As filed with the Securities and Exchange Commission on August 21, 2019
Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
___________________
PAYSIGN, INC.
(Exact Name of Registrant as Specified in Its Charter)
| Nevada | 95-4550154 | |||
|
(State of Incorporation) |
(I.R.S. Employer Identification No.) |
1700 W. Horizon
Ridge Parkway, Suite 200
Henderson, Nevada 89012
(702)
453-2221
(Address and Telephone Number of Principal Executive Offices)
Non-Qualified
Stock Option Agreement for Dan Henry
(Full title of the plan)
Mark Newcomer,
Chief Executive Officer
Paysign, Inc.
1700 W. Horizon Ridge Parkway, Suite 200
Henderson, Nevada 89012
(702) 453-2221
(Name and address of agent for service)
COPIES TO:
Brian Blaney, Esq.
Greenberg Traurig, LLP
2375 East Camelback Road, Suite 700
Phoenix, Arizona 85016
Telephone: (602) 455-8000
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer o | Accelerated filer x |
| Non-accelerated filer o | Smaller reporting company x |
| Emerging growth company x |
If an emerging growth company, indicate by check mark if the registrant has elected not to use extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
CALCULATION OF REGISTRATION FEE
|
Title of securities
to be registered |
Amount to be
registered(1) |
Proposed maximum offering price
per share (2) |
Proposed
maximum aggregate offering price (2) |
Amount of
registration fee |
| Common Stock, par value $0.001 per share | 1,500,000 | $16.09 | $24,135,000.00 | $2,925.16 |
| (1) | In accordance with Rule 416(a) promulgated under the Securities Act of 1933, also includes an indeterminable number of shares that may become issuable by reason of stock splits, stock dividends, and similar transactions. |
| (2) | Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) and Rule 457(h) of the Securities Act of 1933 on the basis of $16.09, the average of the high and low sales price of the common stock of Paysign, Inc., as reported on the Nasdaq Capital Market on August 20, 2019. |
Explanatory Note
This Registration Statement on Form S-8 (this “Registration Statement”) registers an aggregate of 1,500,000 shares of common stock, par value $0.001 per share, of Paysign, Inc. (“Common Stock”), that may be issued and sold pursuant to a stock option previously granted to Dan Henry, a member of the board of directors of Registrant, pursuant to that certain Non-Qualified Stock Option Agreement dated May 3, 2018, in a transaction by the Registrant exempted from registration under Section 4(a)(2) of the Securities Act of 1933.
Part I
INFORMATION REQUIRED IN SECTION 10(A) PROSPECTUS
| Item 1. | Plan Information. |
Not required to be filed with this Registration Statement.
| Item 2. | Registrant Information and Employee Plan Annual Information. |
Not required to be filed with this Registration Statement.
| 3 |
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
| ITEM 3. | Incorporation of Documents by Reference. |
The following documents are incorporated by reference in this registration statement:
| (a) | The Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the Commission on March 12, 2019; |
| (b) | The Registrant’s Quarterly Reports for the periods ended March 31, 2019, filed with the Commission on May 8, 2019, and June 30, 2019, filed with the Commission on August 7, 2019; |
| (c) | The Registrant’s Current Reports on Form 8-K filed with the Commission on March 13, 2019, April 29, 2019, May 8, 2019 (as amended July 31, 2019), May 24, 2019 and August 7, 2019; and. |
| (d) | The description of the Registrant’s common stock contained in the Registrant’s Registration Statement on Form 10, with the Commission on September 16, 2010, including any amendments or reports filed for the purpose of updating such description. |
From the date of filing of such documents, all documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended, after the date of this Registration Statement and before the filing of a post-effective amendment to this Registration Statement that indicates that all securities covered by the Registration Statement have been sold or that deregisters all securities covered by the Registration Statement then remaining unsold. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any subsequently filed document which also is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.
| ITEM 4. | Description of Securities. |
The Common Stock to be offered is registered under Section 12 of the Securities Exchange Act of 1934.
| ITEM 5. | Interests of Named Experts and Counsel. |
Not applicable.
| 4 |
| ITEM 6. | Indemnification of Directors and Officers. |
The Registrant is a Nevada corporation. Section 78.7502 of Chapter 78 of the Nevada Revised Statutes ("NRS") empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation, by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with the action, suit or proceeding if the person (a) acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the conduct was unlawful; or (b) is not liable pursuant to Section 78.138 of the NRS. Under Section 78.138, a director or officer is not individually liable to the corporation unless such person breached their fiduciary duty and such breach involved intentional misconduct, fraud or a knowing violation of law. If the action or suit is by or in the right of the corporation, indemnification may not be made for any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.
