Bioregenx, Inc 10-Q/A for FY2024 Q1
Bioregenx, Inc. (BRGX)
About this 10-Q/A
Bioregenx, Inc filed this 10-Q/A on October 9, 2024, covering the quarter ended March 31, 2024 (FY2024 Q1).
Headline figures
Quarter ended March 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $549.55K
- down 48.9% from $1.08M a year earlier
- Net loss
- $3.15M
- compared with a net loss of $229.84K a year earlier
- Diluted EPS
- $0.00
- compared with $0.00 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended:
OR
For the transition period from _____________to______________
Commission file number:
(Exact name of Company in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification) |
(Address of principal executive offices, including zip code)
Registrant's Telephone number, including area code:
(
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g)
of the Act:
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the preceding 12 months (or
such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for
at least the past 90 days. Yes ☐
Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (section 232.406 of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company.
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
No
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. The number of shares outstanding of the registrant's only class of common stock, as of September 18, 2024 was shares of its $0.001 par value common stock.
EXPLANATORY NOTE
On June 10, 2024, BioRegenx, Inc. (the “Company”) engaged Weinberg & Company, P.A. (“Weinberg”) as the Company’s new independent accountant. This amendment no. 2 to quarterly report on Form 10-Q for the period ended March 31, 2024, as filed on May 24, 2024 and subsequently amended on May 28, 2024, includes revised and restated financial statements reviewed by Weinberg for the three months ended March 31, 2024 and 2023.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS AND INFORMATION
This report contains statements reflecting our views about our future performance that constitute “forward-looking statements.”. Statements that constitute forward-looking statements are generally identified through the inclusion of words such as “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “may,” “objective,” “potential,” “will” or similar statements or variations of such words and other similar expressions. All statements addressing our future operating performance, and statements addressing events and developments that we expect or anticipate will occur in the future, are forward-looking statements. These forward-looking statements are based on currently available information, operating plans and projections about future events and trends. They inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in any such forward-looking statement. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
| 3 |
BIOREGENX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| As of March 31, 2024 (As Restated) | As of December 31, 2023 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable | ||||||||
| Inventories, net | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total Current Assets | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, provisional, net | ||||||||
| Goodwill, provisional | ||||||||
| Other Assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES & STOCKHOLDERS' DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accounts payable – related parties | ||||||||
| Accrued expenses | ||||||||
| Accrued interest - related parties | ||||||||
| Promissory notes payable and loans (including $ | ||||||||
| Promissory notes payable and loans – related parties | ||||||||
| Deferred revenue | ||||||||
| Total current liabilities | ||||||||
| Notes payable | ||||||||
| Total Liabilities | ||||||||
| Stockholders’ Equity (Deficit): | ||||||||
| Common stock, $ par value, shares authorized, issued and outstanding as of March 31, 2024 and as of December 31, 2023 | ||||||||
| Series A preferred stock, non-dividend, 2,500 votes per share, $par value, authorized; issued and outstanding as of March 31, 2024 and December 31, 2023 | ||||||||
| Additional paid-in-capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income (loss) | ( | ) | ||||||
| Total Stockholders' Deficit | ( | ) | ||||||
| Total Liabilities and Stockholders' Deficit | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements
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BIOREGENX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
| For the Three Months Ended March 31, | ||||||||
| 2024 (As restated) | 2023 | |||||||
| Revenues: | ||||||||
| Gross sales | $ | $ | ||||||
| Returns (including $ | ( | ) | ( | ) | ||||
| Net sales | ||||||||
| Cost of sales | ||||||||
| Gross profit | ||||||||
| Operating Expenses: | ||||||||
| Distributors incentives | ||||||||
| Selling, general and administrative (including equity compensation costs of $ | ||||||||
| Amortization expense | ||||||||
| Total operating expenses | ||||||||
| Loss from Operations | ( | ) | ( | ) | ||||
| Other income (expense): | ||||||||
| Interest income | ||||||||
| Interest expense and financing costs | ( | ) | ( | ) | ||||
| Total other expense | ( | ) | ( | ) | ||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Weighted average common shares outstanding – basic and diluted | ||||||||
| Loss per share – basic and diluted | $ | ) | $ | ) | ||||
| Comprehensive Income: | ||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Other comprehensive income (loss) | ||||||||
| Foreign currency translation adjustment | ||||||||
| Other comprehensive loss | $ | ( | ) | $ | ( | ) | ||
The accompanying notes are an integral part of these condensed consolidated financial statements
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BIOREGENX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT (AS RESTATED)
(Unaudited)
For the three months ended March 31, 2024
| Common Stock | Preferred Stock Series A | Additional Paid-in | Accumulated | Accumulated Other Comprehensive | Total Stockholders’ Equity | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Income | (Deficit) | |||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| Issuance of common shares for services | – | |||||||||||||||||||||||||||||||
| Fair value of options issued to officers and directors for services | – | – | ||||||||||||||||||||||||||||||
| Fair value of common shares and warrants issued for refunds | – | |||||||||||||||||||||||||||||||
| Issuance of common shares as loan incentive | – | |||||||||||||||||||||||||||||||
| Issuance of common shares to acquire technology | – | |||||||||||||||||||||||||||||||
| Shares issued (retained by Findit, Inc.’s shareholders in merger with Findit, Inc. | – | |||||||||||||||||||||||||||||||
| Net loss | – | – | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Other Comprehensive Income | – | – | ||||||||||||||||||||||||||||||
| Balance, March 31, 2024, as restated | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||
For the three months ended March 31, 2023
| Common Stock | Preferred Stock Series A | Additional Paid-in | Accumulated | Accumulated Other Comprehensive | Total Stockholders’ Equity | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Income | (Deficit) | |||||||||||||||||||||||||
| Balance, December 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| Issuance of common shares and warrants in private placement | – | |||||||||||||||||||||||||||||||
| Net loss | – | – | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Other Comprehensive Income | – | – | ||||||||||||||||||||||||||||||
| Balance, March 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements
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BIOREGENX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Three Months Ended March 31, | ||||||||
| 2024 (As Restated) | 2023 | |||||||
| Operating Activities | ||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used by operating activities: | ||||||||
| Depreciation and amortization expense | ||||||||
| Amortization of debt discount | ||||||||
| Fair value of warrants issued to officers and directors | ||||||||
| Fair value of common shares issued for services | ||||||||
| Fair value of warrants issued for refunds | ||||||||
| Change in operating assets and liabilities (net of acquired) | ||||||||
| Accounts receivable | ( | ) | ||||||
| Inventories | ( | ) | ||||||
| Prepaid expenses and other assets | ||||||||
| Accounts payable | ( | ) | ||||||
| Accounts payable – related parties | ( | ) | ( | ) | ||||
| Accrued expenses and other liabilities | ( | ) | ||||||
| Accrued expenses and other liabilities – related parties | ||||||||
| Deferred Revenue | ||||||||
| Net Cash Used in Operating Activities | ( | ) | ( | ) | ||||
| Investing Activities: | ||||||||
| Purchases of property and equipment | ( | ) | ||||||
| Purchase of intangibles | ( | ) | ||||||
| Cash acquired in DocSun transaction | ||||||||
| Net Cash Used in Investing Activities | ( | ) | ||||||
| Financing Activities: | ||||||||
| Note and loan payments | ( | ) | ||||||
| Note and loan payments – related parties | ( | ) | ||||||
| Increase in note and loan balances | ||||||||
| Proceeds from the issuance of common stock | ||||||||
| Net Cash Provided by Financing Activities | ||||||||
| Effect of Exchange Rate Fluctuations | ||||||||
| Net Decrease in Cash and Cash Equivalents | ( | ) | ( | ) | ||||
| Cash and Cash Equivalents, Beginning Balance | ||||||||
| Cash and Cash Equivalents, Ending Balance | $ | $ | ||||||
| Cash Paid During the Period for: | ||||||||
| Interest | $ | $ | ||||||
| Income Taxes | $ | $ | ||||||
| Non-Cash Investing and Financing Activities: | ||||||||
| Fair value of common stock issued for intangible property and equipment in the acquisition of DocSun Biomedical Holdings Inc. | $ | $ | ||||||
| Fair value of common stock issued upon acquisition of intangible property and goodwill in the merger with Findit, Inc. | ||||||||
| Fair value of common stock and warrants issued for refunds offset to deferred revenue | ||||||||
| Fair value of common stock issued for loan fees offset to loan discounts | ||||||||
| Reclass of deposit to intangibles | ||||||||
| Debt discount upon issuance of notes payable | ||||||||
| Net non-cash activities | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements
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BIOREGENX, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2024 (RESTATED) AND 2023
NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Business
BioRegenx, Inc. (“the Company”) develops and manufactures medical test equipment and high quality, science-based nutritional products. The Company distributes wellness devices. The products are sold nationally through a direct selling channel, to health professionals and research organizations.
On April 6, 2021, the Company’s consolidated group was formed by the contribution of 100% of the equity interests of three companies, Microvascular Health Services, LLC, My Body Rx, LLC and NuLife Sciences, Inc. in exchange for newly issued common and preferred stock representing all the issued and outstanding shares of BioRegenx. The combination is expected to product synergies between companies with the production activities and the distribution network of the marketing company.
On January 8, 2024, the Company acquired all the shares outstanding of DocSun Biomedical Holdings, Inc. in exchange for shares of the Company’s stock. This acquired company is accounted for as an asset acquisition and the activities of the acquired company are included in the consolidated financial statements starting with the acquisition. Assets and liabilities are reported at the purchase price allocated to the relative fair market value.
The Company filed Articles of Merger effective March 8, 2024 with the state of Nevada. Pursuant to the Articles of Merger, BioRegenx, Inc, a private Nevada corporation was merged into the Company, with the Company being the surviving company.
The Consolidated Financial Statements (the “Financial Statements”) include the accounts and operations of the Company, and its wholly owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. The accounting and reporting policies of the Company conform with accounting principles generally accepted in the United States of America (“US GAAP”).
Basis of Presentation of Unaudited Financial Information
The unaudited condensed consolidated financial statements of the Company for the three months ended March 31, 2024 and 2023 have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-K for scaled disclosures for smaller reporting companies. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the Company’s financial position and results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of December 31, 2023 was derived from the audited financial statements included in the Company’s financial statements as of and for the years ended December 31, 2023 and 2022 contained in the Company’s Form 8-KA to be filed with the Securities and Exchange Commission (“SEC”), on September 25, 2024. These financial statements should be read in conjunction with that report.
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Going Concern
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates the continuation of the Company as a going concern.
The Company has generated recurring losses
from operations and cash flow deficits from its operations since inception and has had to raise funds through equity offerings or
borrowings to continue operating. These factors raise substantial doubt about the Company’s ability to continue as a going
concern. As reflected in the accompanying financial statements, during the quarter ended March 31, 2024, the Company incurred net
loss of $
The continuation of the Company as a going concern is dependent upon its ability to obtain necessary debt or equity financing to continue operations until it begins generating positive cash flow. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution for our stockholders, in case of equity financing.
Use of Estimates
The preparation of Consolidated Financial Statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period.
Those estimates and assumptions include estimates for credit loss reserves for accounts receivable, assumptions used in valuing inventories at net realizable value, assumptions made in purchase price allocations, impairment testing of recorded long-term tangible and intangible assets, the valuation allowance for deferred tax assets, accruals for potential liabilities, and assumptions made in valuing equity instruments issued for services. The Company bases estimates and assumptions on historical experience, when available, and on various factors that it believes to be reasonable under the circumstances. The Company evaluates its estimates and assumptions on an ongoing basis, and its actual results may differ from estimates made under different assumptions or conditions.
Fair value of financial instruments
The Company uses various inputs in determining the fair value of its financial assets and liabilities and measures these assets on a recurring basis. Financial assets recorded at fair value are categorized by the level of subjectivity associated with the inputs used to measure their fair value. Accounting Standards Codification Section 820 defines the following levels of subjectivity associated with the inputs:
Level 1—Quoted prices in active markets for identical assets or liabilities.
Level 2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.
Level 3—Unobservable inputs based on the Company’s assumptions.
The carrying amounts of financial assets and liabilities, such as cash, accounts receivable, inventory, accounts payable, and other payables, approximate their fair values because of the short maturity of these instruments. The carrying values of long-term financing obligations approximate their fair values because interest rates on these obligations are based on prevailing market interest rates.
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Translation of Foreign Currencies
The Company’s foreign sales activities are conducted in US Dollars and no foreign currency translations are recorded in these financial statements. The Company purchases are conducted in the currency negotiated by the Company and the vendors. When a foreign currency transaction is required, the Company will record the transaction in its financial statements at the current exchange rate. Upon satisfaction of the obligation denominated in foreign currency the then current exchange rate is used, any difference in the amount originally recorded the amount to satisfy the obligation is recorded to foreign currency gain or loss. A foreign currency obligation that remains outstanding at the end of a reporting period, the amount outstanding is valued at the exchange rate on the reporting date and an entry is made to other comprehensive income for the resulting translation adjustment.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less from the date of purchase to be cash equivalents. Cash equivalents consisted primarily of bank balances and amounts receivable from credit card processors. Amounts receivable from credit card processors and other forms of electronic payment are considered cash equivalents because they are both short- term and highly liquid in nature and are typically converted to cash within three days of the sales transaction.
Inventories
Inventories consist of finished goods and are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method. Net realizable value is determined using various assumptions with regard to excess or slow-moving inventories, non-conforming inventories, expiration dates, current and future product demand, and market conditions. A change in any of these variables could result in an adjustment to inventory.
Accounts Receivable
Payments from the customers are typically made at the time of the order before satisfaction of the performance obligation. The Company in rare instances grants 30-day terms to select long term customers. In such instances the revenue recognition occurs when the performance obligation is satisfied. Accounts receivables are recorded at the invoiced amount and do not bear interest. The Company establishes an allowance for doubtful accounts for estimated losses inherent in its accounts receivable as determined by management. In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions and our customers’ financial condition, the amount of the receivables in dispute, and the current receivables aging and current payment patterns. The Company reviews its allowance for doubtful accounts regularly. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of March 31, 2024 and December 31, 2023, management determined a reserve for uncollectible accounts was not required.
Income Taxes
The Company accounts for income taxes using the asset and liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of the differences between the financial statement assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates that are expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax law is recognized in income in the period that includes the enactment date. Deferred tax expense or benefit is the result of changes in deferred tax assets and liabilities. The Company evaluates the probability of realizing the future benefits of its deferred tax assets and provides a valuation allowance for the portion of any deferred tax assets where the likelihood of realizing an income tax benefit in the future does not meet the “more-likely-than-not” criteria for recognition. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the Financial Statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution.
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Property and Equipment
Property and equipment are recorded at cost. Maintenance, repairs, and renewals, which neither materially add to the value of the property nor appreciably prolong its life, are charged to expense as incurred. Depreciation is provided in amounts sufficient to relate the cost of depreciable assets to operations over the estimated useful lives of the related assets. The straight-line method of depreciation and amortization is followed for financial statement purposes. Property and equipment are reviewed for impairment whenever events or changes in circumstances exist that indicate the carrying amount of an asset may not be recoverable. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period.
Management assesses the carrying value of property and equipment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If there is an indication of impairment, management prepares an estimate of future cash flows expected to result from the use of the asset and its eventual disposition. If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized to write down the asset to its estimated fair value. Management determined there were no indicators of impairment of its property and equipment during the quarter ended March 31, 2024 and the year ended December 31, 2023.
Leases
The Company has adopted ASC Topic 842 for lease accounting. This standard requires that right of use assets and liabilities are measured and recorded on the balance sheet. ASC Topic 842 provides an exception for short term leases that are for 12 months or less. The Company reports short term leases under the exception to the standard. Leases for a period of 12 months or less are recorded as expense on a ratable basis throughout the term of the lease.
Acquisitions and Business Combinations
The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and separately identified intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired trademarks and trade names, useful lives, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is the period needed to gather all information necessary to make the purchase price allocation, not to exceed one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.
Intangible Assets
Intangible assets consist of costs incurred for licensed technology. Amortized intangible assets are amortized over their related useful lives, using a straight-line or accelerated method consistent with the underlying expected future cash flows related to the specific intangible asset. Amortized intangible assets are reviewed for impairment whenever events or changes in circumstances exist that indicate the carrying amount of an asset may not be recoverable. When indicators of impairment exist, an estimate of undiscounted net cash flows is used in measuring whether the carrying amount of the asset or related asset group is recoverable. Measurement of the amount of impairment, if any, is based upon the difference between the asset or asset group’s carrying value and fair value. Fair value is determined through various valuation techniques, including market and income approaches as considered necessary.
Revenue Recognition
The Company applies ASC Topic 606, Revenue from Contracts with Customers ("ASC 606") for all periods presented in the consolidated financial statements. To determine the appropriate amount of revenue to be recognized in accordance with ASC 606, the Company follows a five-step model as follows:
1 – Identification of the contract with a customer
2 – Identification of the performance obligation in the contract
3 – Determination of the transaction price
4 – Allocation of the transaction price to the performance obligation in the contract
5 – Recognition of revenue when, or as, a performance obligation is satisfied
The Company through its subsidiaries provides a medical testing machine, consumables for the testing process, wellness devices and nutritional supplements The company requires payment prior to shipping, with only a few exceptions. Sales are also not shipped until payment is received, typically via credit card. Shipping typically occurs in 24 hours of the payment. Sales are recorded. All product orders that are unused and returned within the first 30 days following purchase are refunded at 100% of the sales price.
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Other Revenue
Other sales include fees, which are paid by the customer at the beginning of the service period, for access to online customer service applications and payment fees. Such fees are amortized over the period to which they relate, typically 12 months, which is recorded as other sales income.
Gross revenue received consisted of the following product sources:
| Schedule of gross revenue received | ||||||||
| 3/31/2024 | 3/31/2023 | |||||||
| Medical Testing | $ | $ | ||||||
| Wellness devices | ||||||||
| Nutritional | ||||||||
| Other Sales | ||||||||
| Total Gross Sales | $ | $ | ||||||
Gross revenue received consisted of the following customer types:
| Schedule of gross revenue received for customer types | ||||||||
| 3/31/2024 | 3/31/2023 | |||||||
| Medical and Academic | $ | $ | ||||||
| Customers and Direct Sales | ||||||||
| Reseller | ||||||||
| Total Gross Sales | $ | $ | ||||||
Deferred Revenue
The Company as a matter of ordinary
operations allocates the purchase price against the performance obligation on an order-by-order basis for the entire order. In the event
an order has not been fulfilled or partially filled revenues are not recognized for the portion of the order for which the performance
obligation has not been satisfied. In 2022 the company shipped packages of its new wellness product that omitted certain components. An
allocation to the portion of the orders that were not fulfilled with functional units was made and deferred revenues relating to the unfilled
obligations were recorded. The Company also made advanced shipments of certain components of its medical test machines. These components
were not functional relative to the testing machine’s purpose and no revenue was recorded for these shipments. As of December 31,
2023, the Company recorded deferred revenue of $
Independent Business Partners Incentives
Certain of the company’s products are distributed through a network of Independent Brand Partners (IBPs). IBPs pay an annual membership fee to maintain the IBP status which is a requirement to participate in the compensation plan. IBP incentives expenses include all forms of commissions, and other incentives paid to our IBPs. Commission expense and other amounts payable to IBPs are recorded upon recognition of sale.
Selling, General and Administrative
Selling, general and administrative expenses include wages and benefits, depreciation and amortization, rents and utilities, associate event costs, advertising and professional fees, marketing, and research and development expenses.
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Equity-Based Compensation
The Company periodically issues stock options to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for such grants issued and vesting based on ASC 718, Compensation-Stock Compensation whereby the value of the award is measured on the date of grant and recognized for employees as compensation expense on the straight-line basis over the vesting period. The Company recognizes the fair value of stock-based compensation within its Statements of Operations with classification depending on the nature of the services rendered.
The fair value of each option or warrant grant is estimated using the Black-Scholes option-pricing model. The Company is a private company and lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies with characteristics similar to the Company. The expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The expected term of
stock options granted to non-employees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is zero, based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.
As of March 8, 2024, the date of the merger, the Company’s common shares were publicly traded on the OTC Markets Group exchange. On the date of merger and for subsequent transactions the fair value of equity instruments are valued with reference to the share price reported on the public exchange. For the period of January 1, 2024 through March 7, 2024 and during the year ended December 31, 2023, common shares of the Company were not publicly traded and the Company estimated the fair value of common stock using an appropriate valuation methodology, in accordance with the framework of the American Institute of Certified Public Accountants’ Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation. Each valuation methodology includes estimates and assumptions that require the Company’s judgment. These estimates and assumptions include a number of objective and subjective factors, including external market conditions, guideline public company information, the prices at which the Company sold its common stock to third parties in arms’ length transactions, the rights and preferences of securities senior to the Company’s common stock at the time, and the likelihood of achieving a liquidity event such as an initial public offering or sale. Significant changes to the assumptions used in the valuations could result in different fair values of stock options at each valuation date, as applicable.
Advertising
Advertising costs are charged to expense as incurred and are presented as part of the “Selling, general and administrative” line item. Advertising costs incurred during the three months ended March 31, 2024 and 2023 were $11,702 and $42,979, respectively.
Research and Development
Research and development costs are expensed
as incurred per ASC Topic 730. None of the activities of the Company in the periods presented qualified for exceptions to the general
guidance of ASC Topic 730. Research and development costs incurred during the three month ended March 31, 2024 and 2023 were $
We calculate basic net income (loss) per share using the weighted-average number of common stock shares outstanding during the period. For the calculation of diluted net income (loss) per share, we give effect to all the shares of common stock that were outstanding during the period plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation when their effect is anti-dilutive. Dilutive potential shares of common stock consist of incremental shares of common stock issuable upon exercise of stock options and warrants.
For the three months ended March 31, 2024 and 2023, there were no reconciling items related to either the numerator or denominator of the loss per share calculation, as their effect would have been anti-dilutive. securities which may have affected the calculation of diluted earnings per share for the three months ended March 31, 2024 if their effect had been dilutive include outstanding warrants to purchase our common stock and of unvested shares of common stock.
| 13 |
Segments
The Company operates in one segment for the manufacture and distribution of our products. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in economic characteristics, nature of products and services, and procurement, manufacturing and distribution processes. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying financial statements.
Reclassifications
During the current period, the Company reclassified $72,000 of return reserves previously reflected as an offset to accounts receivable at December 31, 2023 to accrued expenses to conform to current period classification.
Recently Issued Accounting Standards
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expense categories that are regularly provided to the chief operating decision maker and included in each reported measure of a segment’s profit or loss. The update also requires all annual disclosures about a reportable segment’s profit or loss and assets to be provided in interim periods and for entities with a single reportable segment to provide all the disclosures required by ASC 280, Segment Reporting, including the significant segment expense disclosures. This standard became effective for the Company on January 1. The adoption of this standard should be applied retrospectively to all periods presented in the financial statements. The Company did not have a material impact on its results of operations, financial position or cash flows.
Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company's present or future financial statements.
NOTE 2—INVENTORIES, NET
Inventories consist of the following:
| Schedule of inventories | ||||||||
| Finished Goods: | 3/31/2024 | 3/31/2023 | ||||||
| Medical Testing | $ | $ | ||||||
| Wellness devices | ||||||||
| Nutritional | ||||||||
| Total Finished Goods: | $ | $ | ||||||
Medical testing equipment components were purchased and assembled once orders were received during the financial statement period. The medical testing components are salable separately in the form received. Nutritional inventories are purchased in finished form with labels purchased separately in an amount to support the production run.
NOTE 3—PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consisted of the following:
| Schedule of prepaid expenses and other current assets | ||||||||
| 3/31/2024 | 3/31/2023 | |||||||
| Prepaid commissions | $ | $ | ||||||
| Other current assets | ||||||||
| Total | $ | $ | ||||||
| 14 |
NOTE 4 – ACQUISITION OF DOCSUN TECHNOLOGY
On January 8, 2024, the Company
acquired
NOTE 5 – MERGER TRANSACTION WITH FINDIT
Effective March 8, 2024, BioRegenx, Inc, a private Nevada corporation was merged into Findit, Inc. (the “Company”), with Findit, Inc. being the surviving company.
Pursuant
to the merger, all of the issued and outstanding BioRegenx, Inc., a private Nevada corporation, common and preferred shares were exchanged
for 851,977,296 common shares and 3,800 Series A preferred shares of the Company which represented 90.0% of the voting securities of the
Company. Concurrently, holder(s) of the Company’s Series A and Series B preferred shares retired all of their Series A and Series
B preferred shares back into the treasury. The Series A and Series B preferred shares represented a voting control of 98.47% of the Company.
Simultaneously, the majority shareholders of the Company retired a total of 172,197,602 common shares, as a result the existing shareholders of Findit, retained
shares of common stock valued at $
At the date of the acquisition and as of this Quarterly Report on Form 10-Q, management has not yet finalized its valuation analysis. The fair values of the assets acquired, as set forth below, are considered provisional and subject to adjustment as additional information is obtained through the purchase price measurement period (a period of up to one year from the closing date). Any prospective adjustments would change the fair value allocation as of the acquisition date. The Company is still in the process of reviewing underlying models, assumptions and discount rates used in the valuation of provisional goodwill and intangible assets. The following table summarizes the provisional fair value of the assets acquired and liabilities assumed on the date of acquisition, and is as follows:
| Schedule of consideration paid, the assets acquired and liabilities assumed recognized at acquisition date | ||||
| $ Amount | ||||
| Consideration | ||||
| BioRegenx common stock shares | $ | |||
| Recognized amounts of identifiable assets acquired and liabilities assumed (provisional) | ||||
| Intangibles – search engine, domain, website, source code (provisional) | ||||
| Accrued expenses | ( | ) | ||
| Accrued Interest | ( | ) | ||
| Loan payable | ( | ) | ||
| Total identifiable net assets | ||||
| Goodwill, provisional | ||||
| Total | $ | |||
| Acquisition related costs | $ | |||
The proforma results of operations of Findit for the three month period ended March 31, 2023 were not material.
| 15 |
NOTE 6—INTANGIBLES
Identifiable Intangible assets consisted of the following:
| Schedule of identifiable Intangible assets | ||||||||
| 03/31/2024 | 12/31/2023 | |||||||
| DocSun intangibles (provisional) | $ | $ | ||||||
| Application in progress | ||||||||
| Findit intangibles (provisional) | ||||||||
| Total | ||||||||
| Less accumulated amortization | ( | ) | ||||||
| Net intangible assets | $ | $ | ||||||
The Company acquired non-contact medical diagnostic
technology in its acquisition of DocSun Biomedical Holdings, inc. on January 8, 2024. The Company also acquired identifiable intangible
assets in the reverse merger with Findit, Inc. on March 8, 2024, related to its search engine, website functions and active accounts.
(See Note 11) The Company had capitalized intangible cost at December 31, 2023 that related to the purchase of a licensed technology.
The licensed product was not yet placed in service as on March 31, 2024 and amortization has not been recorded. Amortization of intangible
assets was $
The technology acquired from DocSun is being amortized over five years based on its nature as acquired technology and its expected useful life. The Findit intangibles is being amortized over five years based on its expected useful life.
The Company will perform its indefinite-lived intangible asset impairment test on an annual basis with the initial impairment test after an acquisition completed before the expiration of the next 12 month period.
Amortization will be recorded as follows:
| Schedule of amortization | ||||||||||||||||||||||||
| 2024 | 2025 | 2026 | 2027 | 2028 | Thereafter | |||||||||||||||||||
| DocSun intangibles | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Findit intangibles | ||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
NOTE 7—PROPERTY AND EQUIPMENT
The property and equipment are comprised solely
of computer servers, related equipment and other computer equipment. Estimated useful lives for computer servers and related equipment
is
The property and equipment is presented net of
accumulated depreciation. Depreciation of property and equipment was $
| 16 |
NOTE 8—COMMITMENTS AND CONTINGENCIES
Lease Commitments
The Company leases two office spaces,
its headquarters in Chattanooga Tennessee and a satellite office in Alpine Utah, both are short term leases.
Warrants issuable upon financing
in August 2023, Hitesh Juneja was granted
warrants in an amount to be determined based on the amount of approved equity financing related to his efforts. The grant provided for
warrants equal to ½% of the outstanding shares at the time of the grant. Warrants for the ½% of outstanding shares would
be issued for bringing in $
Company disputes and other claims
The Company is involved in disputes with certain parties, including parties that are former officers and board members and vendors associated with their activities. Such disputes arise from time to time in the ordinary course of conducting business. The disputes including matters involving amounts due to the Company, contract performance standards, and liabilities under contracts or arrangements entered by the prior officers including with parties related to them. The Company records a liability when a particular contingency is probable and estimable. The Company faces contingencies that are reasonably possible to occur; however, they cannot currently be estimated. While assurance cannot be given as to the outcome of these disputes, management does not currently believe that any of these matters, individually or in the aggregate are estimable or probable and is therefore unable to represent whether they would have a material adverse effect on the Company’s financial condition, liquidity or results of operations. It is reasonably possible that a change in the contingencies could result in a change in the amount recorded by the Company in the future.
During the period ended March 31, 2024 the Company
granted shares of its common stock with a fair value of $
During the period the Company granted
options to acquire shares
of its common stock at $
per share with a fair value of $
For stock options granted, the Company estimated the fair value of each stock option at the grant dated using the Black-Scholes option-pricing model with the following assumptions:
| Schedule of assumptions | ||||||||
| 3/31/2024 | 3/31/2023 | |||||||
| Risk-free interest | ||||||||
| Expected dividend yield | ||||||||
| Expected volatility | ||||||||
| Expected life | yr | yr | ||||||
| 17 |
A summary of the stock warrants outstanding as of March 31, 2024 and December 31, 2023 follows:
| Schedule of stock warrants outstanding | ||||||||
Number of Shares | Weighted Average Exercise Price | |||||||
| Outstanding as of December 31, 2022 | $ | |||||||
| Granted | $ | |||||||
| Forfeited | $ | |||||||
| Outstanding as of December 31, 2023 | $ | |||||||
| Granted | $ | |||||||
| Forfeited | $ | |||||||
| Outstanding as of March 31, 2024 | $ | |||||||
| Exercisable at March 31, 2024 | $ | |||||||
Warrants Outstanding and Exercisable at March 31, 2024
| Schedule of warrants outstanding and exercisable | ||||||||||||||
| Range of Exercise Price | # of Warrants Outstanding | Weighted Average Remaining (Years) | Weighted Average Exercise Price | |||||||||||
| $ to | $ | |||||||||||||
The Company records compensation costs
for outstanding unvested common shares and warrants over the remaining vesting period on the straight line basis. As of March 31, 2024,
the company had
The outstanding and exercisable warrants had no intrinsic as on March 31, 2024.
NOTE 10—ISSUANCE OF COMMON STOCK
During the period ended March 31, 2023,
the Company issued shares of common stock at prices ranging from $ per share to $ per share, resulting in gross proceeds
to the Company of $
Issuance of common stock and warrants for refunds
In November 2023, the Company offered
to certain customers whose orders had been deferred, the option of accepting shares of common stock or warrants to acquire common stock,
as compensation for the delivery delay. There were shares with a fair value of $
| 18 |
NOTE 11—LOANS
The Company, through certain subsidiaries, financed past activities, in part, with borrowing from private parties, Small Business Administration’s Economic Injury Disaster Loans (EIDL) and related parties.
Loans from unrelated parties are as follows:
| Schedule of loans from unrelated parties | ||||||||
| 3/31/2024 | 12/31/2023 | |||||||
| (A) Howard note - In Default | $ | $ | ||||||
| (A) Howard note - In Default | ||||||||
| (B) Goff note - In Default | ||||||||
| (C) Insurance notes | ||||||||
| (D) Alder note | ||||||||
| (D) Genisis Glass note | ||||||||
| (E) EIDL notes ($ | ||||||||
| (F) Other | ||||||||
| Total | ||||||||
| Less current portion | ( | ) | ( | ) | ||||
| Total long term | $ | $ | ||||||
(A) The first Howard note was advanced
on 06/28/2016 and the second on 04/03/2017 to Microvascular Health Solutions, LLC. Both notes had one-year terms and both notes are in
default. The stated interest rate on each note was
(B)
(C)
(D) In January of 2024, the Company
issued two notes for $
| 19 |
(E) EIDL Notes
The principal amount of economic injury
disaster loans (EIDL) issued under the Small Business Administration’s COVID-19 recovery program was $
EIDL Debt Payoff Schedule
The Company has outstanding long-term EIDL debt obligations that will be paid off over the next five years. The following table summarizes the principal payments due in each fiscal year:
| Schedule of long term debt | ||||||||||||||||||||||||||||
| Long-Term Debt Payoff Schedule | Balance at | Principal Payments | 2029 and | |||||||||||||||||||||||||
| 3/31/2024 | 2024 | 2025 | 2026 | 2027 | 2028 | thereafter | ||||||||||||||||||||||
| EIDL loan September 2020 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| EIDL loan August 2021, in Default | ||||||||||||||||||||||||||||
| EIDL loan September 2022, in Default | ||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||
(F) The other loan does not have stated terms.
Related Party Loans
BioRegenx and its subsidiaries have financed past activities, in part, with unsecured borrowings from certain related parties. The principal amount of debt from related parties is summarized in the following table:
| Schedule of debt from related parties | |||||||||
| Related Party | 3/31/2024 | 12/31/2023 | |||||||
| Libertas Trust | $ | $ | A | ||||||
| Wilshire Holding Trust | A | ||||||||
| Resco Enterprises Trust | A | ||||||||
| Avis Trust | A | ||||||||
| Richard Long | B | ||||||||
| $ | $ | ||||||||
| A | |
| B |
Each of the listed loans indicated with an A are demand loans that have a one-year term and an auto renewal feature. They bear an interest rate of 10% per annum.
The loan indicated with a C, does not have stated terms.
The entire balance of related party loans are recorded as current liabilities.
Total accrued interest on related party debts was $
During the year ended December 31, 2023, the Company made
payments of $
| 20 |
NOTE 12 —RELATED-PARTY TRANSACTIONS
Rental
The Company rents its home office from
BBD Holdings, LLC which is controlled by Joseph Bird, an officer and director. The rental is on the month-to-month basis and is at a rate
of $1,725 per month which is no more than the prevailing rate for the Chattanooga, TN market. Rent paid during the three months ended
March 31, 2024 and 2023 were $
Royalties
The Company sells a product subject to a royalty agreement with the VHS Pool that was set up by a predecessor entity, through two if its subsidiaries. An officer and director – Robert Long through a related entity – Lone Peak Innovative Holdings, LLC, has a creditor interest in the VHS Pool. Lone Peak Innovative Holdings, LLC has to date not received payments from the VHS Pool and the likelihood of future payments are not ascertainable.
The royalty agreement calls for the payment of 1% of the gross sales of the subject product(s). The royalty applies to any product designed to support a healthy Endothelium Glycocalyx, such as the Company’s Endocalyx. The royalty agreement also calls for the payment of 1% of the proceeds, after taxes, on a liquidity event. A liquidity event is defined as the subsidiary entering an arms-length transaction with a third party or making an initial public offering. Should a liquidity even occur, the agreement requires a minimum payment to raise the pool amount to $7,500,000. The pool ceiling is $15,000,000 and the Company may have two subsidiaries subject to the agreement.
