performance Plan Subcommittee which has been established to administer the Plan in accordance with Section 3.1 and Section 162(m) of the Code.
“Company” means Quantum Medical Transport, Inc. and any successor, whether by merger, ownership of all or substantially all of its assets, or otherwise.
“EBITDA” for any Year means the consolidated earnings before interest, tax, depreciation, and amortization as reported in the financial statements of the Company for the Year.
“EPS” for any Year means earnings per share of the Company, as reported in the Company's Consolidated Statement of Income set forth in the financial statements of the Company for the Year.
“Executive” means a key employee (including any officer) of the Company who is (or in the opinion of the Committee may during the applicable Performance Period become) an "executive officer" as defined in Rule 3b-7 under the Securities Exchange Act of 1934.
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“Free Cash Flow” for any Year means the Consolidated Net Income plus the sum of the decrease in working capital and depreciation and amortization less the sum of capital expenditures, mandatory debt payments and the increase in working capital as reported in the financial statements of the Company for the Year.
“Income before Taxes” for any Year means the consolidated income before taxes of the Company, as reported in the financial statements of the Company for the Year.
“Net Income” for any Year means the consolidated net income of the Company, as reported in the financial statements of the Company for the Year.
“Participant” means an Executive selected to participate in the Plan by the Committee.
“Performance Period” means the Year or Years with respect to which the Performance Targets are set by the Committee.
“Performance Target(s)” means the specific objective goal or goals (which may be cumulative and/or alternative) that are timely set in writing by the Committee for each Executive for the Performance Period in respect of any one or more of the Business Criteria.
“Plan” means this Annual Bonus Performance Plan for Executive Officers of the Company, as amended from time to time.
“Pre-tax Margin” for any Year means the Income before Taxes of the Company divided by Consolidated Sales of the Company, as reported in the financial statements of the Company for the Year.
“Return on Assets” means Net Income divided by the average of the total assets of the Company at the end of the four fiscal quarters of the Year, as reported by the Company in its consolidated financial statements.
“Return on Equity” means the Net Income divided by the average of the common stockholders equity of the Company at the end of each of the four fiscal quarters of the Year, as reported by the Company in its consolidated financial statements.
“Section 162(m)” means Section 162(m) of the Code, and the regulations promulgated thereunder, all as amended from time to time.
“Shares” means shares of common stock of the Company or any securities or property, including rights into which the same may be converted by operation of law or otherwise.
“Valuation” for any Year means the product of consolidated EBITDA, as reported in the financial statements of the Company for the Year, and six.
“Working Capital” for any Year means the consolidated current assets of the Company less the consolidated current liabilities of the Company, as reported in the financial statements of the Company for the Year.
“Year” means any one or more fiscal years of the Company commencing on or after January 1, 2018 that represent(s) the applicable Performance Period and end(s) no later than December 31, 2026.
SECTION 3. ADMINISTRATION OF THE PLAN
3.1 The Committee. The Plan shall be administered by a Committee consisting of at least one member of the Board of Directors of the Company, duly authorized by the Board of Directors of the Company to administer the Plan, who (i) are not eligible to participate in the Plan and (ii) are "outside directors" within the meaning of Section 162(m).
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3.2 Powers of the Committee. The Committee shall have the sole authority to establish and administer the Performance Target(s) and the responsibility of determining from among the Executives those persons who will participate in and receive Bonuses under the Plan and, subject to Sections 4 and 5 of the Plan, the amount of such Bonuses, and the time or times at which and the form and manner in which Bonuses will be paid (which may include elective or mandatory deferral alternatives) and shall otherwise be responsible for the administration of the Plan, in accordance with its terms. The Committee shall have the authority to construe and interpret the Plan (except as otherwise provided herein) and any agreement or other document relating to any Bonus under the Plan, may adopt rules and regulations governing the administration of the Plan, and shall exercise all other duties and powers conferred on it by the Plan, or which are incidental or ancillary thereto. For each Performance Period, the Committee shall determine, at the time the Business Criteria and the Performance Target(s) are set, those Executives who are selected as Participants in the Plan.
3.3 Requisite Action. A majority of the members of the Committee shall constitute a quorum. The vote of a majority of those present at a meeting at which a quorum is present or the unanimous written consent of the Committee shall constitute action by the Committee.
3.4 Express Authority (and Limitations on Authority) to Change Terms and Conditions of Bonus; Acceleration or Deferral of Payment. Without limiting the Committee's authority under other provisions of the Plan, but subject to any express limitations of the Plan and Section 5.8, the Committee shall have the authority to accelerate a Bonus (after the attainment of the applicable Performance Target(s)) and to waive restrictive conditions for a Bonus (including any forfeiture conditions, but not Performance Target(s)), in such circumstances as the Committee deems appropriate. In the case of any acceleration of a Bonus after the attainment of the applicable Performance Target(s), the amount payable shall be discounted to its present value using an interest rate equal to Moody's Average Corporate Bond Yield for the month preceding the month in which such acceleration occurs. Any deferred payment shall be subject to Section 4.9 and, if applicable, Section 4.10.
SECTION 4. BONUS PROVISIONS.
4.1 Maximum Total Bonus. In any Year the aggregate amount of bonuses awarded by the Company to all Participants may not exceed the Bonus Pool. In any year the bonus Pool is the product of 10% and Income before Taxes.
4.2 Provision for Bonus. Each Participant may receive a Bonus if and only if the Performance Target(s) established by the Committee, relative to the applicable Business Criteria, are attained. The applicable Performance Period and Performance Target(s) shall be determined by the Committee consistent with the terms of the Plan and Section 162(m). Notwithstanding the fact that the Performance Target(s) have been attained, the Company may pay a Bonus of less than the amount determined by the formula or standard established pursuant to Section 4.2 or may pay no Bonus at all, unless the Committee otherwise expressly provides by written contract or other written commitment.
4.3 Selection of Performance Target(s). The specific Performance Target(s) with respect to the Business Criteria must be established by the Committee in advance of the deadlines applicable under Section 162(m) and while the performance relating to the Performance Target(s) remains substantially uncertain within the meaning of Section 162(m). At the time the Performance Target(s) are selected, the Committee shall provide, in terms of an objective formula or standard for each Participant, and for any person who may become a Participant after the Performance Target(s) are set, the method of computing the specific amount that will represent the maximum amount of Bonus payable to the Participant if the Performance Target(s) are attained, subject to Sections 4.1, 4.2, 4.3, 4.8, 5.1 and 5.8.
4.4 Maximum Individual Bonus. Notwithstanding any other provision hereof, no Executive shall receive a Bonus under the Plan for the Year in excess of $1 million. No Executive shall receive aggregate bonuses under this Plan for the Year in excess of $1 million.
4.5 Selection of Participants. For each Performance Period, the Committee shall determine, at the time the Business Criteria and the Performance Target(s) are set, those Executives who will participate in the Plan.
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4.6 Effect of Mid-Year Commencement of Service. To the extent compatible with Sections 4.3 and 5.8, if services as an Executive commence after the adoption of the Plan and the Performance Target(s) are established for a Performance Period, the Committee may grant a Bonus that is proportionately adjusted based on the period of actual service during the Year; the amount of any Bonus paid to such person shall not exceed that proportionate amount of the applicable maximum individual bonus under Section 4.1 and 4.4.
4.7 Changes Resulting From Accounting Changes. Subject to Section 5.8, if, after the Performance Target(s) are established for a Performance Period, a change occurs in the applicable accounting principles or practices, the amount of the Bonuses paid under this Plan for such Performance Period shall be determined without regard to such change.
4.8 Committee Discretion to Determine Bonuses. The Committee has the sole discretion to determine the standard or formula pursuant to which each Participant's Bonus shall be calculated (in accordance with Section 4.3), whether all or any portion of the amount so calculated will be paid, and the specific amount (if any) to be paid to each Participant, subject in all cases to the terms, conditions and limits of the Plan and of any other written commitment authorized by the Committee. To this same extent, the Committee may at any time establish additional conditions and terms of payment of Bonuses (including but not limited to the achievement of other financial, strategic or individual goals, which may be objective or subjective) as it may deem desirable in carrying out the purposes of the Plan and may take into account such other factors as it deems appropriate in administering any aspect of the Plan. The Committee may not, however, increase the maximum amount permitted to be paid to any individual under Section 4.3 or 4.4 of the Plan or award a Bonus under this Plan if the applicable Performance Target(s) have not been satisfied.
