Profusa, Inc 8-K, filed Jul 31, 2026
Profusa, Inc. (PFSA)
About this 8-K
Profusa, Inc filed this 8-K on July 31, 2026.
Items reported
- Item 1.01: Entered into a material agreement
- Item 3.02: Unregistered sale of equity
- Item 5.03: Charter or bylaw amendment, or fiscal year change
- Item 7.01: Regulation FD disclosure
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Item 1.01 - Entry into a Material Definitive Agreement.
On July 31, 2026, Profusa, Inc., a Delaware corporation (the “Company” or “Profusa”), entered into an Option Agreement (the “Option Agreement”), by and among the Company, CentralLarkfieldKarin NA LLC (“CLK”), Venkata Boyapalli (“Boyapalli”), a privately held trust (the “Trust” and, together with CLK and Boyapalli, the “Sellers” and each a “Seller”), and, solely for purposes of Sections 5, 8 and 10 thereof, G3 Vision Labs Inc., a New Jersey corporation (“G3”), Med Screen Laboratories Inc., a New Jersey corporation (“Med Screen”), Dominion Diagnostics LLC, a Delaware limited liability company (“Dominion”) and Acutis Diagnostics Inc., a New York corporation (“Acutis” and, together with G3, Med Screen and Dominion, the “Target Companies” and each a “Target Company”).
The Option Agreement provides the Company with the right, but not the obligation (the “Call Option”), to acquire from the Sellers all of the equity securities (the “Target Securities”) held by the Sellers in G3, which constitute 100% of the equity securities in G3. G3 owns all or substantially all of the equity securities of Med Screen, Dominion and Acutis and, accordingly, if the Company exercises the Call Option and consummates the purchase of the Target Securities (as defined below), G3, Med Screen, Dominion and Acutis will become direct or indirect subsidiaries of the Company.
Pursuant to the Option Agreement, the Company’s ability to exercise the Call Option is subject to satisfaction of, among other items, the following conditions: (i) the Company shall have consummated, or received binding commitments to consummate, one or more financings resulting in aggregate gross proceeds to the Company or G3 of at least $30 million; (ii) certain indebtedness of G3 shall be refinanced, repaid, or otherwise satisfied (or its existing senior secured debt lenders shall have consented to the exercise of the option); (iii) the Company’s Certificate of Designation of Preferences, Rights and Limitations of Series A Non-Voting Convertible Preferred Stock shall be in effect, (iv) approval of the Preferred Stock Conversion Proposal (as defined below) and the Nasdaq Proposal (as defined below) by the requisite holders of Common Stock at a duly convened meeting of the Company’s stockholders; (v) no suspension or removal from listing of the Common Stock on Nasdaq (as defined below), and no initiation or threatening of any proceedings for any of such purposes or delisting, shall have occurred, and (vi) any and all obligations of any Seller as guarantor, co-obligor or surety for any indebtedness of any Target Company shall have been terminated and released in full, without any liability to such Seller from and after the Closing. The consummation of the purchase of the Target Securities will also be subject to execution and delivery of definitive acquisition documents by the Sellers and the Company.
The Option Agreement provides that the Call Option will expire on date that is 90 days after the Target Companies provide certain audited and reviewed financial information to Buyer.
As consideration for the Sellers’ execution of the Option Agreement, the Company issued to the Sellers the following consideration: (i) an aggregate of 201,120 shares of the Company common stock, par value $0.0001 per share (“Common Stock”); and (ii) an aggregate of 52,903.566 shares of Series A Non-Voting Convertible Preferred Stock (the “Series A Preferred Stock”), a newly-designated series of preferred stock having the rights, privileges and preferences set forth in the Certificate of Designation (as defined below) (together, the “Option Grant Consideration”). If the Company exercises the Call Option, the Sellers will be entitled to receive 53,918.113 additional shares of the Series A Preferred Stock in the aggregate. Each share of Series A Preferred Stock is convertible into 1,000 shares of the Company’s Common Stock, subject to receipt of stockholder approval. If the Company does not satisfy the conditions to exercise the Call Option or the Call Option remains unexercised for any reason, G3 stockholders will retain the Option Grant Consideration. If after the date that is eighteen (18) months after the closing, approval by the Company’s stockholders of the Preferred Stock Conversion Proposal has not been obtained and the Company is unable or otherwise fails to deliver, or cause to be delivered, shares of Common Stock issuable upon conversion of shares of Series A Preferred Stock to any Seller, then, at the election of each Seller (exercisable by written notice to Buyer), Buyer shall redeem the shares of Series A Non-Voting Convertible Preferred Stock issued to the Sellers upon such closing for cash at a price per share equal to the then-fair market value of the Common Stock issuable upon conversion thereof.
The discussion of the Certificate of Designation in Item 5.03 of this Current Report on Form 8-K is incorporated into this Item 1.01 by reference.
Pursuant to the Option Agreement, the Company has agreed to hold a stockholders’ meeting (the “Stockholders’ Meeting”) to submit the following matters to its stockholders for their consideration: (i) the approval in accordance with applicable rules of the Nasdaq Stock Market, LLC (the “Nasdaq”) of the conversion of the Series A Preferred Stock into shares of Common Stock (the “Preferred Stock Conversion Proposal”), (ii) the approval of the transactions contemplated by the Option Agreement in accordance with applicable Nasdaq Listing Rules (the “Nasdaq Proposal”), (iii) the approval of an Amended and Restated Equity Incentive Plan of the Company that will provide for new awards for a number of shares of Common Stock not exceeding 15% of the fully diluted shares of capital stock of the Company outstanding immediately after the Closing, as mutually agreed upon by the Company and the Target Companies, and (iv) to the extent deemed necessary or advisable by the Company’s board of directors, approval of an amendment to the Company’s certificate of incorporation to effect a reverse stock split (the matters contemplated in items (i) through (iv) collectively, the “Parent Stockholder Matters”).
Pursuant to the Option Agreement, if the Company exercises the Call Option, it will be obligated as promptly as practicable following the closing of the purchase and sale of the Target Securities pursuant to such exercise (the “Closing”) (and in any event not later than 75 days following the Closing), to prepare and file with the SEC a Registration Statement on Form S-3 (or, if Form S-3 is not then available to the Company, on such form of registration statement as is then available) to register the resale of (i) the shares of Common Stock issued pursuant to the Option Agreement and (ii) the shares of Common Stock underlying the Series A Preferred Stock issued pursuant to the Option Agreement (upon the execution thereof and in connection with the exercise of the Call Option).
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The foregoing description of the Option Agreement does not purport to be complete and is qualified in its entirety by reference to the Option Agreement, which is filed as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 3.02 - Unregistered Sales of Equity Securities.
The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02. The shares of Common Stock and Series A Preferred Stock issued upon the execution of the Option Agreement were offered and sold in transactions exempt from registration under the Securities Act, in reliance on Section 4(a)(2) thereof. Each of the Sellers represented that it was an “accredited investor,” as defined in Regulation D, and is acquiring the Option Grant Consideration for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof. In the Option Agreement, Sellers also made representations regarding the knowledge and experience in financial and business matters and investment intent. The shares of Common Stock and Series A Preferred Stock comprising the Option Grant Consideration have not been registered under the Securities Act and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws. Neither this Current Report on Form 8-K nor any of the exhibits attached hereto constitutes an offer to sell or the solicitation of an offer to buy shares of Common Stock, shares of Preferred Stock or any other securities of the Company.
Item 5.03 - Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On July 31, 2026, the Company filed with the Secretary of State of the State of Delaware a Certificate of Designation of Preferences, Rights and Limitations of the Series A Non-Voting Convertible Preferred Stock (the “Certificate of Designation”) in connection with the Option Agreement described in Item 1.01 above. The Certificate of Designation provides for the creation of the Company’s Series A Preferred Stock.
Holders of Series A Preferred Stock are entitled to receive dividends on shares of Series A Preferred Stock equal to, on an as-if-converted-to-Common-Stock basis, and in the same form as dividends actually paid on shares of the Common Stock. Except as otherwise provided in the Certificate of Designation or as otherwise required by the General Corporation Law of the State of Delaware, the Series A Preferred Stock shall have no voting rights. However, as long as any shares of Series A Preferred Stock are outstanding, the Company shall not, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series A Preferred Stock: (i) alter or change adversely the powers, preferences or rights given to the Series A Preferred Stock or alter or amend the Certificate of Designation, amend its certificate of incorporation or other charter documents in any manner that adversely affects any rights of the holders of Series A Preferred Stock, (ii) issue additional shares of Series A Preferred Stock or increase or decrease (other than by conversion) the number of authorized shares of Series A Preferred Stock, (iii) prior to the Automatic Conversion (as defined below), consummate either: (A) any Fundamental Transaction (as defined in the Certificate of Designation) or (B) any merger or consolidation of the Company with or into another Person or any stock sale to, or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, share exchange or scheme of arrangement) with or into, another Person in which the stockholders of the Company immediately before such transaction do not hold at least a majority of the voting power of the capital stock of the Company or surviving corporation or the parent entity of the Company or surviving corporation immediately after such transaction or in which the Company or the surviving corporation issues securities in such transaction that represent, or are convertible into securities representing, more than a majority of the voting power of the Company immediately before such transaction, (iv) prior to the stockholder approval of the Preferred Stock Conversion Proposal, authorize or issue any class or series of stock that has powers, preferences or rights that are senior to those of the Series A Preferred Stock, (v) amend, waive or modify the Merger Agreement in any manner that would be reasonably likely to prevent, impede or materially delay stockholder approval of the Preferred Stock Conversion Proposal or the Automatic Conversion (as defined below) or (vi) enter into any agreement with respect to any of the foregoing.
