8-K
Bimergen Energy Corp (BESS)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
___________
FORM
8-K
___________
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 30, 2022
SPINE
INJURY SOLUTIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
| Delaware | 000-27407 | 98-0187705 |
|---|---|---|
| (State<br> or other jurisdiction of<br><br> <br>incorporation<br> or organization) | (Commission<br><br> <br>File<br> No.) | (IRS<br> Employee<br><br> <br>Identification<br> No.) |
600Anton Boulevard, Suite 1100
CostaMesa, CA 92626
(Address of principal executive offices)
(Registrant’s telephone number, including area code: (855) 777-0888
5151
Mitchelldale, Suite A2
Houston,
Texas 77092
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written<br> communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting<br> material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement<br> communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act: None.
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
TABLE
OF CONTENTS
| Item No. | Description of Item | Page No. |
|---|---|---|
| Item<br> 1.01 | Entry Into a Material Definitive Agreement | 3 |
| Item<br> 2.01 | Completion of Acquisition or Disposition of Assets | 3 |
| Item<br> 3.02 | Unregistered Sales of Equity Securities | 20 |
| Item<br> 5.01 | Changes in Control of Registrant | 20 |
| Item<br> 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. | 21 |
| Item<br> 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. | 21 |
| Item<br> 7.01 | Regulation<br>FD Disclosure. | 21 |
| Item<br> 9.01 | Financial Statements and Exhibits | 22 |
| 2 |
| --- |
Useof Names
In this registration statement, unless the context otherwise requires, the terms “we,” “us,” “our,” “Company” or “SPIN” refer to Spine Injury Solutions, Inc. together with its wholly owned subsidiaries.
DisclosureRegarding Forward-Looking Statements
This Current Report on Form 8-K (“Form 8-K”) contains statements that we believe are, or may be considered to be, “forward-looking statements.” All statements other than statements of historical fact included in this Form 8-K regarding the prospects of our industry or our prospects, plans, financial position or business strategy may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking words such as “may,” “will,” “expect,” “intend,” “estimate,” “foresee,” “project,” “anticipate,” “believe,” “plan,” “forecast,” “continue” or “could” or the negative of these terms or variations of them or similar terms. Furthermore, forward-looking statements may be included in various filings that we make with the SEC or press releases or oral statements made by or with the approval of one of our authorized executive officers. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct. These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. Readers are cautioned not to place undue reliance on any forward-looking statements contained in this Form 8-K, which reflect management’s opinions only as of the date hereof. Except as required by law, we undertake no obligation to revise or publicly release the results of any revision to any forward-looking statements. You are advised, however, to consult any additional disclosures we make in our reports to the SEC. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this Form 8-K.
ExplanatoryNote
This Form 8-K is being filed by Spine Injury Solutions, Inc. (the “Company”) in connection with a transaction in which the Company has acquired all of the issued and outstanding capital stock (the “Bitech Shares”) of Bitech Mining Corporation, a Wyoming corporation (“Bitech”).
Item1.01. Entry into a Material Definitive Agreement.
Item2.01. Completion of Acquisition or Disposition of Assets.
The Company acquired Bitech on March 31, 2022 (the “Closing Date”) through a share exchange pursuant to a Share Exchange Agreement (the “Share Exchange Agreement”) by and among the Company, Bitech, each of Bitech’s shareholders (each, a “Seller” and collectively, the “Sellers”), and Benjamin Tran, solely in his capacity as Sellers’ Representative (“Sellers’ Representative”). The transaction contemplated by the Share Exchange Agreement is hereinafter referred to as the “Share Exchange”). The Share Exchange Agreement provides that the Company will acquire from the Sellers, an aggregate of 94,312,250 shares of Bitech’s Common Stock, par value $0.001 per share, representing 100% of the issued and outstanding shares of Bitech (collectively, the “Bitech Shares”). In consideration of the Bitech Shares, the Company issued to the Sellers an aggregate of 9,000,000 shares of the Company’s newly authorized Series A Convertible Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”). Each Bitech Share shall be entitled to receive 0.09543 shares of Series A Preferred Stock. Each share of Series A Preferred Stock shall automatically convert into 53.975685 shares (an aggregate of approximately 485,781,300) of the Company’s Common Stock (the “Company Common Stock”) upon filing of an amendment to its Certificate of Incorporation increasing the number of the Company’s authorized common stock so that there are a sufficient number of shares of Company Common Stock authorized but unissued to permit a full conversion of all the Series A Preferred Stock. Upon conversion of the Series A Preferred Stock, the Sellers will hold, in the aggregate, approximately 96% of the issued and outstanding shares of Company capital stock on a fully diluted basis.
| 3 |
| --- |
The following agreements were entered into in connection with the acquisition of Bitech:
ManagementServices Agreement
On the Closing Date, the Company, its wholly owned subsidiary Quad Video Halo, Inc. (“Quad”) and Peter L. Dalrymple (“Dalrymple”), a director of the Company, entered into a Management Services Agreement (the “MSA”) whereby Dalrymple agreed to act as the general manager of the video recording operations of Quad and collect certain accounts receivable of the Company (the “Services”). In exchange for providing the Services, the Company agreed to pay Dalrymple a fee equal to the net revenues derived from these operations after payment of all operating expenses related to such operations. The term of the MSA commences on the Closing Date and continues until the earlier to occur of the following: (i) 90 days after the Closing Date; (ii) the Company and Dalrymple’s mutual written consent; or (iii) any material breach of the MSA by either party, provided that the breaching party has been provided written notice of such breach and has failed to cure such breach within ten (10) days of receipt of such written notice.
Amendmentto the Note
On the Closing Date, the Company, Quad and Dalrymple, entered into an Amendment to the Secured Promissory Note (the “Note Amendment”) whereby Dalrymple agreed that (i) the principal and accrued interest outstanding under the Secured Promissory Note dated August 31, 2020 as amended on October 29, 2021 issued by the Company in favor of Dalrymple (collectively, the “Note”) is $95,000 as of the Closing Date, (ii) the date on which the outstanding principal and accrued interest is due is 90 days after the Closing Date, (iii) any obligations of (x) the Company that become due and owing to Bitech or the Sellers under Section 4.07(c) of the Share Exchange Agreement or (y) that become due and owing under Section 6.12 of the MSA may be offset against any amounts owed by the Company or Quad under the Note and (iv) all claims or causes of action (whether in contract or in tort, in law or in equity) that may be based upon, arise out of or relate to the Note, or the negotiation, execution or performance of the Note (including any representation or warranty made in or in connection with the Note or as an inducement to enter into the Note or this Amendment), may be made only against Quad, and SPIN who is not a party to the Note as of the Closing Date, including without limitation any past, present or future director, officer, employee, incorporator, member, manager, partner, equityholder, affiliate, agent, attorney or representative of SPIN (“SPIN Parties”), shall have no liability (whether in contract or in tort, in law or in equity, or based upon any theory that seeks to impose liability of the SPIN Parties) for any obligations or liabilities arising under, in connection with or related to the Note or for any claim based on, in respect of, or by reason of the Note or its negotiation or execution, and Dalrymple waives and releases all such liabilities, claims and obligations against any such SPIN Parties.
Amendmentto the Security Agreement
On the Closing Date, the Company, Quad and Dalrymple, entered into an Amendment to Security Agreement (the “Security Agreement Amendment”) whereby the parties to that agreement agreed that (i) Quad shall be included with the Company as an additional debtor for all purposes in the Security Agreement entered into between the Company and Dalrymple dated August 31, 2020 (the “Security Agreement”), (ii) Quad’s collateral obligations under the Security Agreement shall only relate to its accounts receivable, and the collateral described relating to “Pledged Securities” as defined in the Security Agreement shall not apply to Quad’s obligations under the Security Agreement, (iii) the Company’s pledge of its accounts receivables as provided for in the Security Agreement will be limited solely to the Company’s accounts receivables in existence as of March 27, 2022 at 11:59 P.M. ET, and shall not apply to any after acquired accounts receivables and (iv) the Company is authorized to file an amended financing statement to reflect the terms of Security Agreement Amendment and Quad shall promptly file a financing statement reflecting the terms set for in such amendment.
| 4 |
| --- |
BUSINESS
BitechMining Corporation History
Bitech Mining Corporation (“Bitech”) was founded on January 8, 2021 in the state of Wyoming by Benjamin Tran and Michael Cao. Mr. Tran has been serving as Bitech’s Chairman and Chief Executive Officer since its inception, devoting his full business time to the operation of the Company which is focused on developing green technology solutions initially focused on the cryptocurrency mining industry and in the future to applications outside of the cryptocurrency mining business. Mr. Cao has been serving as its Board Member, devoting a majority of his time to build the Company based on its core business strategy in the crypto mining community and collaborations with worldwide strategic partners in supporting the commercializing our core technology we call Tesdison, aiming to reduce significant electricity consumption from crypto mining operations.
On January 15, 2021, the Company acquired the global exclusive license of Tesdison technology (U.S. patent No. 10,547,179 B2 - High electric Power Generation and Charging System) for the crypto mining vertical market worldwide from licensor Supergreen Energy Corp.
On May 3, 2021, the Company started its initial launch of Evirontek, an integrated technology platform of Bitech to provide integrated solutions to the crypto mining industry to include (1) U.S. patented Tesdisontechnology, and (2) Bitech Intellisys-8, an in-house proprietary system architectural design for crypto miners.
On October 25, 2021, the Company executed the amendment from its licensor to upgrade from 4-year exclusivity license to the perpetual exclusive license for the crypto mining vertical market worldwide.
In 2021, the Company started the architecture design of Bitech Intellysis-8 and engaged with its Chief Scientific Advisor Calvin Cao who is the inventor of Tesdison technology to lead the technical implementation and commercialization of the Tesdison technology, and hired Robert Brilon to serve Bitech in the capacity of its Chief Financial Officer.
On March 31, 2022, the shareholders of Bitech acquired the control of Spine Injury Solutions, Inc., as discussed in Item 1.01 of this Current Report.
| 5 |
| --- |
LegacyBusiness
The Company continues to actively pursue the collection of previously provided spine injury diagnostic services and Quad continues to operate its business of owning, developing and leasing the Quad Video Halo video recording system (“QVH”) used to record medical procedures. Following completion of the Share Exchange, we plan to evaluate potential strategic alternatives for non-core assets and operations in our legacy business including but not limited to a possible sale of those operations.
BitechMining Corporation
BitechMining Corporation (“Bitech”) is a development-stage technology company dedicated to providing a suite of revolutionary electrical power generation technologies we call the “Evirontek Integrated Platform” as discussed below.
Overviewof Bitech’s Business
There is an urgency in the global needs of today’s ever-changing energy landscape in the world of cryptocurrency mining where power saving is the most challenging issue for this business. Bitech’s goal is to change the future of the cryptocurrency mining businesses by providing its patented revolutionary green technology power-saving solution that has been designed to be safe, reliable, cost effective, and easily scalable.
We plan to initially market the Evirontek Integrated Platform to the cryptocurrency mining industry to reduce the exorbitant high cost of electricity. The Evirontek Integrated Platform, once fully developed, will be comprised of (1) a patented high efficiency electric power generation and charging system which we license and call the “Tesdison Technology” and (2) a chipset and related software component we plan to develop which we call the “Bitech Intellisys-8 Chipset Solution” or “Intellisys-8”. Combined, we refer to these technologies as the Evirontek Dual Platform.
TheTesdison System
The Tesdison System is a virtually renewable electric power-generating system configured to provide an efficient means for generating electricity for charging an electrical energy storage source such as batteries as well as provide energy for other uses. Bitech intends to develop a large scale Tesdison System based on the current prototype. The prototype Tesdison System utilizes patented technology that:
| ● | Enables<br> the generation of electricity of up to twice the original output, |
|---|---|
| ● | Is<br> a modular and scalable electrical storage and power generation device, |
| ● | Is<br> capable of distributing a steady stream of 120/220/480 volts of electricity, and |
| ● | Can<br> be run in concert with other units to generate a constant, uninterrupted supply of electricity 24 hours per day at any desired voltage. |
The Tesdison System technology was validated by National Technical Systems, Inc. (“NTS”) on September 17, 2019. Established in 1961, NTS is a global provider of testing, inspection and certification services.
| 6 |
| --- |
TheBitech Intellisys-8 Chipset Solution (“Intellisys-8”)
The planned Intellisys-8 Chipset Solution is a combination of computer chips and other hardware components that will be driven by software that is intended to reduce power consumption and heat in computer systems and accelerate their computational speed. The solution will include a central intelligent controller that controls a power management controller, a climate controller, distributing processing controller and internet interface.
Below is a diagram of the Evirontek Dual Platform:
RevenueModel
Bitech’s planned revenue model is a 5-pronged revenue ecosystem including (1) initial set up fees, (2) system building services, (3) cryptocurrency production revenue sharing, (4) mass production sales of smaller scale systems using the Tesdison Technology, and (5) royalty fee from non-cryptocurrency businesses that use the Tesdison Technology.
The recurring revenue nature of our planned crypto-production sharing is intended to be our main revenue source, enhanced with other potential revenue streams to strengthen our business longevity. At times, we plan to offer customized power-saving system buildings for data centers and power plants using our licensed Tesdison Technology while providing working capital to support the continued expansion of all five prongs of our planned revenue model. Bitech, while introducing the Tesdison Technology to business partners throughout the world, also expects to benefit from collecting a portion of any revenue derived from various large-scale commercialization projects with partners, using this technology to replace other outdated, ineffective power solutions in data centers.
| 7 |
| --- |
The following diagram illustrates our planned revenue model:
MarketingPlans
Bitech plans to*,* in conjunction with international business developers, seek cryptocurrency mining partners with large-scale productions to facilitate and initially market the Tesdison Technology solution and implement its planned revenue share business model with cryptocurrency miners of the most popular cryptocurrencies such as Bitcoin and Ethereum. Once development of the Intellisys-8 has been completed, we intend to integrate this solution with the Tesdison Technology and market this solution as the Evirontek Integrated Platform. Bitech has an exclusive license to use the Tesdison Technology in the cryptocurrency industry. We can also offer the Tesdison Technology pursuant to our license agreement on a non-exclusive basis to any other industry application outside of the cryptocurrency industry to include data centers, solar power plants, natural resource mining, data centers, and many other renewable initiatives.
Bitech plans to capture market share in three tiers as depicted in the diagram below. Bitech plans to take a strategic approach by partnering with major players of in the cryptocurrency mining industry to accelerate revenue generation in order to quickly obtain sizable market share executing its revenue sharing model via technology licensing and solution-driven implementations. Bitech has created a market penetration model that accommodates its “green tech” brand recognition with plans for global expansion and balanced revenue lines between three major customer tiers, primarily including (1) cryptocurrency mining market leaders, (2) upcoming cryptocurrency miners, and (3) data centers and power plants.
| 8 |
| --- |
CoreTechnology
The Evirontek technology integrated platform includes both a renewable energy system solution using Tesdison Technology for power saving and a chipset solution using the Bitech Intellisys-8 architecture we are developing based on its design to reduce power consumption and heat in computer systems and accelerate their computational speed.
Bitech will offer the patented Tesdison Technology with its expected cost savings, reliability and scalability solution to clients and client partners via a licensing model with revenue-sharing partnerships. The proprietary Tesdison Technology has been shown to generate up to twice the original energy output and is a modular, scalable storage and power generation solution. Tesdison Technology distributes a steady stream of 120/220/480 VAC output and multiple Tesdison units can be run in concert to generate a constant, uninterrupted supply of electricity 24 hours a day at any desired voltage.
Our core technology Tesdison system is a virtually renewable electric power-generating system configured to provide an efficient means for generating electricity for charging an electrical energy storage source such as batteries using the same energy storage source to power an electro-mechanical system for generating electricity. Part of the output of the electro-mechanical system for generating electricity is fed back to the energy storage source to recharge the storage source, as well as provide energy to charge a second energy storage system.
Cryptocurrency Mining Industry
The global cryptocurrency market is expected to grow at a compound annual growth rate (CAGR) of 30% from 2019 to 2026^3^.
The global cryptocurrency mining market size is projected to reach US$ 2,584.6 million by 2026, from US$ 1,015.9 million in 2020, at a CAGR of 16.8% during 2021-2026^4^.
According to The Block Research, bitcoin miners made more than $15 billion in revenue over the course of 2021. The estimate represents a year-over-year increase of 206%. The bitcoin mining revenue peaked in March last year, when miners brought in some $1.75 billion, including $167 million in transaction fees. Throughout the year, bitcoin mining revenue was buoyed by soaring prices for the digital asset, which hit an all-time high in early November 2021. The scenario was no different for Ethereum miners. “Ethereum miners have generated a total of $16.5 billion in revenue, representing a year-on-year increase of 678%, a record revenue year,” says the report^5^.
The United States is now the bitcoin mining capital of the world. It is because China has recently banned all domestic cryptocurrency mining in June 2021 and then outlawed cryptocurrencies completely in September 2021^6^.
The green new era has begun entering the cryptocurrency mining world with a technological shift toward green energy solutions. Organizations such as the Bitcoin Mining Council are working to increase transparency in the industry through higher reporting standards. Many crypto-native organizations are also joining the Crypto Climate Accord, committing to achieve net-zero emissions from electricity consumption associated with crypto-related operations by 2030^7^.
^3^See Current and Upcoming Trends in CryptoCurrency Market - https://www.globenewswire.com/news-release/2021/02/23/2180372/0/en/Current-and-Upcoming-Trends-in-CryptoCurrency-Market-Cap-to-Hit-5-190-62-Million-by-2026-Soars-at-30-CAGR-Facts-Factors.html
^4^See InvestorPlace – Stock Market News –
https://www.yahoo.com/video/4-crypto-mining-stocks-worth-165938416.html.
^5^See Bitcoin Miners' Revenue Rose 206% In 2021 –
https://www.prnewswire.com/news-releases/bitcoin-miners-revenue-rose-206-in-2021-301482452.html
^6^See U.S. is now the ‘Bitcoin mining capital of the world’ –
https://news.yahoo.com/us-is-now-the-bitcoin-mining-capital-of-the-world-gem-mining-ceo-155729770.html
^^
^7^See Green New Era Dawn For Crypto with Global Mining Shift – https://techcrunch.com/2021/12/13/green-new-era-dawns-for-crypto-with-global-mining-shift/
^^
| 9 |
| --- |
The rising tide of bitcoin prices has lifted stock prices for Bitcoin mining company. Although Bitcoin proponents claim that anyone can mine it, the cryptocurrency’s mining ecosystem is dominated by industrial outfits. This is primarily due to the considerable equipment and electric cost associated with the activity^8^.
Renewable/ElectricityIndustry
In its Annual Energy Outlook 2021 (AEO2021), the U.S. Energy Information Administration (EIA) projects that the share of renewables in the United States electricity generation mix will increase from 21% in 2020 to 42% in 2050^9^.
According to International Energy Agency Report in October 2020, electricity production is witnessing a profound transformation, with a greater role for smarter grids going hand in hand with increased solar and wind deployment. Electricity grids – transmission and distribution - provide the bedrock of today’s and tomorrow’s power systems, enabling electricity to flow and all sources of flexibility to contribute to electricity security. Grid expansion must accelerate over the next decade to connect all new sources of electricity, including renewables, extending grids by 16 million kilometers, 80% more than over the past decade^10^.
Ernst & Young in its 2021 report stated that a reinvigorated focus on talent and skills is necessary to fully realize the value of technology and propel transformation across the utility value chain^11^. Electricity demand and emissions are now 5% higher than where they were before the Covid-19 outbreak in 2020, which prompted worldwide lockdowns that led to a temporary drop in global greenhouse gas emissions. Electricity demand also surpassed the growth of renewable energy, the analysis found^12^.
PatentLicense Agreement
On January 15, 2021, Bitech entered into a Patent & Technology Exclusive and Non-Exclusive License Agreement with Supergreen Energy Corp. (“SGE”) which was amended on January 15, 2021 and on March 26, 2022 (collectively, the “License Agreement” or “License”). Pursuant to the terms of the License Agreement, Bitech has a perpetual and globally exclusive license to United States patent no. 10,547,179 B2 granted by the U.S. Patent and Trademark Office on January 28, 2020 for a high efficiency electric power generation and charging system (the “Power Generation Patent”) within the cryptocurrency mining industry and a non-exclusive license for all other industries.
Bitech issued to SGE 10,000,000 shares of Bitech’s Common Stock and paid it $25,000 in cash as a license fee under the License Agreement. In addition, Bitech agreed to pay SGE the following milestone fees pursuant to the terms of the License Agreement: (1) 10% of the total cash received from Bitech’s clients, (2) 30% of the total equity received from Bitech’s clients, (3) 30% of the total value of any coin, token or cryptocurrency received from Bitech’s clients and (4) 10% of the total gross sales revenue or 15% of net profit from its sales revenue. In addition, Bitech agreed to pay SGE the following sublicense fees pursuant to the terms of the License Agreement: (1) 10% of cash, non-royalty sublicensing consideration, (2) 30% of royalty sublicensing consideration and (3) 30% of royalty sublicensing consideration paid in equity, tokens or bitcoins. Further, Bitech is obligated to pay SGE an assignment fee of 15% of the consideration received by the shareholders of Bitech in the event of a transaction involving a change of control of Bitech or sale of all or substantially all of its assets but excluding issuance of equity in financing transactions or acquisitions of synergistic businesses and the Share Exchange.
The term of the license continues for the term of the Power Generation Patent. Bitech may terminate the License Agreement at any time upon 90 days prior notice to SGE. SGE may terminate the License Agreement if (a) Bitech fails to make any payments due under the License Agreement within 30 days after written notice from SGE, (b) Bitech breaches any non-payment provision of the License Agreement and does not cure such breach within 60 days after written notice from SGE, (c) SGE delivers notice to Bitech of three or more actual breaches of the License Agreement in any 12-month period even in the event Bitech cures such breaches in the allowed period, or (d) Bitech or any sublicensee of Bitech initiates any proceeding or action to challenge the validity, enforceability or scope of the Power Generation Patent or assists a third party in pursuing such a proceeding.
Calvin Cuong Cao who is the principal owner of SGE is the brother of Michael Cao, a director and substantial shareholder of the Company.
^8^See Bitcoin Mining Firms Benefit From Soaring Bitcoin Price – https://www.investopedia.com/bitcoin-mining-firms-benefit-from-soaring-bitcoin-price-5094729
^9^See EIA projects renewables share of U.S. electricity generation mix will double by 2050 –https://www.eia.gov/todayinenergy/detail.php?id=46676
^10^See Electricity Security in Tomorrow’s Power Systems – https://www.iea.org/articles/electricity-security-in-tomorrow-s-power-systems
^^
^11^See If Tech Powers the Future, Who Power the Tech? – https://www.ey.com/en_us/power-utilities/if-tech-powers-the-future-who-powers-the-tech
^12^See Global electric power demand surges above pre-pandemic level –
https://www.cnbc.com/2021/08/25/global-electric-power-demand-surges-above-pre-pandemic-levels-.html
| 10 |
| --- |
Intellectual Property—Patents,Trademarks
We regularly seek to protect our intellectual property rights in connection with our Tesdison Technology platform. We rely on non-disclosure/confidentiality agreements to protect our intellectual property rights. To the extent we describe or disclose our proprietary technology, we redact or request redaction of such information prior to public disclosure. Despite these measures, we may be unable to detect the unauthorized use of, or take appropriate steps to enforce our intellectual property rights. Effective trade secret protection may not be available in every country in which we plan to license our technology to the same extent as in the United States. Failure to adequately protect our intellectual property could impair our ability to compete effectively. Further, enforcing our intellectual property rights could result in the expenditure of significant financial and managerial resources and may not prove successful. Although we intend to protect our rights vigorously, there can be no assurance that these measures will be successful.
We own the website www.bitech.tech.
We license from SGE United States patent no. 10,547,179 B2 granted by the U.S. Patent and Trademark Office on January 28, 2020 for a high efficiency electric power generation and charging system (the “Power Generation Patent”) pursuant to the License Agreement. The Power Generation Patent and the License Agreement expires on April 4, 2038 so long as all required filing fees are paid with respect to such patent.
Competition
The renewable energy market is evolving and highly competitive. With the introduction of new technologies and the potential entry of new competitors into the market, we expect competition to increase in the future, which could harm our business, results of operations, or financial condition once we complete development and commence marketing the Tesdison Technology and the Intellisys-8 Chipset Solution. Electrical power consumption associated with cryptocurrency mining is a significant challenge facing all cryptocurrency miners. We believe that the more energy efficient proprietary Tesdison Technology will enable us to be competitive with other renewable energy providers by achieving a reduction in electrical power consumption that results in costs savings greater than the costs to implement either the Tesdison Technology or the Intellisys-8 Chipset Solution. We expect to face significant competition, which may have an adverse effect on expected revenues.
We believe our ability to compete successfully with other renewable energy providers will also depend on a number of factors including implementation costs, safety and cycle life, and on non-technical factors such as brand, established customer relationships and financial and manufacturing resources. Many of the incumbents have, and future entrants may have, greater resources than we have and may also be able to devote greater resources to the development of their current and future technologies. They may also have greater access to larger potential customer bases and have and may continue to establish cooperative or strategic relationships amongst themselves or with third parties (including OEMs) that may further enhance their resources and offerings.
Sourcesand Availability of Materials
As discussed above, we plan to develop a full scale Tesdison Technology based system and since we are not currently producing these systems, we have no current need to obtain the input materials needed to produce them. Once we commence production, we plan to source our input materials from industry leading suppliers of the needed components.
Once we commence commercial production of the Evirontek Integrated Platform or any of its component systems, any significant interruption or negative change in the availability or economics of the supply chain for key inputs, such as the raw material cost of batteries or computer chips, could, however, materially impact our business, financial condition, results of operations or prospects. We intend to purchase input materials on a purchase order basis from worldwide suppliers at market prices based on our production requirements. Consequently, our management believes that we will have access to a sufficient supply of the key inputs for the foreseeable future. Furthermore, we do not anticipate any unique supply constraints that would impede the commercialization of our planned products or systems for the foreseeable future.
| 11 |
| --- |
Employees
As of March 31, 2022, Bitech has two full-time employees and Quad employs one collection consultant and one QVH consultant. To date, we have not experienced any work stoppages and we consider our relationship with our employees to be good. None of our employees are either represented by a labor union or are subject to a collective bargaining agreement.
GovernmentRegulation and Compliance with Respect to Bitech’s Business
There are government regulations pertaining to battery safety, transportation of batteries, use of batteries in industry, factory safety, and disposal of hazardous materials. We will ultimately have to comply with these regulations to license or sell our Tesdison Technology based systems into the market. The license and sale of these systems abroad is likely to be subject to export controls in the future.
Properties
Our principal executive offices are located at 600 Anton Boulevard, Suite 1100, Costa Mesa, CA 92626. We occupy this location pursuant to a lease that may be terminated by us on 90 days prior notice.
Quad, our wholly owned subsidiary, operates its business at 5151 Mitchelldale, Suite A2, Houston, Texas 77092. This office space encompasses approximately 200 square feet and its use is provided to us free of charge by a company owned by William Donovan, M.D., our director and former Chief Executive Officer.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Thefollowing discussion and analysis of the consolidated financial condition and results of operations should be read with our consolidatedfinancial statements and related notes appearing elsewhere in this Current Report.
Overview
Bitech Mining Corporation (“Bitech” or the “Company”) is a development-stage technology company dedicated to providing a suite of revolutionary electrical power generation technologies we call the “Evirontek Integrated Platform” as discussed below. Bitech was founded on January 8, 2021 in the state of Wyoming by Benjamin Tran and Michael Cao. Bitech plans to initially market the Evirontek Integrated Platform to the cryptocurrency mining industry to reduce the exorbitant high cost of electricity. The Evirontek Integrated Platform, once fully developed, will be comprised of (1) a patented high efficiency electric power generation and charging system which we license and call the “Tesdison Technology” and (2) a chipset and related software component we plan to develop which we call the “Bitech Intellisys-8 Chipset Solution” or “Intellisys-8”. Combined, we refer to these technologies as the “Evirontek Dual Platform”.
| 12 |
| --- |
On January 15, 2021, the Company acquired the global exclusive license of Tesdison technology (U.S. patent No. 10,547,179 B2 - High electric Power Generation and Charging System) for the crypto mining vertical market worldwide from licensor Supergreen Energy Corp.