Royalties paid the three month periods
ended March 31, 2024 and 2023 were $
Distribution Agreement
The Company has a worldwide distribution
agreement with GlycoCheck B.V. for the GlycoCheck machine distribution. Bob Long and Hans Vink are directors of both BioRegenx, Inc. and
Glycocheck B.V. and may have an ownership interest in Glycocheck B.V. Mr. Long and Mr. Vink left the Company and have called into
question the status of the distribution agreement by issuing a cancellation notice. There were
Legal Counsel
The Company’s legal counselors
included a member of the board of directors. The board member provided legal services for SEC reporting and general legal matters. Legal
fees paid during three month periods ended March 31, 2024 and 2023 were $-
| 21 |
Accounts Payable – Related Parties
The Company reimburses certain officers for company expenses paid through individual accounts, such as credit cards and other credit accounts, the amounts are as follows:
| Schedule of accounts payable related parties | ||||||||
| Related Party Payables | 3/31/2024 | 12/31/2023 | ||||||
| Due to officers | $ | $ | ||||||
| Due to former officer | ||||||||
| Total | $ | $ | ||||||
The Company reimburses certain officers
and board members for company expenses paid through individual credit cards. Total short-term advances from Resides Enterprises B were
$
Equity Instruments Issued for Service
See Note 9 for discussion of options issued to officers and directors
NOTE 13 – RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
The financial statements for the three months ended March 31, 2024 and 2023 and the opening balances as of December 31, 2023 have been restated. Subsequent to the original issuance of these financial statements, our management determined the following:
| · | the Company erroneously did not recognize a valuation decreases in recorded assets pursuant to current accounting guidelines. Assets effected included inventory, notes receivable and other current assets. | |
| · | the Company had erroneously capitalized patent filing costs. | |
| · | In addition, the Company is making certain reclassification entries. |
The effects on the previously issued financial statements are as follows:
For periods before January 1, 2024, Management of the Company determined that the following:
[1] An additional reserve for slow moving
inventory of $
[2] The recovery of a note receivable
related to previous commission advances was determined to be doubtful based on the terms of the note and the debtor’s recent commission
history. The balance of $
[3] A valuation adjustment related to
a note receivable, related to an inventory transfer in the amount of $
[4] It was necessary to provide a reserve
for advances made to acquire inventory that would not be recoverable within a reasonable period of time and adjusted the advances in the
amount of $
| 22 |
[5] A financing deposit on a financing
commitment from the PFV Fund I in the amount of $
[6] The Company determined it was necessary
to reverse previously recorded amounts associated with the note payable related to commissions. A reserve set up to reduce the carrying
value of the note was reversed in the amount of $
[7] The Company wrote off capitalized
patent cost to legal fees in the amount of $
[8] The Company granted warrants to
an employee and recorded expense of $123,622 based on calculation of the warrant value based on the Black Scholes method. The Company
became aware the assumptions used in the calculation were erroneous and recalculated the expense to be $. The Company had recorded
paid in capital related to the equity compensation as an increase to warrant paid in capital, this amount has been reclassified to additional
paid in capital. The additional $
[9] The Company issued common stock
or warrants to certain distributors who responded to an offer after the purchase of a medical testing device. Based on calculation of
the warrant value based on the Black Scholes method the value of the warrant was modified and $
For the three months ending March 31, 2024:
[10] Adjustments were required to reverse the effects of the prior year’s entries in the current period.
Certain adjustments in the prior periods had an effect in in the current period and were recorded.
The changes are as follows:
| Schedule of changes in adjustments | ||||
| Reduction to reserved notes receivable | $ | ( | ) | |
| Reduction to commissions reserved note receivable | ( | ) | ||
| Reduction to interest income reserved note receivable | ||||
| Reduction of amortization on assets written off | ||||
| Increase in cost of goods sold due to prepaid inventory | ||||
| Decrease in capitalized patents reversed in prior year | $ | ( | ) |
[11] It was necessary to revalue the equity used in the acquisition and merger based on a third party appraisal. The common share value changed from a range of $ to $ to a common share value of $ per share. The associated depreciation and amortization and transaction expenses were also adjusted to reflect the revised asset valuations.
The changes are as follows:
| Schedule of changes in depreciation and amortization and transaction expenses | ||||
| Reduction in property and equipment | $ | ( | ) | |
| Reduction in acquired intangibles - Docsun | ( | ) | ||
| Reduction in amortizable intangibles – Findit | ( | ) | ||
| Increase in goodwill – Findit | ||||
| Reduction in amortization expense | ||||
| Reduction in depreciation expense | $ | ( | ) |
| 23 |
The amounts above were recorded as a reduction to assets or paid in capital and the associated adjustment to expense was recorded to the statement of operations.
[12] It was necessary to revalue the equity used for recording
compensation, returns and loan incentives based on a third party appraisal. The fair market value of options issued was changed from a
range of $
The changes related to warrants and shares are as follows:
| Schedule of changes related to warrants and shares | ||||
| Increase in compensation expense | $ | |||
| Increase to discount for loan incentives | ||||
| Discount recognized as interest expense | ||||
| Reduction to expense related to returns | ( | ) | ||
| Effect of warrants on deferred revenue | ( | ) | ||
| Effect of warrants on returns reserve | ||||
| Effect on additional paid in capital | $ |
The amounts above were recorded as a reduction to assets or paid in capital and the associated adjustment to expense was recorded to the statement of operations.
[13] It was necessary to reverse accrued
income and receivables for acquired subsidiary. The Company acquired a contract in its acquisition of DocSun. The contract contained a
provision for a minimum payment of $
[14] It was necessary to accrue or adjust costs received after the close of the period and transaction costs that had been capitalized pending the completion of the transactions that related to the acquisition, merger and operations.
Additional costs are:
| Schedule of additional costs | ||||
| Legal | $ | |||
| Software | ||||
| Transaction costs | $ |
The amounts above were recorded as a reduction to assets or an increase in liabilities and the associated adjustment to expense was recorded to the statement of operations.
[15] It was necessary to adjust deferred
revenue and current assets for activities related to the completion of the sales of medical testing machines. Revenue was reduced and
deferred revenue was increased by $
[16] As a result of the above adjustments and other reclassifications, it was necessary to adjust the Statement of Cash Flows to remove netted items, including non-cash items, and to match classification on the previous financial statements.
[17] The presentation of sales was changed to separately show gross sales, refunds and net sales.
| 24 |
The following table presents the effect of the restatements of the Company’s previously issued balance sheet.
As of March 31, 2024
| Schedule of restatements of previously issued balance sheet | ||||||||||||||||||||||
As Previously Reported | Adjustments before January 1, 2024 | March 31, 2024 Adjustments | Reclassifications | As Restated | Notes | |||||||||||||||||
| Accounts receivable | $ | $ | $ | ( | ) | $ | $ | [13] | ||||||||||||||
| Inventory | ( | ) | [1], [14] | |||||||||||||||||||
| Prepaid expenses and other current assets | ( | ) | ( | ) | [6], [10] | |||||||||||||||||
| ( | ) | ( | ) | [4], [5], [15] | ||||||||||||||||||
| ( | ) | ( | ) | [14] | ||||||||||||||||||
| Notes and receivables | ( | ) | ( | ) | [2], [3], [10] | |||||||||||||||||
| Property and equipment | ( | ) | [11] | |||||||||||||||||||
| [11] | ||||||||||||||||||||||
| Intangible assets, net of Amortization | ( | ) | ( | ) | [7], [11] | |||||||||||||||||
| ( | ) | [11] | ||||||||||||||||||||
| ( | ) | [11] | ||||||||||||||||||||
| ( | ) | [10] | ||||||||||||||||||||
| [10] | ||||||||||||||||||||||
| Goodwill | [11] | |||||||||||||||||||||
| Total Assets | ( | ) | ( | ) | [2]-[14] | |||||||||||||||||
| Account Payable | [14] | |||||||||||||||||||||
| ( | ) | |||||||||||||||||||||
| ( | ) | |||||||||||||||||||||
| ( | ) | |||||||||||||||||||||
| Accounts Payable – related Parties | ||||||||||||||||||||||
| Accrued Expenses | ( | ) | [14] | |||||||||||||||||||
| [14] | ||||||||||||||||||||||
| ( | ) | |||||||||||||||||||||
| Accrued Expenses – related Parties | ||||||||||||||||||||||
| Promissory notes payable and notes | ( | ) | ( | ) | [12] | |||||||||||||||||
| ( | ) | ( | ) | [14] | ||||||||||||||||||
| Promissory notes payable and notes – related parties | ||||||||||||||||||||||
| Deferred Revenue | ( | ) | [9], [12], [14] | |||||||||||||||||||
| Total Liabilities | ( | ) | ||||||||||||||||||||
| Additional paid-in-capital | ( | ) | [8], [11] | |||||||||||||||||||
| [9], [12] | ||||||||||||||||||||||
| [12] | ||||||||||||||||||||||
| [12] | ||||||||||||||||||||||
| Warrant PIC | ( | ) | [9], [10] | |||||||||||||||||||
| Accumulated Deficit | ( | ) | ( | ) | ( | ) | – | ( | ) | [2]-[14] | ||||||||||||
| Total Equity | $ | $ | ( | ) | $ | ( | ) | $ | – | $ | [2]-[14] | |||||||||||
| 25 |
The following table presents the effect of the restatements of the Company’s previously issued income statement:
As of March 31, 2024
| Schedule of restatements of previously issued income statement | ||||||||||||||||||
As Previously Reported | Adjustments | Reclassifications | As Restated | Notes | ||||||||||||||
| Sales | $ | $ | ( | ) | $ | $ | [13] | |||||||||||
| Gross sales | ( | ) | [15] | |||||||||||||||
| Returns | ( | ) | ( | ) | ||||||||||||||
| Net sales | ( | ) | ||||||||||||||||
| Cost of goods sold | [10] | |||||||||||||||||
| ( | ) | [14] | ||||||||||||||||
| Distributor incentives | [12], [14] | |||||||||||||||||
| Selling, general and administrative expenses | ( | ) | [11] | |||||||||||||||
| (including amortization) | [11] | |||||||||||||||||
| [12] | ||||||||||||||||||
| ( | ) | [10] | ||||||||||||||||
| ( | ) | [12] | ||||||||||||||||
| [14] | ||||||||||||||||||
| Interest income | ( | ) | [10] | |||||||||||||||
| Interest expense and financing costs | [12] | |||||||||||||||||
| ( | ) | [14] | ||||||||||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | [10] - [14] | |||||||
The following table presents the effect of the restatements of the Company’s previously issued statement of shareholder deficit:
| Schedule of restatements of previously issued statement of shareholder deficit | ||||||||||||||||||||||||||
| Common Stock | Common Stock | Additional Paid- | Additional Paid-in Capital- | Accumulated | Stockholders’ | |||||||||||||||||||||
| Shares | Amount | In Capital | Warrants | Deficit | Deficit | Notes | ||||||||||||||||||||
| Balance, March 31, 2024, as previously reported | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||
| Prior period revisions | – | – | – | ( | ) | ( | ) | [2] - [14] | ||||||||||||||||||
| Restatements | – | – | – | ( | ) | ( | ) | [2] - [14] | ||||||||||||||||||
| Reclassifications | – | – | ( | ) | – | – | ||||||||||||||||||||
| Balance, March 31, 2024, as restated | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||
| 26 |
The following table presents the effect of the restatements of the Company’s previously issued statement of cash flows:
As of March 31, 2024
| Schedule of restatements of previously issued statement of cash flows | ||||||||||||||||||||||
As Previously Reported | Adjustments | As Adjusted | Reclassifications | As Restated | Notes | |||||||||||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | |||||||||
| Depreciation and amortization | ( | ) | [11] | |||||||||||||||||||
| Fair value of shares and warrants issued for returns and services | ( | ) | [12] | |||||||||||||||||||
| Amortization of debt discount | ||||||||||||||||||||||
| Fair value of warrants for Services (officers& directors) | ||||||||||||||||||||||
| Fair value of shares and warrants issued for services | ||||||||||||||||||||||
| Fair value of shares and warrants issued for returns | ||||||||||||||||||||||
| Issuance of common shares as loan incentives | ( | ) | ||||||||||||||||||||
| Accounts receivable | ( | ) | ( | ) | [13] | |||||||||||||||||
| Prepaid expenses and other assets | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| [14] | ||||||||||||||||||||||
| Accounts payable | ( | ) | ( | ) | [14] | |||||||||||||||||
| ( | ) | |||||||||||||||||||||
| Accounts payable – related parties | ( | ) | ( | ) | ||||||||||||||||||
| Accrued expenses | ( | ) | [14] | |||||||||||||||||||
| ( | ) | |||||||||||||||||||||
| Accrued expenses – related parties | ||||||||||||||||||||||
| Deferred Revenue | ( | ) | ( | ) | [9], [12], [14] | |||||||||||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ( | ) | [11] | |||||||||||||||
| Cash acquired in DocSun acquisition | [11] | |||||||||||||||||||||
| Intangible property | ( | ) | ( | ) | [11] | |||||||||||||||||
| ( | ) | [14] | ||||||||||||||||||||
| Increase in SBA loans | ( | ) | ||||||||||||||||||||
| Note and loan payments | ( | ) | ( | ) | ( | ) | ( | ) | [14] | |||||||||||||
| Increase in note and loan balances | ( | ) | [12] | |||||||||||||||||||
| Issuance of common shares in acquisition and merger | ( | ) | ( | ) | [11] | |||||||||||||||||
| ( | ) | |||||||||||||||||||||
| Net effect of currency fluctuation | $ | $ | $ | $ | $ | |||||||||||||||||
| 27 |
NOTE 14—SUBSEQUENT EVENTS
Subsequent Financing
In May of 2024, a person related to a board member loaned the Company $32,079. The note bears interest at 10% per annum and is due in 12 months.
In June of 2024, the Company began offering convertible notes to sophisticated investors. To date the Company has issued four notes for a total of $130,000. The convertible notes have a stated interest rate of 16%, of which 10% is payable by adding to the principal of the note and 6% is payable in cash, biannually. The notes are convertible into common shares at the option of the noteholder at 0.09 cents per common share. The notes mature 2 years after the note date. The Company has the option to convert the convertible notes in the event of an uplift to a national stock exchange. The conversion price to the Company is the lessor of 0.09 cents or 85% of the price at on the national exchange. For each $5,000 principal of the notes, the Company granted 2,500 warrants to purchase common stock at 0.20 cents pe common share. The warrants expire 2 years after the Company’s shares are listed on an internationally recognized exchange.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The Company was incorporated on December 23, 1998 in the state of Nevada as “Knowledge Networks, Inc.” The Company’s name was changed to “Findit, Inc.” on March 25, 2016. On March 8, 2024, the Company was the surviving corporation in a merger transaction (described below), and, as part of the merger transaction, the Company’s name was changed to “BioRegenx, Inc."
On April 6, 2021, the Company’s consolidated group was formed by the contribution of 100% of the equity interests of three companies, Microvascular Health Services, LLC, My Body Rx, LLC and NuLife Sciences, Inc. in exchange for newly issued common and preferred stock representing all the issued and outstanding shares of the Company. The combination was expected to product synergies between companies with the production activities and the distribution network of the marketing company.
On January 8, 2024, the Company acquired all the shares outstanding of DocSun Biomedical Holdings, Inc. in exchange for shares of the Company’s stock. This acquired company is accounted for as an asset acquisition and the activities of the acquired assets are included in the consolidated financial statements starting with the acquisition.
Pursuant to Articles of Merger effective March 8, 2024, BioRegenx, Inc., also a Nevada corporation (the “merged entity”), was merged into the Company (“surviving entity”)and the Company adopted and changed its name to the merged entity’s name - “BioRegenx, Inc.” Pursuant to the merger, all of the issued and outstanding, common and preferred shares of the merged entity were exchanged for 851,977,296 common shares and 3,800 Series A preferred shares of the Company which represented 90.0% of the voting securities of the Company. Concurrently, holder(s) of the Company’s Series A and Series B preferred shares retired all of their Series A and Series B preferred shares back into the treasury. The Series A and Series B preferred shares represented a voting control of 98.47% of the Company. Simultaneously, the majority shareholders of the Company retired a total of 172,197,602 common shares. The pre-merger shareholders of the Company retained 104,552,804 shares of common stock. The exchange value of the publicly traded stock that was retained was valued at $7,318,594, based on the trading price of Findit as of the date of the merger.
The Company develops and manufactures medical test equipment and high quality, science-based nutritional products. The Company distributes wellness devices. The products are sold nationally through a direct selling channel, to health professionals and research organizations.
Results of Operations
The following discussion may contain forward-looking statements, and our actual results may differ materially from the results suggested by these forward-looking statements. The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.
We are a smaller reporting company and have incurred substantial losses in connection with our operations. We will need substantial capital to fund working capital in order to pursue our current plans to develop our business.
The table presented below compare our results of operations for the three months ended March 31, 2024 to the three months ended March 31, 2023, in both dollars and percentages.
| March 31, 2024 (As Restated) | March 31, 2023 | $ Variance
Favorable/ (Unfavorable) | % Variance
Favorable/ (Unfavorable) | |||||||||||||
| Gross sales | $ | 684,949 | $ | 1,103,651 | $ | (418,702 | ) | -38% | ||||||||
| Returns | (135,401 | ) | (28,066 | ) | (107,335 | ) | -382% | |||||||||
| Net sales | 549,548 | 1,075,585 | (526,037 | ) | -49% | |||||||||||
| Cost of sales | 165,390 | 311,694 | 146,304 | 47% | ||||||||||||
| Gross profit | 384,158 | 763,891 | (379,733 | ) | -50% | |||||||||||
| Distributors incentives | 54,658 | 177,004 | (122,346 | ) | -69% | |||||||||||
| Selling, general and administrative (including equity compensation costs of $1,650,802 granted to officers and directors in the period ending March 31, 2024) | 2,911,165 | 770,993 | (2,637,943 | ) | -342% | |||||||||||
| Amortization expense | 497,771 | – | (497,771 | ) | n/a | |||||||||||
| Total operating expenses | 3,463,594 | 947,997 | (2,515,597 | ) | -265% | |||||||||||
| Loss from operations | (3,079,436 | ) | (184,106 | ) | (2,895,330 | ) | -1573% | |||||||||
| Interest income | – | 1 | (1 | ) | -100% | |||||||||||
| Interest expense and financing costs | (73,022 | ) | (45,733 | ) | (27,289 | ) | -60% | |||||||||
| Total other expenses | (73,022 | ) | (45,732 | ) | (27,290 | ) | -60% | |||||||||
| Net loss | $ | (3,152,458 | ) | $ | (229,838 | ) | $ | (2,922,620 | ) | -1272% | ||||||
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For the three months ended March 31, 2024, the Company had gross sales of $684,949 and returns of $(135,401) resulting in net sales of $549,548. Comparatively, for the three months ended March 31, 2023, the Company had gross sales of $1,103,651 and returns of $(28,066) resulting in net sales of $1,075,585. Net sales decreased by 49% and returns increased by 382% for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The resulting decrease in net sales and increase in returns related to the product issues experienced with the medical testing machine and a resulting equity refund offer by the Company.
Cost of sales were $165,390 resulting in gross profit of $384,158 for the three months ended March 31, 2024. Cost of sales were $311,694 resulting in gross profit of $763,891 for the three months ended March 31, 2023. Cost of goods sold decreased by 47% and gross profit decreased by 50% for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The resulting decrease related to lower product sales caused by the effects on the distributor base from product issues experienced with the medical testing machine.
For the three months ended March 31, 2024, the Company paid out distributors’ incentives of $54,658 and had selling, general and administrative expenses of $3,408,936 resulting in total operating expenses of $3,463,594. These selling, general and administrative expenses consisted primarily of employee expenses of $1,392,311 and operating expenses of $2,016,625. Operating expenses consisted of advertising and marketing of $11,702, software costs of $25,836, bank and payment charges of $18,176, contract labor of $51,027, legal and accounting of $162,668, professional services of $1,175,675, insurance of $19,648, taxes and licenses of $7,796, postage and freight of $8,519, rent & lease of $11,537, travel of $4,723 and miscellaneous expenses of $519,318. Additionally, the Company had interest expense and financial costs of $73,022 resulting in net loss of $3,152,458 for the three months ended March 31, 2024.
Comparatively, for the three months ended March 31, 2023, the Company paid out distributors’ incentives of $177,004 and had selling general and administrative expenses of $770,993 resulting in total operating expenses of $947,997. These selling, general and administrative expenses consisted primarily of employee expenses of $271,528 and operating expenses of $499,465. Operating expenses consisted of advertising and marketing of $42,979, software costs of $80,781, bank and payment charges of $33,089, contract labor of $18,321, management fees of $56,100, legal and accounting of $90,146 professional services of $35,907, insurance of $6,757, taxes and licenses of $22,190, postage and freight of $809, rent & lease of $10,288, travel of $29,580 and miscellaneous expenses of $72,518. Additionally, the Company had interest income of $1, interest expense and financial costs of $45,733 resulting in net loss of $229,838 for the three months ended March 31, 2023.
Distributor incentives decreased by 69% for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 as a result of the reduction in sales between the periods, Selling, general and administrative expenses, increased by 342% for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, relating to equity compensation granted and increased legal, accounting, professional and miscellaneous cost during the three months ended March 31, 2024.
The Company had a loss from operations of $(3,079,436) and $(184,106) for the three months ended March 31, 2024 and March 31, 2023, respectively. For those same periods, the Company received interest income of $0 and $1 and interest expense and financing costs of $(73,022) and $(45,733). As a result, the Company had a net loss of $(3,152,458) and $(229,838) for the three months ended March 31, 2024 and March 31, 2023, respectively. Loss from operations increased by 1,573% and interest expense increased by 60% for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The resulting increases related to decreases in net sales and increase in returns related to the product issues experienced with the medical testing machine and a resulting equity refund offer by the Company, equity compensation, and increases in legal, accounting, professional and miscellaneous expenses. Interest expense increased due to higher debt balances during the three months ended March 31, 2024 compared to the three months ended March 31, 2023.
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Liquidity and Capital Resources
Operating Activities. For the three months ended March 31, 2024, the Company had net loss of $(3,152,458). During that period, the Company incurred depreciation and amortization expense of $500,530, amortization of debt discount of $11,228, issued warrants to officers and directors with a fair value of $1,650,282, issued common shares for services with a fair value of f $621,736 and issued warrants for refunds with a fair value of $19,351. The Company had a change in operating assets and liabilities (net of amounts acquired) consisting of a decrease in accounts receivable of $93,406, a decrease in inventories of $4,186, a decrease in prepaid expenses and other assets of $58,363, an increase in accounts payable of $129,162, a decrease in accounts payable - related parties of $(31,915), a decrease in accrued expenses and other liabilities of $(40,764), an increase in accrued expenses and other liabilities -related parties of $29,707 and an increase of deferred revenue of $2,936. As a result, the Company had net cash used in operating activities of $(104,250) for the three months ended March 31, 2024.
Comparatively, for the three months ended March 31, 2023, the Company had net loss of $(229,838). During that period, the Company incurred depreciation and amortization expense of $1,194. The Company had a change in operating assets and liabilities (net of amounts acquired) consisting of an increase in accounts receivable of $(24,442), an increase in inventories of $(140,156), a decrease in prepaid expenses and other assets of $36,250, a decrease in accounts payable of $(116,620), a decrease in accounts payable - related parties of $(9,818), an increase in accrued expenses and other liabilities of $12,480, an increase in accrued expenses and other liabilities -related parties of $29,604 and an increase of deferred revenue of $104,554. As a result, the Company had net cash used in operating activities of $(336,792) for the three months ended March 31, 2024.
Investing Activities. For the three months ended March 31, 2024, the Company made purchases of property and equipment of $(189,390), cash acquired in the DocSun transaction of $1,445 and acquired intangibles of $(2,652). As a result, the Company had net cash used in investing activities of $(190,597) for the three months ended March 31, 2024.
For the three months ended March 31, 2023, the Company did not pursue any investing activities.
Financing Activities. For the three months ended March 31, 2024, the Company made note and loan payments of $17,438 and had an increase in note and loan balances of $300,000. As a result, the Company had net cash provided by financing activities of $282,562 for the three months ended March 31, 2024.
For the three months ended March 31, 2023, the Company made note and loan payments of $(173,000), and received proceeds from the issuance of common stock of $337,739. As a result, the Company had net cash provided by financing activities of $164,739.
Management intends to raise additional debt or equity financing to fund ongoing operations and for necessary working capital. However, there is no assurance that such financing plans will be successful or be obtained in amounts sufficient to meet the Company’s needs.
Notwithstanding, the Company anticipates generating losses and therefore may be unable to continue operations in the future. The Company anticipates it will require additional capital in order to develop its business. The Company may use a combination of equity and/or debt instruments or enter into a strategic arrangement with a third party. Management has yet to find a solution to its funding requirements.
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The Company financed past activities, in part, with borrowing from, private parties, Small Business Administration’s Economic Injury Disaster Loans (EIDL) and certain related parties. Outstanding debt consists of the following:
Loans from unrelated parties are as follows:
| 3/31/2024 | 12/31/2023 | |||||||
| (A) Howard note - In Default | $ | 50,000 | $ | 50,000 | ||||
| (A) Howard note - In Default | 50,000 | 50,000 | ||||||
| (B) Goff note - In Default | 22,500 | 22,500 | ||||||
| (C) Insurance notes | 16,109 | 32,181 | ||||||
| (D) Alder note | 144,941 | – | ||||||
| (D) Genisis Glass note | 144,941 | – | ||||||
| (E) EIDL notes ($400,000 and $200,000 in default, respectively) | 550,000 | 350,000 | ||||||
| (F) Other | 21,000 | 21,000 | ||||||
| Total | 999,491 | 525,681 | ||||||
| Less current portion | (849,491 | ) | (375,681 | ) | ||||
| Total long term | $ | 150,000 | $ | 150,000 | ||||
(A)The first Howard note was advanced on 06/28/2016 and the second on 04/03/2017 to Microvascular Health Solutions, LLC. Both notes had one-year terms and both notes are in default. The stated interest rate on each note was 2.5% per month, upon default the interest rate increased to 3.5% per month. The notes are secured by the accounts receivable of the borrower. At year end after the default each note contained a provision entitling the lender to 5% ownership in the borrower, a consolidated subsidiary. The Company estimates that if the interest in the subsidiary were converted into its common shares it would represent an equivalent of 29,400,000 common shares, which would only be issuable in lieu of the interest in the subsidiary, if agreed upon by the Company.
(B)The Goff note had a maturity date of February 13th, 2016, the note is in default. The original note advanced $15,000 and called for a payment of $22,500 on the maturity date. The note provides for a 4% interest rate per annum after the maturity date.
(C) Insurance notes are from finance companies that provided short term financing of insurance premiums. The notes require ten installments. The balance will mature at May 3rd, 2024 for the $1,357 and June 1st, 2024 for $14,752.
(D) In January of 2024, the Company issued two notes for $165,000 each, Alder and Genisis Glass. The notes are due in twelve months from the note date or before if the company brings in equity equal to $1,500,000. The funds were designated for the improvement of the technical infrastructure of the newly acquired DocSun Biomedical Holdings, Inc. Each note was issued with a $15,000 original issue discount. Loan fees of $1,000 plus 4,500 common shares with a fair value of $9,990 were paid to each lender. The amounts recorded are net of discounts of $19,376 each consisting of the original discount and fair value of shares issued.
(E) EIDL Notes
The principal amount of economic injury disaster loans (EIDL) issued under the Small Business Administration’s COVID-19 recovery program was $550,000 and $350,000 at March 31, 2024 and December 31, 2023, respectively. At March 31,2024, the long term balance of the EIDL loans was $150,000 and the current balance for delinquent loans was 400,000. The total balance is comprised of three notes made by subsidiaries of the Company, secured by the assets of the Company. One of which was acquired in the merger with Findit, inc. and is in charge off status at the SBA. The Findit EIDL loan and the other $200,000 subsidiary loan are in default and shown as current liabilities. Each loan has a 30-year term and an interest rate of 3.75% per annum. The SBA granted a total of thirty months payment deferment period under the EIDL program for Covid-19 related loans, both EIDL loans qualified for and used the full deferment period. Interest continued to accrue during the deferment period and the deferred amounts will be paid as a balloon payment at the end of the 30 year amortization period. Current payments are being applied against interest accrued. The notes maturity dates are May 17, 2050 for a $150,000 note, July 12, 2051 for a $200,000 subsidiary note and July 17, 2050 for the Findit EIDL loan.
(F) The other loan does not have stated terms.
| 32 |
Related Party Loans
BioRegenx and its subsidiaries have financed past activities, in part, with unsecured borrowings from certain related parties. The principal amount of debt from related parties is summarized in the following table:
| Related Party | 3/31/2024 | 12/31/2023 | |||||||
| Libertas Trust | $ | 180,000 | $ | 180,000 | A | ||||
| Wilshire Holding Trust | 518,000 | 518,000 | A | ||||||
| Resco Enterprises Trust | 157,747 | 157,747 | A | ||||||
| Avis Trust | 67,606 | 67,606 | A | ||||||
| Richard Long | 39,862 | 39,862 | B | ||||||
| $ | 963,215 | $ | 963,215 | ||||||
A Stockholder and related to current or former officer
B Entity controlled by current officer
Each of the listed loans indicated with an A are demand loans that have a one-year term and an auto renewal feature. They bear an interest rate of 10% per annum.
The entire balance of related party loans are recorded as current liabilities.
Total accrued interest on related party debts was $321,897 at March 31, 2024 and $292,190 at December 31, 2023.
Going Concern
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates the continuation of the Company as a going concern.
The Company has generated recurring losses from operations and cash flow deficits from its operations since inception and has had to raise funds through equity offerings or borrowings to continue operating. These factors raise substantial doubt about the Company’s ability to continue as a going concern. As reflected in the accompanying financial statements, during the quarter ended March 31, 2024, the Company incurred a net loss of $,3,152,458, used cash in operations of $104,250 and had a working capital deficit of $2,899,223 as of that date. In addition, $522,500 of notes payable were in default. At March 31, 2024, the Company had cash on hand in the amount of $114,158. As a result, management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern. Our independent registered public accounting firm, in its report on our consolidated financial statements for the year ended December 31, 2023, has also expressed substantial doubt about our ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the company cannot continue as a going concern.
The continuation of the Company as a going concern is dependent upon its ability to obtain necessary debt or equity financing to continue operations until it begins generating positive cash flow. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution for our stockholders, in case of equity financing.
Significant changes in the number of employees
We currently have a total of ten employees. We are dependent upon our officers for our future business development. As our operations expand, we anticipate the need to hire additional employees, consultants and professionals; however, the exact number is not quantifiable at this time.
| 33 |
Off-Balance Sheet Arrangements
As of March 31, 2024, and as of the date of this Quarterly Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Critical Accounting Policies and Estimates
Revenue Recognition: The Company recognizes revenue related to product sales when (I) persuasive evidence of the arrangement exists, (ii) shipment has occurred, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured.
Recent Pronouncements
The Company's management has evaluated all the recently issued accounting pronouncements through the filing date of these financial statements and does not believe that any of these pronouncements will have a material impact on the Company's current financial position and results of operations.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not required for smaller reporting company.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosures. Our management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding management’s control objectives.
Our management, with the participation of our CEO, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the period ended March 31, 2024. Based upon this evaluation, our CEO concluded that our disclosure controls and procedures were not effective because of the identification material weaknesses in our internal control over financial reporting as described below.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Rule 13a-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with U.S. GAAP.
Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP and our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention of overriding controls. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
| 34 |
Our management assessed the effectiveness of our internal control over financial reporting as of March 31, 2024. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Tread way Commission (“COSO”) in Internal Control-Integrated Framework (2013). Based on this evaluation, management concluded that our internal control over financial reporting was not effective as of March 31, 2024. Our management concluded we have the following material weaknesses . A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
Ineffective Control Environment. The Company did not maintain an effective control environment, which is the foundation necessary for effective internal control over financial reporting. Specifically, the Company (i) did not maintain a functioning independent audit committee; (ii) did not have its Board of Directors review and approve significant transactions; (iii) had an insufficient number of personnel appropriately qualified to perform control design, execution and monitoring activities; (iv) had an insufficient number of personnel with an appropriate level of U.S. GAAP knowledge and experience and ongoing training in the application of U.S. GAAP and SEC disclosure requirements commensurate with the Company’s financial reporting requirements; (v) had inadequate segregation of duties consistent with control objectives; and (vi) lack of written documentation of the Company’s key internal control policies and procedures over financial reporting. The Company is required under Section 404 of the Sarbanes-Oxley Act to have written documentation of key internal controls over financial reporting. The Company did not formally document policies and controls to enable management and other personnel to understand and carry out their internal control responsibilities including the lack of closing checklists, budget-to-actual analyses, balance sheet variation analysis, and pro-forma financial statements. Additionally, the Company did not have an adequate process in place to complete its testing and assessment of the design and operating effectiveness of internal control over financial reporting in a timely manner;
Ineffective controls over financial statement close and reporting process. The Company did not maintain effective controls over its financial statement close and reporting process. Specifically, the Company: (i) had insufficient preparation and review procedures for disclosures accompanying the Company’s financial statements; and (ii) did not provide reasonable assurance that accounts were complete and accurate and agreed to detailed support and that reconciliations of accounts were properly performed, reviewed and approved; and
Insufficient segregation of duties in our finance and accounting functions due to limited personnel. We do not have sufficient segregation of duties within accounting functions. During the period ended March 31, 2024, we had limited personnel that performed nearly all aspects of our financial reporting process, including, but not limited to, access to the underlying accounting records and systems, the ability to post and record journal entries and responsibility for the preparation of the financial statements. Due to the fact that these duties were often performed by the same person, this creates a lack of review over the financial reporting process that would likely result in a failure to detect errors in spreadsheets, calculations, or assumptions used to compile the financial statements and related disclosures as filed with the SEC. These control deficiencies could result in a material misstatement to our interim or annual financial statements that would not be prevented or detected.
As of the date of this report, our remediation efforts continue related to each of the material weaknesses that we have identified in our internal control over financial reporting, and additional time and resources will be required in order to fully address these material weaknesses. We have not been able to complete all actions necessary and test the remediated controls in a manner that would enable us to conclude that such controls are effective. We are committed to implementing the necessary controls to remediate the material weaknesses described below as our resources permit. These material weaknesses will not be considered remediated until (1) the new processes are designed, appropriately controlled and implemented for a sufficient period of time and (2) we have sufficient evidence that the new processes and related controls are operating effectively.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Control Over Financial Reporting
During the quarter ended March 31, 2024, there were no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
We are not currently involved in any pending legal proceeding or litigation and, to the best of our knowledge, no governmental authority is contemplating any proceeding to which we are a party or to which any of our properties is subject, which would reasonably be likely to have a material adverse effect on us.
We are involved in disputes with certain parties, including parties that are former officers and board members and vendors associated with their activities. Such disputes arise from time to time in the ordinary course of conducting business. While assurance cannot be given as to the outcome of these disputes, management does not currently believe that any of these matters, individually or in the aggregate are estimable or probable and is therefore unable to represent whether they would have a material adverse effect on the Company’s financial condition, liquidity or results of operations. Refer to Note 8. Commitments and Contingencies – Company Disputes and Other Claims in the Notes to Condensed Consolidated Financial Statements set forth in Part I, Item 1 Financial Statements of this Quarterly Report, for further information.