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At 5:00 pm Eastern time on the third business day following stockholder approval of the Preferred Stock Conversion Proposal, each share of Series A Preferred Stock will automatically convert into 1,000 shares of Common Stock (the “Automatic Conversion”), subject to certain limitations, including that a holder of Series A Preferred Stock is prohibited from converting shares of Series A Preferred Stock into shares of Common Stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than a specified percentage (to be established by the holder between 4.9% and 19.9%) of the total number of shares of Common Stock issued and outstanding immediately after giving effect to such conversion (the “Beneficial Ownership Limitation”); provided that following stockholder approval of the Preferred Stock Conversion Proposal, such Beneficial Ownership Limitation may be waived by each holder of Series A Preferred Stock upon written notice to the Company to be effective on the 61st day following receipt of such notice.
The foregoing description of the Series A Preferred Stock does not purport to be complete and is qualified in its entirety by reference to the Certificate of Designation, a copy of which is filed as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 7.01 - Regulation FD Disclosure.
On July 31, 2026, the Company issued a press release related to the Option Agreement. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in Item 7.01 of this Current Report on Form 8-K, including the information in the press release attached as Exhibit 99.1 is furnished pursuant to Item 7.01 of Form 8-K and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. Furthermore, the information in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1 to this Current Report on Form 8-K, shall not be deemed to be incorporated by reference in the filings of the Company under the Securities Act.
Forward Looking Statements
Certain statements contained in this Form 8-K may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words and phrases “designed to,” “may,” “might,” “can,” “will,” “to be,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “likely,” “continue,” “ongoing” or similar expressions, or the negative of such words, are intended to identify “forward-looking statements.” These forward-looking statements include, but are not limited to, statements regarding the Company, the Target Companies, the Option Agreement and the exercise of the Call Option (including the consummation of the purchase and sale of the Target Securities upon the exercise thereof), if any, and the expected effects, perceived benefits or opportunities and related timing with respect thereto; expectations regarding or plans for the combined company’s pipeline. The Company has based these forward-looking statements on its current expectations and projections about future events. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to these differences include those above in this Current Report on Form 8-K and in the Company’s other filings with the SEC. Statements made herein are as of the date of the filing of this Current Report on Form 8-K with the SEC and should not be relied upon as of any subsequent date. Unless otherwise required by applicable law, the Company does not undertake, and it specifically disclaims, any obligation to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement.
Item 8.01 Other Events.
As a result of the issuance of the common and preferred stock pursuant to the Option Agreement, the Company believes that, as of the date of the filing of this Current Report on Form 8-K, the Company has at least $2.5 million in stockholders’ equity as required for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(1), which is an alternative standard to the $35 million market value of listed securities requirement under Nasdaq Listing Rule 5550(b)(2) (collectively, the “Rule”).
The Company awaits Nasdaq’s formal confirmation that it has evidenced compliance with the Rule and will provide an update regarding its listing status upon receipt of the relevant determination from The Nasdaq Stock Market LLC.
Item 9.01 - Financial Statements and Exhibits.
(d) Exhibits
|
Exhibit |
Description | |
| 2.1* | Option Agreement, dated July 31, 2026, by and among Profusa, Inc., CentralLarkfieldKarin NA LLC, Venkata Boyapalli, the Trust and, solely for purposes of Sections 5, 8 and 10 thereof, G3 Vision Labs Inc., Med Screen Laboratories Inc., Dominion Diagnostics LLC and Acutis Diagnostics Inc. | |
| 3.1 | Certificate of Designation of Series A Non-Voting Convertible Preferred Stock | |
| 99.1 | Press Release issued on July 31, 2026 (furnished herewith) | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
| * | Certain schedules and attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to provide, on a supplemental basis, a copy of any omitted schedules and attachments to the Securities and Exchange Commission or its staff upon request. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| July 31, 2026 | Profusa, Inc. | |
| By: | /s/ Jack Stover | |
| Name: | Jack Stover | |
| Title: | Chief Executive Officer | |
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Exhibit 2.1
OPTION AGREEMENT
This Option Agreement (this “Agreement”) is made and entered into as of July 31, 2026, by and among Profusa, Inc., a Delaware corporation (the “Buyer”), CentralLarkfieldKarin NA LLC (“CLK”), Venkata Boyapalli (“Boyapalli”), a privately held trust (the “Trust” and, together with CLK and Boyapalli, the “Sellers” and each a “Seller”), and, solely for purposes of Sections 5, 8 and 10, G3 Vision Labs Inc., a New Jersey corporation (“G3”), Med Screen Laboratories Inc., a New Jersey corporation (“Med Screen”), Dominion Diagnostics LLC, a Delaware limited liability company (“Dominion”) and Acutis Diagnostics Inc., a New York corporation (“Acutis” and, together with G3, Med Screen and Dominion, the “Target Companies” and each a “Target Company”). Buyer, Sellers and the Target Companies are sometimes referred to herein, collectively, as the “Parties” and each as a “Party.”
RECITALS
A. Each Seller is the owner and holder of the number and class of shares of the capital stock, warrants, options and other equity securities of G3 set forth opposite his name on Schedule 1 hereto under the caption “G3 Securities” (with respect to each Seller, its “Securities”), which constitute 100% of the issued and outstanding Equity Securities (as defined below) of G3.
B. G3 is the owner of 100% of the issued and outstanding Equity Securities of Acutis and Dominion and substantially all of the Equity Securities of Med Screen.
D. Each Seller desires to grant to the Buyer the right and option, but not the obligation, to purchase such Seller’s Securities for the consideration, during the time period and otherwise upon the terms, and subject to the conditions, set forth in this Agreement.
NOW, THEREFORE, the Parties hereto agree as follows:
1. Option. At any time prior to 11:59 p.m. (New York City time) on the ninetieth (90th) day following the date the Target Companies shall have delivered audited financial statements for the 2024 and 2025 fiscal years of each Target Company and reviewed financial statements the quarterly periods ended March 31, 2026 and June 30, 2026 (such audited and reviewed financial statements, the “Target Company Financial Information”) for each of the Target Companies (the “Expiration Time”), Buyer shall have the right and option, but not the obligation (the “Call Option”), exercisable by delivering written notice (the “Call Notice”) to [***] (or such other Person as the Sellers holding a majority of the then-outstanding Securities may designate by written notice to Buyer) (the “Seller Representative”), to purchase from each Seller, and require each Seller to sell to the Buyer, all, but not less than all, of such Seller’s Securities, in exchange for the Option Exercise Shares (defined below), and otherwise on the terms and conditions set forth in Exhibit A (the “Transaction Agreement Terms”). Subject to the satisfaction (or waiver by the Seller Representative) of the conditions set forth in Section 4, the Call Option may be exercised by Buyer in its sole discretion at any time after the date hereof, but in any event no later than the Expiration Time and, upon such exercise, each Seller shall sell, transfer, assign and deliver its Securities to Buyer for the Option Exercise Shares and otherwise in accordance with the Transaction Agreement Terms. The Call Notice shall specify the date (which shall be a Business Day that is not less than three (3) nor more than fifteen (15) Business Days after the date the Call Notice is delivered to the Seller Representative and in any event no later than the third (3rd) Business Day following the date on which the Expiration Time occurs), time and place of the Closing. The term “Business Day” means any day other than a Saturday, Sunday or other day on which banks in New York, New York or San Diego, California are authorized or obligated by law to be closed. Buyer shall use its reasonable best efforts to satisfy the conditions set forth in Section 4 as promptly as practicable following the date hereof and shall deliver to the Seller Representative a written status update, not less frequently than every thirty (30) days, regarding the status of the equity financing referenced in Section 4(a) and the refinancing referenced in Section 4(b). The Target Companies shall use their respective reasonable best efforts to deliver, or cause to be delivered, the Target Company Financial Information as soon as reasonably practicable following the date hereof, and in any event no later than September 2, 2026.