4.9 Committee Certification. No Executive shall receive any payment under the Plan unless the Committee has certified, by resolution or other appropriate action in writing, that the amount thereof has been accurately determined in accordance with the terms, conditions and limits of the Plan and that the Performance Target(s) and any other material terms previously established by the Committee or set forth in the Plan were in fact satisfied.
4.10 Time of Payment; Deferred Amounts. Any Bonuses granted by the Committee under the Plan shall be paid as soon as practicable following the Committee's determinations under this Section 4 and the certification of the Committee's findings under Section 4.9. Any such payment shall be in cash or cash equivalent or in such other form of equal value on such payment date as the Committee may approve or require. Notwithstanding the foregoing, the Committee may, in its sole discretion (but subject to any prior written commitments and to any conditions consistent with Sections 3.4, 4.1, 4.4 and 5.8 that it deems appropriate), defer the payout or vesting of any Bonus and/or provide to Participants the opportunity to elect to defer the payment of any Bonus under a nonqualified deferred compensation plan. In the case of any deferred payment of a Bonus after the attainment of the applicable Performance Target(s), any amount in excess of the amount otherwise payable shall be based on either Moody's Average Corporate Bond Yield over the deferral period or one or more predetermined actual investments (including Shares) such that the amount payable at the later date will be based upon actual returns, including any decrease or increase in the value of the investment(s), unless the alternative deferred payment is otherwise exempt from the limitations under Section 162(m).
SECTION 5. GENERAL PROVISIONS
5.1 No Right to Bonus or Continued Employment. Neither the establishment of the Plan nor the provision for or payment of any amounts hereunder nor any action of the Company (including, for purposes of this Section 5.1, any predecessor or subsidiary), the Board of Directors of the Company or the Committee in respect of the Plan, shall be held or construed to confer upon any person any legal right to receive, or any interest in, a Bonus or any other benefit under the Plan, or any legal right to be continued in the employ of the Company. The Company expressly reserves any and all rights to discharge an Executive in its sole discretion, without liability of any person, entity or governing body under the Plan or otherwise. Notwithstanding any other provision hereof and notwithstanding the fact that the Performance Target(s) have been attained and/or the individual maximum amounts pursuant to Section 4.2 have been calculated, the Company shall have no obligation to pay any Bonus hereunder nor to pay the maximum amount so calculated or any prorated amount based on service during the period, unless the Committee otherwise expressly provides by written contract or other written commitment.
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5.2 Discretion of Company, Board of Directors and Committee. Any decision made or action taken by the Company or by the Board of Directors of the Company or by the Committee arising out of or in connection with the creation, amendment, construction, administration, interpretation and effect of the Plan shall be within the absolute discretion of such entity and shall be conclusive and binding upon all persons. No member of the Committee shall have any liability for actions taken or omitted under the Plan by the member or any other person.
5.3 Absence of Liability. A member of the Board of Directors of the Company or a member of the Committee of the Company or any officer of the Company shall not be liable for any act or inaction hereunder, whether of commission or omission.
5.4 No Funding of Plan. The Company shall not be required to fund or otherwise segregate any cash or any other assets which may at any time be paid to Participants under the Plan. The Plan shall constitute an "unfunded" plan of the Company. The Company shall not, by any provisions of the Plan, be deemed to be a trustee of any property, and any obligations of the Company to any Participant under the Plan shall be those of a debtor and any rights of any participant or former Participant shall be no greater than those of a general unsecured creditor.
5.5 Non-Transferability of Benefits and Interests. Except as expressly provided by the Committee, no benefit payable under the Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any such attempted action be void and no such benefit shall be in any manner liable for or subject to debts, contracts, liabilities, engagements or torts of any Participant or former Participant. This Section 5.5 shall not apply to an assignment of a contingency or payment due after the death of the Executive to the deceased Executive's legal representative or beneficiary.
5.6 Law to Govern. All questions pertaining to the construction, regulation, validity and effect of the provisions of the Plan shall be determined in accordance with the laws of the State of Delaware.
5.7 Non-Exclusivity. Subject to Section 5.8, the Plan does not limit the authority of the Company, the Board or the Committee, or any subsidiary of the Company to grant awards or authorize any other compensation under any other plan or authority, including, without limitation, awards or other compensation based on the same Performance Target(s) used under the Plan. In addition, Executives not selected to participate in the Plan may participate in other plans of the Company.
5.8 Section 162(m) Conditions; Bifurcation of Plan. It is the intent of the Company that the Plan and Bonuses paid hereunder satisfy and be interpreted in a manner, that, in the case of Participants who are or may be persons whose compensation is subject to Section 162(m), satisfies any applicable requirements as performance-based compensation. Any provision, application or interpretation of the Plan inconsistent with this intent to satisfy the standards in Section 162(m) of the Code shall be disregarded. Notwithstanding anything to the contrary in the Plan, the provisions of the Plan may at any time be bifurcated by the Board or the Committee in any manner so that certain provisions of the Plan or any Bonus intended (or required in order) to satisfy the applicable requirements of Section 162(m) are only applicable to persons whose compensation is subject to Section 162(m).
SECTION 6. AMENDMENTS, SUSPENSION
OR TERMINATION OF PLAN
The Board of Directors or the Committee may from time to time amend, suspend or terminate in whole or in part, and if suspended or terminated, may reinstate, any or all of the provisions of the Plan. Notwithstanding the foregoing, no amendment may be effective without Board of Directors and/or shareholder approval if such approval is necessary to comply with the applicable rules of Section 162(m) of the Code.
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CERTIFICATION
The undersigned Secretary of the Company certifies that the foregoing constitutes a complete and correct copy of the Plan as amended on August August 23, 2018 by the Board of Directors of Quantum Medical Transport, Inc.
_________________________
Secretary
Date: August 23, 2018
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Exhibit 6.4
__________
Quantum Medical Transport, Inc.
EMPLOYMENT AGREEMENT
__________
Ricky Bernard – President
__________
THIS EMPLOYMENT AGREEMENT (this "Agreement"), effective as of the Effective Date (as defined below), is entered into by and between Quantum Medical Transport, Inc., a Delaware corporation (the "Company"), and Ricky Bernard (the “Executive”).
WHEREAS, the Company desires to employ the Executive and to enter into an agreement embodying the terms of such employment; and
WHEREAS, the Executive desires to accept employment with the Company, subject to the terms and conditions of this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Employment Period. Subject to the provisions for earlier termination hereinafter provided, the Executive's employment hereunder shall be for a term (the "Employment Period") commencing on the Effective Date and ending on the fifth anniversary of the Effective Date (the "Initial Termination Date"); provided, however, that this Agreement shall be automatically extended for one additional year on the Initial Termination Date and on each subsequent anniversary of the Initial Termination Date, unless either the Executive or the Company elects not to so extend the term of the Agreement by notifying the other party, in writing, of such election not less than sixty (60) days prior to the last day of the term as then in effect. For purposes of this Agreement, "Effective Date" shall mean the date written below.
2. Terms of Employment.
(a) Position and Duties.
(i) During the Employment Period, the Executive shall serve as Chairman and President of the Company and shall perform such employment duties as are usual and customary for such positions. At the Company's request, the Executive shall serve the Company and/or its subsidiaries and affiliates in other offices and capacities in addition to the foregoing. In the event that the Executive, during the Employment Period, serves in any one or more of such additional capacities, the Executive's compensation shall not be increased beyond that specified in Section 2(b) of this Agreement. In addition, in the event the Executive's service in one or more of such additional capacities is terminated, the Executive's compensation, as specified in Section 2(b) of this Agreement, shall not be diminished or reduced in any manner as a result of such termination for so long as the Executive otherwise remains employed under the terms of this Agreement.
(ii) During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote appropriate attention and time during normal business hours to the business and affairs of the Company. During the Employment Period it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) fulfill limited teaching, speaking and writing engagements or (C) manage his personal investments, so long as such activities do not significantly interfere with the performance of the Executive's responsibilities as an employee of the Company in accordance with this Agreement and (D) undertake other business responsibilities. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive's responsibilities to Company; provided that no such activity that violates any written non-competition agreement between the parties shall be permitted.
(b) Compensation.
(i) Base Salary. During the Employment Period, the Executive shall receive a base salary (the "Base Salary") as determined by the Board of Directors from time to time with due regard for the state of development of the Company, as the same may be increased thereafter pursuant to the Company's normal practices for its executives. The Base Salary shall be paid at such intervals as the Company pays executive salaries generally. During the Employment Period, the Base Salary shall be reviewed at least annually for possible increase in the Company's discretion. Any increase in Base Salary shall not serve to limit or reduce any other obligation to the Executive under this Agreement. The Base Salary shall not be reduced after any such increase and the term "Base Salary" as utilized in this Agreement shall refer to Base Salary as so increased.