On May 3, 2021, the Company started its initial launch of Evirontek, an integrated technology platform of Bitech to provide integrated solutions to the crypto mining industry to include (1) U.S. patented Tesdison technology, and (2) Bitech Intellisys-8, an in-house proprietary system architectural design for crypto miners.
On October 25, 2021, the Company executed the amendment from its licensor to upgrade from 4-year exclusivity license to the perpetual exclusive license for the crypto mining vertical market worldwide.
In 2021, the Company started the architecture design of Bitech Intellysis-8 and engaged with its Chief Scientific Advisor Calvin Cao who is the inventor of Tesdison technology to lead the technical implementation and commercialization of the Tesdison technology, and hired Robert Brilon to serve Bitech in the capacity of its Chief Financial Officer.
On March 31, 2022, the shareholders of Bitech acquired the control of Spine Injury Solutions, Inc., as discussed in Item 1.01 of this Current Report.
RESULTS
OF OPERATIONS OF BITECH
The following discussion and analysis relates to Bitech’s operations from January 8, 2021 (inception) to December 31, 2021.
Revenue
Bitech did not have any revenues during the period from January 8, 2021 (inception) to December 31, 2021 as the company was engaged in organizational activities and the early stages of development of its “Evirontek Integrated Platform”. While Bitech plans to initially market the Evirontek Integrated Platform to the cryptocurrency mining industry, it cannot predict when it expects to receive revenues from this line of its business. Bitech plans to start the commercialization of the exclusively licensed Tesdison Technology in the cryptocurrency mining sector during fiscal year 2022.
TotalOperating Expenses
Total operating expenses during the period from January 8, 2021 (inception) to December 31, 2021 was $284,959 that was comprised of general and administrative expenses incurred in connection with its organizational activities. Bitech expects to incur increased costs in the current fiscal year for legal, accounting and other expenses related to its regulatory compliance obligations associated with being a public company in the United States and increased costs in connection with its plans to develop and commercially exploit the Evirontek Integrated Platform.
WorkingCapital
The calculation of Working Capital provides additional information and is not defined under GAAP. We define Working Capital as current assets less current liabilities. This measure should not be considered in isolation or as a substitute for any standardized measure under GAAP. This information is intended to provide investors with information about Bitech’s liquidity.
Other companies in our industry may calculate this measure differently than we do, limiting its usefulness as a comparative measure.
| 13 |
| --- |
LIQUIDITY
AND CAPITAL RESOURCES OF BITECH
As of December 31, 2021, Bitech had total current liabilities of $11,106 and current assets of $976,947 comprised of cash and cash equivalents to meet its current obligations. As of December 31, 2021, Bitech had working capital of $965,841.
Bitech has a history of operating losses since its inception on January 8, 2021. Bitech has not yet achieved profitable operations and expect to incur further losses. Bitech has funded its operations from equity financing. As of December 31, 2021, cash generated from financing activities was not sufficient to fund operations and, in particular, to fund our growth strategy in the short-term or long-term. As a result, we expect to raise additional funds from equity and debt financing transactions in 2021 as discussed below under “Recent Financing Transactions.” The primary need for liquidity is to fund working capital requirements of the business, including operational expenses, develop the Bitech Intellisys-8 Chipset Solution, commence marketing and commercializing the Tesdison Technology and the capital expenditures associated with these initiatives. The sole source of liquidity has been private financing transactions. The ability to fund operations, to make planned capital expenditures, and to execute on the development and marketing of our planned Evirontek Integrated Platform depends on our ability to raise funds from debt and/or equity financing which is subject to prevailing economic conditions and financial, business and other factors, some of which are beyond our control. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms.
As of December 31, 2021, there have not had any meaningful impact or disruptions to our operations as a result of the COVID-19 pandemic. We continue to assess the impact of COVID-19 on an ongoing basis.
RecentFinancing Transactions
During the year ended December 31, 2021, Bitech issued the following shares of its common stock: 3,301,250 shares for an aggregate of $1,164,500 in cash, 10,106,000 shares in exchange for services and 10,000,000 shares for the License Agreement and 70,000,000 shares to its founders upon formation of the company.
CashFlows
CashUsed in Operating Activities
For the period ended December 31, 2021, cash used in operating activities was $162,653 comprised of a net loss of $284,959 partially offset by the expense related to common stock issued for consulting services of $111,200 and an increase in accounts payable of $11,106.
CashUsed in Investing Activities
For the period ended December 31, 2021, Bitech paid $25,000 as the cash consideration for the License Agreement.
CashUsed in Financing Activities
For the period ended December 31, 2021, Bitech received cash proceeds of $1,164,500 from the sale of 3,301,250 shares its common stock.
OffBalance Sheet Arrangements
As of the date of this Form 8-K, Bitech does not have any off-balance-sheet arrangements that have, or are reasonably likely to have, a current or future effect on its results of operations or financial condition, including, and without limitation, such considerations as liquidity and capital resources.
| 14 |
| --- |
Critical
Accounting Policies
See Note 1 to Bitech’s financial statements for the period ended December 31, 2021 included elsewhere in this Form 8-K.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS
AND MANAGEMENT
The following table sets forth the beneficial ownership of our securities as of March 31, 2022 after giving effect to the Share Exchange for (i) each member of our board of directors, (ii) each named executive officer (as defined below), (iii) each person known to us to be the beneficial owner of more than 5% of our securities and (iv) the members of our board of directors and our executive officers as a group. Beneficial ownership is determined according to the rules of the SEC. Generally, a person has beneficial ownership of a security if the person possesses sole or shared voting or investment power of that security, including any securities that a person has the right to acquire beneficial ownership within 60 days. Information with respect to beneficial owners of more than 5% of our securities is based on completed questionnaires and related information provided by such beneficial owners as of March 31, 2022. Except as indicated, all shares of our securities will be owned directly, and the person or entity listed as the beneficial owner has sole voting and investment power. Except as noted in the footnotes below, the address for each director and executive officer is c/o Spine Injury Solutions, Inc., 600 Anton Boulevard, Suite 1100, Costa Mesa, CA 92626.
| Common Stock | Series A <br><br>Preferred Stock | Total^(1)^ | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Name, Position and Address of<br> Beneficial Owner | Number<br> Beneficially<br> Owned | % of<br> Total<br> Common Stock | Number<br> Beneficially<br> Owned | % of<br> Total<br> Series A Preferred <br> Shares | Total<br> Number of<br> Capital<br> Stock<br> Beneficially<br> Owned | % of<br> Total<br> Capital<br> Stock | |||||||||
| Benjamin Tran^(2)^<br> Director, Chief Executive Officer | 0 | 0 | % | 2,750,035 | 30.56 | % | 148,435,030 | 29.33 | % | ||||||
| Robert J. Brilon <br> Chief Financial Officer | 0 | 0 | % | 23,857 | 0.27 | % | 1,287,694 | 0.25 | % | ||||||
| William F. Donovan, M.D.<br> Former Chief Executive Officer, Director | 3,872,427 | 19.13 | % | 0 | 0 | % | 3,872,427 | 0.77 | % | ||||||
| John Bergeron<br> Former Chief Financial Officer and Director | 160,000 | 0.79 | % | 0 | 0 | % | 160,000 | 0.03 | % | ||||||
| Michael Cao^(3)^<br> <br>Director | 0 | 0 | % | 3,339,969 | 37.11 | % | 180,277,121 | 35.63 | % | ||||||
| Peter L. Dalrymple <br>Director | 2,987,276 | 14.76 | % | 0 | 0 | % | 2,987,276 | 1.69 | % | ||||||
| All directors and executive officers as a group | 7,019,703 | 33.89 | % | 6,113,861 | 67.94 | % | 342,608,075 | 67.70 | % | ||||||
| Calvin Cao^(4)^ | 0 | 0 | % | 954,277 | 10.60 | % | 51,507,749 | 10.18 | % |
Notes:
| (1) | Total<br> share values are on an as-converted basis. Each share of Series A Preferred Stock automatically converts into 53.975685 shares of<br> common stock. See Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year – Series A Preferred Stock. |
|---|---|
| (2) | Includes<br> the following: (i) 10,000,000 Series A Preferred Shares held directly; (ii) 10,000,000 Series A Preferred Shares held by his spouse;<br> and (iii) 8,818,000 held by United Systems Capital LLC, an entity owned or controlled by Mr. Tran. |
| (3) | Includes<br> the following: (i) 25,000,000 Series A Preferred Shares held directly and (ii) 10,000,000 Series A Preferred Shares held by his spouse. |
| (4) | Includes<br> the following: (i) 10,000,000 Series A Preferred Shares held by Supergreen Energy Corp., an entity owned or controlled by Calvin<br> Cao. |
| 15 |
| --- |
DIRECTORS
AND EXECUTIVE OFFICERS
In connection with the change of control of the Company described in Item 5.01 of this Form 8-K, we have appointed the following executive officers and directors for the Company.
| Directors<br> and Executive Officers | Position/Title | Age |
|---|---|---|
| Benjamin<br> Tran | Chief<br> Executive Officer, President and Director | 55 |
| Robert<br> J. Brilon | Chief<br> Financial Officer | 61 |
| Michael<br> Cao | Director | 51 |
| William<br> F. Donovan, M.D. | Director | 79 |
| Peter<br> L. Dalrymple | Director | 78 |
All of our directors hold offices until the next annual meeting of the shareholders of the Company, and until their successors have been qualified after being elected or appointed. The Bylaws provide that the directors may, from time to time, appoint such officers as the directors determine. The directors may, at any time, terminate any such appointment.
Directorand Executive Officer Biographies
BenjaminTran co-founded Bitech Mining and currently serves as Chairman and Chief Executive Officer of the company since its inception in January 2021. He has been the corporate strategist, investor, and financial partner in the formation and growth of several emerging growth technology companies. Benjamin specializes in cross-border M&A, private equity, merchant banking advisory and technology marketing. He also serves as Managing Partner of Cleantek Venture Capital, a cleantech-focused private equity advisory firm since January 2021 to present. Benjamin, at times, serves as senior advisor to several publicly traded companies. Since February 2021 to present, Benjamin has served as Senior Capital Market Advisor for Iveda Solutions, Inc. (NASDAQ: IVDA), an AI and IoT technology company to assist with financing and uplisting to Nasdaq. From August 2017 to January 2019, he served as Advisory Chairman of Vemanti Group, Inc. (OTCQB: VMNT), an innovative fintech company to assist in M&A and international business development. From November 2018 to April 2021, Benjamin also co-founded and served as chairman of CBMD.com, a privately held physician-based CBD science company specializing in pain management. Benjamin served as CFO of privately held Stock Navigators, a leading software and educational training institution for technical traders from June 2018 to June 2019. Since 2014 to present, Benjamin has served as managing partner of United System Capital, a private equity advisory firm in Newport Beach, California. Prior to United System Capital, Benjamin was managing partner of an Asia-based joint venture with Brean Murray Carret & Co., a New York-based investment bank that has transacted over 100 IPOs/APOs/SPACs and raised over $4B for the U.S. and Asian companies. Benjamin spearheaded the organization to formulate a multi-functional investment banking service for emerging growth companies via globalization strategies. Benjamin has been seasoned international consultant providing corporate development and interim senior management to small and medium sized enterprises in Silicon Valley and the Asia Pacific region. He also served as a board director, CFO, corporate strategist, and executive advisor for several distressed companies, managing turn-around situations. As a Silicon Valley high-tech veteran, Benjamin brings over 20 years of diversified experience including mergers and acquisitions, venture management, strategic marketing, and international business development. Prior to his investment and corporate advisory career, Benjamin worked for technology leaders including Micron Technology, Fujitsu Microelectronics, Mitsubishi Electric America, Philips Semiconductors, holding various senior technical and marketing management positions. Benjamin received a PhD in Business Administration, a Masters in Business Administration from the University of Phoenix, a Masters of Science and Bachelor of Science degrees in Electrical Engineering from San Jose State University, California.
| 16 |
| --- |
RobertJ. Brilon has served as our Chief Financial Officer since October 1, 2021. He also has served as Chief Financial Officer for Iveda Solutions, Inc. (NASDAQ: IVDA) since December 2013. He was also Iveda’s President from February 2014 to July 2018 and Treasurer from December 2013 to July 2018 and was appointed Treasurer again on December 15, 2021. Mr. Brilon served as Iveda’s Executive Vice President of Business Development from December 2013 to February 2014 and as Iveda’s interim Chief Financial Officer and Treasurer from December 2008 to August 2010. Mr. Brilon joined New Gen Management Services, Inc. in July 2017 as the CFO (subsequently becoming President and CFO of New Gen in July 2018). Mr. Brilon was the President, Chief Financial Officer, Corporate Secretary, and Director of both Vext Science, Inc and New Gen until he resigned in February 2020. Mr. Brilon served as Chief Financial Officer and Executive Vice President of Business Development of Brain State Technologies, a brainwave optimization software licensing and hardware company, from August 2010 to November 2013. From January 2010 to August 2010, Mr. Brilon served as Chief Financial Officer of MD Helicopters, a manufacturer of commercial and light military helicopters. Mr. Brilon also served as Chief Executive Officer, President, and Chief Financial Officer of InPlay Technologies (NASDAQ: NPLA), formerly, Duraswitch (NASDAQ: DSWT), a company that licensed patented electronic switch technology and manufactured digital pen technology, from November 1998 to June 2007. Mr. Brilon served as Chief Financial Officer of Gietz Master Builders from 1997 to 1998, Corporate Controller of Rental Service Corp. (NYSE: RRR) from 1995 to 1996, Chief Financial Officer and Vice President of Operations of DataHand Systems, Inc. from 1993 to 1995, and Chief Financial Officer of Go-Video (AMEX:VCR) from 1986 to 1993. Mr. Brilon is a certified public accountant and practiced with several leading accounting firms, including McGladrey Pullen, Ernst and Young and Deloitte and Touche. Mr. Brilon holds a Bachelor of Science degree in Business Administration from the University of Iowa.
MichaelCao co-founded Bitech with Mr. Tran and has served as a director of the company since its inception in January 2021. Mr. Michael Cao has been engaged in the development of businesses various industries with concentration in cryptocurrency mining, blockchain, cleantech, and healthcare including sale and financing transactions as discussed below. From June 2019 to December 2020, Mr. Cao had been collaborating with Mr. Tran in sourcing and conducting due diligence on the Tesdison technology including the ultimate licensing of that technology to Bitech. On April 2017, Mr. Cao co-founded iRide Tech Corp. (“iRide) where he served as its Chief Executive Officer and chairman of the board of directors until May 2019. iRide developed ride sharing technology built on the Ethereum platform to disrupt the traditional ride-sharing industry using the power of decentralization. iRide’s assets were acquired by iRide.io Tech PTE LTD. in May 2019. Mr. Cao oversaw the development of iRide’s technology platform and was instrumental in its sale of assets. In 2005, Mr. Cao founded Ultroid Technologies, Inc. (“Ultroid Technologies”) where he served as its Chief Executive Officer and chairman of the board of directors until May 2008. Ultroid Technologies manufactures and markets the U.S. Food and Drug Administration cleared Ultroid® Hemorrhoid Management System, a non-invasive hemorrhoid eradication process. Ultroid Technologies merged it with Vascular Technologies in 2008 where Mr. Cao served on the board of directors from 2011 until October 2016. Mr. Cao oversaw the development of the Ultroid® Hemorrhoid Management System and was instrumental in completing the merger with Vascular Technologies. From 2000-2004 Mr. Cao was the Chief Executive Officer of Liberty Consultant Group, a company that provided advisory services to emerging growth technology companies in connection with capital formation and merger and acquisition strategies and execution for capital market entry. From 1997 to 1999, Mr. Cao was the Chief Executive Officer and a co-founder of Netoy.com Corp., a pioneer in the toy products eCommerce business. Mr. Cao received a Bachelor of Arts in International Business from Eckerd College, Florida.
| 17 |
| --- |
WilliamF. Donovan, M.D. has served as our Chief Executive Officer since January 2009 and as our President since May 2010 until his resignation from those positions on March 31, 2022. He has served as one of our directors since April 2008. He is a Board Certified Orthopedic Surgeon, and has been involved with venture funding and management for over 25 years. He was the co-founder of DRCA (later known as I.O.I) and became Chairman of this company that went from the pink sheets, to NASDAQ and then to the AMEX before being acquired by a subsidiary of the Bass Family. He was a founder of “I Need A Doc,” later changed to IP2M that was acquired by Dialog Group, a publicly traded company. He was the Chairman of House of Brussels, an international chocolate company and president of ChocoMed, a specialized confectionery company combining Nutraceuticals with chocolate bars. Dr. Donovan has been practicing as a physician in Houston, Texas since 1975. Throughout his career as a physician, he has been involved in projects with both public and private enterprises. He received his Orthopedic training at Northwestern University in Chicago. He was a Major in the United States Air Force for 2 years at Wright Patterson Air Force base in Dayton, Ohio. He established Northshore Orthopedics, Assoc. in 1975 and continues in active practice in Houston, specializing in Orthopedic Surgery.
PeterL. Dalrymple joined our board of directors in August 2014. Since July 2012, he has served as General Partner of LPD Investments Ltd. and Manager of DLD Oil & Gas LLC. Prior to that, he was one of the co-founders and owners of the Royal Purple Synthetic Lubricants Company, which at the time of its sale in 2012, was one of the largest synthetic lubricants companies in North America. While with Royal Purple, he was in charge of Sales and Marketing. After the company was sold to Calumet Specialty Products Partner, a New York Stock Exchange company, in July of 2012, Mr. Dalrymple became a very active investor in several companies. He is also a trustee of Norwich University, from which he holds a Bachelor of Science Degree in Engineering Management. He previously served as a Lieutenant with the United States Army Corp. of Engineers.
The Company confirms that (1) there is no family relationship between any director or executive officer of the Company, (2) other than as set forth in Share Exchange Agreement, there was no arrangement or understanding between any person pursuant to which they were elected to their position with the Company, and (3) there is no transaction between any Director or Executive Officer and the Company that would require disclosure under Item 404(a) of Regulation S-K except as set forth in the section titled “Certain Relationships and Related Transactions; and Director Independence”.
Involvementin Certain Legal Proceedings
None of our directors, executive officers, significant employees or control persons has been involved in any legal proceeding listed in Item 401(f) of Regulation S-K in the past 10 years.
| 18 |
| --- |
EXECUTIVE
COMPENSATION
At this time, we do not have any employment agreements or other compensation agreements with our any of our Executive Officers or Directors. Messrs. Donovan and Dalrymple have agreed to serve as members of the Board of Directors without compensation. Compensation arrangements other members of our Board of Directors and Executive Officers are the subject of ongoing development and we will make appropriate additional disclosures as they are further developed and formalized.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS; AND DIRECTOR INDEPENDENCE
Transactionswith Related Parties
Upon Peter L. Dalrymple paying off the principal balance of the Wells Fargo term loan on our behalf on August 31, 2020, we issued Mr. Dalrymple a $610,000 one-year secured promissory note (the “Dalrymple Note”). The secured promissory note bears interest of 6% per year with monthly payments of interest only due until maturity, when all unpaid interest and principal is due. This note is collateralized by all our accounts receivable as of March 27, 2022 and a pledge of the stock of our wholly owned subsidiary, Quad Video Halo, Inc. The secured promissory note balance was $395,000 at December 31, 2021.
We transferred to SPIN Collections LLC (an entity owned and controlled by Mr. Dalrymple) certain accounts receivable the Company owns, which accounts receivable have a gross balance of $84,865 and a carrying value of $0 in consideration of Mr. Dalrymple agreeing to reduce the balance of his promissory note by $33,946. The Company recognized $33,946 as other income. The maturity date of the note has been extended to June 30, 2022.
During the year ended December 31, 2021, the Company recorded $27,357 in interest expense on the Dalrymple Note, representing all interest due through that date.
Pursuant to the terms of the Share Exchange Agreement, up to $320,000, less the Company’s general liabilities in excess of $140,000 will be paid to Mr. Dalrymple as a partial payment towards principal and accrued interest due under the Dalrymple Note. In addition, Mr. Dalrymple is entitled to the balance of $140,000 less (i) $80,000 payable to M1 Advisors LLC for consulting services provided to the Company in connection with the Share Exchange and (ii) all amounts owed by the Company and Quad for accounts payable and any other liabilities of the Company and Quad.
On the Closing Date, the Company, Quad and Dalrymple, a director of the Company, entered into a Management Services Agreement (the “MSA”) whereby Dalrymple agreed to act as the general manager of the video recording operations of Quad and collect certain accounts receivable of the Company (the “Services”). See Item 1.01 Entry into a Material Agreement – Management Services Agreement.
On the Closing Date, the Company, Quad and Dalrymple, entered into an Amendment to the Secured Promissory Note. See Item 1.01 Entry into a Material Agreement – Amendment to the Note.
On the Closing Date, the Company, Quad and Dalrymple, entered into an Amendment to Security Agreement. See Item 1.01 Entry into a Material Agreement – Amendment to the Security Agreement.
| 19 |
| --- |
DirectorIndependence
For purposes of this Current Report, the independence of our directors is determined under the corporate governance rules of the Nasdaq Stock Market (“Nasdaq”). The independence rules of Nasdaq include a series of objective tests, including that an “independent” person will not be employed by us and will not be engaged in various types of business dealings with us. In addition, our board of directors is required to make a subjective determination as to each person that no material relationship exists with us either directly or as a partner, shareholder or officer of an organization that has a relationship with us. It has been determined that none of our directors are independent persons under the independence rules of Nasdaq.
LEGAL
PROCEEDINGS
We know of no material, active, pending or threatened proceeding against us or Bitech, nor are we involved as a plaintiff in any material proceeding or pending litigation.
RECENT
SALES OF UNREGISTERED SECURITIES
Please see Item 3.02 - “Unregistered Sales of Equity Securities,” of this Current Report on Form 8-K.
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
Please see Item 9.01 - “Financial Statements and Exhibits” of this Current Report on Form 8-K.
AVAILABLE
INFORMATION
Our website address is www.bitech.tech. Through this website, our filings with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports, will be accessible (free of charge) as soon as reasonably practicable after materials are electronically filed with or furnished to the SEC. The information provided on our website is not part of this registration statement.
You also may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.
Item3.02 Unregistered Sales of Equity Securities.
Information concerning the issuance of Series A Preferred Stock in exchange for the Bitech Shares is set forth in Item 1.01 and Item 2.01 above and incorporated herein by this reference.
The Series A Preferred Stock was issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) or Regulation D or Regulation S promulgated thereunder since the Share Exchange did not involve a public offering. The Sellers were sophisticated investors and had access to information normally provided in a prospectus regarding us. In addition, the Sellers were “accredited investors” as that term is defined in Rule 501(a) of Regulation D. Further, the Share Exchange was not a “public offering” as defined in Section 4(a)(2) of the Securities Act due to the insubstantial number of persons involved in the transaction, size of the offering, manner of the offering and number of shares offered. We did not undertake an offering in which we sold a high number of shares to a high number of investors. In addition, the Sellers had the necessary investment intent as required by Section 4(a)(2) since they agreed to allow us to include a legend on the Series A Preferred Stock and the Common Stock issuable upon conversion of those shares stating that such shares are restricted pursuant to Rule 144 of the Securities Act. These restrictions ensure that these shares would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(a)(2) of the Securities Act for the Share Exchange.
Item5.01 Changes in Control of Registrant
Information concerning the issuance of Series A Preferred Stock in exchange for the Bitech Shares is set forth in Item 1.01 and Item 2.01 and the ownership of such securities is set forth in the section titled “Security Ownership of Certain Beneficial Owners and Management” above and incorporated herein by this reference.
As required to be disclosed by Regulation S-K Item 403(c), there are no arrangements, known to the Company, including any pledge by any person of securities of the Company or any of its parents, the operation of which may at a subsequent date result in a change in control of the Company.
| 20 |
| --- |
Item5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangementsof Certain Officers.
The information set forth above in the sections titled “Directors and Officers,” “Executive Compensation,” and “Certain Relationships and Related Party Transactions; and Indemnification of Directors and Officers” are incorporated herein by reference.
In connection with the consummation of the Share Exchange Agreement, William Donovan, M.D. tendered his resignation as our Chief Executive Officer, John Bergeron tendered his resignation as our Chief Financial and as a member of our Board of Directors, and Jerry Bratton tendered his resignation as a member of our Board of Directors. Dr. Donovan and Messrs. Bergeron and Bratton have advised the Company that their resignations were not the result of any disagreement with the Company on any matter relating to its operation, policies (including accounting or financial policies) or practices.
Effective as of the Closing Date, Benjamin Tran (who is Bitech’s founder and its Chief Executive Officer) was elected as a director of the Company and appointed as its Chief Executive Officer; Robert J. Brilon was appointed as the Company’s Chief Financial Officer and Michael Cao was appointed as a member of our Board of Directors.
Item5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
SeriesA Preferred Stock
On March 30, 2022, the Secretary of State of Delaware acknowledged the Company’s filing of a Certificate of Designations of Preferences and Rights off Series A Convertible Preferred Stock (the “Certificate of Designations”) with the Delaware Secretary of State creating a series of 9,000,000 shares of Series A Preferred Stock (the “Series A Preferred Stock”) to be issued in connection with the Share Exchange. The Certificate of Designations include:
| ● | the<br> stated value of each share is $1.00 (the “Stated Value”), |
|---|---|
| ● | each<br> share has 53.9757 votes per share on any matter, event or action submitted to the holders of our common stock for a vote or on which<br> the holders of our common stock have a right to vote, |
| ● | each<br> share is automatically convertible into shares of our common stock determined by dividing (i) the Stated Value by (ii) the Conversion<br> Price then in effect. Initially, the “Conversion Price” is $0.018526887 per share, subject to<br> adjustment as described below on the first business day immediately following the earlier of (a) the date on which the Secretary<br> of State of Delaware shall have filed the Certificate of Designations; and (b) the date on which FINRA has affected a reverse stock<br> split of the Company’s outstanding common stock, after all required approvals by the Company’s board of directors and<br> its stockholders, in either (a) or (b), so that there are a sufficient number of shares of the Company’s Common Stock authorized<br> but unissued to permit a full conversion of all the Series A Preferred Stock based upon the Conversion Price, |
| ● | the<br> conversion price of the Series A Preferred Stock is subject to proportional adjustment in the event of stock splits, stock dividends<br> and similar corporate events, and |
| ● | upon<br> any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), each holder<br> of the Series A Preferred Stock shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount<br> equal to the Stated Value, plus any other fees or liquidated damages then due and owing thereon under the Certificate of Designations,<br> for each share of Series A Preferred Stock before any distribution or payment shall be made to the holders of any junior securities<br> (as hereinafter defined), and if the assets of the Company shall be insufficient to pay in full such amounts, then the entire assets<br> to be distributed to each holder of the Series A Preferred Stock shall be ratably distributed among each such holder in accordance<br> with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full. |
Item 7.01 Regulation FD Disclosure.
On April 4, 2022, the Company issued a press release regarding the completion of the acquisition of Bitech pursuant to the terms of the Share Exchange Agreement. The press release is attached hereto as Exhibit 99.1 and incorporated herein by this reference.