Under Article V.B of the Registrant’s Articles of Incorporation, the Registrant is required to indemnify, to the fullest extent permitted by Nevada law, its officers and directors. Furthermore, Article V.C of the Registrant’s Articles of Incorporation, the Registrant is required to pay (or through insurance purchased and maintained by the Registrant or through other financial arrangements) any expenses of an officer or director as they are incurred and in advance of the final disposition of a civil or criminal action, suit or proceeding, upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he or she is not entitled to be indemnified by the corporation.
Under Article VII of our Bylaws, the Registrant is required to indemnify and hold harmless, to the fullest extent required by Nevada law, each director or officer who was or is a party to, or is threatened to be made a party to, or is otherwise involved in, any action, suit or proceeding, by reason of the fact that he or she is or was a director or officer or member, manager, or managing member of a predecessor limited liability company or affiliate of such limited liability company, or is or was serving in any capacity at the request of the Registrant as a director, officer, employee, agent, partner, member, manager, or fiduciary of, or in any other capacity for, another corporation or any partnership, joint venture, limited liability company, trust, or other enterprise or affiliate. Indemnification may not be made to or on behalf of an indemnitee if a final adjudication establishes that his or her acts or omissions involved intentional misconduct, fraud, or a knowing violation of law and was material to the cause of action. Furthermore, we are required to advance expenses to an indemnitee in advance of a final disposition of the proceeding.
The indemnification provided by our Articles of Incorporation and Bylaws is not exclusive of any rights to which those indemnified may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.
Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the “Securities Act”) may be permitted to directors, officers and controlling persons of the Registrant pursuant to the Nevada law, the Registrant’s Articles of Incorporation, the Registrant’s Bylaws or any indemnification agreements of the Registrant with its directors and officers, the Registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
The Registrant maintains a Directors' and Officers' Liability Insurance Policy designed to reimburse it for any covered payments made by the Registrant pursuant to the foregoing indemnification.
| 5 |
| ITEM 7. | Exemption from Registration Claimed. |
Not applicable.
| ITEM 8. | Exhibits. |
| Exhibit No. | Exhibit | |
| 4.1 | Amended and Restated Articles of Incorporation (1) | |
| 4.2 | Amended and Restated By-Laws (2) | |
| 4.3* | Non-Qualified Stock Option Agreement | |
| 5.1* | Opinion re: Legality | |
| 23.1* | Consent of Squar Milner LLP to the use of its opinion included in the Annual Report of the Registrant on Form 10-K for the fiscal year ended December 31, 2018. | |
| 23.2 | Consent of Greenberg Traurig, LLP to the filing of its opinion with respect to the legality of the securities being registered hereby (included in Exhibit 5.1). | |
| 24.1 | Power of Attorney (included in the Signatures section of this Registration Statement). |
*Filed herewith.
| (1) | Incorporated by reference to Exhibit 3.1 to Registrant’s Registration Statement on Form 10 (File No. 000-54123) filed with the Commission on September 16, 2010. |
| (2) | Incorporated by reference to Exhibit 3.2 to Registrant’s Current Report on Form 8-K filed on May 22, 2018. |
| 6 |
| ITEM 9. | Undertakings. |
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
| (i) | To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; |
| (ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; |
| (iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
PROVIDED, HOWEVER, that paragraphs (1)(i), (1)(ii) and (1)(iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are incorporated by reference in this registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Henderson, State of Nevada, on August 21, 2019.