Item 1A. Risk Factors
Not applicable to smaller reporting companies.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the period ended March 31, 2024 the Company granted 7,912,000 shares of its common stock to two consultants for services. One tranche of shares of stock issued had a vesting term of 50% at grant date, 25% on 1st year anniversary date, and the remaining 25% on 2nd year anniversary from grant date.
During the period the Company granted options to acquire 23,575,328 shares of its common stock at $.13 per share to two officers and directors. At grant date 853,328 of the options vested immediately, and 22,720,000 of the options had a vesting term of 50% at grant date, 25% on 1st year anniversary date, and the remaining 25% on 2nd year anniversary from grant date.
During the three months ended March 31, 2024, the Company issued 4,040,000 common shares services to non-affiliates. The shares were valued at $.187 per common share.
During the three months ended March 31, 2024, the Company issued 144,000 common shares to non-affiliated lenders as loan incentives. The shares were valued at $.08.
During the three months ended March 31, 2024, the Company issued 76,800,000 common shares in the acquisition of DocSun Biomedical Holdings Inc. The shares were valued at $.19 per common share.
During the three months ended March 31, 2024, the Company issued (retained) 104,552,804 shares to Findit Inc. shareholders in merger the Findit, Inc.
During the three months ended March 31, 2024, the Company issued 142,400,000 Series A preferred shares converted to common shares upon the merger.
During the three months ended March 31, 2023, the Company issued 2,674,192 shares of common stock to non-affiliates at prices ranging from $0.156 per share to $0.188 per share, resulting in gross proceeds to the Company of $337,736.
Issuance of common stock for refunds
In November 2023, the Company offered to certain customers whose orders had been deferred, the option of accepting shares of common stock or warrants to acquire common stock, as compensation for the delivery delay. There were 2,080,000 shares with a fair value of $390,000 and 480,000 options with a fair value of $67,180 issued in 2023 under the offer. In January of 2024, there were 160,000 shares with a fair value of $22,200 and 160,000 options with a fair value of $19,351 issued under the offer. The offer was closed in January 2024. For accounting purposes, the Company considered the fair value of the shares and options issued in the aggregate amount of $22,200 as a reduction to deferred revenue and reduced returns reserves by $19,351 at March 31, 2024.
Share were issued in the above listed transactions in reliance upon exemption from registration for transactions not involving a public offering provided by Rule 506(b) of Regulation D promulgated under the Securities Act of 1933, as amended (the “Act”) or Section 4(a)(2) of the Act . All of the transactions described above were exempt from registration in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended, as a transaction by an issuer not involving a public offering. Each purchaser in these transactions represented his or her intention to acquire these securities for investment only and not with a view to offer or sell, in connection with any distribution of the securities, and appropriate legends were affixed to the share certificates and instruments issued in such transactions.
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Item 3. Defaults Upon Senior Securities
None that is required to be reported under this Item 3
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
There have been no changes to the procedures by which security holders may recommend nominees to the Company’s board of directors.
During the quarter ended March
31, 2024, no director or officer of the Company
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Item 6. Exhibits
The following is a list of the exhibits filed as part of this Form 10-Q. The documents incorporated by reference can be viewed on the SEC’s website at http://www.sec.gov.
| Exhibit No. | Description | |
| 2.1 | Acquisition Agreement dated December 5, 2023 by and among BioRegenx, Inc., DocSun BioMedical Holdings, Inc. and its shareholders | |
| 2.2 | Agreement and Plan of Merger dated December 29, 2022 by and between BioRegenx, Inc. (merged out entity) and Findit, Inc. (the Company) | |
| 3.1 | Articles of Incorporation dated December 23, 1998 (incorporated by reference to Exhibit 3.1 to Registration Statement on Form S-1 filed on as filed March 11, 2021) | |
| 3.2 | Amendment to Certificate of Designation of Series B Convertible Preferred Stock filed December 30, 2015 (incorporated by reference to Exhibit 3.3 to Annual Report on Form 10-K, as filed on April 4, 2023) | |
| 3.3 | Certificate of Amendment to Articles of Incorporation filed with the State of Nevada on March 29, 2016 (incorporated by reference to Exhibit 3.4 to Annual Report on Form 10-K as filed on April 4, 2023) | |
| 3.4 | Certificate of Amendment to Articles of Incorporation filed on March 8, 2024 (incorporated by reference to Exhibit 3.6 to Current Report on Form 8-K dated March 8, 2024, as filed April 1, 2024) | |
| 3.5 | Articles of Merger dated March 8, 2024(incorporated by reference to Exhibit 3.5 to Current Report on Form 8-K dated March 8, 2024, as filed on April 1, 2024) | |
| 3.6 | Certificate of Designation of Series A Preferred Shares filed March 14, 2024 (incorporated by reference to Exhibit 3.7 to Current Report on Form 8-K dated March 8, 2024, as filed on April 1, 2024) | |
| 3.7 | Certificate of Correction dated March 26, 2024 (incorporated by reference to Exhibit 3.8 to Current Report on Form 8-K dated March 8, 2024, as filed on April 1, 2024) | |
| 3.8 | Bylaws (incorporated by reference to Exhibit 3.2 to Registration Statement on Form S-1 filed on as filed March 11, 2021) | |
| 10.1 | Distribution Agreement dated December 1, 2014 by and between MicroVascular Health Solutions, LLC and Glycocheck B.V | |
| 10.2 | Agreement dated May 13, 2015 by and between Vascular Health Sciences, LLC, Theodore C. Skokos, Loan Peak Innovative Holdings, LLC, JD2 Holdings, Inc., Dayid Daniels, Atmadharma, LLC, Bruce Bouche, the Ted and Shannon Skokos Foundation, and Pvsa Investments LLC, on one hand, and Microvascular Health Solutions LLC, Vigorous Health LLC, and Robert Long, on the other hand | |
| 31 | Certification of our Chief Executive Officer and Interim Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32 | Certification of our Chief Executive Officer and Interim Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101 | The following materials from BioRegenx, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March, 2024 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Statements of Changes in Stockholders (Deficit), (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements | |
| 104 | The cover page from the BioRegenx, Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in Inline XBRL and contained in Exhibit 101 |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BioRegenx Inc.
/s/ William Resides
By: William Resides
Chief Executive Officer, Interim Chief Financial Officer
(Principal Executive Officer, Principal Financial and Accounting Officer)
Date: October 9, 2024
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Exhibit 2.1
SECURITIES EXCHANGE AGREEMENT
THIS SECURITIES EXCHANGE AGREEMENT (the “Agreement”) is made effective on 12/5/2023 .
| AMONG: | |
| BioRegenx, Inc. | a corporation existing under the laws of the State of Nevada, having a registered office at 7407 Ziegler Road, Chattanooga, Tennessee 37421 |
(hereinafter referred to as the “BioRegenx”) - and - | |
DocSun Biomedical Holdings, Inc. | a corporation existing under the laws of Florida, having a registered office at 6763 32nd Avenue N, St. Petersburg FL 33710 (hereinafter referred to as “DocSun”) |
| -and- | |
| The individuals listed on Schedule A, the shareholders of DocSun (hereinafter referred to as “DocSun Shareholders”). |
WHEREAS:
| A. | DocSun Shareholders are the legal and beneficial owners of all the issued and outstanding DocSun common shares, and. |
| B. | BioRegenx has agreed to purchase from DocSun Shareholders all of the issued and outstanding DocSun common shares, in exchange for the issuance of Four Million Eight Hundred Thousand BioRegenx Common Shares to DocSun Shareholders, upon the terms and conditions set forth in this Agreement (the “Transaction”), such that BioRegenx will, upon Closing (as defined herein), be the sole shareholder of DocSun. |
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and the respective covenants and agreements herein contained, the parties covenant and agree as follows:
ARTICLE I
INTERPRETATION
1.01 Definitions
In this Agreement, unless otherwise defined, capitalized words and terms shall have the following meanings:
| (1) | “Affiliate” has the meaning ascribed to such term in the Securities Act of 1933. | |
| (2) | “Agreement” means this securities exchange agreement effective October __, 2023, together with all schedules, appendices, and exhibits attached hereto, as the same may be supplemented or amended from time to time. | |
| (3) | “Alternative Transaction” means any of the following (and excludes the transactions contemplated by this Agreement): (a) any merger, amalgamation, arrangement, share exchange, takeover bid, tender offer, recapitalization, consolidation or other business combination directly or indirectly involving DocSun or BioRegenx, as applicable, or any analogous transaction, (b) any acquisition of all or substantially all of the assets of DocSun or BioRegenx, as applicable (or any lease, long-term supply agreement, exchange, mortgage, pledge or other arrangement having a similar economic effect), (c) any acquisition of beneficial ownership of 50% or more of, as applicable, DocSun or BioRegenx’s voting securities in a single transaction or a series of related transactions, (d) any acquisition by DocSun or BioRegenx, as applicable, of any assets or capital stock of another Person (other than acquisitions of capital stock or assets of any other Person that are not, individually or in the aggregate, material to DocSun or BioRegenx, as applicable), or (e) any bona fide proposal to, or public announcement of an intention to, do any of the foregoing on or before the Termination Date. |
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| (4) | “Applicable Laws” means, in respect of any Person, property, transaction, event or other matter, as applicable, (i) any present or future law, statute, regulation, code, ordinance, principle of common law or equity, municipal by-law, treaty, order, directive, judgment, decree, injunction, decision, ruling, award or writ, domestic or foreign, of any governmental authority having jurisdiction applicable to that Person, property, transaction, event or other matter and, (ii) whether or not having the force of law, all applicable requirements, requests, official directives, rules, consents, approvals, authorizations, guidelines and policies of any Governmental Authority having jurisdiction over that person, property, transaction, event or other matter and regarded by such Governmental Authority as requiring compliance. |
| (5) | “Authorizations” means, collectively, all consents, licenses, registrations, permits, authorizations, permissions, assignments, orders, approvals, clearances, waivers, certificates, and declarations issued, granted, given or otherwise made available by or under the authority of any Governmental Authority, whether domestic or foreign, or pursuant to any requirement under Applicable Laws. |
| (6) | “BioRegenx Common Shares” means the common shares with par value of $0.001 per share in the capital of BioRegenx. |
| (7) | “BioRegenx Data Room” means the internet-based data room established by or on behalf of BioRegenx and made available to DocSun, DocSun Shareholders and their respective advisors prior to 11:59 p.m. on September 8, 2023, and hosted by GoogleDrive. |
| (8) | “BioRegenx Data Room Information” means all information, books, maps, records, reports, files, data, interpretations, papers and other records or documents relating to BioRegenx, and its respective subsidiaries or businesses and affairs in BioRegenx Data Room. |
| (9) | “BioRegenx Disclosure Letter” means the disclosure letter dated as of the Closing Date (and addressed to DocSun) delivered by BioRegenx to DocSun concurrently with the execution of this Agreement. | |
| (10) | “BioRegenx Financial Statements” has the meaning set forth in Section 5.01(9). |
| (11) | “BioRegenx Material Contracts” means, collectively, all Contracts and other obligations or rights (and all amendments, modifications and supplements thereto) to which BioRegenx is a party or by which its assets, rights and properties are bound that are material to the business or assets of BioRegenx, including, all Contracts listed in BioRegenx Disclosure Letter or made available in BioRegenx Data Room. |
| (12) | “Books and Records” means all technical, business and financial records, financial books and records of account, books, data, reports, files, lists, drawings, plans, logs, briefs, customer and supplier lists, deeds, certificates, contracts, surveys, title opinions or any other documentation and information in any form whatsoever (including written, printed, electronic or computer printout form) relating to a corporation and its business. |
| (13) | “Business Day” means a day which is not a Saturday, Sunday or a statutory holiday in the United States. |
| (14) | “Closing” means the completion of the Transaction in accordance with the terms and conditions of this Agreement. |
| (15) | “Closing BioRegenx Common Shares” has the meaning set forth in Section 2.02. | |
| (16) | “Closing Date” means the date of Closing, which shall be the third (3rd) Business Day following the satisfaction or waiver of all conditions to the obligations of the parties to consummate the Transaction (other than conditions that are satisfied with respect to actions the respective parties will take at the Closing itself), or such other earlier or later date as BioRegenx and DocSun may mutually determine. |
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| (17) | “Constating Documents” means, with respect to any Person, as applicable, its articles and/or certificate of incorporation, notice of articles, articles of amendment, articles of amalgamation or continuance, memorandum of association, charter, by-laws, declaration of trust and other constating documents (in the case of a trust), partnership agreement, limited liability company agreement or other similar document, and all unanimous shareholder agreements, other shareholder agreements, voting trust agreements and similar arrangements applicable to the Person’s equity interests, all as in effect from time to time. |
| (18) | “Contracts” (individually, a “Contract”) means all written or oral outstanding contracts and agreements, leases (including the real property leases), third-party licenses, insurance policies, deeds, indentures, instruments, entitlements, commitments, undertakings and orders made by or to which a party is bound or under which a party has, or will have, any rights or obligations and includes rights to use, franchises, license and sub-licenses agreements and agreements for the purchase and sale of assets or common shares. |
| (19) | “Corporate Records” means the corporate records of a limited liability company or corporation, including (i) its articles, notice of articles or other constating documents, any unanimous member agreement and any amendments thereto, (ii) all minutes of meetings and resolutions of members, directors and any committee thereof, (iii) the securities certificate books, register of members, register of transfers and registers of members, directors and officers, and (iv) all accounting records. |
| (20) | “disclosed” means, (i) in the case of the DocSun and DocSun Shareholders, fairly disclosed in writing to BioRegenx prior to the date of this Agreement (with sufficient details to identify the nature and scope of the matter disclosed), and (ii) in the case of BioRegenx, fairly disclosed in writing to DocSun prior to the date of this Agreement (with sufficient details to identify the nature and scope of the matter disclosed). |
| (21) | “DocSun Common Shares” means the common shares with par value of $0.001 per share in the capital of DocSun. |
| (22) | “DocSun Data Room” means the internet-based data room established on or before September 8, 2023 and hosted by GoogleDrive. |
| (23) | “DocSun Data Room Information” means all information, books, maps, records, reports, files, data, interpretations, papers and other records or documents relating to DocSun, and its subsidiaries or businesses and affairs in the DocSun Data Room. |
| (24) | “DocSun Disclosure Letter” means the disclosure letter dated as of the Closing Date (and addressed to BioRegenx) delivered by DocSun to BioRegenx concurrently with the execution of this Agreement. |
| (25) | “DocSun Financial Statements” has the meaning set forth in Section 5.03(9)(a). |
| (26) | “DocSun Material Contracts” means, collectively, all Contracts and other obligations or rights (and all amendments, modifications and supplements thereto) to which DocSun is a party or by which its assets, rights and properties are bound that are material to the business or assets of DocSun, including, all Contracts listed in the DocSun Disclosure Letter or made available in the DocSun Data Room. |
| (27) | “Securities Act” means the United States Securities Act of 1933. |
| (28) | “Environmental Laws” means all Applicable Laws relating to the environment, including, but not limited to, those pertaining to (i) the reclamation or restoration of properties, (ii) the abatement of pollution, (iii) the protection of the environment or wildlife, including endangered species, (iv) public safety with respect to environmental hazards, (v) the protection of cultural or historic resources, (vi) the management, treatment, storage, disposal or control of, or exposure to, any substance or material that is prohibited, controlled or regulated by any Governmental Authority pursuant to Environmental Laws (such substances and materials collectively referred to in this definition as, “Hazardous Substances”), (vii) the release or threatened release of pollutants, contaminants, chemicals or industrial, toxic or hazardous substances, including ambient air, surface water and groundwater, (viii) the manufacturing, processing, distribution, use, treatment, storage, disposal, handling or transport of Hazardous Substances. |
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| (29) | “Escrow Agent” means J.M. Walker & Associates or such other Person as may be mutually agreed upon and duly appointed by BioRegenx and DocSun, each acting reasonably, as escrow agent pursuant to the Escrow Agreement. |
| (30) | “Escrow Agreement” means the escrow agreement in the form attached hereto as Schedule B, to be entered into simultaneously with this Agreement by BioRegenx, DocSun, and the Escrow Agent. |
| (31) | “Governmental Authority” means any (a) multinational, federal, provincial, territorial, state, regional, municipal, local or other government, governmental or public department, court, tribunal, commission, board or agency, whether domestic or foreign, or (b) regulatory authority, including any securities commission, or stock exchange. |
| (32) | “Information Technology” means computer hardware, software in source code and object code form (including documentation, interfaces and development tools), websites, databases, telecommunications equipment and facilities and other information technology systems owned, licensed, used or held by a Person. |
| (33) | “Intellectual Property” means all intellectual property and industrial property rights and assets, and all rights, interests and protections that are associated with, similar to, or required for the exercise of, any of the foregoing, however arising, pursuant to Applicable Laws of any jurisdiction throughout the world, whether registered or unregistered, including any and all (a) trademarks, service marks, trade names, brand names, logos, slogans, trade dress, design rights and other similar designations of source, sponsorship, association or origin, together with the goodwill connected with the use of, and symbolized by, and all registrations, applications and renewals for, any of the foregoing, (b) internet domain names, whether or not trademarks, web addresses, web pages, websites and related content and URLs, (c) works of authorship, expressions, designs and design registrations, whether or not copyrightable, including copyrights, author, performer, moral and neighboring rights, and all registrations, applications for registration and renewals of such copyrights and (d) patents (including all reissues, divisionals, provisionals, continuations and continuations-in-part, re- examinations, renewals, substitutions and extensions thereof), patent applications, and other patent rights and any other Governmental Authority-issued indicia of invention ownership (including inventor s certificates, petty patents and patent utility models). |
| (34) | “Lien” means any mortgage, encumbrance, charge, pledge, hypothecation, security interest, assignment, lien (statutory or otherwise), claim, mortgage, title retention agreement or arrangement, restrictive covenant, or other encumbrance of any nature, or any other arrangement or condition which, in substance, secures payment, or performance of an obligation. |
| (35) | “Material Adverse Effect”, when used in connection with the a party, means (i) any change, effect, fact, circumstance or event which, individually or when taken together with any other changes, effects, facts, circumstances or events, would reasonably be expected to be material and adverse to the assets, liabilities, condition (financial or otherwise), business, properties or results of operation of the party and its affiliates (if applicable), taken as a whole, or (ii) a material impairment of or delay in the ability of the parties (or any one of them) to perform their obligations under this Agreement or consummate the Transaction, provided however that, a Material Adverse Effect shall not include (1) any change, effect, fact, circumstance or event (A) relating to the global economy or financial, securities or commodities markets in general in the world including, without limitation, changes in currency exchange rates or interest rates, or (B) generally affecting the industry within which the party and its subsidiaries (if applicable) are engaged in business, which does not have a materially disproportionate effect on such party and its subsidiaries (if applicable) relative to other comparable Persons operating in the industry in which the party and its subsidiaries (if applicable) are engaged in business, and (2) the impact(s) of the COVID-19 pandemic or other health crisis or public health event, on the business, operations or financial condition of the party and its subsidiaries (if applicable). |
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| (36) | “Material Contract” means, with respect to a Person, any Contract to which such Person is a party and which is material to such Person, including any Contract: (i) the termination of which would have a Material Adverse Effect on such Person, (ii) which would result in payments to or from such Person or its subsidiaries (if any) in excess of $25,000, whether payable in one payment or in successive payments, (iii) relating to the borrowing of money or to capital expenditures, and (iv) not entered into in the Ordinary Course. |
| (37) | “material fact” shall have the meaning ascribed to it in the Securities Act of 1933. |
| (38) | “Ordinary Course” means, with respect to an action taken by a Person, that such action is (i) consistent with the past practices of such Person and is taken in the ordinary course of the normal dayto-day operations of the business of such Person, and (ii) similar in nature to actions customarily taken in the normal day-to-day operations of the businesses of other Persons that are in the same line of business as such Person. |
| (39) | “Person” includes an individual, sole proprietorship, partnership, limited partnership, unincorporated association or organization, unincorporated syndicate, body corporate, trust, trustee, executor, administrator, legal representative of any agency or instrumentality thereof. |
| (40) | “Securities Laws” means the securities legislation having application, the regulations and rules thereunder and all administrative policy statements, instruments, blanket orders, notices, directions and rulings issued or adopted by the applicable securities regulatory authority, all as amended. |
| (41) | “Tax” means any tax, impost, levy, withholding, duty, fee, premium, assessment and other charge of any kind, however denominated and any instalment or advance payment in respect thereof, including any interest, penalties, fines or other additions that have been, are or will become payable in respect thereof, imposed by any Governmental Authority, including for greater certainty any income, gain or profit tax (including federal, state, provincial and territorial income tax), payroll and employee withholding tax, employment or payroll tax, unemployment insurance, disability tax, social insurance tax, social security contribution, sales and use tax, consumption tax, customs tax, ad valorem tax, excise tax, goods and services tax, harmonized sales tax, franchise tax, gross receipts tax, capital tax, business license tax, alternative minimum tax, estimated tax, abandoned or unclaimed (escheat) tax, occupation tax, real and personal property tax, stamp tax, environmental tax, transfer tax, severance tax, workers’ compensation, government pension plan premium or contribution and other governmental charge, and other obligations of the same or of a similar nature to any of the foregoing, together with any interest, penalties or other additions to tax that may become payable in respect of such tax, and any interest in respect of such interest, penalties and additions whether disputed or not, and “Taxes” has a corresponding meaning. |
| (42) | “Tax Return” means all returns, declarations, designations, forms, schedules, reports, elections, notices, filings, statements (including withholding tax returns and reports and information returns and reports) and other documents of every nature whatsoever filed or required to be filed with any Governmental Authority with respect to any Tax together with all amendments and supplements thereto. | |
| (43) | “Termination Date” means November 15, 2023 or such later date as may be agreed in writing between BioRegenx and DocSun. |
| (44) | “Time of Closing” means 10:00 a.m. (EST) on the Closing Date, or such other time as BioRegenx and DocSun may mutually determine. |
| (45) | “Transaction” has the meaning set forth in the recitals of this Agreement. |
| (46) | “U.S. GAAP” means generally accepted accounting principles in the United States. |
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1.02 Currency
All sums of money which are referred to in this Agreement are expressed in lawful money of the United States unless otherwise specified.
1.03 Interpretation Not Affected by Headings, etc.
The division of this Agreement into articles, sections and other portions and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. Unless otherwise indicated, any reference in this Agreement to an Article, Section or a Schedule or Exhibit refers to the specified Article or Section of, or Schedule or Exhibit to this Agreement.
1.04 Number, etc.
Unless the subject matter or context requires the contrary, (i) words importing the singular number only shall include the plural and vice versa, (ii) words importing the use of any gender shall include all genders, and (iii) words importing Persons shall include natural persons, firms, trusts, partnerships and corporations.
1.05 Date for Any Action
In the event that any date on which any action is required or permitted to be taken hereunder by any Person is not a Business Day, such action shall be required to be taken on the next succeeding day which is a Business Day.
1.06 Statutory References
Any reference in this Agreement to a statute includes all regulations and rules made thereunder, all amendments to such statute in force from time to time, and any statute, regulation or rule that supplements or supersedes such statute, regulation or rule.
1.07 Accounting Principles
Wherever in this Agreement reference is made to generally accepted accounting principles, such reference shall be deemed to be U.S. GAAP, approved by the American Institute of Certified Public Accountants or any successor thereto, applicable as at the date on which a calculation is made or required to be made in accordance with generally accepted accounting principles.
1.08 Knowledge
| (1) | Any reference herein to “the knowledge of BioRegenx” (or similar expressions) will be deemed to mean the actual knowledge of the BioRegenx officers and directors, together with the knowledge such Person would have had if they had conducted a diligent inquiry into the relevant subject matter. | |
| (2) | Any reference herein to “the knowledge of DocSun” (or similar expressions) will be deemed to mean the actual knowledge of DocSun officers and managers, together with the knowledge such Person would have had if they had conducted a diligent inquiry into the relevant subject matter. |
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1.09 Schedule
The following schedules to this Agreement are an integral part of this Agreement:
| Schedule | Description |
| Schedule A | DocSun Shareholders |
| Schedule B | Escrow Agreement |
ARTICLE II
PURCHASE AND SALE OF DOCSUN COMMON SHARES
2.01 Purchase and Sale
Subject to the terms and conditions hereof, DocSun Shareholders covenants and agrees, on its own behalf, to sell, assign and transfer to BioRegenx, and BioRegenx covenants and agrees to purchase from DocSun Shareholders, the number of DocSun Common Shares which are beneficially owned by DocSun Shareholders at the Time of Closing. As of the date of this Agreement, the number of DocSun Common Shares which are beneficially owned by DocSun Shareholders is Eleven Million Five Hundred Thousand (11,500,000).
2.02 Purchase Consideration
In consideration for the acquisition of the DocSun Common Shares, BioRegenx shall issue from treasury to DocSun Shareholders, the Closing BioRegenx Common Shares (the “Closing BioRegenx Common Shares” being, for the avoidance of doubt, an aggregate of Four Million Eight Hundred Thousand (4,800,000) BioRegenx Common Shares). To the extent DocSun Shareholders are to receive a fractional BioRegenx Common Share, that entitlement shall be rounded up to the nearest whole number and no consideration shall be payable therefor.
2.03 Restrictions on Resale
DocSun Shareholders acknowledges and agrees as follows:
| (1) | the transfer of the DocSun Common Shares and the issuance of the BioRegenx Common Shares in exchange therefore will be made pursuant to appropriate exemptions (the “Exemptions”) under the Securities Act of 1933. | |
| (2) | As a consequence of acquiring the Closing BioRegenx Common Shares pursuant to the Exemptions: |
| a) | DocSun Shareholders will be restricted from using certain of the civil remedies available under the Securities Laws; | |
| b) | DocSun Shareholders may not receive information that might otherwise be required to be provided to DocSun Shareholders, and BioRegenx is relieved from certain obligations that would otherwise apply under Securities Laws if the Exemptions were not being relied upon by BioRegenx; | |
| c) | no securities commission, stock exchange or similar regulatory authority has, or will have, reviewed or passed on the merits of an investment in the Closing BioRegenx Common Shares; |
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| d) | there is no, and will not be, government or other insurance covering the Closing BioRegenx Common Shares; and | |
| e) | an investment in the Closing BioRegenx Common Shares is speculative and of high risk. |
| (3) | The certificates representing the Closing BioRegenx Common Shares will bear such legends as required by the applicable Securities Laws and it is the responsibility of DocSun Shareholders (and BioRegenx is in no way responsible) to find out what those restrictions are and to comply with them before selling or transferring the Closing BioRegenx Common Shares. | |
| (4) | DocSun Shareholders are knowledgeable of, or has been independently advised as to, the Applicable Laws of the applicable jurisdiction(s) which apply to the sale of the DocSun Common Shares and the issuance of the Closing BioRegenx Common Shares in exchange therefor, and which may impose restrictions on the resale of such Closing BioRegenx Common Shares in such jurisdiction(s) and it is the responsibility of DocSun Shareholders to find out (and BioRegenx is in no way responsible for advising as to) what those resale restrictions are, and to comply with them before selling or transferring the BioRegenx Common Shares. |
2.04 Registration Exemption
It is the intention of the parties that the issuance of the Closing BioRegenx Common Shares to be issued hereunder be exempt from the registration requirements of applicable federal and state Securities Laws of the United States, pursuant to the provisions of Section 4(a)(2), and accordingly, each party agrees to abide by all applicable resale restrictions and holding periods imposed by all applicable Securities Laws, and to take such further actions (including the execution and delivery of such further instruments and documents) as any other party may reasonably request with regards to maintaining such exemption.
ARTICLE III
CONDITIONS OF CLOSING
3.01 Mutual Conditions of Closing
The obligations to complete the Transaction are subject to the fulfillment of each of the following conditions on or before the Time of Closing:
| (1) | There shall be no action taken under any Applicable Laws by any Governmental Authority that (i) makes it illegal or restrains, enjoins or prohibits the Transaction, (ii) results in a judgment or assessment of damages relating to the Transaction that has a Material Adverse Effect on BioRegenx or DocSun, or (iii) could reasonably be expected to impose any condition or restriction upon BioRegenx or DocSun which, after giving effect to the Transaction, would so materially and adversely impact the economic or business benefits of the Transaction as to render inadvisable the consummation of the Transaction. | |
| (2) | There shall be no legislation (whether by statute, regulation, order-in-council, notice of ways and means motion, by-law or otherwise) enacted, introduced or tabled which, in the opinion of BioRegenx or DocSun, acting reasonably and with the benefit of advice from independent legal counsel, materially adversely affects or is reasonable likely to materially adversely affect the Transaction. | |
| (3) | The parties shall have received all Authorizations and other required regulatory, corporate and third party approvals, if applicable, and be in compliance with all applicable requirements and conditions under Applicable Laws necessary to complete the Transaction. | |
| (4) | Neither BioRegenx nor DocSun shall be subject to any material, unresolved litigation or court proceedings. |
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| (5) | There shall not be any prohibition under Applicable Laws against the completion of the Transaction. | |
| (6) | The Closing Date shall be on or before the Termination Date. |
The foregoing conditions precedent are for the benefit of all parties, and any one or more of such conditions may be waived by DocSun or by BioRegenx, in whole or in part, without prejudice to any party’s right to rely on any other condition in favor of any party.
3.02 Conditions of Closing in Favor of BioRegenx
The obligations of BioRegenx to complete the Transaction are subject to the fulfillment of each of the
following conditions on or before the Time of Closing:
| (1) | Immediately upon the execution of this Agreement, DocSun shall have appointed two BioRegenx nominees to serve as directors to assist in the transition period. | |
| (2) | DocSun shall have tendered all closing deliveries set forth in Section 4.03, including delivery of the assignment of DocSun Common Shares to BioRegenx, duly executed, in a form acceptable to BioRegenx, acting reasonably. | |
| (3) | DocSun shall not have violated Section 9.01. | |
| (4) | The representations and warranties of DocSun set forth in this Agreement shall have been true and correct as of the date hereof and shall be true and correct at the Time of Closing in all respects (in the case of any representation or warranty containing any materiality or Material Adverse Effect qualifier) or in all material respects (in the case of any representation or warranty without any materiality or Material Adverse Effect qualifier), except as affected by the transactions contemplated by this Agreement, and a certificate of a senior officer of DocSun to this effect shall have been delivered to BioRegenx. | |
| (5) | All of the terms, covenants and conditions of this Agreement to be complied with or performed by DocSun at or before the Time of Closing will have been complied with or performed, and a certificate of a senior officer of DocSun to this effect shall have been delivered to BioRegenx. | |
| (6) | All Authorizations and all consents, assignments, waivers, permits, orders and approvals of all other Persons, including, if applicable, all those party to the DocSun Material Contracts, necessary to conduct the business of DocSun or completion of the Transaction shall have been obtained. | |
| (7) | There shall not be any inquiry or investigation (whether formal or informal) in relation to DocSun or its directors or officers commenced or threatened by any securities commission or regulatory body having jurisdiction, the outcome of which could, in the opinion of BioRegenx, acting reasonably and with the benefit of advice from independent legal counsel, reasonably be expected to have a Material Adverse Effect on DocSun. | |
| (8) | There shall not have been, after the date of this Agreement, any Material Adverse Effect with respect to DocSun. | |
| (9) | Except with the prior written consent of BioRegenx, DocSun shall not have (i) completed, or agreed to complete, any acquisition or disposition other than in the Ordinary Course, or (ii) undertaken or completed, or agreed to undertake or complete, any financing of debt or equity securities of DocSun, or any “related party transaction” (within the meaning of applicable Securities Laws). |
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| (10) | DocSun shall not have suffered a loss, impairment, termination, or failure to renew, of any material Authorization. | |
| (11) | BioRegenx shall have received resignations and releases in a form acceptable to BioRegenx, acting reasonably, in favor of DocSun and such other Persons as may be specified by BioRegenx, acting reasonably, duly executed by each of the directors of DocSun. | |
| (12) | BioRegenx shall be satisfied with the DocSun Disclosure Letter. |
The foregoing conditions precedent are for the benefit of BioRegenx and any one or more of such conditions may be waived by BioRegenx, in whole or in part, without prejudice to BioRegenx’s right to rely on any other condition in favour of BioRegenx.
3.03 Conditions of Closing in Favor of DocSun
The obligations of DocSun to complete the Transaction are subject to the fulfillment of each of the following conditions on or before the Time of Closing:
| (1) | BioRegenx shall have tendered all closing deliveries set forth in Section 4.02, including delivery of the certificates representing the Closing BioRegenx Common Shares. | |
| (2) | BioRegenx shall have tendered its Board of Director minutes whereby Gary Kiss shall have been appointed to BioRegenx Board. | |
| (3) | All Authorizations and all consents, waivers, permits, orders and approvals of all other Persons, including, if applicable, all those party to BioRegenx Material Contracts necessary to permit the completion of the Transaction shall have been obtained. | |
| (4) | BioRegenx shall not have violated Section 9.02. | |
| (5) | The representations and warranties of BioRegenx set forth in this Agreement shall have been true and correct as of the date hereof and shall be true and correct at the Time of Closing in all respects (in the case of any representation or warranty containing any materiality or Material Adverse Effect qualifier) or in all material respects (in the case of any representation or warranty without any materiality or Material Adverse Effect qualifier), except as affected by the transactions contemplated by this Agreement, and a certificate of a senior officer of BioRegenx to this effect shall have been delivered to DocSun. | |
| (6) | All of the terms, covenants and conditions of this Agreement to be complied with or performed by BioRegenx at or before the Time of Closing will have been complied with or performed and a certificate of a senior officer of BioRegenx to this effect shall have been delivered to DocSun. | |
| (7) | There shall not have been after the date of this Agreement, any Material Adverse Effect with respect to BioRegenx. | |
| (8) | The Closing BioRegenx Common Shares will have been approved for issuance by the directors of BioRegenx, and upon issuance in accordance with the terms hereof, the Closing BioRegenx Common Shares will be issued as fully paid and non-assessable common shares in the capital of BioRegenx. | |
| (9) | There shall not be any inquiry or investigation (whether formal or informal) in relation to BioRegenx or its directors or officers commenced or threatened by any securities commission or regulatory body having jurisdiction, the outcome of which could, in the opinion of DocSun, acting reasonably and with the benefit of advice from independent legal counsel, reasonably be expected to have a Material Adverse Effect on BioRegenx. |
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| (10) | BioRegenx and DocSun shall have received resignations and releases in a form acceptable to DocSun and BioRegenx, each acting reasonably, in favour of BioRegenx, DocSun and such other Persons as may be specified by DocSun and BioRegenx, each acting reasonably, duly executed by each of the officers and directors of BioRegenx and of DocSun (other than as set forth in Clause (9) above). | |
| (11) | DocSun shall be satisfied with the pro forma post-Closing capitalization table of BioRegenx as set forth in BioRegenx Disclosure Letter. | |
| (12) | DocSun shall be satisfied with BioRegenx Disclosure Letter. |
The foregoing conditions precedent are for the benefit of DocSun and any one or more of such conditions may be waived by DocSun in whole or in part, without prejudice to DocSun’s right to rely on any other condition in favor of DocSun.
