UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2019
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 000-52069
Celexus, Inc. fka Telupay International, Inc.
(Exact Name of Registrant as Specified in its Charter)
Nevada | 98-0466350 |
(State of other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification Number) |
8275 S. Eastern Ave. Suite 200 | |
Las Vegas, NV | 89123 |
(Address of principal executive offices) | (Zip Code) |
Registrant's Phone: 702-675-8003 |
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to section 12(g) of the Act:
Common Stock, par value $0.001 |
(Title of class) |
Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☒ No ☐
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the registrant as required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be
submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such fi les). Yes ☐ No☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 | ☐ | Accelerated filer | ☐ |
Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
Emerging growth company | ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) Yes ☐ No ☒
As of June 28, 2019, the registrant had 16,538,457 shares of common stock issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Form 10-Q filed on April 3, 2019.
TABLE OF CONTENTS
PART I
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Our Business” and elsewhere in this annual report 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 annual report, 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:
· | overall strength and stability of general economic conditions and of the hemp and cannabis industry more specifically, both in the United States and globally; | |
· | changes in the competitive environment; | |
· | our ability to generate consistent revenues; | |
· | our ability to effectively execute our business plan; | |
· | changes in laws or regulations governing our business and operations; | |
· | our ability to maintain adequate liquidity and financing sources and an appropriate level of debt on terms favorable to our company; | |
· | our ability to maintain quality control over our operations; | |
· | costs and risks associated with litigation; | |
· | changes in accounting principles, or their application or interpretation, and our ability to make estimates and the assumptions underlying the estimates, which could have an effect on earnings; | |
· | other risks described from time to time in periodic and current reports that we file with the Securities and Exchange Commission (“Commission”). |
This list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative, but not exhaustive. New risk factors and uncertainties not described here or elsewhere in this annual report, including in the sections of entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” may emerge from time to time. Moreover, because we operate in a competitive and rapidly changing environment, it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. The forward-looking statements are also subject to the risks and uncertainties specific to the company including but not limited to the fact that we have limited operating history and have limited number of management and other staff. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this annual report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither we nor any other person assume responsibility for the accuracy and completeness of the forward-looking statements.
This annual report contains estimates and statistical data that we obtained from industry publications and reports. These publications generally indicate that they have obtained their information from sources believed to be reliable, but do not guarantee the accuracy and completeness of their information, and you are cautioned not to give undue weight to such estimates. Although we believe the publications are reliable, we have not independently verified their data. In addition, projections, assumptions and estimates of our future performance and the future performance of the markets in which we operate are necessarily subject to a high degree of uncertainty and risk.
You should read this annual report and the documents that we reference and have filed as exhibits to this annual report with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect.
Should one or more of the risks or uncertainties described in this annual report occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements.
All forward-looking statements, expressed or implied, included in this annual report are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.
Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this annual report.
3 |
General
Celexus, Inc. is an acquisition, management and holding company for early stage businesses and technologies in the hemp industry. Prior to the end of the fiscal year covered in this report, we entered into an agreement to acquire HempWave, Inc., which formerly operated as Bio Distribution, Inc. (“HempWave”). While that acquisition has not been finalized, we anticipate it will be completed in the coming months after we obtain an appraisal of HempWave.
Corporate History
Celexus, Inc. is a Nevada incorporated corporation, originally organized on August 23, 2008. The company has been operating as Celexus, Inc. since October 2018. Prior to October 2018, the corporate entity operated under various names and business plans. Investors should only consider the company’s operations since October 2018 as relevant to the current business of the company. A detailed list of the corporate history of the company is available in our Form 10-Q filed on April 3, 2019 and available at: https://www.sec.gov/Archives/edgar/data/1355559/000173112219000162/e1260_form10q.htm.
Prior to October 2018, and within the past five years, the company was known as Telupay International, Inc., a development stage company focused on mobile banking and payment processing. Prior to this annual report, the last annual report filed for the company was submitted on July 17, 2014, for the fiscal year ended March 31, 2014. On February 28, 2018, the company filed a Form 15 notice of termination of registration under section 12(g) of the Securities Exchange Act of 1934. The company then undertook a change in majority ownership and business plan, reconstituting as Celexus, Inc., and on February 5, 2019 filing its Form 10 General Form for Registration of Securities pursuant to section 12(g) of the Securities Act of 1934.
Business Overview
We are focused on the new opportunities available for the growth of hemp following the passage of the 2018 Farm Bill. We believe that the changes in law resulting from this legislation allow for hemp cultivation and transfer of hemp-derived products across state lines for commercial or other purposes. We believe that the hemp industry is ready for significant growth as a result of hemp therapeutic uses and environmental benefits and feel that this is the right time to enter this industry.
Some observers estimate that hemp biomass has over 50,000 uses including 100% biodegradable plastic, paper, clothing, building materials, etc. Additionally, cannabidiol (“CBD”) based medicines and supplements are believed to provide many medical benefits. In particular, it has been reported that CBD has demonstrated effectiveness in treating some forms of childhood epilepsy syndromes and reducing or eliminating seizures in some patients. Others believe that CBD can treat hundreds of medical issues such as anxiety, depression, pain, arthritis, insomnia, anorexia, heart disease, diabetes, asthma, several types of cancer, Alzheimer’s, and dementia, among other medical conditions. However, medical trials are still necessary for many of these conditions.
Hemp production also provides environmental benefits compared to traditional agricultural or forestry products. For instance, in regards to biomass for methanol, paper production, and fiberboard for construction, the average grow cycle for hemp is 12-14 weeks to fully mature at 10-15 feet tall. In contrast, a tree can take 20-50 years to reach full maturity. We believe that growth of hemp could significantly reduce deforestation by providing the same products that trees are able to supply. Further, hemp is a more efficient carbon absorbent than trees, helping to improve air quality and reducing greenhouse gas accumulation.
We expect that more uses will be realized following new research and development that has only recently become possible after the enactment of the 2018 Farm Bill.
Our Objective
Our objective is to control every aspect of the hemp farming industry from seeds, to cultivation, to extraction, and to distribution. Our goal is to become a leading supplier of both hemp seeds and clones internationally. We aim to do this by undertaking strategic acquisitions of companies that will be wholly-owned operating subsidiaries of Celexus, Inc. Our business plan includes three-stages for these acquisitions. We intend to acquire:
1. | Landholding entities for the cultivation of high grade, certified hemp seeds and clones. | |
2. | Processing facilities to dry biomass, extract hemp oil and refine to pharmaceutical grade CBD oils. | |
3. | Wholesale distribution services for domestic and international distribution of hemp products. |
4 |
Seeds and Clones Products
As part of stage one, we intend to acquire state law compliant entities that will be able to cultivate help and produce seeds and clones for other cultivators.
Finding quality seeds in the current hemp market has proven difficult for many growers. Low quality seeds are suitable for biomass and products derived from hemp fiber, but higher quality seeds are necessary for higher-value CBD production. These higher quality seeds are typically bio-engineered and protected by patents. As a result, cultivators will need to repurchase seeds every grow cycle. A typical CBD hemp farm will grow between 1,500 to 2,500 plants per acre. This requires approximately 2,500 to 3,500 seeds per acre per growth cycle since all seeds will not germinate.
Clones are clippings from another hemp plant that can be planted and grown into new plants. There are three main benefits to growing clones over seeds.
1. | Faster growth cycles because the plant is already several inches tall; |
2. | A clone copies the exact genetic makeup of the plant it was clipped from, reducing the risk of genetic issues; and |
3. | Guaranteed plants in contrast to seed cultivation because some seeds do not sprout. |
Clones, however, are costlier per plant than seeds, which can reduce the demand for such products. With clones, there is also the risk that plants will carry over any disease or infection from the original plant. To mitigate this risk and to generate the highest quality product possible, we intend to grow out plants indoors and under constant supervision from our master growers.
Initial Acquisition
In February 2019, we entered into an agreement to acquire Bio Distribution, Inc., which recently has been renamed to HempWave. The acquisition price is $13,000,000 worth of our stock and $1. HempWave and Celexus, Inc. are under common control. However, we do not anticipate the acquisition will be completed until we receive a full appraisal of HempWave. The acquisition terms include a due diligence period through July 31, 2019. If we are not satisfied with the results of the due diligence, then no qcquisition will occur. We also note that the acquisition price could be increased if the appraisal determines that HempWave valuation is significantly higher than $13,000,000.
HempWave has acquired a bio-engineered strain of hemp seeds that produce low Tetrahydrocannabinol (“THC”) levels, to meet industry regulations, and a high CBD content, which is ideal for CBD products. HempWave will begin cultivation operations in two greenhouse facilities based in Phoenix and Willcox, Arizona, which have a combined total of over 210,000 square feet of arable land. The greenhouse facilities include agricultural lighting, drip systems, storage areas, and sufficient water rights.
We believe HempWave is a suitable acquisition target. In addition to its current strains and growing space, HempWave has received all five industrial hemp licenses issued by the State of Arizona. The licenses include:
Employees
As of June 1, 2019, we have one full time employee with Celexus, Inc, our President, David Soto, who is engaged as a contractor.
5 |
The SEC requires the company to identify risks that are specific to its business and its financial condition. The company is also subject to all the same risks that all companies in its business, and all companies in the economy, are exposed to. These include risks relating to economic downturns, political and economic events and technological developments (such as cyber-attacks and the ability to prevent such attacks). Additionally, early-stage companies are inherently more risky than more developed companies, and the risk of business failure and complete loss of your investment capital is higher for early stage companies than for more established companies. You should consider general risks as well as specific risks when deciding whether to invest.
Risks Related to Our Company
We have a limited operating history upon which you can evaluate our performance, and have not yet generated profits. Accordingly, our prospects must be considered in light of the risks that any new company encounters. In its current form, our company has only been in operations since October 2018. The likelihood of our creation of a viable business must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the growth of a business, and operation in a competitive industry. We anticipate that our operating expenses will increase for the near future, and there is no assurance that we will be profitable in the near future. You should consider our business, operations and prospects in light of the risks, expenses and challenges we face as an emerging growth company.
The auditor included a “going concern” note in its audit report. We may not have enough funds to sustain the business until it becomes profitable. Even if we raise funds through this offering, we may not accurately anticipate how quickly we may use the funds and whether these funds are sufficient to bring the business to profitability.
We anticipate having a negative cash flow for the foreseeable future. We expect to generate operating losses and experience negative cash flow for the immediate future and it is uncertain whether we will achieve future profitability. We expect to continue to incur operating losses until such time, if ever, as we are able to achieve sufficient levels of revenue from our investments and services rendered. Our ability to commence revenue operations and achieve profitability will depend upon revenue received primarily from investments or otherwise through services that we render. There can be no assurance that we will ever achieve profitability. Accordingly, the extent of future losses and the time required to achieve profitability, if ever, cannot be predicted at this point.
Uncertain government regulation may impact our ability to execute our business plan. Our business will be subject to extensive regulation at the, local, state and federal level. There has been an active debate among regulators and legislators over the appropriate extent of regulation and oversight of hemp growth, production, and distribution as well as cannabis-derived products and distribution. Changes in laws, regulations and policies, and the related interpretations and enforcement practices, may significantly affect our cost of doing business as we endeavor to maintain compliance with such new policies and laws. Changes in laws, regulations and policies, and the related interpretations and enforcement practices generally cannot be predicted and may require extensive system and operational changes. Any failure to comply with applicable regulatory requirements could result in significant legal and financial exposure, damage our reputation, shut down our business or have a material adverse effect on our business operations, financial condition and results of operations.
We are dependent on key personnel. Our success will depend, in large part, on the skill, expertise, and acumen of Mr. David Soto. There is no requirement that Mr. Soto allocate a specific amount of time to our company. If Mr. Soto ceases to participate in our company’s activities for any reason, our company’s ability to select attractive investments could be impaired severely.
Our failure to attract and retain highly qualified personnel in the future could harm our business. As the company grows, it will be required to hire and attract additional qualified sales, technical, and managerial personnel. Competition for such personnel is intense and we may not be able to attract, train, retain, or motivate such persons in the future. The company may not be able to locate or attract qualified individuals for such positions, which will affect the company’s ability to grow and expand its business.
We operate in a highly competitive industry with significant existing competition, and high interest by potential competitors. A number of our existing or potential competitors may have substantially greater financial, technical, and marketing resources, larger investor bases, greater name recognition, more established relationships with their investors, and more established sources of deal flow and investment opportunities than we do. This may enable our competitors to: develop and expand their services and develop infrastructure more quickly, and achieve greater scale and cost efficiencies; adapt more quickly to new or emerging markets and opportunities, strategies, techniques, technologies, and changing investor needs; take advantage of acquisitions and other market opportunities more readily; establish operations in new markets more rapidly; devote greater resources to the marketing and sale of their products and services; adopt more aggressive pricing policies; and provide clients with additional benefits at lower overall costs in order to gain market share. If our competitive advantages are not compelling or sustainable and we are not able to effectively compete with larger competitors, then we may not be able to increase or sustain cash flow.
6 |
We may be required to raise additional capital through equity and/or debt offerings to support our working capital requirements . In order to fund future growth and acquisitions, the company will likely need to raise additional funds in the future by offering shares of its Common Stock and/or other classes of equity, or take on additional debt. Furthermore, if the company raises capital through debt, the holders of our debt would have priority over holders of Common Stock upon liquidation and the company may be required to accept terms that restrict its ability to incur more debt. We cannot assure you that the necessary funds will be available on a timely basis, on favorable terms, or at all, or that such funds if raised, would be sufficient. The level and timing of future expenditure will depend on a number of factors, many of which are outside our control. If we are not able to obtain additional capital on acceptable terms, or at all, we may be forced to curtail or abandon our growth plans, which could adversely impact the company, its business, development, financial condition, operating results or prospects.
Implications of being an Emerging Growth Company
As a company with less than $2.0 billion in revenue during its last fiscal year, we qualify as an “emerging growth company” as defined in the JOBS Act. For as long as a company is deemed to be an emerging growth company, it may take advantage of specified reduced reporting and other regulatory requirements that are generally unavailable to other public companies. These provisions include:
· | A requirement to have only two years of audited financial statements and only two years of related Management’s Discussion and Analysis included in an initial public offering registration statement; | |
· | an exemption to provide less than five years of selected financial data in an initial public offering registration statement; | |
· | an exemption from the auditor attestation requirement in the assessment of our internal controls over financial reporting; | |
· | an exemption from the adoption of new or revised financial accounting standards until they would apply to private companies; | |
· | an exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer; and | |
· | reduced disclosure about our executive compensation arrangements. |
An emerging growth company is also exempt from Section 404(b) of the Sarbanes Oxley Act, which requires that the registered accounting firm shall, in the same report, attest to and report on the assessment on the effectiveness of the internal control structure and procedures for financial reporting. Similarly, as a Smaller Reporting Company we are exempt from Section 404(b) of the Sarbanes-Oxley Act and our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting until such time as we cease being a Smaller Reporting Company.
As an emerging growth company, we are exempt from Section 14A (a) and (b) of the Exchange Act which require stockholder approval of executive compensation and golden parachutes.
Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
We would cease to be an emerging growth company upon the earliest of:
· | the first fiscal year following the fifth anniversary of the filing of our Form 10; | |
· | the first fiscal year after our annual gross revenues are $2 billion or more; | |
· | the date on which we have, during the previous three-year period, issued more than $2 billion in non-convertible debt securities; or | |
· | as of the end of any fiscal year in which the market value of our Common Stock held by non-affiliates exceeded $700 million as of the end of the second quarter of that fiscal year. |
We do not have an audit or compensation committee of our Board of Directors. Because we do not have an audit or compensation committee, stockholders will have to rely on our entire Board of Directors, none of which are independent, to perform these functions. Thus, there is a potential conflict in that Board members who are also part of management will participate in discussions concerning management compensation and audit issues that may affect management decisions.
7 |
Risks Related to our Common Stock
The price of our Common Stock may experience price volatility in secondary trading. Our Common Stock trades over the Pink Open Market, managed by OTC Markets Group. The Pink Open Market is self-described as being for professional and sophisticated investors only, which may limit ongoing interest in our Common Stock. As a result, investors may be deprived of the full value of their shares because our Common Stock is expected to have fewer market makers, lower trading volumes, and larger spreads between bid and ask prices than securities listed on an exchange such as the New York Stock Exchange or the Nasdaq Stock Market. These factors may result in higher price volatility and less market liquidity for our Common Stock.
Our Common Stock is likely to experience a low market price. A low market price would severely limit the potential market for our Common Stock . Our Common Stock is expected to trade at a price substantially below $5.00 per share, subjecting trading in the stock to certain Commission rules requiring additional disclosures by broker-dealers. These rules generally apply to any non-Nasdaq equity security that has a market price share of less than $5.00 per share, subject to certain exceptions (a “penny stock”). Such rules require the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and the risks associated therewith, and impose various sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and institutional or wealthy investors. For these types of transactions, the broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to the sale. The broker- dealer also must disclose the commissions payable to the broker-dealer, current bid and offer quotations for the penny stock and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Such information must be provided to the customer orally or in writing before or with the written confirmation of trade sent to the customer. Monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. The additional burdens imposed upon broker-dealers by such requirements could discourage broker- dealers from effecting transactions in our Common Stock.
Holders of our Common Stock may not be able to resell their shares due to the lack of a market and state Blue Sky laws. Investors may have difficulty in reselling their shares due to the lack of market or state Blue Sky laws. The holders of our shares of Common Stock and persons who desire to purchase them in any trading market that might develop in the future should be aware that there may be significant state law restrictions upon the ability of investors to resell our shares. Accordingly, investors should consider any secondary market for our securities to be a limited one. We intend to seek coverage and publication of information regarding our company in an accepted publication which permits a “manual exemption.” This manual exemption permits a security to be distributed in a particular state without being registered if the company issuing the security has a listing for that security in a securities manual recognized by the state. However, it is not enough for the security to be listed in a recognized manual. The listing entry must contain: (1) the names of issuers, officers, and directors; (2) an issuer’s balance sheet; and (3) a profit and loss statement for either the fiscal year preceding the balance sheet or for the most recent fiscal year of operations. We may not be able to secure a listing containing all of this information. Furthermore, the manual exemption is a non-issuer exemption restricted to secondary trading transactions, making it unavailable for issuers selling newly issued securities. Most of the accepted manuals are those published in Standard and Poor’s, Moody’s Investor Service, Fitch’s Investment Service, and Best’s Insurance Reports, and many states expressly recognize these manuals. A smaller number of states declare that they “recognize securities manuals” but do not specify the recognized manuals. The following states do not have any provisions and therefore do not expressly recognize the manual exemption: Alabama, Georgia, Illinois, Kentucky, Louisiana, Montana, South Dakota, Tennessee, Vermont, and Wisconsin.
Accordingly, our shares of Common Stock should be considered totally illiquid, which inhibits investors’ ability to resell their shares.
Our Common Stock will be subject to penny stock regulations. We will be subject to penny stock regulations and restrictions and you may have difficulty selling shares of our Common Stock. The Commission has adopted regulations which generally define so-called “penny stocks” to be an equity security that has a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. We anticipate that our Common Stock will become a “penny stock”, and we will become subject to Rule 15g-9 under the Exchange Act, or the “Penny Stock Rule”. This rule imposes additional sales practice requirements on broker-dealers that sell such securities to persons other than established customers. For transactions covered by Rule 15g-9, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to sale. As a result, this rule may affect the ability of broker-dealers to sell our securities and may affect the ability of purchasers to sell any of our securities in the secondary market.
For any transaction involving a penny stock, unless exempt, the rules require delivery, prior to any transaction in a penny stock, of a disclosure schedule prepared by the Commission relating to the penny stock market. Disclosure is also required to be made about sales commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements are required to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock.