| PAYSIGN, INC. | |
| Date: August 21, 2019 | /s/ Mark Newcomer |
| By: Mark Newcomer, Chief Executive Officer |
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Mark Newcomer, Mark Attinger and Robert Strobo, and each of them, his or her true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, severally, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
| Signature | Title | Date |
|
/s/ Mark Newcomer Mark Newcomer
|
Chief Executive Officer and Director (Principal Executive Officer) | August 21, 2019 |
|
/s/ Mark Attinger Mark Attinger
|
Chief Financial Officer (Principal Financial and Accounting Officer) | August 21, 2019 |
|
/s/ Dan Henry Dan Henry
|
Chairman and Director | August 21, 2019 |
|
/s/ Daniel Spence Daniel Spence
|
Chief Technical Officer and Director | August 21, 2019 |
|
/s/ Joan Herman Joan Herman
|
Chief Operating Officer and Director | August 21, 2019 |
|
/s/ Dennis Triplett Dennis Triplett
|
Director | August 21, 2019 |
|
/s/ Quinn Williams Quinn Williams
|
Director | August 21, 2019 |
|
/s/ Bruce Mina Bruce Mina
|
Director | August 21, 2019 |
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Exhibit 4.3
3PEA INTERNATIONAL, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
FOR
DAN HENRY
1. Grant of Option. 3Pea International, Inc., a Nevada corporation (the “Company”) hereby grants, as of May 3, 2018 (“Date of Grant”), to Dan Henry (the “Optionee”) an option (the “Option”) to purchase up to one million five hundred thousand (1,500,000) shares of the Company’s common stock, $0.001 par value per share (the “Shares”), at an exercise price per share equal to $1.34 (the “Exercise Price”).
2. Definitions. Unless otherwise provided herein, terms used herein shall have the meanings set forth below:
(a) “Beneficial Owner” and “Beneficial Ownership” shall have the meaning ascribed to such term in Rule 13d-3 under the Securities Exchange Act of 1934 (the “Exchange Act”) and any successor to such Rule.
(b) “Board” means the Company’s Board of Directors.
(c) “Change in Control” means shall mean the occurrence of any of the following:
i. The acquisition by any Person of Beneficial Ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than fifty percent (50%) of either (A) the value of then outstanding equity securities of the Company (the “Outstanding Company Stock”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”) (the foregoing Beneficial Ownership hereinafter being referred to as a “Controlling Interest”); provided, however, that for purposes of this Section 9(b), the following acquisitions shall not constitute or result in a Change in Control: (v) any acquisition directly from the Company; (w) any acquisition by the Company; (x) any acquisition by any Person that as of the Date of Grant owns Beneficial Ownership of a Controlling Interest; (y) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Related Entity; or (z) any acquisition by any entity pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) below; or
ii. During any period of three (3) consecutive years (not including any period prior to the Date of Grant) individuals who constitute the Board on the Date of Grant (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 of Grant whose election, or nomination for election by the Company’s shareholders, 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 actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
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iii. Consummation of a reorganization, merger, statutory share exchange or consolidation or similar transaction involving the Company or any of its Related Entities, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or equity of another entity by the Company or any of its Related Entities (each a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the Beneficial Owners, respectively, of the Outstanding Company Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of the value of the then outstanding equity securities and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of members of the board of directors (or comparable governing body of an entity that does not have such a board), as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any employee benefit plan (or related trust) of the Company or such entity resulting from such Business Combination or any Person that as of the Date of Grant owns Beneficial Ownership of a Controlling Interest) beneficially owns, directly or indirectly, fifty percent (50%) or more of the value of the then outstanding equity securities of the entity resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such entity except to the extent that such ownership existed prior to the Business Combination and (C) at least a majority of the members of the Board of Directors or other governing body of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
iv. Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
(d) “Continuous Service” means the uninterrupted provision of services to the Company or any Related Entity in any capacity of employee, director, consultant or other service provider. Continuous Service shall not be considered to be interrupted in the case of (i) any approved leave of absence, (ii) transfers among the Company, any Related Entities, or any successor entities, in any capacity of employee, director, consultant or other service provider, or (iii) any change in status as long as the individual remains in the service of the Company or a Related Entity in any capacity of employee, director, consultant or other service provider. An approved leave of absence shall include sick leave, military leave, or any other authorized personal leave.
(e) “Related Entity” means any Subsidiary, and any business, corporation, partnership, limited liability company or other entity designated by the Board, in which the Company or a Subsidiary holds a substantial ownership interest, directly or indirectly.