2. Closing. To the extent Buyer exercises the Call Option, the closing (the “Closing”) of the purchase and sale of the Securities shall take place remotely via the exchange of documents and signatures on the date (the date the Closing occurs, being the “Closing Date”) and time specified in the Call Notice or at such other place as the Buyer and Seller Representative shall mutually agree (subject in any case to the satisfaction (or waiver by the Seller Representative) of the conditions to Closing set forth in Section 4). At the Closing, (i) the Buyer shall issue and deliver to each Seller (or cause its transfer agent to issue and deliver to each Seller) the number of shares of Series A Non-Voting Convertible Preferred Stock of the Buyer set forth opposite such Seller’s name on Schedule 1 hereto under the caption “Option Exercise Shares” (with respect to each Seller, its “Option Exercise Shares”) in book-entry form or, at the election of the Buyer, represented by stock certificates issued in the name of such Seller and (ii) Seller shall, (A) with respect to any Securities comprised of capital stock, execute and deliver to Buyer or its designee one or more Stock Powers in the form attached hereto as Exhibit B (as applicable), (B) with respect to any Securities comprised of warrants, options or other Equity Securities, execute and deliver to Buyer or its designee one or more instruments of assignment in form and substance reasonably satisfactory to the Buyer and the Seller Representative, (C) deliver to the Buyer any stock certificate, warrant certificate, promissory note or other certificate, instrument, agreement or document representing such Seller’s Securities, (D) a Seller is an individual and is married, such Seller shall deliver to Buyer a Consent of Spouse in the form of Exhibit C hereto (the “Spousal Consent”), and (E) execute and deliver to Buyer a transaction agreement and other documents, in each case, in form and substance reasonably satisfactory to Buyer and the Seller Representative that reflect the Transaction Agreement Terms or such additional or different terms as the Buyer and the Seller Representative may mutually agree. Following the Closing, Buyer would own, directly or indirectly, all of the Equity Securities of the Target Companies.
3. Initial Consideration. As consideration for the Call Option and as an advance s an advance of a portion of the total consideration to be issued for the Securities, Buyer shall issue and deliver to each Seller the number of shares of the Buyer’s common stock, par value $0.0001 per share (“Common Stock”), and the number of shares of Buyer’s Series A Non-Voting Convertible Preferred Stock set forth opposite such Seller’s name on Schedule 2 under the captions “Common Shares” and “Series A Shares,” respectively (such shares, with respect to each Seller, the “Initial Consideration”). The Buyer will cause the transfer agent to issue to each Seller the Initial Consideration in book-entry form or, at the Buyer’s election, certificates representing such Initial Consideration, in each case free and clear of all restrictive and other legends (except as expressly provided in Section 7(j) hereof).
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4. Conditions to Sellers’ Obligations. The obligations of each Seller, to effect the Closing, are subject to the satisfaction prior to or at the Closing of the following conditions:
(a) Buyer shall have consummated, or shall have received binding commitments to consummate, one or more financings resulting in aggregate gross proceeds to Buyer or G3 of at least $30,000,000 (for purposes of this Section 4(a), “binding commitments” means definitive, fully executed written commitments from institutional or accredited investors that are subject only to customary closing conditions and pursuant to which funding is required concurrently with the Closing) (collectively, the “Required Financing”);
(b) The indebtedness of the Target Companies shall have been refinanced, repaid or otherwise satisfied (including through the conversion or exchange thereof into capital stock and/or other Equity Securities of the Buyer) or, at the option of Buyer, each existing senior secured debt lender of any Target Company with respect to such indebtedness set forth on Schedule 4(b) shall have consented to and approved the transactions contemplated by the Transaction Agreement;
(c) The Certificate of Designation of Preferences, Rights and Limitations of Series A Non-Voting Convertible Preferred Stock of the Buyer (the “Certificate of Designation”) shall be in effect;
(d) No suspension or removal from listing of the Common Stock on Nasdaq, and no initiation or threatening of any proceedings for any of such purposes or delisting, shall have occurred;
(e) Approval of the Preferred Stock Conversion Proposal (as defined below) and the Nasdaq Proposal (as defined below) by the requisite holders of Common Stock at a duly convened meeting of the Buyer’s stockholders.
(f) No temporary restraining order, preliminary or permanent injunction or other order preventing the consummation of the purchase and sale of the Securities as contemplated hereby shall have been issued by any court of competent jurisdiction or other governmental authority of competent jurisdiction and remain in effect and there shall not be any law which has the effect of making the consummation of the purchase and sale of the Securities illegal; and
(g) Each of the representations and warranties of Buyer in substantially the form contained in the Transaction Agreement Terms shall be true and correct in all respects on and as of the Closing Date (in the case of any representation or warranty qualified by materiality or material adverse effect) or in all material respects (in the case of any representation or warranty not qualified by materiality or material adverse effect) on and as of the Closing Date (in each case, except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects).
(h) Any and all obligations of Venkata Boyapalli (or any other Seller) as guarantor, co-obligor or surety for any indebtedness of any Target Company shall have been terminated and released in full, with written evidence of such termination and release delivered to the Seller Representative, in each case, without any liability to such Seller from and after the Closing.
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5. Additional Agreements of the Parties.
(a) Each Party shall cooperate reasonably with the other Parties and shall provide the other Parties with such assistance as may be reasonably requested for the purpose of facilitating the performance by each Party of their respective obligations under this Agreement and to enable the Buyer and the Target Companies to continue to meet their respective obligations following any exercise of the Call Option.
(b) Each Party shall use their respective reasonable best efforts to take or cause to be taken all actions necessary to satisfy or cause the representations and warranties of such Party, if any, in substantially the form set forth in the Transaction Agreement Terms to be true and correct upon any Closing and to otherwise comply, or cause its affiliates to be in compliance, with the Transaction Agreement Terms upon the Closing. Without limiting the generality of the foregoing, each Party shall use its reasonable best efforts to: (i) make all filings and other submissions (if any) and give all notices (if any) set forth in the Transaction Agreement Terms; (ii) obtain each consent (if any) set forth in the Transaction Agreement Terms and reasonably required to be obtained (pursuant to any applicable law or contract, or otherwise) in connection with the consummation of the purchase and sale of the Securities prior to the Closing; (iii) lift any injunction prohibiting, or any other order preventing, the such Party from consummating the purchase and sale of the Securities upon any exercise of the Call Option; and (iv) to satisfy the conditions precedent to the consummation of the purchase and sale of the Securities upon any exercise of the Call Option.
(c) From the date of this Agreement until the earlier of the Expiration Time and the Closing, without the prior written consent of Buyer, the Target Companies shall, and the Sellers shall cause the Target Companies to, (i) conduct their businesses in the ordinary course of business consistent with past practice, (ii) maintain the books and records of the Target Companies consistent with past practice and (iii) use reasonable best efforts to keep available the services of key employees of the Target Companies and maintain the Target Companies’ material business relationships.
(d) Without limiting the generality of Sections 5(b) and 5(c) from the date of this Agreement until the earlier of the Expiration Time and the Closing, except (i) as expressly required by this Agreement, (ii) as may be required by applicable law, or (iii) with the prior written consent of the Buyer (which consent shall not be unreasonably withheld, delayed or conditioned), the Target Companies shall, and Sellers shall cause the Target Companies to use commercially reasonably efforts to:
(i) preserve and maintain all licenses, permits, certifications, authorizations and approvals required for the conduct of the Target Companies’ businesses as currently conducted or the ownership and use of the assets of the Target Companies;
(ii) pay the debts, taxes and other obligations (including accounts payable) of the Target Companies when due;
(iii) continue to collect accounts receivable in the ordinary course of business;
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(iv) maintain the properties and assets of the Target Companies in the same condition as they were on the date of this Agreement, subject to wear and tear in the ordinary course of business;
(v) defend and protect the properties and assets of the Target Companies from infringement or usurpation;
(vi) perform in all material respects its obligations under all material contracts; and
(vii) comply in all material respects with all laws applicable to the conduct of the businesses, or the ownership and use of the assets, of the Target Companies.