We do not anticipate that our Common Stock will qualify for exemption from the Penny Stock Rule. In any event, even if our Common Stock were exempt from the Penny Stock Rule, we would remain subject to Section 15(b)(6) of the Exchange Act, which gives the Commission the authority to restrict any person from participating in a distribution of penny stock, if the Commission finds that such a restriction would be in the public interest.
8 |
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
As of the date of this annual report, Celexus, Inc. does not own or lease any property.
From time to time, the company may be involved in a variety of legal matters that arise in the normal course of business. The company is not currently involved in any litigation, and its management is not aware of any pending legal actions relating to conduct of its business activities, or otherwise.
ITEM 4. MINE SAFETY DISCLOSURES
None required.
PART II
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
As of June 28, 2019, 16,538,457 shares of our common stock are issued and outstanding following a 90 for 1 reverse split of our shares effected in March 2019. This figure is in contrast to that contained in our Form 10 that preceded the 90 for 1 reverse split. Of the total issued and outstanding shares, 5,444,444 (32.9% of total issued and outstanding shares) were held by one shareholder of record, Global Services Unlimited Group, Inc. We currently have 138 shareholders of record.
There is a limited public market for our common shares, which are quoted on the OTC Markets and OTCPink ATS under the symbol “CXUS.” Over the past 52 weeks, which includes time in which the company was not operational, our stock price has demonstrated a quotation range of $0.135 to $1.953. We note that such over-the-counter market quotations reflect inter-dealer prices. Such prices do include retail mark-up, mark-down, or commissions and may not necessarily represent actual transactions. As a result, this over-the-counter quotation information may contain stock price information that differs materially from the price that an investor would pay at or around the time of such quotation. We also note that trading in stocks quoted on the OTC Markets and OTCPink ATS is often thin and is characterized by wide fluctuations in trading prices due to many factors that may be unrelated to a company’s operations or business prospects. We cannot assure you that there will be a market in the future for our common stock.
Dividends
We have never paid or declared any dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future.
Securities Authorized for Issuance Under Equity Compensation Plans
We currently do not have any equity compensation plans. We are currently considering issuing shares of our common stock to certain members of management, those providing advisory services, and vendors of the company in lieu of cash payments. In the event that such shares are issued, we will file a current report with the Commission.
Recent Sales of Unregistered Securities
During the years ended March 31, 2019 and 2018, we have not sold any securities in unregistered offerings.
During the year ended March 31, 2017 and prior to the current activities of the company, on January 18, 2017, in connection with the custodianship of Telupay International Inc., the company resolved to issue 400,000,000 shares of common stock to Barton Hollow, LLC to satisfy, and cause to be retired, the obligations of the company as born by Barton Hollow, LLC during 2017. Although, constructively earned and issued by January 18, 2017, the shares were not issued until one year later on January 25, 2018. As such, pursuant to ASC 260-10-45, the shares had been reflected on the balance sheet and, for purposes of the earnings per share calculation, on an as-if issued basis as of January 18, 2017. The company recognized stock compensation expense of $160,000 based on the closing stock price on January 18, 2017 of $0.0004 per share.
9 |
ITEM 6. SELECTED FINANCIAL DATA
As a smaller reporting company, we have elected to not provide selected financial data in accordance with Item 301(c) of Regulation S-K.
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of our financial condition and results of operations for the fiscal years ended March 31, 2018 and March 31, 2019 should be read in conjunction with our financial statements and the related notes, included in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements.
Overview
We intend to become a key supplier of high grade CBD hemp seeds and clones to international farmers entering the market. The quality, durability, performance and certification on hemp seeds and clones will determine their value. Our seeds will ultimately be bio-engineered to grow large, robust crops, durable to a wide range of weather and altitude and contain some of the highest percentages of CBD on the market. Our genetic improvement strategy includes the following objectives:
· | High yield |
· | Minimal male contamination |
· | Premium market quality |
· | Reliable low levels of THC content |
· | Continual development of new improvements to our strains of hemp seeds and clones |
We are committed to breeding strains of hemp that can maximize the profitability of the industrial hemp industry.
Results of Operations
The company has not yet begun its principal operations, and will not do so until completing its initial acquisition. As of the date of this annual report, the acquisition of HempWave has not yet been completed. However, we fully intend to complete the acquisition before the end of July to avoid triggering a termination clause of the Exchange Agreement between the company and HempWave. In addition, we note that financial statements for HempWave are not yet available.
For the fiscal years ended March 31, 2019 and 2018, we did not record any revenue and our expenses were $18,445and $3,793, respectively. During the fiscal year ended March 31, 2019, our principal expense was professional fees for legal and accounting expenses related to Exchange Act reporting requirements.
In addition, for the fiscal years ended March 31, 2019 and 2018, we recorded $2,791 and $2,538 in interest expenses, respectively. While the fiscal year ended March 31, 2018 included a gain on forgiveness of liabilities in the amount of $16,030, the fiscal year ended March 31, 2019 only saw a similar gain of $2.
As a result of the foregoing, the company experienced a ness loss of $21,234 for the year ended March 31, 2019, as compared to a net profit of $9,699 for the year ended March 31, 2018, which was mostly driven by the gain on forgiveness of liabilities.
Liquidity and Capital Resources
At March 31, 2019 we had $44,862 in current assets compared to $0 at March 31, 2018. These assets consisted entirely of cash deposited into our bank account. Current liabilities at March 31, 2019 totaled $92,859 compared to $36,041 at March 31, 2018. The increase in current liabilities was primarily the result of two loans from a shareholder of the company, totaling $58,500. This loans do not bear any interest, and are payable on demand.
Our operations will not fully commence until we complete our acquisition of HempWave by fulfilling the Exchange Agreement with HempWave prior to the end of July 2019. Pursuant to the Exchange Agreement, we will issue Common Stock in the amount of $13,000,000 to HempWave as compensation. Over the course of the current fiscal year ending March 31, 2020, we intend to explore various fundraising methods available to us to replenish the company’s cash reserves and to expand its operations.
The company has significant net operating loss carryforwards that may offset future tax expenses. For the fiscal year ended March 31, 2019, the company had a net operating loss carryforward of $5,812,118, which could be used to defer up to $1,220,545 of federal tax expenses at a 21% statutory tax rate.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to investors.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company, we have elected to not provide selected financial data in accordance with Item 305(e) of Regulation S-K.
10 |
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial Statements
CELEXUS, INC.
(formerly Telupay International, Inc.)
For the Years ending March 31, 2019 and 2018
F- 1 |
CELEXUS, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
F- 2 |
Report of Independent Registered Public Accounting Firm
To the shareholders and the board of directors of Celexus, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Celexus, Inc. (the "Company") as of March 31, 2019 and 2018, the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2019 and 2018, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company’s minimal activities raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ BF Borgers CPA PC
BF Borgers CPA PC
We have served as the Company's auditor since 2019
Lakewood, CO
July 15, 2019
F- 1 |
(The accompanying notes are an integral part of these financial statements) |
F- 2 |
(The accompanying notes are an integral part of these financial statements)
F- 3 |
(The accompanying notes are an integral part of these financial statements)
F- 4 |
(The accompanying notes are an integral part of these financial statements)
F- 5 |
(formerly Telupay International, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED MARCH 31, 2019 AND 2018
NOTE 1 –Organization and Going Concern
Celexus, Inc. (the Company)(formerly Telupay International, Inc.; formerly i-Level Media Group Incorporated; formerly Jackson Ventures, Inc.) was incorporated in the State of Nevada on August 23, 2005 as Jackson Ventures Ltd. and its initial operations included the acquisition and exploration of mineral resources. In March, 2007 the Company changed its name to i-Level Media Group Incorporated (“i-Level”) and changed its business to that of developing and operating a digital media network service. This business ceased operations on December 1, 2008 and its business was wound-up.
On September 24, 2013, the Company effected the acquisition of Telupay, PLC by way of a reverse merger. As a result of the Merger, the Company changed its name to Telupay International Inc., effectuated a 1.5-for-1 forward stock split and Telupay became a wholly-owned subsidiary. Telupay was engaged in the mobile banking and payment processing business primarily in the Philippines, Peru, Indonesia, Myanmar and the United Kingdom. Telupay PLC was the primary operating subsidiary of the Company accounting for most of our assets and liabilities. Telupay PLC never reached profitability and was spun out of the Company shortly after December 31, 2014 to the former directors and officers of the Company whereby the business, including the assets and liabilities of Telupay PLC were transferred for no consideration. As a result, the Company had no operations.
On January 18, 2017, Barton Hollow, LLC, a limited liability company, was appointed custodian for the Company by the District Court of Clark County, Nevada. The Company was reinstated by the Nevada Secretary of State on November 9, 2017 and on September 9, 2018 changed its name to Celexus, Inc. The Company currently is looking to acquire an operating business or develop a business.
Going Concern
The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs to allow it to continue as a going concern. As of March 31, 2019, the Company had an accumulated deficit of $8,932,710. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In view of these conditions, the ability of the Company to continue as a going concern is in doubt and dependent upon achieving a profitable level of operations and on the ability of the Company to obtain necessary financing to fund ongoing operations. Historically, the Company has relied upon internally generated funds and funds from the sale of shares of stock, issuance of promissory notes and loans from its shareholders and private investors to finance its operations and growth. Management is planning to raise necessary additional funds for working capital through loans and/or additional sales of its common stock. However, there is no assurance that the Company will be successful in raising additional capital or that such additional funds will be available on acceptable terms, if at all. Should the Company be unable to raise this amount of capital its operating plans will be limited to the amount of capital that it can access. These financial statements do not give effect to any adjustments which will be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying financial statements.
F- 6 |
NOTE 2 – Summary of Significant Accounting Policies
Use of Estimates
The preparation of the Company’s consolidated financial statements requires management to make estimates and use assumptions that affect the reported amounts of assets, liabilities and expenses. These estimates and assumptions are affected by management’s application of accounting policies. On an on-going basis, the Company evaluates its estimates. Actual results and outcomes may differ materially from these estimates and assumptions.
Cash
Cash includes amounts held in bank accounts. The Company has amounts deposited with financial institutions in excess of federally insured limits.
Fair Value Measurements
The Company measures fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The Company utilizes a three-tier hierarchy which prioritizes the inputs used in the valuation methodologies in measuring fair value:
Level 1. Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access. The Company has no assets or liabilities measured and recorded on a recurring or nonrecurring basis with Level 1 inputs.
Level 2. Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. The Company has no assets or liabilities measured and recorded on a recurring or nonrecurring basis with Level 2 inputs.
Level 3. Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company has no assets or liabilities measured and recorded on a recurring or nonrecurring basis with Level 3 inputs.
Fair Value of Financial Instruments
The carrying value of cash and cash equivalents, accounts payable and interest payable approximate their fair value because of the short-term nature of these instruments and their liquidity. It is not practical to determine the fair value of the Company’s debentures payable due to the complex terms. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments.
Stock Based Compensation
When applicable, the Company will account for stock-based payments to employees in accordance with ASC 718, “Stock Compensation” (“ASC 718”). Stock-based payments to employees include grants of stock, grants of stock options and issuance of warrants that are recognized in the consolidated statement of operations based on their fair values at the date of grant.
The Company accounts for stock-based payments to non-employees in accordance with ASC 505-50, “Equity-Based Payments to Non-Employees.” Stock-based payments to non-employees include grants of stock, grants of stock options and issuances of warrants that are recognized in the consolidated statement of operations based on the value of the vested portion of the award over the requisite service period as measured at its then-current fair value as of each financial reporting date.
F- 7 |
The Company calculates the fair value of option grants and warrant issuances utilizing the Black-Scholes pricing model. The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. ASC 718 requires forfeitures to be estimated at the time stock options are granted and warrants are issued to employees and non-employees, and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The term “forfeitures” is distinct from “cancellations” or “expirations” and represents only the unvested portion of the surrendered stock option or warrant. The Company estimates forfeiture rates for all unvested awards when calculating the expense for the period. In estimating the forfeiture rate, the Company monitors both stock option and warrant exercises as well as employee termination patterns. The resulting stock-based compensation expense for both employee and non-employee awards is generally recognized on a straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period.
Loss per Share
The computation of basic earnings per share (“EPS”) is based on the weighted average number of shares that were outstanding during the period, including shares of common stock that are issuable at the end of the reporting period. The computation of diluted EPS is based on the number of basic weighted-average shares outstanding plus the number of common shares that would be issued assuming the exercise of all potentially dilutive common shares outstanding using the treasury stock method. The computation of diluted net income per share does not assume conversion, exercise or contingent issuance of securities that would have an antidilutive effect on earnings per share. Therefore, when calculating EPS if the Company experienced a loss, there is no inclusion of dilutive securities as their inclusion in the EPS calculation is antidilutive. Furthermore, options and warrants will have a dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the options or warrants (they are in the money). See “NOTE 5 - Net Loss Per Share” for further discussion.
Income Taxes
The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credits and loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carry-forwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized. The Company reports a liability for unrecognized tax benefits resulting from uncertain income tax positions, if any, taken or expected to be taken in an income tax return. Estimated interest and penalties are recorded as a component of interest expense or other expense, respectively.
Business segments
ASC 280, “Segment Reporting” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company determined it has one operating segment.
F- 8 |
Recent Accounting Pronouncements
In July 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a free-standing equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The Company does not expect this accounting update to have a material effect on its Consolidated Financial Statements.
In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718) Scope of Modification Accounting. The amendments in this Update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The amendments in this Update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for public business entities for reporting periods for which financial statements have not yet been issued. The Company does not expect this accounting update to have a material effect on its Consolidated Financial Statements.
In March 2016, the FASB issued ASU No. 2016-09, “Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting (Topic 718)”, which is intended to simplify several aspects of the accounting for share-based payment award transactions. The guidance is effective for our current fiscal year. The adoption of ASU 2016-09 did not have a material impact on the Consolidated Financial Statements.
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842)”, which supersedes ASC Topic 840, Leases, and creates a new topic, ASC 842, Leases. The new guidance requires the recognition of lease assets and liabilities for operating leases with terms of more than 12 months. Presentation of leases within the consolidated statements of operations and consolidated statements of cash flows will be generally consistent with the current lease accounting guidance. The ASU is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company does not expect this accounting update to have a material effect on its Consolidated Financial Statements.
The Company reviews new accounting standards as issued. Although some of these accounting standards issued or effective after the end of the Company’s previous fiscal year may be applicable, the Company has not identified any standards that the Company believes merit further discussion. The Company believes that none of the new standards will have a significant impact on the financial statements.
NOTE 3 – Debt – Related Party
On January 18, 2017, the Company entered into a Revolving Demand Note (the “Revolving Demand Note”) with Securities Compliance Group, Ltd. (the “Creditor”). Pursuant the Revolving Demand Note, the Company borrowed $25,000 at an annual interest rate of 9.5% with a default rate of 22%. The Revolving Demand Note may be converted into common stock at an exercise price of par, or $0.001 per share at the discretion of the Creditor. The Revolving Demand Note does not have a maturity date.
The debt discount attributable to the fair value of the beneficial conversion feature amounted to $17,500 and was accreted on the date of issuance due to no maturity date of the Revolving Demand Note.
F- 9 |
During the years ended March 31, 2019 and 2018, the Company recognized $2538 and $2,791 of interest expense related to the Convertible Debenture.
A shareholder who is a related party has loaned the corporation $58,500 as of March 31, 2019. The note bears no interest and is payable on demand.
Also see “Note 7” – Related Party Transactions.”
NOTE 4 – Common Stock
At March 31, 2019, the Company had 1,500,000,000 authorized shares of common stock with a par value of $0.001 per share and 565,864,527 shares of common stock outstanding.
During the year ended March 31, 2017, On January 18, 2017, in connection with the custodianship, the Company issued 400,000,000 shares to Barton hollow, LLC to satisfy and caused to be retired, the obligations of the Company. As a result the Company recognized stock compensation expense of $160,000 based on the closing stock price on January 18, 2017 of $0.004 per share.
NOTE 5 - Net Loss Per Share
During the years ended March 31, 2018 and 2017, the Company recorded a net loss. Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. The Company has not included the effects of convertible debt on net loss per share because to do so would be antidilutive.
Following is the computation of basic and diluted net loss per share for the years ended March 31, 2019 and 2018:
Years Ended March 31, | ||||||||||
2019 | 2018 | |||||||||
Basic and Diluted EPS Computation | ||||||||||
Numerator: | ||||||||||
Loss available to common stockholders' | $ | (21,234 | ) | $ | 9,669 | |||||
Denominator: | ||||||||||
Weighted average number of common shares outstanding | 565,864,527 | 565,864,527 | ||||||||
Basic and diluted EPS | $ | (0.00 | ) | $ | 0.00 | |||||
The shares listed below were not included in the computation of diluted losses | ||||||||||
per share because to do so would have been antidilutive for the periods presented: | ||||||||||
Convertible debt | 5,802,270 | 3,011,097 |
NOTE 6 – Income Taxes
On December 22, 2017, the Tax Cuts and Jobs Act (“The Act”) was enacted into law. The Act applies to corporations generally beginning with taxable years starting after December 31, 2017 and reduces the corporate tax rate from a graduated set of rates with a maximum 35% tax rate to a flat 21% tax rate. Additionally, the Act introduces other changes that impact corporations, including a net operating loss (“NOL”) deduction annual limitation, an interest expense deduction annual limitation, elimination of the alternative minimum tax, and immediate expensing of the full cost of qualified property. The Act also introduces an international tax reform that moves the U.S. toward a territorial system, in which income earned in other countries will generally not be subject to U.S. taxation. However, the accumulated foreign earnings of certain foreign corporations will be subject to a one-time transition tax, which can be elected to be paid over an eight-year tax transition period, using specified percentages, or in one lump sum. NOL and foreign tax credit (“FTC”) carryforwards can be used to offset the transition tax liability. The Company does not expect that this change will have an impact on the Company as it has not earned taxable income in the past and it has significant NOL carryforwards.
F- 10 |
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets at March 31, 2018 and 2017 are as follows:
2019 | 2018 | |||||||
Deferred tax assets: | ||||||||
Net operating loss carryforwards | $ | 5,812,118 | $ | 5,790,884 | ||||
Statutory tax rate | 21 | % | 21 | % | ||||
Total deferred tax assets | 1,220,545 | 1,216,086 | ||||||
Less: valuation allowance | (1,220,545 | ) | (1,216,086 | ) | ||||
Net deferred tax asset | $ | — | $ | — |
The net change in the valuation allowance for deferred tax assets was an increase of $4,459 and decrease of $2,036 for the years ended March 31, 2019 and 2018, respectively. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Due to the uncertainty of realizing the deferred tax asset, management has recorded a valuation allowance against the entire deferred tax asset.
For federal income tax purposes, the Company has net U.S. operating loss carry forwards at March 31, 2019 available to offset future federal taxable income, if any, of $5,812,118. Accordingly, there is no tax expense for the years ended March 31, 2019 and 2018.
The utilization of the tax net operating loss carry forwards may be limited due to ownership changes that have occurred as a result of sales of common stock.
The effects of state income taxes were insignificant for the years ended March 31, 2019 and 2018.
A reconciliation between the amount of income tax benefit determined by applying the applicable U.S. statutory income tax rate of 21% to pre-tax loss for the years ended March 31, 2019 and 2018 is as follows:
2019 | 2018 | |||||||
Federal Statutory Rate | $ | 4,459 | $ | (2,036 | ) | |||
Nondeductible expenses | — | — | ||||||
Change in allowance on deferred tax assets | 4,459 | (2,036 | ) | |||||
$ | — | $ | — |
The Company does not have any uncertain tax positions at March 31, 2018 and 2017 that would affect its effective tax rate. The Company does not anticipate a significant change in the amount of unrecognized tax benefits over the next twelve months. Because the Company is in a loss carryforward position, the Company is generally subject to US federal and state income tax examinations by tax authorities for all years for which a loss carryforward is available. If and when applicable, the Company will recognize interest and penalties as part of income tax expense.