(f) “Subsidiary” means any corporation or other entity in which the Company has a direct or indirect ownership interest of 50% or more of the total combined voting power of the then outstanding securities or interests of such corporation or other entity entitled to vote generally in the election of directors or in which the Company has the right to receive 50% or more of the distribution of profits or 50% or more of the assets on liquidation or dissolution.
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3. Exercise Schedule. Except as otherwise provided in Sections 6 or 9 of this Agreement, the Option is exercisable in installments as provided below, which shall be cumulative. To the extent that the Option has become exercisable with respect to a percentage of Shares as provided below, the Option may thereafter be exercised by the Optionee, in whole or in part, at any time or from time to time prior to the expiration of the Option as provided herein. The following table indicates each date (the “Vesting Date”) upon which the Optionee shall be entitled to exercise the Option with respect to the percentage of Shares granted as indicated beside the date, provided that the Continuous Service of the Optionee continues through and on the applicable Vesting Date:
|
Percentage of Shares |
Vesting Date | ||
| 25% (375,000 shares) | May 3, 2019 | ||
| 25% (375,000 shares) | May 3, 2020 | ||
| 25% (375,000 shares) | May 3, 2021 | ||
| 25% (375,000 shares) | May 3, 2022 |
Except as otherwise specifically provided herein, there shall be no proportionate or partial vesting in the periods prior to each Vesting Date, and all vesting shall occur only on the appropriate Vesting Date. Upon the termination of the Optionee’s Continuous Service, any unvested portion of the Option shall terminate and be null and void. The applicable Vesting Date shall be determined in reference to the date of execution of the offer letter between the Company and the Recipient.
4. Method of Exercise. The vested portion of this Option shall be exercisable in whole or in part in accordance with the exercise schedule set forth in Section 3 hereof by written notice which shall state the election to exercise the Option, the number of Shares in respect of which the Option is being exercised, and such other representations and agreements as to the holder’s investment intent with respect to such Shares as may be required by the Company at the time. Such written notice shall be signed by the Optionee and shall be delivered in person or by certified mail to the Secretary of the Company. The written notice shall be accompanied by payment of the Exercise Price. This Option shall be deemed to be exercised after both (a) receipt by the Company of such written notice accompanied by the Exercise Price and (b) arrangements that are satisfactory to the Board in its sole discretion have been made for Optionee’s payment to the Company of the amount, if any, that is necessary to be withheld in accordance with applicable Federal or state withholding requirements. No Shares shall be issued pursuant to the Option unless and until such issuance and such exercise shall comply with all relevant provisions of applicable law, including the requirements of any stock exchange upon which the Shares then may be traded.
5. Method of Payment. Payment of the Exercise Price shall be by any of the following, or a combination thereof, at the election of the Optionee: (a) cash; (b) check; or (c) to the extent permitted by the Board, with Shares owned by the Optionee, or the withholding of Shares that otherwise would be delivered to the Optionee as a result of the exercise of the Option [or] [(d) pursuant to a “cashless exercise” procedure, by delivery of a properly executed exercise notice together with such other documentation, and subject to such guidelines, as the Board shall require to effect an exercise of the Option and delivery to the Company by a licensed broker acceptable to the Company of proceeds from the sale of Shares], or (e) such other consideration or in such other manner as may be determined by the Board in its absolute discretion.
6. Termination of Option.
(a) General. Any unexercised portion of the Option shall automatically and without notice terminate and become null and void at the time of the earliest to occur of the following:
i. immediately upon the termination of the Optionee’s Continuous Service by the Company or a Related Entity for Cause;
ii. the tenth anniversary of the date as of which the Option is granted.
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(b) Cancellation. To the extent not previously exercised, (i) the Option shall terminate immediately in the event of (A) the liquidation or dissolution of the Company, or (B) any reorganization, merger, consolidation or other form of corporate transaction in which the Company does not survive or the Shares are exchanged for or converted into securities issued by another entity, or an affiliate of such successor or acquiring entity, unless the successor or acquiring entity, or an affiliate thereof, assumes the Option or substitutes an equivalent option or right, and (ii) the Board in its sole discretion may by written notice (“cancellation notice”) cancel, effective upon the consummation of any transaction that constitutes a Change in Control, the Option (or portion thereof) that remains unexercised on such date. The Board shall give written notice of any proposed transaction referred to in this Section 6(b) a reasonable period of time prior to the closing date for such transaction (which notice may be given either before or after approval of such transaction), in order that the Optionee may have a reasonable period of time prior to the closing date of such transaction within which to exercise the Option if and to the extent that it then is exercisable (including any portion of the Option that may become exercisable upon the closing date of such transaction). The Optionee may condition his exercise of the Option upon the consummation of a transaction referred to in this Section 6(b).