3.04 Conditions Subsequent to Closing
Subsequent to the Closing, the following conditions shall apply:
| (1) | The parties herein mutually commit to a collaborative approach, drawing upon their collective resources and expertise to secure requisite capital and strategic investments. This concerted effort aims to actualize their shared ambition of a successful listing on a premier stock exchange. To ensure that all pivotal stakeholders and entities are appropriately incentivized, the parties will engage collaboratively with the BioRegenx Compensation Committee and BioRegenx’ Securities Attorney. This collaboration will focus on devising a comprehensive compensation and bonus structure, which may encompass various incentive mechanisms. Potential incentives could include, but are not limited to, bonuses related to successful uplisting, performance-driven sales bonuses, consultancy remunerations, and other merit-based rewards. | |
| (2) | BioRegenx shall provide further capitalization of DocSun of up to Six Hundred Thousand Dollars ($600,000). This capitalization shall be deferred and disbursed following the successful S-1 filing and the subsequent listing of the amalgamated entities on a major stock exchange. |
3.05 Notice and Cure Provisions
Each party will give prompt notice to the other parties of the occurrence, or failure to occur, at any time from the date hereof until the Closing Date, of any event, change, or state of facts which occurrence or failure would or would be likely to:
| (1) | cause any of the representations or warranties of such party contained herein to be untrue or inaccurate on the date hereof or at the Closing Date; or | |
| (2) | result in the failure by such party to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by such party hereunder prior to the Closing Date. |
Subject to Article VII, no party may elect not to complete the Transaction as contemplated herein as a result of the non-fulfillment of the conditions precedent contained in Sections 3.01, 3.02 or 3.03, as applicable, unless the party intending to rely thereon has delivered a written notice to the other parties prior to the Time of Closing specifying, in reasonable detail, all breaches of representations and warranties or covenants or other matters which the party delivering such notice is asserting as the basis for the non-fulfillment of the applicable condition precedent.
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ARTICLE IV
CLOSING AND POST CLOSING ARRANGEMENTS
4.01 Time and Place of Closing
Closing of the Transaction shall take place remotely at the Time of Closing by exchange of counterpart and
electronic documentation and deliveries.
4.02 Closing Deliveries of BioRegenx
At the Time of Closing, BioRegenx will deliver or cause to be delivered to DocSun each of the following:
| (1) | Share certificates evidencing the Closing BioRegenx Common Shares. | |
| (2) | Board of Director’s Minutes appointing Gary Kiss as a director of BioRegenx. | |
| (3) | Board of Directors Minutes approving the terms of further capitalization of DocSun of up to Six Hundred Thousand Dollars ($600,000). This capitalization shall be deferred and disbursed following the successful S-1 filing and the subsequent listing of the amalgamated entities on a major stock exchange. | |
| (4) | A certificate of one of BioRegenx’s senior officers, dated as of the Closing Date, certifying: (i) that attached thereto are true and complete copies of the Constating Documents of BioRegenx (and all amendments thereto as in effect as on such date), (ii) all resolutions of the board of directors of BioRegenx approving the entering into of this Agreement and all ancillary agreements contemplated herein and the completion of the Transaction, including the issuance of the BioRegenx Common Shares, and (iii) as to the incumbency and genuineness of the signature of each officer of BioRegenx executing this Agreement or any of the other agreements or documents contemplated hereby. | |
| (5) | A certificate of status or good standing for BioRegenx, dated within two (2) days of the Closing Date. |
4.03 Closing Deliveries of DocSun
Except as set forth below, at the Time of Closing, DocSun will deliver or cause to be delivered to BioRegenx each of the following:
| (1) | Share certificates evidencing the DocSun Common Shares with all of the appropriate stock powers. | |
| (2) | A certificate of one of DocSun’s senior officers, dated as of the Closing Date, certifying: (i) that attached thereto are true and complete copies of the Constating Documents of DocSun (and all amendments thereto as in effect as on such date), (ii) all resolutions of the members of DocSun approving the entering into of this Agreement and the completion of the Transaction, and (iii) as to the incumbency and genuineness of the signature of DocSun executing this Agreement or any of the other agreements or documents contemplated hereby. | |
| (3) | Audited Financials from inception to September 30, 2023. | |
| (4) | A certificate of status or good standing for DocSun, dated within two (2) days of the Closing Date. |
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01 Representations and Warranties of BioRegenx
BioRegenx represents and warrants to and in favor of DocSun as follows, and acknowledges that such parties are relying upon such representations and warranties in connection with the transactions contemplated herein:
| (1) | Organization and Qualification. BioRegenx is a corporation validly existing under the laws of its jurisdiction of incorporation and is duly qualified, licensed or registered to carry on business and is in good standing in each jurisdiction in which the character of its assets and properties, owned, leased, licensed or otherwise held, or the nature of its activities makes such qualification necessary. BioRegenx has all Authorizations required to own, lease and operate its properties and to carry on its business as now conducted. | |
| (2) | Corporate Power and Authority. BioRegenx has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and each additional agreement or instrument to be delivered pursuant to this Agreement, and to own and lease its properties, and carry on its businesses as now being conducted. | |
| (3) | Execution and Binding Obligation. This Agreement has been, and each additional agreement or instrument to be delivered pursuant to this Agreement will be prior to the Time of Closing, duly authorized, executed, and delivered by BioRegenx, and each is, or will be at the Time of Closing, a legal, valid and binding agreement of BioRegenx enforceable against it in accordance with its terms, subject only to any limitation under bankruptcy, insolvency or other law affecting the enforcement of creditors’ rights generally and the discretion that a court may exercise in the granting of equitable remedies such as specific performance and injunction. | |
| (4) | Governmental Authorization. No Authorization of, or registration or declaration with, any applicable Governmental Authority with jurisdiction over BioRegenx is required to be obtained by BioRegenx in connection with the execution and delivery of this Agreement, except for those Authorizations which are contemplated by this Agreement or those Authorizations that, if not obtained, would not prevent or materially delay the consummation of the Transaction or otherwise prevent or materially delay BioRegenx from performing its obligations under this Agreement and could not reasonably be expected to have a Material Adverse Effect on BioRegenx. | |
| (5) | No Conflict or Contravention. The execution and delivery of this Agreement does not, and the consummation of the Transaction will not, (i) result in a breach or violation of the Constating Documents of BioRegenx or of any resolutions of the directors or shareholder of BioRegenx, (ii) conflict with, result in a breach of, constitute a default under, or accelerate the performance required by, or result in the suspension, cancellation, material alteration or creation of a Lien upon, any material Contract (including any BioRegenx Material Contracts), or license or permit to which BioRegenx is a party or by which BioRegenx is bound or to which any material assets or property of BioRegenx is subject, or (iii) violate any provision of any Applicable Law applicable to BioRegenx. | |
| (6) | Capitalization. |
| a) | The authorized capital of BioRegenx consists of Two Hundred Fifty Million (250,000,000) BioRegenx Common Shares, Thirty Eight Million, Eight Hundred Ninety Eight Thousand, Three Hundred Thirty One (38,898,331) common shares are issued and outstanding. In addition, as of the date of this Agreement, no BioRegenx Common Shares are issuable upon the exercise of incentive stock options of BioRegenx. | |
| b) | All outstanding BioRegenx Common Shares have been duly authorized and validly issued, are fully paid and non-assessable. |
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| c) | All securities of BioRegenx have been issued in compliance with all applicable Securities Laws. | |
| d) | BioRegenx Disclosure Letter sets for a true and accurate fully-diluted capitalization table of BioRegenx on a pre- and post-Closing Date basis, including without limitation all options, warrants, convertible and contingent issuance or purchase obligations with respect to equity securities of BioRegenx. |
| (7) | Closing BioRegenx Common Shares. The Closing BioRegenx Common Shares will, when issued in accordance with the terms hereof, be validly issued as fully paid and nonassessable BioRegenx Common Shares. | |
| (8) | Third Party Consents, Waivers, Approvals. There are no waivers, consents, notices or approvals required to be given to, or obtained from, any Person by BioRegenx under any Contract to which BioRegenx is a party in connection with (i) the execution, delivery and performance by BioRegenx of this Agreement, or (ii) the consummation of the Transaction and the other transactions contemplated by this Agreement. | |
| (9) | Financial Statements. |
| a) | The audited financial statements of BioRegenx for the years ended December 31, 2022 and 2021 and the nine months ended June 30, 2023 (collectively, the “BioRegenx Financial Statements”) are true and correct in all material respects, and present fairly and accurately the financial position of BioRegenx as at the respective dates thereof and the results of the operations of BioRegenx for the respective periods then ended. BioRegenx Financial Statements have been prepared in accordance with U.S. GAAP, applied on a consistent basis. |
| b) | No information has come to the attention of BioRegenx since the last date of the most recently issued BioRegenx Financial Statements that would, or would reasonably be expected to, require any restatement or revisions of any such BioRegenx Financial Statements. |
| c) | Except as disclosed in BioRegenx Financial Statements, (i) there are no related-party transactions or off-balance sheet structures or transactions with respect to BioRegenx, and (ii) BioRegenx is not a party to, or bound by, any agreement of guarantee, indemnification, assumption or endorsement or any like commitment of the obligations, liabilities (contingent or otherwise) or indebtedness of any other Person. |
| (10) | No Undisclosed Liabilities. There are no liabilities or obligations of BioRegenx of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, other than (i) liabilities or obligations disclosed in BioRegenx Financial Statements, (ii) liabilities or obligations incurred in the Ordinary Course since the date of BioRegenx Financial Statements, and (iii) reasonable accounting and legal fees of BioRegenx incurred in connection with the Transaction and/or incurred in connection with this Agreement. | |
| (11) | Non-Arms’ Length Transactions. Except as disclosed in BioRegenx Financial Statements, BioRegenx has not, in the last five (5) years, (i) made or agreed to make any payment or loan to, or borrowed any moneys from or is otherwise indebted to, any current or former officer, director, employee or shareholder of BioRegenx, or any affiliate of BioRegenx, or any other Person not dealing at arm’s length with BioRegenx, or any affiliate of any of the foregoing Persons (collectively referred to in this subsection as, the “BioRegenx Non-Arm’s Length Parties”), except for payment made in the Ordinary Course, and (ii) has not incurred, assumed or guaranteed any debt for borrowed money, or created or assumed any Lien or on behalf or for the benefit of, any BioRegenx Non-Arm’s Length Party. |
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| (12) | Conduct of Business. BioRegenx has conducted, and is conducting, its business in compliance in all material respects with all Applicable Laws of each jurisdiction in which its business is carried on. | |
| (13) | Authorizations. BioRegenx has all Authorizations of, and has made all filings, applications and registrations with, applicable Governmental Authorities that are required in order to permit it to carry on its business as presently conducted and own, operate or use the assets and property of BioRegenx, except for such Authorizations, the failure to have or make, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect on BioRegenx, and all such Authorizations are in good standing in all material respects. | |
| (14) | Insolvency, Bankruptcy, Etc. No bankruptcy, insolvency or receivership proceedings have been instituted by BioRegenx or, to the knowledge of BioRegenx, are pending or threatened against BioRegenx. | |
| (15) | Material Contracts. BioRegenx Material Contracts are each in full force and effect, unamended, and there exists no default, warranty claim or other obligation or liability or event, occurrence, condition or act (including the purchase and sale of the DocSun Common Shares hereunder and the other transactions contemplated hereunder, including, without limitation, the issuance of the BioRegenx Common Shares) which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a default, or give rise to a warranty claim or other obligation or liability thereunder. BioRegenx has not violated or breached, in any material respect, any of the terms or conditions of any BioRegenx Material Contract and all the covenants to be performed by any other party thereto have been fully and properly performed in all material respects. | |
| (16) | Investigations. BioRegenx has not been notified by any Governmental Authority of any investigation with respect to it that is pending or threatened, nor has any Governmental Authority notified BioRegenx of such Governmental Authority’s intention to commence or to conduct any investigation, that could be reasonably likely to have a Material Adverse Effect on BioRegenx. | |
| (17) | Litigation, Judgements, Etc. There is no claim, suit, action or proceeding in effect or ongoing or, to the knowledge of BioRegenx, pending or threatened, against or relating to BioRegenx that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect on BioRegenx, and there is no writ, judgment, decree, award, injunction, rule or order of any Governmental Authority outstanding against BioRegenx causing, or which could reasonably be expected to cause, a Material Adverse Effect on BioRegenx. | |
| (18) | BioRegenx Data Room Information. All BioRegenx Data Room Information is true and correct in all respects and does not contain any omissions as at its respective date as stated therein, or, if any BioRegenx Data Room Information is undated, as of the date of its delivery to BioRegenx Data Room for purposes of the transactions contemplated by this Agreement. None of BioRegenx Data Room Information has been amended except as disclosed to BioRegenx in BioRegenx Data Room. Additionally, all information disclosed or provided to DocSun in relation to DocSun’s due diligence requests, including information not disclosed or provided in BioRegenx Data Room, is true and correct in all respects and does not contain any omissions as at its respective date as stated therein, and has not been amended except as disclosed to DocSun. BioRegenx acknowledges that DocSun are relying on all information disclosed or provided to it by BioRegenx in entering into this Agreement, and to the extent that there has been a material change to any of BioRegenx Data Room Information or any other information disclosed or provided to DocSun since the date disclosed or provided to DocSun, such BioRegenx Data Room Information or other information, as applicable, is true and correct in all material respects or is no longer relevant or material to BioRegenx or additional information has been disclosed and provided in BioRegenx Data Room or disclosed to DocSun which supersedes or replaces such BioRegenx Data Room Information or other information, as applicable. |
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| (19) | Brokers and Finders. BioRegenx has not engaged or authorized any Person to act as broker or finder or in any other similar capacity in connection with the transactions contemplated by this Agreement that in any manner may or will impose liability on DocSun. | |
| (20) | Corporate Records. The Corporate Records of BioRegenx are complete and accurate in all material respects and all corporate proceedings and actions reflected therein have been conducted or taken in compliance with all Applicable Laws and with the Constating Documents of BioRegenx. The minute books of BioRegenx contain (i) complete and accurate minutes of all meetings of the directors (and any committee thereof) and the shareholders of BioRegenx, and (ii) all written resolutions passed by the directors (and any committee thereof) and the shareholders of BioRegenx. The share certificate books, if any, the register and register of transfers of BioRegenx are complete and accurate, and all transfers of common shares of BioRegenx reflected therein have been duly completed and approved. The registers of directors and officers are complete and accurate and all former and present directors and officers of BioRegenx were duly elected or appointed, as the case may be. | |
| (21) | Full Disclosure. To the knowledge of BioRegenx, no representation or warranty of BioRegenx contained in this Agreement or any document or certificate delivered pursuant to this Agreement contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein, as the case may be, not misleading. |
5.02 Representations and Warranties of DocSun
DocSun represents and warrants to BioRegenx as follows and acknowledges that BioRegenx is relying on such representations and warranties in connection with the transactions contemplated herein:
| (1) | Organization and Qualification. DocSun is a Florida corporation validly existing under the laws of its jurisdiction of organization and is duly qualified, licensed or registered to carry on business and is in good standing in each jurisdiction in which the character of its assets and properties, owned, leased, licensed or otherwise held, or the nature of its activities makes such qualification necessary. DocSun has all Authorizations required to own, lease and operate its properties and to carry on its business as now conducted. | |
| (2) | Corporate Power and Authority. DocSun has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and each additional agreement or instrument to be delivered pursuant to this Agreement, and to own and lease its properties, and carry on its businesses as now being conducted. | |
| (3) | Execution and Binding Obligation. This Agreement has been, and each additional agreement or instrument to be delivered pursuant to this Agreement will be prior to the Time of Closing, duly authorized, executed, and delivered by DocSun, and each is, or will be at the Time of Closing, a legal, valid and binding agreement of DocSun enforceable against it in accordance with its terms, subject only to any limitation under bankruptcy, insolvency or other law affecting the enforcement of creditors’ rights generally and the discretion that a court may exercise in the granting of equitable remedies such as specific performance and injunction. | |
| (4) | Governmental Authorization. No Authorization of, or registration or declaration with, any applicable Governmental Authority with jurisdiction over DocSun is required to be obtained by DocSun in connection with the execution and delivery of this Agreement, except for those Authorizations which are contemplated by this Agreement or those Authorizations that, if not obtained, would not prevent or materially delay the consummation of the Transaction or otherwise prevent or materially delay DocSun from performing its obligations under this Agreement and could not reasonably be expected to have a Material Adverse Effect on DocSun. |
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| (5) | No Conflict or Contravention. The execution and delivery of this Agreement does not, and the consummation of the Transaction will not, (i) result in a breach or violation of the Constating Documents of DocSun or of any resolutions of the directors or shareholder of DocSun, (ii) conflict with, result in a breach of, constitute a default under, or accelerate the performance required by, or result in the suspension, cancellation, material alteration or creation of a Lien upon, any material Contracts (including any DocSun Material Contracts), or license or permit to which DocSun is a party or by which DocSun is bound or to which any material assets or property of DocSun is subject, or (iii) violate any provision of any Applicable Law applicable to DocSun. | |
| (6) | Capitalization. |
| a) | The authorized capital of DocSun consists of One Hundred Twenty Million (120,000,000) common shares. As of the date of this Agreement, there are (i) Eleven Million Five Hundred Thousand common shares issued and outstanding. |
| b) | Except as disclosed above, there are not now, and at the Time of Closing there will not be, any options, warrants, conversion privileges or other rights, member rights plans, agreements, arrangements or commitments (pre-emptive, contingent or otherwise) of any character whatsoever, (i) requiring or which may require the issuance, sale or transfer by DocSun of any securities of DocSun (including any DocSun Common Shares, or any securities or obligations convertible into, or exchangeable or exercisable for, or otherwise evidencing a right or obligation to acquire, any securities of DocSun, including any DocSun Common Shares) (collectively referred to in this subsection as, the “Subject DocSun Securities”), or (ii) obliging DocSun to, directly or indirectly, issue or sell any Subject DocSun Securities, or give any Person a right to subscribe for or acquire from DocSun, any Subject DocSun Securities. |
| c) | All outstanding DocSun Common Shares have been duly authorized and validly issued, are fully paid and non-assessable. There are no outstanding contractual or other obligations of DocSun to repurchase, redeem or otherwise acquire any of its securities. There are no outstanding bonds, debentures or other evidences of indebtedness of DocSun having the right to vote with the sole shareholder on any matter. |
| d) | All securities of DocSun have been issued in compliance with all applicable Securities Laws. |
| (7) | Third Party Consents, Waivers, Approvals. There are no waivers, consents, notices or approvals required to be given to, or obtained from, any Person by DocSun under any Contract to which DocSun is a party (i) in connection with the execution, delivery and performance by DocSun of this Agreement, or the consummation of the Transaction and the other transactions contemplated by this Agreement, or (ii) in order to maintain the DocSun Material Contracts in full force and effect immediately upon the consummation of the Transaction. |
| (8) | Shareholder Agreements. DocSun is not a party to any pooling, voting, or other similar arrangement or agreement relating to the ownership or voting of any of the securities of DocSun or pursuant to which any Person may have any right or claim in connection with any existing or past equity interest in DocSun, and DocSun and has not adopted a shareholders’ rights plan or any other similar plan or agreement. |
| (9) | Subsidiaries. DocSun has no subsidiaries. |
| (10) | Reporting Issuer. DocSun is not a “reporting issuer” or equivalent in any jurisdiction nor are any securities of DocSun listed or quoted on any stock exchange or electronic quotation system. |
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| (11) | Financial Statements. The unaudited financial statements of DocSun since inception (the “DocSun Financial Statements”) are true and correct in all material respects, and present fairly and accurately the financial position of DocSun as at the date thereof and the results of the operations of DocSun for the period then ended. The DocSun Financial Statements have been prepared in accordance with U.S. GAAP, applied on a consistent basis. Since inception, there has been no material alteration in the manner of keeping the books, accounts or records of DocSun or in its accounting policies or practices. |
| a) | No information has come to the attention of DocSun since the date of the DocSun Financial Statements that would, or would reasonably be expected to, require any restatement or revisions of the DocSun Financial Statements. |
| b) | Except as disclosed in the DocSun Financial Statements, (i) there are no related-party transactions or off-balance sheet structures or transactions with respect to DocSun, and (ii) DocSun is not a party to, or bound by, any agreement of guarantee, indemnification, assumption or endorsement or any like commitment of the obligations, liabilities (contingent or otherwise) or indebtedness of any other Person. |
| (12) | No Undisclosed Liabilities. There are no liabilities or obligations of DocSun of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, other than (i) liabilities or obligations disclosed in the DocSun Financial Statements, (ii) liabilities or obligations incurred in the Ordinary Course since the date of the DocSun Financial Statements, and (iii) reasonable accounting and legal fees of DocSun incurred in connection with the Transaction and/or incurred in connection with this Agreement. |
| (13) | Non-Arms’ Length Transactions. Except as disclosed in the DocSun Financial Statements, DocSun has not, since incorporation, (i) made or agreed to make any payment or loan to, or borrowed any moneys from or is otherwise indebted to, any current or former officer, director, employee or shareholder of DocSun, or any affiliate of DocSun, or any other Person not dealing at arm’s length with DocSun, or any affiliate of any of the foregoing Persons (collectively referred to in this subsection as, the “DocSun Non-Arm’s Length Parties”), except for payment made in the Ordinary Course, and (ii) has not incurred, assumed or guaranteed any debt for borrowed money, or created or assumed any Lien or on behalf or for the benefit of, any DocSun Non-Arm’s Length Party. |
| (14) | Absence of Certain Changes of Events. Since inception, except as disclosed to BioRegenx: |
| a) | DocSun has conducted its business only in the Ordinary Course. |
| b) | DocSun has not (a) issued, sold, or agreed to issue, sell, pledge, hypothecate, lease, dispose of or encumber any DocSun Common Shares or other securities of DocSun or any right, option or warrant with respect thereto, or (b) split, combined or reclassified any of its securities, or declared or made any distribution in respect thereof. |
| c) | DocSun has not amended or proposed to amend its Constating Documents. |
| d) | DocSun has not incurred any liability or obligation of any nature (whether absolute, accrued, contingent or otherwise) which has had, or is reasonably likely to have, a Material Adverse Effect on DocSun. |
| e) | Except as disclosed in the DocSun Financial Statements, DocSun has neither approved nor entered into any agreement in respect of the purchase of any assets or properties or any interest therein, or the sale, transfer or other disposition of any portion of its assets or properties or any interest therein currently owned by DocSun and/or its affiliates, whether by asset sale, transfer of Common Shares or otherwise, or a change of control (by sale or transfer of Common Shares or sale of all or substantially all such property and assets). |
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| f) | DocSun has not incurred or suffered a Material Adverse Effect. |
| g) | DocSun has not redeemed, repurchased or otherwise acquired any securities of DocSun, or declared, set aside, or paid or made any dividend or other distribution (whether in cash or otherwise) with respect to any securities of DocSun. |
| h) | DocSun has not entered into, or amended, any DocSun Material Contract. |
| i) | DocSun has not, other than in the Ordinary Course, entered into any Contract under which it has outstanding indebtedness for borrowed money or for the deferred purchase price of property, or made any loan or advance to any Person. |
| j) | DocSun has not satisfied or settled any material claims or material liabilities that have not been reflected in the DocSun Financial Statements, other than the settlement of claims or liabilities incurred in the Ordinary Course. |
| k) | DocSun has not entered into any agreement or understanding to do any of the foregoing. |
| (15) | Compliance with Laws. DocSun is not in default under, or in violation of, and has not violated (and failed to cure such violation under) any Applicable Law, including, without limitation, Applicable Laws relating to the issuance or sale of securities, privacy and intellectual property, or any Authorizations, franchises, or concessions granted by, or any judgment, decree, writ, injunction or order of, any Governmental Authority, applicable to its business or any of its properties or assets, except where such default or violation would not have a Material Adverse Effect on DocSun. DocSun has not received any notice or other written communication alleging any material violations and/ or failure to comply with any Applicable Laws. |
| (16) | Authorizations. DocSun has all Authorizations of, and has made all filings, applications and registrations with, applicable Governmental Authorities that are required in order to permit it to carry on its business as presently conducted and own, operate or use the assets and property of DocSun, except for such Authorizations, the failure to have or make, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect on DocSun, and all such Authorizations are in good standing in all material respects. |
| (17) | Investigations. DocSun has not been notified by any Governmental Authority of any investigation with respect to it that is pending or threatened, nor has any Governmental Authority notified DocSun of such Governmental Authority’s intention to commence or to conduct any investigation, that could be reasonably likely to have a Material Adverse Effect on DocSun. |
| (18) | Insolvency, Bankruptcy, Etc. No bankruptcy, insolvency or receivership proceedings have been instituted by DocSun or, to the knowledge of DocSun, are pending or threatened against BioRegenx. |
| (19) | Material Contracts. The DocSun Material Contracts, together with this Agreement, and after the execution and delivery hereof, all ancillary agreements contemplated herein, constitute all the DocSun Material Contracts. True and complete copies of the DocSun Material Contracts have been disclosed in the DocSun Data Room. Each of the DocSun Material Contracts is in full force and effect, unamended, and there exists no default, warranty claim or other obligation or liability or event, occurrence, condition or act (including the purchase and sale of the DocSun Common Shares hereunder and the other transactions contemplated hereunder, including, without limitation, the issuance of the BioRegenx Common Shares) which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a default, or give rise to a warranty claim or other obligation or liability thereunder. DocSun has not violated or breached, in any material respect, any of the terms or conditions of any DocSun Material Contract and all the covenants to be performed by any other party thereto have been fully and properly performed. DocSun has not received any notice (whether written or oral), that any party to a DocSun Material Contract intends to cancel, terminate or otherwise modify or not renew its relationship with DocSun, and, to the knowledge of DocSun, no such action has been threatened. |
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| (20) | Intellectual Property. |
| a) | The DocSun Disclosure Letter sets out a true, correct and complete list, and, where appropriate, a description of (i) all of the registered and material registered and unregistered Intellectual Property owned or used by DocSun (collectively referred to in this subsection as, the “DocSun IP”) and (ii) all licenses or similar agreements or arrangements to which DocSun is a party, either as licensee or licensor, with respect to registered and material unregistered Intellectual Property necessary for the carrying on of the business of DocSun as presently conducted. |
| b) | DocSun is the exclusive owner of all right, title and interest in and to, or possesses the right to use the DocSun IP, free and clear of all Liens. Other than as disclosed in the DocSun Disclosure Letter, DocSun has not assigned, licensed or otherwise conveyed any of the DocSun IP other than in the Ordinary Course. |
| c) | DocSun has maintained or caused to be maintained the rights to any of the registered DocSun IP in full force and effect and, all registered DocSun IP is valid, subsisting, in full force and effect (except with respect to applications), and has not expired or been cancelled or abandoned. All necessary registration, maintenance and renewal fees in connection with the registered DocSun IP have been paid, and all necessary documents and certificates in connection with the registered DocSun IP have been filed with the relevant patent, copyright, trademark or other equivalent authorities in the applicable jurisdictions, as the case may be, for the purposes of perfecting, prosecuting and maintaining such DocSun IP. Without limiting the generality of the foregoing, DocSun has renewed or has made application for renewal of any registered DocSun IP (including applications therefor) subject to expiration on or prior to the date that is three (3) months following the Closing Date. |
| d) | The DocSun IP has not been used, not used, enforced or not enforced in a manner that would reasonably be expected to result in the abandonment, cancellation or unenforceability of any of the DocSun IP. DocSun has not received notice from any Person of any claim or any intention to commence any legal proceeding with respect to infringement, adverse ownership, invalidity, lack of distinctiveness, misappropriation or misuse regarding any of the DocSun IP or challenging any of the DocSun IP or the right of DocSun to use the DocSun IP. DocSun has not infringed and is not currently infringing on the Intellectual Property of any other Person in a manner that would reasonably be expected to result in a Material Adverse Effect on DocSun. |
| e) | DocSun has not commenced and does not intend to commence any claim or legal proceeding challenging the Intellectual Property rights of any other Person. |
| f) | DocSun has the full right and authority to use, and BioRegenx will be entitled to continue to use after the Closing Date, the DocSun IP in the manner presently conducted, and such use or continuing use does not to the knowledge of DocSun infringe upon or violate any rights of any other Person. The DocSun IP is sufficient to conduct the business of DocSun as presently conducted, subject to the fact that the business of DocSun includes the development of Intellectual Property not currently existing and that the current absence of such Intellectual Property and/or the failure to develop in future any such Intellectual Property will not constitute a breach or violation of this Agreement. All licenses to which DocSun is a party relating to DocSun IP are in good standing, binding and enforceable in accordance with their respective terms and no default exists on the part of DocSun thereunder. |
| g) | To the knowledge of DocSun, no Person is infringing, or is threatening to infringe, upon or otherwise violate any of the DocSun IP. |
| h) | To the knowledge of DocSun, subject to and in compliance with Applicable Laws, no current or former officer, employee or independent contractor of DocSun owns or has claimed an ownership interest in any of the DocSun IP, nor has any right to a royalty or other consideration as a result of its marketing, licensing or assignment. |
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| i) | DocSun has used commercially reasonably efforts (including measures to protect secrecy and confidentiality, where appropriate) to protect the DocSun IP and confidential information relating thereto. To the knowledge of DocSun, there has not been any material unauthorized disclosure of Intellectual Property such as to prevent DocSun, or following the Closing Date, BioRegenx, from obtaining or enforcing any right that it could otherwise have obtained or enforced with respect to such Intellectual Property. |
| j) | DocSun has not received notice that there are any Intellectual Property rights of any other Person that form part of the DocSun IP or that would constitute joint ownership by or with any other Person or that would constitute rights to market, distribute, license or convey the DocSun IP, and no funding or facilities of any Governmental Authority nor any personnel of any such Person in their capacity as personnel of such Person, were used, directly or indirectly, to develop or create, in whole or in part, any of the DocSun IP. |
| (22) | Litigation. There is no claim, action, inquiry, proceeding or investigation in effect or ongoing, pending or, to the knowledge of DocSun, threatened against or relating to DocSun, the business of DocSun, or affecting any of its properties or assets, and to the knowledge of DocSun, there is no event or circumstance which could reasonably be expected to give rise to any such claim, action, inquiry, proceeding or investigation. There is no judgment, writ, decree, injunction, rule, award or order of any Governmental Authority outstanding against DocSun in respect of its businesses, properties or assets. |
| (23) | Environmental Matters. |
| a) | DocSun is in compliance with all applicable Environmental Laws, and has not used, except in material compliance with all Environmental Laws, any property or facility which it owns or leases, or previously owned or leased, to conduct any environmental activity. |
| b) | Neither DocSun nor any of its predecessor companies, has received any notice of any material claim, judicial or administrative proceeding, order or direction, pending, instituted, threatened, concluded or issued against, DocSun or any of its properties, assets or operations relating to, or alleging any violation of, any Environmental Laws, and DocSun is not aware of any facts which would reasonably be expected to give rise to any such claim, judicial or administrative proceeding, order or direction, or any liabilities relating thereto (whether contingent or otherwise). |
| c) | Neither DocSun, nor any of its properties, assets or operations is the subject of any investigation, evaluation, audit or review by any Governmental Authority to determine whether any violation of any Environmental Laws has occurred or is occurring or whether any remedial action is needed in connection with a release of any contaminant into the environment. |
| d) | DocSun is not required to hold or obtain any Authorization under any Environmental Laws in connection with the operation of its business as currently conducted and the ownership and use of its assets, and DocSun has not received any notification that (i) any such Authorization under any Environmental Laws is required in connection with the operation of its business as currently conducted and the ownership and use of its assets, or (ii) any work, repairs, constructions or capital expenditures are required to be made by DocSun as a condition of continued compliance with any Environmental Laws. |
| (24) | Employment Matters. |
| a) | Other than as disclosed to BioRegenx, DocSun does not have any employees. DocSun is not a party to any employment, management or consulting agreement of any kind whatsoever, or any collective bargaining agreement, and further, has not entered into any written or oral agreement or understanding providing for bonuses, severance or termination payments to any director, officer or employee in connection with the termination of their position or their employment as a direct result of a change in control of DocSun (including as a result of the Transaction). |
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| b) | DocSun is in compliance with all material terms and conditions of employment and all Applicable Laws respecting employment, including, but not limited to, pay equity, wages, hours of work, overtime, occupational health and safety, workers compensation and human rights. DocSun is not subject to (i) any outstanding grievance, complaint, investigation, orders under Applicable Laws respecting employment, or (ii) any proceeding, claim, or litigation relating to wrongful dismissal, constructive dismissal, unfair labour practice, or tort, in each case relating to employment, or any termination of the employment of employees or the termination of the engagement of independent contractors, and to the knowledge of DocSun, no such proceeding, claim, or litigation is threatened, and there is no basis for any such proceeding, claim, or litigation. |
| c) | DocSun has not implemented, and is not a party to, any employee or benefit plans (including, without limitation, any plans or agreements providing for benefits to employees (such as, dental or medical plans, or plans providing for retention bonuses, severance, or termination payments). Without limiting the generality of the foregoing, DocSun does not currently sponsor, maintain, contribute to or has any liability under, nor has ever sponsored, maintained, contributed to or incurred any liability under a “registered pension plan” or a “retirement compensation arrangement”, each as defined under the Tax Act, a “pension plan” as defined under applicable pension benefits standards legislation, or any other plan organized and administered to provide pensions for employees or former employees of any member of DocSun. |
| d) | DocSun has operated in all material respects in accordance with all Applicable Laws with respect to employment and labour, including employment and labour standards, occupational health and safety, employment equity, pay equity, workers’ compensation, human rights, labour relations and privacy, and there are no current, pending, or, to the knowledge of DocSun, threatened actions or proceedings before any Governmental Authority with respect to any such matters. |
| e) | Neither the execution of this Agreement nor the consummation of the Transaction and the other transactions contemplated in this Agreement will (i) result in any payment (including severance, unemployment compensation, “golden parachute”, bonus or otherwise) becoming due to any Person or other entity including, but not limited to, any director, officer, employee or consultant of DocSun, or (ii) increase the rate of wages, salaries, commissions, bonuses, incentive compensation or other remuneration, severance entitlements, or benefits otherwise payable to any current or former employee of DocSun. |
| (25) | No Limitations or Restrictions. |
| a) | DocSun is neither a party to nor is otherwise bound by, and there is not in place, any noncompetition, exclusivity or other similar agreement, commitment or understanding, whether written or oral, that would now or hereafter, in any material respect, restrict or limit the business and operations of DocSun or the use of the properties and assets of DocSun, as now conducted or presently proposed to be conducted by BioRegenx following the consummation of the Transaction. |
| b) | There is no judgement, injunction, order or decree binding upon DocSun that has or could reasonably be expected to have the effect of prohibiting, restricting or materially impairing any business practice of DocSun, any acquisition of property by DocSun, or the conduct of business by DocSun as now conducted or or presently proposed to be conducted by BioRegenx following the consummation of the Transaction. |
| (26) | Assets, Properties and Title. |
| a) | DocSun does not own any real or immovable property. |
| b) | DocSun has valid, good, and marketable title to, and legal and beneficial ownership of, all its properties and assets free and clear of all Liens (other than any property or an asset as to which DocSun is a lessee, in which case it has a valid leasehold interest therein), except for such defects in title that individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect on DocSun. |
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| c) | The DocSun Data Room contains complete and accurate copies of all leases and subleases for real and immovable property leased or subleased by DocSun (the “Leased Properties”). Each lease or sublease in respect of the Leased Properties is in good standing, legal, valid, binding and in full force and effect and is a legal, valid, binding obligation of, and is enforceable against, each other party thereto in accordance with its terms, subject only to any limitation under bankruptcy, insolvency or other law affecting the enforcement of creditors’ rights generally and the discretion that a court may exercise in the granting of equitable remedies such as specific performance and injunction. There is no event of breach or default, or any event which, with the giving of notice, the lapse of time or both, would become an event of default, under any lease or sublease in respect of the Leased Properties and, DocSun has not received or delivered any notice of any material breach of, or default under, any such lease or sublease. |
| d) | Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on DocSun, the properties and assets of DocSun (including the Leased Properties) are structurally sound, in good operating condition and repair having regard to their use and age and are adequate and suitable for the uses to which they are being put, and none of the said properties and assets are in need of maintenance or repairs except for ordinary routine maintenance and repairs that are not material in nature or cost. |
| (27) | Insurance. DocSun maintains such policies of insurance as are appropriate to the business of DocSun and the assets and properties of DocSun, in such amounts and against such risks as are customarily carried and insured against by owners of comparable businesses, properties and assets. The DocSun Disclosure Letter sets forth a complete list of the insurance policies which are maintained by or on behalf of DocSun, and sets out, in respect of each policy, a description of the type of policy, the name of insurer, the coverage, the expiration date, the annual premium and any pending or threatened claims in connection with such policy. To the knowledge of DocSun, DocSun is not in default in any material respect with respect to any of the provisions contained in such insurance policies. True, correct and complete copies of all insurance policies held by or on behalf of DocSun and the most recent inspection reports received from insurance underwriters have been delivered to BioRegenx or included in the DocSun Data Room Information. |
| (28) | Taxes. |
| a) | DocSun has duly and in a timely manner made or prepared all Tax Returns required to be made or prepared by it and has duly and in a timely manner filed (within the prescribed times) all Tax Returns required to be filed by it with the appropriate Governmental Authority. All such Tax Returns were complete and correct in all material respects. |
| b) | DocSun has (i) duly and in a timely manner paid all Taxes, including installments on account of Taxes for the current year required by Applicable Laws, which are due and payable by it whether or not assessed by the appropriate Governmental Authority, (ii) duly and timely withheld all Taxes and other amounts required by Applicable Laws to be withheld by it (including Taxes and other amounts required to be withheld by it in respect of any amount paid or credited or deemed to be paid or credited by it to or for the benefit of any Person) and has duly and timely remitted to the appropriate Governmental Authority such Taxes or other amounts required by Law to be remitted by it, and (iii) duly and timely collected all amounts on account of any sales, use or transfer Taxes, including goods and services, harmonized sales, provincial and territorial taxes and state and local taxes, required by Applicable Laws to be collected by it and has duly and timely remitted to the appropriate Governmental Authority such amounts required by Law to be remitted by it. |
| c) | Since the date of the DocSun Financial Statements, no material liability in respect of Taxes not reflected in the DocSun Financial Statements has been assessed, proposed to be assessed, incurred or accrued, other than in the Ordinary Course. |
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| d) | Except as disclosed to BioRegenx, DocSun has not made, prepared and/or filed any elections, designations or similar filings relating to Taxes or entered into any agreement or other arrangement in respect of Taxes or Tax Returns in respect of any period. DocSun is not a party to any agreement, waiver or arrangement with any Governmental Authority which relates to any extension of time with respect to the filing of any Tax Return, any payment of Taxes or any action or assessment relating to Taxes. |
| e) | There are no proceedings, investigations, audits, assessments, reassessments, or claims now pending or threatened against DocSun in respect of any Taxes and there are no matters under discussion, audit or appeal with any Governmental Authority relating to Taxes. |
| f) | There are no Liens for Taxes upon any properties or assets of DocSun, other than Liens relating to Taxes not yet due and payable and for which adequate reserves have been recorded on the most recent balance sheet included in the DocSun Financial Statements. |
| g) | DocSun has made available to BioRegenx true and complete copies of all Tax Returns, examination reports and statements of deficiencies for taxable periods, or transactions consummated, for which the applicable statutory periods of limitations have not expired. |
| (29) | DocSun Data Room Information. All DocSun Data Room Information is true and correct in all respects and does not contain any omissions as at its respective date as stated therein, or, if any DocSun Data Room Information is undated, as of the date of its delivery to the DocSun Data Room for purposes of the transactions contemplated by this Agreement. None of the DocSun Data Room Information has been amended except as disclosed to BioRegenx in the DocSun Data Room. Additionally, all information disclosed or provided to BioRegenx in relation to BioRegenx’s due diligence requests, including information not disclosed or provided in the DocSun Data Room, is true and correct in all respects and does not contain any omissions as at its respective date as stated therein, and has not been amended except as disclosed to BioRegenx. DocSun acknowledges that BioRegenx is relying on all information disclosed or provided to it by DocSun in entering into this Agreement, and to the extent that there has been a material change to any of the DocSun Data Room Information or any other information disclosed or provided to BioRegenx since the date disclosed or provided to BioRegenx, such DocSun Data Room Information or other information, as applicable, is true and correct in all material respects or is no longer relevant or material to DocSun or additional information has been disclosed and provided in the DocSun Data Room or disclosed to BioRegenx which supersedes or replaces such DocSun Data Room Information or other information, as applicable. |
| (30) | Brokers and Finders. DocSun has not engaged or authorized any Person to act as broker or finder or in any other similar capacity in connection with the transactions contemplated by this Agreement, and no Person is, or will be entitled to, any brokerage or finder’s fee in connection with the transactions contemplated by this Agreement. |
| (31) | Corporate Records. The Corporate Records of DocSun are complete and accurate in all material respects and all corporate proceedings and actions reflected therein have been conducted or taken in compliance with all Applicable Laws and with the Constating Documents of DocSun. The minute books of DocSun contain (i) complete and accurate minutes of all meetings of the members (and any committee thereof) and the members of DocSun, and (ii) all written resolutions passed by the members (and any committee thereof) and the members of DocSun. The membership interest certificate books, if any, the register and register of transfers, are complete and accurate, and all transfers of Common Shares of DocSun reflected therein have been duly completed and approved. The registers of members, officers and directors are complete and accurate and all former and present members, officers and directors of DocSun were duly elected or appointed, as the case may be. |
| (32) | Books and Records. All Books and Records of DocSun have been fully, properly and accurately kept and, where required, completed in accordance with generally accepted accounting principles, and there are no material inaccuracies or discrepancies of any kind contained or reflected therein. The financial books and records and accounts of DocSun (i) have been maintained in accordance with good business practices and in accordance with U.S. GAAP, on a basis consistent with prior years except as noted in the DocSun Financial Statements, (ii) are stated in reasonable detail and accurately and fairly reflect the transactions and dispositions of assets of DocSun, and (ii) accurately and fairly reflect the basis for DocSun’s financial statements. |
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| (33) | Full Disclosure. To the knowledge of DocSun, no representation or warranty of DocSun contained in this Agreement or any document or certificate delivered pursuant to this Agreement contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein, as the case may be, not misleading. |
5.04 Survival of Representations and Warranties
The representations and warranties made by the parties and contained in this Agreement or any document or certificate given pursuant hereto shall survive the Closing of the Transaction until the date that is 24 months from the date of Closing. No claim for breach of any representation, warranty or covenant shall be valid unless that party against whom such claim is made has been given notice thereof before the expiry of such 24-month period.