F- 11 |
NOTE 7 - Related Party Transactions
During the year ended March 31, 2019 and 2018, our former President made payments on behalf of the Company totaling $0 and $7,830, respectively.
During the year ended March 31, 2019 and 2018, a shareholder who is a related party has loaned the corporation $59,507 and $0 respectively.
Also see “Note 3” – Debt Related Party.”
NOTE 8 – Subsequent Events
Management has reviewed material events subsequent of the period ended March 31, 2019 and through the date of filing of financial statements in accordance with FASB ASC 855 “Subsequent Events”.
On December 10, 2018 it was RESOLVED by the board of directors of the corporation that the name change of the corporation be changed to Celexus and that the outstanding shares of stock of the cororation be reverse split on a 1 for 90 basis without change to authorized shares. The name change and 1-90 reverse split will take effect at the open of business April 9, 2019.
On May 13, 2019 Celexus has entered into a definitive agreement by which it will acquire HempWave f/k/a Bio Distributions upon the completion of an appraisal satisfactory to management of both companies.
As of May 20, 2019 Lisa Averbuch has resigned as President of Celexus, Inc. Ms. Averbuch with continue to serve as Director of the Company and maintains the authority to vote shares of the Company’s majority shareholder, Global Services Unlimited Group, Inc.
Following the resignation of Ms. Averbuch, the Board of Directors has appointed David Soto to serve as President of the Company.
F- 12 |
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
On March 27, 2019, the company terminated MICHAEL GILLESPIE & ASSOCIATES, PLLC ("Gillespie") as its registered independent public accountant.
Gillespie's reports on the financial statements for the periods ended March 31, 2017 and March 31, 2018, contained no adverse opinion or disclaimer of opinion and was not qualified or modified as to audit scope or accounting, except that the report contained an explanatory paragraph stating that there was substantial doubt about the company's ability to continue as a going concern. |
Our Board of Directors participated in, and approved the decision to, change independent accountants. Through the reporting periods ended March 31, 2017 and March 31, 2018, there have been no disagreements with Gillespie on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements if not resolved to the satisfaction of Gillespie would have caused them to make reference thereto in their report on the financial statements. Through the interim period to March 27, 2019 (the date of termination of Gillespie), there have been no disagreements with Gillespie on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements if not resolved to the satisfaction of Gillespie would have caused them to make reference thereto in their report on the financial statements. |
On March 27, 2019, the company engaged BF Borgers, CPA PC ("BF Borgers"), situated at 5400 W Cedar Ave, Lakewood, CO, USA 80226 (Ph: 303-953-1454, Fax: 720-251-8836; Website: www.bfbcpa.us), as its new registered independent public accountant. The company has engaged BF Borgers to act as the company's independent accountant going forward.
During the periods ending March 31, 2017 and March 31, 2018, and prior to March 27, 2019 (the date of the new engagement), we did not consult with BF Borgers regarding: · The application of accounting principles to a specified transaction; · The type of audit opinion that might be rendered on the company's financial statements by BF Borgers, in either case where written or oral advice provided by BF Borgers would be an important factor considered by us in reaching a decision as to any accounting, auditing or financial reporting issues; or · Any other matter that was the subject of a disagreement between us and our former auditor or was a reportable event (as described in Items 304(a)(1)(iv) or Item 304(a)(1)(v) of Regulation S-K, respectively)., |
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. This rule defines internal control over financial reporting as a process designed by, or under the supervision of, the company’s President, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that:
● | Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions; |
● | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and |
● | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements. |
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of July 12, 2019. Based upon this evaluation, the company’s President concluded that our disclosure controls and procedures were not effective because of the identification of material weaknesses in our internal control over financial reporting which are described below.
11 |
Management’s Reports on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control, as is defined in the Securities Exchange Act of 1934. These internal controls are designed to provide reasonable assurance that the reported financial information is presented fairly, that disclosures are adequate and that the judgments inherent in the preparation of financial statements are reasonable. There are inherent limitations in the effectiveness of any system of internal controls, including the possibility of human error and overriding of controls. Consequently, an effective internal control system can only provide reasonable, not absolute, assurance with respect to reporting financial information.
Our internal control over financial reporting includes policies and procedures that: (i) pertain to maintaining records that in reasonable detail accurately and fairly reflect our transactions; (ii) provide reasonable assurance that transactions are recorded as necessary for preparation of our financial statements in accordance with generally accepted accounting principles and the receipts and expenditures of company assets are made and in accordance with our management and directors authorization; and (iii) provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.
The assessment included a review of current personnel of the company, its activities since reconstituting operations in October 2018, and anticipated future activities of the company. Based on this evaluation, management concluded that our internal control over financial reporting was not effective as of July 12, 2019. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
We had the following material weaknesses at July 12, 2019:
● | We have a lack of proper segregation of duties. Management is dominated by a single individual without adequate compensating controls. |
● | Our internal control structure lacks multiple levels of review and oversight; and |
● | There is an overreliance upon independent financial reporting consultants for review of critical accounting areas and disclosures and material, nonstandard transactions. |
This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to the SEC rules that permit us to provide only management’s report in this Annual Report.
Anticipated Remediation Plans
The company is aware that is principal material weaknesses are related to the limited management team of the company. Our immediate priority is expanding our leadership through recruitment of an independent director to join our Board. With an independent director in place, we believe we will be able to hire capable executive officers that will be responsible for disclosure controls and internal controls over financial reporting.
Changes in Internal Controls over Financial Reporting
There was no change in our internal control over financial reporting during the fiscal quarter ended March 31, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
None.
12 |
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Our directors and executive officers and additional information concerning them are as follows:
Name | Age | Position | ||
Executive Officers | ||||
David Soto | 52 | President | ||
Directors | ||||
Lisa Averbuch | 65 | Director | ||
Significant Employees | ||||
N/A |
David Soto, President
Mr. David Soto is an accomplished start-up leader, hands-on investment-focused C-Suite executive and entrepreneur. He is the President of Celexus, Inc., and CEO of HempWave, ensuring that the company is fully focused on the high-potential in industrial scale hemp farming and processing. Previously, Mr. Soto oversaw organizational growth of the fee-based investment house Benchmark Co. from startup in 1998 to exit in 2006. He then founded Asturia Ventures in 2016, a private equity and venture development company where, as of 2019, he resides as Board Advisor.
Lisa Averbuch, Director
Ms. Lisa Averbuch has been a Director of Celexus, Inc. since October 2018. Up until May 2019, she also served as our President. Prior to and concurrently with Celexus, Ms. Averbuch has provided executive leadership to multiple companies, including Energy Conversion Services, Inc., for which she has served as President and Director beginning in 2017, as well as Triton Acquisitions Company and Gold Standard mining Company, which she joined in 2019. Prior to these roles, Ms. Averbuch founded Loft Liquors in 2006. Loft Liquors was the first organic, fresh fruit Liquor company in the United States, which was sold in 2010. Ms. Averbuch holds a Bachelor’s degree in Hospitality Administration from Boston University in Boston Massachusetts.
During the past ten years, neither Mr. Soto nor Ms. Averbuch has been the subject to any of the following events, except as described above:
1. | Any bankruptcy petition filed by or against any business of which Mr. Soto or Ms. Averbuch was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time. |
2. | Any conviction in a criminal proceeding or being subject to a pending criminal proceeding. |
3. | An order, judgment, or decree, not subsequently reversed, suspended or vacated, or any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting Mr. Soto’s or Ms. Averbuch’s involvement in any type of business, securities or banking activities. |
4. | Found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Future Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated. |
5. | Was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity; |
6. | Was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated; |
7. | Was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: |
i. | Any Federal or State securities or commodities law or regulation; or |
ii. | Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or |
iii. | Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or |
8. | Was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
Code of Ethics
We have not yet adopted a Code of Ethics as our company is still in its early stages of operations after reconstituting as Celexus, Inc.
Audit Committee
We have not yet established an audit committee comprised of independent directors.
Director Independence
We are not currently listed on any national securities exchange that has a requirement that our Board of Directors be independent. At this time, we do not have an “independent director” as that term is defined under the rules of the Nasdaq Capital Market.
13 |
ITEM 11. EXECUTIVE COMPENSATION
For the fiscal year ended March 31, 2019, we compensated our three highest-paid directors and executive officers as follows:
The following table sets forth certain information concerning the annual and long-term compensation of our President and our other executive officers for the last two fiscal years.
(a) | (b) | (c) | ||||||||||
Option | All Other | Total | ||||||||||
Name and Principal Position | Year | Salary* | Bonus | Awards | Compensation | Compensation | ||||||
Lisa Averbuch, President |
2018 2019 |
$ |
0 0 |
$ |
0 0 |
$ |
0 0 |
$ |
0 0 |
$ |
0 0 |
On May 20, 2019, Lisa Averbuch resigned as President of the company. At that time, David Soto was appointed to serve as President of the company. Mr. Soto is not currently receiving compensation from the company for his services.
Compensation Committee Interlocks and Insider Participation
The company does not currently have a compensation committee.
Compensation Committee Report
The company does not currently have a compensation committee.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth, as of June 28, 2019, certain information concerning the beneficial ownership of our Common Stock by: (i) each stockholder known by us to own beneficially 5% or more of our outstanding Common Stock; (ii) each director; (iii) each named executive officer; and (iv) all of our executive officers and directors as a group, and their percentage ownership:
Title of class | Name of beneficial owner | Amount and nature of beneficial ownership | Percentage of class | ||||||||
Common Stock | Global Services Unlimited Group, Inc. | 5,444,445 shares of Common Stock | 32.9 | % | |||||||
Common Stock | David Soto | 100,000 shares of Common Stock | 0.6 | % | |||||||
Common Stock | Lisa Averbuch | 500,000 shares of Common Stock | 3.0 | % | |||||||
Common Stock | Kings Gate Management Inc. | 2,5000,000 shares of Common Stock | 15.1 | % | |||||||
Common Stock | Andre Missell | 2,500,000 shares of Common Stock | 15.1 | % | |||||||
Common Stock | European Trade Partners LLC | 1,000,000 shares of Common Stock | 6.0 | % | |||||||
Common Stock | Wenxin Cou | 1,000,000 shares of Common Stock | 6.0 | % | |||||||
Common Stock | All executive officers, directors, and beneficial ownership thereof as a group * | 8,544,445 | 51.7 | % |
* Lisa Averbuch is the control person of Global Services Unlimited Group, Inc. and Kings Gate Management Inc.
Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, each of the stockholders named in this table has sole or shared voting and investment power with respect to the shares indicated as beneficially owned.
The mailing address for all stockholders referenced in the chart above is 8275 S. Eastern Ave. Suite 200, Las Vegas, NV 89123.
The company has not instituted any equity compensation plans.
14 |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS , and Director Independence
In February 2019, the company and Bio Distribution, Inc., now operating as HempWave, executed the Exchange Agreement included as Exhibit 10.1, which provides for the acquisition of HempWave as a wholly owned subsidiary of the company. In exchange for the currently issued shares of HempWave, the company will issue shares of common stock of the company valued at $13,000,000. This acquisition is a related party transaction as both the company and HempWave have common majority ownership and management. The company intends to complete the acquisition following the completion of a due diligence review of HempWave before July 31, 2019. This Exchange Agreement is included as an exhibit to this Annual Report.
From January 2019 through February 2019, the company has also issued Promissory Notes to Global Services Unlimited Group, Inc., an entity controlled by Lisa Averbuch, in exchange for cash consideration of $58,000. These Promissory Notes are included as exhibits to this Annual Report.
Additionally, in September 2018, the company issued a Promissory Note to Gold Partners, and entity controlled by Lisa Averbuch, in exchange for cash consideration of $500. This Promissory Note is included as an exhibit to this Annual Report.
Director Independence
The company currently has one director, Lisa Averbuch. Ms. Averbuch is the control person of Global Services Unlimited Group, Inc., which owns 32.9% of the company’s Common Stock, and Kings Gate Management Inc., which owns 15.1% of the company’s Common Stock.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table shows the fees that were billed for audit and other services during the fiscal years ended March 31, 2019 and 2018:
For the Fiscal Years ended March 31 | ||||||||
2019 | 2018 | |||||||
Audit Fees (1) | ||||||||
Gillespie | $ | 3,350 | $ | - | ||||
BF Borgers (did not render any audit-related services for fiscal 2019 and 2018, respectively and, accordingly, did not bill for any such services) | 1,500 | - | ||||||
Accounting Fees (2) | ||||||||
Frontline Accounting | 3,800 | |||||||
VIP Accounting Solutions | 1,650 | |||||||
Audit-related Fees (3) | 4,757 | 3,146 | ||||||
Tax Fees (4) | - | - | ||||||
All Other Fees (5) | 3,000 | - | ||||||
Total | $ | 18,057 | $ | 3,146 |
(1) | Audit Fees - This category includes the audit of our annual financial statements, review of financial statements included in our Quarterly Reports on Form 10-Q, and services that are normally provided by independent auditors in connection with the engagement for each fiscal year as indicated. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements. |
(3) | Accounting Fees - This category includes fees paid to accountants engaged by the company for maintenance of books and records of the company on a day to day basis. |
(3) | Audit-Related Fees - This category consists of assurance and related services by our independent auditors that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees.” |
(4) | Tax Fees - This category consists of professional services rendered by our independent auditors for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and technical tax advice. |
(5) | All Other Fees - This category consists of fees for other miscellaneous items. |
Audit Committee Pre-Approval Policies
We have not established an audit committee comprised of independent directors nor has it adopted any pre-approval policies.
15 |
ITEM 15. EXHIBITS, FINANICIAL STATEMENT SCHEDULES
The following exhibits are filed as part of this Annual Report.
Exhibits:
None.
16 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
CELEXUS, INC. FKA TELUPAY INTERNATIONAL, INC. | ||
By | /s/ David Soto | |
David Soto, President | ||
Celexus, Inc. | ||
Date: July 15, 2019
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
/s/ David Soto | |
David Soto, President, Principal Financial Officer, Principal Accounting Officer | |
Date: July 15, 2019 |
/s/ Lisa Averbuch |
Lisa Averbuch, Director |
Date: July 15, 2019 |
17 |
Exhibit 3.3
BYLAWS
Bylaws for the regulation, except as otherwise
provided by statute or its Articles of Incorporation
of
JACKSON VENTURES, INC.
a Nevada corporation
ARTICLE I. OFFICES .
Section 1. PRINCIPAL EXECUTIVE OFFICE. The principal executive office of the corporation shall be fixed and located at 100 W. Liberty Street, 10 th Floor, Reno, Nevada 89501. The Board of Directors (hereinafter the "Board") is granted full power and authority to change said principal executive office from one location to another within or without the State of Nevada. Any such change shall be noted in the Bylaws opposite this Section or this Section may be amended to state the new location.
Section 2. OTHER OFFICES. Branch or subordinate offices may be established at any time by the Board at any place or places.
ARTICLE II. STOCKHOLDERS .
Section 1. PLACE OF MEETINGS. Meetings of stockholders shall be held either at the principal executive office of the corporation or at any other place within or without the State of Nevada which may be designated by the Board.
Section 2. ANNUAL MEETINGS. The annual meetings of stockholders shall be held on such date and at such time as may be fixed by the Board. At such meetings, directors shall be elected and any other proper business may be transacted.
Section 3. SPECIAL MEETINGS. Special meetings of the stockholders may be called at any time by the Board, the Chairman of the Board or the President. Upon request in writing to the Chairman of the Board, the President, any Vice President or the Secretary by any person (other than the Board) entitled to call a special meeting of stockholders, the officer forthwith shall cause notice to be given to the stockholders entitled to vote that a meeting will be held at a time requested by the person or persons calling the meeting, not less than thirty-five (35) nor more than sixty (60) days after the receipt of the request. If the notice is not given within twenty (20) days after receipt of the request, the persons entitled to call the meeting may give the notice.
Section 4. NOTICE OF ANNUAL OR SPECIAL MEETING. Written notice of each annual or special meeting of stockholders shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote thereat. Such notice shall state the place, date and hour of the meeting and in the case of a special meeting, the purpose or purposes for which the meeting is called. Such written notice must be signed by the President, or any Vice-President, Secretary or any Assistant Secretary. Except as otherwise expressly required by law, notice of any adjourned meeting of the stockholders need not be given if the time and place thereof are announced at the meeting at which the adjournment is taken.
1 |
Notice of a stockholders' meeting shall be given either personally or by mail or by other means of written communication, addressed to the stockholder at the address of such stockholder appearing on the books of the corporation or given by the stockholder to the corporation for the purpose of notice. Notice by mail shall be deemed to have been given at the time a written notice is deposited in the United States' mail, postage prepaid. Any other written notice shall be deemed to have been given at the time it is personally delivered to the recipient or is delivered to a common carrier for transmission, or actually transmitted by the person giving the notice by electronic means, to the recipient.
Section 5. NOTICE OF BUSINESS. At any meeting of stockholders, only such business shall be conducted as shall have been brought before the meeting (a) by or at the direction of the Board, or (b) by a stockholder of record entitled to vote at such meeting who complies with the notice procedures set forth in this Section. For business to be properly brought before a meeting by such a stockholder, the stockholder shall have given timely notice thereof in writing to the Secretary of the corporation. To be timely, such notice shall be delivered to or mailed and received at the principal executive office of the corporation not less than thirty days nor more than ninety days prior to the meeting; provided , however , that in the event that less than forty days' notice of the date of the meeting is given by the corporation, notice by the stockholder to be timely must be so received not later than the close of business on the tenth day following the day on which such notice of the date of the meeting was mailed or otherwise given. Such stock-holder's notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the meeting (a) a brief description of the business desired to be brought before the meeting, and in the event that such business includes a proposal to amend either the Articles of Incorporation or the Bylaws of the corporation, the language of the proposed amendment, (b) the name and address of the stockholder proposing such business, (c) the class and number of shares of stock of the corporation which are owned by such stockholder, and (d) any material personal interest of such stockholder in such business. If notice has not been given pursuant to this Section, the Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that the proposed business was not properly brought before the meeting, and such business may not be transacted at the meeting.
Section 6. NOTICE OF BOARD CANDIDATE. At any meeting of stockholders, a person may be a candidate for election to the Board only if such person is nominated (a) by or at the direction of the Board, (b) by any nominating committee or person appointed by the Board, or (c) by a stockholder of record entitled to vote at such meeting who complies with the notice procedures set forth in this Section. To properly nominate a candidate, a stockholder shall give timely notice of such nomination in writing to the Secretary of the corporation. To be timely, such notice shall be delivered to or mailed and received at the principal executive office of the corporation not less than thirty days nor more than ninety days prior to the meeting; provided , however , that in the event that less than forty days' notice of the date of the meeting is given by the corporation, notice of such nomination to be timely must be so received not later than the close of business on the tenth day following the day on which such notice of the date of the meeting was mailed or otherwise given. Such stockholder's notice to the Secretary shall set forth (a) as to each person whom the stockholder proposes to nominate (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class and number of shares of stock of the corporation which are owned by the person, and (iv) any other information relating to the person that would be required to be disclosed in a solicitation of proxies for election of directors pursuant to Regulation 14A under the Securities Exchange Act of 1934; and (b) as to the stockholder giving the notice (i) the name and address of such stockholder and (ii) the class and number of shares of stock of the corporation owned by such stockholder. The corporation may require such other information to be furnished respecting any proposed nominee as may be reasonably necessary to determine the eligibility of such proposed nominee to serve as a director of the corporation. No person shall be eligible for election by the stockholders as a director at any meeting unless nominated in accordance with this Section.