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(ii) Annual Bonus. In addition to the Base Salary, the Executive shall be eligible to earn, for each fiscal year of the Company ending during the Employment Period, an annual cash performance bonus annual Bonus") under the Company's bonus plan or plans applicable to senior executives. The amount of the Annual Bonus and the target performance goals applicable to the Annual Bonus shall be determined in accordance with the terms and conditions of such bonus plan as in effect from time to time.
(iii) Incentive, Savings and Retirement Plans. During the Employment Period, the Executive shall be entitled to participate in all other incentive plans, practices, policies and programs, and all savings and retirement plans, practices, policies and programs, in each case that are applicable generally to senior executives of the Company.
(iv) Welfare Benefit Plans. During the Employment Period, the Executive and the Executive's eligible family members shall be eligible for participation in the welfare benefit plans, practices, policies and programs (including, if applicable, medical, dental, disability, employee life, group life and accidental death insurance plans and programs) maintained by the Company for its senior executives.
(v) Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable business expenses incurred by the Executive in accordance with the policies, practices and procedures of the Company provided to senior executives of the Company.
(vi) Fringe Benefits. During the Employment Period, the Executive shall be entitled to such fringe benefits and perquisites as are provided by the Company to its senior executives from time to time, in accordance with the policies, practices and procedures of the Company, and shall receive such additional fringe benefits and perquisites as the Company may, in its discretion, from time-to-time provide.
(vii) Vacation. During the Employment Period, the Executive shall be entitled to paid vacation in accordance with the plans, policies, programs and practices of the Company applicable to its senior executives.
(viii) Additional Payments. The amount of compensation payable to Executive pursuant to Sections 2(b)(i) and (ii) above shall be "grossed up" as necessary (on an after-tax basis) to compensate for any additional social security withholding taxes due as a result of Executive's shared employment by any subsidiary and/or affiliate of the Company, the Company, if applicable.
3. Termination of Employment.
(a) Death or Disability. The Executive's employment shall terminate automatically upon the Executive's death or Disability during the Employment Period. For purposes of this Agreement, "Disability" shall mean the absence of the Executive from the Executive's duties with the Company on a full-time basis for 90 consecutive days or on a total of 180 days in any 12-month period, in either case as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive's legal representative.
(b) Cause. The Company may terminate the Executive's employment during the Employment Period for Cause or without Cause. For purposes of this Agreement, "Cause" shall mean the occurrence of any one or more of the following events unless the Executive fully corrects the circumstances constituting Cause within a reasonable period of time after receipt of the Notice of Termination (as defined below):
(i) the Executive's willful and continued failure to substantially perform his duties with the Company (other than any such failure resulting from the Executive's incapacity due to physical or mental illness or any such actual or anticipated failure after his issuance of a Notice of Termination for Good Reason), after a written demand for substantial performance is delivered to the Executive by the Board, which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed his duties;
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(ii) the Executive's willful commission of an act of fraud or dishonesty resulting in economic or financial injury to the Company;
(iii) the Executive's conviction of, or entry by the Executive of a guilty plea to the commission of a felony or a crime involving moral turpitude;
(iv) a willful breach by the Executive of his fiduciary duty to the Company which results in economic or other injury to the Company; or
(v) the Executive's willful and material breach of the Executive's covenants set forth in Section 9 hereof.
For purposes of this provision, no act or failure to act, on the part of the Executive, shall be considered "willful" unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive's action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. The cessation of employment of the Executive shall not be deemed to be for Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than two-thirds of the entire membership of the Board at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive and the Executive is given an opportunity, together with counsel for the Executive, to be heard before the Board), finding that, in the good faith opinion of the Board, the Executive is guilty of any of the conduct described in Section 3(b), and specifying the particulars thereof in detail; provided, that if the Executive is a member of the Board, the Executive shall not vote on such resolution nor shall the Executive be counted in determining the "entire membership" of the Board.
(c) Good Reason. The Executive's employment may be terminated by the Executive for Good Reason or by the Executive without Good Reason. For purposes of this Agreement, "Good Reason" shall mean the occurrence of any one or more of the following events without the Executive's prior written consent, unless the Company fully corrects the circumstances constituting Good Reason (provided such circumstances are capable of correction) prior to the Date of Termination (as defined below):
(i) the assignment to the Executive of any duties materially inconsistent in any respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 2 of this Agreement, or any other action by the Company which results in a material diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;
(ii) the Company's reduction of the Executive's annual base salary or bonus opportunity, each as in effect on the date hereof or as the same may be increased from time to time;
(iii) the relocation of the Company's offices at which the Executive is principally employed (the "Principal Location") to a location more than thirty (30) miles from such location, or the Company's requiring the Executive to be based at a location more than thirty (30) miles from the Principal Location, except for required travel on the Company's business to an extent substantially consistent with the Executive's present business travel obligations;
(iv) the Company's failure to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement, as contemplated in Section 10 hereof; or
(v) the Company's failure to cure a material breach of its obligations under the Agreement after written notice is delivered to the Board by the Executive which specifically identifies the manner in which the Executive believes that the Company has breached its obligations under the Agreement and the Company is given a reasonable opportunity to cure any such breach.
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(d) Notice of Termination. Any termination by the Company for Cause, or by the Executive for Good Reason, shall be communicated by Notice of Termination to the other parties hereto given in accordance with Section 12(c) of this Agreement. For purposes of this Agreement, a "Notice of Termination" means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than thirty days after the giving of such notice). The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if the Executive's employment is terminated by the Company for Cause, or by the Executive for Good Reason, the date of receipt of the Notice of Termination or any later date specified therein (which date shall not be more than 30 days after the giving of such notice), as the case may be, (ii) if the Executive's employment is terminated by the Company other than for Cause or Disability, the Date of Termination shall be the date on which the Company notifies the Executive of such termination, (iii) if the Executive's employment is terminated by the Executive without Good Reason, the Date of Termination shall be the tenth day after the date on which the Executive notifies the Company of such termination, unless otherwise agreed by the Company and the Executive, and (iv) if the Executive's employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death or Disability of the Executive, as the case may be.
4. Obligations of the Company upon Termination.
(a) Without Cause or For Good Reason. If, during the Employment Period, the Company shall terminate the Executive's employment without Cause or the Executive shall terminate his employment for Good Reason:
(i) The Executive shall be paid, in a single lump sum payment within 60 days after the Date of Termination, the aggregate amount of (A) the Executive's earned but unpaid Base Salary and accrued vacation pay through the Date of Termination, and any Annual bonus required to be paid to the Executive pursuant to Section 2(b)(ii) above for any fiscal year of the Company that ends on or before the Date of Termination to the extent not previously paid (the "Accrued Obligations"), and (B) two (the "Severance Multiple") times the sum of (x) the annual Base Salary in effect on the Termination Date plus (y) the average Annual Bonus received by the Executive for the three complete fiscal years (or such lesser number of years as the Executive has been employed by the Company) of the Company immediately prior to the Termination Date (the "Severance Amount");
(ii) At the time when annual bonuses are paid to the Company's other senior executives for the fiscal year of the Company in which the Date of Termination occurs, the Executive shall be paid an Annual Bonus in an amount equal to the product of (x) the amount of the Annual Bonus to which the Executive would have been entitled if the Executive's employment had not been terminated, and (y) a fraction, the numerator of which is the number of days in such fiscal year through the Date of Termination and the denominator of which is the total number of days in such fiscal year (a "Pro-Rated Annual Bonus");
(iii) For a period of years equal to the Severance Multiple, the Company shall continue to provide the Executive and the Executive's eligible family members with group health insurance coverage at least equal to that which would have been provided to them if the Executive's employment had not been terminated; provided, however, that if the Executive becomes re-employed with another employer and is eligible to receive group health insurance coverage under another employer's plans, the Company's obligations under this Section 4(a)(iii) shall be reduced to the extent comparable coverage is actually provided to the Executive and the Executive's eligible family members, and any such coverage shall be reported by the Executive to the Company.
(iv) The Company shall, at its sole expense and on an as-incurred basis, provide the Executive with outplacement services the scope and provider of which shall be reasonable and consistent with industry practice for similarly situated executives; and
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(v) To the extent not theretofore paid or provided, the Company shall timely pay or provide to the Executive any vested benefits and other amounts or benefits required to be paid or provided or which the Executive is eligible to receive under any plan, program, policy or practice or contract or agreement of the Company and its affiliates (such other amounts and benefits shall be hereinafter referred to as the "Other Benefits").