7. Transferability. Unless otherwise determined by the Board, the Option granted hereby is not transferable otherwise than by will or under the applicable laws of descent and distribution, and during the lifetime of the Optionee the Option shall be exercisable only by the Optionee, or the Optionee’s guardian or legal representative. In addition, the Option shall not be assigned, negotiated, pledged or hypothecated in any way (whether by operation of law or otherwise), and the Option shall not be subject to execution, attachment or similar process. Upon any attempt to transfer, assign, negotiate, pledge or hypothecate the Option, or in the event of any levy upon the Option by reason of any execution, attachment or similar process contrary to the provisions hereof, the Option shall immediately become null and void. The terms of this Option shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee.
8. No Rights of Stockholders. Neither the Optionee nor any personal representative (or beneficiary) shall be, or shall have any of the rights and privileges of, a stockholder of the Company with respect to any Shares purchasable or issuable upon the exercise of the Option, in whole or in part, prior to the date on which the Shares are issued.
9. Acceleration of Exercisability of Option.
(a) [Acceleration Upon Certain Terminations or Cancellations of Option. This Option shall become immediately fully exercisable in the event that, prior to the termination of the Option pursuant to Section 6 hereof, (i) the Option is terminated pursuant to Section 6(b)(i) hereof, or (ii) the Company exercises its discretion to provide a cancellation notice with respect to the Option pursuant to Section 6(b)(ii) hereof.]
(b) Acceleration Upon Change in Control. This Option shall become immediately fully exercisable in the event that, prior to the termination of the Option pursuant to Section 6 hereof, and during the Optionee’s Continuous Service, there is a Change in Control.
10. No Right to Continued Employment. Neither the Option nor this Agreement shall confer upon the Optionee any right to continued employment or service with the Company.
11. Law Governing. This Agreement shall be governed in accordance with and governed by the internal laws of the State of Nevada.
12. Interpretation. The Optionee accepts the Option subject to all of the terms and provisions of this Agreement. The undersigned Optionee hereby accepts as binding, conclusive and final all decisions or interpretations of the Board upon any questions arising under this Agreement, unless shown to have been made in an arbitrary and capricious manner.
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13. Notices. Any notice under this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally or when deposited in the United States mail, registered, postage prepaid, and addressed, in the case of the Company, to the Company’s Secretary at 1700 W Horizon Ridge Parkway, Suite 200, Henderson, NV 89012, or if the Company should move its principal office, to such principal office, and, in the case of the Optionee, to the Optionee’s last permanent address as shown on the Company’s records, subject to the right of either party to designate some other address at any time hereafter in a notice satisfying the requirements of this Section.
14. Section 409A.
(a) It is intended that the Option awarded pursuant to this Agreement be exempt from Section 409A of the Code (“Section 409A”) because it is believed that (i) the Exercise Price may never be less than the Fair Market Value of a Share on the Grant Date and the number of shares subject to the Option is fixed on the original Date of Grant, (ii) the transfer or exercise of the Option is subject to taxation under Section 83 of the Code and Treas. Reg. 1.83-7, and (iii) the Option does not include any feature for the deferral of compensation other than the deferral of recognition of income until the exercise of the Option. The provisions of this Agreement shall be interpreted in a manner consistent with this intention, and the provisions of this Agreement may not be amended, adjusted, assumed or substituted for, converted or otherwise modified without the Optionee’s prior written consent if and to the extent that the Company believes or reasonably should believe that such amendment, adjustment, assumption or substitution, conversion or modification would cause the award to violate the requirements of Section 409A. In the event that either the Company or the Optionee believes, at any time, that any benefit or right under this Agreement is subject to Section 409A, then the Board may (acting alone and without any required consent of the Optionee) amend this Agreement in such manner as the Board deems necessary or appropriate to be exempt from or otherwise comply with the requirements of Section 409A (including without limitation, amending the Agreement to increase the Exercise Price to such amount as may be required in order for the Option to be exempt from Section 409A).