(e) Without limiting the generality of Sections 5(b) and 5(c), from the date of this Agreement until the earlier of the Expiration Time and the Closing, except (i) as expressly required by this Agreement, (ii) as may be required by applicable law, or (iii) with the prior written consent of the Buyer (which consent shall not be unreasonably withheld, delayed or conditioned), the Target Companies shall not, and Sellers shall cause the Target Companies not to, take any of the following actions:
(i) amend or modify the organizational documents of any Target Company;
(ii) declare, set aside or pay any dividend or otherwise make a distribution with respect to the Equity Securities of any Target Company (other than cash dividends or distributions paid by any Target Company to another Target Company);
(iii) authorize for issuance, commit to issue, or issue any additional Equity Securities of, or with respect to, any Target Company (except for the issuance of any shares of a Target Company’s capital stock upon exercise, conversion or settlement of any Equity Securities outstanding as of the date hereof);
(iv) merge or consolidate with, or purchase all or substantially all of the assets of, or otherwise acquire the business of, or any Equity Securities of any Person (as defined below);
(v) sell, transfer, lease, license or otherwise dispose of any material portion of the assets or material rights of the Target Companies (other than in the ordinary course of business consistent with past practice) or any of the Securities;
(vi) make any change in any method of financial accounting or financial accounting practice or policy other than those required by United States Generally Accepted Accounting Principles;
(vii) engage in any new line of business or discontinue or materially modify any existing line of business of the Target Companies, or enter into any joint venture, partnership or similar venture between any Target Company and any other Person;
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(viii) except for borrowings under any existing credit agreement or debt facility in the ordinary course of business (or any renewal or replacement thereof on substantially similar terms and conditions), (A) create, incur or assume any indebtedness or (B) grant or create any lien, pledge, hypothecation, charge, mortgage, security interest, lease, license, option, easement, reservation, servitude, adverse title, claim, infringement, interference, option, right of first refusal, preemptive right, community property interest or restriction or encumbrance of any nature (including any restriction on the voting of any security, any restriction on the transfer of any security or other asset, any restriction on the receipt of any income derived from any asset, any restriction on the use of any asset and any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset) (collectively, “Encumbrances”) on any asset of any Target Company that does not exist on the date hereof, other than (a) any Encumbrance for current taxes not yet due and payable; (b) minor Encumbrances that arise in the ordinary course of business consistent with past practice that do not (in any case or in the aggregate) materially detract from the value of the assets or properties subject thereto or materially impair the operations of any Target Company; (c) Encumbrances to secure obligations to landlords, lessors or renters under leases or rental agreements; (d) deposits or pledges made in connection with, or to secure payment of, workers’ compensation, unemployment insurance or similar programs mandated by law; (e) non-exclusive licenses of intellectual property rights granted by the Target Companies in the ordinary course of business consistent with past practice that do not (in any case or in the aggregate) materially detract from the value of the intellectual property rights subject thereto; (f) statutory Encumbrances in favor of carriers, warehousemen, mechanics and materialmen, to secure claims for labor, materials or supplies and (g) any Encumbrances created in furtherance of the conditions set forth in Section 4;
(ix) (A) adopt, enter into, amend or terminate any employee benefit plan or employment agreement or (b) increase any benefits under any employee benefit plan or increase the compensation payable or paid, whether conditionally or otherwise, to any employee, officer, director or consultant of the Target Companies (other than (1) any increase adopted in the ordinary course of business or (2) any increase in benefits or compensation required by law or required pursuant to the terms of an existing employee benefit plan, collective bargaining agreement or employment, consulting, indemnification, change of control, severance or similar agreement with any current or former director, officer, employee or consultant);
(x) hire or engage, terminate or promote any officers, employees or other service providers of any Target Company with annual base salary in excess of $250,000;
(xi) make any capital expenditures in excess of $100,000 individually or $500,000 in the aggregate;
(xii) grant, modify, abandon, dispose of or terminate any rights relating to the Target Companies’ material intellectual property or otherwise permit the rights of any of the Target Companies related to any material intellectual property to lapse (other than grants of non-exclusive licenses in the ordinary course of business);
(xiii) settle any lawsuit, action, claim or proceeding with or before any governmental authority or other Person or enter into any consent decree or settlement agreement with any governmental authority or other Person, against, or affecting the business of, the Target Companies, except, in each case, solely for monetary payments that would not (A) prevent or materially delay consummation of the purchase and sale of the Securities as contemplated hereby, and (B) result in the imposition of any term or condition that would restrict the future activity or conduct of the Buyer or its subsidiaries (including the Target Companies following the Closing) or a finding or admission of liability or a violation of law;
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(xiv) cancel or terminate any material insurance policy naming any Target Company as a beneficiary or a loss payee unless the same shall be replaced with one or more insurance policies with the same or comparably rated insurers providing coverage reasonably comparable in scope and terms; or
(xv) enter into any Contract to do any of the things referred to elsewhere in this Section 5(e).
(f) Each Seller hereby agrees that until the earlier of the Expiration Time and the Closing it shall not, directly or indirectly, (a) sell, assign, transfer (including by operation of law), pledge, hypothecate, grant an option to purchase, distribute, dispose of or otherwise Encumber any of its Securities or otherwise enter into any contract, option or other arrangement or undertaking to do any of the foregoing (each, a “Transfer”), (b) deposit any of its Securities into a voting trust or enter into a voting agreement or arrangement or grant any proxy or power of attorney with respect to any of its Securities that conflicts with any of the covenants or agreements set forth in this Agreement or (c) take any action that would have the effect of preventing or materially delaying or impeding the Closing or the performance of such Seller’s obligations hereunder; provided, however, that the foregoing shall not apply to any Transfer pursuant to the exercise of the Call Option.
(g) From the date of this Agreement until the earlier of the Expiration Time and the Closing, without the prior written consent of the Seller Representative, the Buyer shall, and shall cause its subsidiaries to, (i) conduct their businesses in the ordinary course of business consistent with past practice, (ii) maintain their books and records consistent with past practice and (iii) use reasonable best efforts to keep available the services of their key employees and maintain their material business relationships.
(h) Without limiting the generality of Sections 5(b) and 5(g) from the date of this Agreement until the earlier of the Expiration Time and the Closing, except (i) as expressly required by this Agreement, (ii) as may be required by applicable law, or (iii) with the prior written consent of the Seller Representative (which consent shall not be unreasonably withheld, delayed or conditioned), the Buyer shall, and shall cause its subsidiaries to use commercially reasonable efforts to:
(i) preserve and maintain all licenses, permits, certifications, authorizations and approvals required for the conduct of the Buyer’s and its subsidiaries’ businesses as currently conducted or the ownership and use of the assets of the Buyer and its subsidiaries;
(ii) pay the debts, taxes and other obligations (including accounts payable) of the Buyer and its subsidiaries when due;
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(iii) continue to collect accounts receivable in the ordinary course of business;
(iv) maintain the properties and assets of the Buyer and its subsidiaries in the same condition as they were on the date of this Agreement, subject to wear and tear in the ordinary course of business;
(v) defend and protect the properties and assets of the Buyer and its subsidiaries from infringement or usurpation;
(vi) perform in all material respects the Buyer’s and its subsidiaries’ obligations under all material contracts; and
(vii) comply in all material respects with all laws applicable to the conduct of the businesses, or the ownership and use of the assets, of the Buyer and its subsidiaries.
(i) Without limiting the generality of Sections 5(b) and 5(g), from the date of this Agreement until the earlier of the Expiration Time and the Closing, except (i) as expressly required by this Agreement, (ii) as may be required by applicable law, or (iii) with the prior written consent of the Seller Representative (which consent shall not be unreasonably withheld, delayed or conditioned), the Buyer shall not, and shall cause its subsidiaries not to, take any of the following actions:
(i) amend or modify the organizational documents of the Buyer or any of its subsidiaries;
(ii) declare, set aside or pay any dividend or otherwise make a distribution with respect to the Equity Securities of the Buyer or any of its subsidiaries (other than cash dividends or distributions paid by the Buyer to one of its subsidiaries or among the Buyer’s subsidiaries);
(iii) authorize for issuance, commit to issue, or issue any additional Equity Securities of, or with respect to, the Buyer or any of its subsidiaries (except for the issuance of any shares of the Buyer’s capital stock upon exercise, conversion or settlement of any Equity Securities outstanding as of the date hereof);
(iv) merge or consolidate with, or purchase all or substantially all of the assets of, or otherwise acquire the business of, or any Equity Securities of any Person (as defined below);
(v) sell, transfer, lease, license or otherwise dispose of any material portion of the assets or material rights of the Buyer or any of its subsidiaries (other than in the ordinary course of business consistent with past practice);
(vi) make any change in any method of financial accounting or financial accounting practice or policy other than those required by United States Generally Accepted Accounting Principles;
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(vii) engage in any new line of business or discontinue or materially modify any existing line of business of the Buyer or any of its subsidiaries, or enter into any joint venture, partnership or similar venture between the Buyer or any of its subsidiaries and any other Person;
(viii) except for borrowings under any existing credit agreement or debt facility in the ordinary course of business (or any renewal or replacement thereof on substantially similar terms and conditions), (A) create, incur or assume any indebtedness or (B) grant or create any lien, pledge, hypothecation, charge, mortgage, security interest, lease, license, option, easement, reservation, servitude, adverse title, claim, infringement, interference, option, right of first refusal, preemptive right, community property interest or restriction or encumbrance of any nature (including any restriction on the voting of any security, any restriction on the transfer of any security or other asset, any restriction on the receipt of any income derived from any asset, any restriction on the use of any asset and any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset) (collectively, “Encumbrances”) on any asset of the Buyer or any of its subsidiaries that does not exist on the date hereof, other than (a) any Encumbrance for current taxes not yet due and payable; (b) minor Encumbrances that arise in the ordinary course of business consistent with past practice that do not (in any case or in the aggregate) materially detract from the value of the assets or properties subject thereto or materially impair the operations of the Buyer or any of its subsidiaries; (c) Encumbrances to secure obligations to landlords, lessors or renters under leases or rental agreements; (d) deposits or pledges made in connection with, or to secure payment of, workers’ compensation, unemployment insurance or similar programs mandated by law; (e) non-exclusive licenses of intellectual property rights granted by the Buyer or any of its subsidiaries in the ordinary course of business consistent with past practice that do not (in any case or in the aggregate) materially detract from the value of the intellectual property rights subject thereto; and (f) statutory Encumbrances in favor of carriers, warehousemen, mechanics and materialmen, to secure claims for labor, materials or supplies and (g) any Encumbrances created in furtherance of the conditions set forth in Section 4;
(ix) (A) adopt, enter into, amend or terminate any employee benefit plan or employment agreement or (b) increase any benefits under any employee benefit plan or increase the compensation payable or paid, whether conditionally or otherwise, to any employee, officer, director or consultant of the Buyer or any of its subsidiaries (other than (1) any increase adopted in the ordinary course of business or (2) any increase in benefits or compensation required by law or required pursuant to the terms of an existing employee benefit plan, collective bargaining agreement or employment, consulting, indemnification, change of control, severance or similar agreement with any current or former director, officer, employee or consultant);
(x) hire or engage, terminate or promote any officers, employees or other service providers of the Buyer or any of its subsidiaries with annual base salary in excess of $250,000;
(xi) make any capital expenditures in excess of $100,000 individually or $500,000 in the aggregate;
(xii) grant, modify, abandon, dispose of or terminate any rights relating to the Buyer’s or any of its subsidiaries’ intellectual property or otherwise permit the rights of the Buyer or any of its subsidiaries related to any intellectual property to lapse (other than grants of non-exclusive licenses in the ordinary course of business);
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(xiii) settle any lawsuit, action, claim or proceeding with or before any governmental authority or other Person or enter into any consent decree or settlement agreement with any governmental authority or other Person, against, or affecting the business of, the Buyer or any of its subsidiaries; or
(xiv) enter into any Contract to do any of the things referred to elsewhere in this Section 5(i).