The information contained in the press release attached hereto is being furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that Section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| 21 |
| --- |
Item9.01 Financial Statements and Exhibits.
| (a) | FINANCIAL<br> STATEMENTS OF BUSINESS ACQUIRED |
|---|
The audited Financial Statements of Bitech Mining Corporation at December 31, 2022 are filed as Exhibit 99.2 to this Current Report on Form 8-K and are incorporated herein by reference.
| (b) | PRO<br> FORMA FINANCIAL INFORMATION. |
|---|
The unaudited pro forma balance sheet as of December 31, 2021 and unaudited pro forma income statement for the year ended December 31, 2021 to give effect to the acquisition of Bitech Mining Corporation are filed as Exhibit 99.3 to this Current Report on Form 8-K report and are incorporated herein by reference.
| 22 |
| --- | | 10.1* | Secured Promissory Note with Peter Dalrymple, dated August 31, 2020 (Incorporated by reference from Form 8-K filed with the SEC on September 2, 2020) | | --- | --- | | 10.2* | Security Agreement with Peter Dalrymple, dated August 31, 2020 (Incorporated by reference from Form 8-K filed with the SEC on September 2, 2020) | | 10.3* | Letter agreement with Peter Dalrymple, dated October 28, 2021 (Incorporated by reference from Form 8-K filed with the SEC on November 2, 2021) | | 10.4* | Amendment to Secured Promissory Note with Peter Dalrymple, dated October 29, 2021 (Incorporated by reference from Form 8-K filed with the SEC on November 2, 2021) | | 10.5 | Share Exchange Agreement among Spine Injury Solutions, Inc., Bitech Mining Corporation, its shareholders and Benjamin Tran as Stockholders’ Representative dated as of March 31, 2022. | | 10.6+ | Management Services Agreement between Spine Injury Solutions, Inc., Quad Video Halo, Inc. and Peter L. Dalrymple dated as of March 31, 2022. | | 10.7 | Amendment to Secured Promissory Note Agreement between Spine Injury Solutions, Inc., Quad Video Halo, Inc. and Peter L. Dalrymple dated as of March 31, 2022. | | 10.8 | Amendment to Security Agreement between Spine Injury Solutions, Inc., Quad Video Halo, Inc. and Peter L. Dalrymple dated as of March 31, 2022. | | 17.1 | Resignation Letter of William F. Donovan, M.D. dated March 31, 2022. | | 17.2 | Resignation Letter of Jerry Bratton dated March 31, 2022. | | 17.3 | Resignation Letters of John Bergeron dated March 31, 2022. | | 21.1 | Subsidiaries | | 99.1 | Press Release dated April 4, 2022. | | 99.2 | Audited Financial Statements of Bitech Mining Corporation for the Year Ended December 31, 2021. | | 99.3 | Unaudited pro forma balance sheet as of December 31, 2021 and unaudited pro forma consolidated income statement for the year ended December 31, 2021. | | 104 | Cover<br> Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | | + | Certain<br> confidential information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively<br> harmful if publicly disclosed. | | --- | --- | | * | Previously<br> filed. |
| 23 |
| --- |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
| SPINE INJURY SOLUTIONS, INC. | ||
|---|---|---|
| Dated:<br> April 4, 2022 | By: | /s/ Benjamin Tran |
| Benjamin<br> Tran | ||
| Chief<br> Executive Officer |
| 24 |
| --- |
Exhibit 3.9
CERTIFICATE OF DESIGNATIONS OF PREFERENCES AND RIGHTS OF
SERIES A CONVERTIBLE PREFERRED STOCK
OF
SPINE INJURY SOLUTIONS, INC.
a Delaware corporation
Pursuant to Section 151 of the General Corporation Law of the State of Delaware, the undersigned Chief Executive Officer of Spine Injury Solutions, Inc. (the “Corporation”), a corporation organized and existing under the laws of the State of Delaware, does hereby make this Certificate of Designations of Preferences and Rights of Series A Convertible Preferred Stock (this “Certificate of Designations”) and DOES HEREBY CERTIFY that pursuant to the authority contained in the Corporation’s Certificate of Incorporation, as amended, and pursuant to Section 151 of the General Corporation Law of the State of Delaware and in accordance with the provisions of the resolution creating a series of the class of the Corporation’s authorized Preferred Stock designated as Series A Convertible Preferred Stock, as follows:
FIRST: The Certificate of Incorporation of the Corporation authorizes the issuance by the Corporation of 250,000,000 shares of common stock, $0.001 par value per share (the “Common Stock”) and 10,000,000 shares of preferred stock, par value $0.001 per share (the “Preferred Stock”), and, further, authorizes the Board of Directors of the Corporation (the “Board”), by resolution or resolutions, at any time and from time to time, to fix or alter the rights, preferences, privileges and restrictions of any wholly unissued series of Preferred Stock, and the number of shares constituting any such series or the designation thereof.
SECOND: By unanimous written consent of the Board dated March 18, 2022, the Board designated 9,000,000 shares of the Preferred Stock as Series A Convertible Preferred Stock, par value $0.001 per share (the “Series A Stock”), pursuant to a resolution providing that a series of preferred stock of the Corporation be and hereby is created, and that the designation and number of shares thereof and the voting and other powers, preferences and relative, participating, optional or other rights of the shares of such series and the qualifications, limitations and restrictions thereof are as follows:
SERIES A CONVERTIBLE PREFERRED STOCK
Section
- Powers and Rights of Series A Convertible Preferred Stock. There is hereby designated a class of Preferred Stock of the Corporation as the Series A Convertible Preferred Stock, par value $0.001 per share, of the Corporation (the “Series A Stock”). The number of shares, powers, terms, conditions, designations, preferences and privileges, relative, participating, optional and other special rights, and qualifications, limitations and restrictions, if any, of the Series A Stock shall be as set forth in this Certificate of Designations of Preferences and Rights of Series A Convertible Preferred Stock (this “Certificate of Designations”). For purposes hereon, a holder of a share or shares of Series A Stock, with respect to their rights as related to the Series A Stock, shall be referred to as a “Series A Holder.”
Section 2. Number; Stated Value. The number of authorized shares of the Series A Stock is 9,000,000 shares. Each share of the Series A Stock shall have a stated value equal to $1.00 (the “Stated Value”).
| 1 |
| --- |
Section 3. Conversion.
(a) Automatic Conversion. On the first business day immediately following the earlier of (a) the date on which the Secretary of State of Delaware shall have filed, after all required approvals by the Board and the Corporation’s stockholders, an amendment to the Corporation’s Certificate of Incorporation increasing the number of its authorized shares of Common Stock; and (b) the date on which FINRA has affected a reverse stock split of the Corporation’s outstanding common stock, after all required approvals by the Board and the Corporation’s stockholders, in either (a) or (b), so that there are a sufficient number of shares of the Corporation’s Common Stock authorized but unissued to permit a full conversion of all the Series A Stock based upon the Conversion Price (as hereinafter defined) (the “Conversion Condition”), all shares of the Series A Stock shall automatically convert into shares of the Corporation’s Common Stock at the Conversion Price without any action of the Series A Holder (the “Conversion”). Promptly thereafter, the Corporation shall issue to the Series A Holder a certificate representing the number of shares of Common Stock issued pursuant to such automatic conversion, of the Series A Stock, or otherwise issue such shares of Common Stock in book entry/non-certificated form. Shares of Series A Stock converted into Common Stock in accordance with the terms hereof shall be canceled and shall not be reissued.
(b) Calculation. The number of shares of Common Stock to be issued upon conversion of the Series A Stock pursuant to Section 3(a) above shall be determined by dividing (i) the Stated Value by (ii) the Conversion Price then in effect, with such shares of Common Stock issuable in connection with such conversion defined herein as “Conversion Shares”.
(c) Conversion Price. The conversion price shall be $0.018526887 per share of Series A Stock (the “Conversion Price”), subject to further adjustment from time to time upon the happening of certain events as set forth below.
(d) Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of the Series A Stock. In the event that for any reason the number of shares of Common Stock issuable to any Series A Holder pursuant to Section 3(a) above results in a fraction of a Conversion Share being due to a Series A Holder, the Corporation shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the fair market value of a share of Common Stock as determined in good faith by the Board, or round up to the next whole share of Common Stock resulting from such fractional share.
(e) Transfer Taxes and Expenses. The issuance of Conversion Shares on conversion of Series A Stock shall be made without charge to any Series A Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion Shares, provided that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such Conversion Shares upon conversion in a name other than that of the applicable Series A Holder of such shares of Series A Stock and the Corporation shall not be required to issue or deliver such Conversion Shares unless or until the Person (as defined below) or Persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid. For purposes hereof, “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
| 2 |
| --- |
(f) Cancellation of Series A Stock Certificates. Without limiting the obligation of each Series A Holder set forth herein (including below), the Corporation and/or the Corporation’s Transfer Agent shall be authorized to take whatever action necessary, if any, following the Conversion to reflect the cancellation of the Series A Stock shares and certificates subject to the Conversion, which shall not require the approval and/or consent of any Series A Holder (a “Cancellation”). Notwithstanding the above, each Series A Holder, by accepting such Series A Stock hereby covenants that it will, whenever and as reasonably requested by the Corporation and the Transfer Agent, at the Corporation’s sole cost and expense, do, execute, acknowledge and deliver any and all such other and further acts, deeds, assignments, transfers, conveyances, confirmations, powers of attorney and any instruments of further assurance, approvals and consents as the Corporation or the Transfer Agent may reasonably require in order to complete, insure and perfect the Cancellation, if such may be reasonably required by the Corporation and/or the Corporation’s Transfer Agent, including, but not limited to the delivery to the Corporation of all certificates and stock powers with medallion signature guaranty in connection with the Cancellation.
Section 4. Certain Adjustments.
(a) Stock Dividends and Stock Splits. If the Corporation, at any time while Series A Stock is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any other Common Stock Equivalents (as hereinafter defined) (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Corporation upon conversion of the Series A Stock), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Corporation, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section 4(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification. “Common Stock Equivalents” means any securities of the Corporation which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
| 3 |
| --- |
(b) Pro Rata Distributions. During such time as the Series A Stock is outstanding, if the Corporation declares or makes any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of the Series A Stock, then, in each such case, each Series A Holder shall be entitled to participate in such Distribution to the same extent that the Series A Holder would have participated therein if the Series A Holder had held the number of shares of Common Stock acquirable upon complete Conversion of the Series A Stock held by such Series A Holder (without regard to any limitations on Conversion hereof) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution.
(c) Consolidation or Merger. At any time while the Series A Stock remains outstanding, in case of any consolidation or merger of the Corporation with or into another corporation (other than a merger with another corporation in which the Corporation is a continuing corporation and which does not result in any reclassification or change, other than a change in par value, or from par value to no par value per share, or from no par value per share to par value), or in the case of any sale or transfer to another corporation of the property of the Corporation as an entirety or substantially as an entirety, the Corporation or such successor or purchasing corporation, as the case may be, shall, without payment of any additional consideration therefor, assume the Corporation’s obligations hereunder.
Section 5. Dividends. Except for adjustments to the Conversion Price provided by Section 4 hereof, to the extent applicable, or dividends as may be declared by the Board in its sole and absolute discretion, the Series A Stock shall not accrue dividends.
Section 6. Voting Power. Other than as set forth in Section 9, on any matter, event or action submitted to the holders of Common Stock for a vote or on which the holders of Common Stock have a right to vote, each share of Series A Stock shall have a number of votes per share equal to the number of Conversion Shares then issuable upon Conversion thereof, and the Series A Stock shall vote on any such matter, event or action submitted to the holders of Common Stock for a vote or on which the holders of Common Stock have a right to vote, together with the Common Stock as one class. Any vote or consent of the Series A Holders may be taken either by vote at a meeting called for the purpose or by written consent without a meeting and in either case may be given in person or by proxy. The rules and procedures for calling and conducting any meeting of the Series A Holders (including, without limitation, the fixing of a record date in connection therewith), the solicitation and use of proxies at such a meeting, the obtaining of written consents and any other aspect or matter with regard to such a meeting or such consents shall be governed by any rules the Board or a duly authorized committee of the Board, in its discretion, may adopt from time to time, which rules and procedures shall conform to the requirements of the Certificate of Incorporation, the Bylaws and applicable law.
Section 7. Participation. The Series A Stock shall participate in any dividends, distributions or payments to the holders of the Common Stock on an as-converted basis, but without any conversion being required in connection therewith and regardless of whether there are a sufficient number of authorized but unissued shares of Common Stock to permit full conversion of all shares of Series A Stock.
| 4 |
| --- |
Section 8. Liquidation. Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”), each Series A Holder shall be entitled to receive out of the assets, whether capital or surplus, of the Corporation an amount equal to the Stated Value, plus any other fees or liquidated damages then due and owing thereon under this Certificate of Designation, for each share of Series A Stock before any distribution or payment shall be made to the holders of any Junior Securities (as hereinafter defined), and if the assets of the Corporation shall be insufficient to pay in full such amounts, then the entire assets to be distributed to each Series A Holder shall be ratably distributed among each Series A Holder in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full. A Fundamental Transaction or Change of Control Transaction shall not be deemed a Liquidation. The Corporation shall mail written notice of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each Holder. The following terms shall have the following meanings in this Certificate of Designations:
(a) “Change of Control Transaction” means the occurrence after the date hereof of any of the following: (a) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d 5(b)(1) promulgated under the Securities Exchange Act of 1934, as amended) of effective control (whether through legal or beneficial ownership of capital stock of the Corporation, by contract or otherwise) of in excess of 33% of the voting securities of the Corporation (other than by means of conversion of the Series A Stock), (b) the Corporation merges into or consolidates with any other Person, or any Person merges into or consolidates with the Corporation and, after giving effect to such transaction, the stockholders of the Corporation immediately prior to such transaction own less than 66% of the aggregate voting power of the Corporation or the successor entity of such transaction, (c) the Corporation sells or transfers all or substantially all of its assets to another Person and the stockholders of the Corporation immediately prior to such transaction own less than 66% of the aggregate voting power of the acquiring entity immediately after the transaction, (d) a replacement at one time or within a one year period of more than one half of the members of the Board which is not approved by a majority of those individuals who are members of the Board, or (e) the execution by the Corporation of an agreement to which the Corporation is a party or by which it is bound, providing for any of the events set forth in clauses (a) through (d) above.
(b) “Fundamental Transaction” means (i) one or more related transactions effects whereby the Corporation, directly or indirectly, merges or consolidates with or into another Person, (ii) the Corporation, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Corporation or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Corporation, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Corporation, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination).
| 5 |
| --- |
(c) “Junior Securities” means the Common Stock and all other Common Stock Equivalents of the Corporation other than those securities which are explicitly senior or pari passu to the Series A Stock in dividend rights or liquidation preference.
Section 9. Amendment.
(a) The Corporation may not, and shall not, amend this Certificate of Designations, including by merger, consolidation or otherwise, without the prior written consent of Series A Holders holding a majority of the issued and outstanding shares of Series A Stock, voting separately as a single class, in person or by proxy, either in writing without a meeting or at an annual or a special meeting of the Series A Holders and with each share of Series A Stock having a number of votes per share equal to the number of Conversion Shares then issuable upon Conversion of the Series A Stock on such matter, and any such act or transaction entered into without such vote or consent shall be null and void ab initio, and of no force or effect.
(b) In addition to any other rights and restrictions provided under applicable law, the Corporation may not, and shall not, amend or repeal any provision of, or add any provision to, the Corporation’s Certificate of Incorporation or bylaws, including by merger, consolidation or otherwise, if such action would adversely alter or change the preferences, rights, privileges, or powers of, or restrictions provided for the benefit of, the Series A Stock, as reasonably determined and agreed in writing by the Series A Holders holding a majority of the Series A Stock issued and outstanding, without the prior written consent of Series A Holders holding a majority of the issued and outstanding shares of Series A Stock, voting separately as a single class, in person or by proxy, either in writing without a meeting or at an annual or a special meeting of the Series A Holders and with each share of Series A Stock having a number of votes per share equal to the number of Conversion Shares then issuable upon Conversion of the Series A Stock on such matter, and any such act or transaction entered into without such vote or consent shall be null and void ab initio, and of no force or effect.
Section 10. Miscellaneous.
(a) Notices. Any and all notices or other communications or deliveries to be provided by a Series A Holder shall be in writing and delivered personally, by facsimile, via email with return receipt requested, sent by a nationally recognized overnight courier service, addressed to the Corporation at the primary offices of the Corporation. Any and all notices or other communications or deliveries to be provided by the Corporation hereunder shall be in writing and delivered personally, by facsimile, via email with return receipt requested, sent by a nationally recognized overnight courier service addressed to the Series A Holder at the email, facsimile, telephone number or address of such Series A Holder appearing on the books of the Corporation, or if no such facsimile telephone number or address appears, at the principal place of business of the Series A Holder. Any notice or other communication or delivery hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section 10(a) prior to 5:30 p.m. (Eastern time); (ii) upon receipt of a return receipt if sent via email; (iii) the date after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section 10(a) later than 5:30 p.m. (Eastern time) on any date and earlier than 11:59 p.m. (Eastern time) on such date, (iv) the second business day following the date of mailing, if sent by nationally recognized overnight courier service, or (v) upon actual receipt by the party to whom such notice is required to be given.
| 6 |
| --- |
(b) Legend. Any certificates representing the Series A Stock and any Conversion Shares issued upon conversion hereof shall bear a restrictive legend in substantially the following form (and a stop transfer order may be placed against transfer of such stock certificates):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR REGISTERED NOR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION IS NOT REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE SET FORTH HEREIN.
(c) Lost or Mutilated Series A Stock Certificate. If the certificate for the Series A Stock held by a Series A Holder thereof shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the share of Series A Stock so mutilated, lost, stolen or destroyed but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership hereof, and indemnity, if requested, all reasonably satisfactory to the Corporation.
(d) Waiver. Any waiver by the Corporation or a Series A Holder of a breach of any provision of this Certificate of Designations shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate of Designations. The failure of the Corporation or a Series A Holder to insist upon strict adherence to any term of this Certificate of Designations on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Certificate of Designations. Any waiver must be in writing.
(e) Severability. If any provision of this Certificate of Designations is invalid, illegal or unenforceable, the balance of this Certificate of Designations shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest.
(f) No Other Rights or Privileges. Except as specifically set forth herein, the Series A Holders and the Series A Stock shall have no other rights, privileges or preferences.
(g) Record Holders. To the fullest extent permitted by applicable law, the Corporation and the transfer agent, if any, for the Series A Stock may deem and treat the record holder of any share of Series A Stock as the true and lawful owner thereof for all purposes, and neither the Corporation nor any such transfer agent shall be affected by any notice to the contrary.
(h) Technical, Corrective, Administrative or Similar Changes. The Corporation may, by any means authorized by law and without any vote of the Series A Holders, make technical, corrective, administrative or similar changes in this Certificate of Designations that do not, individually or in the aggregate, adversely affect the rights or preferences of the Series A Holders.
(Signaturepage follows.)
| 7 |
| --- |
IN WITNESS WHEREOF, Spine Injury Solutions, Inc. has caused this Certificate of Designations to be signed by a duly authorized officer on this 18^th^ day of March 2022.
| Spine Injury Solutions, Inc. | |
|---|---|
| By: | /s/ William F. Donovan, M.D. |
| Name: | William<br> F. Donovan, M.D. |
| Title: | Chief<br> Executive Officer |
| 8 |
| --- |
Exhibit10.5
SHARE EXCHANGE AGREEMENT
by and among
SPINE INJURY SOLUTIONS, INC.
a Delaware Corporation
and
BITECH MINING CORPORATION,
A Wyoming corporation
and
the Shareholders of Bitech Mining Corporation
Dated as of March 31, 2022
TABLE OF CONTENTS
| PAGE | |
|---|---|
| ARTICLE<br> I REPRESENTATIONS, COVENANTS, AND WARRANTIES OF THE TARGET COMPANY AND THE SELLERS | 2 |
| Section<br> 1.01 Incorporation. | 2 |
| Section<br> 1.02 Authorized Shares and Capital; Assets. | 2 |
| Section<br> 1.03 Litigation and Proceedings | 3 |
| Section<br> 1.05 Material Changes; Undisclosed Events, Liabilities or Developments | 3 |
| Section<br> 1.06 Subsidiaries and Predecessor Corporations | 3 |
| Section<br> 1.07 Contracts.. | 3 |
| Section<br> 1.08 No Conflict With Other Instruments | 4 |
| Section<br> 1.09 Compliance With Laws and Regulations | 4 |
| Section<br> 1.10 Material Transactions or Affiliations | 4 |
| Section<br> 1.11 Taxes, Tax Returns and Audits | 4 |
| Section<br> 1.12 Insurance Policies | 4 |
| Section<br> 1.13 Anti-Money Laundering, Anti-Bribery and Anti-Corruption; Sanctions. | 5 |
| Section<br> 1.14 Approval of Agreement | 5 |
| Section<br> 1.15 The Acquired Company Schedules | 6 |
| Section<br> 1.16 Valid Obligation | 6 |
| Section<br> 1.17 Patent and Technology Agreement | 6 |
| Section<br> 1.18 Investment Representations. | 6 |
| ARTICLE<br> II REPRESENTATIONS, COVENANTS, AND WARRANTIES OF SPIN | 9 |
| Section<br> 2.01 Organization | 9 |
| Section<br> 2.02 Capitalization | 9 |
| Section<br> 2.03 Material Changes; Undisclosed Events, Liabilities or Developments | 10 |
| Section<br> 2.04 Subsidiaries and Predecessor Corporations | 10 |
| Section<br> 2.05 Shell Company Status; SEC Reports; Financial Statements | 10 |
| Section<br> 2.06 Information | 11 |
| Section<br> 2.07 DTC Eligible | 11 |
| Section<br> 2.08 Litigation and Proceedings | 11 |
| Section<br> 2.09 Contracts. | 11 |
| Section<br> 2.10 No Conflict With Other Instruments | 12 |
| Section<br> 2.11 Compliance With Laws and Regulations | 12 |
| Section<br> 2.12 Approval of Agreement | 12 |
| Section<br> 2.13 Material Transactions or Affiliations | 12 |
| Section<br> 2.14 SPIN Schedules | 12 |
| Section<br> 2.15 Bank Accounts; Power of Attorney | 13 |
| Section<br> 2.16 Valid Obligation. | 13 |
| Section<br> 2.17 Listing and Maintenance Requirements. | 13 |
| Section<br> 2.18 DTC Eligibility. | 13 |
| Section<br> 2.19 Taxes, Tax Returns and Audits | 13 |
| Section<br> 2.20 Insurance Policies | 14 |
| Section<br> 2.21 Anti-Money Laundering, Anti-Bribery and Anti-Corruption; Sanctions. | 14 |
| ARTICLE<br> III SHARE EXCHANGE; DEPOSIT | 16 |
| Section<br> 3.01 The Exchange. | 16 |
| Section<br> 3.02 Deposit. | 16 |
| Section<br> 3.03 Closing | 16 |
| Section<br> 3.04 Closing Events | 16 |
| --- | --- |
| Section<br> 3.05 Termination | 16 |
| Section<br> 3.06 Survival After Termination | 17 |
| Section<br> 3.07 Effect of Termination | 17 |
| ARTICLE<br> IV SPECIAL COVENANTS | 17 |
| Section<br> 4.01 Access to Properties and Records | 17 |
| Section<br> 4.02 Delivery of Books and Records | 18 |
| Section<br> 4.03 Third Party Consents and Certificates | 18 |
| Section<br> 4.04 Designation of Directors and Officer. | 18 |
| Section<br> 4.05 Management of Quad. | 18 |
| Section<br> 4.06 Additional Actions Prior to Closing. | 18 |
| Section<br> 4.07 Indemnification. | 19 |
| ARTICLE<br> V CONDITIONS PRECEDENT TO OBLIGATIONS OF SPIN | 20 |
| Section<br> 5.01 Accuracy of Representations and Performance of Covenants | 20 |
| Section<br> 5.02 Officer’s Certificate | 21 |
| Section<br> 5.03 Approval by the Sellers | 21 |
| Section<br> 5.04 No Governmental Prohibition | 21 |
| Section<br> 5.05 Consents | 21 |
| Section<br> 5.06 Other Items. | 21 |
| ARTICLE<br> VI CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED COMPANY AND THE SELLERS | 22 |
| Section<br> 6.01 Accuracy of Representations and Performance of Covenants | 22 |
| Section<br> 6.02 Officer’s Certificate | 22 |
| Section<br> 6.03 Good Standing | 22 |
| Section<br> 6.04 No Material Adverse Effect | 22 |
| Section<br> 6.05 No Governmental Prohibition | 23 |
| Section<br> 6.06 Approval by SPIN Board of Directors | 23 |
| Section<br> 6.07 Consents | 23 |
| Section<br> 6.08 Shareholder Report. | 23 |
| Section<br> 6.09 Other Items | 23 |
| ARTICLE<br> VII MISCELLANEOUS | 24 |
| Section<br> 7.01 Brokers | 24 |
| Section<br> 7.02 Governing Law | 24 |
| Section<br> 7.03 Notices | 24 |
| Section<br> 7.04 Attorney’s Fees | 25 |
| Section<br> 7.05 Confidentiality | 25 |
| Section<br> 7.06 Public Announcements and Filings | 26 |
| Section<br> 7.07 Schedules; Knowledge | 26 |
| Section<br> 7.08 Third Party Beneficiaries | 26 |
| Section<br> 7.09 Expenses | 26 |
| Section<br> 7.10 Entire Agreement | 26 |
| Section<br> 7.11 Survival; Termination | 26 |
| Section<br> 7.12 Specific Performance | 26 |
| Section<br> 7.13 Counterparts | 26 |
| Section<br> 7.14 Amendment or Waiver | 27 |
| Section<br> 7.15 Best Efforts | 27 |
| Section<br> 7.16 Sellers’ Representative | 27 |
| Section<br> 7.17 Tax and SEC Filings | 28 |
| Section<br> 7.18 Rule 144 Opinions | 28 |
Exhibits
Exhibit A – Form of Certificate of Designations, Preferences and Rights of Series A Preferred Stock
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (hereinafter referred to as this “Agreement”) is entered into as of this 31^ST^ day of March 2022 (the “Effective Date”), by and between (i) SPINE INJURY SOLUTIONS, INC., a Delaware corporation (“SPIN”), (ii) BITECH MINING CORPORATION, a Wyoming corporation (the “Acquired Company”), (iii) each of the shareholders of the Acquired Company who executes a joinder to this Agreement (each, a “Seller” and collectively, the “Sellers”), and (iv) Benjamin Tran, solely in his capacity as Sellers’ Representative (“Sellers’ Representative”). Each of the Acquired Company, the Sellers and the Sellers’ Representative may be referred to collectively herein as the “Acquired Company Parties” and separately as an “Acquired Company Party.” Each of SPIN, the Sellers, the Sellers’ Representative and the Acquired Company Party may be referred to herein collectively as the “Parties” and separately as a “Party.”
Premises
WHEREAS, the Sellers own an aggregate of 94,312,250 shares of common stock of Acquired Company, which shares constitute 100% of the issued and outstanding common stock of Acquired Company;
WHEREAS, SPIN is a publicly-held corporation organized under the laws of the State of Delaware;
WHEREAS, the Acquired Company is a privately-held company organized under the laws of Wyoming corporation;
WHEREAS, SPIN agrees to acquire 100% of the issued and outstanding shares of the Acquired Company from the Sellers in exchange for the issuance of up to 9,000,000 shares of SPIN’s Series A Convertible Preferred Stock par value $0.001 per share (the “Series A Preferred Stock”) representing approximately 96% of the proforma issued and outstanding shares of SPIN’s common stock after the filing of the Series A Certificate of Designations as provided for herein and is hereinafter referred to as the “Exchange”. On the Closing Date, the Sellers will become shareholders of SPIN.
WHEREAS, for Federal income tax purposes, it is intended that the Exchange qualify as a reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”); and
| 1 |
| --- |
Agreement
NOW THEREFORE, on the stated premises and for and in consideration of the mutual covenants and agreements hereinafter set forth and the mutual benefits to the parties to be derived herefrom, and intending to be legally bound hereby, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF THE TARGET COMPANY AND THE SELLERS
As an inducement to, and to obtain the reliance of SPIN, except as set forth in the Acquired Company Schedules (as hereinafter defined), the Acquired Company and each Seller, severally as hereinafter provided, represents and warrants as of the Closing Date (as hereinafter defined), as follows:
Section 1.01 Incorporation. The Acquired Company is a company duly organized, validly existing, and in good standing under the laws of Wyoming corporation and has the corporate power and is duly authorized under all applicable laws, regulations, ordinances, and orders of public authorities to carry on its business in all material respects as it is now being conducted. Included in the Acquired Company Schedules are complete and correct copies of the Articles of Incorporation and bylaws of the Acquired Company as in effect on the date hereof. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any provision of the Acquired Company’s Articles of Incorporation or bylaws. The Acquired Company has taken all actions required by law, its Articles of Incorporation, bylaws, or otherwise to authorize the execution and delivery of this Agreement. The Acquired Company has full power, authority, and legal capacity and has taken all action required by law, its Articles of Incorporation, bylaws, and otherwise to consummate the transactions herein contemplated.