Notwithstanding the foregoing, it shall be a condition to the Executive's right to receive the amounts provided for in Sections 4(a)(i)(B) and 4(a)(ii), (iii) and (iv) above that the Executive execute, deliver to the Company and not revoke a release of claims in substantially the form attached hereto as Exhibit A.
(b) For Cause or Without Good Reason. If the Executive's employment shall be terminated by the Company for Cause or by the Executive without Good Reason during the Employment Period, the Company shall have no further obligations to the Executive under this Agreement other than pursuant to Sections 7 and 8 hereof, and the obligation to pay to the Executive the Accrued Obligations in cash within 30 days after the Date of Termination and to provide the Other Benefits.
(c) Death or Disability. If the Executive's employment is terminated by reason of the Executive's death or Disability during the Employment Period:
(i) The Accrued Obligations shall be paid to the Executive's estate or beneficiaries or to the Executive, as applicable, in cash within 30 days of the Date of Termination;
(ii) 100% of the Executive's annual Base Salary, as in effect on the Date of Termination, shall be paid to the Executive's estate or beneficiaries or to the Executive, as applicable, in cash within 30 days following the Date of Termination;
(iii) The Pro-Rated Annual Bonus shall be paid to the Executive's estate or beneficiaries or to the Executive, as applicable, at the time when annual bonuses are paid to the Company's other senior executives for the fiscal year of the Company in which the Date of Termination occurs;
(iv) For a period of twelve months following the Date of Termination, the Executive and the Executive's eligible family members shall continue to be provided with group health insurance coverage at least equal to that which would have been provided to them if the Executive's employment had not been terminated; provided, however, that if the Executive becomes re-employed with another employer and is eligible to receive group health insurance coverage under another employer's plans, the Company's obligations under this Section 4(d)(iv) shall be reduced to the extent comparable coverage is actually provided to the Executive and the Executive's eligible family members, and any such coverage shall be reported by the Executive to the Company; and
(v) The Other Benefits shall be paid or provided to the Executive on a timely basis.
5. Termination Upon a Change in Control. If a Change in Control (as defined herein) occurs during the Employment Period and the Executive's employment is terminated (a) by the Company without Cause or by the Executive for Good Reason, in each case within two (2) years after the effective date of the Change in Control or (b) by the Executive for any reason on or within 30 days after the one year anniversary of the effective date of the Change in Control, then the Executive shall be entitled to the payments and benefits provided in Section 4(a), subject to the terms and conditions thereof, except that for purposes of this Section 5, the Severance Multiple shall equal three (3). In addition, in the event of such a termination of the Executive's employment, all outstanding stock options, restricted stock and other equity awards granted to the Executive under any of the Company's equity incentive plans (or awards substituted therefore covering the securities of a successor company) shall become immediately vested and exercisable in full. For purposes of this Agreement, "Change in Control" shall mean the occurrence of any of the following events:
(i) the acquisition, directly or indirectly, by any "person" or "group" (as those terms are defined in Sections 3(a)(9), 13(d), and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act") and the rules thereunder) of "beneficial ownership" (as determined pursuant to Rule 13d-3 under the Exchange Act) of securities entitled to vote generally in the election of directors ("voting securities") of the Company that represent 35% or more of the combined voting power of the Company's then outstanding voting securities, other than
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(A) an acquisition of securities by a trustee or other fiduciary holding securities under any employee benefit plan (or related trust) sponsored or maintained by the Company or any person controlled by the Company or by any employee benefit plan (or related trust) sponsored or maintained by the Company or any person controlled by the Company, or
(B) an acquisition of securities by the Company or a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of the stock of the Company, or
(C) an acquisition of securities pursuant to a transaction described in clause (iii) below that would not be a Change in Control under clause (iii), or
(D) any direct or indirect acquisition of securities by the Executive or his family, or any entity controlled thereby;
Notwithstanding the foregoing, the following event shall not constitute an "acquisition" by any person or group for purposes of this clause (i): an acquisition of the Company's securities by the Company which causes the Company's voting securities beneficially owned by a person or group to represent 35% or more of the combined voting power of the Company's then outstanding voting securities; provided, however, that if a person or group shall become the beneficial owner of 35% or more of the combined voting power of the Company's then outstanding voting securities by reason of share acquisitions by the Company as described above and shall, after such share acquisitions by the Company, become the beneficial owner of any additional voting securities of the Company, then such acquisition shall constitute a Change in Control;
(ii) individuals who, as of the Effective Date, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election by the Company's shareholders, or nomination for election by the Board, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an election contest with respect to the election or removal of directors or other solicitation of proxies or consents by or on behalf of a person other than the Board;
(iii) the consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all of the Company's assets or (z) the acquisition of assets or stock of another entity, in each case, other than a transaction
(A) which results in the Company's voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company's assets or otherwise succeeds to the business of the Company (the Company or such person, the "Successor Entity")) directly or indirectly, at least 50% of the combined voting power of the Successor Entity's outstanding voting securities immediately after the transaction, and
(B) after which no person or group beneficially owns voting securities representing 35% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this clause (B) as beneficially owning 35% or more of combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction; or
(iv) approval by the Company's shareholders of a liquidation or dissolution of the Company.
For purposes of clause (i) above, the calculation of voting power shall be made as if the date of the acquisition were a record date for a vote of the Company's shareholders, and for purposes of clause (iii) above, the calculation of voting power shall be made as if the date of the consummation of the transaction were a record date for a vote of the Company's shareholders.
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6. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive's continuing or future participation in any plan, program, policy or practice provided by the Company and for which the Executive may qualify, nor shall anything herein limit or otherwise affect such rights as the Executive may have under any contract or agreement with the Company. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement.
7. Full Settlement. The Company's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and except as expressly provided, such amounts shall not be reduced whether or not the Executive obtains other employment. The Company agrees to pay as incurred (within 30 days following the Company's receipt of an invoice from the Executive), to the full extent permitted by law, all reasonable legal fees and expenses which the Executive or his beneficiaries may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company, the Executive or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive or his beneficiaries about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code. The preceding sentence shall not apply with respect to any such contest if the court having jurisdiction over such contest determines that the Executive's claim in such contest is frivolous or maintained in bad faith.
8. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding and except as set forth below, in the event it shall be determined that any Payment would be subject to the Excise Tax, then the Executive shall be entitled to receive an additional payment (the "Excise Tax Gross-Up Payment") in an amount such that, after payment by the Executive of all taxes (and any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Excise Tax Gross-Up Payment, the Executive retains an amount of the Excise Tax Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing provisions of this Section 8(a), if it shall be determined that the Executive is entitled to the Excise Tax Gross-Up Payment, but that the Parachute Value of all Payments does not exceed 110% of the Safe Harbor Amount, then no Excise Tax Gross-Up Payment shall be made to the Executive and the amounts payable under this Agreement shall be reduced so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount. The reduction of the amounts payable hereunder, if applicable, shall be made by first reducing the payments under Section 4(a)(i), unless an alternative method of reduction is elected by the Executive, and in any event shall be made in such a manner as to maximize the Value of all Payments actually made to the Executive. For purposes of reducing the Payments to the Safe Harbor Amount, only amounts payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amount payable under this Agreement would not result in a reduction of the Parachute Value of all Payments to the Safe Harbor Amount, no amounts payable under the Agreement shall be reduced pursuant to this Section 8(a). The Company's obligation to make Excise Tax Gross-Up Payments under this Section 8 shall not be conditioned upon the Executive's termination of employment.
(b) Subject to the provisions of Section 8(c), all determinations required to be made under this Section 8, including whether and when an Excise Tax Gross-Up Payment is required, the amount of such Excise Tax Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by such nationally recognized accounting firm as may be selected by the Company and reasonably acceptable to the Executive (the "Accounting Firm"); provided, that the Accounting Firm's determination shall be made based upon "substantial authority" within the meaning of Section 6662 of the Code. The Accounting Firm shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment or such earlier time as is requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Excise Tax Gross-Up Payment, as determined pursuant to this Section 8, shall be paid by the Company to the Executive within five days of the receipt of the Accounting Firm's determination. Any determination by the Accounting Firm shall be binding upon the Company and the Executive, unless the Company obtains an opinion of outside legal counsel, based upon at least "substantial authority" within the meaning of Section 6662 of the Code, reaching a different determination, in which event such legal opinion shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Excise Tax Gross-Up Payments that will not have been made by the Company should have been made (the "Underpayment"), consistent with the calculations required to be made hereunder. In the event the Company exhausts its remedies pursuant to Section 8(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive.