(xv) From the date of this Agreement until the earlier of the Expiration Time and the Closing, Seller and the Target Companies shall use their respective reasonable best efforts to cause each of Med Screen, Acutis and Dominion to become or remain, as applicable, wholly-owned subsidiaries of G3, including (without limitation) by causing any equity securities of Med Screen, Acutis and Dominion that are not held by G3 as of the date hereof to be directly or indirectly purchased by G3 for cash (in an amount approved by Buyer) or sold (directly or indirectly) to Buyer upon substantially the same terms as the Securities are being acquired pursuant to this Agreement (taking into account the relative ownership of G3, Med Screen, Acutis and Dominion, taken as a whole, represented by any such securities).
6. Buyer Stockholders’ Meeting; Registration Statement; Proxy Statement.
(a) As promptly as practicable following the date of this Agreement (and in any event before the date that is 60 days following the Closing (the “Stockholder Approval Deadline”), Buyer shall take all action necessary under applicable law to call, give notice of and hold a meeting of the holders of Common Stock for the purpose of seeking:
(i) Approval of the issuance of shares of Common Stock to the holders of the Series A Non-Voting Convertible Preferred Stock issued as Initial Consideration upon conversion of any and all shares thereof in accordance with the terms of the Certificate of Designation for purposes of the rules of The Nasdaq Stock Market LLC (“Nasdaq”) (the “Preferred Stock Conversion Proposal”);
(ii) approval of an Amended and Restated Equity Incentive Plan that will provide for new awards for a number of shares of Common Stock not exceeding 15% of the fully diluted shares of capital stock of Buyer outstanding immediately after the Closing, as mutually agreed upon by Buyer and the Target Companies, and subject to approval by the board of directors of Buyer;
(iii) approval of the transactions contemplated hereby required in accordance with applicable Nasdaq Listing Rules, including approval of a “change of control” under Nasdaq Listing Rule 5635(b) (the “Nasdaq Proposal”);
(iv) to the extent deemed necessary or advisable by the Buyer’s board of directors, approval of an amendment to Buyer’s certificate of incorporation to effect a reverse stock split of all outstanding shares of Common Stock at a reverse stock split ratio in the range of 1:2 to 1:12 or as otherwise mutually agreed to by Buyer and the Seller Representative that is effected by Buyer for the purpose of maintaining compliance with Nasdaq listing standards (the matters contemplated by clauses 6(a)(i)-(iv) are referred to as the “Buyer Stockholder Matters,” and such meeting, the “Buyer Stockholders’ Meeting”); and
(v) such other changes or approvals as are mutually agreeable to Buyer and the Seller Representative or otherwise required by applicable law or the rules and regulations of Nasdaq.
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(b) Buyer agrees to call and hold the Buyer Stockholders’ Meeting as soon as reasonably practicable after the filing of the Preliminary Proxy Statement, taking into account the factors referenced in Section 6(e). If the approval of the Buyer Stockholder Matters is not obtained at the Buyer Stockholders’ Meeting or if on a date preceding the Buyer Stockholders’ Meeting, Buyer reasonably believes that (i) it will not receive proxies sufficient to obtain such approval, whether or not a quorum would be present, (ii) it will not have sufficient shares of Common Stock represented (whether in person or by proxy) to constitute a quorum necessary to conduct the business of the Buyer Stockholders’ Meeting or (iii) as may be required for the Contemplated Transactions by the listing and governance rules and regulations of Nasdaq, then, in each case, Buyer shall adjourn or postpone the Buyer Stockholders’ Meeting one or more times to a date or dates no more than ten (10) days after the scheduled date for such meeting and in no event later than the Stockholder Approval Deadline, and to obtain such approvals at such time. If the approval of the Buyer Stockholder Matters is not then obtained, Buyer shall use its reasonable best efforts to obtain such approvals as soon as practicable thereafter, and shall hold an annual meeting or special meeting of its stockholders, at which a vote of the stockholders of Buyer to approve the Buyer Stockholder Matters will be solicited and taken, at least once every six months until Buyer obtains the approval of the Buyer Stockholder Matters. Notwithstanding anything in this Agreement to the contrary, no adjournment or postponement of, or failure to obtain approval of the Buyer Stockholder Matters at, the Buyer Stockholders’ Meeting, and no subsequent meeting of the stockholders of Buyer, shall extend the Stockholder Approval Deadline or limit, delay, condition or otherwise affect the rights of the holders of Series A Non-Voting Convertible Preferred Stock under Section 1.12.
(c) If after the date that is eighteen (18) months after the Closing Date, approval of the Preferred Stock Conversion Proposal has not been obtained and the Company is unable or otherwise fails to deliver or cause to be delivered to a Seller such certificates or statements, or electronically deliver (of cause its transfer agent to electronically deliver) the Conversion Shares (as defined in the Certificate of Designation) pursuant to the Certificate of Designation on or prior to the deadline provided in the Certificate of Designation applicable to such Conversion (as defined in the Certificate of Designation) (other than a failure caused by (a) incorrect or incomplete information or documentation provided by such Seller to the Corporation or its transfer agent, (b) the failure of such Seller’s prime broker to timely initiate a DWAC deposit of such Conversion Shares into such Seller’s account or (c) the application of the Beneficial Ownership Limitation), then, at the election of such Seller (exercisable by written notice to Buyer), Buyer shall (a) redeem the portion of such Seller’s shares of Series A Non-Voting Convertible Preferred Stock issued pursuant to the exercise of the Call Option (and not, for the avoidance of doubt, any portion of the Initial Consideration) for cash at a price per share equal to the fair market value of the Common Stock issuable upon conversion of such shares of Series A Non-Voting Convertible Preferred Stock;
(d) Buyer agrees that: (i) the Buyer Board shall recommend that the holders of Common Stock vote to approve the Buyer Stockholder Matters, and (ii) the Proxy Statement shall include a statement to the effect that the Buyer Board recommends that the Buyer’s stockholders vote to approve the Buyer Stockholder Matters.
(e) Buyer acknowledges that, under the Nasdaq Stock Market Rules, the holders of the Initial Consideration will not be entitled to vote such securities on the Preferred Stock Conversion Proposal.
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(f) As promptly as practicable following the Closing Date (and in any event within 75 days (the “Filing Deadline”)), Buyer shall prepare and shall cause to be filed with the United States Securities and Exchange Commission (“SEC”), a Registration Statement Form S-3 (or, if Form S-3 is not then available to Buyer, on such form of registration statement as is then available) (the “Registration Statement”) to register the resale of (i) the shares of Common Stock included in the Initial Consideration and (ii) the shares of Common Stock underlying the shares of Series A Non-Voting Convertible Preferred Stock included in the Stock Consideration (as defined below). Each of Buyer, Sellers and the Target Companies shall furnish all information concerning it as may reasonably be requested by Buyer in connection with such actions and the preparation of the Registration Statement. Buyer covenants and agrees that the Registration Statement, will not, at the effective time of such Registration Statement or at the time any post-effective amendment or supplement thereto is filed with the SEC, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading (provided, however, that Buyer makes no such representations or warranties in respect of information furnished in writing by any Seller for inclusion in the Registration Statement). Buyer shall cause the Registration Statement to comply with the applicable rules and regulations promulgated by the SEC, shall respond promptly to any comments of the SEC or its staff and shall use its reasonable best efforts to have the Registration Statement declared effective as promptly as reasonably practicable after it is filed with the SEC (any in any event within one ninety (90) days following the Filing Deadline). If Buyer fails to file the Registration Statement, or fails to have the Registration Statement declared effective, by the respective deadlines set forth in this Section 6, Buyer shall pay to each Seller, as liquidated damages and not as a penalty, an amount equal to 1% of the aggregate value (based on the volume-weighted average closing price of the Common Stock for the ten (10) trading days immediately preceding the applicable deadline) of the Stock Consideration issued to such Seller for each thirty (30)-day period (or portion thereof) that such failure continues, up to a maximum aggregate amount of 6% of such value.