ARTICLE VI
6.01 Mutual Covenants
Each of the parties hereby covenants and agrees with each of the other parties as follows:
| (1) | It will use commercially reasonable efforts to satisfy (or cause the satisfaction of) the conditions precedent to its obligations hereunder which are reasonably under its control and to take, or cause to be taken, all other actions and to do, or cause to be done, all other things necessary, proper or advisable under Applicable Laws to complete the Transaction in accordance with the terms of this Agreement. Without limiting the generality of the foregoing, in the event that any Person, including without limitation, any securities regulatory authority, seeks to prevent, delay or hinder implementation of all or any portion of the Transaction or seeks to invalidate all or any portion of this Agreement, BioRegenx and DocSun shall use commercially reasonable efforts to resist such proceedings and to lift or rescind any injunction or restraining order or other order or action seeking to stop or otherwise adversely affecting the ability of the parties to complete the Transaction. |
| (2) | It will use commercially reasonable efforts to obtain, before the Time of Closing, all Authorizations, and all authorizations, waivers, exemptions, consents, orders and other approvals from shareholders and third parties, as are necessary, for the consummation of the transactions contemplated herein. |
| (3) | It will use commercially reasonable efforts to defend, or cause to be defended, any lawsuits or other legal proceedings brought against it challenging this Agreement or the completion of the Transaction. It will not settle or compromise any claim brought against it in connection with the transactions contemplated by this Agreement prior to the Closing Date without the prior written consent of each of the other parties, such consent not to be unreasonably withheld, delayed, or conditioned. |
| (4) | It will promptly notify each of the other parties if any representation or warranty made by it in this Agreement ceases to be true and correct in all respects (in the case of any representation or warranty containing any materiality or Material Adverse Effect qualifier) or in all material respects (in the case of any representation or warranty without any materiality or Material Adverse Effect qualifier) and of any failure to comply in any material respect with any of its obligations under this Agreement. |
| (5) | It will co-operate with each of the other parties in good faith in order to ensure the timely completion of the Transaction. |
| (6) | It will use commercially reasonable efforts to co-operate with each of the other parties in connection with the performance by each of the other parties of its obligations under this Agreement. |
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6.02 Covenants of BioRegenx
Subject to Section 7.02, BioRegenx covenants and agrees with DocSun as follows, until the earlier of the Closing Date and the date upon which this Agreement is terminated in accordance with Article VII:
| (1) | It will, in a timely and expeditious manner file and/or deliver any document or documents as may be required in order for the Transaction as contemplated herein to be effective. |
| (2) | It will not solicit, initiate, knowingly encourage, cooperate with or facilitate (including by way of furnishing any non-public information or entering into any form of agreement, arrangement or understanding) the submission, initiation or continuation of any oral or written inquiries or proposals or expressions of interest regarding, constituting or that may reasonably be expected to lead to any activity, arrangement or transaction or propose any activities or solicitations in opposition to or in competition with the Transaction. Without limiting the generality of the foregoing, it will neither (i) induce or attempt to induce any other Person to initiate any shareholder proposal or “takeover bid,” exempt or otherwise, within the meaning of the Securities Act, for securities or assets of BioRegenx, (ii) undertake any transaction or negotiate any transaction which would be, or potentially could be, in conflict with the Transaction, including, without limitation, allowing access to any third party to conduct due diligence, nor (iii) permit any of its officers or directors to authorize such access, except as required by statutory obligations. In the event BioRegenx, including any of its officers or directors, receives any form of offer or inquiry, BioRegenx shall forthwith (in any event within one (1) Business Day following receipt) notify DocSun of such offer or inquiry and provide DocSun with such details as it may request. |
| (3) | It will make available and afford DocSun and its authorized representatives and, if requested by DocSun, provide a copy of all title documents, contracts, financial statements, minute books, share certificate books, if any, share registers, plans, reports, licenses, orders, permits, books of account, accounting records, constating documents and all other documents, information and data relating to BioRegenx. BioRegenx will afford DocSun and its authorized representatives every reasonable opportunity to have free and unrestricted access to BioRegenx’s property, assets, undertaking, records and documents. At the request of DocSun, BioRegenx will execute or cause to be executed such consents, authorizations and directions as may be necessary to permit any inspection of BioRegenx’s business and any of its property or to enable DocSun or its authorized representatives to obtain full access to all files and records relating to any of the assets of BioRegenx maintained by Governmental Authorities. The obligations in this Section 6.02 are subject to any access or disclosure contemplated herein not being otherwise prohibited by reason of a confidentiality obligation owed to a third party for which a waiver cannot be obtained, provided that in such circumstance BioRegenx will be required to disclose that information has been withheld on this basis. The exercise of any rights of inspection by or on behalf of DocSun under this Section 6.02 will not mitigate or otherwise affect the representations and warranties of BioRegenx hereunder. |
| (4) | Except for non-substantive communications, and provided that such disclosure is not otherwise prohibited by reason of a confidentiality obligation owed to a third party for which a waiver cannot be obtained (provided that in such circumstance BioRegenx will be required to disclose that information has been withheld on this basis), it will furnish promptly to DocSun (on behalf of itself and its shareholders) a copy of each notice, report, schedule or other document or communication delivered, filed or received by BioRegenx in connection with or related to the Transaction, any filings under Applicable Laws and any dealings with any Governmental Authority in connection with or in any way affecting the Transaction as contemplated herein. |
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| (5) | It will use commercially reasonable efforts to satisfy (or cause the satisfaction of) the conditions precedent to its obligations set forth in this Agreement to the extent the same are within its control and to take, or cause to be taken, all other actions and to do, or cause to be done, all other things necessary, proper or advisable under all Applicable Laws to complete the Transaction as contemplated herein, including using commercially reasonable efforts to: |
| a) | obtain all necessary waivers, consents and approvals required to be obtained by it from other parties to loan agreements, leases, licenses, agreements and other Contracts, as applicable; |
| b) | effect all necessary registrations and filings and submissions of information requested by any Governmental Authority required to be effected by it in connection with the Transaction and participate and appear in any proceedings of either BioRegenx or DocSun before any Governmental Authority to the extent permitted by such authorities; and |
| c) | fulfill all conditions and satisfy all provisions of this Agreement and the Transaction. |
| (6) | Subject to Applicable Laws or as authorized by this Agreement, it will not take any action, refrain from taking any action, or permit any action to be taken or not taken, inconsistent with this Agreement or which would reasonably be expected to significantly impede the consummation of the Transaction. |
| (7) | It will conduct and operate its business and affairs only in the Ordinary Course and use commercially reasonable efforts to preserve its business organization, goodwill and material business relationships with other Persons. |
| (8) | Except as may be necessary or desirable in order to effect the Transaction as contemplated hereunder, it will not alter or amend its Constating Documents as the same exist at the date of this Agreement. |
| (9) | It will not merge into or with, or amalgamate or consolidate with, or enter into any other corporate reorganization or arrangement with, or transfer its undertaking or assets as an entirety or substantially as an entirety to, any other Person or perform any act which would render inaccurate in any material way any of its representations and warranties set forth herein as if such representations and warranties were made at a date subsequent to such act and all references to the date of this Agreement were deemed to be such later date, except as contemplated in this Agreement. Without limiting the generality of the foregoing, it will not: |
| a) | make any distribution by way of dividend, distribution of property or assets, return of capital or otherwise to or for the benefit of its shareholders; |
| b) | increase or decrease its paid-up capital or purchase or redeem any Common Shares except upon the exercise of share purchase warrants or options or conversion of convertible securities of BioRegenx outstanding as of the date hereof; or |
| c) | issue or enter into any commitment to issue any of its Common Shares or securities convertible into, or rights, warrants or options to acquire, any such Common Shares, except upon the exercise of share purchase warrants or options or conversion of convertible securities of BioRegenx outstanding as of the date hereof. |
| (10) | It will take all necessary corporate action and proceedings to approve and authorize the issuance of the BioRegenx Common Shares to DocSun Shareholders in accordance with the terms of this Agreement. |
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| (11) | It will prepare and file with all applicable securities commissions such notifications and fees necessary to permit, or that are required in connection with, the issuance of the BioRegenx Common Shares to DocSun on a basis exempt from the prospectus requirements of the applicable Securities Laws. |
| (12) | It will not authorize, sell or issue, or negotiate or enter into an agreement to sell or issue, any debt, equity or other securities of BioRegenx (including those that are convertible or exchangeable into securities of BioRegenx), other than as contemplated under this Agreement or pursuant to the exercise or conversion of share purchase warrants, options or convertible securities of BioRegenx outstanding as of the date hereof. |
| (13) | It will include a pro forma post-Closing capitalization table in BioRegenx Disclosure Letter and will use commercially reasonable efforts to provide DocSun with all documentation relevant to the rights, preference and privileges of all authorized equity securities of BioRegenx. |
6.03 Covenants of DocSun
Subject to Section 7.02, DocSun covenants and agrees with BioRegenx as follows, until the earlier of the Closing Date and the date upon which this Agreement is terminated in accordance with Article VII:
| (1) | It will, in a timely and expeditious manner file and/or deliver any document or documents as may be required in order for the Transaction as contemplated herein to be effective. |
| (2) | It will not solicit, initiate, knowingly encourage, cooperate with or facilitate (including by way of furnishing any non-public information or entering into any form of agreement, arrangement or understanding) the submission, initiation or continuation of any oral or written inquiries or proposals or expressions of interest regarding, constituting or that may reasonably be expected to lead to any activity, arrangement or transaction or propose any activities or solicitations in opposition to or in competition with the Transaction. Without limiting the generality of the foregoing, it will neither (i) induce or attempt to induce any other Person to initiate any shareholder proposal or “takeover bid,” exempt or otherwise, within the meaning of the Securities Act, for securities or assets of DocSun, (ii) undertake any transaction or negotiate any transaction which would be, or potentially could be, in conflict with the Transaction, including, without limitation, allowing access to any third party to conduct due diligence, nor (iii) permit any of its officers or directors to authorize such access, except as required by statutory obligations. In the event DocSun, including any of its officers or directors, receives any form of offer or inquiry, DocSun shall forthwith (in any event within one (1) Business Day following receipt) notify BioRegenx of such offer or inquiry and provide BioRegenx with such details as it may request. |
| (3) | It will make available and afford BioRegenx and its authorized representatives and, if requested by BioRegenx, provide a copy of all title documents, contracts, financial statements, minute books, share certificate books, if any, share registers, plans, reports, licences, orders, permits, books of account, accounting records, constating documents and all other documents, information and data relating to DocSun. DocSun will afford BioRegenx and its authorized representatives every reasonable opportunity to have free and unrestricted access to DocSun’s property, assets, undertaking, records and documents. At the request of BioRegenx, DocSun will execute or cause to be executed such consents, authorizations and directions as may be necessary to permit any inspection of DocSun’s business and any of its property or to enable BioRegenx or its authorized representatives to obtain full access to all files and records relating to any of the assets of DocSun maintained by Governmental Authorities. The obligations in this Section 6.03 are subject to any access or disclosure contemplated herein not being otherwise prohibited by reason of a confidentiality obligation owed to a third party for which a waiver cannot be obtained, provided that in such circumstance DocSun will be required to disclose that information has been withheld on this basis. The exercise of any rights of inspection by or on behalf of BioRegenx under this Section 6.03 will not mitigate or otherwise affect the representations and warranties of DocSun hereunder. |
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| (4) | Except for non-substantive communications, and provided that such disclosure is not otherwise prohibited by reason of a confidentiality obligation owed to a third party for which a waiver cannot be obtained (provided that in such circumstance DocSun will be required to disclose that information has been withheld on this basis), it will furnish promptly to BioRegenx (on behalf of itself and its shareholders) a copy of each notice, report, schedule or other document or communication delivered, filed or received by DocSun in connection with or related to the Transaction, any filings under Applicable Laws and any dealings with any Governmental Authority in connection with or in any way affecting the Transaction as contemplated herein. |
| (5) | It will use commercially reasonable efforts to satisfy (or cause the satisfaction of) the conditions precedent to its obligations set forth in this Agreement to the extent the same are within its control and to take, or cause to be taken, all other actions and to do, or cause to be done, all other things necessary, proper or advisable under all Applicable Laws to complete the Transaction as contemplated herein, including using commercially reasonable efforts to: |
| a) | obtain all necessary waivers, consents and approvals required to be obtained by it from other parties to loan agreements, leases, licenses, agreements and other Contracts, as applicable; |
| b) | effect all necessary registrations and filings and submissions of information requested by any Governmental Authority required to be effected by it in connection with the Transaction and participate and appear in any proceedings of either DocSun or BioRegenx before any Governmental Authority to the extent permitted by such authorities; and |
| c) | fulfill all conditions and satisfy all provisions of this Agreement and the Transaction. |
| (6) | Subject to Applicable Laws or as authorized by this Agreement, it will not take any action, refrain from taking any action, or permit any action to be taken or not taken, inconsistent with this Agreement or which would reasonably be expected to significantly impede the consummation of the Transaction. |
| (7) | It will conduct and operate its business and affairs only in the Ordinary Course and use commercially reasonable efforts to preserve its business organization, goodwill and material business relationships with other Persons. For greater certainty, it will not enter into any material transaction out of the Ordinary Course without the prior consent of BioRegenx, and DocSun will keep BioRegenx fully informed as to the material decisions or actions required or required to be made with respect to the operation of its business, provided that such disclosure is not otherwise prohibited by reason of a confidentiality obligation owed to a third party for which a waiver could not be obtained. |
| (8) | Except as may be necessary or desirable in order to effect the Transaction as contemplated hereunder, it will not alter or amend its Constating Documents as the same exist at the date of this Agreement. |
| (9) | It will not merge into or with, or amalgamate or consolidate with, or enter into any other corporate reorganization or arrangement with, or transfer its undertaking or assets as an entirety or substantially as an entirety to, any other Person or perform any act which would render inaccurate in any material way any of its representations and warranties set forth herein as if such representations and warranties were made at a date subsequent to such act and all references to the date of this Agreement were deemed to be such later date, except as contemplated in this Agreement. Without limiting the generality of the foregoing, it will not: |
| a) | make any distribution by way of dividend, distribution of property or assets, return of capital or otherwise to or for the benefit of its shareholders; |
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| b) | increase or decrease its paid-up capital or purchase or redeem any Common Shares except upon the exercise of share purchase warrants or options or conversion of convertible securities of DocSun outstanding (and disclosed to BioRegenx) as of the date hereof; or |
| c) | issue or enter into any commitment to issue any of its Common Shares or securities convertible into, or rights, warrants or options to acquire, any such Common Shares, except upon the exercise of share purchase warrants or options or conversion of convertible securities of DocSun outstanding (and disclosed to BioRegenx) as of the date hereof. |
| (10) | It will take all necessary corporate action and proceedings to approve and authorize the valid and effective transfer of the DocSun Common Shares to BioRegenx. |
| (11) | It will not authorize, sell or issue, or negotiate or enter into an agreement to sell or issue, any debt, equity or other securities of DocSun (including those that are convertible or exchangeable into securities of DocSun), other than as contemplated under this Agreement or pursuant to the exercise or conversion of share purchase warrants, options or convertible securities of DocSun outstanding (and disclosed to BioRegenx) as of the date hereof. |
ARTICLE VII
| TERMINATION |
7.01 Termination
This Agreement may be terminated in writing at any time prior to the Closing:
| (1) | by mutual written consent of BioRegenx and DocSun; |
| (2) | by either DocSun or BioRegenx if the Closing shall not have been consummated on or prior to the Termination Date, without liability to the terminating party on account of such termination; provided that the right to terminate this Agreement pursuant to this Section 7.01 shall not be available to a party whose breach or violation of any representation, warranty, covenant, obligation or agreement under this Agreement has been the cause of or has resulted in the failure of the Closing to occur on or before such date; |
| (3) | by BioRegenx, if there has been a material breach by DocSun of any representation, warranty, covenant or agreement set forth in this Agreement or any of the documents contemplated hereby which breach would result in the failure to satisfy one or more of the conditions set forth in Sections 3.01 or 3.02 which DocSun fails to cure within ten (10) Business Days after written notice thereof is given by BioRegenx; |
| (4) | by DocSun, if there has been a material breach by BioRegenx of any representation, warranty, covenant or agreement set forth in this Agreement or any of the documents contemplated hereby which breach would result in the failure to satisfy one or more of the conditions set forth in Sections 3.01 or 3.02 which BioRegenx fails to cure within Ten (10) Business Days after written notice thereof is given by DocSun; |
| (5) | by BioRegenx or DocSun, if the other party completes an Alternative Transaction or enters into a definitive and binding agreement to effect an Alternative Transaction; and |
| (6) | by any party, if any permanent injunction or other order of a court or other competent authority preventing the Closing shall have become final and non-appealable, provided however, that no party shall be entitled to terminate this Agreement if such party’s material breach of this Agreement or any of the documents contemplated hereby has resulted in such permanent injunction or order. |
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7.02 Effect of Termination
Upon termination of this Agreement in accordance with the terms hereof, the parties shall have no further obligations under this Agreement, other than the obligations contained in Sections 10.02 and 10.07.
ARTICLE VIII
| INDEMNIFICATION |
8.01 Indemnification by BioRegenx
Subject to Section 5.04, BioRegenx shall indemnify and hold DocSun harmless for and from (i) any loss, damages or deficiencies suffered by DocSun as a result of any breach of representation, warranty or covenant on the part of BioRegenx contained in this Agreement or in any certificate or document delivered pursuant to or contemplated by this Agreement, and (ii) all claims, demands, costs and expenses, including reasonable legal fees, in respect of the foregoing.
8.02 Indemnification by DocSun
Subject to Section 5.04, (i) DocSun shall indemnify and save BioRegenx harmless for and from any loss, damages or deficiencies suffered by BioRegenx as a result of any breach of representation, warranty or covenant on the part of DocSun contained in this Agreement or in any certificate or document delivered pursuant to or contemplated by this Agreement, and for and from all claims, demands, costs and expenses, including reasonable legal fees, in respect of the foregoing; and (ii) DocSun shall indemnify and save BioRegenx harmless for and from any and all claims, demands, actions, applications, suits, causes of action, charges, indictments, prosecutions, other similar processes for or relating to Taxes arising in or in respect of any period ending on, before or including the Closing Date, including any Taxes relating to any period prior to the Closing Date for which a reassessment is issued by a Governmental Authority after the Closing Date.
8.03 Notice of Claim
A party entitled to and seeking indemnification pursuant to the terms of this Agreement (such party, the “Indemnified Party”) shall promptly give written notice to the party or parties, as applicable, responsible for indemnifying the Indemnified Party (each such party or parties, as applicable, the “Indemnifying Party”) of any claim for indemnification pursuant to Sections 8.01 and 8.02 (a “Claim”, which term shall include more than one Claim). Such notice shall specify whether the Claim arises as a result of a claim by a Person against the Indemnified Party (a “Third Party Claim”) or whether the Claim does not so arise (a “Direct Claim”), and shall also specify with reasonable particularity (to the extent that the information is available) (i) the factual basis for the Claim, and (ii) the amount of the Claim, or, if any amount is not then determinable, an approximate and reasonable estimate of the likely amount of the Claim.
8.04 Procedure for Indemnification
| (1) | Direct Claims. With respect to Direct Claims, following receipt of notice from the Indemnified Party of a Claim, the Indemnifying Party shall have 30 days to make such investigation of the Claim as the Indemnifying Party considers necessary or desirable, acting reasonably. For the purpose of such investigation, the Indemnified Party shall make available to the Indemnifying Party the information relied upon by the Indemnified Party to substantiate the Claim. If the Indemnified Party and the Indemnifying Party agree at or prior to the expiration of such 30 day period (or any mutually agreed upon extension thereof) to the validity and amount of such Claim, the Indemnifying Party shall immediately pay to the Indemnified Party the full agreed upon amount of the Claim. |
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| (2) | Third Party Claims. With respect to any Third Party Claim, the Indemnifying Party shall have the right, at its own expense, to participate in or assume control of the negotiation, settlement or defense of such Third Party Claim and, in such event, the Indemnifying Party shall reimburse the Indemnified Party for all the Indemnified Party’s commercially reasonable out-of-pocket expenses incurred as a result of such participation or assumption. If the Indemnifying Party elects to assume such control, the Indemnified Party shall cooperate with the Indemnifying Party, shall have the right to participate in the negotiation, settlement or defense of such Third Party Claim at its own expense and shall have the right to disagree on reasonable grounds with the selection and retention of counsel, in which case counsel satisfactory to the Indemnifying Party and the Indemnified Party shall be retained by the Indemnifying Party. If the Indemnifying Party, having elected to assume such control, thereafter fails to defend any such Third Party Claim within a reasonable time, the Indemnified Party shall be entitled to assume such control and the Indemnifying Party shall be bound by the results obtained by the Indemnified Party with respect to such Third Party Claim. |
8.05 General Indemnification Rules
The obligations of the Indemnifying Party to indemnify the Indemnified Party in respect of Claims shall also be subject to the following:
| (1) | without limiting the generality of Sections 8.01 and 8.02, any Claim for breach of any representation, warranty or covenant shall be subject to Section 5.04; |
| (2) | the Indemnifying Party’s obligation to indemnify the Indemnified Party shall only apply to the extent that the Claims in respect of which the Indemnifying Party has given an indemnity, in the aggregate, exceed $25,000; |
| (3) | notwithstanding anything to the contrary in this Agreement, the aggregate liability of DocSun or BioRegenx to any and all Indemnified Parties under this Article VIII shall be limited to the value of the Closing BioRegenx Common Shares issuable under this Agreement; |
| (4) | if any Third Party Claim is of a nature such that the Indemnified Party is required by Applicable Laws to make a payment to any Person (a “Third Party”) with respect to such Third Party Claim before the completion of settlement negotiations or related legal proceedings, the Indemnified Party may make such payment and thereafter seek reimbursement from the Indemnifying Party for any such payment. If any Indemnifying Party pays, or reimburses an Indemnified Party in respect of any Third Party Claim before completion of settlement negotiations or related legal proceedings, and the amount of any liability of the Indemnified Party under the Third Party Claim in respect of which such a payment was made, as finally determined, is less than the amount which was paid by the Indemnifying Party, the Indemnified Party shall, forthwith after receipt of the difference from the Third Party, pay the amount of such difference to the Indemnifying Party; |
| (5) | except in the circumstance contemplated by Section 8.04, and whether or not the Indemnifying Party assumes control of the negotiation, settlement or defence of any Third Party Claim, the Indemnified Party shall not negotiate, settle, compromise or pay any Third Party Claim except with the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld); |
| (6) | the Indemnified Party shall not permit any right of appeal in respect of any Third Party Claim to terminate without giving the Indemnifying Party notice and an opportunity to contest such Third Party Claim; |
| (7) | the Indemnified Party and the Indemnifying Party shall cooperate fully with each other with respect to Third Party Claims and shall keep each other fully advised with respect thereto (including supplying copies of all relevant documentation promptly as it becomes available); and |
| (8) | the provisions of this 0 shall constitute the sole remedy available to a party against another party with respect to any and all breaches of any agreement, covenant, representation or warranty made by such other party in this Agreement. |
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ARTICLE IX
EXCLUSIVITY AND ACCESS
9.01 Obligations of DocSun
Prior to the Termination Date, or the earlier termination of this Agreement, DocSun shall not, directly or indirectly, negotiate or deal with any party other than with BioRegenx relating to an Alternative Transaction involving DocSun or the sale or disposition of any part of the outstanding DocSun Common Shares or assets of DocSun, or solicit enquiries or provide information with respect to same. Nothing contained in this Agreement will prohibit, prevent or restrict DocSun from furnishing or providing information in respect of or otherwise responding to or engaging in discussions or negotiations in respect of, an unsolicited Alternative Transaction not resulting from a breach of this Section 9.01, or the directors of DocSun, in the fulfilment of their fiduciary duties, from supporting or facilitating any such unsolicited Alternative Transaction, or DocSun from completing any such Alternative Transaction, or entering into a definitive and binding agreement to effect such an Alternative Transaction, if directors of DocSun determine in good faith, after consultation, to the extent considered appropriate by the directors, with its financial and legal advisors, that such unsolicited Alternative Transaction constitutes, or could reasonably be expected to lead to or result in, a transaction that would, if consummated in accordance with its terms, be more favourable to DocSun than the Transaction, provided however, that prior to taking such action, the directors of DocSun shall have concluded, after considering Applicable Laws, and receiving advice of independent, outside legal counsel, that such action would be a proper exercise of their fiduciary duties, that it is appropriate that the directors take such action in order to properly discharge their fiduciary duties, or that such action is otherwise required under Applicable Laws. In the event DocSun or its shareholders receive any form of offer or inquiry, DocSun shall forthwith (in any event within one (1) Business Day following receipt) notify BioRegenx of such offer or inquiry and provide BioRegenx with such details as it may request.
9.02 Obligations of BioRegenx
Except as disclose, prior to the Termination Date, or the earlier termination of this Agreement, BioRegenx shall not, directly or indirectly, negotiate or deal with any party other than DocSun relating to an Alternative Transaction involving BioRegenx, or solicit enquiries or provide information with respect to same. Nothing contained in this Agreement will prohibit, prevent or restrict BioRegenx from furnishing or providing information in respect of or otherwise responding to or engaging in discussions or negotiations in respect of, an unsolicited Alternative Transaction not resulting from a breach of this Section 9.02, or the directors of BioRegenx, in the fulfilment of their fiduciary duties, from supporting or facilitating any such unsolicited Alternative Transaction, or BioRegenx from completing any such Alternative Transaction, or entering into a definitive and binding agreement to effect such an Alternative Transaction, if directors of BioRegenx determine in good faith, after consultation, to the extent considered appropriate by the directors, with its financial and legal advisors, that such unsolicited Alternative Transaction constitutes, or could reasonably be expected to lead to or result in, a transaction that would, if consummated in accordance with its terms, be more favourable to BioRegenx than the Transaction, provided however, that prior to taking such action, the directors of BioRegenx shall have concluded, after considering Applicable Laws, and receiving advice of independent, outside legal counsel, that such action would be a proper exercise of their fiduciary duties, that it is appropriate that the directors take such action in order to properly discharge their fiduciary duties, or that such action is otherwise required under Applicable Laws. In the event BioRegenx receives any form of offer or inquiry, BioRegenx shall forthwith (in any event within one (1) Business Day following receipt) notify DocSun of such offer or inquiry and provide DocSun with such details as it may request.
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ARTICLE X
| GENERAL |
10.01 Notices
Any notice, consent, waiver, direction or other communication required or permitted to be given under this Agreement (each, a “notice”) shall be in writing shall be in writing addressed as follows:
| (1) | If to BioRegenx: |
BioRegenx, Inc.
7407 Ziegler Road
Chattanooga, Tennessee 37421
Attention: William Resides, Chief Executive Officer
with a courtesy copy (which copy shall not constitute notice to BioRegenx) to:
J.M. Walker & Associates
7841 South Garfield Way
Centennial, CO 80122
Attention: Jody M. Walker
| (2) | If to DocSun: |
DocSun Biomedical Holdings, Inc.
6763 32nd Avenue N
St. Petersburg FL 33710
Attention: Gary Kiss, Chief Executive Officer
or such other address as may be designated by notice given by either DocSun or BioRegenx to the other in accordance with this Section 10.02. Each notice shall be personally delivered to the addressee or sent by e-mail to the addressee and a notice which is personally delivered or sent by email shall, if delivered or sent prior to 4:00 p.m. (local time of the recipient) on a Business Day, be deemed to be given and received on that day and, in any other case, be deemed to be given and received on the next Business Day.
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10.02 Confidentiality
Prior to Closing and, if the Transaction is not completed, at all times thereafter, each of the parties will keep confidential and refrain from using all information obtained by it in connection with the transactions contemplated by this Agreement relating to all other parties, provided however that such obligation shall not apply to any information which was in the public domain at the time of its disclosure to a party or which subsequently comes into the public domain other than as a result of a breach of such party’s obligations under this Section 10.02. For greater certainty, nothing contained herein shall prevent any disclosure of information which may be required pursuant to Applicable Laws or pursuant to an order in judicial or administrative proceedings or any other order made by any Governmental Authority.
10.03 Assignment
No party may assign this Agreement or its rights or obligations hereunder without the prior written consent of the other parties, such consent not to be unreasonably withheld, delayed, or conditioned.
10.04 Binding Effect
This Agreement shall be binding upon and shall enure to the benefit of the parties and their respective heirs, successors and permitted assigns.
10.05 Waiver
No waiver of any provision of this Agreement will constitute a waiver of any other provision, nor will any waiver constitute a continuing waiver unless otherwise expressly provided.