Section 1.02 Authorized Shares and Capital; Assets. The authorized number of common shares with $0.001 par value per share of the Acquired Company is 100,000,000 with 94,312,250 shares issued and outstanding. Each Seller owns the issued and outstanding shares of the Acquired Company representing in aggregate a 100% interest in the Acquired Company. The issued and outstanding shares are validly issued, fully paid, and non-assessable and not issued in violation of preemptive or other rights of any person. Except as set forth on Section 1.02 of the Acquired Company Schedules, no Person (as hereinafter defined) has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by this Agreement. Except as set forth in Section 1.02 of the Acquired Company Schedules, there are no agreements or arrangements under which the Acquired Company is obligated to register the sale of any of the Acquired Company’s securities under the Securities Act. Except as set forth in Section 1.02 of the Acquired Company Schedules, no shares of common stock and/or other securities of the Acquired Company are entitled to preemptive rights and there are no outstanding debt securities and no contracts, commitments, understandings, or arrangements by which the Acquired Company is or may become bound to issue additional shares of the capital stock and/or other securities of the Acquired Company or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into or exchangeable for, any shares of capital stock of the Acquired Company other than those issued or granted in the ordinary course of business pursuant to the Acquired Company’s equity incentive and/or compensatory plans or arrangements. Except for customary transfer restrictions contained in agreements entered into by the Acquired Company to sell restricted securities and/or as set forth in Section 1.02 of the Acquired Company Schedules, the Acquired Company is not a party to, and it has no knowledge of, any agreement restricting the voting or transfer of any shares of the capital stock and/or other securities of the Acquired Company. Except as set forth in Section 1.02 of the Acquired Company Schedules, the offer and sale of all capital stock, convertible or exchangeable securities, rights, warrants, options and/or any other securities of the Acquired Company, when any such securities of the Acquired Company were issued, complied in all material respects with all applicable federal and state securities laws, and no current and/or prior holder of any securities of the Acquired Company has any right of rescission or damages or any “put” or similar right with respect thereto. Except as set forth on Section 1.02 of the Acquired Company Schedules, there are no securities or instruments of the Acquired Company containing anti-dilution or similar provisions that will be triggered by the issuance and/or sale of the Exchange Shares and/or the consummation of the transactions described herein. Acquired Company has cash of at least $460,000 (the “Acquired Company Working Capital”) which shall be used by SPIN as provided for in Section 5.06(a) and Section 5.06(b).
| 2 |
| --- |
Section 1.03 Litigation and Proceedings. Except as disclosed in Section 1.03 of the Acquired Company Schedules, there are no actions, suits, proceedings, or investigations pending or, to the knowledge of the Acquired Company after reasonable investigation, threatened by or against the Acquired Company or affecting the Acquired Company or its properties, at law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign, or before any arbitrator of any kind. The Acquired Company does not have any knowledge of any material default on its part with respect to any judgment, order, injunction, decree, award, rule, or regulation of any court, arbitrator, or governmental agency or instrumentality or of any circumstances which, after reasonable investigation, would result in the discovery of such a default.
Section 1.04 Financial Statements. The Acquired Company audited financial statements which include the Balance Sheet as of December 31, 2021, Statements of Operations for the Years Ended December 31, 2021, Statement of Stockholders’ Equity for the Years Ended December 31, 2021 and Statement of Cashflows for the Year Ended December 31, 2021 (the “Acquired Company Financial Statements”) have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto, and fairly present in all material respects the financial position of the Acquired Company as of and for the dates thereof and the results of operations and cash flows for the periods then ended.
Section 1.05 Material Changes; Undisclosed Events, Liabilities or Developments. Since the Balance Sheet Date: (i) there has been no event, occurrence or development that has had or that could reasonably be expected to be materially adverse to the Acquired Company, (ii) the Acquired Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Acquired Company’s consolidated financial statements pursuant to GAAP or disclosed in filings made with the Commission (if the Acquired Company is an issuer required to file periodic reports under the Exchange Act), (iii) the Acquired Company has not altered its method of accounting, and (iv) the Acquired Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock. Except for the issuance of the Securities contemplated by this Agreement or as set forth in Section 1.05 of the Acquired Company Schedules, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Acquired Company or its businesses, properties, operations, assets or financial condition, that would be required to be disclosed by the Acquired Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least one business day prior to the date that this representation is made. Section 1.05 of the Acquired Company Schedules sets forth all of the Acquired Company General Liabilities as of the Effective Date.
Section 1.06 Subsidiaries and Predecessor Corporations. The Acquired Company does not have any predecessor corporation(s), subsidiaries, and does not own, beneficially or of record, any shares of any other corporation.
Section 1.07 Contracts. Except as set forth in Section 1.07 of the Acquired Company Schedules, the Acquired Company is not a party to, and its assets, products, technology and properties are not bound by, any leases, contract, franchise, license agreement, agreement, debt instrument, obligation, arrangement, understanding or other commitments whether such agreement is in writing or oral whereby each such agreement involves aggregate annual consideration in excess of $125,000 (each, an “Acquired Company Material Contract”).
| 3 |
| --- |
Section 1.08 No Conflict With Other Instruments. The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or provision of, constitute a default under, or terminate, accelerate or modify the terms of, any indenture, mortgage, deed of trust, or other material agreement or instrument to which the Acquired Company is a party or to which any of its assets, properties or operations are subject.
Section 1.09 Compliance With Laws and Regulations. The Acquired Company has complied with all Laws (as hereinafter defined) applicable to the Acquired Company and the operation of its business. This compliance includes, but is not limited to, the filing of all reports to date with federal and state securities authorities.
Section 1.10 Material Transactions or Affiliations. Except as disclosed herein and in Section 1.07 of the Acquired Company Schedules, there exists no contract, agreement or arrangement between the Acquired Company and any predecessor and any Person who was at the time of such contract, agreement or arrangement an officer, director, or Person owning of record or known by the Acquired Company to own beneficially, 5% or more of the issued and outstanding common stock of the Acquired Company and which is to be performed in whole or in part after the date hereof or was entered into not more than three years prior to the date hereof. Neither any officer, director, nor 5% Shareholders of the Acquired Company has, or has had since inception of the Acquired Company, any known interest, direct or indirect, in any such transaction with the Acquired Company which was material to the business of the Acquired Company. The Acquired Company has no commitment, whether written or oral, to lend any funds to, borrow any money from, or enter into any other transaction with, any such affiliated Person.
Section 1.11 Taxes, Tax Returns and Audits. Except as set forth in Section 1.11 of the Acquired Company Schedules, all federal, state and local Tax Returns (as hereinafter defined) of the Acquired Company have been accurately prepared in all material respects and duly and timely filed, except for those returns covered by a timely filed extension, and all federal, state and local Taxes required to be paid with respect to the periods covered by such Tax Returns have been paid to the extent that the same have become due. The Acquired Company is not and has not been delinquent in the payment of any Tax (as hereinafter defined). The Acquired Company has not had a Tax deficiency assessed against it and has not executed a waiver of any statute of limitations for the assessment or collection of any Tax. None of the Tax Returns filed by the Acquired Company has been audited by any Authority. The Acquired Company has not received any written notice of any proposed audits, investigations, claims or administrative proceedings relating to Taxes or any Tax Returns. The Acquired Company (i) is not a party to, nor is it bound by or obligated under, any Tax sharing agreements (other than commercial agreements, the primary purpose of which does not relate to Taxes), and (ii) does not have any potential liability or obligation to any Person as a result of, or pursuant to, any such Tax sharing agreements. The Acquired Company has no liability for the Taxes of any other taxpayer under U.S. Treasury Regulation 1.1502-6 or any other similar provision. The following terms, as used herein, have the following meanings:
Section 1.12 Insurance Policies. The Acquired Company has not received written notice of any pending or threatened cancellation (retroactive or otherwise) with respect to any of the insurance policies in force naming the Acquired Company or employees thereof as an insured or beneficiary or as a loss payable payee, and the Acquired Company is in compliance in all material respects with all conditions contained therein. Except as disclosed in Section 1.12 of the Acquired Company Schedules, there are no pending claims against such insurance policies by the Acquired Company as to which insurers are defending under reservation of rights or have denied liability, and there exists no claim under such insurance policies that has not been properly filed by the Acquired Company. Set forth in Section 1.12 of the Acquired Company Schedules is a schedule of all of the insurance policies of the Acquired Company.
| 4 |
| --- |
Section 1.13 Anti-Money Laundering, Anti-Bribery and Anti-Corruption; Sanctions.
(a) Neither the Acquired Company nor its Affiliates or any director or officer of any of them is an individual or entity currently, or has not in the past 5 years been, subject to any Sanctions (as hereinafter defined) or is on any Sanctions List (as hereinafter defined).
(b) Each of the Acquired Company and its Affiliates and their respective directors, officers, employees and, to the knowledge of the Acquired Company, agents and any other person or entity acting on behalf of the Acquired Company, has complied with the Money Laundering, Anti-Corruption and Anti-Bribery Laws (as hereinafter defined), in each case as applicable to them, and no action, suit or proceeding by or before any court or any arbitrator or any governmental agency, authority or body involving the Acquired Company or its directors or officers and, to the knowledge of the Acquired Company, the employees, agents, or representatives of each of them, is pending or threatened with respect to Money Laundering, Anti-Corruption and Anti-Bribery Laws.
(c) Neither the Acquired Company nor its directors or officers, nor, to the knowledge of the Acquired Company, the employees or agents of any of them has:
(i) used any corporate funds for any unlawful contribution, gift, entertainment or unlawful expense relating to political activity;
(ii) nor taken any action in furtherance of an unlawful offer, payment, promise to pay, or authorization or approval of the payment or giving of money, property, gifts or (anything else of value, directly or indirectly, to any “government official” (including any officer or employee of a government or government owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for public office) or made any other bribe, rebate, payoff, influence payment or kickback intended to improperly influence official action or secure an improper advantage.
(d) The Acquired Company will promote and ensure compliance with Money Laundering, Anti-Corruption and Anti-Bribery Laws in all jurisdictions where it operates and with the representations and warranties contained herein.
Section 1.14 Approval of Agreement. This Agreement has been duly and validly authorized and executed and delivered on behalf of the Acquired Company and the Sellers, and this Agreement constitutes a valid and binding agreement of the Acquired Company and the Sellers enforceable in accordance with its terms.
| 5 |
| --- |
Section 1.15 The Acquired Company Schedules. The Acquired Company has delivered to SPIN the following schedules, which are collectively referred to as the “Acquired Company Schedules” and which consist of separate schedules dated as of the date of execution of this Agreement, all certified by the chief executive officer of the Acquired Company as complete, true, and correct as of the date of this Agreement in all material respects:
(a) a schedule containing complete and accurate copies of the certificate of incorporation and bylaws of the Acquired Company as in effect as of the date of this Agreement;
(b) a schedule setting forth a description of any material adverse change in the business, operations, property, inventory, assets, or condition of the Acquired Company since December 31, 2021, required to be provided pursuant to Section 1.05 hereof; and
(c) a schedule setting forth any other information, together with any required copies of documents, required to be disclosed in the Acquired Company Schedules provided for in this Agreement.
The Acquired Company shall cause the Acquired Company Schedules and the instruments and data delivered to SPIN hereunder to be promptly updated after the date hereof up to and including the Closing Date.
Section 1.16 Valid Obligation. This Agreement and all agreements and other documents executed by the Acquired Company in connection herewith constitute the valid and binding obligations of the Acquired Company and the Sellers, enforceable in accordance with its or their terms, except as may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought.
Section 1.17 Patent and Technology Agreement. The Patent and Technology Exclusive and Non-Exclusive License Agreement between Supergreen Energy Corp. and Acquired Company with an effective date of January 15, 2021, as amended on October 25, 2021 and March 27, 2022 (collectively, the “License Agreement”) is valid and enforceable by the Acquired Company in all respects, except as limited by bankruptcy and insolvency laws and by other laws affecting the rights of creditors generally.
Section 1.18 Investment Representations.
(a) Investment Purpose. As of the date hereof, each Seller understands and agrees that the consummation of this Agreement including the delivery of the Exchange Consideration to the Sellers in exchange for the Acquired Company Shares as contemplated hereby constitutes the offer and sale of securities under the Securities Act of 1933, as amended (the “Securities Act “) and applicable state statutes and that the Acquired Company Shares are being acquired for the Sellers’s own account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the Securities Act.
| 6 |
| --- |
(b) Accredited Investor Status. Each Seller is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”).
(c) Reliance on Exemptions. Each Seller understands that the Exchange Consideration is being offered and sold to the Sellers in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that SPIN is relying upon the truth and accuracy of, and the Sellers’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Sellers set forth herein in order to determine the availability of such exemptions and the eligibility of the Sellers to acquire the Exchange Consideration.
(d) Information. Each Seller and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of SPIN and materials relating to the offer and sale of the Exchange Consideration which have been requested by the Sellers or their advisors. Each Seller and their advisors, if any, have been afforded the opportunity to ask questions of SPIN. Notwithstanding the foregoing, SPIN has not disclosed to the Sellers any material nonpublic information and will not disclose such information unless such information is disclosed to the public prior to or promptly following such disclosure to the Sellers. Each Seller understands that their investment in the Exchange Consideration involves a significant degree of risk.
(e) Governmental Review. Each Seller understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Exchange Consideration.
(f) Transfer or Re-sale. Each Seller understands that (i) the sale or re-sale of the Exchange Consideration has not been and is not being registered under the Securities Act or any applicable state securities laws, and the Exchange Consideration may not be transferred unless (a) the Exchange Consideration is sold pursuant to an effective registration statement under the Securities Act, (b) the Sellers shall have delivered to SPIN, at the cost of the Sellers, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in comparable transactions to the effect that the Exchange Consideration to be sold or transferred may be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by SPIN, (c) the Exchange Consideration is sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the Securities Act (or a successor rule) (“Rule 144”)) of the Sellers who agrees to sell or otherwise transfer the Exchange Consideration only in accordance with this Section and who is an Accredited Investor, (d) the Exchange Consideration is sold pursuant to Rule 144, or (e) the Exchange Consideration is sold pursuant to Regulation S under the Securities Act (or a successor rule) (“Regulation S”), and the Sellers shall have delivered to SPIN, at the cost of the Sellers, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion shall be accepted by SPIN; (ii) any sale of such Exchange Consideration made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Exchange Consideration under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the SEC thereunder; and (iii) neither SPIN nor any other person is under any obligation to register such Exchange Consideration under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder (in each case). Notwithstanding the foregoing or anything else contained herein to the contrary, the Exchange Consideration may be pledged as collateral in connection with a bona fide margin account or other lending arrangement.
| 7 |
| --- |
(g) Legends. Each of the Sellers understand that the shares of SPIN’s common stock that comprise the Exchange Consideration (the “Exchange Shares”) and, until such time as the Exchange Shares have been registered under the Securities Act, may be sold pursuant to Rule 144 or Regulation S, the Exchange Shares may bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates for such Exchange Shares):
“THEISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF(A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL(WHICH COUNSEL MAY BE SELECTED BY THE SELLER), IN A FORM REASONABLY SATISFACTORY TO SPIN, THAT REGISTRATION IS NOT REQUIRED UNDER SAIDACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIESMAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”
The legend set forth above shall be removed and SPIN shall issue a certificate without such legend to the holder of any Exchange Share upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) the Exchange Shares are registered for sale under an effective registration statement filed under the Securities Act or otherwise may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides SPIN with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Exchange Shares may be made without registration under the Securities Act, which opinion shall be accepted by SPIN so that the sale or transfer is effected. Each Seller agrees to sell all Exchange Shares, including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any.
| 8 |
| --- |
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF SPIN
As an inducement to, and to obtain the reliance of the Acquired Company and the Sellers, except as set forth in the SPIN Schedules (as hereinafter defined), SPIN represents and warrants, as of the date hereof and as of the Closing Date, as follows:
Section 2.01 Organization. SPIN and its Subsidiary are corporations duly organized, validly existing, and in good standing under the laws of the State of Delaware and Texas, respectively, and have the corporate power and are duly authorized under all applicable laws, regulations, ordinances, and orders of public authorities to carry on its business in all material respects as it is now being conducted. Included in the SPIN Schedules are complete and correct copies of the certificate of incorporation and bylaws of SPIN and its Subsidiary as in effect on the date hereof. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any provision of SPIN’s certificate of incorporation or bylaws. SPIN has taken all action required by law, its certificate of incorporation, its bylaws, or otherwise to authorize the execution and delivery of this Agreement, and SPIN has full power, authority, and legal right and has taken all action required by law, its certificate of incorporation, bylaws, or otherwise to consummate the transactions herein contemplated.
Section 2.02 Capitalization. SPIN’s authorized capitalization consists of (a) 250,000,000 shares of common stock, par value $0.001 per share (“SPIN Common Stock”), of which 20,240,882 shares are issued and outstanding, and (b) 10,000,000 shares of preferred stock, par value $.001 per share, none of which are issued and outstanding. All issued and outstanding shares are legally issued, fully paid, and non-assessable and not issued in violation of the preemptive or other rights of any person. Except as set forth on Section 2.02 of the SPIN Schedules, no Person (as hereinafter defined) has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by this Agreement. Except as set forth on Schedule Section 2.02, there are no agreements or arrangements under which SPIN is obligated to register the sale of any of SPIN’s securities under the Securities Act. Except as set forth on Schedule Section 2.02, no shares of Common Stock and/or other securities of SPIN are entitled to preemptive rights and there are no outstanding debt securities and no contracts, commitments, understandings, or arrangements by which SPIN is or may become bound to issue additional shares of the capital stock and/or other securities of SPIN or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into or exchangeable for, any shares of capital stock of SPIN other than those issued or granted in the ordinary course of business pursuant to SPIN’s equity incentive and/or compensatory plans or arrangements. Except for customary transfer restrictions contained in agreements entered into by SPIN to sell restricted securities and/or as set forth on Schedule Section 2.02, SPIN is not a party to, and it has no knowledge of, any agreement restricting the voting or transfer of any shares of the capital stock and/or other securities of SPIN. Except as set forth on Schedule Section 2.02, the offer and sale of all capital stock, convertible or exchangeable securities, rights, warrants, options and/or any other securities of SPIN, when any such securities of SPIN were issued, complied in all material respects with all applicable federal and state securities laws, and no current and/or prior holder of any securities of SPIN has any right of rescission or damages or any “put” or similar right with respect thereto. Except as set forth on Section 2.02 of the SPIN Schedules, there are no securities or instruments of SPIN containing anti-dilution or similar provisions that will be triggered by the issuance and/or sale of the Exchange Shares and/or the consummation of the transactions described herein. The term “Person” means an individual, corporation, partnership (including a general partnership, limited partnership or limited liability partnership), limited liability company, association, trust or other entity or organization, including a government, domestic or foreign, or political subdivision thereof, or an agency or instrumentality thereof.
| 9 |
| --- |
Section 2.03 Material Changes; Undisclosed Events, Liabilities or Developments. Since the Balance Sheet Date: (i) there has been no event, occurrence or development that has had or that could reasonably be expected to be materially adverse to SPIN or its Subsidiary, (ii) SPIN or its Subsidiary has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in SPIN’s consolidated financial statements pursuant to GAAP or disclosed in filings made with the Commission (if SPIN is an issuer required to file periodic reports under the Exchange Act), (iii) SPIN has not altered its method of accounting, and (iv) SPIN or its Subsidiary has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) SPIN has not issued any equity securities to any officer, director or Affiliate (as hereinafter defined), except as set forth in Section 2.03 of the SPIN Schedules pursuant to existing Company stock option plans. Except for the issuance of the Securities contemplated by this Agreement or as set forth in Section 2.03 of the SPIN Schedules, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to SPIN or its Subsidiary or their respective businesses, properties, operations, assets or financial condition, that would be required to be disclosed by SPIN under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least one business day prior to the date that this representation is made. Section 2.03 of the SPIN Schedules sets forth all of the SPIN General Liabilities as of the Effective Date. The term “Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with such Person. “Control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise. “Controlled”, “Controlling” and “under common Control with” have correlative meanings. Without limiting the foregoing a Person (the “Controlled Person”) shall be deemed Controlled by (a) any other Person (the “50% Owner”) (i) owning beneficially, as meant in Rule 13d-3 under the Exchange Act, securities entitling such Person to cast 50% or more of the votes for election of directors or equivalent governing authority of the Controlled Person or (ii) entitled to be allocated or receive 50% or more of the profits, losses, or distributions of the Controlled Person; or (b) an officer, director, general partner, partner (other than a limited partner), manager, or member (other than a member having no management authority that is not a 50% Owner ) of the Controlled Person.
Section 2.04 Subsidiaries and Predecessor Corporations. Other than Quad Video Halo, Inc., a Texas corporation (“Quad”) and Concussion and Spine Injury Solutions Inc., a Texas corporation, SPIN does not have any predecessor corporation(s), subsidiaries, and does not own, beneficially or of record, any shares of any other corporation (collectively, the “Subsidiary”).
Section 2.05 Shell Company Status; SEC Reports; Financial Statements. SPIN has filed all reports, schedules, forms, statements and other documents required to be filed by SPIN under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as SPIN was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of SPIN included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of SPIN and its consolidated Subsidiary as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. For purposes of this Agreement, December 31, 2021 is referred to as the “Balance Sheet Date”.
| 10 |
| --- |
Section 2.06 Information. The information concerning SPIN and its Subsidiary set forth in this Agreement and the SPIN Schedules is complete and accurate in all material respects and does not contain any untrue statements of a material fact or omit to state a material fact required to make the statements made, in light of the circumstances under which they were made, not misleading. In addition, SPIN has fully disclosed in writing to the Sellers (through this Agreement or the SPIN Schedules) all information relating to matters involving SPIN, its Subsidiary or their assets or their present or past operations or activities which (i) indicated or may indicate, in the aggregate, the existence of a greater than $10,000 liability, (ii) have led or may lead to a competitive disadvantage on the part of SPIN or its Subsidiary or (iii) either alone or in aggregation with other information covered by this Section 2.06, otherwise have led or may lead to a material adverse effect on SPIN or its Subsidiary, its assets, or its operations or activities as presently conducted or as contemplated to be conducted after the Closing Date, including, but not limited to, information relating to governmental, employee, environmental, litigation and securities matters and transactions with affiliates (a “Material Adverse Effect”).
Section 2.07 DTC Eligible. The SPIN Common Stock is DTC eligible and DTC has not placed a “freeze” or a “chill” on the Common Stock and SPIN has no reason to believe that DTC has any intention to make the Common Stock not DTC eligible, or place a “freeze” or “chill” on the Common Stock. No federal or state regulatory authority has indicated that it will prohibit the listing of SPIN’s securities.
Section 2.08 Litigation and Proceedings. There are no actions, suits, proceedings or investigations pending or, to the knowledge of SPIN or its Subsidiary after reasonable investigation, threatened by or against SPIN or its Subsidiary or affecting SPIN or its Subsidiary or their properties, at law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign, or before any arbitrator of any kind except as disclosed in the SPIN Schedules. SPIN or its Subsidiary have no knowledge of any default on its part with respect to any judgment, order, writ, injunction, decree, award, rule or regulation of any court, arbitrator, or governmental agency or instrumentality or any circumstance which after reasonable investigation would result in the discovery of such default.
Section 2.09 Contracts.
(a) Except as provided for in Section 2.09 of the SPIN Schedules, neither SPIN nor its Subsidiaries are a party to, and their assets, products, technology and properties are not bound by, any leases, contract, franchise, license agreement, agreement, debt instrument, obligation, arrangement, understanding or other commitments whether such agreement is in writing or oral (the “SPIN Contracts”).
(b) Except as provided for in Section 2.09 of the SPIN Schedules, neither SPIN nor its Subsidiary are a party to or bound by, and the properties of SPIN or its Subsidiary are not subject to any Contract, agreement, other commitment or instrument; any charter or other corporate restriction; or any judgment, order, writ, injunction, decree, or award; and
| 11 |
| --- |
(c) Neither SPIN nor its Subsidiary are a party to any oral or written (i) contract for the employment of any officer or employee; (ii) profit sharing, bonus, deferred compensation, stock option, severance pay, pension benefit or retirement plan, (iii) agreement, contract, or indenture relating to the borrowing of money, (iv) guaranty of any obligation, (v) collective bargaining agreement; or (vi) agreement with any present or former officer or director of SPIN, other than the Dalrymple Note.
Section 2.10 No Conflict With Other Instruments. The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or provision of, constitute a default under, or terminate, accelerate or modify the terms of, any indenture, mortgage, deed of trust, or other material agreement or instrument to which SPIN is a party or to which any of its assets, properties or operations are subject.
Section 2.11 Compliance With Laws and Regulations. SPIN and its Subsidiary have complied with all United States federal, state or local or any applicable foreign statute, law, rule, regulation, ordinance, code, order, judgment, decree or any other applicable requirement or rule of law (a “Law”) applicable to SPIN and the operation of its business. This compliance includes, but is not limited to, the filing of all reports to date with federal and state securities authorities.
Section 2.12 Approval of Agreement. The Board of Directors of SPIN has authorized the execution and delivery of this Agreement by SPIN and has approved this Agreement and the transactions contemplated hereby.
Section 2.13 Material Transactions or Affiliations. Except as disclosed herein and in the SPIN Schedules, there exists no contract, agreement or arrangement between SPIN, its Subsidiary and any predecessor and any Person who was at the time of such contract, agreement or arrangement an officer, director, or Person owning of record or known by SPIN to own beneficially, 5% or more of the issued and outstanding common stock of SPIN and which is to be performed in whole or in part after the date hereof or was entered into not more than three years prior to the date hereof. Neither any officer, director, nor 5% Shareholders of SPIN has, or has had since inception of SPIN, any known interest, direct or indirect, in any such transaction with SPIN which was material to the business of SPIN. SPIN has no commitment, whether written or oral, to lend any funds to, borrow any money from, or enter into any other transaction with, any such affiliated Person.
Section 2.14 SPIN Schedules. SPIN has delivered to the Sellers the following schedules, which are collectively referred to as the “SPIN Schedules” and which consist of separate schedules, which are dated the date of this Agreement, all certified by the chief executive officer of SPIN to be complete, true, and accurate in all material respects as of the date of this Agreement.
(a) a schedule containing complete and accurate copies of the certificate of incorporation and bylaws of SPIN as in effect as of the date of this Agreement;
(b) a schedule setting forth a description of any material adverse change in the business, operations, property, inventory, assets, or condition of SPIN since December 31, 2021, required to be provided pursuant to Section 2.03 hereof; and
(c) a schedule setting forth any other information, together with any required copies of documents, required to be disclosed in the SPIN Schedules provided for in this Agreement.
SPIN shall cause the SPIN Schedules and the instruments and data delivered to the Sellers hereunder to be promptly updated after the date hereof up to and including the Closing Date.
| 12 |
| --- |
Section 2.15 Bank Accounts; Power of Attorney. Set forth in Section 2.15 of the SPIN Schedules is a true and complete list of (a) all accounts with banks, money market mutual funds or securities or other financial institutions maintained by SPIN and its Subsidiary within the past twelve (12) months, the account numbers thereof, and all persons authorized to sign or act on behalf of SPIN, (b) all safe deposit boxes and other similar custodial arrangements maintained by SPIN and its Subsidiary within the past twelve (12) months, and (c) the names of all persons holding powers of attorney from SPIN or its Subsidiary or who are otherwise authorized to act on behalf of SPIN or its Subsidiary with respect to any matter, other than its officers and directors, and a summary of the terms of such powers or authorizations.
Section 2.16 Valid Obligation. This Agreement and all agreements and other documents executed by SPIN in connection herewith constitute the valid and binding obligation of SPIN, enforceable in accordance with its or their terms, except as may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought.
Section 2.17 Listing and Maintenance Requirements. SPIN has not, in the 12 months preceding the date hereof, received notice from the OTC Markets that SPIN is not in compliance with the listing or maintenance requirements of the OTC Markets. The SPIN Common Stock is eligible for quotation on OTC Market and SPIN has no reason to believe that OTC Market has any intention of no longer quoting the SPIN Common Stock from OTC Market. The issuance of the Exchange Shares hereunder does not contravene the rules and regulations of the OTC Market. SPIN has not received any notice of delisting or threat thereof with respect to the SPIN Common Stock. SPIN has paid all applicable OTC Market fees payable as of the Effective Date and will have paid all such fees as of the Closing Date.
Section 2.18 DTC Eligibility. SPIN is a participant in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program and the SPIN Common Stock is DTC eligible.