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(c) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Excise Tax Gross-Up Payment. Such notification shall be given as soon as practicable, but no later than 10 business days after the Executive is informed in writing of such claim. The Executive shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which the Executive gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that the Company desires to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by the Company relating to such claim,
(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest, and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 8(c), the Company shall control all proceedings taken in connection with such contest, and, at its sole discretion, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the applicable taxing authority in respect of such claim and may, at its sole discretion, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that, if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive, on an interest-free basis, and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties) imposed with respect to such advance or with respect to any imputed income in connection with such advance; and provided, further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which the Excise Tax Gross-Up Payment would be payable hereunder, and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by the Executive of an Excise Tax Gross-Up Payment or an amount advanced by the Company pursuant to Section 8(c), the Executive becomes entitled to receive any refund with respect to the Excise Tax to which such Excise Tax Gross-Up Payment relates or with respect to such claim, the Executive shall (subject to the Company's complying with the requirements of Section 8(c), if applicable) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 8(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Excise Tax Gross-Up Payment required to be paid.
(e) Notwithstanding any other provision of this Section 8, the Company may, in its sole discretion, withhold and pay over to the Internal Revenue Service or any other applicable taxing authority, for the benefit of the Executive, all or any portion of any Excise Tax Gross-Up Payment, and the Executive hereby consents to such withholding.
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(f) Any other liability for unpaid or unwithheld Excise Taxes shall be borne exclusively by the Company, in accordance with Section 3403 of the Code. The foregoing sentence shall not in any manner relieve the Company of any of its obligations under this Employment Agreement.
(g) Definitions. The following terms shall have the following meanings for poses of this Section 8:
(i) "Excise Tax" shall mean the excise tax imposed by Section 4999 of the Code, together with any interest or penalties imposed with respect to such excise tax.
(ii) "Parachute Value" of a Payment shall mean the present value as of the date of the change of control for purposes of Section 280G of the Code of the portion of such Payment that constitutes a "parachute payment" under Section 280G(b)(2), as determined by the Accounting Firm for purposes of determining whether and to what extent the Excise Tax will apply to such Payment.
(iii) A "Payment" shall mean any payment or distribution in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to or for the benefit of the Executive, whether paid or payable pursuant to this Agreement or otherwise.
(iv) The "Safe Harbor Amount" shall mean 2.99 times the Executive's "base amount," within the meaning of Section 280G(b)(3) of the Code.
(v) "Value" of a Payment shall mean the economic present value of a Payment as of the date of the change of control for purposes of Section 280G of the Code, as determined by the Accounting Firm using the discount rate required by Section 280G(d)(4) of the Code.
9. Confidential Information and Non-Solicitation.
(a) In no event shall an asserted violation of the provisions of this Section 9 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement. However, in recognition of the facts that irreparable injury will result to the Company in the event of a breach by the Executive of his obligations under Sections 9(a) and (b) of this Agreement, that monetary damages for such breach would not be readily calculable, and that the Company would not have an adequate remedy at law therefor, the Executive acknowledges, consents and agrees that in the event of such breach, or the threat thereof, the Company shall be entitled, in addition to any other legal remedies and damages available, to specific performance thereof and to temporary and permanent injunctive relief (without the necessity of posting a bond) to restrain the violation or threatened violation of such obligations by the Executive.
(b) The Employee shall, at all times during and subsequent to the Term, keep secret and retain in strictest confidence all confidential matters of the Company, and the "know-how", trade secrets, technical processes, inventions, equipment specifications, equipment designs, plans, drawings, research projects, confidential client lists, details of client, subcontractor or consultant contracts, pricing policies, operational methods, marketing plans and strategies, project development, acquisition and bidding techniques and plans, business acquisition plans, and new personnel acquisition plans of the Company and its subsidiaries and divisions (whether now known or hereafter learned by the Employee), except to the extent that (i) such information is generally available to the public without restriction, (ii) the Employee obtains confidentiality agreements with respect to such confidential information, (iii) the Employee is requested by the Board of Directors of the Company or a Committee thereof, or by the Chairman of the Company, to disclose such confidential information, (iv) such information is provided to a customer of the Company pursuant to a request received from such customer in the ordinary course of business, or (v) the Employee is under compulsion of either a court order or a governmental agency's or authority's inquiry, order or request to so disclose such information.
(c) Property of the Company.
(i) Except as otherwise provided herein, all lists, records and other non-personal documents or papers (and all copies thereof) relating to the Company and/or any of its subsidiaries or divisions, including such items stored in computer memories, on microfiche or by any other means, made or compiled by or on behalf of the Employee, or made available to the Employee, are and shall be the property of the Company, and shall be delivered to the Company on the date of termination of the Employee's employment with the Company, or sooner upon request of the Company at any time or from time to time.
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(ii) All inventions, including any procedures, formulas, methods, processes, uses, apparatuses, patterns, designs, plans, drawings, devices or configurations of any kind, any and all improvements to them which are developed, discovered, made or produced, and all trade secrets and information used by the Company and/or its subsidiaries and divisions (including, without limitation, any such matters created or developed by the Employee during the term of this Agreement), shall be the exclusive property of the Company or the subject subsidiary, and shall be delivered to the Company or the subject subsidiary (without the Employee retaining any copies, components or records thereof) on the date of termination of the Employee's employment with the Company; provided, however, that nothing herein contained shall be deemed to grant to the Company any property rights in any inventions or other intellectual property which may at any time be developed by the Employee which is wholly unrelated to any business then engaged in or under development by the Company.
(d) The Employee shall not, at any time (whether during the term of this Agreement or at any time thereafter), directly or indirectly, for or on behalf of any business enterprise other than the Company and/or its subsidiaries and affiliates, solicit any employee of the Company or any of its subsidiaries to leave his or her employment with the Company or such subsidiary, or encourage any such employee to leave such employment, without the prior written approval of the Company in each instance.
(e) Non-Competition. For so long as the Employee shall be receiving any compensation or remuneration under this Agreement, and for a further period of one (1) year thereafter, the Employee shall not, directly or indirectly, whether individually or as an employee, stockholder (other than the passive ownership of up to 5% of the capital stock of a publicly traded corporation), partner, joint venturer, agent or other representative of any other person, firm or corporation, engage or have any interest in any business (other than the Company or any of its subsidiaries or affiliates) which, in any country in which the Company or any of its subsidiaries or divisions does or solicits business during the Term, is engaged in or derives any revenues from performing any functionally equivalent services or marketing any functionally equivalent products as those services provided and products marketed by the Company or any of its subsidiaries or divisions during the Term.
(f) Severability of Covenants. The Employee acknowledges and agrees that the provisions of this Section 9 of this Agreement are (a) made in consideration of the premises and undertakings of the Company set forth herein, (b) made for good, valuable and adequate consideration received and to be received by the Employee, and (c) reasonable and necessary, in terms of the time, geographic scope and nature of the restrictions, for the protection of the Company and the business and good will thereof. It is intended that the provisions of this Section 9 be fully severable, and in the event that any of the foregoing restrictions, or any portion of the foregoing restrictions, shall be deemed contrary to law, invalid or unenforceable in any respect by any court or tribunal of competent jurisdiction, then such restrictions shall be deemed to be amended, modified and reduced in scope and effect, as to duration and/or geographic area, only to that extent necessary to render same valid and enforceable (and in such reduced form, such provisions shall then be enforceable), and any other of the foregoing restrictions shall be unaffected and shall remain in full force and effect.
(g) Equitable Remedies. The parties hereby acknowledge that, in the event of any breach or threatened breach by the Employee of the provisions of this Section 9, the Company will suffer irreparable harm and will not have an adequate remedy at law. Accordingly, in the event of any such breach or threatened breach, the Company may seek and obtain appropriate equitable relief to restrain or enjoin such breach or threatened breach and/or to compel compliance herewith.
(h) Trade Secrets. The Parties hereby agree and stipulate that any confidential information of the Parties shall be deemed a "trade secret" as that term is defined under the Economic Espionage Act of 1996 (the "Act"), and further agree and stipulate that the Parties by this Agreement have taken all reasonable steps under the Act to keep such information secret.
10. Successors.
(a) This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives.
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(b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.
11. Payment of Financial Obligations. The payment or provision to the Executive by the Company of any remuneration, benefits or other financial obligations pursuant to this Agreement shall be allocated to the Company and, if applicable, any subsidiary and/or affiliate thereof from time to time.
12. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.