(g) As promptly as reasonably practicable after the Closing Date (and in any event, provided the Target Companies shall have provided all financial and other information that the Company reasonably requests for inclusion therein, within ten (10) calendar days following such date), taking into account the time required for preparing and/or obtaining audited annual and interim financial statements and other information relating to the Target Companies and pro forma financial information, Buyer shall prepare and file with the SEC a proxy statement relating to the Buyer Stockholders’ Meeting to be held in connection with the Buyer Stockholder Matters (together with any amendments thereof or supplements thereto, the “Proxy Statement”). Buyer shall (i) cause the Proxy Statement to comply with applicable rules and regulations promulgated by the SEC and (ii) respond promptly to any comments or requests of the SEC or its staff related to the Proxy Statement. The Proxy Statement in the form initially filed with the SEC is referred to as the “Preliminary Proxy Statement” and the Proxy Statement in the final definitive form to be delivered to the holders of Common Stock is referred to herein as the “Definitive Proxy Statement.”
(h) Buyer covenants and agrees that the Definitive Proxy Statement (and the letters to stockholders, notice of meeting and form of proxy included therewith) will (i) comply as to form in all material respects with the requirements of applicable U.S. federal securities laws and the Delaware General Corporation Law (the “DGCL”), and (ii) will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.
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(i) Buyer shall cause the Proxy Statement to be mailed to Buyer’s stockholders as promptly as reasonably practicable after the Proxy Statement has been filed with the SEC and either (i) the SEC has indicated that it does not intend to review the Proxy Statement or that its review of the Proxy Statement has been completed or (ii) at least ten (10) days shall have passed since the Proxy Statement was filed with the SEC without receiving any correspondence from the SEC commenting upon, or indicating that it intends to review, the Proxy Statement, all in compliance with applicable U.S. federal securities laws and the DGCL. If Buyer (A) becomes aware of any event or information that, pursuant to the Securities Act or the Exchange Act, should be disclosed in an amendment or supplement to the Proxy Statement, (B) receives notice of any SEC request for an amendment or supplement to the Proxy Statement or for additional information related thereto, or (C) receives SEC comments on the Proxy Statement, as the case may be, then Buyer shall promptly inform the other Parties thereof and shall cooperate with such other Parties in Buyer filing such amendment or supplement with the SEC and, if appropriate, in mailing such amendment or supplement to the Buyer stockholders.
(j) For as long as any shares of Series A Non-Voting Convertible Preferred Stock remain outstanding, Buyer shall at all times reserve and keep available, free from preemptive rights, out of its authorized but unissued Common Stock or shares of Common Stock held in treasury by Buyer, for the purpose of effecting the conversion of the shares of the Series A Non-Voting Convertible Preferred Stock, the full number of shares of Common Stock then issuable upon the conversion of all shares of Series A Non-Voting Convertible Preferred Stock then outstanding. All shares of Common Stock delivered upon conversion of the shares of Series A Non-Voting Convertible Preferred Stock shall be newly issued shares or shares held in treasury by Buyer, shall have been duly authorized and validly issued and shall be fully paid and nonassessable, and shall be free from preemptive rights and free of any encumbrance.
7. Representations of the Seller. Each Seller represents and warrants to Buyer as of the date hereof and as of the Closing as follows:
(a) Authority; Capacity. If such Seller is not a natural person, (i) Seller has the requisite power and authority to enter into and to consummate the transactions contemplated by this Agreement, and otherwise to carry out its obligations hereunder; and (ii) the execution and delivery by such Seller of this Agreement and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of such Seller, and no further action of such Seller, its board of directors, managers, members or stockholders, as applicable, is required in connection herewith. If such Seller is a natural person, such Seller has the requisite capacity to enter into and to consummate the transactions contemplated by this Agreement, and otherwise to carry out his or her obligations hereunder.
(b) Binding Agreement. This Agreement has been duly executed and delivered by such Seller, and constitutes the valid and binding obligation of such Seller, enforceable against such Seller in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.
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(c) Title. Such Seller is the sole record and beneficial owner of the Securities, free and clear of all Encumbrances (other than restrictions on transfer under applicable securities laws). Such Seller has the absolute right to sell, assign, convey, transfer and deliver the Securities, together with all of the rights, privileges and benefits incidental thereto, to the Buyer pursuant to this Agreement. Upon the Closing (if any), such Seller will transfer and deliver to Buyer valid title to the Securities free and clear of all Encumbrances (other than restrictions on transfer arising under applicable securities laws). Except for such Seller’s Securities, the Seller does not own (beneficially, of record or otherwise) any Equity Securities of any Target Company and, to the knowledge of such Seller, the Securities subject to the Call Option hereunder constitute 100% of the outstanding Equity Securities of the Target Companies (other than Equity Securities of the Target Companies owned of record and beneficially by G3).
(d) Non-Contravention The execution and delivery by such Seller of this Agreement, and the performance by such Seller of its obligations hereunder do not and will not (i) if such Seller is not a natural person, violate any provision of such Seller’s organizational documents, (ii) conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which such Seller is subject, or by which any property or asset of such Seller is bound or affected or (iii) require any permit, authorization, consent, approval, exemption or other action by, notice to or filing or registration with, any court or other federal, state, local or other governmental authority or other Person (as defined below). Without limiting the foregoing, the Securities are not being sold in violation of, any right of first refusal, right of first offer, tag-along (co-sale) right or similar rights of any individual, entity, partnership or other organization (a “Person”) that have not been validly, unconditionally and irrevocably waived.
(e) Non-Reliance. Such Seller acknowledges that, in connection with transactions contemplated hereby, neither Buyer nor any of its affiliates, advisors or agents has made to such Seller, and such Seller disclaims reliance on, any representations or warranties of any kind or nature, express or implied (including any representations or warranties relating to the future or historical financial condition, results of operations, assets or liabilities or prospects of the Buyer or its subsidiaries or as to the accuracy or completeness of any information regarding the Buyer or its subsidiaries provided or made available to Seller or its representatives), other than the representations and warranties expressly made by Buyer in this Agreement. Such Seller has consulted his or its own financial, legal and tax advisors, and is solely responsible for the decision to sell the Securities pursuant to this Agreement and to acquire the Initial Consideration and any shares of Series A Non-Voting Convertible Preferred Stock issuable upon exercise of the Call Option (such shares, collectively, the “Stock Consideration”). Such Seller’s decision to sell the Securities and to acquire the Stock Consideration pursuant to this Agreement (and, if applicable, Buyer’s exercise of the Call Option) has been made by such Seller independently of, and without reliance upon, any Target Company or Buyer.
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(f) Sophistication; Information. Such Seller (i) is a sophisticated investor experienced with transactions similar to those contemplated by this Agreement, (ii) is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”); (iii) is capable of evaluating the merits and risks of its participation in this transaction (including an investment in the Stock Consideration) and has the ability to protect its own interests in this transaction; (iv) has received from Buyer and the Target Companies all of the financial and other information (including information regarding the business, financial condition and prospects of the Buyer) such Seller considers necessary or appropriate for deciding whether to enter into, execute and deliver this Agreement and consummate the transactions contemplated hereby, and to otherwise make an informed decision regarding the sale of the Securities and an investment in the Stock Consideration; and (v) has had an opportunity to ask questions and receive answers from Buyer and the Target Companies regarding the business, properties, prospects and financial condition of Buyer and the Target Companies, including, without limitation, any strategic transaction, public securities offering, private financing transaction (whether debt or equity), merger, consolidation, recapitalization, reclassification, reorganization, change of control transaction, sale of assets or securities, liquidation or similar transaction. Such Seller is not in possession of material, non-public information regarding any Target Company that has not been disclosed to Buyer.
(g) No Fiduciary Relationship. Such Seller acknowledges that neither any Target Company, Buyer, nor any of their respective affiliates is acting as a fiduciary or financial or investment adviser to such Seller, and neither any Target Company, Buyer nor any of their respective affiliates, advisors or agents has given such Seller any investment advice, opinion or other information on whether the sale of the Securities is prudent.
(h) General Solicitation. Such Seller has not engaged in any form of general solicitation or advertising in connection with the offer and sale of the Securities.
(i) Investment Intent. Such Seller is acquiring the Initial Consideration, and will acquire any Stock Consideration issuable in connection with the exercise of the Call Option, solely for investment purposes, for such Seller’s own account and not for the account of others, and not with a view to the resale or distribution of any part thereof in violation of the Securities Act of 1933, as amended (the “Securities Act”), and such Seller has no present intention of selling, granting any participation in, or otherwise distributing any Stock Consideration in violation of the Securities Act. Such Seller has no present arrangement to sell the Stock Consideration to or through any person or entity. Such Seller understands that the Stock Consideration must be held indefinitely unless such Securities are resold pursuant to a registration statement under the Securities Act or an exemption from registration is available. Nothing contained herein shall be deemed a representation or warranty by such Seller to hold the Stock Consideration for any period of time.