2 |
Section 7. QUORUM AND ADJOURNMENT. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum for holding all meetings of stockholders, except as otherwise provided by applicable law or by the Articles of Incorporation; provided , however , that the stockholders present at a duly called or held meeting at which a quorum is present may continue to transact business until adjournment notwithstanding the withdrawal of enough stockholders to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum. If it shall appear that such quorum is not present or represented at any meeting of stockholders, the Chairman of the meeting shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. 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. The Chairman of the meeting may determine that a quorum is present based upon any reasonable evidence of the presence in person or by proxy of stockholders holding a majority of the outstanding votes, including without limitation, evidence from any record of stockholders who have signed a register indicating their presence at the meeting.
Section 8. VOTING. In all matters except the election of Directors, when a quorum is present at any meeting, the vote of the holders of a ma-jority of the capital stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of applicable law or of the Articles of Incorporation, a different vote is required in which case such express provision shall govern and control the decision of such question. Such vote may be viva voce or by written ballot; provided , however , that the Board may, in its discretion, require a written ballot for any vote, and further provided that all elections for directors must be by written ballot upon demand made by a stockholder at any elec-tion and before the voting begins.
Unless otherwise provided in the Articles of Incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder.
Notwithstanding the foregoing, at all elections of Directors of the corporation, each stockholder shall be entitled to as many votes as shall be equal to the number of such stockholder shares of capital stock entitled to vote multiplied by the number of Directors to be elected, and such stockholder, in his, her, or its sole discretion, may cast all or such votes for a single Director or may cast such votes among several Directors.
Section 9. RECORD DATE. The Board may fix, in advance, a record date for the determination of the stockholders entitled to notice of any meeting or to vote or entitled to receive payment of any dividend or other distribution, or any allotment of rights, or to exercise rights in respect of any other lawful actions. The record date so fixed shall be not more than sixty (60) days nor less than ten (10) days prior to the date of the meeting nor more than sixty (60) days prior to any other action.
3 |
Section 10. CONSENT OF ABSENTEES; WAIVER OF NOTICE. The transactions of any meeting of stockholders, however called and noticed, and wherever held, are as valid as though a meeting had been duly held after regular call and notice, if a quorum is present either in person or by proxy, and if, either before or after the meeting, each of the persons entitled to vote, not present in person or by proxy, signs a written waiver of notice, or a consent to the holding of the meeting or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Neither the business to be transacted at nor the purpose of any regular or special meeting of stockholders need be specified in any written waiver of notice.
Section 11. PROXIES. Every person entitled to vote shares has the right to do so either in person or by one or more persons authorized by a written proxy executed by such stockholder and filed with the Secretary. Any proxy duly executed is not revoked and continues in full force and effect until revoked by the person executing it prior to the vote pursuant thereto by a writing delivered to the corporation stating that the proxy is revoked or by a subsequent proxy executed by, or by attendance at the meeting; provided , however , that no proxy shall be valid after expiration of three (3) years from the date of its execution unless otherwise provided in the proxy.
Section 12. JUDGES OF ELECTION. The Board may appoint a Judge or Judges of Election for any meeting of stock-holders. Such Judges shall decide upon the qualifica-tion of the voters and report the number of shares repre-sented at the meeting and entitled to vote, shall conduct the voting and accept the votes and when the voting is completed shall ascer-tain and report the number of shares voted respec-tively for and against each position upon which a vote is taken by bal-lot. The Judges need not be stockholders, and any officer of the corporation may be a Judge on any position other than a vote for or against a proposal in which such person shall have a material interest.
Section 13. STOCKHOLDER LISTS. The officer who has charge of the stock ledger of the corporation shall pre-pare and make, at least ten days before every meeting of stockhold-ers, a complete list of stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the ad-dress 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 meet-ing, 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 at the place of the meeting, and the list shall also be available at the meeting during the whole time thereof, and may be inspect-ed by any stockholder who is present.
4 |
ARTICLE III. DIRECTORS .
Section 1. POWERS. Subject to the limitations of the Articles of Incorporation or these Bylaws or the Nevada Revised Statutes, Chapter 78, relating to action required to be approved by the stockholders or by the outstanding shares, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board. The Board may delegate the management of the day-to-day operation of the business of the corporation to management or other persons provided that the business and affairs of the corporation shall be managed and all corporate powers shall be exercised under the ultimate direction of the Board. Without prejudice to such general powers, but subject to the same limitations, it is hereby expressly declared that the Board shall have the following powers in addition to the other powers enumerated in these Bylaws:
(a) To select and remove all the other officers, agents and employees of the corporation, prescribe the powers and duties for them as may not be inconsistent with law, with the Articles of Incorporation or these Bylaws and fix their compensation.
(b) To conduct, manage and control the affairs and business of the corporation and to make such rules and regulations therefor not inconsistent with law, or with the Articles of Incorporation or these Bylaws, as they may deem best.
(c) To adopt, make and use a corporate seal, and to prescribe the forms of certificates of stock, and to alter the form of such seal and such certificates from time to time as in their judgment they may deem best.
(d) To authorize the issuance of shares of stock of the corporation from time to time, upon such terms and for such consideration as may be lawful.
(e) To borrow money and incur indebtedness for the purposes of the corporation, and to cause to be executed and delivered therefor, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations or other evidences of debt and securities therefor.
Section 2. NUMBER OF DIRECTORS. The authorized number of directors of the corporation shall be fixed from time to time by resolution adopted by the Board.
Section 3. ELECTION AND TERM OF OFFICE. Directors shall be elected at the annual meeting of stockholders and each director shall hold office until his successor is elected and qualified or until his death, retirement, earlier resignation or removal.
Section 4. VACANCIES. Any director may resign effective upon giving written notice to the Chairman of the Board, the President, Secretary or the Board, unless the notice specifies a later time for the effectiveness of such resignation. Vacancies in the Board may be filled by the remaining directors, though less than a quorum, or by a sole remaining director, and each director so elected shall hold office until his or her successor is elected at an annual or special meeting of the stockholders.
5 |
Section 5. PLACE OF MEETING. Regular or special meetings of the Board shall be held at any place designated from time to time by the Board. In the absence of such designation, regular meetings shall be held at the principal executive office of the corporation.
Section 6. REGULAR MEETINGS. Regular meetings of the Board shall be held without call at such dates, times and places as the Board may establish from time to time. Call and notice of all regular meetings of the Board are hereby dispensed with.
Section 7. SPECIAL MEETINGS. Special meetings of the Board for any purpose or purposes may be called at any time by the Chairman of the Board, the President or the Secretary or by any two (2) directors.
Special meetings of the Board shall be held upon four (4) days' written notice or forty-eight (48) hours' notice given personally or by telephone, telegraph, telex or other similar means of communication. Any such notice shall be addressed or delivered to each director at such director's address as it is shown upon the records of the corporation or as may have been given to the corporation by the director for purposes of notice or, if such address is not shown on such records or is not readily ascertainable, at the place in which the meetings of the directors are regularly held.
Notice by mail shall be deemed to have been given at the time a written notice is deposited in the United States mail, postage prepaid. Any other written notice shall be deemed to have been given at the time it is personally delivered to the recipient or is delivered to a common carrier for transmission or actually transmitted by the person giving the notice by electronic means to the recipient. Oral notice shall be deemed to have been given at the time it is communicated, in person or by telephone or wireless, to the recipient or to a person at the office of the recipient who the person giving the notice has reason to believe will promptly communicate it to the recipient.
Section 8. QUORUM. A majority of the whole Board shall constitute a quorum except when a vacancy or vacancies prevents such majority, whereupon a majority of the directors in office shall constitute a quorum, provided, that such majority shall constitute at least one-third of the whole Board. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board, unless a greater number be required by law or by the Articles of Incorporation. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action is approved by at least a majority of the required quorum for such meeting.
6 |
Section 9. PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE. Members of the Board may participate in a meeting through use of conference telephone or similar communications equipment, so long as all members participating in such meeting can hear one another.
Section 10. WAIVER OF NOTICE. The transactions of any meeting of the Board, however called and noticed, and wherever held, are as valid as though a meeting had been duly held after regular call and notice if a quorum be present and if, either before or after the meeting, each of the directors not present signs a written waiver of notice, a consent to holding such meeting or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting.
Section 11. ADJOURNMENT. A majority of the directors present, whether or not a quorum is present, may adjourn any directors' meeting to another time and place. Notice of the time and place of holding an adjourned meeting need not be given to absent directors if the time and place be fixed at the meeting adjourned. If the meeting is adjourned for more than twenty-four (24) hours, notice of any adjournment to another time or place shall be given prior to the time of the adjourned meeting to the directors who were not present at the time of the adjournment.
Section 12. FEES AND COMPENSATION. Directors and members of committees may receive such compensation, if any, for their services, and such reimbursement for expenses, as may be fixed or determined by the Board.
Section 13. ACTION WITHOUT MEETING. Any action required or permitted to be taken by the Board or committee thereof may be taken without a meeting if all members of the Board or committee shall individually or collectively consent in writing to such action. Such consent or consents shall have the same effect as a unanimous vote of the Board or committee and shall be filed with the minutes of the proceedings of the Board or committee.
7 |
Section 14. COMMITTEES. The Board may appoint one (1) or more committees, each consisting of two (2) or more directors, and delegate to such committees any of the authority of the Board except with respect to:
(i) The approval of any action for which the Nevada Revised Statutes, Chapter 78, also requires stockholders approval or approval of the outstanding shares;
(ii) The filling of vacancies on the Board or in any committee;
(iii) The fixing of compensation of the directors for serving on the Board or on any committee;
(iv) The amendment or repeal of Bylaws or the adoption of new Bylaws;
(v) The amendment or repeal of any resolution of the Board which by its express terms is not so amendable or repealable;
(vi) The appointment of other committees of the Board or the members thereof.
Any such committee must be appointed by resolution adopted by a majority of the whole board of directors and may be designated an Executive Committee or by such other name as the Board shall specify. The Board shall have the power to prescribe the manner in which the proceedings of any such committee shall be conducted. In the absence of any such prescription, such committee shall have the power to prescribe the manner in which its proceedings shall be conducted. Unless the Board or such committee shall otherwise provide, the regular and special meetings and other actions of any such committee shall be governed by the provisions of this Article applicable to meetings and actions of the Board. Minutes shall be kept of each meeting of each committee.
8 |
Section 15. RIGHTS OF INSPECTION. Every director shall have the absolute right at any reasonable time to inspect and copy all the books, records and documents of every kind and to inspect physical properties of the corporation and also of its subsidiary corporations, domestic or foreign. Such inspection by a director may be made in person or by agent or attorney and includes the right to copy and obtain extracts.
Section 16. ADVISORY DIRECTORS. The Board of Directors may appoint such additional advisory directors (by whatever name designated) to advise the Board on such matters and in such fashion as the Board may from time to time request. Such advisory directors shall be entitled to notice of, and to attend, regular and special meetings of the Board, but shall not be entitled to vote at such meetings and may be appointed or removed at the pleasure of the Board. Such advisory directors shall not be deemed to be regular members of the Board of Directors or employees of the corporation for any purpose whatsoever.
ARTICLE IV. OFFICERS .
Section 1. OFFICERS. The officers of the corporation shall be a Chairman of the Board, a Chief Executive Officer, a President, a Secretary, a Chief Financial Officer, a Controller, and a Treasurer. The corporation may also have, at the discretion of the Board, one or more Vice Presidents, one or more Assistant Secretaries, one or more Financial Officers, and such other officers as may be elected or appointed in accordance with the provisions of Section 2 of this Article.
Section 2. APPOINTMENT OF OFFICERS. The officers of the corporation shall be appointed by the Board of Directors. Each of these officers shall hold office for such period and shall have such authority and perform such duties as are prescribed by these Bylaws or determined from time to time by the Board of Directors.
Section 3. REMOVAL AND RESIGNATION. Any officer may be removed, with or without cause, by the Board of Directors at any time or, except in the case of an officer chosen by the Board, by any officer upon whom such power of removal may be conferred by the Board. Any such removal shall be without prejudice to the rights, if any, of the officer under any contract of employment of the officer.
Any officer may resign at any time by giving written notice to the corporation, but without prejudice to the rights, if any, of the corporation under any contract to which the officer is a party. Any such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
Section 4. VACANCIES. A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in these Bylaws for regular election or appointment to such office.
9 |
Section 5. CHAIRMAN OF THE BOARD. The Chairman of the Board shall preside at all meetings of the stockholders and at all meetings of the Board and shall have such other powers and duties as may from time to time be assigned by the Board.
Section 6. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer, subject to the control of the Board, the committees of the Board and the Chairman of the Board, is the general manager of the corporation. The Chief Executive Officer shall have supervising authority over and may exercise general executive power concerning the supervision, direction and control of the business and officers of the corporation, with the authority from time to time to delegate to the President and other officers such executive powers and duties as the Chief Executive Officer may deem advisable. In the absence of the Chairman of the Board, the Chief Executive Officer shall preside at all meetings of the Board and the stockholders.
Section 7. PRESIDENT. The President is the chief operating officer of the corporation and, subject to the control of the Board, the committees of the Board, the Chairman of the Board and the Chief Executive Officer, has supervisory authority over and may exercise general executive powers concerning the operations, business and subordinate officers of the corporation, with the authority from time to time to delegate to other officers such executive powers and duties as the President may deem advisable. In the absence of the Chairman of the Board and the Chief Executive Officer, the President shall preside at all meetings of the stock-holders and at all meetings of the Board. The President has the general powers and duties of management usually vested in the office of President of a corporation and such other powers and duties as may be prescribed by the Board.
Section 8. VICE PRESIDENTS. In the absence or disability of the President, the Vice Presidents in order of their rank as fixed by the Board or, if not ranked, the Vice President designated by the Board, shall perform all duties of the President and, when so acting, shall have all the powers of, and be subject to all the restrictions upon, the President. The Vice Presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the Board.
Section 9. SECRETARY. The Secretary shall keep or cause to be kept, at the principal executive office and such other place as the Board may order, a book of minutes of all meetings of stockholders, the Board and its committees, with the time and place of holding, whether regular or special, and if special, how authorized, the notice thereof given, the names of those present at Board and committee meetings, and the number of shares present or represented at stock-holders' meetings, and the proceedings thereof. The Secretary shall keep, or cause to be kept, a copy of the Bylaws of the corporation at the principal executive office or business office.
10 |
The Secretary shall keep, or cause to be kept, at the principal executive office a share register, or a duplicate share register, showing the name of the stockholders and their addresses, the number and classes of shares held by each, the number and date of certificates issued for the same, and the number and date of cancellation of every certificate surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and of the Board and of any committees thereof required by these Bylaws or by law to be given, shall keep the seal of the corporation in safe custody, and shall have such other powers and perform such other duties as may be prescribed by the Board.
Section 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the corporation. The books of account shall at all times be open to inspection by any director.
The Chief Financial Officer shall deposit all moneys and other valuables in the name and to the credit of the corporation with such depositories as may be designated by the Board. The Chief Financial Officer shall disburse the funds of the corporation as may be ordered by the Board, shall render to the Chief Executive Officer, the President and directors, whenever they request it, an account of all transactions as Chief Financial Officer and of the financial condition of the corporation, and shall have such other powers and perform such other duties as may be prescribed by the Board.
The Financial Officer or Officers, who are subordinate to the Chief Financial Officer, if any, shall, in the absence or disability of the Chief Financial Officer, or at his request, perform his duties and exercise his powers and authority, and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.
Section 11. CONTROLLER. The Controller shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, surplus and surplus shares. The Controller is responsible for the formulation of the corporation's accounting policies, procedures and practices, and the preparation of the corporation's financial reports. The Controller shall establish and administer a plan for the financial control of the corporation and compare performance with that plan. The Controller shall have such other powers and duties as the Board of Directors may from time to time prescribe.
Section 12. TREASURER. The Treasurer shall deposit all moneys and other valuables in the name and to the credit of the corporation with such depositories as may be designated by the Board. The Treasurer shall disburse the funds of the corporation as may be ordered by the Board, shall render to the Chief Executive Officer, the President and directors, whenever they request it, an account of all transaction as Treasurer and of the financial condition of the corporation, and shall have such other powers and perform such other duties as may be prescribed by the Board.
11 |
ARTICLE V. STOCK .
Section 1. FORM OF STOCK CERTIFICATE. Every holder of stock in the corporation shall be entitled to have a certificate signed by, or in the name of, the corporation by the Chairman or Vice-Chairman of the Board of Directors, if any, or by the President or a Vice-President, and by the Chief Financial Officer or a subordinate Financial Officer, or the Secretary or an Assistant Secretary certifying the number of shares owned in the corporation. Any or all of the signa-tures on the certificate may be a facsimile signature. If 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 such person were such officer, transfer agent or registrar at the date of the issu-ance.
If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, partici-pating, optional or other special rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certif-icate that the corporation shall issue to represent such class or series of stock. Except as otherwise provided in Section 78.195 of Nevada Revised Statutes, Chapter 78, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restric-tions of such preferences and/or rights.
Section 2. TRANSFERS OF STOCK. Upon surrender of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person enti-tled thereto, cancel the old certificate and record the trans-action upon its books.
Section 3. LOST, STOLEN OR DESTROYED CERTIFICATES. The Board may direct a new certificate or certifi-cates be issued in place of any certificate theretofore is-sued alleged to have been lost, stolen or destroyed, upon the mak-ing of an affidavit of the fact by the person claiming the certificate to be lost, stolen or destroyed. When authoriz-ing such issue of a new certificate, the Board may, in its discre-tion and as a condition precedent to the issuance, require the owner of such certificate or certificates, or such person's legal representative, to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the lost, stolen or destroyed certificate.
Section 4. REGISTERED STOCKHOLDERS. The corporation shall be entitled to treat the hold-er of record of any share or shares of stock of the- cor-poration as the holder in fact thereof and shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, except as ex-pressly provided by applicable law.
12 |
ARTICLE VI. OTHER PROVISIONS.
Section 1. ENDORSEMENT OF DOCUMENTS; CONTRACTS. Subject to the provisions of applicable law, any note, mortgage, evidence of indebtedness, contract, share certificate, conveyance or other instrument in writing and any assignment or endorsements thereof executed or entered into between the corporation and any other person, when signed by the Chairman of the Board, the President or any Vice President and the Secretary, any Assistant Secretary, the Chief Financial Officer or any Assistant Chief Financial Officer of the corporation shall be valid and binding on the corporation in the absence of actual knowledge on the part of the other person that the signing officers had no authority to execute the same. Any such instruments may be signed by any other person or persons and in such manner as from time to time shall be determined by the Board, and, unless so authorized by the Board, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or amount.
Section 2. REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The Chairman, the Chief Executive Officer, the President, any Vice President, Secretary or any other officer or officers authorized by the Board or the Chairman are each authorized to vote, represent and exercise on behalf of the corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of the corporation. The authority herein granted may be exercised either by any such officer or by any other person authorized so to do by proxy or power of attorney duly executed by said officer.
Section 3. SEAL. It shall not be necessary to the validity of any instrument executed by any authorized officer or officers of the corporation that the execution of such instrument be evidenced by the corporate seal, and all documents, instruments, contracts and writings of all kinds signed on behalf of the corporation by any authorized officer or officers shall be as effectual and binding on the corporation without the corporate seal, as if the execution of the same had been evidenced by affixing the corporate seal thereto. The Board may give general authority to any officer to affix the seal of the corporation and to attest the affixing by signature.
Section 4. FISCAL YEAR. The fiscal year of the corporation shall be fixed by resolution of the Board.
Section 5. DIVIDENDS. Dividends on the capital stock of the corporation, subject to the provisions of the Articles of Incorporation, if any, may be declared by the Board at any regular or special meeting, pursuant to law, and may be paid in cash, in property or in shares of capital stock.
Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall determine to be in the best interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.
13 |
ARTICLE VII. INDEMNIFICATION
Section 1. RIGHT TO INDEMNIFICATION. Each person who was or is a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she, or a person of whom he or she is the legal representative, 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, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the corporation to the fullest extent permitted by the laws of Nevada as the same exist or may hereafter be amended (but in the case of such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than said laws permitted the corporation to provide prior to such amendment) against all costs, charges, expenses, liabilities and losses (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement and amounts expended in seeking indemnification granted to such person under applicable law, this bylaw or any agreement with the corporation) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided , however , that, except as provided in Section 2 of this Article, the corporation shall indemnify any such person seeking indemnifica-tion in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was initiated or authorized by one or more members of the Board of Directors of the corporation. The right to indemnification conferred in this Section 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 final disposition; provided , however , that, if the Nevada Revised Statutes, Chapter 78, so requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) 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 Section or otherwise. In no event shall anything herein contained be so construed as to permit the Board to authorize payment of, or the corporation to pay, any amounts for any purpose where the director or officer was engaged in any action or activity known to him or her while so engaged to be unlawful, nor any action or activity constituting willful misfeasance, bad faith, gross negligence, or reckless disregard of his or her duties and obligations to the corporation and the stockholders. The rights set forth herein shall not be exclusive of other right to which any director or officer may be entitled as a matter of law. The corporation may, by action of its Board of Directors, provide indemnification to employees and agents of the corporation with the same scope and effect as the foregoing indemnification of directors and officers.
14 |
Section 2. RIGHT OF CLAIMANT TO BRING SUIT. If a claim under Section 1 of this Article is not paid in full by the corporation within thirty days after a written claim has been received by the corporation, the claimant may at any time thereafter bring suit against the corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the corporation) that the claimant has failed to meet a standard of conduct which makes it permissible under Nevada law for the corporation to indemnify the claimant for the amount claimed. Neither the failure of the corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is permissible in the circumstances because he or she has met such standard of conduct, nor an actual determination by the corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the claimant has not met such standard of conduct, shall be a defense to the action or create a presumption that the claimant has failed to meet such standard of conduct.
Section 3. NON-EXCLUSIVITY OF RIGHTS. The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Articles of Incorporation, Bylaw, agreement, vote of stockholders or disinterested directors or otherwise.
Section 4. INSURANCE. The corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the corporation or another corporation, partnership, joint venture, trust or other enterprise against any such expense, liability or loss, whether or not the corporation would have the power to indemnify such person against such expense, liability or loss under Nevada law.
Section 5. EXPENSES AS A WITNESS. To the extent that any director, officer, employee or agent of the corporation is by reason of such position, or a position with another entity at the request of the corporation, a witness in any action, suit or proceeding, he or she shall be indemnified against all costs and expenses actually and reasonably incurred by him or her or on his or her behalf in connection therewith.
Section 6. INDEMNITY AGREEMENTS. The corporation may enter into indemnity agreements with the persons who are members of its Board of Directors from time to time, and with such officers, employees and agents as the Board may designate, such indemnity agreements to provide in substance that the corporation will indemnify such persons to the full extent contemplated by this Article.
Section 7. EFFECT OF AMENDMENT. Any amendment, repeal or modification of any provision of this Article VII by the stockholders and the directors of the corporation shall not adversely affect any right or protection of a director or other of the corporation existing at the time of the amendment, repeal or modification.
15 |
ARTICLE VIII. AMENDMENTS .
These Bylaws may be altered, amended, or repealed at any regular meeting of the stockholders (or at any special meeting thereof duly called for the purpose) by a majority vote of the shares represented and entitled to vote at such meeting; provided that in the notice of such special meeting, notice of such purpose shall be given. Subject to the laws of the State of Nevada, the Board of Directors may, by majority vote of those present at any meeting at which a quorum is present, amend these Bylaws, or enact such other Bylaws as in their judgment may be advisable for the regulation of the conduct of the affairs of the Corporation.
END OF DOCUMENT.
16 |
Exhibit 10.1
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (the “ Agreement ”) made this _____ day of February, 2019 by and among, Celexus, Inc., a Nevada corporation, (“CELE”) and Bio Distribution, Inc., a Wyoming corporation, (“BIO ” or “the Company ”) on behalf of its shareholders, both parties hereinafter referred to as the “ Parties .”
BACKGROUND:
A. The Boards of Directors of CELE and BIO have determined that an acquisition of 100% of the outstanding shares of BIO by CELE through an exchange upon the terms and subject to the conditions set forth in this Agreement, would be fair and in the best interests of CELE and BIO’s interest holders, and the Boards of Directors of CELE and BIO have approved such Exchange, pursuant to which all of the right, title and interest in and to 100% of the shares in BIO (the “ Shares ”) will be exchanged for $13,000,000 worth of shares of common stock of CELE (the “ Exchange Shares ”) and $1.
B. CELE and BIO desire to make certain representations, warranties, covenants and agreements in connection with the Exchange and also to prescribe various conditions to the Exchange.
C. For federal income tax purposes, the Parties intend that the Exchange shall qualify as reorganization under the provisions of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the “ Code ”).
NOW, THEREFORE , in consideration of the representations, warranties, covenants and agreements contained in this Agreement, the Parties agree as follows:
ARTICLE I
THE EXCHANGE
I.01 Exchange
Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the Wyoming Revised Statutes (“ Wyoming Statutes ”), at the Closing (as hereinafter defined), the Parties shall do the following:
(a) The interest holders of BIO will sell, convey, assign, and transfer the shares to CELE by delivering to CELE executed and transferable certificates. The shares transferred to CELE at the Closing shall constitute 100% of all issued and outstanding shares in the Company. There shall be a 90 day due diligence period before the closing during which time either party may terminate without further liability.
(b) As consideration for its acquisition of the shares, CELE shall issue the Exchange Shares to BIO by delivering a share certificate to BIO evidencing the Exchange Shares (the “ Exchange Shares Certificate ”).
(c) For federal income tax purposes, the Exchange is intended to constitute a “reorganization” within the meaning of Section 368 of the Code, and the Parties shall report the transactions contemplated by the this Agreement consistent with such intent and shall take no position in any Tax filing or legal proceeding inconsistent therewith. The Parties to this Agreement hereby adopt this Agreement as a “Plan of Reorganization” within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations. None of CELE or BIO has taken or failed to take, and after the Effective Time (as defined below), CELE shall not take or fail to take, any action which reasonably could be expected to cause the Exchange to fail to qualify as a “reorganization” within the meaning of Section 368(a) of the Code.
I.02 Effect of the Exchange
The Exchange shall have the effects set forth in the applicable provisions of the Wyoming Statutes.
1 |
I.03 Closing
Unless this Agreement shall have been terminated and the transactions herein contemplated shall have been abandoned pursuant to Article VI and subject to the satisfaction or waiver of the conditions set forth in Article V, the closing of the Exchange (the “ Closing ”) will take place at 10:00 a.m. U.S. Pacific Standard Time on the business day upon satisfaction of the conditions set forth in Article V (or as soon as practicable thereafter following satisfaction or waiver of the conditions set forth in Article V) (the “ Closing Date ”), at the offices of EAD Law Group, LLC, unless another date, time or place is agreed to in writing by the Parties hereto.
I.04 Effective Time of Exchange
As soon as practicable following the satisfaction or waiver of the conditions set forth in Article V, the Parties shall make all filings or recordings required under Wyoming Statutes. The Exchange shall become effective at such time as is permissible in accordance with Wyoming Statutes (the time the Exchange becomes effective being the “ Effective Time ”). CELE and the Company shall use reasonable efforts to have the Closing Date and the Effective Time to be the same day.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
II.01 Representations and Warranties of the Company
Except as set forth in the disclosure schedule delivered by the BIO to CELE at the time of execution of this Agreement (the “ Company Disclosure Schedule ”), the Company represents and warrants to CELE as follows:
(a) Organization, Standing and Power
The Company is duly organized, validly existing and in good standing under the laws of the State of Wyoming and has the requisite power and authority and all government licenses, authorizations, permits, consents and approvals required to own, lease and operate its properties and carry on its business as now being conducted. The Company is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed (individually or in the aggregate) would not have a material adverse effect (as defined in Section 8.02).
(b) Subsidiaries
The Company does not own directly or indirectly, any equity or other shares in any company, corporation, partnership, joint venture or otherwise.
(c) Shares
The Shares represent 100% of the issued and outstanding shares of the Company. There are no outstanding bonds, debentures, notes or other indebtedness or other securities of the Company. There are no rights, commitments, agreements, arrangements or undertakings of any kind to which the Company is a party or by which it is bound obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of the Company or obligating the Company to issue, grant, extend or enter into any such right, commitment, agreement, arrangement or undertaking. There are no outstanding contractual obligations, commitments, understandings or arrangements of the Company to repurchase, redeem or otherwise acquire or make any payment in respect of the shares of the Company.
(d) Authority; Noncontravention
The Company has all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been (or at Closing will have been) duly authorized by all necessary action on the part of the Company. This Agreement has been duly executed and when delivered by the Company shall constitute a valid and binding obligation of the Company, enforceable against the Company and the selling shareholders, as applicable, in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity. The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated by this Agreement and compliance with the provisions hereof will not, conflict with, or result in any breach or violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of or “put” right with respect to any obligation or to a loss of a material benefit under, or result in the creation of any lien upon any of the properties or assets of the Company under, (i) the Company’s articles of incorporation or bylaws, if any, (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise or license applicable to the Company, its properties or assets, or (iii) subject to the governmental filings and other matters referred to in the following sentence, any judgment, order, decree, statute, law, ordinance, rule, regulation or arbitration award applicable to the Company, its properties or assets, other than, in the case of clauses (ii) and (iii), any such conflicts, breaches, violations, defaults, rights, losses or liens that individually or in the aggregate could not have a material adverse effect with respect to the Company or could not prevent, hinder or materially delay the ability of the Company to consummate the transactions contemplated by this Agreement.
2 |
(e) Governmental Authorization
No consent, approval, order or authorization of, or registration, declaration or filing with, or notice to, any United States court, administrative agency or commission, or other federal, state or local government or other governmental authority, agency, domestic or foreign (a “ Governmental Entity ”), is required by or with respect to the Company in connection with the execution and delivery of this Agreement by the Company or the consummation by the Company of the transactions contemplated hereby, except, with respect to this Agreement, any filings under the Securities Act of 1933, as amended (the “ Securities Act ”) or Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “ Exchange Act ”).
(f) Absence of Certain Changes or Events
Except as set forth on Schedule 2.01(g), since the Company Balance Sheet Date, the Company has conducted its business only in the ordinary course consistent with past practice, and there is not and has not been any:
(i) material adverse change with respect to the Company;
(ii) event which, if it had taken place following the execution of this Agreement, would not have been permitted by Section 3.01 without prior consent of CELE;
(iii) condition, event or occurrence which could reasonably be expected to prevent, hinder or materially delay the ability of the Company to consummate the transactions contemplated by this Agreement;
(iv) incurrence, assumption or guarantee by the Company of any indebtedness for borrowed money other than in the ordinary course and in amounts and on terms consistent with past practices or as disclosed to CELE in writing;
(v) creation or other incurrence by the Company of any lien on any asset other than in the ordinary course consistent with past practices;
(vi) transaction or commitment made, or any contract or agreement entered into, by the Company relating to its assets or business (including the acquisition or disposition of any assets) or any relinquishment by the Company of any contract or other right, in either case, material to the Company, other than transactions and commitments in the ordinary course consistent with past practices and those contemplated by this Agreement;
(vii) labor dispute, other than routine, individual grievances, or, to the knowledge of the Company, any activity or proceeding by a labor union or representative thereof to organize any employees of the Company or any lockouts, strikes, slowdowns, work stoppages or threats by or with respect to such employees;
(viii) payment, prepayment or discharge of liability other than in the ordinary course of business or any failure to pay any liability when due;
(ix) write-offs or write-downs of any assets of the Company;
(x) creation, termination or amendment of, or waiver of any right under, any material contract of the Company;
(xi) damage, destruction or loss having, or reasonably expected to have, a material adverse effect on the Company;
(xii) other condition, event or occurrence which individually or in the aggregate could reasonably be expected to have a material adverse effect or give rise to a material adverse change with respect to the Company; or
(xiii) agreement or commitment to do any of the foregoing.
3 |
(g) Certain Fees
Except as set forth on Schedule 2.01(h), no brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other person with respect to the transactions contemplated by this Agreement.
(h) Litigation; Labor Matters; Compliance with Laws
(i) There is no suit, action or proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company or any basis for any such suit, action, proceeding or investigation that, individually or in the aggregate, could reasonably be expected to have a material adverse effect with respect to the Company or prevent, hinder or materially delay the ability of the Company to consummate the transactions contemplated by this Agreement, nor is there any judgment, decree, injunction, rule or order of any Governmental Entity or arbitrator outstanding against the Company having, or which, insofar as reasonably could be foreseen by the Company, in the future could have, any such effect.
(ii) The Company is not a party to, or bound by, any collective bargaining agreement, contract or other agreement or understanding with a labor union or labor organization, nor is it the subject of any proceeding asserting that it has committed an unfair labor practice or seeking to compel it to bargain with any labor organization as to wages or conditions of employment nor is there any strike, work stoppage or other labor dispute involving it pending or, to its knowledge, threatened, any of which could have a material adverse effect with respect to Company.
(iii) The conduct of the business of the Company complies with all statutes, laws, regulations, ordinances, rules, judgments, orders, decrees or arbitration awards applicable thereto.
(i) Benefit Plans
The Company is not a party to any Benefit Plan under which the Company currently has an obligation to provide benefits to any current or former employee, officer or director of the Company. As used herein, “ Benefit Plan ” shall mean any employee benefit plan, program, or arrangement of any kind, including any defined benefit or defined contribution plan, ownership plan with respect to any membership interest, executive compensation program or arrangement, bonus plan, incentive compensation plan or arrangement, profit sharing plan or arrangement, deferred compensation plan, agreement or arrangement, supplemental retirement plan or arrangement, vacation pay, sickness, disability, or death benefit plan (whether provided through insurance, on a funded or unfunded basis, or otherwise), medical or life insurance plan providing benefits to employees, retirees, or former employees or any of their dependents, survivors, or beneficiaries, severance pay, termination, salary continuation, or employee assistance plan.
(j) Tax Returns and Tax Payments.
(i) The Company has timely filed with the appropriate taxing authorities all Tax Returns required to be filed by it (taking into account all applicable extensions). All such Tax Returns are true, correct and complete in all respects. All Taxes due and owing by the Company has been paid (whether or not shown on any Tax Return and whether or not any Tax Return was required). The Company is not currently the beneficiary of any extension of time within which to file any Tax Return or pay any Tax. No claim has ever been made in writing or otherwise addressed to the Company by a taxing authority in a jurisdiction where the Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. The unpaid Taxes of the Company did not, as of the Company Balance Sheet Date, exceed the reserve for Tax liability (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the financial statements (rather than in any notes thereto). Since the Company Balance Sheet Date, neither the Company nor any of its subsidiaries has incurred any liability for Taxes outside the ordinary course of business consistent with past custom and practice. As of the Closing Date, the unpaid Taxes of the Company and its subsidiaries will not exceed the reserve for Tax liability (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the books and records of the Company.
(ii) No material claim for unpaid Taxes has been made or become a lien against the property of the Company or is being asserted against the Company, no audit of any Tax Return of the Company is being conducted by a tax authority, and no extension of the statute of limitations on the assessment of any Taxes has been granted by the Company and is currently in effect. The Company has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party.
(iii) As used herein, “ Taxes ” shall mean all taxes of any kind, including, without limitation, those on or measured by or referred to as income, gross receipts, sales, use, ad valorem, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium value added, property or windfall profits taxes, customs, duties or similar fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any governmental authority, domestic or foreign. As used herein, “ Tax Return ” shall mean any return, report or statement required to be filed with any governmental authority with respect to Taxes.
(k) Environmental Matters
The Company is in compliance with all Environmental Laws in all material respects. The Company has not received any written notice regarding any violation of any Environmental Laws, including any investigatory, remedial or corrective obligations. The Company holds all permits and authorizations required under applicable Environmental Laws, unless the failure to hold such permits and authorizations would not have a material adverse effect on the Company. The Company is in compliance with all terms, conditions and provisions of all such permits and authorizations in all material respects. No releases of Hazardous Materials have occurred at, from, in, to, on or under any real property currently or formerly owned, operated or leased by the Company or any predecessor thereof and no Hazardous Materials are present in, on, about or migrating to or from any such property which could result in any liability to the Company. The Company has not transported or arranged for the treatment, storage, handling, disposal, or transportation of any Hazardous Material to any off-site location which could result in any liability to the Company. The Company has no liability, absolute or contingent, under any Environmental Law that if enforced or collected would have a material adverse effect on the Company. There are no past, pending or threatened claims under Environmental Laws against the Company and Company is not aware of any facts or circumstances that could reasonably be expected to result in a liability or claim against the Company pursuant to Environmental Laws. “ Environmental Laws ” means all applicable foreign, federal, state and local statutes, rules, regulations, ordinances, orders, decrees and common law relating in any manner to contamination, pollution or protection of human health or the environment, and similar state laws. “ Hazardous Material ” means any toxic, radioactive, corrosive or otherwise hazardous substance, including petroleum, its derivatives, by-products and other hydrocarbons, or any substance having any constituent elements displaying any of the foregoing characteristics, which in any event is regulated under any Environmental Law.
(l) Material Contract Defaults
The Company is not, or has not received any notice or has any knowledge that any other party is, in default in any respect under any Material Contract; and there has not occurred any event that with the lapse of time or the giving of notice or both would constitute such a material default. For purposes of this Agreement, a “ Material Contract ” means any contract, agreement or commitment that is effective as of the Closing Date to which the Company is a party (i) with expected receipts or expenditures in excess of $50,000, (ii) requiring the Company to indemnify any person, (iii) granting exclusive rights to any party, (iv) evidencing indebtedness for borrowed or loaned money in excess of $50,000 or more, including guarantees of such indebtedness, or (v) which, if breached by the Company in such a manner would (A) permit any other party to cancel or terminate the same (with or without notice ofp assage of time) or (B) provide a basis for any other party to claim money damages (either individually or in the aggregate with all other such claims under that contract) from the Company or (C) give rise to a right of acceleration of any material obligation or loss of any material benefit under any such contract, agreement or commitment.
4 |
(m) Accounts Receivable
All of the accounts receivable of the Company that are reflected on the Company Financial Statements or the accounting records of the Company as of the Closing (collectively, the “ Accounts Receivable ”) represent or will represent valid obligations arising from sales actually made or services actually performed in the ordinary course of business and are not subject to any defenses, counterclaims, or rights of set off other than those arising in the ordinary course of business and for which adequate reserves have been established. The Accounts Receivable are fully collectible to the extent not reserved for on the balance sheet on which they are shown.
(n) Properties
The Company has valid land use rights for all real property that is material to its business and good, clear and marketable title to all the tangible properties and tangible assets reflected in the latest balance sheet as being owned by the Company or acquired after the date thereof which are, individually or in the aggregate, material to the Company’s business (except properties sold or otherwise disposed of since the date thereof in the ordinary course of business), free and clear of all material liens, encumbrances, claims, security interest, options and restrictions of any nature whatsoever. Any real property and facilities held under lease by the Company is held by it under valid, subsisting and enforceable leases of which the Company is in compliance, except as could not, individually or in the aggregate, have or reasonably be expected to result in a material adverse effect.