Section 2.19 Taxes, Tax Returns and Audits. Except as set forth in Section 2.19 of the SPIN Schedules, all federal, state and local Tax Returns (as hereinafter defined) of SPIN have been accurately prepared in all material respects and duly and timely filed, except for those returns covered by a timely filed extension, and all federal, state and local Taxes required to be paid with respect to the periods covered by such Tax Returns have been paid to the extent that the same have become due. Any unpaid taxes shall be added to the SPIN Indebtedness to be paid at or prior to Closing. SPIN is not and has not been delinquent in the payment of any Tax (as hereinafter defined). SPIN has not had a Tax deficiency assessed against it and has not executed a waiver of any statute of limitations for the assessment or collection of any Tax. None of Tax Returns filed by SPIN has been audited by any Authority. SPIN has not received any written notice of any proposed audits, investigations, claims or administrative proceedings relating to Taxes or any Tax Returns. SPIN (i) is not a party to, nor is it bound by or obligated under, any Tax sharing agreements (other than commercial agreements, the primary purpose of which does not relate to Taxes), and (ii) does not have any potential liability or obligation to any Person as a result of, or pursuant to, any such Tax sharing agreements. SPIN has no liability for the Taxes of any other taxpayer under U.S. Treasury Regulation 1.1502-6 or any other similar provision. The following terms, as used herein, have the following meanings:
(a) “Tax(es)” means any federal, state, local or foreign tax, charge, fee, levy, custom, duty, deficiency, or other assessment of any kind or nature imposed by any Taxing Authority (including any income (net or gross), gross receipts, profits, windfall profit, sales, use, goods and services, ad valorem, franchise, license, withholding, employment, social security, workers compensation, unemployment compensation, employment, payroll, transfer, excise, import, real property, personal property, intangible property, occupancy, recording, minimum, alternative minimum, environmental or estimated tax), including any liability therefor as a transferee (including under Section 6901 of the Code or similar provision of applicable Law) or successor, as a result of Treasury Regulation Section 1.1502-6 or similar provision of applicable Law or as a result of any Tax sharing, indemnification or similar agreement, together with any interest, penalty, additions to tax or additional amount imposed with respect thereto.
| 13 |
| --- |
(b) “Taxing Authority” means the Internal Revenue Service and any other Authority responsible for the collection, assessment or imposition of any Tax or the administration of any Law relating to any Tax.
(c) “Tax Return” means any return, information return, declaration, claim for refund or credit, report or any similar statement, and any amendment thereto, including any attached schedule and supporting information, whether on a separate, consolidated, combined, unitary or other basis, that is filed or required to be filed with any Taxing Authority in connection with the determination, assessment, collection or payment of a Tax or the administration of any Law relating to any Tax.
Section 2.20 Insurance Policies. SPIN and its Subsidiary have not received written notice of any pending or threatened cancellation (retroactive or otherwise) with respect to any of the insurance policies in force naming SPIN or its Subsidiary or employees thereof as an insured or beneficiary or as a loss payable payee, and SPIN and its Subsidiary are in compliance in all material respects with all conditions contained therein. Except as disclosed in Section 2.20 of the SPIN Schedules, there are no pending claims against such insurance policies by SPIN or its Subsidiary as to which insurers are defending under reservation of rights or have denied liability, and there exists no claim under such insurance policies that has not been properly filed by SPIN or its Subsidiary. Set forth in Section 2.20 of the SPIN Schedules is a schedule of all of the insurance policies of SPIN and its Subsidiary.
Section 2.21 Anti-Money Laundering, Anti-Bribery and Anti-Corruption; Sanctions.
(a) Neither SPIN nor, its Subsidiary or Affiliates or any director or officer of any of them is an individual or entity currently, or has not in the past 5 years been, subject to any Sanctions or is on any Sanctions List.
(b) Each of SPIN, its Subsidiary and Affiliates and their respective directors, officers, employees and, to the knowledge of SPIN, agents and any other person or entity acting on behalf of SPIN, has complied with the Money Laundering, Anti-Corruption and Anti-Bribery Laws, in each case as applicable to them, and no action, suit or proceeding by or before any court or any arbitrator or any governmental agency, authority or body involving SPIN and its Subsidiary or their respective directors or officers and, to the knowledge of SPIN, the employees, agents, or representatives of each of them, is pending or threatened with respect to Money Laundering, Anti-Corruption and Anti-Bribery Laws.
| 14 |
| --- |
(c) Neither SPIN nor its Subsidiary nor their respective directors or officers, nor, to the knowledge of SPIN, the employees or agents of any of them has:
(i) used any corporate funds for any unlawful contribution, gift, entertainment or unlawful expense relating to political activity;
(ii) nor taken any action in furtherance of an unlawful offer, payment, promise to pay, or authorization or approval of the payment or giving of money, property, gifts or (anything else of value, directly or indirectly, to any “government official” (including any officer or employee of a government or government owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for public office) or made any other bribe, rebate, payoff, influence payment or kickback intended to improperly influence official action or secure an improper advantage.
(d) SPIN and each Subsidiary will promote and ensure compliance with Money Laundering, Anti-Corruption and Anti-Bribery Laws in all jurisdictions where they operate and with the representations and warranties contained herein. As used in this Section, the following terms shall have the following meanings:
(i) “Money Laundering, Anti-Corruption and Anti-Bribery Laws” means money laundering and anti-corruption statutes of all jurisdictions (including, the Foreign Corrupt Practices Act of 1977, the OECD Convention on Bribery of Foreign Public Officials in International Business Transactions, and any similar national or local law or regulation in the United Kingdom or elsewhere where SPIN and each other Subsidiary conducts business), the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency or any such jurisdiction.
(ii) “Sanctions” means any laws or regulations or restrictive measures relating to economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by a Sanctions Authority.
(iii) “Sanctions Authority” means (i) the United Nations Security Council; (ii) the United States government; (iii) the European Union; (iv) the United Kingdom government; (v) the respective governmental institutions and agencies of any of the foregoing, including without limitation, OFAC, the United States Department of State and Department of Commerce, and Her Majesty’s Treasury; and (vi) any other governmental institution or agency with responsibility for imposing, administering or enforcing Sanctions with jurisdiction over SPIN or any of its subsidiaries (together, “Sanctions Authorities”).
(iv) “Sanctions List” means the Specially Designated Nationals and Blocked Persons List maintained by OFAC, the Denied Persons List maintained by the U.S. Department of Commerce, the Consolidated List of Financial Sanctions Companies maintained by Her Majesty’s Treasury, or any other list issued or maintained by any Sanctions Authority of persons subject to Sanctions (including investment or related restrictions), each as amended, supplemented or substituted from time to time.
| 15 |
| --- |
ARTICLE III
SHARE EXCHANGE; DEPOSIT
Section 3.01 The Exchange. On the terms and subject to the conditions set forth in this Agreement, on the Closing Date (as defined in Section 3.03), the Sellers shall sell, assign, transfer and deliver, free and clear of all liens, pledges, encumbrances, charges, restrictions or known claims of any kind, nature, or description, all of the shares of the Acquired Company’s common shares, par value $0.001 per share (the “Acquired Company Stock”), held by the Sellers; the objective of such purchase (the “Exchange”) being the acquisition by SPIN of not less than 100% of the issued and outstanding shares of the Acquired Company. In exchange for the transfer of such securities by the Sellers, SPIN shall deliver to the Sellers up to 9,000,000 shares of the Series A Preferred Stock (the “Exchange Shares”) which converts into approximately 96% of the issued and outstanding shares of SPIN’s common stock after giving effect to a proposed increase in the number of authorized shares of SPIN’s common stock as provided for herein and is hereinafter referred to as the “Exchange Consideration”. At the Closing Date, the Sellers shall, on surrender of their certificates representing the Acquired Company shares to SPIN or its registrar or transfer agent, be entitled to receive a certificate or certificates evidencing their ownership of the Exchange Shares.
Upon consummation of the transaction contemplated herein, all of the issued and outstanding shares of the Acquired Company shall be held by SPIN.
Section 3.02 Deposit. The Acquired Company has previously paid to SPIN an aggregate of $40,000 (the “Deposit”) pursuant to the terms of the Letter of Intent entered into between SPIN and Acquired Company dated February 7, 2022. Except as otherwise set forth herein, the Deposit shall be non-refundable to the Acquired Company.
Section 3.03 Closing. The closing (“Closing”) of the transactions contemplated by this Agreement shall occur following completion of the conditions set forth in Articles V and VI, and upon delivery of the Exchange Consideration as described in Section 3.01 herein. The Closing shall take place at a mutually agreeable time and place and is anticipated to close by no later than March 25, 2022 (the “Termination Date”) provided that the Parties may amend such Termination Date pursuant to Section 7.14 (the date and time at which the Closing is actually held being the “Closing Date”).
Section 3.04 Closing Events. At the Closing, SPIN, the Acquired Company and the Sellers shall execute, acknowledge, and deliver (or shall ensure to be executed, acknowledged, and delivered), any and all certificates, opinions, financial statements, schedules, agreements, resolutions, rulings or other instruments required by this Agreement to be so delivered at or prior to the Closing, together with such other items as may be reasonably requested by the parties hereto and their respective legal counsel in order to effectuate or evidence the transactions contemplated hereby.
Section 3.05 Termination. This Agreement may be terminated on or prior to the Closing:
(a) By the mutual written consent of SPIN, Acquired Company and the Sellers;
(b) By SPIN (i) if the conditions to the Closing as set forth in ARTICLE V have not been satisfied or waived by SPIN, which waiver SPIN may give or withhold in its sole discretion, by the Termination Date, provided, however, that SPIN may not terminate this Agreement pursuant to this Section 3.05(b) if the reason for the failure of any such condition to occur was the breach of the terms of this Agreement by SPIN; or (ii) there has been a material violation, breach or inaccuracy of any representation, warranty, covenant or agreement of any Acquired Company Party contained in this Agreement, which violation, breach or inaccuracy would cause the conditions set forth in Section 5.01 not to be satisfied, and such violation, breach or inaccuracy has not been waived by SPIN or cured by the Acquired Company Parties, as applicable, within five (5) Business Days after receipt by Acquired Company of written notice thereof from SPIN or is not reasonably capable of being cured prior to the Termination Date;
| 16 |
| --- |
(c) By the Sellers’ Representative (i) if the conditions to Closing as set forth in ARTICLE VI have not been satisfied or waived by the Sellers’ Representative, which waiver the Sellers’ Representative may give or withhold in his sole discretion, by the Termination Date, provided, however, that the Sellers’ Representative may not terminate this Agreement pursuant to this Section 3.05(c) if the reason for the failure of any such condition to occur was the breach of the terms of this Agreement by any of the Acquired Company Parties; or (ii) or there has been a material violation, material breach or material inaccuracy of any representation, warranty, covenant or agreement of SPIN contained in this Agreement, which violation, breach or inaccuracy would cause the conditions set forth in Section 6.01 not to be satisfied, and such violation, breach or inaccuracy has not been waived by Acquired Company and the Sellers or cured by SPIN, as applicable, within five (5) Business Days after receipt by SPIN of written notice thereof from Acquired Company or is not reasonably capable of being cured prior to the Termination Date; or
(d) By any Party, if a court of competent jurisdiction or other Authority shall have issued an order or taken any other action permanently restraining, enjoining or otherwise prohibiting the transactions contemplated under this Agreement and such order or action shall have become final and nonappealable.
Section 3.06 Survival After Termination. If this Agreement is terminated in accordance with Section 3.05, this Agreement shall become void and of no further force and effect with no liability to any Person on the part of any Party hereto (or any officer, agent, employee, direct or indirect holder of any equity interest or securities, or Affiliates of any Party); provided, however, that this Section 3.06, Section 4.07 and ARTICLE VII shall survive the termination of this Agreement and (iii) nothing herein shall relieve any Party from any liability for fraud or any willful and material breach of the provisions of this Agreement prior to the termination of this Agreement.
Section 3.07 Effect of Termination.
(a) If SPIN is the terminating party of this Agreement pursuant to Section 3.05(a) and Section 3.05(b), SPIN shall be entitled to retain the Deposit.
(b) If the Sellers are the terminating party of this Agreement pursuant to Section 3.05(c) or Section 3.05(d), the Acquired Company shall be entitled to the return of the Deposit within 10 days of written demand for such payment.
ARTICLE IV
SPECIAL COVENANTS
Section 4.01 Access to Properties and Records. SPIN and the Acquired Company will each afford to the officers and authorized representatives of the other full access to the properties, books and records of SPIN or the Acquired Company, as the case may be, in order that each may have a full opportunity to make such reasonable investigation as it shall desire to make of the affairs of the other, and each will furnish the other with such additional financial and operating data and other information as to the business and properties of SPIN or the Acquired Company, as the case may be, as the other shall from time to time reasonably request. Without limiting the foregoing, as soon as practicable after the end of each fiscal quarter (and in any event through the last fiscal quarter prior to the Closing Date), each party shall provide the other with quarterly internally prepared and unaudited financial statements.
| 17 |
| --- |
Section 4.02 Delivery of Books and Records and Other Information. At the Closing, SPIN shall deliver to the Acquired Company or its officers, directors and agents, the originals of the corporate minute books, books of account, contracts, records, and all other books or documents of SPIN now in the possession of SPIN or its representatives and SPIN’s CCC and CIK codes and related passwords related to its EDGAR filings with the SEC and all passwords and login information needed in order to access SPIN’s OTC Markets profile and to obtain OTCIQ access.
Section 4.03 Third Party Consents and Certificates. SPIN and the Acquired Company agree to cooperate with each other in order to obtain any required third-party consents to this Agreement and the transactions herein contemplated.
Section 4.04 Designation of Directors and Officer.
(a) On the Closing Date, the following persons will take the position of Director with SPIN: Benjamin Tran and Michael Cao (the “Sellers’ Designee”), and the following officers and/or directors shall tender their resignation of all positions held with SPIN effective on the Closing Date: Jerry Bratton and John Bergeron. William F. Donovan shall resign as Chief Executive Officer. The current directors of SPIN, William Donovan and Peter L. Dalrymple, who will remain on SPIN’s Board of Directors following the Closing have agreed to serve as directors of SPIN without compensation. The Sellers’ Designee shall not be subject to any Disqualification Events as defined in Section 1.17.
(b) In addition, upon the signing of this Agreement, SPIN shall immediately appoint as officers of SPIN the following persons: Benjamin Tran as Chief Executive Officer and President, and Robert Brilon as Chief Financial Officer, Treasurer and Secretary.
Section 4.05 Management of Quad.
(a) On the Closing Date, SPIN shall enter into an operating agreement (the “Quad Operating Agreement”) with Dalrymple whereby he will (i) agree to operate Quad and pay all expenses of the business’s operations and receive any revenues in excess of expenses which will reduce the balance due under the Dalrymple Note, (ii) maintain appropriate accounting records of Quad’s operations and (iii) indemnify and defend SPIN as a result of any liabilities related to the operation of Quad or breach of his obligations under the operating agreement.
Section 4.06 Additional Actions Prior to Closing.
(a) From and after December 31, 2021 until the Closing Date and except as set forth in the SPIN Schedules or the Acquired Company Schedules or as permitted or contemplated by this Agreement, SPIN (subject to paragraph (d) below) and the Acquired Company respectively, will each:
(i) carry on its business in substantially the same manner as it has heretofore and as disclosed in the SEC Reports;
| 18 |
| --- |
(ii) maintain and keep its properties in states of good repair and condition as at present, except for depreciation due to ordinary wear and tear and damage due to casualty;
(iii) maintain in full force and effect insurance comparable in amount and in scope of coverage to that now maintained by it;
(iv) perform in all material respects all of its obligations under material contracts, leases, and instruments relating to or affecting its assets, properties, and business;
(v) use its best efforts to maintain and preserve its business organization intact, to retain its key employees, and to maintain its relationship with its material suppliers and customers; and
(vi) fully comply with and perform in all material respects all obligations and duties imposed on it by all federal and state laws and all rules, regulations, and orders imposed by federal or state governmental authorities.
(b) From and after December 31, 2021 until the Closing Date, neither SPIN nor the Acquired Company will, except as provided for in Schedule 4.06(b):
(i) make any changes in their Articles of Incorporation, articles or certificate of incorporation or bylaws except as contemplated by this Agreement including a name change;
(ii) take any action described in Section 1.07 in the case of the Acquired Company or in Section 2.07, in the case of SPIN (all except as permitted therein or as disclosed in the applicable party’s schedules);
(iii) enter into or amend any contract, agreement, or other instrument of any of the types described in such party’s schedules, except that a party may enter into or amend any contract, agreement, or other instrument in the ordinary course of business involving the sale of goods or services; or
(iv) sell any assets or discontinue any operations, sell any shares of capital stock or conduct any similar transactions other than in the ordinary course of business except as disclosed in the SEC Reports.
Section 4.07 Indemnification.
(a) The Acquired Company hereby agrees to indemnify SPIN and each of the officers, agents and directors of SPIN as of the date of execution of this Agreement against any loss, liability, claim, damage, or expense (including, but not limited to, any and all expense whatsoever reasonably incurred in investigating, preparing, or defending against any litigation, commenced or threatened, or any claim whatsoever) (“Loss”), to which it or they may become subject arising out of or based on any inaccuracy appearing in or misrepresentations made under Article I of this Agreement. The indemnification provided for in this paragraph shall survive the Closing and consummation of the transactions contemplated hereby and termination of this Agreement for one year following the Closing.
| 19 |
| --- |
(b) Each of the Sellers agrees, severally in accordance with their respective Pro Rata Shares (as hereinafter defined) and not jointly, to indemnify SPIN and each of the officers, agents and directors of SPIN as of the date of execution of this Agreement against any Loss, to which it or they may become subject arising out of or based on any material inaccuracy appearing in or misrepresentations made under Article I of this Agreement. The indemnification provided for in this paragraph shall survive the Closing and consummation of the transactions contemplated hereby and termination of this Agreement for one year following the Closing. “Pro Rata Share” means a percentage equal to the number of shares of Acquired Company Stock owned by a Seller divided by the number of shares of Acquired Company Stock owned by all Sellers.
(c) SPIN agrees to indemnify and hold harmless the Acquired Company and each of the officers, agents, and directors of the Acquired Company and the Sellers as of the date of execution of this Agreement (the “Acquired Company Indemnitees”) against any Liabilities incurred or suffered by the Acquired Company Indemnitees. For this purpose, “Liabilities” shall mean all suits, proceedings, claims, expenses, losses, costs, liabilities, judgments, deficiencies, assessments, actions, investigations, penalties, fines, settlements, interest and damages (including reasonable attorneys’ fees and expenses), whether suit is instituted or not and, if instituted, whether at any trial or appellate level, and whether raised by the parties hereto or a third party, incurred or suffered by the Acquired Company Indemnitees or any of them arising from, in connection with or as a result of (a) any false or inaccurate representation or warranty made by or on behalf of SPIN in or pursuant to this Agreement; (b) any default or breach in the performance of any of the covenants or agreements made by SPIN in or pursuant to this Agreement; (c) the operation of SPIN’s business prior to the Closing; (d) any obligation or liability of SPIN which is not included in SPIN’s Financial Statements (e) any breach of the contracts prior to the Closing; and (f) any Liabilities arising out of the claims of creditors of SPIN or any party claiming by, through or under such creditor, including, but not limited to, any bankruptcy trustee or debtor-in-possession. The indemnification provided for in this paragraph shall survive the Closing and consummation of the transactions contemplated hereby and termination of this Agreement for ninety-days following the Closing. Any obligations under this Section 4.07(c) may be offset against any amounts owed by SPIN under the Dalrymple Note (the “Note Offset Rights”).
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF SPIN
The obligations of SPIN under this Agreement are subject to the satisfaction, at or before the Closing Date, of the following conditions:
Section 5.01 Accuracy of Representations and Performance of Covenants. The representations and warranties made by the Acquired Company and the Sellers in this Agreement were true when made and shall be true at the Closing Date with the same force and effect as if such representations and warranties were made at and as of the Closing Date (except for changes therein permitted by this Agreement). The Acquired Company shall have performed or complied with all covenants and conditions required by this Agreement to be performed or complied with by the Acquired Company prior to or at the Closing. SPIN shall be furnished with a certificate, signed by a duly authorized executive officer of the Acquired Company and dated the Closing Date, to the foregoing effect.
| 20 |
| --- |
Section 5.02 Officer’s Certificate. SPIN shall have been furnished with a certificate dated the Closing Date and signed by a duly authorized officer of the Acquired Company to the effect that no litigation, proceeding, investigation, or inquiry is pending, or to the best knowledge of the Acquired Company threatened, which might result in an action to enjoin or prevent the consummation of the transactions contemplated by this Agreement, or, to the extent not disclosed in the Acquired Company Schedules, by or against the Acquired Company, which might result in any material adverse change in any of the assets, properties, business, or operations of the Acquired Company.
Section 5.03 Approval by the Sellers. The Exchange shall have been approved by the holders of not less than ninety percent (90%) of the shares, including voting power, of the Acquired Company, unless a lesser number is agreed to by SPIN.
Section 5.04 No Governmental Prohibition. No order, statute, rule, regulation, executive order, injunction, stay, decree, judgment or restraining order shall have been enacted, entered, promulgated or enforced by any court or governmental or regulatory authority or instrumentality which prohibits the consummation of the transactions contemplated hereby.
Section 5.05 Consents. All consents, approvals, waivers or amendments pursuant to all contracts, licenses, permits, trademarks and other intangibles in connection with the transactions contemplated herein, or for the continued operation of the Acquired Company after the Closing Date on the basis as presently operated shall have been obtained.
Section 5.06 Other Items.
(a) Using funds provided by the Acquired Company that are part of the Acquired Company Working Capital, SPIN shall pay up to $320,000, less the amount of the SPIN General Liabilities that exceed $140,000 (the “Dalrymple Note Closing Payment”) to Peter L. Dalrymple (“Dalrymple”) as partial payment towards the secured promissory note issued by the Company to Dalrymple in the original principal amount of $610,000 on August 31, 2020 as amended on October 29, 2021 (the “Dalrymple Note”). Following this payment, the principal balance of the Dalrymple Note, plus accrued and unpaid interest as of the Effective Date is $95,000;
(b) Using funds provided by the Acquired Company that are part of the Acquired Company Working Capital, $140,000 shall be used to pay the following amounts (the “SPIN General Liabilities”):
(i) $80,000 payable to M1 Advisors LLC for consulting services provided to SPIN;
(ii) All amounts owed by SPIN and its Subsidiary for accounts payable and any other liabilities of SPIN and its Subsidiary; and
(iii) The balance to Dalrymple as reimbursement for SPIN audit and legal fees.
| 21 |
| --- |
(c) SPIN and Dalrymple shall have entered into the Quad Operating Agreement;
(d) SPIN shall have received a list containing the name, address, and number of shares held by the Sellers as of the date of Closing, certified by an executive officer of the Acquired Company as being true, complete and accurate;
(e) SPIN shall have received such further documents, certificates or instruments relating to the transactions contemplated hereby as SPIN may reasonably request; and
(f) The audit of the Acquired Company Financial Statements shall have been completed by an accounting firm that is registered with the Public Company Accounting Oversight Board (PCAOB).
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED COMPANY
AND THE SELLERS
The obligations of the Acquired Company and the Sellers under this Agreement are subject to the satisfaction, at or before the Closing Date, of the following conditions:
Section 6.01 Accuracy of Representations and Performance of Covenants. The representations and warranties made by SPIN in this Agreement were true when made and shall be true as of the Closing Date (except for changes therein permitted by this Agreement) with the same force and effect as if such representations and warranties were made at and as of the Closing Date. Additionally, SPIN shall have performed and complied with all covenants and conditions required by this Agreement to be performed or complied with by SPIN.
Section 6.02 Officer’s Certificate. The Acquired Company shall have been furnished with certificates dated the Closing Date and signed by duly authorized executive officers of SPIN, (i) certifying and attaching true and complete copies of (A) the resolutions duly and validly adopted by the Board of Directors of SPIN authorizing the execution, delivery and performance of this Agreement, the Quad Operating Agreement, the Dalrymple Note Amendment and the Security Agreement Amendment (collectively, the “Ancillary Agreements”) and the consummation of the transactions contemplated hereby and thereby; (B) the certificate of incorporation of SPIN, as amended to date and as currently in effect; (C) the Series A Certificate of Designations; (ii) certifying the names and specimen signatures of the officers of SPIN authorized to sign this Agreement and the Ancillary Agreements to which it is a party and the other documents to be delivered hereunder and thereunder; and (iii) certifying and evidencing that the conditions set forth in ARTICLE VI have been satisfied and that the statements therein are true and correct.
Section 6.03 Good Standing. The Acquired Company shall have received a certificate of good standing from the Secretary of State of Delaware or other appropriate office, dated as of a date within ten days prior to the Closing Date certifying that SPIN is in good standing as a corporation in the State of Delaware and has filed all tax returns required to have been filed by it to date and has paid all taxes reported as due thereon.
Section 6.04 No Material Adverse Effect. No Material Adverse Effect shall have occurred with respect to SPIN from the Effective Date to the Closing Date;
| 22 |
| --- |
Section 6.05 No Governmental Prohibition. No order, statute, rule, regulation, executive order, injunction, stay, decree, judgment or restraining order shall have been enacted, entered, promulgated or enforced by any court or governmental or regulatory authority or instrumentality which prohibits the consummation of the transactions contemplated hereby.
Section 6.06 Approval by SPIN Board of Directors. SPIN’s board of directors shall have approved this Agreement, the Exchange, the Ancillary Agreements and the following (the “Corporate Action”):
(a) adopt the Certificate of Designations, Preferences and Rights of Series A Preferred Stock in the form attached hereto as Exhibit A (the “Series A Certificate of Designations”).
Section 6.07 Consents. All consents, approvals, waivers or amendments pursuant to all contracts, licenses, permits, trademarks and other intangibles in connection with the transactions contemplated herein, or for the continued operation of SPIN after the Closing Date on the basis as presently operated shall have been obtained.
Section 6.08 Shareholder Report.
The Sellers shall receive a shareholder’s report reflective of all SPIN shareholder’s which does not exceed 20,240,882 shares of SPIN common stock issued and outstanding as of the day prior to the Closing Date and no shares of preferred stock outstanding.
Section 6.09 Other Items
(a) SEC Reports; OTC Markets Reports.
SPIN shall have filed all SEC Reports required to be filed as of the Closing Date including, but not limited to SPIN’s Form 10-K for the period ended December 31, 2021 and a Form 8-K disclosing this Agreement. In addition, SPIN shall have completed all of its required filings with the OTC Markets Group, Inc. OTCQB tier (the “OTC Markets”), including, but not limited to the filing of an Annual Report for the period ended December 31, 2021 and the Annual OTCQB Certification for the period ended December 31, 2021, none of which filings shall contain a material misstatement or omission, and be compliant in all material respects with the OTC Markets rules and regulations;
(b) SPIN and Dalrymple shall have entered into the Quad Operating Agreement;
(c) SPIN shall have authorized the Acquired Company to make the Dalrymple Note Closing Payment as provided for in Section 5.06(a);
(d) SPIN shall have authorized the Acquired Company to pay all of the SPIN General Liabilities as provided for in Section 5.06(b);
(e) Dalrymple shall have signed an amendment to the Dalrymple Note (i) extending the maturity date to no earlier than 90 days after the Closing Date, (ii) providing for the Note Offset Rights provided for in Section 4.07(c), and (iii) reducing the principal amount of the Dalrymple Note by the amount which the SPIN General Liabilities exceeds $140,000 (the “Dalrymple Note Amendment”);
| 23 |
| --- |
(f) Dalrymple shall have signed an amendment to the Security Agreement entered into between SPIN and Peter Dalrymple dated August 31, 2020 substituting Quad as the debtor instead of SPIN (the “Security Agreement Amendment”);
(g) Dalrymple shall have filed with the Texas Secretary of State, a UCC termination statement as to SPIN such that no assets of SPIN other than the assets of its sole wholly-owned subsidiary Quad shall be encumbered by a lien arising out of the Dalrymple Note;
(h) SPIN shall have filed with the Delaware Secretary of State the Series A Certificate of Designations; and
(i) the Sellers shall have received further opinions, documents, certificates, or instruments relating to the transactions contemplated hereby as the Sellers may reasonably request.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Brokers. SPIN represents and agrees that, except as set out in Section 7.01 of the SPIN Schedules, there were no finders or brokers involved in bringing the parties together or who were instrumental in the negotiation, execution or consummation of this Agreement. SPIN agrees to indemnify the Sellers against any claim by any third person other than those described above for any commission, brokerage, or finder’s fee arising from the transactions contemplated hereby based on any alleged agreement or understanding between the indemnifying party and such third person, whether express or implied from the actions of the indemnifying party.