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(j) Securities Not Registered; Legends. Seller acknowledges and agrees that the Stock Consideration is being offered in a transaction not involving any public offering within the meaning of the Securities Act, and such Seller understands that the Stock Consideration has not been registered under the Securities Act, by reason of the issuance thereof by Buyer in a transaction exempt from the registration requirements of the Securities Act, and that the Stock Consideration must continue to be held and may not be offered, resold, transferred, pledged or otherwise disposed of by such Seller unless a subsequent disposition thereof is registered under the Securities Act or is exempt from such registration and in each case in accordance with any applicable securities laws of any State of the United States. Such Seller understands that the exemptions from registration afforded by Rule 144 (the provisions of which are known to it) promulgated under the Securities Act depend on the satisfaction of various conditions including, but not limited to, the time and manner of sale, the holding period and requirements relating to Buyer which are outside of such Seller’s control and which Buyer may not be able to satisfy, and that, if applicable, Rule 144 may afford the basis for sales only in limited amounts. Such Seller acknowledges and agrees that it has been advised to consult legal counsel prior to making any offer, resale, transfer, pledge or other disposition of any of the Stock Consideration. Such Seller acknowledges that no federal or state agency has passed upon or endorsed the merits of the offering of the Stock Consideration or made any findings or determination as to the fairness of this investment. Such Seller understands that any certificates or book entry notations evidencing the Stock Consideration may bear one or more legends in substantially the following form and substance:
“THE SECURITIES REPRESENTED HEREBY, INCLUDING ANY SECURITIES ISSUABLE UPON THE CONVERSION OF SUCH SECURITIES, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (II) AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION AND THE DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH REGISTRATION IS NOT REQUIRED. NOTWITHSTANDING THE FOREGOING, THE SECURITIES REPRESENTED HEREBY AND ANY SECURITIES ISSUABLE UPON THE CONVERSION OF SUCH SECURITIES MAY BE (A) PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES OR (B) TRANSFERRED WITHOUT CONSIDERATION TO AN AFFILIATE OF SUCH HOLDER OR A CUSTODIAL NOMINEE, IN EACH CASE WITHOUT THE REQUIREMENT TO OBTAIN AN OPINION OF COUNSEL OR CONSENT OF THE COMPANY.”
In addition, the Stock Consideration may contain a legend regarding affiliate status of such Seller, if applicable.
(k) No General Solicitation. Such Seller acknowledges and agrees that such Seller is acquiring the Stock Consideration directly from Buyer. Such Seller became aware of this offering of the Stock Consideration solely by means of direct contact from Buyer as a result of a pre-existing, substantive relationship with Buyer or its advisors (including, without limitation, attorneys, accountants, bankers, consultants and financial advisors), agents, control persons, representatives, affiliates, directors, officers, managers, members, and/or employees, and/or the representatives of such persons. The Stock Consideration was offered to such Seller solely by direct contact between such Seller and Buyer and/or its respective representatives. Such Seller did not become aware of this offering of the Stock Consideration, nor was the Stock Consideration offered to such Seller, by any other means. Such Seller is not acquiring the Stock Consideration as a result of any general or public solicitation or general advertising, or publicly disseminated advertisement, article, notice or other communication regarding the Stock Consideration published in any newspaper, magazine or similar media or broadcast over television, radio or the internet or presented at any seminar or any other general solicitation or general advertisement, including any of the methods described in Section 502(c) of Regulation D under the Securities Act.
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(l) Brokers. No Person will have, as a result of the transactions contemplated by this Agreement, any valid right, interest or claim against or upon the Buyer for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of Seller.
8. Representations with respect to the Target Companies. Each of the Target Companies represents and warrants to Buyer as of the date hereof and as of the Closing as follows:
(a) Authority; Capacity. Such Target Company has the requisite power and authority to enter into and to consummate the transactions contemplated by this Agreement, and otherwise to carry out its obligations hereunder; and the execution and delivery by such Target Company of this Agreement and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of such Target Company, and no further action of such Target Company, its board of directors, managers, members or stockholders, as applicable, is required in connection herewith.
(b) Binding Agreement. This Agreement has been duly executed and delivered by such Target Company, and constitutes the valid and binding obligation of such Target Company, enforceable against such Target Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.
(c) Non-Contravention The execution and delivery by Sellers and the Target Companies of this Agreement, and the performance by Sellers and the Target Companies of their respective obligations hereunder do not and will not (i) violate any provision of any Target Company’s organizational documents, (ii) conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which any Target Company is subject, or by which any property or asset of any Target Company is bound or affected or (iii) require any permit, authorization, consent, approval, exemption or other action by, notice to or filing or registration with, any court or other federal, state, local or other governmental authority or other Person (as defined below). Without limiting the foregoing, the Securities are not being sold in violation of, any right of first refusal, right of first offer, tag-along (co-sale) right or similar rights of any Person that have not been validly, unconditionally and irrevocably waived.
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(d) Capitalization. Except for the Securities and Equity Securities in the Target Companies other than G3 held of record and beneficially by G3, there are no (i) outstanding Equity Securities of any of the Target Companies or (ii) purchase rights, subscription rights, preemptive rights, rights of first offer or refusal or other rights or contracts that could require any of the Target Companies to issue, sell, or otherwise cause to become outstanding any Equity Securities. There are no outstanding obligations of any of the Target Companies to repurchase, redeem or otherwise acquire any Equity Securities of any Target Company. For purposes of this Agreement:
“Equity Securities” means with respect to any entity, all equity and equity-linked securities of, and other equity interests in, such entity, together with all Convertible Securities (as defined below) with respect to such entity. The term Equity Securities shall be deemed to include capital stock, membership and limited liability company interests, ownership interests, profits interests, phantom equity rights, stock appreciation rights and all similar rights and interests.
“Convertible Securities” means, with respect to any entity, all warrants, rights, options, evidence of indebtedness and securities that are directly or indirectly convertible into or exchangeable or exercisable for equity or equity-linked securities, membership or limited liability company interests, profits interests, phantom equity rights, stock appreciation rights or other equity or equity-linked securities of such entity, either immediately or upon the occurrence of a specified date or event.
(e) Solvency. Both before and after giving effect to the transactions contemplated hereby, each of the Target Companies (i) is Solvent (as defined below) and (ii) has not taken action, and no action has been taken by a third party, for the winding up, dissolution or liquidation or similar executory or judicial proceeding in respect of any Target Company, or for the appointment of a liquidator, custodian, receiver, trustee, administrator or other similar officer for any Target Company or all of their assets or revenues. “Solvent” means, with respect to any Person, as of any date of determination, that, as of such date, (a) the value of the assets of such Person and its consolidated subsidiaries, taken as a whole (both at fair value and present fair saleable value) is greater than the total amount of liabilities (including contingent and unliquidated liabilities) of such Person and such subsidiaries, taken as a whole, (b) such Person and such subsidiaries are able to pay all liabilities of such Person and such subsidiaries as such liabilities mature and (c) such Person and such subsidiaries, taken as a whole, do not have unreasonably small capital in relation to such Person’s and such subsidiaries’ business as contemplated as of such date.
9. Representations of Buyer. Buyer represents and warrants to Sellers and the Target Companies as of the date hereof as follows:
(a) Authority. Buyer has the requisite corporate power and authority, as applicable, to enter into and to consummate the transactions contemplated by this Agreement, and otherwise to carry out its obligations hereunder. The execution and delivery by Buyer of this Agreement and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of Buyer and no further action of Buyer, its board of directors or stockholders is required in connection herewith.
(b) Binding Agreement. This Agreement has been duly executed and delivered by Buyer, and constitutes the valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.
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(c) Exemption from Registration. Buyer is acquiring the Call Option and, upon any exercise of the Call Option will acquire the Securities, for investment for Buyer’s own account and not with a view to, or for resale in connection with, any distribution thereof in violation of the Securities Act. Buyer understands that the sale of the Securities has not been registered under the Securities Act by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things the accuracy of Buyer’s representations contained herein. Buyer further represents that it does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to any third person with respect to the Call Option or any of the Securities.
(d) Accredited Investor. Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D under the Securities Act. Buyer is capable of evaluating the merits and risks of its investment in the Call Option and the Securities and has the ability to protect its own interests in this transaction. Buyer acknowledges that the Securities must be held indefinitely unless subsequently registered under the Securities Act or an exemption from such registration is available for the resale thereof.
(e) General Solicitation. At no time was Buyer presented with or solicited by any leaflet, public promotional meeting, circular, newspaper or magazine article, radio or television advertisement, or any other form of general advertising in connection with Call Option or the transfer of the Securities.
(f) Sophistication; Information. Buyer (i) is a sophisticated investor experienced with transactions similar to those contemplated by this Agreement, (ii) has received from the Sellers all of the financial and other information (including information regarding the business, financial condition and prospects of the Target Companies) that Buyer considers necessary or appropriate for deciding whether to enter into, execute and deliver this Agreement and consummate the transactions contemplated hereby, and to otherwise make an informed decision regarding the purchase of the Securities, (iii) has had an opportunity to ask questions and receive answers from the Target Companies regarding the business, properties, prospects and financial condition of the Target Companies and (iv) has read and understood this Agreement.