(o) Intellectual Properly
(i) As used in this Agreement, the term “ Trademarks ” means trademarks, service marks, trade names, internet domain names, designs, slogans, and general intangibles of like nature; the term “ Trade Secrets ” means technology; trade secrets and other confidential information, know-how, proprietary processes, formulae, algorithms, models, and methodologies; the term “ Intellectual Property ” means patents, copyrights, Trademarks, applications for any of the foregoing, and Trade Secrets; the term “ Company License Agreements ” means any license agreements granting any right to use or practice any rights under any Intellectual Property (except for such agreements for off-the-shelf products that are generally available for less than $25,000), and any written settlements relating to any Intellectual Property, to which the Company is a party or otherwise bound; and the term “ Software ” means any and all computer programs, including any and all software implementations of algorithms, models and methodologies, whether in source code or object code.
(ii) The Company owns or has valid rights to use the Trademarks, trade names, domain names, copyrights, patents, logos, licenses and computer software programs (including, without limitation, the source codes thereto) that are necessary for the conduct of its respective businesses as now being conducted. To the knowledge of the Company, none of the Company’s Intellectual Property or Company License Agreements infringe upon the rights of any third party that may give rise to a cause of action or claim against the Company or its successors.
(p) Undisclosed Liabilities
The Company has no liabilities or obligations of any nature (whether fixed or unfixed, secured or unsecured, known or unknown and whether absolute, accrued, contingent, or otherwise) except for liabilities or obligations reflected or reserved against in the Company Financial Statements incurred in the ordinary course of business or such liabilities or obligations disclosed in Schedule 2.01(g).
(q) Full Disclosure
All of the representations and warranties made by the Company in this Agreement, and all statements set forth in the certificates delivered by the Company at the Closing pursuant to this Agreement, are true, correct and complete in all material respects and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make such representations, warranties or statements, in light of the circumstances under which they were made, misleading. The copies of all documents furnished by the Company pursuant to the terms of this Agreement are complete and accurate copies of the original documents. The schedules, certificates, and any and all other statements and information, whether furnished in written or electronic form, to CELE or its representatives by or on behalf of any of the Company or its affiliates in connection with the negotiation of this Agreement and the transactions contemplated hereby do not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading.
5 |
II.02 Representations and Warranties of CELE
Except as set forth in the disclosure schedule delivered by CELE to the Company at the time of execution of this Agreement (the “ CELE Disclosure Schedule ”), CELE represents and warrants to the Company as follows:
(a) Organization, Standing and Corporate Power
CELE is duly organized, validly existing and in good standing under the laws of the State of Nevada and has the requisite corporate power and authority and all government licenses, authorizations, permits, consents and approvals required to own, lease and operate its properties and carry on its business as now being conducted. CELE is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed (individually or in the aggregate) would not have a material adverse effect with respect to CELE.
(b) Subsidiaries
CELE does not own directly or indirectly, any equity or other shares in any company, corporation, partnership, joint venture or otherwise.
(c) Capital Structure of CELE
As of the date of this Agreement, the authorized capital stock of CELE consists of 1,500,000,000 shares of CELE Common Stock, $0.001 par value. There are no other shares of CELE stock issuable upon the exercise of outstanding warrants, convertible notes, options and otherwise. Except as set forth above, no shares of capital stock or other equity securities of CELE are issued, reserved for issuance or outstanding. All shares which may be issued pursuant to this Agreement will be, when issued, duly authorized, validly issued, fully paid and nonassessable, not subject to preemptive rights, and issued in compliance with all applicable state and federal laws concerning the issuance of securities. Both parties understand and acknowledge that these shares cannot not be issued until and unless the shareholders of CELE approve increasing the authorized shares of the corporation sufficiently to allow for such issuance.
(d) Corporate Authority; Noncontravention
CELE has all requisite corporate and other power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by CELE and the consummation by CELE of the transactions contemplated hereby have been (or at Closing will have been) duly authorized by all necessary corporate action on the part of CELE. This Agreement has been duly executed and when delivered by CELE shall constitute a valid and binding obligation of CELE, enforceable against CELE in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity. The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated by this Agreement and compliance with the provisions hereof will not, conflict with, or result in any breach or violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of or “put” right with respect to any obligation or to loss of a material benefit under, or result in the creation of any lien upon any of the properties or assets of CELE under, (i) its articles of incorporation, bylaws, or other charter documents of CELE (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise or license applicable to CELE, its properties or assets, or (iii) subject to the governmental filings and other matters referred to in the following sentence, any judgment, order, decree, statute, law, ordinance, rule, regulation or arbitration award applicable to CELE, its properties or assets, other than, in the case of clauses (ii) and (iii), any such conflicts, breaches, violations, defaults, rights, losses or liens that individually or in the aggregate could not have a material adverse effect with respect to CELE or could not prevent, hinder or materially delay the ability of CELE to consummate the transactions contemplated by this Agreement.
6 |
(e) Government Authorization
No consent, approval, order or authorization of, or registration, declaration or filing with, or notice to, any Governmental Entity, is required by or with respect to CELE in connection with the execution and delivery of this Agreement by CELE, or the consummation by CELE of the transactions contemplated hereby, except, with respect to this Agreement, any filings under the Wyoming Statutes, the Securities Act or the Exchange Act.
(f) Certain Fees
Except as set forth on Schedule 2.02(h), no brokerage or finder’s fees or commissions are or will be payable by CELE to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other person with respect to the transactions contemplated by this Agreement.
(g) Litigation; Labor Matters; Compliance with Laws
(i) There is no suit, action or proceeding or investigation pending or, to the knowledge of CELE, threatened against or affecting CELE or any basis for any such suit, action, proceeding or investigation that, individually or in the aggregate, could reasonably be expected to have a material adverse effect with respect to CELE or prevent, hinder or materially delay the ability of CELE to consummate the transactions contemplated by this Agreement, nor is there any judgment, decree, injunction, rule or order of any Governmental Entity or arbitrator outstanding against CELE having, or which, insofar as reasonably could be foreseen by CELE, in the future could have, any such effect.
(ii) CELE is not a party to, or bound by, any collective bargaining agreement, contract or other agreement or understanding with a labor union or labor organization, nor is it the subject of any proceeding asserting that it has committed an unfair labor practice or seeking to compel it to bargain with any labor organization as to wages or conditions of employment nor is there any strike, work stoppage or other labor dispute involving it pending or, to its knowledge, threatened, any of which could have a material adverse effect with respect to CELE.
(iii) The conduct of the business of CELE complies with all statutes, laws, regulations, ordinances, rules, judgments, orders, decrees or arbitration awards applicable thereto.
(h) Benefit Plans
CELE is not a party to any Benefit Plan under which CELE currently has an obligation to provide benefits to any current or former employee, officer or director of CELE.
(i) Certain Employee Payments
CELE is not a party to any employment agreement which could result in the payment to any current, former or future director or employee of CELE of any money or other property or rights or accelerate or provide any other rights or benefits to any such employee or director as a result of the transactions contemplated by this Agreement, whether or not (i) such payment, acceleration or provision would constitute a “parachute payment” (within the meaning of Section 280G of the Code), or (ii) some other subsequent action or event would be required to cause such payment, acceleration or provision to be triggered.
7 |
(j) Tax Returns and Tax Payments
(i) CELE has timely filed with the appropriate taxing authorities all Tax Returns required to be filed by it (taking into account all applicable extensions). All such Tax Returns are true, correct and complete in all respects. All Taxes due and owing by CELE has been paid (whether or not shown on any Tax Return and whether or not any Tax Return was required). CELE is not currently the beneficiary of any extension of time within which to file any Tax Return or pay any Tax. No claim has ever been made in writing or otherwise addressed to CELE by a taxing authority in a jurisdiction where CELE does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. The unpaid Taxes of CELE did not, as of the CELE Balance Sheet Date, exceed the reserve for Tax liability (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the financial statements (rather than in any notes thereto). Since the CELE Balance Sheet Date, neither the Company nor any of its subsidiaries has incurred any liability for Taxes outside the ordinary course of business consistent with past custom and practice. As of the Closing Date, the unpaid Taxes of CELE and its subsidiaries will not exceed the reserve for Tax liability (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the books and records of CELE.
(ii) No material claim for unpaid Taxes has been made or become a lien against the property of CELE or is being asserted against CELE, no audit of any Tax Return of CELE is being conducted by a tax authority, and no extension of the statute of limitations on the assessment of any Taxes has been granted by CELE and is currently in effect. CELE has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party.
(k) Environmental Matters
CELE is in compliance with all Environmental Laws in all material respects. CELE holds all permits and authorizations required under applicable Environmental Laws, unless the failure to hold such permits and authorizations would not have a material adverse effect on CELE. CELE is compliance with all terms, conditions and provisions of all such permits and authorizations in all material respects. No releases of Hazardous Materials have occurred at, from, in, to, on or under any real property currently or formerly owned, operated or leased by CELE or any predecessor thereof and no Hazardous Materials are present in, on, about or migrating to or from any such property which could result in any liability to CELE. CELE has not transported or arranged for the treatment, storage, handling, disposal, or transportation of any Hazardous Material to any off-site location which could result in any liability to CELE. CELE has no liability, absolute or contingent, under any Environmental Law that if enforced or collected would have a material adverse effect on CELE. There are no past, pending or threatened claims under Environmental Laws against CELE and CELE is not aware of any facts or circumstances that could reasonably be expected to result in a liability or claim against CELE pursuant to Environmental Laws.
(l) Material Contract Defaults
CELE is not, or has not, received any notice or has any knowledge that any other party is, in default in any respect under any CELE Material Contract; and there has not occurred any event that with the lapse of time or the giving of notice or both would constitute such a material default. For purposes of this Agreement, a “ CELE Material Contract ” means any contract, agreement or commitment that is effective as of the Closing Date to which CELE is a party (i) with expected receipts or expenditures in excess of $5,000, (ii) requiring CELE to indemnify any person, (iii) granting exclusive rights to any party, (iv) evidencing indebtedness for borrowed or loaned money in excess of $5,000 or more, including guarantees of such indebtedness, or (v) which, if breached by CELE in such a manner would (A) permit any other party to cancel or terminate the same (with or without notice of passage of time) or (B) provide a basis for any other party to claim money damages (either individually or in the aggregate with all other such claims under that contract) from CELE or (C) give rise to a right of acceleration of any material obligation or loss of any material benefit under any such contract, agreement or commitment.
(m) Properties
CELE has valid land use rights for all real property that is material to its business and good, clear and marketable title to all the tangible properties and tangible assets reflected in the latest balance sheet as being owned by CELE or acquired after the date thereof which are, individually or in the aggregate, material to CELE’s business (except properties sold o r otherwise disposed of since the date thereof in the ordinary course of business), free and clear of all material liens, encumbrances, claims, security interest, options and restrictions of any nature whatsoever. Any real property and facilities held under lease by CELE are held by them under valid, subsisting and enforceable leases of which CELE is in compliance, except as could not, individually or in the aggregate, have or reasonably be expected to result in a material adverse effect.
8 |
(n) Intellectual Properly
CELE owns or has valid rights to use the Trademarks, trade names, domain names, copyrights, patents, logos, licenses and computer software programs (including, without limitation, the source codes thereto) that are necessary for the conduct of its business as now being conducted. All of CELE’s licenses to use Software programs are current and have been paid for the appropriate number of users. To the knowledge of CELE, none of CELE’s Intellectual Property or CELE License Agreements infringe upon the rights of any third party that may give rise to a cause of action or claim against CELE or its successors.
(o) Board Determination
The Board of Directors of CELE has unanimously determined that the terms of the Exchange are fair to and in the best interests of CELE and its stockholders.
(p) Required CELE Share Issuance Approval
CELE represents that the issuance of the Exchange Shares to the Selling Member will be in compliance with the Wyoming Statutes and the Bylaws of CELE. Both parties understand and acknowledge that these shares cannot not be issued until and unless the shareholders of CELE approve increasing the authorized shares of the corporation sufficiently to allow for such issuance.
(q) Undisclosed Liabilities
CELE has no liabilities or obligations of any nature (whether fixed or unfixed, secured or unsecured, known or unknown and whether absolute, accrued, contingent, or otherwise) except for liabilities or obligations reflected or reserved against in the CELE SEC Documents incurred in the ordinary course of business.
(r) Full Disclosure
All of the representations and warranties made by CELE in this Agreement, and all statements set forth in the certificates delivered by CELE at the Closing pursuant to this Agreement, are true, correct and complete in all material respects and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make such representations, warranties or statements, in light of the circumstances under which they were made, misleading. The copies of all documents furnished by CELE pursuant to the terms of this Agreement are complete and accurate copies of the original documents. The schedules, certificates, and any and all other statements and information, whether furnished in written or electronic form, to the Company or its representatives by or on behalf of CELE and the CELE Stockholders in connection with the negotiation of this Agreement and the transactions contemplated hereby do not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading.
ARTICLE III
COVENANTS RELATING TO CONDUCT OF BUSINESS PRIOR TO EXCHANGE
III.01 Conduct of the Company and CELE
From the date of this Agreement and until the Effective Time, or until the prior termination of this Agreement, the Company and CELE shall not, unless mutually agreed to in writing:
(a) engage in any transaction, except in the normal and ordinary course of business, or create or suffer to exist any lien or other encumbrance upon any of their respective assets or which will not be discharged in full prior to the Effective Time;
(b) sell, assign or otherwise transfer any of their assets, or cancel or compromise any debts or claims relating to their assets, other than for fair value, in the ordinary course of business, and consistent with past practice;
9 |
(c) fail to use reasonable efforts to preserve intact their present business organizations, keep available the services of their employees and preserve its material relationships with customers, suppliers, licensors, licensees, distributors and others, to the end that its good will and ongoing business not be impaired prior to the Effective Time;
(d) except for matters related to complaints by former employees related to wages, suffer or permit any material adverse change to occur with respect to the Company and CELE or their business or assets; or
(e) make any material change with respect to their business in accounting or bookkeeping methods, principles or practices, except as required by GAAP.
ARTICLE IIII
ADDITIONAL AGREEMENTS
IIII.01 Access to Information; Confidentiality
(a) The Company shall, and shall cause its officers, employees, counsel, financial advisors and other representatives to, afford to CELE and its representatives reasonable access during normal business hours during the period prior to the Effective Time to its and to the Company’s properties, books, contracts, commitments, personnel and records and, during such period, the Company shall, and shall cause its officers, employees and representatives to, furnish promptly to CELE all information concerning its business, properties, financial condition, operations and personnel as such other party may from time to time reasonably request. For the purposes of determining the accuracy of the representations and warranties of CELE set forth herein and compliance by CELE of its obligations hereunder, during the period prior to the Effective Time, CELE shall provide the Company and its representatives with reasonable access during normal business hours to its properties, books, contracts, commitments, personnel and records as may be necessary to enable the Company to confirm the accuracy of the representations and warranties of CELE set forth herein and compliance by CELE of its obligations hereunder, and, during such period, CELE shall, and shall cause its officers, employees and representatives to, furnish promptly to the Company upon its request (i) a copy of each report, schedule, registration statement and other document filed by it during such period pursuant to the requirements of federal or state securities laws and (ii) all other information concerning its business, properties, financial condition, operations and personnel as such other party may from time to time reasonably request. Except as required by law, each of the Company and CELE will hold, and will cause its respective directors, officers, employees, accountants, counsel, financial advisors and other representatives and affiliates to hold, any nonpublic information in confidence.
(b) No investigation pursuant to this Section 4.01 shall affect any representations or warranties of the Parties herein or the conditions to the obligations of the Parties hereto.
IIII.02 Best Efforts
Upon the terms and subject to the conditions set forth in this Agreement, each of the Parties agrees to use its best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other Parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Exchange and the other transactions contemplated by this Agreement. CELE and the Company shall mutually cooperate in order to facilitate the achievement of the benefits reasonably anticipated from the Exchange.
IIII.03 Public Announcements
CELE, on the one hand, and the Company, on the other hand, will consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press release or other public statements with respect to the transactions contemplated by this Agreement and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable law or court process. The Parties agree that the initial press release or releases to be issued with respect to the transactions contemplated by this Agreement shall be mutually agreed upon prior to the issuance thereof.
10 |
IIII.04 Expenses
All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses.
IIII.05 No Solicitation
Except as previously agreed to in writing by the other party, neither the Company nor CELE shall authorize or permit any of its officers, directors, agents, representatives, or advisors to (a) solicit, initiate or encourage or take any action to facilitate the submission of inquiries, proposals or offers from any person relating to any matter concerning any exchange, merger, consolidation, business combination, recapitalization or similar transaction involving the Company or CELE, respectively, other than the transaction contemplated by this Agreement or any other transaction the consummation of which would or could reasonably be expected to impede, interfere with, prevent or delay the Exchange or which would or could be expected to dilute the benefits to either the Company or CELE of the transactions contemplated hereby. The Company or CELE will immediately cease and cause to be terminated any existing activities, discussions and negotiations with any Parties conducted heretofore with respect to any of the foregoing.
ARTICLE V
CONDITIONS PRECEDENT
V.01 Conditions to Each Party’s Obligation to Effect the Exchange
The obligation of each Party to effect the Exchange and otherwise consummate the transactions contemplated by this Agreement is subject to the satisfaction, at or prior to the Closing, of each of the following conditions:
(a) No Restraints
No temporary restraining order, preliminary or permanent injunction or other order preventing the consummation of the Exchange shall have been issued by any court of competent jurisdiction or any other Governmental Entity having jurisdiction and shall remain in effect, and there shall not be any applicable legal requirement enacted, adopted or deemed applicable to the Exchange that makes consummation of the Exchange illegal.
(b) Governmental Approvals
All authorizations, consents, orders, declarations or approvals of, or filings with, or terminations or expirations of waiting periods imposed by, any Governmental Entity having jurisdiction which the failure to obtain, make or occur would have a material adverse effect on CELE or the Company shall have been obtained, made or occurred.
(c) No Litigation
There shall not be pending or threatened any suit, action or proceeding before any court, Governmental Entity or authority (i) pertaining to the transactions contemplated by this Agreement or (ii) seeking to prohibit or limit the ownership or operation by the Company, CELE or any of its subsidiaries, or to dispose of or hold separate any material portion of the business or assets of the Company or CELE.
V.02 Conditions Precedent to Obligations of CELE
The obligation of CELE to effect the Exchange and otherwise consummate the transactions contemplated by this Agreement are subject to the satisfaction, at or prior to the Closing, of each of the following conditions:
(a) Representations, Warranties and Covenants
The representations and warranties of the Company in this Agreement shall be true and correct in all material respects (except for such representations and warranties that are qualified by their terms by a reference to materiality or material adverse effect, which representations and warranties as so qualified shall be true and correct in all respects) both when made and on and as of the Closing Date, and (ii) the Company shall have performed and complied in all material respects with all covenants, obligations and conditions of this Agreement required to be performed and complied with by each of them prior to the Effective Time.
11 |
(b) Consents
CELE shall have received evidence, in form and substance reasonably satisfactory to it, that such licenses, permits, consents, approvals, authorizations, qualifications and orders of governmental authorities and other third Parties as necessary in connection with the transactions contemplated hereby have been obtained.
(c) No Material Adverse Change
There shall not have occurred any change in the business, condition (financial or otherwise), results of operations or assets (including intangible assets) and properties of the Company that, individually or in the aggregate, could reasonably be expected to have a material adverse effect on the Company.
(d) Delivery of the Assignment of Shares
The selling shareholders shall have delivered the share certificates to CELE on the Closing Date.
(e) Due Diligence Investigation
CELE shall be reasonably satisfied with the results of its due diligence investigation of the Company in its sole and absolute discretion.