(b) Notwithstanding the foregoing, the Company does not make any representation to the Optionee that the Option awarded pursuant to this Agreement is exempt from, or satisfy, the requirements of Section 409A, and the Company shall have no liability or other obligation to indemnify or hold harmless the Optionee or any Beneficiary for any tax, additional tax, interest or penalties that the Optionee or any Beneficiary may incur in the event that any provision of this Agreement, or any amendment or modification thereof or any other action taken with respect thereto, that either is consented to by the Optionee or that the Company reasonably believes should not result in a violation of Section 409A, is deemed to violate any of the requirements of Section 409A.
| 5 |
IN WITNESS WHEREOF, the parties hereto, agree to the terms of this Agreement and acknowledge receipt as dated below.
| COMPANY: | |
| 3PEA INTERNATIONAL, INC., a Nevada corporation | |
| By: /s/ Anthony E. DePrima | |
| Name: Anthony E. DePrima | |
| Title: Chief Legal Officer | |
| Agreed and Acknowledged Receipt of Agreement: | |
| Dated: ______________________________ | |
| OPTIONEE: | |
| By: _/s/ Dan Henry_____________________ | |
| Dan Henry |
| 6 |
Exhibit 5.1
[Letterhead of Greenberg Traurig, LLP]
August 21, 2019
Paysign, Inc.
1700 W. Horizon Ridge Parkway, Suite 200
Henderson, Nevada 89012
| Re: | Registration on Form S-8 for Paysign, Inc. Non-Qualified Stock Option Agreement with Dan Henry |
Ladies and Gentlemen:
On or about the date hereof, Paysign, Inc., a Nevada corporation (the "Company"), transmitted for filing with the Securities and Exchange Commission (the "Commission") a Registration Statement on Form S-8 (the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"). The Registration Statement relates to the issuance, offering and/or sale by the Company of up to 1,500,000 shares (the "Shares") of common stock, par value $0.001 per share, of the Company, from time to time, pursuant to that certain Non-Qualified Stock Option Agreement, dated as of May 3, 2018 (the “Option”) by the Company in favor of Dan Henry.
In connection with the preparation of the Registration Statement and this opinion letter, we have examined the proceedings taken by the Company in connection with the award of the Option and the authorization of the issuance of the Shares pursuant to the Option, and such documents as we have deemed necessary to render this opinion. For the purpose of the opinions rendered below, we have assumed that in connection with the issuance of the Shares pursuant to the Option, the Company will receive, in each such issuance, consideration for each such Share in an amount and by a method as set forth in the Option.
In rendering the opinions set forth below, we have assumed without investigation the genuineness of all signatures and the authenticity of all documents submitted to us as originals, the conformity to authentic original documents of all documents submitted to us as copies, and the veracity of all documents submitted to us. As to questions of fact material to the opinions hereinafter expressed, we have relied upon the representations and warranties of the Company made in the documents submitted to us.
Based upon the foregoing examination, and subject to the qualifications set forth below, we are of the opinion that the Shares have been duly authorized and, when issued, delivered and paid for in accordance with the provisions of the Option, will be validly issued, fully paid and non-assessable.
The opinions expressed above are limited to the Chapter 78 of the Nevada Revised Statutes which includes the statutory provisions thereof as well as all applicable provisions of the Constitution of the State of Nevada and reported judicial decisions interpreting these laws. Our opinions are rendered only with respect to laws, and the rules, regulations and orders thereunder, which are currently in effect.
We hereby consent to the filing of this opinion letter as an exhibit to the Registration Statement and to the reference to us in the Registration Statement. In giving this consent, we do not thereby admit that we are included within the category of persons whose consent is required by Section 7 of the Securities Act and the rules and regulations promulgated thereunder.
Very truly yours,
/s/ Greenberg Traurig, LLP
Greenberg Traurig, LLP
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in this Registration Statement on Form S-8 of Paysign, Inc. of our report dated March 11, 2019, relating to the consolidated financial statements appearing in the Annual Report on Form 10-K of Paysign, Inc. for the year ended December 31, 2018.
/s/ Squar Milner LLP
Los Angeles, California
August 21, 2019