10.06 Governing Law
This Agreement shall be governed by and construed and interpreted in accordance with the laws of the state of Tennessee.
10.07 Expenses
Each party shall be responsible for and bear all of its own costs and expenses (including any legal, accounting,
banking, broker’s, finder’s, consultant’s or other fees or expenses) incurred in connection with the Transaction, including fees and expenses of its representatives incurred at any time in connection with pursuing or consummating the Transaction.
10.08 No Personal Liability
| (3) | No director, officer, employee or agent of BioRegenx (in such capacity) shall have any personal liability whatsoever to DocSun under this Agreement or any other document delivered in connection with the Transaction on behalf of BioRegenx. |
| (4) | No member, director, officer, employee or agent of DocSun (in such capacity) shall have any personal liability whatsoever to BioRegenx, or to the shareholders of BioRegenx under this Agreement or any other document delivered in connection with the Transaction on behalf of DocSun. |
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10.08 Time of Essence
Time is of the essence of this Agreement and of each of its provisions.
10.09 Public Announcements
DocSun and BioRegenx shall co-operate with the other in releasing information concerning this Agreement and the transactions contemplated herein and shall furnish to and discuss with the other drafts of all press and other releases prior to publication. No press release or other public announcement concerning the proposed transactions contemplated by this Agreement will be made by any party without the prior consent of the other parties, such consent not to be unreasonably withheld, delayed, or conditioned, provided however that, nothing contained herein shall prevent any party at any time from furnishing any information to any Governmental Authority or to the public if so required by Applicable Law.
10.10 Further Assurances
Each party will, upon request but without further consideration, from time to time promptly execute and deliver all further documents and take all further action as may be necessary or appropriate to give effect to and perform the provisions and intent of this Agreement and to complete the transactions contemplated herein.
10.11 Entire Agreement
This Agreement, together with the documents required to be delivered pursuant to this Agreement, constitute the entire agreement among the parties pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations, and discussions, whether oral or written, between the parties with respect to the subject matter hereof (including, without limitation, the non-binding letter of intent dated August 13, 2023 entered into by and among BioRegenx and DocSun. There are no representations, warranties, covenants or conditions with respect to the subject matter hereof except as contained in this Agreement and any document delivered pursuant to this Agreement.
10.12 Amendments
No amendment of any provision of this Agreement will be binding on any party unless consented to in writing by such party.
10.13 Severability
In the event that any provision or part of this Agreement is determined by any court or other judicial or administrative body to be illegal, null, void, invalid or unenforceable, that provision shall be severed to the extent that it is so declared and the other provisions of this Agreement shall continue in full force and effect.
10.14 Remedies Cumulative
The rights and remedies of the parties under this Agreement are cumulative and in addition to, and not in substitution for, any rights or remedies provided by Applicable Laws. Any single or partial exercise by any party of any right or remedy for default or breach of any term, covenant or condition of this Agreement does not waive, alter, affect or prejudice any other right or remedy to which such party may be lawfully entitled for the same default or breach.
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10.15 Counterparts
This Agreement may be executed and delivered in one or more counterparts and may be executed and delivered by facsimile or any other electronically communicated method, each of which when executed and delivered shall be deemed an original and all of which counterparts together shall be deemed to constitute one and the same instrument.
IN WITNESS WHEREOF this Agreement has been executed by the parties on the date first above written.
| BIOREGENX, INC. | ||
| By: | /s/ William Resides | |
| Name: William Resides | ||
| Title: Chief Executive Officer | ||
| DOCSUN BIOMEDICAL HOLDINGS, INC. | ||
| By: | /s/ Gary Kiss | |
| Name: Gary Kiss | ||
| Title Chief Executive Officer | ||
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SCHEDULE A
DOCSUN SHAREHOLDERS
Shareholders of DocSun BioMed Limited as of September 27, 2023
| BioRegenx | ||||||||
| DocSun | DocSun | Common Shares | ||||||
| Shareholder | Common Shares | After Exchange | ||||||
| Huan Taidi | 1,400,000 | 584,348 | ||||||
| Gary Kiss | 1,400,000 | 584,348 | ||||||
| James Weis | 400,000 | 166,957 | ||||||
| Jan Yen | 500,000 | 208,696 | ||||||
| Juuan Dcruz | 500,000 | 208,696 | ||||||
| HNM Intelligence Ltd. | 4,600,000 | 1,920,000 | ||||||
| Winnie Chern | 500,000 | 208,696 | ||||||
| Zong Cyuan Chen | 200,000 | 83,478 | ||||||
| Maryann Isabella Dcruz | 200,000 | 83,478 | ||||||
| Hsu Wei Chieh | 200,000 | 83,478 | ||||||
| Nash Mongent | 200,000 | 83,478 | ||||||
| Yush Lee | 400,000 | 166,957 | ||||||
| Barry Lee | 1,000,000 | 417,390 | ||||||
| Total | 11,500,000 | 4,800,000 | ||||||
| 38 |
SCHEDULE B
ESCROW AGREEMENT
(see attached)
| 39 |
ADDENDUM TO
SECURITIES EXCHANGE AGREEMENT
EFFECTIVE NOVEMBER 15, 2023
BY AND BETWEEN
BIOREGENX, INC. AND DOCSUN BIOMEDICAL HOLDINGS, INC.
THIS ADDENDUM is made and entered into this 12/5/2023, by and between BioRegenx, Inc. (“BioRegenx”) and DocSun Biomedical Holdings, Inc (“DocSun”) providing for changes in the Securities Exchange Agreement effective November 15, 2023 (“Agreement”).
RECITALS
WHEREAS, BioRegenx and DocSun entered into the original Securities Exchange Agreement effective November 15, 2023; and
WHEREAS, parts of the Agreement require certain changes and clarifications; and
WHEREAS, the parties desire to make such changes and revisions to the Agreement as set forth herein, and
NOW, THEREFORE, the parties agree to change, revise and modify the following parts of the Agreement as set forth below.
AGREEMENT
| 1.09 | Schedules |
The following schedules to this Agreement are an integral part of this Agreement:
|
Schedules |
Description | |
| Schedule A | DocSun Shareholders | |
| Schedule B | Escrow Agreement | |
| Schedule C | Intellectual Property |
| 4.03 | Closing Deliveries of DocSun |
Except as set forth below, at the Time of Closing, DocSun will deliver or cause to be delivered to BioRegenx each of the following:
| (1) | Share certificates evidencing the DocSun Common Shares with all of the appropriate stock powers. |
| (2) | A certificate of one of DocSun’s senior officers, dated as of the Closing Date, certifying: (i) that attached thereto are true and complete copies of the Constating Documents of DocSun (and all amendments thereto as in effect as on such date), (ii) all resolutions of the members of DocSun approving the entering into of this Agreement and the completion of the Transaction, and (iii) as to the incumbency and genuineness of the signature of DocSun executing this Agreement or any of the other agreements or documents contemplated hereby. |
| (3) | Verification that all Intellectual Property as defined in Section 1.01 Definitions and attached hereto as Schedule C is owned by or has been properly assigned by DocSun. |
| (4) | A certificate of status or good standing for DocSun, dated within two (2) days of the Closing Date. |
| 40 |
Except as otherwise provided herein all terms and conditions of the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Addendum on the day first written above.
| BIOREGENX | |
| BioRegenx, Inc. | |
| /s/ William Resides | |
| By: William Resides, Chief Executive Officer | |
| DOCSUN | |
| DocSun Biomedical Holdings, Inc. | |
| /s/ Gary Kiss | |
| By: Gary Kiss, Chief Executive Officer |
| 41 |
Exhibit 2.2
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this “Merger Agreement”) made and entered into effective December 29, 2022 by and between BioRegenx, Inc., a Nevada corporation (“BioRegenx”) and Findit, Inc., a Nevada corporation (“Findit”).
WITNESSETH:
WHEREAS, BioRegenx is a corporation duly organized and existing under the laws of the state of Nevada;
WHEREAS, Findit is a corporation duly organized and existing under the laws of the state of Nevada;
WHEREAS, on the date of this Merger Agreement, BioRegenx has the authority to issue three hundred seventy five million (375,000,000) shares of common stock, $.0001 par value per share, of which thirty eight million, five hundred eighty eight thousand, one hundred seventy three (39,588,173) common shares are validly issued and outstanding, fully paid and non-assessable and twenty five million (25,000,000) preferred shares, $.001 par value. BioRegenx has designated one hundred fifty thousand (150,000) Series A preferred shares, of which ninety five thousand (95,000) Series A preferred shares are validly issued and outstanding.;
WHEREAS, on the date of this Merger Agreement, Findit has authority to issue five hundred million (500,000,000) authorized shares of common stock $.001 par value per share of which two hundred sixty nine million, seven hundred forty five thousand, six (269,745,006) common shares are issued and outstanding, fifty million (50,000,000) authorized Series A preferred shares of which five million (5,000,000) Series A preferred shares are issued and outstanding and five million (5,000,000) authorized Series B preferred shares, of preferred shares of which four million nine hundred thousand (4,900,000) Series B preferred shares are issued and outstanding.
WHEREAS, the respective Boards of Directors of BioRegenx and Findit have determined that it is advisable and to the advantage of said two corporations that BioRegenx merge into Findit (hereinafter also referred to as the “Surviving Corporation” upon the terms and conditions herein provided; and
WHEREAS, the respective Boards of Directors of BioRegenx and Findit have approved this Merger Agreement and the Boards of Directors of BioRegenx and Findit have directed that this Merger Agreement be submitted to a vote of their shareholders, if required by state law.
NOW, THEREFORE, in consideration of the mutual agreements and covenants set forth herein, BioRegenx and Findit hereby agree to merge as follows:
| (1) | Name Change. The name of the Surviving Corporation shall be amended to be BioRegenx, Inc. |
| (2) | Increase in Authorized Common Shares. The authorized common shares shall be increased to four billion (4,000,000,000). |
| (3) | Mechanics for Closing Merger. Prior to Closing, each party shall execute and deliver, or cause to be executed and delivered to Jody M. Walker, Attorney At Law as escrow agent, all common stock, Series A preferred stock, documents and instruments, in form and substance satisfactory as reasonably required to carry out or evidence the terms of this Agreement. |
Upon the approval of the respective shareholders, the executed Articles of Merger shall be filed with the Nevada Secretary of State.
| (4) | Further Assurances. At or after Closing, BioRegenx, at the request of Findit, shall promptly execute and deliver, or cause to be executed and delivered, to Findit all such documents and instruments, in form and substance satisfactory to Findit, as Findit reasonably may request in order to carry out or evidence the terms of this Agreement. |
| 1 |
| (5) | Retirement of Series A and Series B preferred shares. Findit shall have retired its issued and outstanding Series A and Series B preferred shares, in accordance with the authorization from the Series A and Series B preferred shareholders. |
| (6) | Reverse stock split. As soon as practicable, both Parties agree to the implementation of up to a 1 for 25 reverse split of FDIT’s common and preferred stock to improve FDIT’s ability to attract institutional investors and analysts as well as to graduate to a senior exchange (OTCQB, NASDAQ). |
| (7) | Potential Spinoff. Simultaneously with the close of the proposed transaction, all of the current assets and liabilities of FDIT, shall be transferred into a wholly owned subsidiary. Both parties agrees that the wholly owned subsidiary may be subsequently spun out upon yet to be determined terms, except that the parties agree that no spin out shall occur until the outstanding $150,000 EIDL loan is repaid in full. The parties acknowledge that, subsequent to the spin out, all assets and liabilities currently outstanding in FDIT will follow the subsidiary and will not be the responsibility of the merged entity post-closing of this transaction. |
| (8) | Classworx Option. Simultaneously with the close of the proposed transaction and as a condition precedent to said closing, the Principals of FDIT shall execute an option agreement with FDIT relating to its acquisition of all of their shares in Classworx (CHNO), subsequent to the merger. The option shall be on terms comparable to those agreed to in this Agreement. After said closing of merger with FDIT and subsequently upon exercising the option of the acquisition of ClassWorx, the Board of Directors agree to support and cause to be placed on the ballot at each election of Directors one name chosen by the current principals of Classworx which shall be a nominee to the current Board of Directors of the Company. |
| (9) | Stock of BioRegenx. On and after the Effective Date, all of the outstanding certificates that prior to that time represented shares of BioRegenx shall be recalled and canceled and not more than three hundred thirty seven thousand, seven hundred ninety three thousand, nine hundred fifty nine (337,793,959) common shares and eight hundred thirty six thousand, forty eight (836,048) Series A preferred shares Findit Common and Preferred Shares shall be issued in proportion to their ownership percentage. Said merger consideration will represent not more than ninety (90) percent of the total voting securities of the newly merged company. |
The registered owner on the books and records of BioRegenx or its transfer agents of any outstanding certificate shall, until such certificate shall have been surrendered for transfer or otherwise accounted for to Findit or its transfer agents, have and be entitled to exercise any voting and other rights with respect to and to receive any dividend and other distributions upon the shares of Findit Common Stock evidenced by such outstanding certificate as above provided.
| (10) | Resignation of Officers and Directors. Each of the current officers and directors of Findit whose written resignation BioRegenx has requested shall have delivered to BioRegenx written resignations effective as of the effective date of the Merger (the “Effective Date”). |
| (11) | Book Entries. As of the Effective Date, entries shall be made upon the books of Findit in accordance with the following. |
| (a) | The assets and liabilities of BioRegenx shall be recorded at the amounts at which they were carried on the books of BioRegenx immediately prior to the Effective Date. | |
| (b) | There shall be credited to the common stock account of Findit the aggregate amount of the total paid-in capital of all shares of Findit Common Stock resulting from the conversion of the outstanding BioRegenx Common Stock pursuant to the merger. | |
| (c) | There shall be credited to the retained earnings account of Findit the aggregate of the amount carried in the retained earnings account of BioRegenx immediately prior to the Effective Date. |
| 2 |
| (12) | Access to Documentation. Prior to the merger, Findit and BioRegenx shall provide each other full access to their books and records, and shall furnish financial and operating data and such other information with respect to their business and assets as may reasonably be requested from time to time. If the proposed transaction is not consummated, all parties shall keep confidential any information (unless ascertainable from public filings or published information) obtained concerning each others operations, assets and business. |
| (13) | Abandonment. At any time before the Effective Date, the Agreement and Plan of Merger and the Articles of Merger may be terminated and the Merger may be abandoned by the Board of Directors of either Findit or BioRegenx or both, notwithstanding approval of the Merger Agreement by the shareholders of Findit or the shareholders of BioRegenx or both. |
| (14) | Counterparts. In order to facilitate the filing and recording of this Merger Agreement the same may be executed in any number of counterparts, each of which shall be deemed to be an original. |
| 3 |
IN WITNESS WHEREOF, this Merger Agreement, having first been duly approved by resolution of the Boards of Directors of BioRegenx and Findit, is hereby executed on behalf of each of said two corporations by their respective officers thereunto duly authorized.
BioRegenx, Inc.
A Nevada corporation
/s/ William Resides
William Resides, Chief Executive Officer
Findit, Inc.
A Nevada corporation
/s/ Ray Firth
Ray Firth, President
| 4 |
Exhibit 10.1
| + DISTRIBUTORSHIP AGREEMENT |
This DISTRIBUTORSHIP AGREEMENT (the “Agreement”) is entered in as of the 1st day of December, 2014 (the “Effective Date”)
| Between: | MicroVascular Health Solutions, LLC, a company located at PO Box 332, American Fork, Utah 84003 U.S.A. (“DISTRIBUTOR”) |
| and: | Glycocheck B.V, a Dutch company organized under the laws of the Netherlands having a place of business at Oxfordlan 70 NL 6229 EV Maastrictht, The Netherlands (“GLYCOCHECK”). |
Hereinafter, GLYCOCHECK and DISTRIBUTOR may be referred to individually as a “Party” and collectively as the “Parties”.
CONSIDERING THAT
WHEREAS, GLYCOCHECK has invented and developed software and a video camera for monitoring the health of the vascular glycocalyx that are proprietary to GLYCOCHECK;
WHEREAS, DISTRIBUTOR has the means available world-wide to import, market and distribute the Products in the Territory;
WHEREAS, GLYCOCHECK intends to grant DISTRIBUTOR the right to import, market and distribute the Products in the Territory; and
WHEREAS, the Parties want to define the terms and conditions which will govern their contractual relationship in this Agreement.
NOW, THEREFORE, for good and valuable consideration as outlined in the Patent and Software License Agreement attached hereto as Appendix 4, including the mutual covenants and promises set forth in this Agreement, the Parties hereto agree as follows:
| 1. | Definitions |
| 1.1 | “Business Day” shall mean any day other than a Saturday or Sunday when banks in the U.S.A. are open for the transaction of normal business. |
| 1.2 | “Confidential Information” shall, for purposes of this Agreement, mean (i) the content of this Agreement and any information in relation thereto; (ii) any information that is not publicly available that is disclosed by GLYCOCHECK to DISTRIBUTOR in the framework of this Agreement, including but not limited to information relating to the Products (e.g., trade secret information relating to the Product, details regarding GLYCOCHECK’s Intellectual Property Rights relevant to the Products, etc.), reports, records or any other documents concerning GLYCOCHECK’s activity or business, any information proprietary to GLYCOCHECK regarding the market, sales figures of the Product, market forecasts for the Product (all excluding information gathered or developed by DISTRIBUTOR pertaining to the Territory), etc., as well as any other information provided by GLYCOCHECK and indicated as confidential whether in writing or orally; and (iii) any and all information gathered or developed by a Party that is not publicly available, that such Party discloses to the other Party and that relates to business plans, market forecasts, marketing and advertising, pricing, sales, sales figures, customer lists, and the like. “Confidential Information” shall not include any information of either Party that a Party can show by written evidence (a) was already known to the receiving Party, or independently developed without use of the disclosing Party’s Confidential Information, (b) is disclosed to the receiving Party by a person who is not in default of any confidentiality obligation to the disclosing Party, or (c) is required to be disclosed in compliance with the applicable law of any government of competent jurisdiction. Any confidential information disclosed orally shall subsequently be confirmed by the disclosing Party in writing within fifteen (15) days of disclosure. |
| 1 |
| 1.3 | “Control” shall mean the ability of a party to direct the affairs of another party, whether by virtue of the ownership of shares, contract or otherwise. |
| 1.4 | “Delivery Point” shall be a named place of destination within the Territory provided by DISTRIBUTOR in each Purchase Order. |
| 1.5 | “Intellectual Property Rights” shall mean all of GLYCOCHECK’s topography rights, design rights, the Trade Marks, copyrights, domain names, trade secrets, patent rights, trade names, utility models, and any other intellectual property rights of a similar nature (whether or not registered) subsisting anywhere in the world related to or associated with the Products, as well as all applications, reissues and extensions for and of any such rights. |
| 1.6 | “Product Prices” shall mean GLYCOCHECK’s list prices as provided by GLYCOCHECK to DISTRIBUTOR from time to time. |
| 1.7 | “Product(s)” means the products listed in Appendix 1 to this Agreement, as well as any other products developed by GLYCOCHECK that GLYCOCHECK and DISTRIBUTOR subsequently agree, by express notice in writing, to include within the scope of this Agreement. |
| 1.8 | “Purchase Order” shall mean a purchase order sent by DISTRIBUTOR to GLYCOCHECK to order one or more Products. |
| 1.9 | “Purchase Order Confirmation” shall mean an order confirmation document sent by GLYCOCHECK to DISTRIBUTOR agreeing to fulfill an order set out in a relevant Purchase Order. |
| 1.10 | “Quarter” shall mean each period of three calendar months ending on 31 March, 30 June, 30 September and 31 December. |
| 1.11 | “Term” shall mean the total of the Initial Term and subsequent Additional Terms, as the case may be, of this Agreement, as set forth in Article 14. |
| 1.12 | “Territory” shall mean world-wide. |
| 1.13 | “Trademarks” shall mean the trademarks, registrations and applications listed in Appendix 2 to this Agreement, and any further trademarks that GLYCOCHECK may, in the future, use in the Territory in connection with any of the Products. |
| 1.14 | “Product Warranty” shall mean the terms set out in Article 7.1. |
| 2. | Appointment |
| 2.1 | Subject to all terms and conditions of this Agreement, GLYCOCHECK hereby appoints DISTRIBUTOR as GlycoCheck’s exclusive distributor to import, promote and distribute the Products in the Territory for the Term. |
| 2.2 | Any direct enquiries and orders, which GLYCOCHECK receives from customers established in the Territory, will be forwarded without delay to DISTRIBUTOR. |
| 3. | Legal Status of DISTRIBUTOR |
| 3.1. | DISTRIBUTOR is solely liable for its operating costs and bears alone the risks inherent in its business. DISTRIBUTOR will sell the Products it purchases from GLYCOCHECK, in its own name and for its own account. DISTRIBUTOR acts as an independent contractor, both towards GLYCOCHECK and towards DISTRIBUTOR’s customers. None of the provisions of this Agreement can be interpreted to mean or imply that Parties have agreed to form a company, an association or a joint venture between them or so as to render DISTRIBUTOR an employee or agent of GLYCOCHECK. |
| 2 |
| 3.2. | DISTRIBUTOR has no authority to enter into contracts on behalf of GLYCOCHECK or in any way commit or bind towards third parties or to incur any liability or obligations for or on behalf of GLYCOCHECK. |
| 3.3 | DISTRIBUTOR shall not without GLYCOCHECK’s prior written consent make any promises or guarantees about the Products beyond those contained in the promotional material supplied by GLYCOCHECK. DISTRIBUTOR shall not be bound by this Article 3.3 if GLYCOCHECK fails to provide DISTRIBUTOR with such promotional material. |
| 4. | Obligations of the Parties |
| 4.1 | DISTRIBUTOR shall use commercially reasonable efforts to promote the Products in the Territory and to market, distribute and sell the Products in the Territory during the term of this Agreement. |
| 4.2 | DISTRIBUTOR shall from time to time, but at least once every Quarter, provide GLYCOCHECK with updates about its activities, market conditions and the state of competition within the Territory (e.g., features and prices of competing products, marketing actions of competing firms, etc.). DISTRIBUTOR shall furthermore respond to any commercially reasonable requests for information made by GLYCOCHECK. |
| 4.3 | DISTRIBUTOR shall further keep GLYCOCHECK informed of matters which come to its attention concerning the laws and regulations in force in the Territory to which the Products must conform (e.g., governmental health requirements, labelling, technical specifications, safety requirements, etc.) which shall be required of GLYCOCHECK for importing, marketing, distributing or selling the Products in the Territory. |
| 4.4 | GLYCOCHECK shall ensure that the Products conform with all laws and regulations of each jurisdiction in the Territory and shall obtain and maintain all necessary approvals, including but not limited to CE clearance certification and governmental health approvals, it being understood between the Parties that GLYCOCHECK is actively pursuing but has not yet obtained CE certification or governmental health approval for the Products as of the Effective Date. |
| 4.5 | DISTRIBUTOR shall perform its obligations under this Agreement in good faith and undertakes to comply in its own name and at its expense with all rules, regulations, laws and legislations necessary to enable the importation of the Products into the Territory, the sale, the promotion and marketing of the Products in the Territory as well as the fair competition and commercial fair trade practices which may be applicable in the Territory. In general, DISTRIBUTOR will represent the Products fairly and avoid misleading or unethical business practices. |
| 4.6 | DISTRIBUTOR shall send within one (1) month after the end of each Quarter a report on DISTRIBUTOR’s activities during that Quarter, showing details of (i) the number of units and contact names where each Product was sold during that Quarter; (ii) remaining inventory on hand; (iii) the number and contact names of new customer orders taken for each Product during the Quarter; (iv) the number and contact names of customer orders taken for each Product that were not fulfilled at the end of the Quarter; and (v) the number of orders placed by DISTRIBUTOR with GLYCOCHECK that are still outstanding, as well as any other information relating to the performance and development of new contact opportunities of DISTRIBUTOR’s obligations under this Agreement that GLYCOCHECK may have a commercially reasonable purpose for receiving, which GLYCOCHECK may request from time to time. |
| 4.8 | Upon receiving written notice of at least five (5) Business Days, and for a commercially reasonable purpose, DISTRIBUTOR will grant GLYCOCHECK access to its books of account and records relevant to such commercially reasonable purpose during DISTRIBUTOR’s regular business hours so that GLYCOCHECK may inspect DISTRIBUTOR’s books of account and records and verify compliance by DISTRIBUTOR with its obligations under Articles 4.5, 4.6, and 4.7 of this Agreement. |
| 3 |
| 4.9 | DISTRIBUTOR will provide to its customers a first line customer support service comprising of an operational and after-sale repair and maintenance service in respect of the Products in accordance with Part 1 of Appendix 3 to this Agreement and the terms of the service and operational manuals provided by GLYCOCHECK during the Term and, at the option of GLYCOCHECK, for twelve months after the Term or after termination of the Agreement, however terminated. If DISTRIBUTOR continues to provide such support after the Term or the termination of the Agreement, DISTRIBUTOR may invoice GLYCOCHECK for reasonable cost made by DISTRIBUTOR in connection with the provision of such support. |
| 4.10 | DISTRIBUTOR will provide to its customers a first line customer training service in accordance with GLYCOCHECK’s training materials during the Term. |
| 4.11 | DISTRIBUTOR will inform GLYCOCHECK immediately of any changes in ownership or Control of DISTRIBUTOR, and of any change that would be reasonably expected to affect the performance of DISTRIBUTOR’s duties under this Agreement. |
| 4.12 | DISTRIBUTOR will maintain an adequate and commercially reasonable policy for handling customer complaints regarding the Products. The Parties shall make commercially reasonable endeavors to agree on and comply with the operational details required to implement such a product complaints handling policy and to address customer complaints. |
| 4.13 | DISTRIBUTOR shall not modify the Products or combine the Products in a manner not otherwise authorized by GLYCOCHECK without the express written consent of GLYCOCHECK. |
| 5. | Rolling Forecasts and Minimum Order Requirements |
| 5.1 | No later than one (1) month after the beginning of each Quarter, DISTRIBUTOR shall provide GLYCOCHECK with its forecast of the quantities of each type of Product that it expects to buy, if any, from GLYCOCHECK for delivery during the ensuing twelve (12) months (the “Ensuing Year”) beginning on the first day of the following Quarter. Such forecasts shall be regarded as a non-binding commitment for DISTRIBUTOR. |
| 5.2 | The Parties agree that failure of DISTRIBUTOR to comply with Article 5 constitutes a material breach of this Agreement, which will give GLYCOCHECK the right to terminate this Agreement in accordance with Article 15. |
| 6. | Terms and Conditions of Purchase |
| 6.1 | When DISTRIBUTOR wishes to place an order for the Products, DISTRIBUTOR shall send a Purchase Order to GLYCOCHECK which shall include details regarding the quantity of each Product to be delivered, the delivery timetables and the Delivery Point. DISTRIBUTOR shall buy the Products for its own account for storage and resale under this Agreement. |
| 6.2 | GLYCOCHECK shall issue a Purchase Order Confirmation to DISTRIBUTOR within five (5) Business Days of receiving each Purchase Order. GLYCOCHECK reserves the right to deviate from the Purchase Order in case it deviates more than ten percent (10%) from the forecast given by DISTRIBUTOR pursuant to Article 5.1 with respect to the period concerned. The Purchase Order Confirmation shall include an invoice with respect to the Purchase Order concerned. |
| 6.3 | GLYCOCHECK shall undertake to use commercially reasonable efforts to meet all Purchase Orders for the Products submitted to it by DISTRIBUTOR in accordance with this Article 6. Upon issuing any Purchase Order Confirmation, GLYCOCHECK shall have sixty (60) days to arrange for delivery of the Products to the Delivery Point identified on the Purchase Order. |
| 4 |
| 6.4 | GLYCOCHECK is entitled to refuse any order placed by DISTRIBUTOR in case of non- payment of previous deliveries or other material breach of this Agreement by DISTRIBUTOR. |
| 6.5 | The prices to be paid by DISTRIBUTOR to GLYCOCHECK for the Products shall be the Product Prices identified in Appendix 1 to this Agreement. The Product Prices applicable at the Effective Date are set forth in Appendix 1, but may change once each calendar year, provided that GLYCOCHECK shall provide DISTRIBUTOR with written notice of any increase in the Product Prices at least two (2) months before the beginning of the calendar year in which any price increase is to take effect. DISTRIBUTOR may not withhold payment of any amount due to GLYCOCHECK because of any set-off, counter-claim, abatement, withholding or other similar deduction. |
| 6.6 | Any and all expenses, costs and charges incurred by DISTRIBUTOR in the performance of its obligations under this agreement shall be paid by DISTRIBUTOR, unless GLYCOCHECK has expressly agreed in advance in writing to pay such expenses, costs and charges. Without prejudice to the foregoing, DISTRIBUTOR shall be responsible for any and all duties, taxes and charges required for DISTRIBUTOR to take possession of the Products from the Delivery Point, including, but not limited to, all import duties, customs duties, carriage and clearance charges, and any further insurance, freight, packaging, taxes, brokers’ fees, VAT and any other amounts payable in connection with the importation of the Products into the Territory and delivery of the Products from the Delivery Point to their final destination. |
| 6.7 | The Products will be delivered by GLYCOCHECK (or by its nominee) Delivered Duty Unpaid (DDU) to the Delivery Point. |
| 6.8 | DISTRIBUTOR will be solely responsible for obtaining all necessary documents, permissions or licenses required for the entry of the Products into the Territory, or their delivery to DISTRIBUTOR. |
| 6.9 | Delivery of the Products shall take place at the Delivery Point. DISTRIBUTOR shall assume responsibility for the Products at the Delivery Point, and shall arrange for suitable transport from the Delivery Point. The Products are at the risk and ownership of DISTRIBUTOR from the time the Products reach the Delivery Point. |
| 6.10 | DISTRIBUTOR shall pay one hundred percent (100%) of the Product prices invoiced to it by GLYCOCHECK in respect of each Purchase Order which is accepted by GLYCOCHECK in accordance with Article 6.2 of this Agreement, within fifteen (15) Business Days of receiving the Purchase Order Conformation that includes the invoice from GLYCOCHECK. |
| 6.11 | Interest shall be chargeable on any amounts overdue at the rate of five percent (5%) per annum above the lowest rate then available from ING Bank. The interest period shall run from the due date for payment until receipt of the full amount by GLYCOCHECK whether before or after judgment and without prejudice to any other right or remedy of GLYCOCHECK. |
| 6.12 | GLYCOCHECK reserves the right at any time to change the list of Products as indicated in Appendix 1 of this Agreement or replace the Products with newer versions of the Products upon communication of this information to DISTRIBUTOR, without the creation of any rights on the part of DISTRIBUTOR or any liability on the part of GLYCOCHECK. Notwithstanding the foregoing, (i) GLYCOCHECK shall provide DISTRIBUTOR with at least thirty (30) Business Days written notice of any changes to the Products or their specifications and (ii) GLYCOCHECK shall fill all Purchase Orders that it has accepted prior to any change in the Products with the Products set forth on said Purchase Orders to the extent GLYCOCHECK has sufficient quantities of such Product in stock. While DISTRIBUTOR automatically becomes the distributor under the same terms and conditions of any new version of a Product that replaces an existing Product, it does not become the distributor of a new Product added by GLYCOCHECK to its range of Products unless explicitly stated in writing by GLYCOCHECK and resulting in a change of the product list of Appendix 1. |
| 6.13 | DISTRIBUTOR shall be free to set its own resale prices for the Products but will inform GLYCOCHECK on the resale and retail prices of the Products in the updates it provides to GLYCOCHECK pursuant to Article 4.2. |
| 5 |
| 6.14 | Subject to the other provisions of this Agreement, and except as otherwise provided for by the mandatory laws of the various jurisdictions throughout the Territory in which Products are sold or used and to the extent such laws cannot be deviated from by contract, GLYCOCHECK shall not be liable for any direct, indirect or consequential loss or damages (all three of which terms include, without limitation, pure economic loss, loss of profits, loss of business, depletion of goodwill and similar loss), costs, damages, charges or expenses caused directly or indirectly by any delay in the delivery of the Products (even if caused by GLYCOCHECK ’s negligence). |
| 6.15 | Except as otherwise provided for by the mandatory laws of the various jurisdictions throughout the Territory in which Products are sold or used and to the extent such laws cannot be deviated from by contract, the liability of GLYCOCHECK for non-delivery of the Products shall be limited to, at GLYCOCHECK’s option, replacing the Products within a reasonable time or issuing a credit note against any invoice raised for such Products. |
| 6.16 | In the event that this Agreement terminates before the end of any Term, all overdue payments payable to GLYCOCHECK under this Agreement shall become due immediately on termination of this Agreement despite any other provision. All other payments owed by DISTRIBUTOR to GLYCOCHECK shall be due on their original due dates. |
| 6.17 | DISTRIBUTOR shall maintain an inventory recording process in respect of the Products which shall include a process for notifying to GLYCOCHECK whenever a customer receives delivery of the Products, such notification to include details of Products received and inventory numbers. |
| 7. | Warranty, Inspection and Product Quality |
| 7.1 | GLYCOCHECK warrants (the “Product Warranty”) that each Product sold by it to DISTRIBUTOR pursuant to this Agreement will, subject to the other provisions of this Article 7, on delivery to DISTRIBUTOR and for two (2) years following receipt of a Product by a customer of DISTRIBUTOR: |
| (a) | be of satisfactory quality; | |
| (b) | comply with generally accepted quality requirements of the jurisdiction(s) in which that Product is used by DISTRIBUTOR’s customer(s); and | |
| (c) | be reasonably fit for its intended purpose. |
| 7.2 | GLYCOCHECK shall provide software updates, if and to the extent they become available, and commercially reasonable software support to DISTRIBUTOR and/or customers of DISTRIBUTOR for a period of five (5) years from delivery of such software to DISTRIBUTOR. |
| 7.3 | DISTRIBUTOR shall, within fifteen (15) Business Days of the arrival of each delivery of the Products at the Delivery Point, give written notice of rejection to GLYCOCHECK on account of any defect by reason of which DISTRIBUTOR alleges that the Products delivered do not comply with the Product Warranty and which was apparent on reasonable inspection (the “Initial Inspection”). The notice must indicate within reasonable precision the defect and the Products to which it refers. In such case, GLYCOCHECK will replace the Products (or parts of the Products) which are defective and make replacement Products available for DISTRIBUTOR within fifteen (15) Business Days at no additional cost to DISTRIBUTOR, assume responsibility for any and all costs for replacement and all costs incurred by DISTRIBUTOR for returning defective Products to GLYCOCHECK, and reimburse DISTRIBUTOR for any and all costs incurred by DISTRIBUTOR in connection with such defective Products, including, but not limited to, any and all costs for returning defective Products to GLYCOCHECK. Failing timely notification of any defect discovered during the Initial Inspection in accordance with this Article 7.3, DISTRIBUTOR’s right to claim that any Product is defective will be forfeited, and such Product will be deemed to have been delivered and accepted by DISTRIBUTOR as complete. Notwithstanding the provisions of this Article 7.3, GLYCOCHECK shall still be obligated to provide the Product Warranty for each Product, as set forth in Article 7.1 except with respect to defects that should have become apparent to DISTRIBUTOR during the Initial Inspection. |
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| 7.4 | All delivered Products need to be inspected carefully by DISTRIBUTOR upon receipt. DISTRIBUTOR shall return defective Products to GLYCOCHECK within a commercially reasonable time. Any returned Products that are not defective shall be subject to a re- stocking charge of 15% of the Product Prices. |
| 7.5 | In case of quantitative non-conformity, GLYCOCHECK shall correct the shortage fairly and within fifteen (15) Business Days of receiving notification of such quantitative non- conformity at no additional expense for DISTRIBUTOR. |
| 7.6 | DISTRIBUTOR shall maintain appropriate, up-to-date and accurate records of all third parties to which the Products are sold or otherwise distributed to enable the immediate recall of any Products (“Customer Records”), whether from the retail or wholesale market. The Customer Records shall include records of the deliveries to and identities of the customers, batch numbers, version numbers or serial numbers, the date(s) on which the Product(s) was (were) received by the customer, and contact information for each customer. DISTRIBUTOR shall provide GLYCOCHECK with the Customer Records immediately after the termination of this Agreement. |