V.03 Conditions Precedent to Obligation of BIO
The obligation of the Company to effect the Exchange and otherwise consummate the transactions contemplated by this Agreement is subject to the satisfaction, at or prior to the Closing, of each of the following conditions:
(a) Representations, Warranties and Covenants
The representations and warranties of CELE in this Agreement shall be true and correct in all material respects (except for such representations and warranties that are qualified by their terms by a reference to materiality or material adverse effect, which representations and warranties as so qualified shall be true and correct in all respects) both when made and on and as of the Closing Date, and (ii) CELE shall have performed and complied in all material respects with all covenants, obligations and conditions of this Agreement required to be performed and complied with by it prior to the Effective Time.
(b) Consents
The Company shall have received evidence, in form and substance reasonably satisfactory to it, that such licenses, permits, consents, approvals, authorizations, qualifications and orders of governmental authorities and other third Parties as necessary in connection with the transactions contemplated hereby have been obtained.
(c) No Material Adverse Change
There shall not have occurred any change in the business, condition (financial or otherwise), results of operations or assets (including intangible assets) and properties of CELE that, individually or in the aggregate, could reasonably be expected to have a material adverse effect on CELE.
(d) Board Resolutions
The Company shall have received resolutions duly adopted by CELE’s board of directors approving the execution, delivery and performance of the Agreement and the transactions contemplated by the Agreement.
(e) Delivery of the Exchange Shares Certificate
The Company shall have received the Exchange Shares Certificate on the Closing Date. Both parties understand and acknowledge that these shares cannot not be issued until and unless the shareholders of CELE approve increasing the authorized shares of the corporation sufficiently to allow for such issuance.
12 |
(f) Due Diligence Investigation
The Company shall be reasonably satisfied with the results of its due diligence investigation of CELE in its sole and absolute discretion.
ARTICLE VI
TERMINATION, AMENDMENT AND WAIVER
VI.01 Termination
This Agreement may be terminated and abandoned at any time prior to the Effective Time of the Exchange:
(a) by mutual written consent of CELE and the Company;
(b) by either CELE or the Company if any Governmental Entity shall have issued an order, decree or ruling or taken any other action permanently enjoining, restraining or otherwise prohibiting the Exchange and such order, decree, ruling or other action shall have become final and nonappealable;
(c) by either CELE or the Company if the Exchange shall not have been consummated on or before July 31, 2018 (other than as a result of the failure of the party seeking to terminate this Agreement to perform its obligations under this Agreement required to be performed at or prior to the Effective Time.);
(d) by CELE, if a material adverse change shall have occurred relative to the Company (and not curable within thirty (30) days);
(e) by the Company if a material adverse change shall have occurred relative to CELE (and not curable within thirty (30) days);
(f) by CELE, if the Company willfully fails to perform in any material respect any of its material obligations under this Agreement; or
(g) by the Company, if CELE willfully fails to perform in any material respect any of its obligations under this Agreement.
VI.02 Effect of Termination
In the event of termination of this Agreement by either the Company or CELE as provided in Section 6.01, this Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of CELE or the Company, other than the provisions of the last sentence of Section 4.01(a) and this Section 6.02. Nothing contained in this Section shall relieve any party for any breach of the representations, warranties, covenants or agreements set forth in this Agreement.
VI.03 Amendment
This Agreement may not be amended except by an instrument in writing signed on behalf of each of the Parties upon approval by the party, if such party is an individual, and upon approval of the Board of Director of CELE and of the Company.
VI.04 Extension; Waiver
Subject to Section 6.01(c), at any time prior to the Effective Time, the Parties may (a) extend the time for the performance of any of the obligations or other acts of the other Parties, (b) waive any inaccuracies in the representations and warranties contained in this Agreement or in any document delivered pursuant to this Agreement, or (c) waive compliance with any of the agreements or conditions contained in this Agreement. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.
13 |
VI.05 Return of Documents
In the event of termination of this Agreement for any reason, CELE and the Company will return to the other party all of the other party’s documents, work papers, and other materials (including copies) relating to the transactions contemplated in this Agreement, whether obtained before or after execution of this Agreement. CELE and the Company will not use any information so obtained from the other party for any purpose and will take all reasonable steps to have such other party’s information kept confidential.
ARTICLE VII
INDEMNIFICATION AND RELATED MATTERS
VII.01 Survival of Representations and Warranties
The representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement shall survive until twelve (12) months after the Effective Time (except for with respect to Taxes, which shall survive for the applicable statute of limitations plus 90 days, and covenants that by their terms survive for a longer period).
VII.02 Indemnification
(a) CELE shall indemnify and hold the selling interest holders and the Company harmless for, from and against any and all liabilities, obligations, damages, losses, deficiencies, costs, penalties, interest and expenses (including, but not limited to, any and all expenses whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever) (collectively, “ Losses ”) to which CELE may become subject resulting from or arising out of any breach of a representation, warranty or covenant made by CELE as set forth herein.
(b) The Company and selling interest holders shall jointly indemnify and hold CELE and CELE’s officers and directors (“ CELE’s Representatives ”) harmless for, from and against any and all Losses to which CELE or CELE’s Representatives may become subject resulting from or arising out of (1) any breach of a representation, warranty or covenant made by the Company as set forth herein; or (2) any and all liabilities arising out of or in connection with: (A) any of the assets of the Company prior to the Closing; or (B) the operations of the Company prior to the Closing.
VII.03 Notice of Indemnification
Promptly after the receipt by any indemnified party (the “ Indemnitee ”) of notice of the commencement of any action or proceeding against such Indemnitee, such Indemnitee shall, if a claim with respect thereto is or may be made against any indemnifying party (the “ Indemnifying Party ”) pursuant to this Article VII, give such Indemnifying Party written notice of the commencement of such action or proceeding and give such Indemnifying Party a copy of such claim and/or process and all legal pleadings in connection therewith. The failure to give such notice shall not relieve any Indemnifying Party of any of its indemnification obligations contained in this Article VII, except where, and solely to the extent that, such failure actually and materially prejudices the rights of such Indemnifying Party. Such Indemnifying Party shall have, upon request within thirty (30) days after receipt of such notice, but not in any event after the settlement or compromise of such claim, the right to defend, at its own expense and by its own counsel reasonably acceptable to the Indemnitee, any such matter involving the asserted liability of the Indemnitee; provided, however, that if the Indemnitee determines that there is a reasonable probability that a claim may materially and adversely affect it, other than solely as a result of money payments required to be reimbursed in full by such Indemnifying Party under this Article VII or if a conflict of interest exists between Indemnitee and the Indemnifying Party, the Indemnitee shall have the right to defend, compromise or settle such claim or suit; and, provided, further, that such settlement or compromise shall not, unless consented to in writing by such Indemnifying Party, which shall not be unreasonably withheld, be conclusive as to the liability of such Indemnifying Party to the Indemnitee. In any event, the Indemnitee, such Indemnifying Party and its counsel shall cooperate in the defense against, or compromise of, any such asserted liability, and in cases where the Indemnifying Party shall have assumed the defense, the Indemnitee shall have the right to participate in the defense of such asserted liability at the Indemnitee’s own expense. In the event that such Indemnifying Party shall decline to participate in or assume the defense of such action, prior to paying or settling any claim against which such Indemnifying Party is, or may be, obligated under this Article VII to indemnify an Indemnitee, the Indemnitee shall first supply such Indemnifying Party with a copy of a final court judgment or decree holding the Indemnitee liable on such claim or, failing such judgment or decree, the terms and conditions of the settlement or compromise of such claim. An Indemnitee’s failure to supply such final court judgment or decree or the terms and conditions of a settlement or compromise to such Indemnifying Party shall not relieve such Indemnifying Party of any of its indemnification obligations contained in this Article VII, except where, and solely to the extent that, such failure actually and materially prejudices the rights of such Indemnifying Party. If the Indemnifying Party is defending the claim as set forth above, the Indemnifying Party shall have the right to settle the claim only with the consent of the Indemnitee.
14 |
ARTICLE VIII
GENERAL PROVISIONS
VIII.01 Notices
Any and all notices and other communications hereunder shall be in writing and shall be deemed duly given to the party to whom the same is so delivered, sent or mailed at addresses and contact information set forth below (or at such other address for a party as shall be specified by like notice.) Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be deemed given and effective on the earliest of: (a) on the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30 p.m. (Pacific Standard Time) on a business day, (b) on the next business day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a business day or later than 5:30 p.m. (Pacific Standard Time) on any business day, (c) on the second business day following the date of mailing, if sent by a nationally recognized overnight courier service, or (d) if by personal delivery, upon actual receipt by the party to whom such notice is required to be given.
If to CELE: Celexus, Inc.
8275 S. Eastern Ave. Suite 200
Las Vegas, NV 89123
If to the Company:
Bio Distribution, Inc.
8275 S. Eastern Ave. Suite 200
Las Vegas, NV 89123
VIII.02 Definitions
For purposes of this Agreement:
(a) an “affiliate” of any person means another person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first person;
(b) “material adverse change” or “material adverse effect” means, when used in connection with the Company or CELE, any change or effect that either individually or in the aggregate with all other such changes or effects is materially adverse to the business, assets, properties, condition (financial or otherwise) or results of operations of such party and its subsidiaries taken as a whole (after giving effect in the case of CELE to the consummation of the Exchange);
(c) “person” means an individual, corporation, partnership, joint venture, association, trust, unincorporated organization or other entity; and (d) a “subsidiary” of any person means another person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its board of Directors or other governing body (or, if there are no such voting interests, fifty percent (50%) or more of the equity interests of which) is owned directly or indirectly by such first person.
15 |
VIII.03 Interpretation
When a reference is made in this Agreement to a Section, Exhibit or Schedule, such reference shall be to a Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”.
VIII.04 Entire Agreement; No Third-Party Beneficiaries
This Agreement and the other agreements referred to herein constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, among the Parties with respect to the subject matter of this Agreement. This Agreement is not intended to confer upon any person other than the Parties any rights or remedies.
VIII.05 Governing Law
This Agreement shall be governed by, and construed in accordance with, the laws of the State of Wyoming, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.
VIII.06 Assignment
Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the Parties without the prior written consent of the other Parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and assigns.
VIII.07 Enforcement
The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court of the United States located in the State of Wyoming, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the Parties hereto (a) agrees that it will not attempt to deny or defeat such personal jurisdiction or venue by motion or other request for leave from any such court, and (b) agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any state court other than such court.
VIII.08 Severability
Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or portion of any provision in such jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.
VIII.09 Counterparts
This
Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together will constitute one and the same Agreement. This Agreement, to the extent
delivered by means of a facsimile machine or electronic mail (any such delivery, an “
Electronic Delivery
”),
shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding
legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto, each other
party hereto shall re-execute original forms hereof and deliver them in person to all other Parties. No party hereto shall raise
the use of Electronic Delivery to deliver a signature or the fact that any signature or agreement or instrument was transmitted
or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and each such party forever
waives any such defense, except to the extent such defense related to lack of authenticity.
16 |
VIII.10 Attorney’s Fees
In the event any suit or other legal proceeding is brought for the enforcement of any of the provisions of this Agreement, the Parties hereto agree that the prevailing party or Parties shall be entitled to recover from the other party or Parties upon final judgment on the merits reasonable attorneys’ fees, including attorneys’ fees for any appeal, and costs incurred in bringing such suit or proceeding.
VIII.11 Currency
All references to currency in this Agreement shall refer to the lawful currency of the United States of America.
[Signature Page Follows]
IN WITNESS WHEREOF , the undersigned have caused their duly authorized officers to execute this Agreement as of the date first above written.
Bio Distribution,
Inc.
By:
Celexus,
Inc.
By:
17 |
Exhibit 10.2
PROMISSORY NOTE
$500.00 | September 11, 2018 |
This Promissory Note ("Note") is made and delivered by Celexus, Inc., a Nevada corporation ("Borrower") in favor of Gold Partners and/or Assignees ("Lender").
FOR VALUE RECEIVED, Borrower promises to pay to Lender, or order, the principal sum of Five Hundred Dollars ($500.00) (the "Note Amount"), together with interest as provided herein.
a. | Interest Rate . Interest shall be at the rate of 0 percent per month until maturity. |
1. Payments. The Note Amount and all accrued interest shall be due and payable in full on the Maturity Date (“defined below”). All cash payments shall be made in lawful money of the United States of America and in immediately available funds at such place as the Lender hereof may from time to time direct by written notice to Borrower. This Note may be repaid at any time prior to the Maturity Date without any prepayment penalty.
2. Maturity Date . This Note is due one year after the full funding of this Note (the "Maturity Date").
3. Default Acceleration. The occurrence of any Event of Default, as defined below, and in Lender’s sole discretion and interpretation shall be a default hereunder. Upon the occurrence of an Event of Default, Lender may declare the entire principal balance of this Note then outstanding (if not then due and payable) and all other obligations of Borrower hereunder and under the Loan Documents, without notice, to be due and payable immediately, and subject to the applicable provisions of law, upon any such declaration, the principal of this Note and all other amounts to be paid under this Note or any other Loan Document shall become and be immediately due and payable, anything in this Note or in the Loan Documents to the contrary notwithstanding.
The occurrence of any one or more of the following, whatever the reason therefor, shall constitute an "Event of Default" hereunder:
a. Borrower shall fail to pay all outstanding principal, on this Note, or any other payment or amount owing under this Note when due and such failure is not cured within 30 days; or
b. Borrower is dissolved or liquidated, or otherwise ceases to exist, or all or substantially all of the assets of Borrower or any entity comprising Borrower are sold or otherwise transferred without Lender’s written consent; or
1 |
c. Borrower is the subject of an order for relief by the bankruptcy court, or is unable or admits in writing its inability to pay its debts as they mature, or makes an assignment for the benefit of creditors; or Borrower applies for or consents to the appointment of any receiver, trustee custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of Borrower as the case may be, and the appointment continues undischarged or unstayed for thirty (30) calendar days; or any Borrower institutes or consents to any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, dissolution, custodianship, conservatorship, liquidation, rehabilitation or similar proceedings relating to it or to all or any part of its property under the Laws of any jurisdictional or any similar proceeding is instituted without the consent of Lender and continues undismissed or unstayed for thirty(30) calendar days; or any judgment writ, attachment, execution or similar process is issued or levied against Borrower and is not released, vacated or fully bonded within thirty (30) calendar days after its issue or levy; or
d. Default in performance of any obligation contained herein that is not cured within 30 days.
4. Waivers . Borrower waives any right of offset it now has or may hereafter have against the Lender hereof and its successors and assigns. Borrower waives presentment, demand, protest, notice of protest, notice of nonpayment or dishonor and all other notices in connection with the delivery, acceptance, performance, default or enforcement of this Note. Borrower expressly agrees that any extension or delay in the time for payment or enforcement of this Note, any renewal of this Note and any substitution or release of the Property, shall in no way affect the liability of Borrower hereunder. Any delay on Lender’s part in exercising any right hereunder or under any of the Loan Documents shall not operate as a waiver. Lender’s acceptance of partial or delinquent payments or the failure of Lender to exercise any rights shall not waive any obligation of Borrower or any right of Lender, or modify this Note, or waive any other similar default.
5. Costs of Collection . Borrower agrees to pay all costs of collection when incurred and all costs incurred by the Lender hereof in exercising or preserving any rights or remedies in connection with the enforcement and administration of this Note or following a default by Borrower, including but not limited to actual attorneys’ fees. If any suit or action is instituted to enforce this Note, Borrower promises to pay, in addition to the costs and disbursements otherwise allowed by law, such sum as the court may adjudge reasonable attorneys’ fees in such suit or action.
6. Usury . Borrower hereby represents that this loan is for commercial use and not for personal, family or household purposes. It is the specific intent of the Borrower and Lender that this Note bear a lawful rate of interest, and if any court of competent jurisdiction should determine that the rate herein provided for exceeds that which is statutorily permitted for the type of transaction evidenced hereby, the interest rate shall be reduced to the highest rate permitted by applicable law, with any excess interest theretofore collected being applied against principal or, if such principal has been fully repaid, returned to Borrower upon written demand.
2 |
7. Assignment By Lender . Lender may assign its rights hereunder or obtain participants in this Note at any time, and any such assignee, successor or participant shall have all rights of the Lender hereunder.
8. Construction . This Note shall be governed by and constructed in accordance with the laws of the State of Wyoming. This Note has been reviewed and negotiated by Borrower and Lender at arms’ length with the benefit of or opportunity to seek the assistance of legal counsel and shall not be construed against either party. The titles and captions in this Note are inserted for convenience only and in no way define, limit, extend, or modify the scope of intent of this Note.
9. Partial Invalidity . If any section or provision of this Note is declared invalid or unenforceable by any court of competent jurisdiction, said determination shall not affect the validity or enforceability of the remaining terms hereof. No such determination in one jurisdiction shall affect any provision of this Note to the extent it is otherwise enforceable under the laws of any other applicable jurisdiction.
10. Venue and Jurisdiction . The jurisdiction and venue of any action brought in connection with this Note shall be exclusively in Nevada and solely under Nevada law.
11. Waiver of Jury Trial . Borrower and Lender, by its acceptance of this Note, hereby waive their respective rights to a trial by jury in any action or proceeding based upon, or related to, the subject matter of this Note and the business relationship that is being established. This waiver is knowingly, intentionally and voluntarily made by Borrower and Lender, and Borrower acknowledges that neither Lender nor any person acting on behalf of Lender has made any representations of fact to induce this waiver of trial by jury or in any way to modify or nullify its effect. Borrower and Lender acknowledge that this waiver is a material inducement to enter into a business relationship that each of them has already relied on this waiver and that each of them will continue to rely on this waiver in their related future dealings. Borrower further acknowledges that he has been represented (or has had the opportunity to be represented) in the signing of this Note and in the making of this waiver by independent legal counsel.
12. Binding Obligations . This Note and any other Loan Documents, when executed and delivered, will constitute the legal, valid and binding obligations of Borrower enforceable in accordance with their terms.
13. Warranties. Borrower hereby warrants that (i) the Borrower is duly and validly organized in the State of Nevada, (ii) the Borrower has authority under its corporate governance documents to borrow funds; (iii) to the Borrowers knowledge, the Borrower has no material undisclosed liabilities and no actions, suites, proceedings or investigations are pending or threatened against the Borrower which might result in a material adverse change in the financial condition of Borrower as a whole; (iv) the statements, representations, warranties and covenants in the Agreement are accurate.
By:
Celexus, Inc.
3 |
Exhibit 10.3
PROMISSORY NOTE
$5,000.00 | January 17, 2019 |
This Promissory Note ("Note") is made and delivered by Celexus, Inc., a Nevada corporation ("Borrower") in favor of Gold Partners and/or Assignees ("Lender").
FOR VALUE RECEIVED, Borrower promises to pay to Lender, or order, the principal sum of Five Thousand Dollars ($5,000.00) (the "Note Amount"), together with interest as provided herein.
a. | Interest Rate . Interest shall be at the rate of 0 percent per month until maturity. |
1. Payments. The Note Amount and all accrued interest shall be due and payable in full on the Maturity Date (“defined below”). All cash payments shall be made in lawful money of the United States of America and in immediately available funds at such place as the Lender hereof may from time to time direct by written notice to Borrower. This Note may be repaid at any time prior to the Maturity Date without any prepayment penalty.
2. Maturity Date . This Note is due one year after the full funding of this Note (the "Maturity Date").
3. Default Acceleration. The occurrence of any Event of Default, as defined below, and in Lender’s sole discretion and interpretation shall be a default hereunder. Upon the occurrence of an Event of Default, Lender may declare the entire principal balance of this Note then outstanding (if not then due and payable) and all other obligations of Borrower hereunder and under the Loan Documents, without notice, to be due and payable immediately, and subject to the applicable provisions of law, upon any such declaration, the principal of this Note and all other amounts to be paid under this Note or any other Loan Document shall become and be immediately due and payable, anything in this Note or in the Loan Documents to the contrary notwithstanding.