(b) Arbitration. Except as set forth in Section 9(c) above, any disagreement, dispute, controversy or claim arising out of or relating to this Agreement or the interpretation of this Agreement or any arrangements relating to this Agreement or contemplated in this Agreement or the breach, termination or invalidity thereof shall be settled by final and binding arbitration administered by the America Arbitration Association in Boca Raton, Florida in accordance with the then existing American Arbitration Association Rules and Procedures for Employment Disputes. In the event of such an arbitration proceeding, the Executive and the Company shall select a mutually acceptable neutral arbitrator from among the American Arbitration Association panel of arbitrators. In the event the Executive and the Company cannot agree on an arbitrator, the Administrator of American Arbitration Association will appoint an arbitrator. Neither the Executive nor the Company nor the arbitrator shall disclose the existence, content, or results of any arbitration hereunder without the prior written consent of all parties. Except as provided herein, the Federal Arbitration Act shall govern the interpretation, enforcement and all proceedings. The arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the state of Florida, or federal law, or both, as applicable, and the arbitrator is without jurisdiction to apply any different substantive law. The arbitrator shall have the authority to entertain a motion to dismiss and/or a motion for summary judgment by any party and shall apply the standards governing such motions under the Federal Rules of Civil Procedure. The arbitrator shall render an award and a written, reasoned opinion in support thereof. Judgment upon the award may be entered in any court having jurisdiction thereof.
(c) Notices. All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive: at the Executive's most recent address on the records of the Company,
If to the Company: at the Company’s principal offices, attention of the Company’s Secretary and President.
or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective hen actually received by the addressee.
(d) Sarbanes-Oxley Act of 2002. Notwithstanding anything herein to the contrary, if the Company determines, in its good faith judgment, that any transfer or deemed transfer of funds hereunder is likely to be construed as a personal loan prohibited by Section 13(k) of the Exchange Act and the rules and regulations promulgated thereunder, then such transfer or deemed transfer shall not be made to the extent necessary or appropriate so as not to violate the Exchange Act and the rules and regulations promulgated thereunder.
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(e) Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
(f) Withholding. The Company may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation. In addition, notwithstanding any other provision of this Agreement, the Company may, in its sole discretion, withhold and pay over to the Internal Revenue Service or any other applicable taxing authority, for the benefit of the Executive, all or any portion of any Excise Tax Gross-Up Payment, and the Executive hereby consents to such withholding.
(g) No Waiver. The Executive's or the Company's failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason pursuant to Section 3(c) of this Agreement, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.
(h) Entire Agreement. As of the Effective Date, this Agreement, together with any non-competition agreement between the parties, constitutes the final, complete and exclusive agreement between the Executive and the Company with respect to the subject matter hereof and replaces and supersedes any and all other agreements, offers or promises, whether oral or written, made to you by any related entity, or representative of the Company or the transactions related thereto. The Executive agrees that any such agreement, offer or promise between the Executive and Employer (or any representative thereof) is hereby terminated and will be of no further force or effect, and the Executive acknowledges and agrees that upon his execution of this Agreement, he will have no right or interest in or with respect to any such agreement, offer or promise. In the event that the Effective Date does not occur, this Agreement (including, without limitation, the immediately preceding sentence) shall have no force or effect.
(i) Counterparts. This Agreement may be executed simultaneously in two counterparts, each of which shall be deemed an original but which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and, pursuant to the authorization from the Board, the Company has caused these presents to be executed in its name on its behalf, all as of the day and year written below.
Quantum Medical Transport, Inc.
A Delaware Corporation
By: /s/ Ricky Bernard
Name: Ricky Bernard
Title: President
EXECUTIVE
/s/ Ricky Bernard
Ricky Bernard
EFFECTIVE DATE:
Dated: August 21, 2018
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Exhibit 6.5
INDEMNIFICATION AGREEMENT
_____
by and between
Quantum Medical Transport, Inc.
and
Ricky Bernard
indemnitee
______
INDEMNIFICATION AGREEMENT
_____
THIS AGREEMENT is entered into, effective as August 21, 2018 of by and between Quantum Medical Transport, Inc. a Delaware corporation (the “Company”), and Ricky Bernard, INDEMNITEE (“Indemnitee”).
WHEREAS, it is essential to the Company to retain and attract as directors and officers the most capable persons available;
WHEREAS, Indemnitee is a director and/or officer of the Company;
WHEREAS, both the Company and Indemnitee recognize the increased risk of litigation and other claims currently being asserted against directors and officers of corporations;
WHEREAS, the Certificate of Incorporation and Bylaws of the Company require the Company to indemnify and advance expenses to its directors and officers to the fullest extent permitted under Delaware law, and the Indemnitee has been serving and continues to serve as a director and/or officer of the Company in part in reliance on the Company’s Certificate of Incorporation and Bylaws; and
WHEREAS, in recognition of Indemnitee’s need for (i) substantial protection against personal liability based on Indemnitee’s reliance on the aforesaid Certificate of Incorporation and Bylaws, (ii) specific contractual assurance that the protection promised by the Certificate of Incorporation and Bylaws will be available to Indemnitee (regardless of, among other things, any amendment to or revocation of the Certificate of Incorporation and Bylaws or any change in the composition of the Company’s Board of Directors or acquisition transaction relating to the Company), and (iii) an inducement to provide effective services to the Company as a director and/or officer, the Company wishes to provide in this Agreement for the indemnification of and the advancing of expenses to Indemnitee to the fullest extent (whether partial or complete) permitted under Delaware law and as set forth in this Agreement, and, to the extent insurance is maintained, to provide for the continued coverage of Indemnitee under the Company’s directors’ and officers’ liability insurance policies.
NOW, THEREFORE, in consideration of the above premises and of Indemnitee continuing to serve the Company directly or, at its request, with another enterprise, and intending to be legally bound hereby, the parties agree as follows:
1. Certain Definitions:
(a) Board: the Board of Directors of the Company.
(b) Affiliate: any corporation or other person or entity that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified.
(c) Change in Control: shall be deemed to have occurred if (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, and other than any person holding shares of the Company on the date that the Company first registers under the Act or any transferee of such individual if such transferee is a spouse or lineal descendant of the transferee or a trust for the benefit of the individual, his spouse or lineal descendants), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30% or more of the total voting power represented by the Company’s then outstanding Voting Securities, or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board and any new director whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the Board, or (iii) the stockholders of the Company approve a merger or consolidation of the Company with any other entity, other than a merger or consolidation that would result in the Voting Securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least 80% of the total voting power represented by the Voting Securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (iv) the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company (in one transaction or a series of transactions) of all or substantially all of the Company’s assets.
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(d) Expenses: any expense, liability, or loss, including attorneys’ fees, judgments, fines, ERISA excise taxes and penalties, amounts paid or to be paid in settlement, any interest, assessments, or other charges imposed thereon, any federal, state, local, or foreign taxes imposed as a result of the actual or deemed receipt of any payments under this A greement, and all other costs and obligations, paid or incurred in connection with investigating, defending, being a witness in, participating in (including on appeal), or preparing for any of the foregoing in, any Proceeding relating to any Indemnifiable Event.
(e) Indemnifiable Event: any event or occurrence that takes place either prior to or after the execution of this Agreement, related to the fact that Indemnitee is or was a director or officer of the Company, or while a director or officer is or was serving at the request of the Company as a director, officer, employee, trustee, agent, or fiduciary of another foreign or domestic corporation, partnership, joint venture, employee benefit plan, trust, or other enterprise, or was a director, officer, employee, or agent of a foreign or domestic corporation that was a predecessor corporation of the Company or of another enterprise at the request of such predecessor corporation, or related to anything done or not done by Indemnitee in any such capacity, whether or not the basis of the Proceeding is alleged action in an official capacity as a director, officer, employee, or agent or in any other capacity while serving as a director, officer, employee, or agent of the
Company, as described above.
(f) Independent Counsel: the person or body appointed in connection with Section 3.
(g) Proceeding: any threatened, pending, or completed action, suit, or proceeding or any
alternative dispute resolution mechanism (including an action by or in the right of the Company), or any inquiry, hearing, or investigation, whether conducted by the Company or any other party, that Indemnitee in good faith believes might lead to the institution of any such action, suit, or proceeding, whether civil, criminal, administrative, investigative, or other.
(h) Reviewing Party: the person or body appointed in accordance with Section 3.
(i) Voting Securities: any securities of the Company that vote generally in the election of directors.
2. Agreement to Indemnify.
(a) General Agreement. In the event Indemnitee was, is, or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, a Proceeding by reason of (or arising in part out of) an Indemnifiable Event, the Company shall indemnify Indemnitee from and against any and all Expenses to the fullest extent permitted by law, as the same exists or may hereafter be amended or interpreted (but in the case of any such amendment or interpretation, only to the extent that such amendment or interpretation permits the Company to provide broader indemnification rights than were permitted prior thereto). The parties hereto intend that this Agreement shall provide for indemnification in excess of that expressly permitted by statute, including, without limitation, any indemnification provided by the Company’s Certificate of Incorporation, its Bylaws, vote of its shareholders or disinterested directors, or applicable law.