Section 7.02 Governing Law. This Agreement shall be governed by, enforced, and construed under and in accordance with the laws of the United States of America and, with respect to the matters of state law, with the laws of the State of Delaware. Venue for all matters shall be in New Castle County, Delaware, without giving effect to principles of conflicts of law thereunder. Each of the parties (a) irrevocably consents and agrees that any legal or equitable action or proceedings arising under or in connection with this Agreement shall be brought exclusively in the federal courts of the United States. By execution and delivery of this Agreement, each party hereto irrevocably submits to and accepts, with respect to any such action or proceeding, generally and unconditionally, the jurisdiction of the aforesaid court, and irrevocably waives any and all rights such party may now or hereafter have to object to such jurisdiction.
Section 7.03 Notices. Any notice or other communications required or permitted hereunder shall be in writing and shall be sufficiently given if personally delivered to it or sent by email, overnight courier or registered mail or certified mail, postage prepaid, addressed as follows:
If to the Sellers and the Acquired Company, to:
c/o Benjamin Tran
Bitech Mining Corporation
600 Anton Boulevard, Suite 1100
Costa Mesa, CA 92626
Email: ben@btcmcorp.com
| 24 |
| --- |
Laura Anthony and Lazarus Rothstein
Anthony L.G., PLLC
625 North Flagler Drive, Suite 600
West Palm Beach, FL 33401
Email: lanthony@anthonypllc.com and lrothstein@anthonypllc.com
If to SPIN, to:
William F. Donovan, M.D., CEO
Spine Injury Solutions, Inc.
5151 Mitchelldale, Suite A2
Houston, Texas 77092
Email: drbortho@nsoortho.com
John Bergeron
c/o The Loev Law Firm, PC
6300 West Loop South
Suite 280
Bellaire, Texas 77401
dloev@loevlaw.com
Peter Dalrymple
c/o The Loev Law Firm, PC
6300 West Loop South
Suite 280
Bellaire, Texas 77401
dloev@loevlaw.com
or such other addresses as shall be furnished in writing by any party in the manner for giving notices hereunder, and any such notice or communication shall be deemed to have been given (i) upon receipt, if personally delivered, (ii) on the day after dispatch, if sent by overnight courier, (iii) upon dispatch, if transmitted by telecopy and receipt is confirmed by telephone and (iv) three (3) days after mailing, if sent by registered or certified mail.
Section 7.04 Attorney’s Fees. In the event that either party institutes any action or suit to enforce this Agreement or to secure relief from any default hereunder or breach hereof, the prevailing party shall be reimbursed by the losing party for all costs, including reasonable attorney’s fees, incurred in connection therewith and in enforcing or collecting any judgment rendered therein.
Section 7.05 Confidentiality. Each party hereto agrees with the other that, unless and until the transactions contemplated by this Agreement have been consummated, it and its representatives will hold in strict confidence all data and information obtained with respect to another party or any subsidiary thereof from any representative, officer, director or employee, or from any books or records or from personal inspection, of such other party, and shall not use such data or information or disclose the same to others, except (i) to the extent such data or information is published, is a matter of public knowledge, or is required by law to be published; or (ii) to the extent that such data or information must be used or disclosed in order to consummate the transactions contemplated by this Agreement. In the event of the termination of this Agreement, each party shall return to the other party all documents and other materials obtained by it or on its behalf and shall destroy all copies, digests, work papers, abstracts or other materials relating thereto, and each party will continue to comply with the confidentiality provisions set forth herein.
| 25 |
| --- |
Section 7.06 Public Announcements and Filings. Unless required by applicable law or regulatory authority, none of the parties will issue any report, statement or press release to the general public, to the trade, to the general trade or trade press, or to any third party (other than its advisors and representatives in connection with the transactions contemplated hereby) or file any document, relating to this Agreement and the transactions contemplated hereby, except as may be mutually agreed by the parties. Copies of any such filings, public announcements or disclosures, including any announcements or disclosures mandated by law or regulatory authorities, shall be delivered to each party at least one (1) business day prior to the release thereof.
Section 7.07 Schedules; Knowledge. Each party is presumed to have full knowledge of all information set forth in the other party’s schedules delivered pursuant to this Agreement.
Section 7.08 Third Party Beneficiaries. This contract is strictly between SPIN, the Sellers and the Acquired Company, and, except as specifically provided, no director, officer, stockholder (other than the Sellers), employee, agent, independent contractor or any other Person or entity shall be deemed to be a third party beneficiary of this Agreement.
Section 7.09 Expenses. Subject to Section 7.04 above, whether or not the Exchange is consummated, each of SPIN and the Acquired Company will bear their own respective expenses, including legal, accounting and professional fees, incurred in connection with the Exchange or any of the other transactions contemplated hereby.
Section 7.10 Entire Agreement. This Agreement represents the entire agreement between the parties relating to the subject matter thereof and supersedes all prior agreements, understandings and negotiations, written or oral, with respect to such subject matter.
Section 7.11 Survival; Termination. The representations, warranties, and covenants of the respective parties shall survive the Closing Date and the consummation of the transactions herein contemplated for a period of two years.
Section 7.12 Specific Performance. The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by them in accordance with the terms hereof or were otherwise breached and that each Party hereto shall be entitled to an injunction or injunctions, specific performance and other equitable relief to prevent breaches of the provisions hereof and to enforce specifically the terms and provisions hereof, without the proof of actual damages, in addition to any other remedy to which they are entitled at law or in equity. Each Party agrees to waive any requirement for the security or posting of any bond in connection with any such equitable remedy, and agrees that it will not oppose the granting of an injunction, specific performance or other equitable relief on the basis that (a) the other Party has an adequate remedy at law, or (b) an award of specific performance is not an appropriate remedy for any reason at law or equity.
Section 7.13 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which taken together shall be but a single instrument. The execution and delivery of a facsimile or other electronic transmission of a signature to this Agreement shall constitute delivery of an executed original and shall be binding upon the person whose signature appears on the transmitted copy.
| 26 |
| --- |
Section 7.14 Amendment or Waiver. Every right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, at law, or in equity, and may be enforced concurrently herewith, and no waiver by any party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default then, theretofore, or thereafter occurring or existing. At any time prior to the Closing Date, this Agreement may by amended by a writing signed by all parties hereto, with respect to any of the terms contained herein, and any term or condition of this Agreement may be waived or the time for performance may be extended by a writing signed by the party or parties for whose benefit the provision is intended.
Section 7.15 Best Efforts. Subject to the terms and conditions herein provided, each party shall use its best efforts to perform or fulfill all conditions and obligations to be performed or fulfilled by it under this Agreement so that the transactions contemplated hereby shall be consummated as soon as practicable. Each party also agrees that it shall use its best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective this Agreement and the transactions contemplated herein.
Section 7.16 Sellers’ Representative.
(a) Each Seller hereby irrevocably appoints Benjamin Tran as Sellers’ Representative and attorney-in-fact to act on behalf of such Seller with respect to this Agreement and to take any and all actions and make any decisions required or permitted to be taken by Sellers individually or by Sellers’ Representative pursuant to this Agreement, including the exercise of the power to give and receive notices and communications in connection with this Agreement and the transactions contemplated hereby, to take all actions on behalf of Sellers pursuant to this Agreement, and to take all actions necessary or appropriate in the judgment of the Sellers’ Representative for the accomplishment of the foregoing. More specifically, the Sellers’ Representative shall have the authority to make all decisions and determinations and to take all actions (including agreeing to any amendments to this Agreement to which it is a party or to the termination hereof or thereof) required or permitted hereunder on behalf of each such Seller, and any such action, decision or determination so made or taken shall be deemed the action, decision or determination of each such Seller, and any notice, communication, document, certificate or information required (other than any notice required by Law) to be given to any Seller hereunder shall be deemed so given if given to the Sellers’ Representative. Without limiting the generality of the foregoing, the Sellers’ Representative shall be authorized, in connection with the Closing, to execute all certificates, documents and agreements on behalf of and in the name of Sellers necessary to effectuate the Closing and related transactions. Each Sellers’ Representative shall be authorized to take all actions on behalf of the Sellers in connection with any claims made under Section 4.07 of this Agreement, to defend or settle such claims, and to make payments in respect of such claims on behalf of Sellers.
(b) No Seller shall have the right to object to, dissent from, protest or otherwise contest any such decision or action of the Sellers’ Representative. The provisions of this Section 7.16, including the power of attorney granted by this Section 7.16, are independent and severable, are irrevocable and coupled with an interest and shall not be terminated by any act of any one Seller, or by operation of Law, whether by death or other event.
| 27 |
| --- |
(c) Each Seller’s Representative may resign at any time, and may be removed for any reason or no reason by the vote of the holders of a majority of the Acquired Company Shares immediately prior to Closing; provided, however, in no event shall Sellers’ Representative resign or be removed without the Sellers having first appointed a new Sellers’ Representative who shall assume such duties immediately upon the resignation or removal of Sellers’ Representative. In the event of the death, incapacity, resignation or removal of Sellers’ Representative, a new Sellers’ Representative shall be appointed by the vote of the holders of a majority of the Acquired Company Shares immediately prior to Closing. Notice of such vote or a copy of the written consent appointing such new Sellers’ Representative shall be sent to Buyer promptly following such vote or consent, such appointment to be effective upon the date indicated in such consent; provided, that until such notice is received, Buyer shall be entitled to rely on the decisions and actions of the prior Sellers’ Representative as described in Section 7.16(a) above.
(d) Each Seller’s Representative shall not be liable to the Sellers for actions taken pursuant to this Agreement, except to the extent such actions shall have been determined by a court of competent jurisdiction to have constituted fraud, intentional misconduct or bad faith (it being understood that any act done or omitted pursuant to the advice of counsel, accountants and other professionals and experts retained by Sellers’ Representative shall be conclusive evidence of good faith). Each Seller shall indemnify and hold harmless Sellers’ Representative from and against, compensate him, her or it for, reimburse him, her or it for and pay any and all Losses, arising out of and in connection with his, her or its activities as Sellers’ Representative under this Agreement, including without limitation any travel expenses such as transportation, lodging and meals, and attorney fees incurred in connection with Sellers actions as Seller Representative, in each case as such Loss is suffered or incurred; provided, that in the event it is finally adjudicated that a Loss or any portion thereof was primarily caused by the fraud, intentional misconduct or bad faith of the Sellers’ Representative, the Sellers’ Representative shall reimburse the Sellers the amount of such indemnified Loss attributable to such fraud, intentional misconduct or bad faith.
Section 7.17 Tax and SEC Filings. Following the Closing, the Acquired Company will be responsible for all SEC filings as well as tax filings including, but not limited, to those due on or after March 31, 2022 (such as the 941).
Section 7.18 Rule 144 Opinions. SPIN shall, promptly at the request of a shareholder of SPIN (a “Selling Shareholder”), upon the Selling Shareholder providing customary supporting documentation, give SPIN’s transfer agent instructions to the effect that, upon the transfer agent’s receipt from the Selling Shareholder of a certificate (a “Rule 144 Certificate”) certifying that the Selling Shareholder’s holding period (as determined in accordance with the provisions of Rule 144 of the Securities Act (“Rule 144”)) for any portion of the shares of common stock which the Selling Shareholder proposes to sell (the “Securities Being Sold”) is not less than six (6) months and such sale otherwise complies with the requirements of Rule 144, and receipt by the transfer agent of the “Rule 144 Opinion” (as hereinafter defined) from SPIN, its counsel or counsel for the Selling Shareholder, the transfer agent is to effect the transfer of the Securities Being Sold and issue to the Selling Shareholder or transferee(s) thereof one or more stock certificates representing the transferred Securities Being Sold without any restrictive legend and without recording any restrictions on the transferability of such Securities Being Sold on the transfer agent’s books and records or, at the Selling Shareholder’s option, the Securities Being Sold shall be transmitted by the transfer agent to the Selling Shareholder by crediting the account of the Selling Shareholder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system if the transfer agent is then a participant in such system. In this regard, upon the Selling Shareholder’s request, SPIN shall have an affirmative obligation at the Selling Shareholder’s expense to cause its counsel to confirm to SPIN’s transfer agent, that it can accept a Rule 144 opinion letter prepared by a legal counsel licensed in the United States, and engaged by the Selling Shareholder, absent manifest error, providing that, based on the Rule 144 Certificate, the Securities Being Sold were or may be sold, as applicable, pursuant to the provisions of Rule 144, even in the absence of an effective registration statement (the “Rule 144 Opinion”). If the transfer agent requires any additional documentation from SPIN in connection with any proposed transfer by the Selling Shareholder of any Securities Being Sold, SPIN shall promptly deliver or cause to be delivered to the transfer agent or to any other person, all such additional documentation in its possession or control as may be reasonably necessary to effectuate the transfer of the Securities Being Sold and the issuance of an unlegended certificate to any transferee thereof, all at SPIN’s expense, provided that SPIN shall not be required to obtain any, or pay for any Rule 144 Opinion. Following the Closing, the Acquired Company will be responsible for all SEC filings as well as tax filings including, but not limited, to those due on or after March 31, 2022 (such as the 941).
[SignaturePage Follows]
| 28 |
| --- |
IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement to be executed by their respective officers, hereunto duly authorized, as of the date first-above written.
| SPINE<br> INJURY SOLUTIONS, INC.<br><br> <br>A<br> Delaware corporation | |
|---|---|
| By: | /s/ William F. Donovan, M.D. |
| William<br> F. Donovan, M.D.<br><br> <br>Chief<br> Executive Officer | |
| Bitech<br> Mining Corporation<br><br> <br>A<br> Wyoming corporation | |
| By: | /s/ Benjamin Tran |
| Benjamin<br> Tran, Chief Executive Officer |
| 29 |
| --- |
SPIN, Inc. (“SPIN”)
Share Exchange Agreement
Exhibits
CERTIFICATE OF DESIGNATIONS OF PREFERENCES AND RIGHTS OF
SERIES A CONVERTIBLE PREFERRED STOCK
OF
SPINE INJURY SOLUTIONS, INC.
a Delaware corporation
Pursuant to Section 151 of the General Corporation Law of the State of Delaware, the undersigned Chief Executive Officer of Spine Injury Solutions, Inc. (the “Corporation”), a corporation organized and existing under the laws of the State of Delaware, does hereby make this Certificate of Designations of Preferences and Rights of Series A Convertible Preferred Stock (this “Certificate of Designations”) and DOES HEREBY CERTIFY that pursuant to the authority contained in the Corporation’s Certificate of Incorporation, as amended, and pursuant to Section 151 of the General Corporation Law of the State of Delaware and in accordance with the provisions of the resolution creating a series of the class of the Corporation’s authorized Preferred Stock designated as Series A Convertible Preferred Stock, as follows:
FIRST: The Certificate of Incorporation of the Corporation authorizes the issuance by the Corporation of 250,000,000 shares of common stock, $0.001 par value per share (the “Common Stock”) and 10,000,000 shares of preferred stock, par value $0.001 per share (the “Preferred Stock”), and, further, authorizes the Board of Directors of the Corporation (the “Board”), by resolution or resolutions, at any time and from time to time, to fix or alter the rights, preferences, privileges and restrictions of any wholly unissued series of Preferred Stock, and the number of shares constituting any such series or the designation thereof.
SECOND: By unanimous written consent of the Board dated March 18, 2022, the Board designated 9,000,000 shares of the Preferred Stock as Series A Convertible Preferred Stock, par value $0.001 per share (the “Series A Stock”), pursuant to a resolution providing that a series of preferred stock of the Corporation be and hereby is created, and that the designation and number of shares thereof and the voting and other powers, preferences and relative, participating, optional or other rights of the shares of such series and the qualifications, limitations and restrictions thereof are as follows:
SERIES A CONVERTIBLE PREFERRED STOCK
Section
- Powers and Rights of Series A Convertible Preferred Stock. There is hereby designated a class of Preferred Stock of the Corporation as the Series A Convertible Preferred Stock, par value $0.001 per share, of the Corporation (the “Series A Stock”). The number of shares, powers, terms, conditions, designations, preferences and privileges, relative, participating, optional and other special rights, and qualifications, limitations and restrictions, if any, of the Series A Stock shall be as set forth in this Certificate of Designations of Preferences and Rights of Series A Convertible Preferred Stock (this “Certificate of Designations”). For purposes hereon, a holder of a share or shares of Series A Stock, with respect to their rights as related to the Series A Stock, shall be referred to as a “Series A Holder.”
Section 2. Number; Stated Value. The number of authorized shares of the Series A Stock is 9,000,000 shares. Each share of the Series A Stock shall have a stated value equal to $1.00 (the “Stated Value”).
| 1 |
| --- |
Section 3. Conversion.
(a) Automatic Conversion. On the first business day immediately following the earlier of (a) the date on which the Secretary of State of Delaware shall have filed, after all required approvals by the Board and the Corporation’s stockholders, an amendment to the Corporation’s Certificate of Incorporation increasing the number of its authorized shares of Common Stock; and (b) the date on which FINRA has affected a reverse stock split of the Corporation’s outstanding common stock, after all required approvals by the Board and the Corporation’s stockholders, in either (a) or (b), so that there are a sufficient number of shares of the Corporation’s Common Stock authorized but unissued to permit a full conversion of all the Series A Stock based upon the Conversion Price (as hereinafter defined) (the “Conversion Condition”), all shares of the Series A Stock shall automatically convert into shares of the Corporation’s Common Stock at the Conversion Price without any action of the Series A Holder (the “Conversion”). Promptly thereafter, the Corporation shall issue to the Series A Holder a certificate representing the number of shares of Common Stock issued pursuant to such automatic conversion, of the Series A Stock, or otherwise issue such shares of Common Stock in book entry/non-certificated form. Shares of Series A Stock converted into Common Stock in accordance with the terms hereof shall be canceled and shall not be reissued.
(b) Calculation. The number of shares of Common Stock to be issued upon conversion of the Series A Stock pursuant to Section 3(a) above shall be determined by dividing (i) the Stated Value by (ii) the Conversion Price then in effect, with such shares of Common Stock issuable in connection with such conversion defined herein as “Conversion Shares”.
(c) Conversion Price. The conversion price shall be $0.018526887 per share of Series A Stock (the “Conversion Price”), subject to further adjustment from time to time upon the happening of certain events as set forth below.
(d) Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of the Series A Stock. In the event that for any reason the number of shares of Common Stock issuable to any Series A Holder pursuant to Section 3(a) above results in a fraction of a Conversion Share being due to a Series A Holder, the Corporation shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the fair market value of a share of Common Stock as determined in good faith by the Board, or round up to the next whole share of Common Stock resulting from such fractional share.
(e) Transfer Taxes and Expenses. The issuance of Conversion Shares on conversion of Series A Stock shall be made without charge to any Series A Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion Shares, provided that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such Conversion Shares upon conversion in a name other than that of the applicable Series A Holder of such shares of Series A Stock and the Corporation shall not be required to issue or deliver such Conversion Shares unless or until the Person (as defined below) or Persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid. For purposes hereof, “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
| 2 |
| --- |
(f) Cancellation of Series A Stock Certificates. Without limiting the obligation of each Series A Holder set forth herein (including below), the Corporation and/or the Corporation’s Transfer Agent shall be authorized to take whatever action necessary, if any, following the Conversion to reflect the cancellation of the Series A Stock shares and certificates subject to the Conversion, which shall not require the approval and/or consent of any Series A Holder (a “Cancellation”). Notwithstanding the above, each Series A Holder, by accepting such Series A Stock hereby covenants that it will, whenever and as reasonably requested by the Corporation and the Transfer Agent, at the Corporation’s sole cost and expense, do, execute, acknowledge and deliver any and all such other and further acts, deeds, assignments, transfers, conveyances, confirmations, powers of attorney and any instruments of further assurance, approvals and consents as the Corporation or the Transfer Agent may reasonably require in order to complete, insure and perfect the Cancellation, if such may be reasonably required by the Corporation and/or the Corporation’s Transfer Agent, including, but not limited to the delivery to the Corporation of all certificates and stock powers with medallion signature guaranty in connection with the Cancellation.
Section 4. Certain Adjustments.
(a) Stock Dividends and Stock Splits. If the Corporation, at any time while Series A Stock is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any other Common Stock Equivalents (as hereinafter defined) (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Corporation upon conversion of the Series A Stock), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Corporation, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section 4(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification. “Common Stock Equivalents” means any securities of the Corporation which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
(b) Pro Rata Distributions. During such time as the Series A Stock is outstanding, if the Corporation declares or makes any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of the Series A Stock, then, in each such case, each Series A Holder shall be entitled to participate in such Distribution to the same extent that the Series A Holder would have participated therein if the Series A Holder had held the number of shares of Common Stock acquirable upon complete Conversion of the Series A Stock held by such Series A Holder (without regard to any limitations on Conversion hereof) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution.
| 3 |
| --- |
(c) Consolidation or Merger. At any time while the Series A Stock remains outstanding, in case of any consolidation or merger of the Corporation with or into another corporation (other than a merger with another corporation in which the Corporation is a continuing corporation and which does not result in any reclassification or change, other than a change in par value, or from par value to no par value per share, or from no par value per share to par value), or in the case of any sale or transfer to another corporation of the property of the Corporation as an entirety or substantially as an entirety, the Corporation or such successor or purchasing corporation, as the case may be, shall, without payment of any additional consideration therefor, assume the Corporation’s obligations hereunder.
Section 5. Dividends. Except for adjustments to the Conversion Price provided by Section 4 hereof, to the extent applicable, or dividends as may be declared by the Board in its sole and absolute discretion, the Series A Stock shall not accrue dividends.
Section 6. Voting Power. Other than as set forth in Section 9, on any matter, event or action submitted to the holders of Common Stock for a vote or on which the holders of Common Stock have a right to vote, each share of Series A Stock shall have a number of votes per share equal to the number of Conversion Shares then issuable upon Conversion thereof, and the Series A Stock shall vote on any such matter, event or action submitted to the holders of Common Stock for a vote or on which the holders of Common Stock have a right to vote, together with the Common Stock as one class. Any vote or consent of the Series A Holders may be taken either by vote at a meeting called for the purpose or by written consent without a meeting and in either case may be given in person or by proxy. The rules and procedures for calling and conducting any meeting of the Series A Holders (including, without limitation, the fixing of a record date in connection therewith), the solicitation and use of proxies at such a meeting, the obtaining of written consents and any other aspect or matter with regard to such a meeting or such consents shall be governed by any rules the Board or a duly authorized committee of the Board, in its discretion, may adopt from time to time, which rules and procedures shall conform to the requirements of the Certificate of Incorporation, the Bylaws and applicable law.
Section 7. Participation. The Series A Stock shall participate in any dividends, distributions or payments to the holders of the Common Stock on an as-converted basis, but without any conversion being required in connection therewith and regardless of whether there are a sufficient number of authorized but unissued shares of Common Stock to permit full conversion of all shares of Series A Stock.
| 4 |
| --- |
Section 8. Liquidation. Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”), each Series A Holder shall be entitled to receive out of the assets, whether capital or surplus, of the Corporation an amount equal to the Stated Value, plus any other fees or liquidated damages then due and owing thereon under this Certificate of Designation, for each share of Series A Stock before any distribution or payment shall be made to the holders of any Junior Securities (as hereinafter defined), and if the assets of the Corporation shall be insufficient to pay in full such amounts, then the entire assets to be distributed to each Series A Holder shall be ratably distributed among each Series A Holder in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full. A Fundamental Transaction or Change of Control Transaction shall not be deemed a Liquidation. The Corporation shall mail written notice of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each Holder. The following terms shall have the following meanings in this Certificate of Designations:
(a) “Change of Control Transaction” means the occurrence after the date hereof of any of the following: (a) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d 5(b)(1) promulgated under the Securities Exchange Act of 1934, as amended) of effective control (whether through legal or beneficial ownership of capital stock of the Corporation, by contract or otherwise) of in excess of 33% of the voting securities of the Corporation (other than by means of conversion of the Series A Stock), (b) the Corporation merges into or consolidates with any other Person, or any Person merges into or consolidates with the Corporation and, after giving effect to such transaction, the stockholders of the Corporation immediately prior to such transaction own less than 66% of the aggregate voting power of the Corporation or the successor entity of such transaction, (c) the Corporation sells or transfers all or substantially all of its assets to another Person and the stockholders of the Corporation immediately prior to such transaction own less than 66% of the aggregate voting power of the acquiring entity immediately after the transaction, (d) a replacement at one time or within a one year period of more than one half of the members of the Board which is not approved by a majority of those individuals who are members of the Board, or (e) the execution by the Corporation of an agreement to which the Corporation is a party or by which it is bound, providing for any of the events set forth in clauses (a) through (d) above.
(b) “Fundamental Transaction” means (i) one or more related transactions effects whereby the Corporation, directly or indirectly, merges or consolidates with or into another Person, (ii) the Corporation, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Corporation or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Corporation, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Corporation, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination).
(c) “Junior Securities” means the Common Stock and all other Common Stock Equivalents of the Corporation other than those securities which are explicitly senior or pari passu to the Series A Stock in dividend rights or liquidation preference.
Section 9. Amendment.
(a) The Corporation may not, and shall not, amend this Certificate of Designations, including by merger, consolidation or otherwise, without the prior written consent of Series A Holders holding a majority of the issued and outstanding shares of Series A Stock, voting separately as a single class, in person or by proxy, either in writing without a meeting or at an annual or a special meeting of the Series A Holders and with each share of Series A Stock having a number of votes per share equal to the number of Conversion Shares then issuable upon Conversion of the Series A Stock on such matter, and any such act or transaction entered into without such vote or consent shall be null and void ab initio, and of no force or effect.
| 5 |
| --- |
(b) In addition to any other rights and restrictions provided under applicable law, the Corporation may not, and shall not, amend or repeal any provision of, or add any provision to, the Corporation’s Certificate of Incorporation or bylaws, including by merger, consolidation or otherwise, if such action would adversely alter or change the preferences, rights, privileges, or powers of, or restrictions provided for the benefit of, the Series A Stock, as reasonably determined and agreed in writing by the Series A Holders holding a majority of the Series A Stock issued and outstanding, without the prior written consent of Series A Holders holding a majority of the issued and outstanding shares of Series A Stock, voting separately as a single class, in person or by proxy, either in writing without a meeting or at an annual or a special meeting of the Series A Holders and with each share of Series A Stock having a number of votes per share equal to the number of Conversion Shares then issuable upon Conversion of the Series A Stock on such matter, and any such act or transaction entered into without such vote or consent shall be null and void ab initio, and of no force or effect.
Section 10. Miscellaneous.
(a) Notices. Any and all notices or other communications or deliveries to be provided by a Series A Holder shall be in writing and delivered personally, by facsimile, via email with return receipt requested, sent by a nationally recognized overnight courier service, addressed to the Corporation at the primary offices of the Corporation. Any and all notices or other communications or deliveries to be provided by the Corporation hereunder shall be in writing and delivered personally, by facsimile, via email with return receipt requested, sent by a nationally recognized overnight courier service addressed to the Series A Holder at the email, facsimile, telephone number or address of such Series A Holder appearing on the books of the Corporation, or if no such facsimile telephone number or address appears, at the principal place of business of the Series A Holder. Any notice or other communication or delivery hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section 10(a) prior to 5:30 p.m. (Eastern time); (ii) upon receipt of a return receipt if sent via email; (iii) the date after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section 10(a) later than 5:30 p.m. (Eastern time) on any date and earlier than 11:59 p.m. (Eastern time) on such date, (iv) the second business day following the date of mailing, if sent by nationally recognized overnight courier service, or (v) upon actual receipt by the party to whom such notice is required to be given.
(b) Legend. Any certificates representing the Series A Stock and any Conversion Shares issued upon conversion hereof shall bear a restrictive legend in substantially the following form (and a stop transfer order may be placed against transfer of such stock certificates):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR REGISTERED NOR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION IS NOT REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE SET FORTH HEREIN.
| 6 |
| --- |
(c) Lost or Mutilated Series A Stock Certificate. If the certificate for the Series A Stock held by a Series A Holder thereof shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the share of Series A Stock so mutilated, lost, stolen or destroyed but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership hereof, and indemnity, if requested, all reasonably satisfactory to the Corporation.