| 7.7 | DISTRIBUTOR shall, at GLYCOCHECK’s sole cost and expense, provide assistance upon any mandatory requirement or commercially reasonable request by GLYCOCHECK to recall any of the Products. |
| 7.8 | In case of a valid warranty claim within the warranty period specified in Article 7.1, GLYCOCHECK shall, at its option, replace at its costs any Product that does not meet relevant Product specifications or issue a credit note against any invoice raised for such Product, provided that the Product not meeting the relevant Product specifications could not have been discovered during an inspection of the Product in question carried out by or on behalf of DISTRIBUTOR. |
| 7.9 | GLYCOCHECK will only be liable for damages suffered by DISTRIBUTOR or any third party, if and to the extent such damages are directly caused by the Products not meeting the relevant Product specifications, and provided that this could not have been discovered during an inspection of the Products in question carried out by or on behalf of DISTRIBUTOR. Any liability of GLYCOCHECK hereunder will be limited to an amount equal to the invoice value of the Products in question and GLYCOCHECK shall not be liable for any direct, indirect or consequential loss or damage (all three of which terms include, without limitation, pure economic loss, loss of profits, loss of business, depletion of goodwill and similar loss, costs, damages, charges or expenses), including but not limited to loss of profit, loss of production or business interruption, except as otherwise provided for by mandatory laws of the various jurisdictions throughout the Territory in which Products are sold or used and to the extend such laws cannot be deviated from by contract. This Article 7.9 shall survive and continue in full force and effect in accordance with its terms notwithstanding the expiration or termination of this Agreement for whatever cause. |
| 8. | Stock |
| 8.1 | The Parties agree that at all times during the Term, at their own expense, each shall |
| (a) | maintain adequate and sufficient quantities of stock of the Products in order to comply with all requests of DISTRIBUTOR or DISTRIBUTOR’s customers, as the case may be, such obligation, on the part of GLYCOCHECK, being dependent on DISTRIBUTOR’s or DISTRIBUTOR’s customer’s requests not deviating more than 10% from the forecast given by DISTRIBUTOR pursuant to Article 5.1 with respect to the period concerned | |
| (b) | provide for adequate storage conditions necessary to keep the Products in good condition and provide appropriate security for the Products. |
| 8.2 | DISTRIBUTOR shall permit GLYCOCHECK, on commercially reasonable notice, access to its premises to inspect the storage conditions of the Products. |
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| 9. | Support to DISTRIBUTOR |
| 9.1 | GLYCOCHECK shall provide DISTRIBUTOR with all necessary documentation relating to the Products needed by DISTRIBUTOR to prepare and print instructions, marketing materials, etc., (collectively, “Printed Materials”) to be used in connection with the Products. If such documentation needs to be translated in any language of DISTRIBUTOR’s Territory or otherwise adapted to the requirements of such Territory, DISTRIBUTOR will carry out such translations or adaptations. The content of any Printed Materials to be used by DISTRIBUTOR in the Territory shall be subject to approval by GLYCOCHECK. GLYCOCHECK shall have fifteen (15) Business Days from the date on which DISTRIBUTOR sends any Printed Materials to object to the same in writing. If GLYCOCHECK does not object to any Printed Materials within fifteen (15) Business Days of DISTRIBUTOR’s transmittal of the same, GLYCOCHECK will automatically be deemed to have approved such Printed Materials. DISTRIBUTOR shall bear sole responsibility for procuring and paying for any Printed Materials. |
| 9.2 | GLYCOCHECK shall provide to DISTRIBUTOR at no additional cost the information and sufficient training each year necessary to enable DISTRIBUTOR to competently train its customers to use the Products, and the support as may reasonably be requested by DISTRIBUTOR to enable it properly and efficiently to discharge its duties under this Agreement. |
| 9.3 | GLYCOCHECK shall provide DISTRIBUTOR with training materials to enable DISTRIBUTOR to discharge its duties under this Agreement properly and efficiently. |
| 10. | Advertising and Sales Promotion |
| 10.1 | DISTRIBUTOR agrees to use commercially reasonable efforts to promote the sale of the Products within the whole Territory in accordance with GLYCOCHECK’s indications and shall protect GLYCOCHECK’s interests with the diligence of a responsible businessman. DISTRIBUTOR shall provide and maintain an adequate organization to promote sales with all necessary means and personnel in order to ensure the fulfilment of its obligations throughout the Territory under this Agreement. |
| 10.2 | DISTRIBUTOR shall observe all directions and instructions given to it by GLYCOCHECK for the promotion and advertisement of the Products and to strictly conform to GLYCOCHECK’s marketing policy, especially with regard to the choice of the distribution channels, which must in any case be adequate for the trademark image of GLYCOCHECK. |
| 10.3 | In the event that DISTRIBUTOR elects to take part in any fairs or exhibitions within the Territory, DISTRIBUTOR shall do so at its own expense. GLYCOCHECK reserves the option to participate directly in any fair or exhibition in the Territory; in such case GLYCOCHECK will bear its respective expenses for attending and/or participating in each fair or exhibition. |
| 10.4 | Advertising |
| 10.4.1 | DISTRIBUTOR shall be responsible for the costs of all advertising and sale promotion of the Products within the Territory. | |
| 10.4.2 | Any advertising and promotion regarding the Products shall comply with any written Trademark use standards, guidelines and other instructions provided by GLYCOCHECK. DISTRIBUTOR shall provide GLYCOCHECK with copies of all of its advertising and promotional materials prior to publicly distributing the same. After receiving any advertising or promotional material, GLYCOCHECK shall have fifteen (15) Business Days from the date on which GLYCOCHECK receives such advertising or promotional material from DISTRIBUTOR to object to the same in writing. If GLYCOCHECK does not object to any advertising or promotional material within fifteen (15) Business Days of receipt, GLYCOCHECK will automatically be deemed to have approved such advertising or promotional material. DISTRIBUTOR shall not use any advertising or promotional material to which GLYCOCHECK has objected within said period. |
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| 11. | Intellectual Property Rights of GLYCOCHECK |
| 11.1 | DISTRIBUTOR agrees that all Intellectual Property Rights related to the Products as of the date of this Agreement are and shall remain at all times the exclusive property or the exclusive license of GLYCOCHECK. Any use by DISTRIBUTOR of any such Intellectual Property Rights whether in connection with the DISTRIBUTOR’s trade name, corporate name or otherwise, requires prior written consent of GLYCOCHECK, without prejudice to what has been agreed in Article 11.2. |
| 11.2 | DISTRIBUTOR is granted the exclusive right to use the Trademarks for the promotion, advertisement and sale of the Products in accordance with the terms of and for the duration of this Agreement. All such use shall conform to any standard and guidelines which may be established by GLYCOCHECK in writing from time to time including but not limited to standards with respect to style, appearance, manner of use, notice of registration and acknowledgement of ownership. |
| 11.3 | The License Agreement of Exhibit 4 is hereby incorporated by reference. |
| 11.4 | GLYCOCHECK makes no representation or warranty as to the validity or enforceability of the Intellectual Property Rights nor as to whether the same infringe on any intellectual property rights of third parties in the Territory. |
| 11.5 | The rights of DISTRIBUTOR to use the Intellectual Property Rights, as granted under Article 11.2, shall cease immediately upon the expiration or termination, for any reason, of this Agreement. Following termination of this Agreement, DISTRIBUTOR agrees to avoid, in its contacts with third parties, to make any reference to the previous relation with GLYCOCHECK, which could confuse the customers, as to its present situation. |
| 11.6 | DISTRIBUTOR shall promptly notify GLYCOCHECK of any acts of unfair competition, illegal trade practices or piracy, or infringement of the Trademarks or other Intellectual Property Rights that DISTRIBUTOR may discover in the Territory. Only GLYCOCHECK shall be entitled to initiate court or other proceedings in that respect, unless otherwise agreed upon between the Parties in writing. However, DISTRIBUTOR shall also assist GLYCOCHECK, at GLYCOCHECK’s expense, in defense of its rights in the Territory (including but not limited to the use of its name in or being joined as a party to proceedings) in connection with any action to be taken by GLYCOCHECK pursuant to this Article 11). |
| 11.7 | Articles 11.1, 11.3, 11.4, 11.5 and 11.6 shall survive and continue in full force and effect in accordance with its terms notwithstanding the expiration or termination of the Agreement for whatever cause. |
| 12. | Non-Competition and Confidentiality |
| 12.1 | Unless authorized in advance in writing by GLYCOCHECK, throughout the Term or until earlier termination of this Agreement for any reason and for a period of two (2) years from the end of the Term or such termination (the “Non-Compete Term”), DISTRIBUTOR shall not represent, manufacture, modify or adapt, or sell or offer for sale in the Territory or elsewhere (or be involved either directly or indirectly in the manufacturing, modification or adaptation, sale, offering for sale or distribution of) any products which in any way compete directly with the Products (because they are identical, similar or substitutable). DISTRIBUTOR shall especially not, prior to the end of the Non-Compete Term, engage in acting as a distributor, reseller, commission agent, agent, any other intermediary or in any other similar way or any other capacity in the Territory, for the benefit of third parties who manufacture or sell products which are in competition with the Products. |
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| 12.2. | Subject to any legal obligation requiring otherwise, each Party, as the recipient of Confidential Information, as well as its directors, officers, agents, employees, advisers or representatives (collectively, the “Receiving Party”), undertakes to keep confidential and not to disclose or divulge either directly or indirectly in any manner whatsoever to any third person or entity, in whole or in part for the duration of this Agreement as well as at any time thereafter, any and all Confidential Information of the other Party (the “Disclosing Party”) and the Receiving Party will not: |
| a) | use any Confidential Information of the Disclosing Party for any purpose other than the performance of its obligations under this Agreement; or | |
| b) | copy or disclose any of the Disclosing Party’s Confidential Information to any third party whomsoever other than in connection with the obtaining of legal or accounting advice. |
| 12.3 | This Article 12 shall survive and continue in full force and effect in accordance with its terms notwithstanding the expiration or termination of the Agreement for whatever cause. |
| 12.4 | Recipient shall maintain all Confidential Information received from the Disclosing Party in a manner of care at least as stringent as Recipient would maintain its own confidential information of similar importance, but at no times less than reasonable care. |
| 13. | Sub-Distributors and Commercial Agents |
| 13.1 | DISTRIBUTOR shall be entirely responsible for the appointing of, and the activities of, its directors, officers, agents, employees, advisers, representatives or any sub-contractors or agents engaged by it as may be authorized by GLYCOCHECK from time to time. |
| 14. | Term and Termination |
| 14.1 | This Agreement begins on the Effective Date and subject to the provisions of Article 15, shall continue in force for an initial period of two (2) years (the “Initial Term”) and, concurrently with the end of the Initial Term or Additional Term then in effect, automatically and immediately renew for a subsequent term of one (1) year (each, an “Additional Term”) until terminated by either Party for cause, or by either Party without cause by giving at least three (3) months prior written notice to the expiry date of the Initial Term or Additional Term then in effect. For the sake of clarity, termination by a party for cause is effective immediately upon providing written notice of the termination, and the terminating Party need not provide at least three months notice prior to the expiry date of the Initial Term or Additional Term then in effect. Termination by a Party without cause will become effective at the conclusion of the Initial Term or the Additional Term that concludes at least three months after the written notice of termination. |
| 15. | Early Termination |
| 15.1 | Either Party may give notice in writing to the other Party to unilaterally terminate the Agreement effective immediately if any of the following events occurs: |
| a) | the other Party commits a material breach of its obligations arising out of this Agreement, and, if such breach is remediable, fails to remedy that breach within a period of thirty (30) days of receiving notice in writing to do so, or | |
| b) | one or more exceptional circumstances exists justifying earlier termination as defined in Article 15.5, notwithstanding any other rights that it may be entitled to. |
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| 15.2 | Any failure by either Party to carry out all or part of its contractual obligations resulting in detriment to the other Party so as to substantially deprive it of what it is entitled to expect under the Agreement, shall be considered as a material breach for the purpose of Article 15.1. |
| 15.3 | The Parties hereby agree to consider as a material breach of the Agreement by DISTRIBUTOR the violation of the provisions under Article 5 (Rolling Forecast and Minimum Order Requirements), Article 10 (Advertising and Sales Promotion) and Article 11 (Intellectual Property Rights of GLYCOCHECK). |
| 15.4 | The Parties hereby agree to consider as a material breach by a Party the violation of the provisions under Article 2 (Appointment), Article 4 (Obligations of the Parties), Article 6 (Terms and Conditions of Purchase), Article 7 (Warranty, Inspection and Product Quality) and Article 12 (Non-Competition and Confidentiality). |
| 15.5 | The Parties agree to consider as exceptional circumstances the following situations: |
| a) | a third party that imports, promotes, distributes, sells or provides products that compete with the Products assumes Control of DISTRIBUTOR without GLYCOCHECK’s prior written agreement to such change of Control; | |
| b) | the other Party suspends or ceases, or threatens to suspend or cease, to carry on all or a substantial part of its business; | |
| c) | a winding up or bankruptcy order is made against the other Party; | |
| d) | the other Party passes a resolution or makes a determination for it to be wound up (except for the purposes of amalgamation or reconstruction); | |
| e) | the other Party has appointed to it an administrator or an administrative receiver; | |
| f) | an encumbrancer takes possession, or a receiver, manager or administrative receiver is appointed, of the whole or any part of the other Party’s assets; | |
| g) | the other Party ceases or suspends payment of any of its debts, or is unable to pay its debts; | |
| h) | the other Party makes any arrangement, compromise or composition in satisfaction of its debts which is proposed or entered into; or | |
| i) | any event analogous to those described in any of Articles 15.5(a) to 155(h) occurs in relation to the other Party in any jurisdiction in which that other Party is incorporated, resident or carries on business. |
| 16. | Effects of Termination |
| 16.1 | Upon termination or expiry of this Agreement for any reason whatsoever, except as otherwise provided herein, at the moment of effective termination or expiration: |
| a) | DISTRIBUTOR shall immediately cease and refrain from the importation, promotion, distribution, offering, sale, forwarding and shipping of the Products except to carry out and perform any outstanding distribution and sales; |
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| b) | DISTRIBUTOR shall immediately cease to act as distributor of the Products and will cease any reference to its activities as the distributor of GLYCOCHECK except to carry out and perform any outstanding distribution and sales. DISTRIBUTOR shall be entitled (at its option) to cancel any Purchase Orders with respect to which GLYCOCHECK has not issued a Purchase Order Confirmation. In case of termination of this Agreement by GLYCOCHECK pursuant to Article 15.1, GLYCOCHECK may, at its discretion, either ignore or fulfil any Purchase Order made by DISTRIBUTOR, whether GLYCOCHECK has issued a Purchase Order Confirmation or not; | |
| c) | DISTRIBUTOR shall immediately refrain from any use of the Trademarks or any other Intellectual Property Rights of GLYCOCHECK; | |
| d) | Each Party shall immediately return or destroy any Confidential Information of the other Party, as referred to in Article 12.2 of this Agreement to the Party that owns such Confidential Information held in any format (including electronic copies), and any and all copies thereof, but the Party that received such Confidential Information shall be permitted to retain one (1) copy of such Confidential Information strictly for accounting and legal purposes only. |
| 16.2 | GLYCOCHECK shall be under no obligation to take back the Products DISTRIBUTOR may still have in stock upon the termination or expiration of the Agreement. |
| 16.3 | DISTRIBUTOR’s obligation to pay all invoices related to the purchase of the Products shall continue in effect until paid or settled. |
| 16.4 | Under no circumstances will either Party be entitled to an indemnity or compensation in lieu of notice, nor will it be entitled to a goodwill indemnity or similar compensation in case of termination of the Agreement for any reason whatsoever. |
| 16.5 | This Article 16 shall survive and continue in full force and effect in accordance with its terms notwithstanding the expiration or termination of this Agreement for whatever cause. |
| 17. | Representations and Warranties |
| 17.1 | GLYCOCHECK hereby represents and warrants to that it has the right, ability and intention to enter into this Agreement and perform its obligations hereunder, that it has executed no other agreement in conflict with this Agreement, and that, before termination or expiration of this Agreement, it will not enter into any agreement that would conflict with this Agreement. GLYGOCHECK represents and warrants that it has filed for registration of the Trademarks. GLYCOCHECK represents and warrants that it has filed for and/or obtained Product-related patent protection hereto. GLYCOCHECK also represents and warrants that it either legally or beneficially owns or controls all rights, title and interest in and to GLYCOCHECK Intellectual Property Rights, and that it has not entered into any assignment, grant, mortgage, license or other agreement or encumbrance which would affect Distributor’s rights to utilize under this Agreement any of the Intellectual Property Rights. GLYCOCHECK further represents and warrants that, to the best of its knowledge at the Effective Date, none of the Intellectual Property Rights have been abandoned. GLYCOCHECK represents and warrants that DISTRIBUTOR’s importation of the Products into the Territory, that DISTRIBUTOR’s offering for sale and sale of the Products within the Territory, that DISTRIBUTOR’s customers’ use of the Products within the Territory and that DISTRIBUTOR’s used of the Trademarks within the Territory will, to the best of its knowledge at the Effective Date, not infringe the intellectual property rights of any third party. |
| GLYCOCHECK makes no other representations or warranties concerning the Intellectual Property Rights, including without limitation any express or implied warranty of merchantability or fitness for a particular purpose. Specifically, GLYCOCHECK makes no warranty or representation (i) regarding the validity or scope of the Intellectual Property Rights, and (ii) that any third party is not currently infringing or will not infringe the Intellectual Property Rights. | |
| 17.2 | DISTRIBUTOR represents, warrants and covenants that it has the right, ability and intention to enter into this Agreement and perform its obligations hereunder, that it has executed no other agreement in conflict with this Agreement, that, before termination or expiration of this Agreement and during the Non-Compete Term, it will not enter into any agreement that would conflict with this Agreement, and that it has the capacity and means to import, market, distribute and sell the Products in the Territory. |
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| 17.3 | LIMITATION ON LIABILITY. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO, LOSS OF INVESTMENT, ANTICIPATED PROFITS, BUSINESS, GOODWILL OR OTHER ECONOMIC LOSS) EVEN IF ADVISED OF THE POSSIBILITY THEREOF. This Article 17.3 shall survive and continue in full force and effect in accordance with its terms notwithstanding the expiration or termination of this Agreement for whatever cause. |
| 18. | Indemnification |
| 18.1 | Except as otherwise outlined in this Agreement, GLYCOCHECK will indemnify, defend, and hold harmless DISTRIBUTOR and DISTRIBUTOR’s officers, directors, employees, and agents from and against any and all losses, costs, liabilities, or expenses (including costs and reasonable fees of attorneys and other professionals) in connection with or related to (i) GLYCOCHECK’s breach of any representation, warranty, or covenant in this Agreement, (ii) the negligent act or omission of GLYCOCHECK, (iii) any damage to property, personal injury or death arising in any way from a fault or defect in the Products, except to the extent that damage, personal injury or death arises out of the act or omission of DISTRIBUTOR, and (iv) any and all claims that any of the Products or their labeling, use, marketing, sale, or importation infringes the intellectual property rights of any third party (each, an “Infringement Claim”), except to the extent that such Infringement Claim arises out of an act or omission by DISTRIBUTOR and that such act or omission is (A) without inducement by GLYCOCHECK, (B) without any contribution by GLYCOCHECK and (C) does not relate solely to the Products as delivered of their manufacture, importation, offer for sale, sale, use or labelling. |
| 18.2 | DISTRIBUTOR will indemnify, defend, and hold harmless GLYCOCHECK and GLYCOCHECK’s officers, directors, employees, and agents from and against any and all losses, costs, liabilities, or expenses (including costs and reasonable fees of attorneys and other professionals) in connection with or related to (i) DISTRIBUTOR’s breach of any representation, warranty, or covenant in this Agreement, (ii) the negligent act or omission of DISTRIBUTOR (iii) any damage to property, personal injury or death arising in any way in connection with the importation, promotion, distribution and sale of the Products, except to the extent that damage, personal injury or death arises out of (A) a fault or defect in the Products or (B) the act or omission of GLYCOCHECK and any claim of patent infringement of the Product if modified or combined with other products by DISTRIBUTOR without inducement by GLYCOCHECK, which modification or combination is the cause of the claim of patent infringement. |
| 18.3 | The Party seeking indemnification (the “Indemnified Party”) shall (i) give the other Party (the “Indemnifying Party”) written notice of such claim within 10 business days of becoming aware of such claim, (ii) cooperate with the Indemnifying Party, allow the Indemnifying Party access to materials, records and documents relevant to the defense of such claim, and take any other action reasonably required by the Indemnifying Party, at the Indemnifying Party’s expense, in the defense of such claim, and (iii) give the Indemnifying Party the right to exclusively control the defense and settlement of any such claim, except that the Indemnifying Party shall not enter into any admission or settlement that affects the Indemnified Party’s rights or interest without the Indemnified Party’s prior written approval. The Indemnified Party shall have no authority to settle any claim on behalf of the Indemnifying Party. All costs and expenses incurred by the Indemnifying Party in the defense of such claim shall be reimbursed by the Indemnified Party in case it is established during the defense and settlement that the claim concerned is not covered by the Indemnifying Party’s indemnification. |
| 18.4 | This Article 18 shall survive and continue in full force and effect in accordance with its terms notwithstanding the expiration or termination of this Agreement for whatever cause. |
| 19. | Insurance |
| 19.1 | During the Term, GLYCOCHECK shall maintain product liability insurance with a reputable insurer of no less than $1 Million USD for any one occurrence and no less than $2.5 Million USD in total in any one calendar year for any and all liability (however arising) for a claim that the Products are faulty or defective. GLYCOCHECK shall provide a copy of the insurance policy and proof of payment of the current premium to DISTRIBUTOR on request. |
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| 20. | Assignment and Other Dealings Prohibited |
| 20.1 | Neither Party shall, without the prior written consent of the other Party, assign or transfer this Agreement or its rights under this Agreement. |
| 20.2 | Notwithstanding Article 20.1, GLYCOCHECK may at any time sell, assign, transfer, charge, renew or otherwise dispose of this Agreement or deal in any other manner with this Agreement (in whole or in part) as it thinks fit, or sub-contract any or all of its obligations under it (together: “Assignment”). In case such Assignment materially affects DISTRIBUTOR’s rights and obligations pursuant to this Agreement, DISTRIBUTOR may, by giving GLYCOCHECK written notice within thirty (30) days from such Assignment, require GLYCOCHECK to re-negotiate the terms of this Agreement on commercially reasonable terms. |
| 21. | Waiver |
| 21.1 | No waiver of any breach of any provision of this Agreement, and no failure to insist on strict compliance with the terms of this Agreement by either Party shall be held to be a waiver of any other or subsequent breach by the other Party, and no failure of a Party to enforce any right of that Party shall preclude such Party’s right to subsequently enforce such provision or any other provision of this Agreement. Likewise, failure of either Party to require at any time strict compliance with the terms of this Agreement shall not be construed as a waiver or preclude or restrict the further exercise of that or any other right or remedy by that Party. |
| 22. | Severability |
| 22.1 | In the event a provision of this Agreement or any part of any provision of this Agreement is deemed by a court to be prohibited, illegal, invalid, void or unenforceable, the validity or legality or enforceability of all remaining provisions of this Agreement will not be affected and, in lieu of such prohibited, illegal, invalid, void or unenforceable provision, there will be added as part of this Agreement one or more provisions as similar in terms as may be legal, valid, and enforceable under applicable law. |
| 23. | Force Majeure |
| 23.1 | Except for payment obligations, neither Party shall be liable to the other Party for any delay, prevention, frustration, or impediment of performance of its obligations arising directly or indirectly from any cause beyond its reasonable control (each, a “Force Majeure Event”), provided that the Party whose performance has been diminished by the Force Majeure Event has taken all appropriate precautions as well as commercially reasonable measures to avoid any impediments caused by the Force Majeure Event. |
| 23.2 | The following circumstances shall qualify as a Force Majeure Event under this Agreement: |
| (a) | war, threat of or preparation for war, riots, terrorist attacks, insurrections or civil unrest, embargoes, sanctions, breaking off of diplomatic relations or similar actions, blockades or conflicts with respect to territorial issues; and | |
| (b) | diseases, plagues, earthquakes, storms, floods and any other climatic disaster, explosions, fires, thunder, machine breakdowns, and nuclear, chemical or biological contamination or sonic boom. |
| 23.3 | In the event of any Force Majeure Event, the Party confronted with the Force Majeure Event shall immediately give notice to the other Party and shall have the right to extend the Term for the duration of such Force Majeure Event or the contingency giving rise thereto for a maximum period of three (3) months. On expiry of said three (3) month period, either Party may, on written notice, terminate this Agreement without prejudice to its rights hereunder. |
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| 24. | Notices |
| 24.1 | All notices and other forms of communication required under this Agreement shall be in writing and must be delivered personally or sent to the recipient by either of the methods below: |
| (a) | in person through a reputable courier service; | |
| (b) | by fax with a confirmation slip; or | |
| (c) | by registered express mail with return receipt, to the addresses set out below: GlycoCheck BV |
For the attention of: Dr. Hans Vink
Oxfordlaan 70, 6229 EV Maastricht, The Netherlands
MicroVascular Health Solutions, LLC
PO Box 332, American Fork, Utah 84003
For the attention of: Robert M Long
| 24.2 | Any notice shall be deemed to have been duly delivered to the recipient’s address: |
| (a) | on the date of delivery if delivered in person, | |
| (b) | if delivered by a reputable courier, on the date and at the time that the courier’s delivery receipt is signed; | |
| (c) | on the third Business Day following the mailing date if sent by registered express mail, and | |
| (d) | the next Business Day if sent by fax. |
| 24.3 | Each Party may change the address to which notices are to be sent by giving the other Party written notice in the manner set forth above. |
| 24.4 | The provisions of this Article 24 shall not apply to the service of any proceedings or other documents in any legal action. |
| 25. | Limitation of Liability |
| 25.1 | Except as otherwise set forth in this Agreement, all other warranties, conditions and other terms implied by law are, to the fullest extent permitted by law, excluded from this Agreement. |
| 25.2 | Subject to Articles 25.1 and 7.9, Notwithstanding anything in this Agreement to the contrary, GLYCOCHECK’s total liability for damages in contract, tort (including negligence or breach of statutory duty), misrepresentation, restitution or otherwise, arising in connection with the performance or contemplated performance of this Agreement shall be limited to 1 Million USD for any one occurrence with a maximum of 2.5 Million USD in total in any one calendar year. |
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| 26. | Complete Agreement |
| 26.1 | This Agreement, including its appendices, constitutes the entire agreement between the Parties with all the rights and obligations existing between them with respect to the matters addressed therein. |
| 26.2 | The Agreement supersedes any prior contracts, negotiations, authorizations, representations and prior commitments of Parties hereto regarding the same subject matter. |
| 26.3 | Each Party acknowledges that, in entering into this agreement, it has not relied on, and shall have no right or remedy in respect of, any statement, representation, assurance or warranty (whether made negligently or innocently) other than as expressly set out in this agreement. |
| 26.4 | Nothing in this Article 26 shall limit or exclude any liability for fraud. |
| 26.5 | The Agreement is written in the English language which is the sole authoritative text. |
| 27. | Counterparts |
| 27.1 | This Agreement may be executed in one or more counterparts all of which taken together will constitute one and the same instrument. |
| 28. | Headings |
| 28.1 | Section headings used in this Agreement are for convenience only and form no part or in any way modify or define the text or meaning of any provision of this Agreement. |
| 29. | Construction |
| 29.1 | Except where the context requires otherwise, whenever used in this Agreement, the singular includes the plural, the plural includes the singular, the use of any gender is applicable to all genders and the word “or” has the inclusive meaning represented by the phrase “and/or.” The words “include” and “including” and variations thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed by the words “without limitation.” |
| 30. | Modifications |
| 30.1 | This Agreement can only be amended or modified in writing, signed by each of the Parties. |
| 31. | Applicable law Governing Law and Jurisdiction |
| 31.1 | This Agreement is governed by and construed in accordance with the laws of the United States of America without giving effect to its conflict or choice of law provisions. The Parties irrevocably agree that the laws of the state of Utah shall apply with exclusive jurisdiction therein to settle any dispute or claim that arises out of or in connection with this Agreement or its subject matter or formation (including non-contractual disputes or claims). |
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[SIGNATURE PAGE TO DISTRIBUTORSHIP AGREEMENT
BETWEEN GLYCOCHECK AND DISTRIBUTOR]
This Agreement has been entered into on the date stated below and each Party acknowledges receipt of its original.
Dated this 1st day of December , 2014
Signed for and on behalf of GlycoCheck BV
___________________________________________
By Dr. Hans Vink
Signed for and on behalf MicroVascular Health Solutions, LLC
___________________________________________
By Robert M Long
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Appendix 1. List of the Products and Prices *
| GS001V2. 1 | GlycoCheck Software V2.1 | 1 | |
| GS002V2 | GlycoCheck Video Microscope Camera | 1 | |
| V2 | |||
| GS003V3 | GlycoCheck Laptop PC V3 | 1 | |
| GS004V1 | GlycoCheck Carry Case V1 | 1 | |
| Total | Distributor System Total Price | $26,000 | |
| (Manufacturer List Price $29,995) | |||
| Product | Price USD | ||
|
GT001V2. 1 |
Software Support Service V2.1 | 1 | Included |
| GT002V1 | Remote Technical Training | 1 | Included |
| GM001V1 | User’s Manual | 1 | Included |
| Consumable Products | Quantity | Price USD | |
| GL001V10 | GlycoCheck Lens Tip XL ($550 Value) | 100 | Included |
| 0 | Included with system purchase | ||
| GL001V10 | GlycoCheck Lens Tip XL – Reorder | 100 | $400 |
| 0 | (Manufacturer List Price $550 USD) | ||
| Warranty | Quantity | Price USD | |
| GW001V3 |
3 Year Warranty Included with system purchase |
1 | Included |
| GW001V5 | 5 Year Warranty – (Manufacturer List Price) | 1 | $1,500 |
Minimum order to maintain exclusivity:
| Minimum order of GlycoCheck to | |
| By the end of Q32015 | 3 |
| By the end of Q4 2015: | 3 |
|
Minimum orders for 2016 will be established by December of 2015. |
|
| 2015 Total | 6 |
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|
Minimum order GlycoCheck Lens Tip XL | |
| By the end of Q32015 | 2000 |
| By end of Q4 2015: | 4000 |
|
Minimum orders for 2016 will be established by December of 2015 |
|
| 6000 |
*In view of inflation, the above prices will be linked to the Retail Price Index and corrected each year to reflect any increase in that rate.
Promotions to be agreed separately from time to time.
** The technical recommendations, brand and type of the appropriate i7 laptop will be communicated once agreement is in place.
*** The figure relates to additional expenses incurred by DISTRIBUTOR under Articles 6.6 and 6.8. GLYCOCHECK and DISTRIBUTOR will review this estimate each half year based on the average of the actual additional expenses incurred in the distribution and sale of the Products
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Appendix 2.
Trade Marks of GLYCOCHECK shall be supplied by GLYCOCHECK subsequently
| 20 |
Appendix 3.
First Line Customer Support and Returns Policy Part 1 First Line Customer Support Service
Set out here details of first line customer support service comprising of an operational and after- sale repair and maintenance service in respect of the Products as per Article 4.10
Part 2 Returns Policy
Set out here details of a returns policy as per Article 7.3
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Appendix 4
PATENT AND SOFTWARE LICENSE AGREEMENT
This PATENT AND SOFTWARE LICENSE AGREEMENT (“PSA”) is effective as of the first (1st) day of December, 2014 (“Effective Date”), and is entered into by and between GlycoCheck BV, a Dutch company with principal offices at Oxfordlaan 70, 6229 EV Maastricht, The Netherlands (“GLYCOCHECK”), and MicroVascular Health Solutions, LLC, a company located at PO Box 332, American Fork, Utah 84003 U.S.A. (“Licensee”).
RECITALS
WHEREAS, GLYCOCHECK is the exclusive owner and developer of a proprietary software system used to measure the Glycocalyx layer (the “Software”) and the exclusive licensee to a patent owned by University of Maastricht, represented by EP2215480B1 but including all patents and patent applications world-wide that are part of the related family of patents, including but not limited those patents and patent applications listed in Exhibit A (the “Patent”);
WHEREAS, Licensee wishes to obtain from GLYCOCHECK, and GLYCOCHECK wishes to grant and provide to Licensee, an exclusive license to the Software and Patent as further outlined in this PSA.
NOW, THEREFORE, in consideration of these premises and of the mutual covenants and conditions in this PSA and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
| 1. | DEFINITIONS |
1.1. “Documentation” means all user manuals, reference guides, brochures, installation manuals, specifications, release notes, error message manuals or other written documentation provided by GLYCOCHECK pertaining to the installation, use, data flows, features or performance of the Software and all source code.
1.2. “Improvements” means and includes any improvements, modifications, amendments to the Software, derivative works, or combinations of the Software with other product(s).
1.3. “Intellectual Property Rights” means patent(s), application for patent(s) and rights to patent(s) (whether granted or not), copyrights (whether registered or not), trademarks (whether registered or not), trade secrets, inventions, know-how, moral rights, ideas, processes, techniques, data, confidential information and all other proprietary rights that are embodied in any form of media.
1.4. “Maintenance and Support” shall mean ongoing maintenance and support as set forth in Section 7 hereof, and shall include all new versions, revisions, updates, temporary and permanent fixes or workarounds that may be necessary or appropriate to facilitate Licensee’s use of the Software.
1.5. “Software” means the computer software program in object code and source code form owned by GLYCOCHECK and forming part of the Software and all associated procedural code, and all components thereof, including all Documentation, Updates, Upgrades, and all other software and documentation provided by GLYCOCHECK to Licensee, and all intellectual property rights therein.
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1.6. “Source Code” means (i) the human-readable code making up the Software Product and all other software required for a reasonably skilled programmer to compile the machine-executable software code for such Software Product, including all required tools that are not commercially available on an off-the-shelf basis, and (ii) all related design charts, data flows and other documentation related to the Software Product needed to maintain and understand the code of the Software Product and all other similar documentation that would assist a programmer in the maintenance of the Software Product.
1.7. “Updates” means any and all fixes, patches, and corrections to, the Software or Documentation made independently by GLYCOCHECK and made generally available by Licensor to Licensee.