(b) Initiation of Proceeding. Notwithstanding anything in this Agreement to the contrary, Indemnitee shall not be entitled to indemnification pursuant to this Agreement in connection with any Proceeding initiated by Indemnitee against the Company or any director or officer of the Company unless (i) the Company has joined in or the Board has consented to the initiation of such Proceeding; (ii) the Proceeding is one to enforce indemnification rights under Section 5; or (iii) the Proceeding is instituted after a Change in Control (other than a Change in Control approved by a majority of the directors on the Board who were directors immediately prior to such Change in Control) and Independent Counsel has approved its initiation.
(c) Expense Advances. If so requested by Indemnitee, the Company shall advance (within ten business days of such request) any and all Expenses to Indemnitee (an “Expense Advance”). The Indemnitee shall qualify for such Expense Advances upon the execution and delivery to the Company of this Agreement which shall constitute an undertaking providing that the Indemnitee undertakes to repay such Expense Advances if and to the extent that it is ultimately determined by a court of competent jurisdiction in a final judgment, not subject to appeal, that Indemnitee is not entitled to be indemnified by the Company. Indemnitee’s obligation to reimburse the Company for Expense Advances shall be unsecured and no interest shall be charged thereon.
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(d) Mandatory Indemnification. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise in defense of any Proceeding relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter therein, Indemnitee shall be indemnified against all Expenses incurred in connection therewith.
(e) Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion thereof to which Indemnitee is entitled.
(f) Prohibited Indemnification. No indemnification pursuant to this Agreement shall be paid by the Company on account of any Proceeding in which judgment is rendered against Indemnitee for an accounting of profits made from the purchase or sale by Indemnitee of securities of the Company pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of any federal, state, or local laws.
3. Reviewing Party. Prior to any Change in Control, the Reviewing Party shall be any appropriate person or body consisting of a member or members of the Board or any other person or body appointed by the Board who is not a party to the particular Proceeding with respect to which Indemnitee is seeking indemnification; after a Change in Control, the Independent Counsel referred to below shall become the Reviewing Party. With respect to all matters arising after a Change in Control (other than a Change in Control approved by a majority of the directors on the Board who were directors immediately prior to such Change in Control) concerning the rights of Indemnitee to indemnity payments and Expense Advances under this Agreement or any other agreement or under applicable law or the Company’s Certificate of Incorporation or Bylaws now or hereafter in effect relating to indemnification for Indemnifiable Events, the Company shall seek legal advice only from Independent Counsel selected by Indemnitee and approved by the Company (which approval shall not be unreasonably withheld), and who has not otherwise performed services for the Company or the Indemnitee (other than in connection with indemnification matters) within the last five years. The Independent Counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. Such counsel, among other things, shall render its written opinion to the Company and Indemnitee as to whether and to what extent the Indemnitee should be permitted to be indemnified under applicable law. The Company agrees to pay the reasonable fees of the Independent Counsel and to indemnify fully such counsel against any and all expenses (including attorneys’ fees), claims, liabilities, loss, and damages arising out of or relating to this Agreement or the engagement of Independent Counsel pursuant hereto.
4. Indemnification Process and Appeal.
(a) Indemnification Payment. Indemnitee shall be entitled to indemnification of Expenses, and shall receive payment thereof, from the Company in accordance with this Agreement as soon as practicable after Indemnitee has made written demand on the Company for indemnification, unless the Reviewing Party has given a written opinion to the Company that Indemnitee is not entitled to indemnification under applicable law.
(b) Suit to Enforce Rights. Regardless of any action by the Reviewing Party, if Indemnitee has not received full indemnification within thirty days after making a demand in accordance with Section 4(a), Indemnitee shall have the right to enforce its indemnification rights under this Agreement by commencing litigation in any court in the State of California or the State of Delaware having subject matter jurisdiction thereof seeking an initial determination by the court or challenging any determination by the Reviewing Party or any aspect thereof. The Company hereby consents to service of process and to appear in any such proceeding. Any determination by the Reviewing Party not challenged by the Indemnitee shall be binding on the Company and Indemnitee. The remedy provided for in this Section 4 shall be in addition to any other remedies available to Indemnitee at law or in equity.
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(c) Defense to Indemnification, Burden of Proof, and Presumptions. It shall be a defense to any action brought by Indemnitee against the Company to enforce this Agreement (other than an action brought to enforce a claim for Expenses incurred in defending a Proceeding in advance of its final disposition) that it is not permissible under applicable law for the Company to indemnify Indemnitee for the amount claimed. In connection with any such action or any determination by the Reviewing Party or otherwise as to whether Indemnitee is entitled to be indemnified hereunder, the burden of proving such a defense or determination shall be on the Company. Neither the failure of the Reviewing Party or the Company (including its Board, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action by Indemnitee that indemnification of the claimant is proper under the circumstances because Indemnitee has met the standard of conduct set forth in applicable law, nor an actual determination by the Reviewing Party or Company (including its Board, independent legal counsel, or its stockholders) that the Indemnitee had not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the Indemnitee has not met the applicable standard of conduct. For purposes of this Agreement, the termination of any claim, action, suit, or proceeding, by judgment, order, settlement (whether with or without court approval), conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law.
5. Indemnification for Expenses Incurred in Enforcing Rights. The Company shall indemnify Indemnitee against any and all Expenses that are incurred by Indemnitee in connection with any action brought by Indemnitee for (i) indemnification or advance payment of Expenses by the Company under this Agreement or any other agreement or under applicable law or the Company’s Certificate of Incorporation or Bylaws now or hereafter in effect relating to indemnification for Indemnifiable Events, and/or (ii) recovery under directors’ and officers’ liability insurance policies maintained by the Company, but only in the event that Indemnitee ultimately is determined to be entitled to such indemnification or insurance recovery, as the case may be. In addition, the Company shall, if so requested by Indemnitee, advance the foregoing Expenses to Indemnitee, subject to and in accordance with Section 2(c).
6. Notification and Defense of Proceeding.
(a) Notice. Promptly after receipt by Indemnitee of notice of the commencement of any Proceeding, Indemnitee shall, if a claim in respect thereof is to be made against the Company under this Agreement, notify the Company of the commencement thereof; but the omission so to notify the Company will not relieve the Company from any liability that it may have to Indemnitee, except as provided in Section 6(c).
(b) Defense. With respect to any Proceeding as to which Indemnitee notifies the Company of the commencement thereof, the Company will be entitled to participate in the Proceeding at its own expense and except as otherwise provided below, to the extent the Company so wishes, it may assume the defense thereof with counsel reasonably satisfactory to Indemnitee. After notice from the Company to Indemnitee of its election to assume the defense of any Proceeding, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently incurred by Indemnitee in connection with the defense of such Proceeding other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ legal counsel in such Proceeding, but all Expenses related thereto incurred after notice from the Company of its assumption of the defense shall be at Indemnitee’s expense unless: (i) the employment of legal counsel by Indemnitee has been authorized by the Company, (ii) Indemnitee has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of the Proceeding, (iii) after a Change in Control (other than a Change in Control approved by a majority of the directors on the Board who were directors immediately prior to such Change in Control), the employment of counsel by Indemnitee has been approved by the Independent Counsel, or (iv) the Company shall not in fact have employed counsel to assume the defense of such Proceeding, in each of which cases all Expenses of the Proceeding shall be borne by the Company. The Company shall not be entitled to assume the defense of any Proceeding brought by or on behalf of the Company or as to which Indemnitee shall have made the determination provided for in (ii), (iii) and (iv) above.
(c) Settlement of Claims. The Company shall not be liable to indemnify Indemnitee under this Agreement or otherwise for any amounts paid in settlement of any Proceeding effected without the Company’s written consent, such consent not to be unreasonably withheld; provided, however, that if a Change in Control has occurred (other than a Change in Control approved by a majority of the directors on the Board who were directors immediately prior to such Change in Control), the Company shall be liable for indemnification of Indemnitee for amounts paid in settlement if the Independent Counsel has approved the settlement. The Company shall not settle any Proceeding in any manner that would impose any penalty or limitation on Indemnitee without Indemnitee’s written consent. The Company shall not be liable to indemnify the Indemnitee under this Agreement with regard to any judicial award if the Company was not given a reasonable and timely opportunity, at its expense, to participate in the defense of such action; the Company’s liability hereunder shall not be excused if participation in the Proceeding by the Company was barred by this Agreement.