(d) Waiver. Any waiver by the Corporation or a Series A Holder of a breach of any provision of this Certificate of Designations shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate of Designations. The failure of the Corporation or a Series A Holder to insist upon strict adherence to any term of this Certificate of Designations on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Certificate of Designations. Any waiver must be in writing.
(e) Severability. If any provision of this Certificate of Designations is invalid, illegal or unenforceable, the balance of this Certificate of Designations shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest.
(f) No Other Rights or Privileges. Except as specifically set forth herein, the Series A Holders and the Series A Stock shall have no other rights, privileges or preferences.
(g) Record Holders. To the fullest extent permitted by applicable law, the Corporation and the transfer agent, if any, for the Series A Stock may deem and treat the record holder of any share of Series A Stock as the true and lawful owner thereof for all purposes, and neither the Corporation nor any such transfer agent shall be affected by any notice to the contrary.
(h) Technical, Corrective, Administrative or Similar Changes. The Corporation may, by any means authorized by law and without any vote of the Series A Holders, make technical, corrective, administrative or similar changes in this Certificate of Designations that do not, individually or in the aggregate, adversely affect the rights or preferences of the Series A Holders.
(Signaturepage follows.)
| 7 |
| --- |
IN WITNESS WHEREOF, Spine Injury Solutions, Inc. has caused this Certificate of Designations to be signed by a duly authorized officer on this ___ day of March 2022.
| Spine Injury Solutions, Inc. | |
|---|---|
| By: | |
| Name: | William<br> F. Donovan, M.D. |
| Title: | Chief<br> Executive Officer |
| 8 |
| --- |
Exhibit 10.6
CERTAIN CONFIDENTIAL INFORMATION(MARKED BY BRACKETS AS “[***]”) HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BECOMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.
MANAGEMENTSERVICES AGREEMENT
This Management Services Agreement (this “Agreement”), dated as of March 31, 2022 (the “Effective Date”), is made by and between Spine Injury Solutions, Inc., a Delaware corporation (“Owner”), Quad Video Halo, Inc., a Texas corporation (the “Company”), and Peter L. Dalrymple (“Manager”). Owner, the Company and Manager are referred to herein, collectively, as the “Parties,” and individually, as a “Party.” Capitalized terms used but not otherwise defined in this Agreement shall have the meaning ascribed to such terms in the Share Exchange Agreement, dated as of the Effective Date, by and among Owner, Bitech Mining Corporation, a Wyoming corporation (the “Acquired Company”), each of the shareholders of the Acquired Company who execute a joinder to the Share Exchange agreement (each, a “Seller” and collectively, the “Sellers”), and Benjamin Tran, solely in his capacity as Sellers’ Representative (“Sellers’ Representative”) (the “SEA”).
Recitals
A. Owner owns 100% of the issued and outstanding capital stock of the Company (the “Quad Capital Stock”).
B. Pursuant to the SEA, Owner has agreed to acquire all of the Quad Capital Stock.
C. Owner is collecting certain accounts receivables as of the Effective Date that arose from the delivery of medical diagnostic services provided by medical professionals at spine injury diagnostic centers (the “Accounts Receivables Collections”).
D. The Company owns a patented device and process by which a video recording system is attached to a fluoroscopic x-ray machine, the “four camera technology,” known as the “Quad Video Halo System 3.0” (the “Quad Business”, together with the Accounts Receivables Collections, the “Business”) and operates its business at [***] (the “Premises”).
E. In connection with the contemplated transactions under the SEA, Owner desires to engage Manager to manage the operations of the Business, and Manager wishes to provide such management services on behalf of Company, in accordance with the terms and conditions set forth in this Agreement.
Terms
Therefore, in consideration of the foregoing recitals and the mutual covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties hereby represent, covenant, promise, and agree as follows:
1. Term.
1.1 The term (the “Term”) of this Agreement shall commence on the Effective Date and, unless otherwise provided below, shall continue until the earlier to occur of the following: (i) 90 days after the Effective Date; (ii) Owner and Manager mutual written consent; or (iii) any material breach of this Agreement by either Party, provided that the breaching Party has been provided written notice of such breach and has failed to cure such breach within ten (10) days of receipt of such written notice (each of the foregoing, the “Termination Date”).
2. Appointmentof Manager.
2.1 Engagement of Manager. The Company hereby appoints and engages Manager as general manager of the Business, and Manager agrees to act as general manager, to supervise and manage the administration and operation of the Business, beginning on the Effective Date and continuing for the term of this Agreement and to provide the management services (the “Management Services”) described in Section 3 of this Agreement.
2.2 Maintenance of Assets. Manager shall maintain the assets of the Company located at the Premises in good operating condition and in compliance with all applicable laws and permits. Manager shall comply with all laws applicable to the provision of the Management Services.
3. ManagementServices.
3.1 Manager agrees to manage and operate all aspects of the Business on a day-to-day basis through the Termination Date; provided, however, Manager acknowledges that the Company maintains ultimate legal responsibility and control of the operations of the Business through the Termination Date, including its policies, procedures, services, and organization. In operating the Business during the period between the Effective Date and the Termination Date, Manager shall not take any action that causes Owner, the Company or its personnel to be in violation of any applicable law, regulation or permit. Except as expressly set forth herein, Manager shall, as of the Effective Date, pay or be liable for all expenses and costs associated with the operations of the Business, including, without limitation, personnel, taxes, insurance services, utilities, construction costs and any and all other fees and expenses in connection therewith during the Term (collectively, the “Company Expenses”). Subject to the terms and conditions of this Agreement, Manager will, in consultation with Owner, provide the following Management Services during the Term at it sole cost and expense:
| a. | carry<br> on the Business in substantially the same manner as it has prior to the Effective Date; |
|---|---|
| b. | maintain<br> and keep the Company’s properties in states of good repair and condition as at present,<br> except for depreciation due to ordinary wear and tear and damage due to casualty; |
| --- | --- |
| c. | perform<br> in all material respects all of the Company’s obligations under contracts, leases,<br> and instruments relating to or affecting the Company’s assets, properties, and business; |
| --- | --- |
| d. | maintain and preserve the Company’s business organization intact, to retain its employees, and to maintain its relationship with its suppliers and customers; |
| --- | --- |
| 2 |
| --- | | e. | fully comply with and perform in all material respects all obligations and duties imposed on it by all federal and state laws and all rules, regulations, and orders imposed by federal or state governmental authorities as it relates to the Business; and | | --- | --- | | f. | Manager<br> shall coordinate the orderly payment when due, from the revenues of the Business or otherwise,<br> of accounts payable, taxes, insurance premiums, and all other liabilities and obligations<br> of the Business. In the event the Revenues are insufficient to pay such amounts, Manager<br> shall pay such amounts. | | --- | --- |
3.2 Billing Services. Manager shall be responsible for billing and collecting on behalf of the Company for all products and services provided by the Business on and after the Effective Date. The Company hereby irrevocably appoints Manager for the term of this Agreement as its agent and attorney in fact for the following purposes: (i) to invoice customers of the Business; and (ii) to take possession of and endorse in the name of Company all cash, notes, checks, money orders, insurance payments, and other instruments received as payment of accounts receivable attributable to the Business on and after the Effective Date and use such funds for payment of the Company Expenses.
3.3 Revenues During the Term. Manager shall collect and receive all revenue from the Business during the Term (“Revenue”) and retain such Revenue in accordance with Section 3.2, and the Company hereby grants Manager a power of attorney to collect and receive all Revenue. In the event the Company receives any Revenue, the Company shall promptly deposit all such Revenue related to the Quad Business in the Company’s existing bank account and all such Revenue related to the Accounts Receivables Collections in the Owner’s existing bank account at Wells Fargo Bank (collectively, the “Bank Accounts”). Owner shall be provided with access to the Bank Accounts for accounting and SEC reporting purposes.
3.4 Records and Reporting Requirements. Manager shall require the appropriate Personnel to prepare appropriate records relating to the provision of services for the Business in accordance with Company policies. Manager shall provide to Owner any reasonable financial and operational information with respect to the operation of the Business and the Bank Accounts through the Termination Date which may from time to time be specifically requested by Owner, including any information needed to assist Owner in preparation of its financial statements, tax returns and otherwise complying with applicable law. This Section 3.4 will survive the termination of this Agreement. Notwithstanding anything contained herein to the contrary, Owner (or its authorized agents, employees, officers or directors) shall at all times have a right to access the Bank Accounts or the Premises at any time.
3.5 Prohibited Actions. Neither Manager nor the Company shall, without the prior written consent of Owner, directly or indirectly:
| a. | incur<br> or guarantee, assume or suffer to exist any indebtedness on behalf of the Company; |
|---|---|
| b. | allow<br> or suffer to exist any mortgage, lien, pledge, charge, security interest or other encumbrance<br> upon or in any property or assets (including accounts and contract rights) owned by the Company<br> or any of its Subsidiaries (collectively, “Liens”); |
| --- | --- |
| 3 |
| --- | | c. | make,<br> any change in the nature of the Business as it exists on the Effective Date or modify its<br> corporate structure or purpose; | | --- | --- | | d. | encumber,<br> license or otherwise allow any Liens on any assets of the Company, including, without limitation,<br> any claims for damage by way of any past, present, or future infringement of any of the foregoing,<br> in each case; | | --- | --- | | e. | enter<br> into, renew, extend or be a party to, any transaction or series of related transactions (including,<br> without limitation, the purchase, sale, lease, license, transfer or exchange of property<br> or assets of any kind or the rendering of services of any kind) with any affiliate of Owners; | | --- | --- | | f. | issue<br> any securities of the Company; or | | --- | --- | | g. | take<br> any action on behalf of the Company to litigate any claim on behalf of the Company without<br> Owner’s prior written consent. | | --- | --- |
4. Compensationand Company Expenses.
4.1 Manager’s Compensation. In consideration of Manager’s performance of the Management Services, Manager shall retain 100% of all Revenue after payment of the Company Expenses. To the extent Manager has collected Revenue in excess of the Company Expenses (the “Company Profit”), such amounts shall be offset against the amounts owed by Owner under the Dalrymple Note.
4.2 Company Expenses and Liabilities. Manager shall be responsible for the prompt payment when due of all Company Expenses incurred to operate the Business from and after the Effective Date and through the Termination Date, whether such Company Expenses are payable by Owner or Company (e.g., insurance premiums, license renewal fees and the like) or by Manager hereunder. Any amounts advanced hereunder by the Owner for which Manager is liable to reimburse Owner or Company shall be reimbursed by Manager within five (5) business days of Owner’s submission of evidence of such costs.
**5. Notices.**To be effective, a notice or other communication required or permitted under this Agreement must be given in accordance with the notice provisions under the SEA applicable to Owner and Manager.
6. Miscellaneous.
6.1 Severability. This Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision hereof shall be prohibited or invalid under any such law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating or nullifying the remainder of such provision or any other provisions of this Agreement. If any one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to duration, geographic scope, activity or subject, such provisions shall be construed by limiting and reducing it so as to be enforceable to the maximum extent permitted by applicable law.
| 4 |
| --- |
6.2 Amendment; Waivers. This Agreement may be amended or modified only with the written consent of both Manager and Owner. No waiver of any term or provision hereof shall be effective unless it is in writing and signed by the Party waiving such term or provision. No failure to exercise and no delay in exercising any right, power, or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power, or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power, or remedy. The rights provided hereunder are cumulative and not exclusive of any rights, powers, or remedies provided by law. If required by state law, Manager and Owner will deliver a copy of this Agreement to state regulators and agree to use their good faith efforts to give state regulators copies of any amendments to this Agreement as required by law; provided, that neither shall be in default of its obligations hereunder should it fail to do so.
6.3 Entire Agreement. This Agreement, including the exhibits to this Agreement, contains the entire understanding of the Parties concerning the subject matter of this Agreement and supersedes all prior and contemporaneous agreements and negotiations, written or oral, relating to the that subject matter. Nothing contained in this Agreement shall be deemed to amend, limit, expand, restrict or otherwise modify any of the provisions in the SEA.
6.4 Laws to Govern. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Texas applicable to agreements executed and to be performed solely within such state.
6.5 No Construction Against Drafter. The Parties hereto have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises under any provision of this Agreement, this Agreement shall be construed as if drafted jointly by the Parties thereto, and no presumption or burden of proof shall arise favoring or disfavoring either Party by virtue of authoring any of the provisions of this Agreement.
6.6 Confidentiality. Each Party hereto agrees that it shall not disclose the terms of this Agreement to third parties without the consent of the other Party, except to the extent disclosure is required by court or administrative order or by applicable law or regulation, or required for the performance of its obligations hereunder, or as necessary or appropriate in dealing with the accountants, attorneys, and other representatives of the respective Parties.
6.7 Assignment. Manager shall have the right to assign this Agreement to any Affiliate, upon prior written notice to Owner, provided, however, that notwithstanding any such assignment, Manager shall at all times remain responsible and liable, together with any such assignee, for the performance of Manager’s obligations under this Agreement.
6.8 Counterpart Signatures. This Agreement may be executed in one or more counterparts, and with counterpart electronic or facsimile signature pages, each of which shall be an original, but all of which when taken together shall constitute one and the same Agreement.
6.9 Headings, Gender, Interpretation. The headings and other captions contained in this Agreement are for convenience of reference only and shall not be used in interpreting, construing or enforcing any of the provisions of this Agreement. Whenever the context requires, the gender of all words used herein shall include the masculine, feminine and neuter, and the number of all words shall include the singular and plural. When used in this Agreement, the term “including” shall be deemed followed by the words “without limitation”.
| 5 |
| --- |
6.10 Warranty of Management Services. The Manager warrants that the Management Services shall be performed in accordance with industry standards of professional practice, care, and diligence practiced by recognized management firms in performing services of a similar nature in existence at the time of the Effective Date.
6.11 Independent Contractors. The relationship between Owner and Manager is that of independent contractors. This Agreement does not create a partnership or joint venture between Owner and Manager.
6.12 Indemnification. Manager agrees to indemnify and hold harmless Owner and each of the officers, agents, and directors of Owner as of the date of execution of this Agreement (the “Owner Indemnitees”) against any Liabilities (as hereinafter defined) incurred or suffered by the Owner Indemnitees. For this purpose, “Liabilities” shall mean all suits, proceedings, claims, expenses, losses, costs, liabilities, judgments, deficiencies, assessments, actions, investigations, penalties, fines, settlements, interest and damages (including reasonable attorneys’ fees and expenses), whether suit is instituted or not and, if instituted, whether at any trial or appellate level, and whether raised by the parties hereto or a third party, incurred or suffered by Owner Indemnitees or any of them arising from, in connection with or as a result of (a) any false or inaccurate representation or warranty made by or on behalf of Manager in or pursuant to this Agreement; (b) any default or breach in the performance of any of the covenants or agreements made by Manager in or pursuant to this Agreement; (c) the operation of the Business prior to and during the Term; and (d) any Liabilities arising out of the claims of any person or entity that owes funds to SPIN that are included within the Accounts Receivables Collections or any party claiming by, through or under such creditor, person or entity, including, but not limited to, any bankruptcy trustee or debtor-in-possession. The indemnification provided for in this paragraph shall remain in effect during the Term and for a period of 90 days thereafter. Any obligations under this Section 6.12 may be offset against any amounts owed by SPIN or Quad under the secured promissory note issued by Owner to Manager in the original principal amount of $610,000 on August 31, 2020 as amended on October 29, 2021 (the “Note Offset Rights”).
[REMAINDEROF PAGE IS INTENTIONALLY LEFT BLANK]
| 6 |
| --- |
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written.
| MANAGER: | |
|---|---|
| /s/ Peter L. Dalrymple | |
| Name: Peter L. Dalrymple | |
| COMPANY: | |
| Quad Video Halo, Inc. | |
| By: | /s/ William F. Donovan, M.D. |
| Name: | William F. Donovan, M.D. |
| Title: | President |
| OWNER: | |
| Spine Injury Solutions, Inc. | |
| By: | /s/ William F. Donovan, M.D. |
| Name: | William F. Donovan, M.D. |
| Title: | Chief Executive Officer |
| 7 |
| --- |
Exhibit10.7
AMENDMENT TO SECURED PROMISSORY NOTE AGREEMENT
THIS AMENDMENT TO SECURED PROMISSORY NOTE AGREEMENT (the “Amendment”) is made effective as of March 31, 2022 (the “Effective Date”) by and between Spine Injury Solutions, Inc., a Delaware corporation (“SPIN”), Peter Dalrymple (“Dalrymple”) and Quad Video Halo, Inc., a Texas corporation (“Quad”). The Company, Dalrymple and Quad may collectively be referred to as the “Parties” and individually as a “Party”.
BACKGROUND
A. SPIN and Dalrymple are the parties to that certain Secured Promissory Note dated August 31, 2020 as amended on October 29, 2021 (collectively, the “Note”);
B. SPIN, Bitech Mining Corporation (the “Acquired Company”), each of the shareholders of the Acquired Company who executed a joinder to the Share Exchange Agreement (each, a “Seller” and collectively, the “Sellers”), and Benjamin Tran, solely in his capacity as Sellers’ Representative (“Sellers’ Representative”) entered into a Share Exchange Agreement dated March 31, 2022 (the “SEA”);
C. SPIN, Quad Video Halo, Inc. and Dalrymple are parties to a Management Services Agreement dated as of the Effective Date (the “Management Services Agreement”); and
D. The parties desire to amend certain parts of the Note as provided for in the SEA and as set forth below.
NOW, THEREFORE, in consideration of the execution and delivery of the SEA and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
New Debtor. As of the Effective Date, the Note is hereby amended such that Quad shall replace SPIN as the Debtor for all purposes in the Note and all references to the term Borrower, Debtor or Company shall refer only to Quad.
Amount Outstanding. The amount outstanding under the Note reflecting principal and accrued interest as of the Effective Date is $:95,000.
Maturity Date. The Maturity Date is hereby amended to be 90 days after the Effective Date.
Note Offset Rights. Any obligations of (i) SPIN that become due and owing to the Acquired Company or the Sellers under Section 4.07(c) of the SEA or (ii) that become due and owing under Section 6.12 of the Management Services Agreement may be offset against any amounts owed by SPIN or Quad under the Dalrymple Note.
1 Non-Recourse. Dalrymple agrees that all claims or causes of action (whether in contract or in tort, in law or in equity) that may be based upon, arise out of or relate to the Note, or the negotiation, execution or performance of the Note (including any representation or warranty made in or in connection with the Note or as an inducement to enter into the Note or this Amendment), may be made only against Quad, and SPIN who is not a party to the Note as of the Effective Date, including without limitation any past, present or future director, officer, employee, incorporator, member, manager, partner, equityholder, affiliate, agent, attorney or representative of SPIN (“SPIN Parties”), shall have no liability (whether in contract or in tort, in law or in equity, or based upon any theory that seeks to impose liability of the SPIN Parties) for any obligations or liabilities arising under, in connection with or related to the Note or for any claim based on, in respect of, or by reason of the Note or its negotiation or execution, and Dalrymple waives and releases all such liabilities, claims and obligations against any such SPIN Parties. The SPIN Parties are expressly intended as third-party beneficiaries of this Amendment.
This Amendment shall be deemed part of, but shall take precedence over and supersede any provisions to the contrary contained in the Note. All initial capitalized terms used in this Amendment shall have the same meaning as set forth in the Note unless otherwise provided. Except as specifically modified hereby, all of the provisions of the Note which are not in conflict with the terms of this Amendment shall remain in full force and effect.
(Signaturepage follows.)
| 2 |
| --- |
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the Effective Date.
| Spine Injury Solutions, Inc. | **** | |
|---|---|---|
| By: | /s/ William F. Donovan | /s/ Peter Dalrymple |
| William<br> F. Donovan, | Peter<br> Dalrymple | |
| President<br> and Chief Executive Officer | ||
| Quad Video Halo, Inc. | ||
| --- | --- | |
| By: | /s/ William F. Donovan | |
| Print Name: | William<br> F. Donovan | |
| --- | --- | |
| Title: | Chief Executive<br> Officer | |
| --- | --- |
| 3 |
| --- |
Exhibit 10.8
AMENDMENT TO SECURITY AGREEMENT
THIS AMENDMENT TO SECURITY AGREEMENT (the “Amendment”) is made effective as of March 31, 2022 (the “Effective Date”) by and between Spine Injury Solutions, Inc., a Delaware corporation (“SPIN”), Peter Dalrymple, an individual (“Dalrymple”) and Quad Video Halo, Inc., a Texas corporation (“Quad”). The Company, Dalrymple and Quad may collectively be referred to as the “Parties”.
BACKGROUND
A. SPIN and Dalrymple are the parties to that certain Security Agreement dated August 31, 2020 (the “Agreement”);
B. Quad is a wholly-owned subsidiary of SPIN, and received significant benefits from the proceeds of the Note as described in the Agreement;
C. SPIN, Bitech Mining Corporation (the “Acquired Company”), each of the shareholders of the Acquired Company who executed a joinder to the Share Exchange Agreement (each, a “Seller” and collectively, the “Sellers”), and Benjamin Tran, solely in his capacity as Sellers’ Representative (“Sellers’ Representative”) entered into a Share Exchange Agreement dated March 31, 2022 (the “SEA”); and
D. The Parties desire to amend certain parts of the Agreement as provided for in the SEA and as set forth below.
NOW, THEREFORE, in consideration of the execution and delivery of the SEA and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
- As of the Effective Date, and pursuant to the Parties’ execution of this Amendment below, the Agreement is hereby amended such that:
1.1 Quad shall be included with SPIN as an additional Debtor for all purposes in the Agreement (except as set forth below in Section 1.2) and all references to the term Debtor shall refer to SPIN and Quad (except for those references which refer specifically to SPIN’s state of organization and except as set forth under Sections 1.2 and 1.3);
1.2 Quad’s collateral obligations under the Agreement shall only relate to its Accounts Receivable, and the Collateral relating to Pledged Securities in the Agreement shall not apply to Quad’s obligations under the Agreement; and
1.3 Notwithstanding anything to contrary provided for in the Agreement, SPIN’s pledge of its Accounts Receivables as provided for in the Agreement is hereby limited solely to SPIN’s Accounts Receivables in existence as of March 27, 2022 at 11:59 P.M. ET, and shall not apply to any after acquired Accounts Receivables.
SPIN shall be authorized to file an amended financing statement to reflect the terms of this Amendment and Quad shall promptly file a financing statement reflecting the terms of this Amendment.
- 1 - Dalrymple agrees to the terms and conditions of this Amendment by his signature below.
This Amendment shall be deemed part of, and shall be read in connection with, but shall take precedence over and supersede any provisions to the contrary contained in the Agreement. All initial capitalized terms used in this Amendment shall have the same meaning as set forth in the Agreement unless otherwise provided. Except as specifically modified hereby, all of the provisions of the Agreement which are not in conflict with the terms of this Amendment shall remain in full force and effect.
This Amendment and any signed agreement or instrument entered into in connection with this Amendment, and any amendments hereto or thereto may be executed in one or more counterparts, all of which shall constitute one and the same instrument. Any such counterpart, to the extent delivered by means of a facsimile machine or by .pdf, .tif, .gif, .jpeg or similar attachment to electronic mail (any such delivery, an “Electronic Delivery”) shall be treated in all manner and respects as an original executed counterpart and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. No party 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 relates to lack of authenticity.
(Signaturepage follows.)
| - 2 - |
| --- |
IN WITNESS WHEREOF, the Parties hereto have executed this Amendment as of the Effective Date.
| “SPIN” | |
|---|---|
| Spine Injury Solutions, Inc. | |
| By: | /s/ William F. Donovan |
| William<br> F. Donovan, | |
| President<br> and Chief Executive Officer | |
| “Quad” | |
| Quad Video Halo, Inc. | |
| By: | /s/ William F. Donovan |
| Print<br> Name: | William<br> F. Donovan |
| --- | --- |
| Title: | Chief<br> Executive Officer |
| --- | --- |
| “Dalrymple” | |
| /s/ Peter Dalrymple | |
| Peter Dalrymple |
| - 3 - |
| --- |
Exhibit 17.1
Spine Injury Solutions, Inc.
To the Board of Directors of Spine Injury Solutions, Inc.:
I, William F. Donovan, M.D., hereby resign as Chief Executive Officer of Spine Injury Solutions, Inc. (the “Company”), effective upon the execution of the Share Exchange Agreement between the Company and Bitech Mining Corporation, a Wyoming corporation (“Bitech”), and the stockholders of Bitech, dated on or around the date hereof (the “Exchange Agreement”). As a result of my resignation, effective immediately upon the execution of the Exchange Agreement by the parties thereof, I will no longer hold any officer position whatsoever with the Company. My resignation is not the result of any disagreement with the Company on any matter relating to its operation, policies (including accounting or financial policies) or practices.
Dated: March 31, 2022
| Very<br> truly yours, |
|---|
| /s/ William F. Donovan, M.D. |
| William<br> F. Donovan, M.D |
Exhibit17.2
Spine Injury Solutions, Inc.
To the Board of Directors of Spine Injury Solutions, Inc.:
I, Jerry Bratton, J.D., M.B.A., hereby resign as a director of Spine Injury Solutions, Inc. (the “Company”), effective upon the closing of that certain Share Exchange Agreement between the Company and Bitech Mining Corporation, a Wyoming corporation (“Bitech”), and the stockholders of Bitech (the “Exchange Agreement”), dated on or around the date hereof. As a result of my resignation, effective as of the closing of the Exchange Agreement, I will no longer hold any director position whatsoever with the Company. My resignation is not the result of any disagreement with the Company on any matter relating to its operation, policies (including accounting or financial policies) or practices.
Dated: March 31, 2022
| Very<br> truly yours, |
|---|
| /s/ Jerry Bratton |
| Jerry<br> Bratton, J.D., M.B.A. |
Exhibit17.3
Spine Injury Solutions, Inc.
To the Board of Directors of Spine Injury Solutions, Inc.:
I, John Bergeron, CPA, hereby resign as a director of Spine Injury Solutions, Inc. (the “Company”), effective upon the closing of the Share Exchange Agreement between the Company and Bitech Mining Corporation, a Wyoming corporation (“Bitech”), and the stockholders of Bitech (the “Exchange Agreement”), dated on or around the date hereof. As a result of my resignation, effective as of the closing of the Exchange Agreement, I will no longer hold any director position whatsoever with the Company. My resignation is not the result of any disagreement with the Company on any matter relating to its operation, policies (including accounting or financial policies) or practices.
Dated: March 31, 2022
| Very<br> truly yours, |
|---|
| /s/ John Bergeron |
| John<br> Bergeron, CPA |
Spine Injury Solutions, Inc.
To the Board of Directors of Spine Injury Solutions, Inc.:
I, John Bergeron, CPA, hereby resign as Chief Financial Officer of Spine Injury Solutions, Inc. (the “Company”), effective upon the execution of the Share Exchange Agreement between the Company and Bitech Mining Corporation, a Wyoming corporation (“Bitech”), and the stockholders of Bitech, dated on or around the date hereof (the “Exchange Agreement”). As a result of my resignation, effective immediately upon the execution of the Exchange Agreement, I will no longer hold any officer position whatsoever with the Company. My resignation is not the result of any disagreement with the Company on any matter relating to its operation, policies (including accounting or financial policies) or practices.
Dated: March 31, 2022
| Very<br> truly yours, |
|---|
| /s/ John Bergeron |
| John<br> Bergeron, CPA |
Exhibit21.1
Exhibit 21.1 List of Subsidiaries of Spine Injury Solutions, Inc.
| Name of Subsidiary | Ownership Interest in Subsidiary | Jurisdiction of Formation | |||
|---|---|---|---|---|---|
| Quad Video Halo, Inc. | 100.0 | % | Texas | ||
| Concussion & Spine Injury Solutions, Inc. | 100.0 | % | Texas | ||
| Bitech Mining Corporation | 100.0 | % | Wyoming |
Exhibit99.1
ForImmediate Release
SpineInjury Solutions Announces Acquisition of Bitech Mining to Offer a Green Energy Solution to the Cryptocurrency Mining Industry
Houston,TX, April 4, 2022 – Spine Injury Solutions, Inc. (the “Company”) [OTCQB: SPIN], a spine injury-related medical service and technology company today announces the completion of its acquisition of Bitech Mining Corporation (“Bitech”), a revolutionary renewable energy technology solution provider for the cryptocurrency mining industry.