The occurrence of any one or more of the following, whatever the reason therefor, shall constitute an "Event of Default" hereunder:
a. Borrower shall fail to pay all outstanding principal, on this Note, or any other payment or amount owing under this Note when due and such failure is not cured within 30 days; or
b. Borrower is dissolved or liquidated, or otherwise ceases to exist, or all or substantially all of the assets of Borrower or any entity comprising Borrower are sold or otherwise transferred without Lender’s written consent; or
1 |
c. Borrower is the subject of an order for relief by the bankruptcy court, or is unable or admits in writing its inability to pay its debts as they mature, or makes an assignment for the benefit of creditors; or Borrower applies for or consents to the appointment of any receiver, trustee custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of Borrower as the case may be, and the appointment continues undischarged or unstayed for thirty (30) calendar days; or any Borrower institutes or consents to any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, dissolution, custodianship, conservatorship, liquidation, rehabilitation or similar proceedings relating to it or to all or any part of its property under the Laws of any jurisdictional or any similar proceeding is instituted without the consent of Lender and continues undismissed or unstayed for thirty(30) calendar days; or any judgment writ, attachment, execution or similar process is issued or levied against Borrower and is not released, vacated or fully bonded within thirty (30) calendar days after its issue or levy; or
d. Default in performance of any obligation contained herein that is not cured within 30 days.
4. Waivers . Borrower waives any right of offset it now has or may hereafter have against the Lender hereof and its successors and assigns. Borrower waives presentment, demand, protest, notice of protest, notice of nonpayment or dishonor and all other notices in connection with the delivery, acceptance, performance, default or enforcement of this Note. Borrower expressly agrees that any extension or delay in the time for payment or enforcement of this Note, any renewal of this Note and any substitution or release of the Property, shall in no way affect the liability of Borrower hereunder. Any delay on Lender’s part in exercising any right hereunder or under any of the Loan Documents shall not operate as a waiver. Lender’s acceptance of partial or delinquent payments or the failure of Lender to exercise any rights shall not waive any obligation of Borrower or any right of Lender, or modify this Note, or waive any other similar default.
5. Costs of Collection . Borrower agrees to pay all costs of collection when incurred and all costs incurred by the Lender hereof in exercising or preserving any rights or remedies in connection with the enforcement and administration of this Note or following a default by Borrower, including but not limited to actual attorneys’ fees. If any suit or action is instituted to enforce this Note, Borrower promises to pay, in addition to the costs and disbursements otherwise allowed by law, such sum as the court may adjudge reasonable attorneys’ fees in such suit or action.
6. Usury . Borrower hereby represents that this loan is for commercial use and not for personal, family or household purposes. It is the specific intent of the Borrower and Lender that this Note bear a lawful rate of interest, and if any court of competent jurisdiction should determine that the rate herein provided for exceeds that which is statutorily permitted for the type of transaction evidenced hereby, the interest rate shall be reduced to the highest rate permitted by applicable law, with any excess interest theretofore collected being applied against principal or, if such principal has been fully repaid, returned to Borrower upon written demand.
2 |
7. Assignment By Lender . Lender may assign its rights hereunder or obtain participants in this Note at any time, and any such assignee, successor or participant shall have all rights of the Lender hereunder.
8. Construction . This Note shall be governed by and constructed in accordance with the laws of the State of Wyoming. This Note has been reviewed and negotiated by Borrower and Lender at arms’ length with the benefit of or opportunity to seek the assistance of legal counsel and shall not be construed against either party. The titles and captions in this Note are inserted for convenience only and in no way define, limit, extend, or modify the scope of intent of this Note.
9. Partial Invalidity . If any section or provision of this Note is declared invalid or unenforceable by any court of competent jurisdiction, said determination shall not affect the validity or enforceability of the remaining terms hereof. No such determination in one jurisdiction shall affect any provision of this Note to the extent it is otherwise enforceable under the laws of any other applicable jurisdiction.
10. Venue and Jurisdiction . The jurisdiction and venue of any action brought in connection with this Note shall be exclusively in Nevada and solely under Nevada law.
11. Waiver of Jury Trial . Borrower and Lender, by its acceptance of this Note, hereby waive their respective rights to a trial by jury in any action or proceeding based upon, or related to, the subject matter of this Note and the business relationship that is being established. This waiver is knowingly, intentionally and voluntarily made by Borrower and Lender, and Borrower acknowledges that neither Lender nor any person acting on behalf of Lender has made any representations of fact to induce this waiver of trial by jury or in any way to modify or nullify its effect. Borrower and Lender acknowledge that this waiver is a material inducement to enter into a business relationship that each of them has already relied on this waiver and that each of them will continue to rely on this waiver in their related future dealings. Borrower further acknowledges that he has been represented (or has had the opportunity to be represented) in the signing of this Note and in the making of this waiver by independent legal counsel.
12. Binding Obligations . This Note and any other Loan Documents, when executed and delivered, will constitute the legal, valid and binding obligations of Borrower enforceable in accordance with their terms.
13. Warranties. Borrower hereby warrants that (i) the Borrower is duly and validly organized in the State of Nevada, (ii) the Borrower has authority under its corporate governance documents to borrow funds; (iii) to the Borrowers knowledge, the Borrower has no material undisclosed liabilities and no actions, suites, proceedings or investigations are pending or threatened against the Borrower which might result in a material adverse change in the financial condition of Borrower as a whole; (iv) the statements, representations, warranties and covenants in the Agreement are accurate.
By:
Celexus, Inc.
3 |
Exhibit 10.4
PROMISSORY NOTE
$3,000.00 | January 28, 2019 |
This Promissory Note ("Note") is made and delivered by Celexus, Inc., a Nevada corporation ("Borrower") in favor of Global Services Unlimited Group and/or Assignees ("Lender").
FOR VALUE RECEIVED, Borrower promises to pay to Lender, or order, the principal sum of Three Thousand Dollars ($3,000.00) (the "Note Amount"), together with interest as provided herein.
a. | Interest Rate . Interest shall be at the rate of 0 percent per month until maturity. |
1. Payments. The Note Amount and all accrued interest shall be due and payable in full on the Maturity Date (“defined below”). All cash payments shall be made in lawful money of the United States of America and in immediately available funds at such place as the Lender hereof may from time to time direct by written notice to Borrower. This Note may be repaid at any time prior to the Maturity Date without any prepayment penalty.
2. Maturity Date . This Note is due one year after the full funding of this Note (the "Maturity Date").
3. Default Acceleration. The occurrence of any Event of Default, as defined below, and in Lender’s sole discretion and interpretation shall be a default hereunder. Upon the occurrence of an Event of Default, Lender may declare the entire principal balance of this Note then outstanding (if not then due and payable) and all other obligations of Borrower hereunder and under the Loan Documents, without notice, to be due and payable immediately, and subject to the applicable provisions of law, upon any such declaration, the principal of this Note and all other amounts to be paid under this Note or any other Loan Document shall become and be immediately due and payable, anything in this Note or in the Loan Documents to the contrary notwithstanding.
The occurrence of any one or more of the following, whatever the reason therefor, shall constitute an "Event of Default" hereunder:
a. Borrower shall fail to pay all outstanding principal, on this Note, or any other payment or amount owing under this Note when due and such failure is not cured within 30 days; or
b. Borrower is dissolved or liquidated, or otherwise ceases to exist, or all or substantially all of the assets of Borrower or any entity comprising Borrower are sold or otherwise transferred without Lender’s written consent; or
1 |
c. Borrower is the subject of an order for relief by the bankruptcy court, or is unable or admits in writing its inability to pay its debts as they mature, or makes an assignment for the benefit of creditors; or Borrower applies for or consents to the appointment of any receiver, trustee custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of Borrower as the case may be, and the appointment continues undischarged or unstayed for thirty (30) calendar days; or any Borrower institutes or consents to any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, dissolution, custodianship, conservatorship, liquidation, rehabilitation or similar proceedings relating to it or to all or any part of its property under the Laws of any jurisdictional or any similar proceeding is instituted without the consent of Lender and continues undismissed or unstayed for thirty(30) calendar days; or any judgment writ, attachment, execution or similar process is issued or levied against Borrower and is not released, vacated or fully bonded within thirty (30) calendar days after its issue or levy; or
d. Default in performance of any obligation contained herein that is not cured within 30 days.
4. Waivers . Borrower waives any right of offset it now has or may hereafter have against the Lender hereof and its successors and assigns. Borrower waives presentment, demand, protest, notice of protest, notice of nonpayment or dishonor and all other notices in connection with the delivery, acceptance, performance, default or enforcement of this Note. Borrower expressly agrees that any extension or delay in the time for payment or enforcement of this Note, any renewal of this Note and any substitution or release of the Property, shall in no way affect the liability of Borrower hereunder. Any delay on Lender’s part in exercising any right hereunder or under any of the Loan Documents shall not operate as a waiver. Lender’s acceptance of partial or delinquent payments or the failure of Lender to exercise any rights shall not waive any obligation of Borrower or any right of Lender, or modify this Note, or waive any other similar default.
5. Costs of Collection . Borrower agrees to pay all costs of collection when incurred and all costs incurred by the Lender hereof in exercising or preserving any rights or remedies in connection with the enforcement and administration of this Note or following a default by Borrower, including but not limited to actual attorneys’ fees. If any suit or action is instituted to enforce this Note, Borrower promises to pay, in addition to the costs and disbursements otherwise allowed by law, such sum as the court may adjudge reasonable attorneys’ fees in such suit or action.
6. Usury . Borrower hereby represents that this loan is for commercial use and not for personal, family or household purposes. It is the specific intent of the Borrower and Lender that this Note bear a lawful rate of interest, and if any court of competent jurisdiction should determine that the rate herein provided for exceeds that which is statutorily permitted for the type of transaction evidenced hereby, the interest rate shall be reduced to the highest rate permitted by applicable law, with any excess interest theretofore collected being applied against principal or, if such principal has been fully repaid, returned to Borrower upon written demand.
2 |
7. Assignment By Lender . Lender may assign its rights hereunder or obtain participants in this Note at any time, and any such assignee, successor or participant shall have all rights of the Lender hereunder.
8. Construction . This Note shall be governed by and constructed in accordance with the laws of the State of Wyoming. This Note has been reviewed and negotiated by Borrower and Lender at arms’ length with the benefit of or opportunity to seek the assistance of legal counsel and shall not be construed against either party. The titles and captions in this Note are inserted for convenience only and in no way define, limit, extend, or modify the scope of intent of this Note.
9. Partial Invalidity . If any section or provision of this Note is declared invalid or unenforceable by any court of competent jurisdiction, said determination shall not affect the validity or enforceability of the remaining terms hereof. No such determination in one jurisdiction shall affect any provision of this Note to the extent it is otherwise enforceable under the laws of any other applicable jurisdiction.
10. Venue and Jurisdiction . The jurisdiction and venue of any action brought in connection with this Note shall be exclusively in Nevada and solely under Nevada law.
11. Waiver of Jury Trial . Borrower and Lender, by its acceptance of this Note, hereby waive their respective rights to a trial by jury in any action or proceeding based upon, or related to, the subject matter of this Note and the business relationship that is being established. This waiver is knowingly, intentionally and voluntarily made by Borrower and Lender, and Borrower acknowledges that neither Lender nor any person acting on behalf of Lender has made any representations of fact to induce this waiver of trial by jury or in any way to modify or nullify its effect. Borrower and Lender acknowledge that this waiver is a material inducement to enter into a business relationship that each of them has already relied on this waiver and that each of them will continue to rely on this waiver in their related future dealings. Borrower further acknowledges that he has been represented (or has had the opportunity to be represented) in the signing of this Note and in the making of this waiver by independent legal counsel.
12. Binding Obligations . This Note and any other Loan Documents, when executed and delivered, will constitute the legal, valid and binding obligations of Borrower enforceable in accordance with their terms.
13. Warranties. Borrower hereby warrants that (i) the Borrower is duly and validly organized in the State of Nevada, (ii) the Borrower has authority under its corporate governance documents to borrow funds; (iii) to the Borrowers knowledge, the Borrower has no material undisclosed liabilities and no actions, suites, proceedings or investigations are pending or threatened against the Borrower which might result in a material adverse change in the financial condition of Borrower as a whole; (iv) the statements, representations, warranties and covenants in the Agreement are accurate.
By:
Celexus, Inc.
3 |
Exhibit 10.5
PROMISSORY NOTE
$50,000.00 | February 27, 2019 |
This Promissory Note ("Note") is made and delivered by Celexus, Inc., a Nevada corporation ("Borrower") in favor of Global Services Unlimited Group and/or Assignees ("Lender").
FOR VALUE RECEIVED, Borrower promises to pay to Lender, or order, the principal sum of Fifty Thousand Dollars ($50,000.00) (the "Note Amount"), together with interest as provided herein.
a. | Interest Rate . Interest shall be at the rate of 0 percent per month until maturity. |
1. Payments. The Note Amount and all accrued interest shall be due and payable in full on the Maturity Date (“defined below”). All cash payments shall be made in lawful money of the United States of America and in immediately available funds at such place as the Lender hereof may from time to time direct by written notice to Borrower. This Note may be repaid at any time prior to the Maturity Date without any prepayment penalty.
2. Maturity Date . This Note is due one year after the full funding of this Note (the "Maturity Date").
3. Default Acceleration. The occurrence of any Event of Default, as defined below, and in Lender’s sole discretion and interpretation shall be a default hereunder. Upon the occurrence of an Event of Default, Lender may declare the entire principal balance of this Note then outstanding (if not then due and payable) and all other obligations of Borrower hereunder and under the Loan Documents, without notice, to be due and payable immediately, and subject to the applicable provisions of law, upon any such declaration, the principal of this Note and all other amounts to be paid under this Note or any other Loan Document shall become and be immediately due and payable, anything in this Note or in the Loan Documents to the contrary notwithstanding.
The occurrence of any one or more of the following, whatever the reason therefor, shall constitute an "Event of Default" hereunder:
a. Borrower shall fail to pay all outstanding principal, on this Note, or any other payment or amount owing under this Note when due and such failure is not cured within 30 days; or
b. Borrower is dissolved or liquidated, or otherwise ceases to exist, or all or substantially all of the assets of Borrower or any entity comprising Borrower are sold or otherwise transferred without Lender’s written consent; or
1 |
c. Borrower is the subject of an order for relief by the bankruptcy court, or is unable or admits in writing its inability to pay its debts as they mature, or makes an assignment for the benefit of creditors; or Borrower applies for or consents to the appointment of any receiver, trustee custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of Borrower as the case may be, and the appointment continues undischarged or unstayed for thirty (30) calendar days; or any Borrower institutes or consents to any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, dissolution, custodianship, conservatorship, liquidation, rehabilitation or similar proceedings relating to it or to all or any part of its property under the Laws of any jurisdictional or any similar proceeding is instituted without the consent of Lender and continues undismissed or unstayed for thirty(30) calendar days; or any judgment writ, attachment, execution or similar process is issued or levied against Borrower and is not released, vacated or fully bonded within thirty (30) calendar days after its issue or levy; or
d. Default in performance of any obligation contained herein that is not cured within 30 days.
4. Waivers . Borrower waives any right of offset it now has or may hereafter have against the Lender hereof and its successors and assigns. Borrower waives presentment, demand, protest, notice of protest, notice of nonpayment or dishonor and all other notices in connection with the delivery, acceptance, performance, default or enforcement of this Note. Borrower expressly agrees that any extension or delay in the time for payment or enforcement of this Note, any renewal of this Note and any substitution or release of the Property, shall in no way affect the liability of Borrower hereunder. Any delay on Lender’s part in exercising any right hereunder or under any of the Loan Documents shall not operate as a waiver. Lender’s acceptance of partial or delinquent payments or the failure of Lender to exercise any rights shall not waive any obligation of Borrower or any right of Lender, or modify this Note, or waive any other similar default.
5. Costs of Collection . Borrower agrees to pay all costs of collection when incurred and all costs incurred by the Lender hereof in exercising or preserving any rights or remedies in connection with the enforcement and administration of this Note or following a default by Borrower, including but not limited to actual attorneys’ fees. If any suit or action is instituted to enforce this Note, Borrower promises to pay, in addition to the costs and disbursements otherwise allowed by law, such sum as the court may adjudge reasonable attorneys’ fees in such suit or action.
6. Usury . Borrower hereby represents that this loan is for commercial use and not for personal, family or household purposes. It is the specific intent of the Borrower and Lender that this Note bear a lawful rate of interest, and if any court of competent jurisdiction should determine that the rate herein provided for exceeds that which is statutorily permitted for the type of transaction evidenced hereby, the interest rate shall be reduced to the highest rate permitted by applicable law, with any excess interest theretofore collected being applied against principal or, if such principal has been fully repaid, returned to Borrower upon written demand.
2 |
7. Assignment By Lender . Lender may assign its rights hereunder or obtain participants in this Note at any time, and any such assignee, successor or participant shall have all rights of the Lender hereunder.
8. Construction . This Note shall be governed by and constructed in accordance with the laws of the State of Wyoming. This Note has been reviewed and negotiated by Borrower and Lender at arms’ length with the benefit of or opportunity to seek the assistance of legal counsel and shall not be construed against either party. The titles and captions in this Note are inserted for convenience only and in no way define, limit, extend, or modify the scope of intent of this Note.
9. Partial Invalidity . If any section or provision of this Note is declared invalid or unenforceable by any court of competent jurisdiction, said determination shall not affect the validity or enforceability of the remaining terms hereof. No such determination in one jurisdiction shall affect any provision of this Note to the extent it is otherwise enforceable under the laws of any other applicable jurisdiction.
10. Venue and Jurisdiction . The jurisdiction and venue of any action brought in connection with this Note shall be exclusively in Nevada and solely under Nevada law.
11. Waiver of Jury Trial . Borrower and Lender, by its acceptance of this Note, hereby waive their respective rights to a trial by jury in any action or proceeding based upon, or related to, the subject matter of this Note and the business relationship that is being established. This waiver is knowingly, intentionally and voluntarily made by Borrower and Lender, and Borrower acknowledges that neither Lender nor any person acting on behalf of Lender has made any representations of fact to induce this waiver of trial by jury or in any way to modify or nullify its effect. Borrower and Lender acknowledge that this waiver is a material inducement to enter into a business relationship that each of them has already relied on this waiver and that each of them will continue to rely on this waiver in their related future dealings. Borrower further acknowledges that he has been represented (or has had the opportunity to be represented) in the signing of this Note and in the making of this waiver by independent legal counsel.
12. Binding Obligations . This Note and any other Loan Documents, when executed and delivered, will constitute the legal, valid and binding obligations of Borrower enforceable in accordance with their terms.
13. Warranties. Borrower hereby warrants that (i) the Borrower is duly and validly organized in the State of Nevada, (ii) the Borrower has authority under its corporate governance documents to borrow funds; (iii) to the Borrowers knowledge, the Borrower has no material undisclosed liabilities and no actions, suites, proceedings or investigations are pending or threatened against the Borrower which might result in a material adverse change in the financial condition of Borrower as a whole; (iv) the statements, representations, warranties and covenants in the Agreement are accurate.
By:
Celexus, Inc.
3 |
Exhibit 31.1
Certification of Principal Executive Officer Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, David Soto, certify that:
1. I have reviewed this Annual Report on Form 10-K of Celexus, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s [most recent fiscal quarter/fourth fiscal quarter] that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: July 15, 2019
|
_ /s/David Soto ___________________ Name: David Soto Title: President and Chief Executive Officer
|
Exhibit 32.1
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, David Soto, the President and Chief Executive Officer of Celexus, Inc. (the “ Company ”), hereby certify, that, to my knowledge:
1. The Annual Report on Form 10-K for the year ended March 31, 2019 (the “ Report ”) of the Company fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: July 15, 2019
|
_ /s/David Soto ____________________ Name: David Soto Title: President and Chief Executive Officer
|