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7. Establishment of Trust. In the event of a Change in Control (other than a Change in Control approved by a majority of the directors on the Board who were directors immediately prior to such Change in Control) the Company shall, upon written request by Indemnitee, create a Trust for the benefit of the Indemnitee and from time to time upon written request of Indemnitee shall fund the Trust in an amount sufficient to satisfy any and all Expenses reasonably anticipated at the time of each such request to be incurred in connection with investigating, preparing for, participating in, and/or defending any Proceeding relating to an Indemnifiable Event. The amount or amounts to be deposited in the Trust pursuant to the foregoing funding obligation shall be determined by the Independent Counsel. The terms of the Trust shall provide that (i) the Trust shall not be revoked or the principal thereof invaded without the written consent of the Indemnitee, (ii) the Trustee shall advance, within ten business days of a request by the Indemnitee, any and all Expenses to the Indemnitee (and the Indemnitee hereby agrees to reimburse the Trust under the same circumstances for which the Indemnitee would be required to reimburse the Company under Section 2(c) of this Agreement), (iii) the Trust shall continue to be funded by the Company in accordance with the funding obligation set forth above, (iv) the Trustee shall promptly pay to the Indemnitee all amounts for which the Indemnitee shall be entitled to indemnification pursuant to this Agreement or otherwise, and (v) all unexpended funds in the Trust shall revert to the Company upon a final determination by the Independent Counsel or a court of competent jurisdiction, as the case may be, that the Indemnitee has been fully indemnified under the terms of this Agreement. The Trustee shall be chosen by the Indemnitee. Nothing in this Section 7 shall relieve the Company of any of its obligations under this Agreement. All income earned on the assets held in the Trust shall be reported as income by the Company for federal, state, local, and foreign tax purposes. The Company shall pay all costs of establishing and maintaining the Trust and shall indemnify the Trustee against any and all expenses (including attorneys’ fees), claims, liabilities, loss, and damages arising out of or relating to this Agreement or the establishment and maintenance of the Trust.
8. Non-Exclusivity. The rights of Indemnitee hereunder shall be in addition to any other rights Indemnitee may have under the Company’s Certificate of Incorporation, Bylaws, applicable law, or otherwise; provided, however, that this Agreement shall supersede any prior indemnification agreement between the Company and the Indemnitee. To the extent that a change in applicable law (whether by statute or judicial decision) permits greater indemnification than would be afforded currently under the Company’s Certificate of Incorporation, Bylaws, applicable law, or this Agreement, it is the intent of the parties that Indemnitee enjoy by this Agreement the greater benefits so afforded by such change.
9. Liability Insurance. To the extent the Company maintains an insurance policy or policies providing general and/or directors’ and officers’ liability insurance, Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any Company director or officer.
10. Period of Limitations. No legal action shall be brought and no cause of action shall be asserted by or on behalf of the Company or any Affiliate of the Company against Indemnitee, Indemnitee’s spouse, heirs, executors, or personal or legal representatives after the expiration of two years from the date of accrual of such cause of action, or such longer period as may be required by state law under the circumstances. Any claim or cause of action of the Company or its Affiliate shall be extinguished and deemed released unless asserted by the timely filing and notice of a legal action within such period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action, the shorter period shall govern.
11. Amendment of this Agreement. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be binding unless in the form of a writing signed by the party against whom enforcement of the waiver is sought, and no such waiver shall operate as a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. Except as specifically provided herein, no failure to exercise or any delay in exercising any right or remedy hereunder shall constitute a waiver thereof.
12. Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights.
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13. No Duplication of Payments. The Company shall not be liable under this Agreement to make any payment in connection with any claim made against Indemnitee to the extent Indemnitee has otherwise received payment (under any insurance policy, Bylaw, or otherwise) of the amounts otherwise indemnifiable hereunder.
14. Binding Effect. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation, or otherwise to all or substantially all of the business and/or assets of the Company), assigns, spouses, heirs, and personal and legal representatives. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation, or otherwise) to all, substantially all, or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. The indemnification provided under this Agreement shall continue as to Indemnitee for any action taken or not taken while serving in an indemnified capacity pertaining to an Indemnifiable Event even though he may have ceased to serve in such capacity at the time of any Proceeding.
15. Severability. If any provision (or portion thereof) of this Agreement shall be held by a court of competent jurisdiction to be invalid, void, or otherwise unenforceable, the remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of this Agreement containing any provision held to be invalid, void, or otherwise unenforceable, that is not itself invalid, void, or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, void, or unenforceable.
16. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to contracts made and to be performed in such State without giving effect to its principles of conflicts of laws.
17. Notices. All notices, demands, and other communications required or permitted hereunder shall be made in writing and shall be deemed to have been duly given if delivered by hand, against receipt, or mailed, postage prepaid, certified or registered mail, return receipt requested, and addressed to the Company at:
Quantum Medical Transport, Inc.
14090 Southwest Frwy
Suite 300
Sugar Land, TX 77478
and to Indemnitee at:
Ricky Bernard
14090 Southwest Frwy
Suite 300
Sugar Land, TX 77478
Notice of change of address shall be effective only when given in accordance with this Section. All notices complying with this Section shall be deemed to have been received on the date of hand delivery or on the third business day after mailing.
18. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the day specified above.
Company:
Quantum Medical Transport, Inc.
By :/s/ Ricky Bernard
President and Director
Indemnitee:
/s/ Ricky Bernard
Ricky Bernard
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Exhibit 12.1
John E. Lux, Esq.
Attorney at Law
1629 K Street, Suite 300
Washington, DC 20006
(202) 780-1000
Admitted in Maryland and the District of Columbia
August 23, 2018
Board of Directors
Quantum Medical Transport, Inc.
14090 Southwest Freeway, Suite 300
Sugar Land, TX 77478
Gentlemen:
I have acted, at your request, as special counsel to Quantum Medical Transport, Inc., a Delaware corporation, (“Quantum Medical Transport, Inc.”) for the purpose of rendering an opinion as to the legality of (1) 2,000,000,000 shares of Quantum Medical Transport, Inc. common stock, par value $0.0001 per share to be offered and distributed by Quantum Medical Transport, Inc. (the “Shares”), pursuant to an Offering Statement to be filed under Regulation A of the Securities Act of 1933, as amended, by Quantum Medical Transport, Inc. with the U.S. Securities and Exchange Commission (the "SEC") on Form 1-A, for the purpose of registering the offer and sale of the Shares (“Offering Statement”).
For the purpose of rendering my opinion herein, I have reviewed statutes of the State of Delaware, to the extent I deem relevant to the matter opined upon herein, certified or purported true copies of the Articles of Incorporation of Quantum Medical Transport, Inc. and all amendments thereto, the By-Laws of Quantum Medical Transport, Inc., selected proceedings of the board of directors of Quantum Medical Transport, Inc. authorizing the issuance of the Shares, certificates of officers of Quantum Medical Transport, Inc. and of public officials, and such other documents of Quantum Medical Transport, Inc. and of public officials as I have deemed necessary and relevant to the matter opined upon herein. I have assumed, with respect to persons other than directors and officers of Quantum Medical Transport, Inc., the due and proper election or appointment of all persons signing and purporting to sign the documents in their respective capacities, as stated therein, the genuineness of all signatures, the conformity to authentic original documents of the copies of all such documents submitted to me as certified, conformed and photocopied, including the quoted, extracted, excerpted and reprocessed text of such documents.
Based upon the review described above, it is my opinion that the Shares are duly authorized and when, as and if issued and delivered by Quantum Medical Transport, Inc. against payment therefore, as described in the Offering Statement, will be validly issued, fully paid and non-assessable.
I have not been engaged to examine, nor have I examined, the Offering Statement for the purpose of determining the accuracy or completeness of the information included therein or the compliance and conformity thereof with the rules and regulations of the SEC or the requirements of Form 1-A, and I express no opinion with respect thereto. My forgoing opinion is strictly limited to matters of Delaware corporation law; and, I do not express an opinion on the federal law of the United States of America or the law of any state or jurisdiction therein other than Delaware, as specified herein.
I hereby consent to the filing of this opinion as Exhibit 12.1 to the Offering Statement and to the reference to our firm under the caption “Legal Matters” in the Offering Circular constituting a part of the Offering Statement. We assume no obligation to update or supplement any of the opinion set forth herein to reflect any changes of law or fact that may occur following the date hereof.
Very truly yours,
/s/ John E. Lux
John E. Lux