1.8. “Upgrades” means any enhancements, improvements, new releases, new versions and any material changes to the Software or Documentation made independently by GLYCOCHECK and generally offered by GLYCOCHECK.
| 2. | LICENSE TO SOFTWARE |
2.1. Subject to the terms and conditions of this PSA, GLYCOCHECK hereby grants to Licensee, and Licensee hereby accepts, an exclusive, paid-up, world-wide license in and to the Software to copy, have copied, make products utilizing the Software, make derivative works, modifications, and/or combination works, with the right to sublicense, loan, sell or otherwise transfer, the Software or any part or component thereof, to any third party.
2.2. GLYCOCHECK hereby grants to Licensee, and Licensee hereby accepts, an exclusive, paid-up, world-wide license in and to all GLYCOCHECK’s rights in the Patent including the rights to make, have made, use, sell or otherwise distribute, with the right to sublicense, any product which infringes any claim of the Patent.
| 3. | LICENSEE’S GENERAL COVENANTS |
3.1. Licensee may copy, amend, reverse engineer, decompile, recompile, disassemble, or otherwise derive the underlying structure, information or ideas embodied in the Software Product, and may make any derivative products or combine the Software Product with any other product pursuant to this PSA.
3.2. Licensee shall be solely responsible for its and its Authorized Users’ use of the Software and shall ensure that Licensee and all Authorized Users abide by and comply with this PSA in connection with their use of the Software. Licensee shall be responsible to GLYCOCHECK and any third party for any acts or omissions of Authorized Users, including, without limitation, failure of any Authorized User to comply with the terms of this PSA. GLYCOCHECK shall have the right to require Licensee to restrict or deny access to the Software by any Authorized User who is not in compliance with this PSA.
3.3. Licensee acknowledges that the Software contains a backup utility that is capable of creating copies of the analyses performed by the Software, and capable of securely storing such copies in storage either on the a hardware system or in a cloud-based environment.
| 4. | CONSIDERATION |
4.1. Upon execution of this PSA, and in consideration of the license granted herein, Licensee shall pay to GLYCOCHECK GLYCOCHECK a royalty of five percent (5%) of each transaction wherein Licensee is paid for use of the Software by a third party.
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| 5. | TERM AND TERMINATION |
5.1. This PSA shall come into effect on the Effective Date and remain in effect in perpetuity as paid-up licenses.
5.2. Except as otherwise specifically provided herein, the termination of this PSA shall not affect the rights, obligations or remedies of either party which accrued prior to the termination of this PSA and all such remedies shall survive the termination of this PSA.
| 6. | OWNERSHIP |
6.1. All rights, title and interest in the Software as so constituted at the Effective Date, and each and every component thereof, and the Intellectual Property Rights embodied therein shall at all times reside in GLYCOCHECK unless otherwise agreed to in a separate agreement. GLYCOCHECK retains all rights not expressly granted herein.
6.2. Licensee shall be the sole and exclusive owner of any and all right, title and interest in and to Improvements to the Software made by or for Licensee.
| 7. | MAINTENANCE AND SUPPORT |
7.1. GLYCOCHECK has set up and activated the Software for Licensee.
7.2. GLYCOCHECK shall provide to Licensee technical support and periodic Updates to the Software. GLYCOCHECK will, upon discovery, notify Licensee of any known problems with the Software and will provide to Licensee any discrepancy reports or technical newsletters when such problems are identified and listing all known “bugs” and their status and, to the extent possible, providing “fixes” and/or work-around procedures for such problems.
7.3. From time to time, GLYCOCHECK may release Upgrades to the Software. Such Upgrades will be provided to Licensee only upon payment of an additional license fee to be determined by GLYCOCHECK upon release of any such Upgrade.
| 8. | REPRESENTATIONS, WARRANTIES, AND DISCLAIMER OF LIABILITY |
8.1. Each party represents and warrants that it has full power and authority to enter into this PSA and its performance of its obligation hereunder does not conflict with or breach the terms and conditions of any agreement with any third party.
8.2. GLYCOCHECK warrants that it is the owner or exclusive licensee of the Software, that it has the right to convey the license set forth in Section 2 hereof, and that to the best of GLYCOCHECK’s knowledge, Licensee’s use of the Software in accordance with the terms of this PSA shall not infringe any third party rights in copyright, patent, or trade secret.
8.3. GLYCOCHECK warrants that the Software will be free from defects in design, materials, and workmanship for a period of three years from the date of delivery of the Software to Licensee. If the Software contains a defect in design, materials or workmanship and such Software is returned to GLYCOCHECK within (3) years of delivery of the Software to Licensee, GLYCOCHECK will repair or replace the Software, or issue a credit for the purchase price of the Software, with the choice to repair, replace or credit being within the sole discretion of GLYCOCHECK. The foregoing repair, replacement or credit remedy will be Licensee’s sole remedy for breach of the warranty set forth in this Section 9.3.
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8.4. Licensee acknowledges that the Software is provided to Licensee on an AS IS basis. EXCEPT AS OTHERWISE PROVIDED HEREIN, GLYCOCHECK DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS, STATUTORY OR IMPLIED, WITH RESPECT TO THE SOFTWARE, DERIVATIVE WORKS, AND DOCUMENTATION, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. GLYCOCHECK MAKES NO WARRANTY THAT THE SOFTWARE WILL MEET LICENSEE’S REQUIREMENTS, BE ERROR FREE, OR OPERATE WITHOUT INTERRUPTION.
8.5. THE PARTIES AGREE THAT GLYCOCHECK, ANY OF ITS AFFILIATED PERSON/ENTITY OR THIRD PARTY VENDORS SHALL NOT BE LIABLE TO LICENSEE (OR ANY PERSON CLAIMING RIGHTS DERIVED FROM THE LICENSEE’S RIGHTS), EXCEPT AS OTHERWISE PROVIDED HEREIN, FOR ANY DIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES OF ANY NATURE OR KIND WHATSOEVER, INCLUDING, BUT NOT LIMITED TO, LOST REVENUES OR PROFITS, LOSS OF BUSINESS OR OTHER ECONOMIC LOSS, LOSS OF DATA, PERSONAL INJURY, OR PROPERTY DAMAGE IN CONNECTION WITH OR ARISING OUT OF THE USE OF THE SOFTWARE AND DERIVATIVE WORKS, IRRESPECTIVE OF WHETHER GLYCOCHECK HAS ADVANCE NOTICE OF THE POSSIBILITY OF SUCH DAMAGES.
8.6. If the foregoing disclaimers and waivers of liability shall be deemed invalid or ineffective, GLYCOCHECK, its subsidiaries and affiliates, and any related persons or entities shall not be liable in any and all events beyond the amount of one thousand dollars ($1,000). If the foregoing limitation is held unenforceable, then the parties agree that GLYCOCHECK, its subsidiaries, affiliates and any related persons or entities, shall not be liable in any and all events beyond the cumulative total of all fees and compensation paid by Licensee to GLYCOCHECK under this PSA (including all Fees pursuant to Section 4 and Schedule A hereto, as well as any Upgrade fees and extended warranty fees set forth in Schedule A hereto). Both parties agree and understand that the pricing for the Software reasonably reflects the allocation of risk and the limitations of the liability set forth in this section.
| 9. | TRANSFER/ASSIGNABILITY |
9.1. Except as expressly outlined in this PSA may not be assigned or transferred by Licensee to any other entity or person. Any attempted assignment in violation hereof shall be void.
9.2. GLYCOCHECK may freely assign this PSA at any time to any subsidiary, parent or other affiliate or to any other party in connection with the sale, merger or other business combination involving all or substantially of that party’s assets of the line of business to which this PSA pertains.
| 10. | GENERAL PROVISIONS |
10.1. Relationship of the Parties. This PSA shall not constitute the designation of either Party as the representative or agent of the other, nor shall either Party by this PSA have the right or authority to make any promise, guarantee, warranty, or representation, or to assume, create, or incur liability or other obligation of any kind, express or implied, against, or in the name of, or on the behalf of, the other Party.
10.2. No Waiver. The failure of any Party to enforce any of its rights hereunder, or at law, shall not be deemed a waiver or a continuing waiver of any of its rights or remedies against the other Party, unless such waiver is in writing and signed by the aggrieved Party.
10.3. Governing Law; Venue. This PSA shall be interpreted and enforced under the laws of the State of Utah, without application of its conflicts or choice of law rules. The Parties irrevocably submit to the exclusive jurisdiction of the state and federal courts located in Salt Lake County, Utah for any action or proceeding regarding this PSA, and the Parties waive any right to object to the jurisdiction or venue of the courts in Salt Lake County, Utah.
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10.4. Notice. Any official notice as required by this PSA shall be addressed to:
| GLYCOCHECK BV: | LICENSEE: |
| Dr. Hans Vink, CSO | Robert M Long, CEO MVHS |
| Oxfordlaan 70, 6229 EV Maastricht | P.O. Box 332 |
| The Netherlands | American Fork, Utah 84003 |
Each of the Parties shall be responsible for notifying the other of any changes to the above information. All notices and other communications hereunder shall be given in writing and delivered: (a) by personal delivery, or by prepaid overnight or international courier service to the addresses set forth in this Section 11.4 as modified from time to time; or (b) by facsimile to such facsimile number as maybe provided in writing by a Party. Notices are deemed given on receipt or attempted delivery, if receipt is refused.
10.5. Entire Agreement. This PSA contains the entire understanding of the Parties with respect to the matters contemplated hereby, superseding all prior oral and written communications, negotiations, understandings and agreements of every kind. No promise, representation, warranty, or covenant not included in this PSA has been or is relied upon by the Parties, who have relied upon their own examination of the full PSA and the provisions thereof. No modification or amendment of this PSA shall be of any force or effect unless in writing expressly referencing this PSA and executed by both the Parties.
10.6. Attorney Fees. In any suit, proceeding or action to enforce any term, condition or covenant of this PSA or to procure an adjudication or determination of the rights of the Parties, the prevailing Party shall be entitled to recover from the other Party, in addition to any award of costs or disbursements provided by statute, reasonable sums as attorney fees and costs and expenses in connection with such suit, proceeding or action, including appeal, which sums shall be included in any judgment or decree entered therein.
10.7. Injunctive Relief. Notwithstanding the foregoing, it is agreed that any breach of this PSA by Licensee making any unauthorized use of the Software or engaging in any other than as outlined in this PSA will cause immediate and irreparable harm to GLYCOCHECK. In the event of any such breach by licensee, GLYCOCHECK shall be entitled to immediate and interim injunctive relief from any court of competent jurisdiction to restrain such unauthorized use or conduct, and to other injunctive relief as may be necessary to protect GLYCOCHECK’s Intellectual Property Rights.
10.8. Severability. If any one or more provisions of this PSA shall be found to be illegal, invalid or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this PSA a legal, valid and enforceable provision of similar terms to the extent legally possible.
10.9. Headings. The paragraph headings used herein are for convenience and shall not be deemed to modify or construe the provisions hereof.
10.10. Counterparts. This PSA may be executed in one or more counterpart copies, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.
10.11. Force Majeure. Neither Party shall be liable to the other Party for any delay or failure to perform any other services nor did obligations set forth in this PSA due to cause beyond its reasonable control. Performance times shall be considered extended for a period of time equivalent to the time lost because of such delays.
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IN WITNESS WHEREOF, the parties hereto have executed this PSA by their respective representatives below.
| GLYCOCHECK: | LICENSEE: |
| GLYCOCHECK BV | MICROVASCULAR HEALTH SOLUTIONS |
| By: _________________________ |  |
| Name: Dr. Hans Vink | By: _________________________ |
| Title: Manager | Name: Robert M Long |
| Title: CEO |
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Exhibit 10.2
AGREEMENT
THIS AGREEMENT is entered into this 13th day of May 2015 (the ''Effective Date"), by and between the "VHS Parties" and the "MVHS Parties," as these terms are defined herein.
RECITALS
WHEREAS, as used herein, the term "VHS Parties" shall collectively refer to VASCULAR HEALTH SCIENCES, LLC, a Delaware limited liability company ("VHS"), THEODORE C. SKOKOS, an individual, LOAN PEAK INNOVATIVE HOLDINGS, LLC, a Utah limited liability company, JD2 HOLDINGS, INC., a Colorado corporation, DAYID DANIELS, an individual, ATMADHARMA, LLC, a California limited liability company, BRUCE BOUCHE, an individual, the TED AND SHANNON SKOKOS FOUNDATION, Texas non-profit corporation, and PVSA INVESTMENTS LLC, a Nevada limited liability company;
WHEREAS, as used herein, the term ''MVHS Parties" shall collectively refer to MICROVASCULAR HEALTH SOLUTIONS LLC, a Delaware limited liability company ("MVHS"), VIGOROUS HEALTH LLC, a Delaware limited liability company ("Vigorous Health"), and ROBERT LONG, an individual;
WHEREAS, VHS is a limited liability company that was created to engage in the business of manufacturing and marketing the products Arterosil, ArterosilHP, and other products related to improving vascular health and the endothelium glycocalyx (the "Business");
WHEREAS, VHS in the process of winding down operations due to a lack of money needed to fund ongoing operations.
WHEREAS, THEODORE C. SKOKOS is a member in VHS;
WHEREAS, LOAN PEAK INNOVATIVE HOLDINGS, LLC is a member in VHS; WHEREAS, JD2 HOLDINGS, INC. is a member in VHS;
WHEREAS, ATMADHARMA, LLC is a member in VHS;
WHEREAS, the TED AND SHANNON SKOKOS FOUNDATION is a creditor of VHS;
WHEREAS, PVSA INVESTMENTS LLC is a creditor of VHS;
WHEREAS, MVHS is a limited liability company that was created to engage in the business of manufacturing and marketing the products related to improving vascular health and the endothelium glycocalyx;
WHEREAS, Vigorous Health is a limited liability company that was created to engage in the business of manufacturing and marketing the products related to improving vascular health and the endothelium glycocalyx;
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WHEREAS, Robert Long, by and through LOAN PEAK INNOVATIVE HOLDINGS, LLC, a Utah limited liability company, is a member in VHS, and Robert Long is a member in MVHS, and a member in Vigorous Health, and desires to continue to pursue the Business through MVHS and Vigorous Health;
WHEREAS, the MVHS Parties desire to compensate the VHS Parties for their contributions to the Business, and to obtain releases from each of the VHS Parties; and
WHEREAS, the VHS Parties are willing to facilitate the MVHS Parties' pursuit of the Business by providing certain releases to the MVHS Parties.
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements, covenants, representations, warranties and promises set forth herein, the parties agree as follows:
ARTICLE I
PAYMENT TO VHS POOL
Section 1.1 The VHS Pool. VHS shall establish a pool (the "VHS Pool") to receive royalty payments on the sale of products that are directed to support, maintain or improve the health of the endothelium glycocalyx (the "Products"). VHS shall place all royalty payments on the Products that received from any person or entity, regardless of whether such person or entity is a party to this Agreement, into the VHS Pool. VHS shall distribute the VHS Pool to its members and creditors according to Section 10.4 of the VHS Limited Liability Company Agreement and all applicable rules, regulations, and laws governing the wind down of VHS.
Section 1.2 MVHS Payments to the VHS Pool. Subject to the terms and conditions set forth in this Agreement, MVHS shall pay to VHS a one percent (1%) royalty (the ''MVHS Royalty") on its revenue from the licensing and/or gross sales of the Products sold to any person or entity other than Vigorous Health. Gross sales shall not include any taxes, shipping or handling fees collected, and shall be reduced by any refunds on sales of the Products. VHS shall place the MVHS Royalties in the VHS Pool. MVHS's obligation to the MVHS Royalty shall cease when the VHS Pool reaches a grand total of fifteen million and 00/100 dollars ($15,000,000.00), regardless of the source of contributions to the VHS Pool.
Section 1.2. l MVHS Payments to the VHS Pool under Liquidity Event. In the event that MVHS is purchased in an arms-length transaction with a third party or makes an IPO (each of which is herein referred to as a "MVHS Liquidity Event"), MVHS shall pay the VHS Pool up to (a) one percent (I%) of the gross proceeds from the MVHS Liquidity Event after taxes, or (b) the amount necessary to bring the VHS Pool to a grand total of fifteen million and 00/100 dollars ($15,000,000), whichever is less, but in no event shall the amount paid under either Section l.2.1 (a) or (b) result in a grand total of less than seven million, five hundred thousand and 00/100 dollars ($7,500,000) being paid to the VHS Pool. If a payment of one percent (1%) of the gross proceeds from the MVHS Liquidity Event after taxes results in less than a grand total of $7,500,000 being paid to the VHS Pool, MVHS shall pay the additional amount required to reach a grand total of
$7,500,000.
Section 1.3 Vigorous Health Payments to the VHS Pool. Subject to the terms and conditions set forth in this Agreement, Vigorous Health shall pay to VHS a one percent (1%) royalty (the "Vigorous Health Royalty") on its revenue from the licensing and/or gross sales of the Products sold to any person or entity other than MVHS. Gross sales shall not include any taxes, shipping or handling fees collected. VHS shall place the Vigorous Health Royalties in the VHS Pool. Vigorous Health's obligation to the Vigorous Health Royalty shall cease when the VHS Pool reaches a grand total of fifteen million and 00/100 dollars ($15,000,000.00), regardless of the source of contributions to the VHS Pool.
Section 1.3.1 Vigorous Health Payments to the VI-IS Pool under Liquidity Event. In the event that Vigorous Health is purchased in an arms-length transaction with a third party or makes an IPO (each of which is herein referred to as a ''Vigorous Health Liquidity Event"), Vigorous Health shall pay the VHS Pool up to (a) one percent (1%) of the gross proceeds from the Vigorous Health Liquidity Event after taxes, or (b) the amount necessary to bring the VHS Pool to a grand total of fifteen million dollars ($15,000,000), whichever is less, but in no event shall the amount paid under either Section 1.3.1 (a) or (b) result in a grand total of less than seven million, five hundred thousand and 00/100 dollars ($7,500,000) being paid to the VHS Pool. If a payment of one percent (1%) of the gross proceeds from the Vigorous Health Liquidity Event after taxes result in less than a grand total of grand total of $7,500,000 being paid to the VHS Pool, Vigorous Health shall pay the additional amount required to reach a grand total of $7,500,000.
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Section 1.4 Royalty Quarterly Reports. MVHS and Vigorous Health shall submit to each of the VHS Parties a quarterly royalty report ("Royalty Quarterly Report") during any fiscal quarter during which it has any sales of the Products. Each Royalty Quarterly Report shall be accompanied by payment of the MVHS Royalty or Vigorous Health Royalty, as the case may be, then due with respect to the calendar quarter just ended. Royalty Quarterly Reports and accompanying payments shall be submitted within thirty (30) days following the end of each fiscal quarter, and shall set forth, as applicable, the gross sales of Products for such quarter, the MVHS Royalty or Vigorous Health Royalty payment due thereon, and any deductions for taxes, shipping or handling fees collected, or refunds.
Section 1.5 VHS Pool Statement. VHS shall maintain records regarding all payments to the VHS Pool. Within thirty (30) days of the grand total of the VHS Pool reaching fifteen million and 00/100 dollars ($15,000,000.00) VHS shall provide MVHS, Vigorous Health and the other VHS Parties with a statement indicating that the VHS Pool has reached the fifteen million and 00/100 dollar ($15,000,000.00) cap. Any payment of royalties over the fifteen million and 00/100 dollar ($15,000,000.00) cap shall be returned to the party that paid royalties to the VHS Pool for the immediately prior fiscal quarter. If more than one party paid royalties during the immediately prior fiscal quarter then VHS shall return the overpayment of royalties to such parties on a prorated basis in proportion to the amounts paid by such parties for the immediately prior fiscal quarter.
Section 1.6 MVHS and Vigorous Health Records. MVHS and Vigorous Health shall each keep correct and complete records with respect to the Products sold. The relevant records of MVHS and Vigorous Health shall be open to inspection at all reasonable times during normal business hours by a representative of any of the VHS Parties, provided that the Party requesting an inspection provide at least ten (10) business days' advance notice. Any such inspection shall be limited to those records which MVHS and Vigorous Health are required to maintain under this Agreement and shall include accounting records, tax records, financials, invoices and purchase orders reflecting MVHS's and Vigorous Health's sales of the Products during the prior three years. The VHS Parties agree to hold all such data and reports completely confidential and to impose a similar requirement of confidentiality on any representative or accountant retained to perform an inspection. Among other things, if any inspection reveals that the royalties reported and/or paid by the party to VHS during any calendar year were understated, the unpaid royalties shall be due and payable within thirty (30) days after written demand from any of the VHS Parties. AH costs and expenses incurred by a party in connection with that party's request for any inspection of records and books of account shall be borne by the party requesting the inspection. Nothing herein shall alter the rights and obligations of the VHS Parties under the VHS Limited Liability Company Agreement with regard to access to VHS books and records.
Section 1.7 VHS Records. VHS shall keep correct and complete records with respect to payments to the VHS Pool received from any party, regardless of whether such party is a party to this Agreement. Upon request by MVHS, Vigorous Health and/or any of the other VHS Parties, the relevant records of VHS shall be open to inspection at all reasonable times during normal business hours by a representative of MVHS, Vigorous Health and/or any of the VHS Parties provided that the Party requesting an inspection provide at least ten (10) business days' advance notice. Any such inspection shall be limited to those records which VHS is required to maintain under this Agreement and shall include accounting records, tax records, financials, invoices and purchase orders reflecting monies received from MVHS or Vigorous Health and MVHS 's and Vigorous Health's sales of the Products. MVHS, Vigorous Health and the other VHS Parties agree to hold all such data and reports completely confidential and to impose a similar requirement of confidentiality on any accountant retained to perform an inspection. Among other things, if any inspection reveals that the party paid royalties to VHS after that parties VHS Pool cap had been reached, the overpaid royalties shall be due and payable to such party within thirty (30) days after written demand from such party. All costs and expenses incurred by a party in connection with that party's request for an inspection of records and books of account shall be borne by the party requesting such inspection. Nothing herein shall alter the rights and obligations of the VHS Parties under the VHS Limited Liability Company Agreement with regard to access to VHS books and records.
Section 1.7 Confidentiality. VHS shall maintain all records and information concerning payments by any party to the VHS Pool strictly confidential, with the exception of providing a party with a VHS Pool Statement when such party's VHS Pool cap has been attained.
ARTICLE II
CLOSING
Section 2.1 Date, Time and Place of Closing. The consummation of the transactions contemplated hereby (the "Closing") shall be held on May 13, 2015, at 9:00 a.m., MST.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
As an inducement to each party to enter into this Agreement and to consummate the transactions contemplated hereby, each party makes the following representations and warranties to the other parties. For purposes of this Article III, whenever a representation or warranty is qualified as having been made "to the best of [a party's] knowledge," such phrase shall mean the identified party's knowledge after reasonable inquiry.
Section 3.1 MVHS. MVHS warrants and represents that it is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware.
Section 3.2 Vigorous Health. Vigorous Health warrants and represents that it is a limited liability company and duly organized, validly existing, and in good standing under the laws of Delaware.
Section 3.3 VHS. VHS warrants and represents that it is a limited liability company and duly organized, validly existing, and in good standing under the laws of Delaware.
Section 3.4 Power and Authority. Each signatory executing this Agreement on behalf of a party that is an entity warrants and represents that such party is duly organized, validly existing, and in good standing and has the requisite power and authority to perform the covenants set forth in this Agreement and to legally bind the party for whom that signatory acts, and has obtained all necessary approval and documents that may be necessary to legally bind such party.
Section 3.5 Execution and Delive1y Permitted. Each party executing this Agreement warrants and represents that the execution, delivery and performance of this Agreement and each instrument and document executed by such party in connection with this Agreement will not violate or result in a breach of any term of such party's Certificate of Formation or Operating Agreement, or violate any law or any order, rule or regulation applicable to such party of any court or of any regulatory body, administrative agency or other governmental instrumentality having jurisdiction over such party or its properties.
Section 3.6 No Pending Litigation. No litigation, tax claim or liability, proceeding, or dispute of any kind is pending or, to each party's knowledge, threatened against or affecting the parties, the adverse determination of which might affect each party's ability to perform its obligations under this Agreement or under any instrument or agreement required by this Agreement.
Section 3.7 No Additional Representations or Warranties. Except to the extent listed above, the parties make no additional representations or warranties.
ARTICLE IV
MISCELLANEOUS
Section 4.1 Non-Disparagement. No party is to speak ill of or disparage any other party or its principal(s) or make statement,; characterizing another party's behavior or conduct that led to this Agreement.
Section 4.2 Tolling of Limitations. The parties agree that any applicable limitations periods for the TED AND SHANNON SKOKOS FOUNDATION and PVSA INVESTMENTS LLC to bring any claims against applicable VHS Parties for its/their breach of the loan agreements with the TED AND SHANNON SKOKOS FOUNDATION and PVSA INVESTMENTS LLC and its nonpayment of the related promissory notes made by VHS to the TED AND SHANNON SKOKOS FOUNDATION in the amount of two million and 00/100 dollars ($2,000,000.00) and to PVSA INVESTMENTS LLC in the amount of two million and 00/100 dollars ($2,000,000.00) are hereby tolled from the date of this agreement until one hundred eighty (180) days after any party hereto gives written notice of its termination of this tolling agreement.
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Section 4.3 Covenant Not to Sue. The TED AND SHANNON SKOK.OS FOUNDATION and PVSA INVESTMENTS LLC covenant not to bring any claims against applicable VHS Parties for its/their breach of the loan agreements with the TED AND SHANNON SKOKOS FOUNDATION and PVSA INVESTMENTS LLC and its nonpayment of the related promissory notes made by VHS to the TED AND SHANNON SKOKOS FOUNDATION in the amount of two million and 00/100 dollars ($2,000,000.00) and to PVSA INVESTMENTS LLC in the amount of two million and 00/100 dollars ($2,000,000.00) during the term of this Agreement.
Section 4.4. Termination by VHS Parties. A VHS Party may terminate this Agreement solely for (a) a material breach of the Agreement by a MVHS Party, or (b) after a consecutive period of eighteen (18) months during which no payments are made to the VHS Pool.
Section 4.5 Covenant Not to Circumvent. The VHS Parties and the MVHS Parties covenant and agree that VHS, MVHS and Vigorous Health shall not take any actions to circumvent this Agreement. This covenant not to circumvent the Agreement includes a covenant that the VHS Parties and the MVHS Parties shall not create any company or enter into any agreement, either directly or indirectly, to circumvent any provision or obligation of this Agreement.
Section 4.6 Attorneys' Fees; Arbitration. Any dispute with respect to this Agreement shall be resolved by binding arbitration upon the written request of either party hereto, at its option, and in accordance with the Commercial Arbitration Rules of the American Arbitration Association. Judgment upon the award rendered may be entered in any court having jurisdiction thereof. Notwithstanding the foregoing, nothing herein shall prohibit a party hereto from seeking injunctive relief in a court having jurisdiction thereof. All costs, fees and expenses relating to the arbitration shall be allocated among the parties in accordance with the determination made by the arbitrator(s).
Section 4.7 Additional Documents. After Closing, each party agrees to furnish such additional documents as are necessary to give effect to the terms and conditions of this Agreement and to complete the transactions contemplated hereby.
Section 4.8 Time is of the Essence. Time is of the essence in the performance of the obligations of the parties hereunder.
Section 4.9 Headings. The headings of the sections of this Agreement are for convenience of reference only, and are not to be considered in construing this Agreement. Whenever required by the context of this Agreement, the singular shall include the plural and the masculine shall include the feminine and vice versa.
Section 4.10 Entire Agreement. This Agreement and the Exhibits attached hereto and incorporated herein by this reference contain the entire Agreement of the parties hereto with respect to the transactions contemplated hereby and supersede all prior agreements, arrangements, and understandings between the parties, relating to the subject matter hereof. No inducements contrary to the terms of this Agreement exist. No waiver of any term, provision, or condition of this Agreement, whether by conduct or otherwise, in any one or more instances shall be deemed to be construed as a farther or continuing waiver of any such term, provision or condition or any other term, provision or condition of this Agreement. This Agreement may not be modified orally and may only be amended in a writing executed by all parties hereto.
Section 4.11 Counterparts. This Agreement may be executed in one or more counterparts pursuant to original or facsimile copies of signatures which in the aggregate shall comprise one Agreement.
Section 4.12 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any law or public policy, an other terms and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible.
Section 4.13 Binding on Successors; No Assignment. All of the terms, provisions and conditions of this Agreement shall be binding upon and inure to the benefit of the parties hereto, and to their respective successors. This Agreement may not be assigned without the prior written consent of all parties hereto.
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Section 4.14 Confidentiality. Each party to this Agreement shall maintain all information gained from each other party in connection with the evaluation of and preparation to consummate the transactions contemplated by this Agreement (the "Confidential Information") in strict confidence, and shall take all reasonable precautions necessary to prevent disclosure, access to, or transmission of the Confidential Information, or any part thereof, to any third party, except for the exclusive purpose contemplated hereby. If the Closing does not occur for any reason, each party shall immediately return all copies and recordings of the Confidential Information in its possession or under its control and delete all records thereof in any data storage system maintained by or for that party. The parties hereto agree and acknowledge that remedies at law for any breach of their obligations under this Article are inadequate and that in addition thereto any offended party shall be entitled to seek equitable relief, including injunctive relief and specific performance, in the event of any breach, without the necessity of demonstrating the inadequacy of monetary damages.
Section 4.15 No Third Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their permitted successors and nothing herein, express or implied, is intended to or shall confer upon any other person or entity, any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Agreement.
Section 4.16 Notices. Any notice, election, payment, report or other correspondence required or permitted hereunder shall be deemed to have been properly given or delivered when made in writing and delivered personally to an officer of the party or to the individual to whom directed, or when sent by United States mail with all necessary postage or charges fully prepaid, return receipt (or in the case of a facsimile, confirmation of delivery) requested; and addressed to the party to whom directed at its below specified address. Any party may at any time change its address for purposes of this Agreement by giving written notice of such change of address to all other parties.
| If to MVHS: | If to Vigorous Health: |
| Robert M Long | Robert M Long |
| 7 South Lone Peak Drive | 7 South Lone Peak Drive |
| Alpine, Utah 84004 | Alpine, Utah 84004 |
| If to VHS: | |
| Robert M Long | |
| 7 South Lone Peak Drive | |
| Alpine, Utah 84004 | |
| and | |
| David Daniels | |
| 4560 Frying Pan Road | |
| Basalt, Colorado 81621 |
Section 4.16 Represented by Counsel. Each party has been represented by counsel of their choice in negotiating and executing this Agreement, or has waived their choice to be represented by counsel in negotiating and executing this Agreement. The parties have read and understand the contents of this Agreement and its legal effect.
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ARTICLE V
GENERAL RELEASE
Section 5.1 Mutual General Release. Except for amounts owed by VHS under the loan agreements with and promissory notes to the Ted and Shannon Skokos Foundation and PVSA Investments LLC, each party to this Agreement hereby releases every other party to this Agreement from all claims and causes of action, whether asserted or not, that arise from any events, circumstances, or conduct that occurred before the Effective Date of this Agreement and are known to have caused injury to that party before the Effective Date of this Agreement.
Section 5.2 General Release by the Ted and Shannon Skokos Foundation and PVSA Investments LLC. When the VHS Pool reaches a grand total of fifteen million and 00/100 dollars ($15,000,000.00), regardless of the source of contributions to the VHS Pool, the Ted and Shannon Skokos Foundation and PVSA Investments LLC each hereby releases every other party to this Agreement from all claims and causes of action, whether asserted or not, that arise from any events, circumstances, or conduct relating to the amounts owed by VHS under the loan agreements with and promissory notes to the Ted and Shannon Skokos Foundation and PVSA Investments LLC.
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lN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day, month, and year first above written. i VASCULAR HEALTH SCIENCES LLC, aDelaware limi t ' e liabi l l ity c z ompa n r y By: PrintedName: i< - o ..vt - L t' \ .c, ,J Its: C, t:.0 MICROVASCULAR HEALTH SOLUTIONS LLC, a Delaware limited liability company By Printed Name: Rcb " L D "": † Its: C .E:.n LONE PEAK INNOVATIVE HOLDINGS, LLC, a Utah li m i i t L ed l w iab i t li t - y ¼ co m J p a = ny By: Printed Name: {l_r3 l.: - t }_ - Its: Ma.1, - 1.c,fj"e. V VIGOROUS HEALTH LLC, aDelaware li m k ited li a r bil i r ty c = ompany By: Printed Name: . l i:t - L,; - Its: C. E:.o THEODORE SKOKOS By: Printed Name: _ _ . _ _ , ROBERT LONG By: Printed Name: TED AND SHANNON SKOKOS JD2 HOLDINGS, INC., FOUNDATION, A Texas non - profit corporation :;olo By: :!f:.s,M,,/,4, n1cd_ Printed Name: ----------- - 1 ts: _ Its: CE a /Jn/4 hC1:f t:., --- - 1
::: r. z r: . - ., - , - ., :::; C .,.. - ;:: ..,; I i ("' . (P 0 :J . ci_ - - ;;a - . - .., . - ; - r: lj - • ::: :::; .,,,. > - , J,/ 0 - C z '.r. c z . : . : . : , . : = - <: G ,... ._, I :::::: , ? - , , > . . ,:" Q . " , ' ' . r. z I :t \ I r i (1 \ z : , > .;' r: , - . . .. r . . . - - . : < . . ; , . Ź :;;; - - r > n - , , r .. . , r.; 'J:
PVSA INVESTMENTS LLC, A Nevada limited liability company By: ATMADHARMA, LLC, ACalifomi a · · b i m · • i t c _ o m . - pa - ny By: Printed Name: u cJ·t:e Name : PP - Uc - If£_ K Printed Its: A - G - s/L M. Its: BRUCE l· - By: DAYID DANIELS By: c.E_K u._CJtE l PrintedName: Name : Printed v
\ ,• PVSA INV , A Nevada 1 11 1 1 - 1,, te d l u : 1 1lltv - 'f o m pa ny I ' y: , V - .: '[ , - - ,' \ ' 11' Printed y rne : JCo Tf J{f Its: A C1hor1 i. J Kep Ce seJdv ATMADHARMA, LLC, A Ca l ifornia limited li ability compan y By: P r inted N a m e : ------------- - Its : BRUCE BOUCHE B y: Pr i nted Na m e : - ------------ - DAYID DANIELS By : Printed Name: _
PVSA INVESTMENTS LLC, A Nevada limited liability company By: _ Printed Name: Its: ATMADHARMA, LLC, A California limited liability company By: Printed Name: Its: BRUCE BOUCHE By. Printed Name: _ Bv,:. t - -- =:7<v' Printed Name}j .a //f /4. /,?/ cz{
Exhibit 31
Certification of our Chief Executive Officer and Interim Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, William Resides, certify that:
1. I have reviewed this quarterly report on Form 10-Q/A of BioRegenx, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report, our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.
Date: October 9, 2024
/s/ William Resides
Name: William Resides
Titles: Chief Executive Officer, Interim Chief Financial Officer
(Principal Executive Officer, Principal Financial and Accounting Officer)
Exhibit 32
Certification of our Chief Executive Officer and Interim Chief Financial Officer Pursuant to 18 U.S.C. Section 1350
as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, William Resides, the Chief Executive Officer and Interim Chief Financial Officer of BioRegenx, Inc. (the “Company”), hereby certify, that, to my knowledge:
1. The Quarterly Report on Form 10-Q/A for the quarterly period ended March 31, 2024 (the “Report”) of the Company fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: October 9, 2024
/s/ William Resides
Name: William Resides
Titles: Chief Executive Officer, Interim Chief Financial Officer
(Principal Executive Officer, Principal Financial and Accounting Officer)