Bitech offers a patented Tesdison core technology involving high efficiency power generation via self-charging system solution to replace costly ASICs in the cryptocurrency mining industry and significantly reduce exorbitant electricity bills.
Via a Share Exchange Agreement dated March 31, 2022 (the “SEA”), the shareholders of Bitech acquired control of the Company and filed a Form 8-K with the U.S. Securities and Exchange Commission today.
Upon closing of the share exchange pursuant to the SEA, the Company’s board of directors appointed Dr. Benjamin Tran as its new Chairman of the Board of Directors and its Chief Executive Officer, Mr. Michael Cao as a new member of the board of directors and Robert Brilon as its Chief Financial Officer. Following completion of the share exchange, all existing shareholders of Bitech together will hold approximately 96% of the issued and outstanding shares of the Company’s common stock upon conversion of the Series A Preferred Stock that was issued by the Company.
“We’repleased to join Spin Injury Solutions to provide a platform for the launch of Bitech’s revolutionary net-zero emission energysolution to the ever-growing cryptocurrency world,” stated Dr. Benjamin Tran, CEO of Bitech Mining.
“Thereis an urgency in the global needs of today’s ever-changing energy landscape in the world of cryptocurrency mining where power savingis the most challenging issue. Our goal is to change the future of the cryptocurrency mining businesses by providing this U.S. patentedgreen energy technology capable of producing a highly efficient power solution that has been designed to be safe, reliable, cost effective,modular and easily scalable,” added Dr. Tran.
According to TechCrunch Report in December 2021, the green new era has begun entering the cryptocurrency mining world with a technological shift toward green energy solutions. Organizations such as the Bitcoin Mining Council are working to increase transparency in the industry through higher reporting standards. Many crypto-native organizations are also joining the Crypto Climate Accord, committing to achieve net-zero emissions from electricity consumption associated with crypto-related operations by 2030.
In its Annual Energy Outlook 2021, the U.S. Energy Information Administration projects that the share of renewables in the United States electricity generation mix will increase from 21% in 2020 to 42% in 2050. Envisioning the technological impact of the current market landscape today, our business vision is always long-term as we go green electric. We believe our game-changer technology solution for crypto mining businesses with practical power technologies from our Evirontek integrated technology platform can replace harmful fossil fuels while electricity demand has also surpassed the growth of renewable energy.
Bitech’s planned revenue model is a 5-pronged revenue ecosystem including (1) initial set up fees, (2) system building services, (3) cryptocurrency production revenue sharing, (4) mass production sales of smaller scale systems using the Tesdison Technology, and (5) royalty fees from non-cryptocurrency businesses that use the Tesdison Technology.
The recurring revenue nature of production revenue sharing is intended to be our main business model, enhanced with other potential revenue streams to strengthen our business longevity. At times, we plan to offer customized power-saving systems for data centers and power plants using our licensed Tesdison technology while providing capital financing to our strategic partners. Bitech, while licensing and implementing the Tesdison technology to business partners throughout the world, also expects to benefit from collecting a portion of any revenue derived from various large-scale commercialization projects with worldwide partners, using this technology to replace other outdated, ineffective renewable power solutions.
We plan to evaluate and selectively work with sizable cryptocurrency mining clients via our licensing model and assist them in implementing this game changer self-charging energy platform for significant cost reduction with a focus in bitcoin, Ethereum and other popular cryptocurrencies.
The Company plans to change its name to Bitech Mining Corporation in the near future to reflect its new business line.
AboutSpine Injury Solutions
Spine Injury Solutions, Inc. [OTCQB: SPIN] is a publicly traded company that engages in the collection of previously funded medical procedures and is a provider of a video recording system known as the Quad Video Halo (“QVH”) which is used to record medical procedures. For more information, please visit www.spinepaininc.com.
AboutBitech Mining
Bitech Mining Corporation (Bitech) is a development stage technology company dedicated to providing a suite of green energy solutions with a focus in cryptocurrency mining and data centers. Aiming to resolve the exorbitant high cost of electricity in crypto mining, Bitech offers its Evirontek Integrated Platform including its core technology Tesdison, a revolutionary U.S. patented self-charging dual-battery system technology providing high efficiency in power generation. Bitech seeks business partnerships with global cryptocurrency miners in bitcoin, ethereum and other popular cryptocurrencies and engage with value-added resellers to facilitate and implement our scalable and modular system solution while pursuing cryptocurrency revenue-sharing and technology licensing model based on its Tesdison technology that is capable of implementation at any scale. For more information, please visit www.bitech.tech.
Cautionary Note Regarding Forward-Looking Statements
This news release contains statements that involve expectations, plans or intentions (such as those relating to future business or financial results) and other factors discussed from time to time in the Company’s Securities and Exchange Commission filings. These statements are forward-looking and are subject to risks and uncertainties, so actual results may vary materially. You can identify these forward-looking statements by words such as “may,” “should,” “expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan” and other similar expressions. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors not within the control of the Company. The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The company disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
Contact:
Bitech Mining Corporation
Investor Relations
Tel: 1.855.777.0888
Email: info@bitech.tech
Exhibit99.2
INDEXTO FINANCIAL STATEMENTS
| Page | |
|---|---|
| Financial Statements<br><br> <br>For the Year Ended December 31, 2021 | |
| Report of Independent Registered Public Accounting Firm | 2 |
| Balance Sheet as of December 31, 2021 | 3 |
| Statements of Operations for the Year Ended December 31, 2021 | 4 |
| Statement of Stockholders’ Equity for the Year Ended December 31, 2021 | 5 |
| Statement of Cashflows for the Year Ended December 31, 2021 | 6 |
| Notes to the Financial Statements | 7 |
| 1 |
| --- |
Reportof Independent Registered Public Accounting Firm
To the shareholders and the board of directors of Bitech Mining Corporation
Opinionon the Financial Statements
We have audited the accompanying balance sheet of Bitech Mining Corporation (the “Company”) as of December 31, 2021, the related statement of operations, stockholders’ equity (deficit), and cash flows for the period January 21, 2021 (Inception) through December 31, 2021 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 December 31, 2021, and the results of its operations and its cash flows for the period January 21, 2021 (Inception) through December 31, 2021, in conformity with accounting principles generally accepted in the United States.
SubstantialDoubt 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 significant operating losses 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.
Basisfor 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. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
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.
/S/BF Borgers CPA PC
BF Borgers CPA PC
We have served as the Company’s auditor since 2022
Lakewood, CO
February 16, 2022
| 2 |
| --- |
BITECHMINING CORPORATION
BALANCESHEET
DECEMBER31, 2021
| ASSETS | ||
| CURRENT ASSETS | ||
| Cash and Cash Equivalents | 976,947 | |
| Accounts Receivable, Net | - | |
| Total Current Assets | 976,947 | |
| OTHER ASSETS | ||
| Intangible Assets, Net | 35,000 | |
| Total Assets | 1,011,947 | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
| CURRENT LIABILITIES | ||
| Accounts and Other Payables | 11,106 | |
| Total Current Liabilities | 11,106 | |
| STOCKHOLDERS’ EQUITY | ||
| Common Stock, 0.001 par value; 100,000,000 shares authorized; 93,407,250 shares issued and outstanding as of December 31, 2021 | 93,407 | |
| Additional Paid-In Capital | 1,192,393 | |
| Accumulated Deficit | (284,959 | ) |
| Total Stockholders’ Equity | 1,000,841 | |
| Total Liabilities and Stockholders’ Equity | 1,011,947 |
All values are in US Dollars.
Seeaccompanying Notes to Financial Statements.
| 3 |
| --- |
BITECHMINING CORPORATION
STATEMENTOF OPERATIONS
YEARENDED DECEMBER 31, 2021
| 2021 | |||
|---|---|---|---|
| REVENUE | |||
| Product Sales | $ | - | |
| License Revenue | - | ||
| Other Revenue | - | ||
| TOTAL REVENUE | - | ||
| COST OF REVENUE | - | ||
| GROSS PROFIT | - | ||
| OPERATING EXPENSES | |||
| General & Administrative | 284,959 | ||
| Total Operating Expenses | 284,959 | ||
| LOSS FROM OPERATIONS | (284,959 | ) | |
| OTHER INCOME (EXPENSE) | |||
| Miscellaneous Income (Expense) | - | ||
| Interest Income | - | ||
| Interest Expense | - | ||
| Total Other Income (Expense) | |||
| LOSS BEFORE INCOME TAXES | (284,959 | ) | |
| BENEFIT (PROVISION) FOR INCOME TAXES | - | ||
| NET LOSS | $ | (284,959 | ) |
| BASIC AND DILUTED LOSS PER SHARE | $ | (0.00 | ) |
| WEIGHTED AVERAGE SHARES | 89,727,414 |
Seeaccompanying Notes to Financial Statements.
| 4 |
| --- |
BITECHMINING CORPORATION
STATEMENTOF STOCKHOLDERS’ EQUITY
YEARENDED DECEMBER 31, 2021
| Common Stock | Additional | Total Stockholder’s | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Common | Par | Paid-in | Accumulated | Equity | |||||||||
| Shares | Value | -Capital | Deficit | (Deficit) | |||||||||
| INCEPTION JANUARY 21, 2021 | |||||||||||||
| Opening Balance | 100 | 100 | |||||||||||
| Founders Stock Issued | 70,000,000 | 70,000 | (70,000 | ) | 0 | ||||||||
| Stock Issued for Intangible Asset - License | 10,000,000 | 10,000 | 10,000 | ||||||||||
| Common Stock Issued for Services | 10,106,000 | 10,106 | 101,094 | 111,200 | |||||||||
| Common Stock Sold in Private Placement | 3,301,250 | 3,301 | 1,161,199 | 1,164,500 | |||||||||
| Net Loss | (284,959 | ) | (284,959 | ) | |||||||||
| BALANCE AT DECEMBER 31, 2021 | 93,407,250 | $ | 93,407 | $ | 1,192,393 | $ | (284,959 | ) | $ | 1,000,841 |
Seeaccompanying Notes to Financial Statements.
| 5 |
| --- |
BITECHMINING CORPORATION
STATEMENTOF CASH FLOWS
DECEMBER31, 2021
| 2021 | |||
|---|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Net Loss | $ | (284,959 | ) |
| Adjustments to Reconcile Net Loss to Net Cash Used by Operating Activities | |||
| Common Stock Issued for Consulting Services | 111,200 | ||
| (Increase) Decrease in Operating Assets | |||
| Accounts Receivable | - | ||
| Increase (Decrease) in Accounts and Other Payables | 11,106 | ||
| Net Cash Used in Operating Activities | (162,653 | ) | |
| CASH FLOWS FROM INVESTING ACTIVITIES | |||
| Purchase Intangible Asset – Exclusive License | 25,000 | ||
| Purchase of Property and Equipment | - | ||
| Net Cash Provided by (Used in) Investing Activities | 25,000 | ||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Opening Balance Equity | 100 | ||
| Common Stock Issued, Net of (Cost of Capital) | 1,164,500 | ||
| Net Cash Provided by Financing Activities | 1,164,600 | ||
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 976,947 | ||
| Cash and Cash Equivalents- Beginning of Period | - | ||
| CASH AND CASH EQUIVALENTS - END OF PERIOD | $ | 976, 947 | |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||
| Interest Paid | $ | - | |
| SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | |||
| Common Stock Issued for Intangible Asset – Exclusive License | $ | 10,000 |
Seeaccompanying Notes to Financial Statements.
| 6 |
| --- |
BITECHMINING CORPORATION
NOTESTO THE FINANCIAL STATEMENTS
FORTHE YEAR ENDED DECEMBER 31, 2021
NOTE1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Natureof Operations
BITECH MINING CORPORATION “Bitech” proactively provides green energy solution expertise across the globe to crypto miners to reduce exorbitant cost of electricity.
We offer revolutionary Tesdison technology (U.S. Patent No. 10,547,179 B) with cost saving, reliability and scalability solution to clients and client partners via licensing model with revenue-sharing partnerships. Tesdison proprietary technology enables generating up to twice the original energy output and is a modular, scalable storage and power generation solution. Tesdison technology distributes a steady stream of 120/220/480 VAC output and multiple Tesdison units can be run in concert to generate a constant, uninterrupted supply of electricity 24 hours a day at any desired voltage.
Bitech controls the perpetual license with global exclusivity right of the Tesdison technology in the Crypto Mining industry.
Impairmentof Long-Lived Assets
We have a minimal amount of Intangible Assets, consisting of an Exclusive License. We review the recoverability of the carrying value of long-lived assets using the methodology prescribed in ASC 360. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of an asset to the undiscounted future net operating cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying value of the assets exceeds their fair value. We did not make any impairment for the years ended December 31, 2021.
Basisof Accounting
Our financial statements have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America.
Useof Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.
Concentrations
Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash and cash equivalents and trade accounts receivable.
Substantially all cash is deposited in one financial institution in the United States. At times, amounts on deposit in the United States may be in excess of the FDIC insurance limit.
Cashand Cash Equivalents
For purposes of the statement of cash flows, we consider all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.
| 7 |
| --- |
IntangibleAssets
Intangible assets consist of an Exclusive License with a value at December 31, 2021 of $35,000. Such assets will being amortized over their estimated useful lives of sixteen years beginning in 2022 as the technology is licensed or used in products for sale.
FairValue of Financial Instruments
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to us as of December 31, 2021. The respective carrying values of certain on-balance-sheet financial instruments approximate their fair values. These financial instruments include cash, accounts receivable, accounts payable, accrued expenses, and amounts due to related parties. Fair values were assumed to approximate carrying values for these financial instruments because they are short-term in nature and their carrying amounts approximate their fair values or because they are receivable or payable on demand.
NewAccounting Standards
No new relevant standards.
NOTE2 - EQUITY
CommonStock
We are authorized to issue up to 100,000,000 shares of common stock, par value $0.001 per share. All outstanding shares of our common stock are of the same class and have equal rights and attributes. The holders of our common stock are entitled to one vote per share on all matters submitted to a vote of the stockholders of our company. Our common stock does not have cumulative voting rights. Persons who hold a majority of the outstanding shares of our common stock entitled to vote on the election of directors can elect all of the directors who are eligible for election. Holders of our common stock are entitled to share equally in dividends, if any, as may be declared from time to time by our Board of Directors. In the event of liquidation, dissolution, or winding up of our company, subject to the preferential liquidation rights of any series of preferred stock that we may from time to time designate, the holders of our common stock are entitled to share ratably in all of our assets remaining after payment of all liabilities and preferential liquidation rights. Holders of our common stock have no conversion, exchange, sinking fund, redemption, or appraisal rights (other than such as may be determined by the Board of Directors in its sole discretion) and have no preemptive rights to subscribe for any of our securities.
On February 11, 2021, the company entered into an exclusive license agreement with SuperGreen Energy Corp, which is majority owned and controlled by Calvin Cao, the brother of Michael Cao, a founder, director and greater than 10% shareholder of Bitech Mining Corporation.
On June 15, 2021, the company entered into an agreement for capital market services and that agreement included the issuance of 4,000,000 shares of Common Stock for the services. The shares are disputed to non-performance and as a result are not issued or valued and the company will defend against any claim to these shares as no performance obligations were met to earn these shares.
NOTE3 - INCOME TAXES
U.S.Federal Corporate Income Tax
Temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities and tax credit and operating loss carryforward that create deferred tax assets and liabilities are as follows:
| 2021 | |||
|---|---|---|---|
| Tax Operating Loss Carryforward - USA | $ | 100,000 | |
| Other | - | ||
| Valuation Allowance - USA | (100,000 | ) | |
| $ | - |
| 8 |
| --- |
NOTE4 - EARNINGS (LOSS) PER SHARE
The following table provides a reconciliation of the numerators and denominators reflected in the basic and diluted earnings per share computations, as required by ASC No. 260, “Earnings per Share.”
Basic earnings per share (“EPS”) is computed by dividing reported earnings available to stockholders by the weighted average shares outstanding.
| 2021 | |||
|---|---|---|---|
| Basic EPS | |||
| Net Loss | $ | (284,959 | ) |
| Weighted Average Shares | 89,727,414 | ||
| Basic Loss Per Share | $ | (0.00 | ) |
NOTE5 - SUBSEQUENT EVENTS
The Company sold 905,000 in Common Stock at $0.40 per share resulting in $362,000 of additional cashflow from financing activities through February 15, 2022.
| 9 |
| --- |
Exhibit99.3
| (b) | PRO<br> FORMA FINANCIAL INFORMATION. |
|---|
SpineInjury Solutions, Inc.
And
BitechMining Corporation
UNAUDITEDPRO FORMA COMBINED FINANCIAL STATEMENTS
AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2021
INDEXTO THE UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
| Contents | Page(s) |
|---|---|
| Unaudited Pro Forma Combined Financial Statements | 2 |
| Unaudited Pro Forma Combined Statement of Operations for the Year Ended December 31, 2021 | 3 |
| Notes to the Unaudited Pro Forma Combined Financial Statements | 5 |
SpineInjury Solutions, Inc.
And
BitechMining Corporation
UNAUDITEDPRO FORMA COMBINED FINANCIAL STATEMENTS
AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2021
The following unaudited pro forma combined balance sheet as of the year ended December 31, 2021 are based on the historical financial statements of Spine Injury Solutions, Inc. (the “Company”) and Bitech Mining Corporation, a Wyoming corporation (“Bitech”) after giving effect to the Company’s acquisition of Bitech using the purchase method of accounting and applying the assumptions and adjustments described in the accompanying notes to the unaudited pro forma combined financial statements as if such acquisition had occurred as of January 1, 2021 for statements of operations for pro forma financial statement purposes.
The merger between the Company and Bitech has been accounted for as a reverse acquisition under the purchase method of accounting in accordance with Statement of Financial Accounting Standards No. 141 “Business Combinations” (“SFAS No. 141”). The combination of the two companies is recorded as a recapitalization of Bitech pursuant to which Bitech is treated as the continuing entity. In connection with the acquisition, the Company entered into a Share Exchange Agreement with the Sellers to exchange an aggregate of 94,312,250 shares of Bitech’s Common Stock, par value $0.001 per share, representing 100% of the issued and outstanding shares of Bitech (collectively, the “Bitech Shares”). In consideration of the Bitech Shares, the Company issued to the Sellers an aggregate of 9,000,000 shares of the Company’s newly authorized Series A Convertible Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”). Each Bitech Share shall be entitled to receive 0.09543 shares of Series A Preferred Stock. Each share of Series A Preferred Stock shall automatically convert into 53.975685 shares (an aggregate of approximately 485,781,300) of the Company’s Common Stock (the “Company Common Stock”) upon filing of an amendment to its Certificate of Incorporation increasing the number of the Company’s authorized common stock so that there are a sufficient number of shares of Company Common Stock authorized but unissued to permit a full conversion of all the Series A Preferred Stock. Upon conversion of the Series A Preferred Stock, the Sellers will hold, in the aggregate, approximately 96% of the issued and outstanding shares of Company capital stock on a fully diluted basis.
The unaudited pro forma combined financial statements have been prepared by management for illustrative purposes only and are not necessarily indicative of the combined consolidated financial position or results of operations in future periods or the results that actually would have been realized had Bitech and the Company been a combined company during the specified periods. The pro forma adjustments are based on the preliminary information available at the time of the preparation of this document and assumptions that management believes are reasonable. The unaudited pro forma combined financial statements, including the notes thereto, are qualified in their entirety by reference to, and should be read in conjunction with, the Company’s historical financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2021 as filed with United States Securities and Exchange Commission (“SEC”) on March 16, 2022 and Bitech’s historical audited financial statements for the year ended December 31, 2021 which are included as Exhibit 99.2, in the Current Report on Form 8-K as filed with SEC on April 4, 2022.
| 2 |
| --- |
Spine Injury Solutions, Inc.
And
Bitech Mining Corporation
PRO FORMA COMBINED BALANCE SHEET
December 31, 2021
(Unaudited)
| Pro Forma | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Bitech Mining Corporation | Adjustments | Combined | ||||||||||
| ASSETS | ||||||||||||
| CURRENT ASSETS: | ||||||||||||
| Cash | 16,437 | $ | 976,947 | $ | - | $ | 993,384 | |||||
| Accounts receivable, net of allowance discounts of 447,126 | 27,263 | - | - | 27,263 | ||||||||
| Total Current Assets | 43,700 | 976,947 | - | 1,020,647 | ||||||||
| PROPERTY AND EQUIPMENT, net | - | - | - | - | ||||||||
| Intangible Asset | - | 35,000 | - | 35,000 | ||||||||
| Total Assets | 43,700 | $ | 1,011,947 | $ | - | $ | 1,055,647 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||||||
| CURRENT LIABILITIES: | ||||||||||||
| Accounts payable and accrued liabilities | 37,495 | 11,106 | - | 48,601 | ||||||||
| Notes Payable | 395,000 | - | - | 395,000 | ||||||||
| Total Current Liabilities | 432,495 | 11,106 | - | 443,601 | ||||||||
| Total Liabilities | 432,495 | 11,106 | - | 443,601 | ||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||||||
| Series A Convertible Preferred stock, 0.001 par value; 9,000,000 shares authorized; | ||||||||||||
| 9,000,000 issued or outstanding | - | - | (a) | 9,000 | 9,000 | |||||||
| Common stock: 0.001 par value; 250,000,000 shares authorized; | ||||||||||||
| 20,240,882 shares issued and outstanding | 20,241 | 20,241 | ||||||||||
| Common Stock: 0.001; 100,000,000 shares authorized; 93,407,250 issued and outstanding | 93,407 | (a) | (93,407 | ) | - | |||||||
| Additional paid-in capital | 19,869,511 | 371,738 | (b) | 369,366 | 21,431,270 | |||||||
| Retained earnings (accumulated deficit) | (20,278,547 | ) | (284,959 | ) | (b) | (284,959 | ) | (20,848,465 | ) | |||
| Total Stockholders’ Equity (Deficit) | (388,795 | ) | 1,000,841 | - | 612,046 | |||||||
| Total Liabilities and Stockholders’ Equity | 43,700 | $ | 1.011,947 | $ | - | $ | 1,055,647 |
All values are in US Dollars.
| See<br> accompanying notes to the unaudited pro forma combined financial statements. |
|---|
| 3 |
| --- |
Spine Injury Solutions, Inc.
And
Bitech Mining Corporation
PRO FORMA COMBINED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2021
(Unaudited)
| Historical | Pro Forma | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Spine Injury Solutions, Inc. | Bitech Mining Corporation | Adjustments | Combined | |||||||||
| NET REVENUES | $ | 168,880 | $ | - | $ | - | $ | 168,880 | ||||
| COST OF SALES | - | - | - | - | ||||||||
| GROSS PROFIT | 168,880 | - | - | 168,880 | ||||||||
| OPERATING EXPENSES: | ||||||||||||
| Operating, general and administrative | 379,883 | 284,959 | - | 664,842 | ||||||||
| INCOME (LOSS) FROM OPERATIONS | (211,003 | ) | (284,959 | ) | - | (495,962 | ) | |||||
| OTHER INCOME (EXPENSE): | ||||||||||||
| Interest expense, net | (26,859 | ) | - | - | (26,859 | ) | ||||||
| Other income (expense) | 97,497 | - | 97,497 | |||||||||
| Total Other income (expense) | 70,638 | - | - | 70,638 | ||||||||
| INCOME (LOSS) BEFORE INCOME TAXES | (140,365 | ) | (284,959 | ) | - | (425,324 | ) | |||||
| INCOME TAXES | - | - | - | - | ||||||||
| NET INCOME (LOSS) | (140,365 | ) | (284,959 | ) | - | (425,324 | ) | |||||
| INCOME (LOSS) PER COMMON SHARE - BASIC: | ||||||||||||
| Net income (loss) | $ | (0.01 | ) | (0.00 | ) | $ | (0.02 | ) | ||||
| Weighted average number of common shares outstanding – basic and diluted (1) | 20,240,882 | 89,727,414 | (89,727,414 | ) | 20,240,882 | |||||||
| (1)<br>Weighted average number of Common Shares outstanding of Spine Injury Solutions, Inc. (the “Company”) reflects the cancellation<br>of all of shares of the Common Stock of Bitech Mining Corporation in exchange for 9,000,000 shares of the Series A Convertible Preferred<br>Stock of the Company. | ||||||||||||
| --- | ||||||||||||
| See<br> accompanying notes to the unaudited pro forma combined financial statements. | ||||||||||||
| --- |
| 4 |
| --- |
Spine Injury Solutions, Inc.
And
Bitech Mining Corporation
NOTESTO THE UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2021
NOTE1 - Basis of Pro Forma Presentation
Spine Injury Solutions, Inc. (the “Company”) acquired Bitech Mining Corporation on March 31, 2022 (the “Closing Date”) through a share exchange pursuant to a Share Exchange Agreement (the “Share Exchange Agreement”) by and among the Company, Bitech, each of Bitech’s shareholders (each, a “Seller” and collectively, the “Sellers”), and Benjamin Tran, solely in his capacity as Sellers’ Representative (“Sellers’ Representative”). The transaction contemplated by the Share Exchange Agreement is hereinafter referred to as the “Share Exchange”). The Share Exchange Agreement provides that the Company will acquire from the Sellers, an aggregate of 94,312,250 shares of Bitech’s Common Stock, par value $0.001 per share, representing 100% of the issued and outstanding shares of Bitech (collectively, the “Bitech Shares”). In consideration of the Bitech Shares, the Company issued to the Sellers an aggregate of 9,000,000 shares of the Company’s newly authorized Series A Convertible Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”). Each Bitech Share shall be entitled to receive 0.09543 shares of Series A Preferred Stock. Each share of Series A Preferred Stock shall automatically convert into 53.975685 shares (an aggregate of approximately 485,781,300) of the Company’s Common Stock (the “Company Common Stock”) upon filing of an amendment to its Certificate of Incorporation increasing the number of the Company’s authorized common stock so that there are a sufficient number of shares of Company Common Stock authorized but unissued to permit a full conversion of all the Series A Preferred Stock. Upon conversion of the Series A Preferred Stock, the Sellers will hold, in the aggregate, approximately 96% of the issued and outstanding shares of Company capital stock on a fully diluted basis.
The unaudited pro forma combined balance sheet as of December 31, 2021 and the unaudited pro forma combined statements of operations for the year ended December 31, 2021 are based on the historical financial statements of the Company and Bitech after giving effect to the Company’s acquisition of Bitech using the purchase method of accounting and applying the assumptions and adjustments described in the accompanying notes to the unaudited pro forma combined financial statements as if such acquisition had occurred as of December 31, 2021 for the balance sheet, and January 1, 2021 for statements of operations for pro forma financial statements purposes. The unaudited pro forma combined financial statements do not purport to represent what the results of operations or financial position of Bitech would actually have been if the merger had in fact occurred on January 1, 2021, nor do they purport to project the results of operations or financial position of Bitech for any future period or as of any date, respectively.
These unaudited pro forma combined financial statements do not give effect to any restructuring costs or to any potential cost savings or other operating efficiencies that could result from the merger between the Company and Bitech since such amounts, if any, are not presently determinable.
NOTE2 - Pro Forma Adjustments
The accompanying unaudited pro forma combined financial statements have been prepared as if the acquisition was completed on March 31, 2022 for balance sheet purposes and on January 1, 2021 for statements of operations purposes and reflect the following pro forma adjustments:
| a) | To<br> reflect Share Exchange Agreement issuance of 9,000,000 shares of the Company’s newly authorized Series A Convertible Preferred<br> Stock, par value $0.001 per share in exchange for an aggregate of 94,312,250 shares of Bitech’s Common Stock, par value $0.001<br> per share, representing 100% of the issued and outstanding shares of Bitech (collectively, the “Bitech Shares”). | |
|---|---|---|
| Series A Convertible Preferred Stock: $0.001 par value | (9,000 | ) |
| --- | --- | --- |
| Additional paid-in capital | 9,000 | |
| Additional paid-in capital | 93,407 | ) |
| Common Stock: $0.001 par value | (93,407 | ) |
| b) | To<br> reclassify the Company’s accumulated deficit as additional paid-in capital in connection with the recapitalization of the Company. | |
| --- | --- | |
| Additional paid-in capital | 284,959 | |
| --- | --- | --- |
| Accumulated deficit | (284,959 | ) |
| 5 |
| --- |