(g) Capitalization. The authorized capital stock of Buyer as of the date of this Agreement consists of 600,000,000 shares of Common Stock, of which 1,013,821 shares have been issued and are outstanding as of the close of business as of July 30, 2026 and 1,000,000 shares of preferred stock of Buyer, par value $0.0001 per share, of which no shares have been issued or are outstanding as of the date of this Agreement. Buyer does not hold any shares of its capital stock in its treasury. All of the outstanding shares of Common Stock have been duly authorized and validly issued and are fully paid and nonassessable. None of the outstanding shares of Common Stock are entitled or subject to any preemptive right, right of participation, right of maintenance or any similar right and none of the outstanding shares of Common Stock is subject to any right of first refusal in favor of Buyer. Buyer is not under any obligation, nor is it bound by any contract pursuant to which it may become obligated, to repurchase, redeem or otherwise acquire any outstanding shares of Common Stock or other securities.
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(h) Valid Issuance. Subject to the filing of the Certificate of Designation with the Secretary of State of the State of Delaware and the effectiveness thereof, the Stock Consideration has been duly and validly authorized and, when issued pursuant to the terms of this Agreement (in the case of Stock Consideration other than the Initial Consideration, against delivery of the Securities in accordance with the terms of this Agreement), will be duly and validly issued, fully paid and non-assessable and will be issued free and clear of any liens or other restrictions (other than as provided herein, and restrictions on transfer under applicable securities laws). Subject to the filing of the Certificate of Designation with the Secretary of State of the State of Delaware and the effectiveness thereof and receipt of the approval of the Buyer Stockholder Matters, the Conversion Shares will, upon issuance in accordance with the Certificate of Designation, be duly and validly authorized and, upon issuance pursuant to the terms of the Certificate of Designation, will be duly and validly issued, fully paid and non-assessable and will be issued free and clear of any liens or other restrictions (other than as provided in this Agreement and restrictions on transfer under applicable securities laws). The issuance and delivery of the Stock Consideration and the Conversion Shares will not, (a) obligate Buyer to offer to issue, or issue, shares of Common Stock or other securities to any Person (other than the Sellers) pursuant to any preemptive rights, rights of first refusal, rights of participation or similar rights, or (b) result in any adjustment (automatic, at the election of any Person or otherwise) of the exercise, conversion, exchange or reset price under, or any other anti-dilution adjustment pursuant to, any outstanding securities of Buyer. Subject to the accuracy of the representations and warranties made by the Sellers in Section 7, the offer and sale of the Stock Consideration to the Sellers is, and will be, (i) exempt from the registration and prospectus delivery requirements of the Securities Act and (ii) exempt from (or otherwise not subject to) the registration and qualification requirements of applicable securities laws of the states of the United States.
10. Miscellaneous.
(a) Survival. All representations and warranties contained herein shall survive the Closing indefinitely.
(b) Governing Law. This Agreement, the enforcement hereof and any claim or controversy arising hereunder shall be governed by and interpreted in accordance with the laws of the State of New York applicable to contracts made and to be performed therein, without giving effect to any conflict of laws rules or principles of any jurisdiction that would result in the application of the laws of any other jurisdiction.
(c) Entire Agreement. This Agreement constitutes the entire agreement, and supersedes all other prior and contemporaneous agreements and understandings, both oral and written, among the Buyer, Seller and the Target Companies with respect to the subject matter hereof. This Agreement may be amended, modified or terminated only by a document in writing and executed by each of the Parties.
(d) Assignment. This Agreement will be binding upon and inure to the benefit of the Parties and their respective heirs, representatives, successors and assigns. No Party may assign any of its rights or delegate any of its obligations under this Agreement without the prior written consent of the other Parties, and any attempted assignment or delegation in violation of the foregoing will be null and void; provided, however, that Buyer may assign its rights hereunder, in whole or in part, to any direct or indirect wholly-owned subsidiary of Buyer without the consent of any Party or any other Person.
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(e) Further Assurances. The Parties hereby agree, from time to time, as and when reasonably requested by any other Party, to execute and deliver or cause to be executed and delivered, all such documents, instruments and agreements, including certificates, representation letters, stock powers and transfer instructions, and to take or cause to be taken such further or other action, as any Party may reasonably deem necessary or desirable in order to carry out the intent and purposes of this Agreement.
(f) Severability. If any provisions of this Agreement shall be adjudicated to be illegal, invalid or unenforceable in any action or proceeding whether in its entirety or in any portion, then such provision shall be deemed amended, if possible, or deleted, as the case may be, from the Agreement in order to render the remainder of the Agreement and any provision thereof both valid and enforceable, and all other provisions hereof shall be given effect separately therefrom and shall not be affected thereby.
(g) Fees and Expenses. Each Party to this Agreement will bear its own expenses incurred in connection with the negotiation, preparation and execution of this Agreement.
(h) Headings. The headings of the various articles and sections of this Agreement are inserted merely for the purpose of convenience and do not expressly or by implication limit, define or extend the specific terms of the section so designated.
(i) No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction will be applied against any Party.
(j) Interpretative Matters. Unless otherwise indicated or the context otherwise requires, (i) all references to Sections, Schedules or Exhibits are to Sections, Schedules, or Exhibits contained in or attached to this Agreement, (ii) words in the singular or plural include the singular and plural and pronouns stated in either the masculine, the feminine or neuter gender shall include the masculine, feminine and neuter, (iii) the words “hereof,” “herein” and words of similar effect shall reference this Agreement in its entirety, and (iv) the use of the word “including” in this Agreement shall be by way of example rather than limitation.
(k) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signatures complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid, and effective for all purposes.
(l) Specific Performance. The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that, without the necessity of posting bond or other undertaking or proving economic damages, the Parties shall be entitled to specific performance of the terms hereof, this being in addition to any other remedies to which they are entitled at law or equity, and in the event that any action or suit is brought in equity to enforce the provisions of this Agreement, and no Party will allege, and each Party hereby waives, the defense or counterclaim that there is an adequate remedy at law.
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(m) Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly delivered and received hereunder (a) one (1) Business Day after being sent for next Business Day delivery, fees prepaid, via a reputable international overnight courier service, (b) upon delivery in the case of delivery by hand, or (c) on the date delivered in the place of delivery if sent by email (with a written or electronic confirmation of delivery), otherwise on the next succeeding Business Day, in each case to the intended recipient as set forth below:
if to Buyer:
Profusa, Inc.
626 Bancroft Way, Suite A
Berkeley, CA 94710
Attention: Fred Knechtel
Email: fred.knechtel@profusa.com
with a copy to (which shall not constitute notice):
Katten Muchin Rosenman LLP
50 Rockefeller Plaza
New York, NY 10020-1605
Attention: Josh Kaufman, Alison Krieser and Jonathan Weiner
Email: josh.kaufman@katten.com; alison.krieser@katten.com; jonathan.weiner@katten.com
if to any Target Company:
G3 Visions Labs Inc.
16 Mt. Bethel Rd. #112
Warren NJ 07059
Attention: Venkata Boyapalli
Email: venkat@g3visionlabs.com
with a copy to (which shall not constitute notice):
K&L Gates LLP
1 Park Plaza, Twelfth Floor
Irvine, CA 92614
Attention: Michael A. Hedge
Email: michael.hedge@klgates.com
if to any Seller or Seller Representative:
[***]
1 Tiffany Way
Warren, NJ 07059
Email: [***]
with a copy to (which shall not constitute notice):
K&L Gates LLP
1 Park Plaza, Twelfth Floor
Irvine, CA 92614
Attention: Michael A. Hedge
Email: michael.hedge@klgates.com
[Signatures on following page]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first set forth above.
| BUYER: | ||
| PROFUSA, INC. | ||
| By: | /s/ Fred Knechtel | |
| Name: | Fred Knechtel | |
| Title: | Chief Financial Officer | |
| SELLERS: | ||
| CENTRALLARKFIELDKARIN NA LLC | ||
| By: | /s/ Jibreel Sarij | |
| Name: | Wahid Jibreel Sarij | |
| Title: | Authorized Signatory | |
| /s/ Venkata Boyapalli | ||
| Venkata Boyapalli | ||
| THE PRIVATELY HELD TRUST | ||
| TARGET COMPANIES: | ||
| G3 VISION LABS INC. | ||
| By: | /s/ Venkata Boyapalli | |
| Name: | Venkata Boyapalli | |
| Title: | President | |
| DOMINION DIAGNOSTICS LLC | ||
| By: | /s/ Venkata Boyapalli | |
| Name: | Venkata Boyapalli | |
| Title: | President | |
| MED SCREEN LABORATORIES INC | ||
| By: | /s/ Venkata Boyapalli | |
| Name: | Venkata Boyapalli | |
| Title: | President | |
| ACUTIS DIAGNOSTICS INC | ||
| By: | /s/ Venkata Boyapalli | |
| Name: | Venkata Boyapalli | |
| Title: | President | |
Schedule 1
| Seller | G3 Securities | Option Exercise Shares | ||||
| CentralLarkfieldKarin NA LLC | 9.44% of the capital stock | 5,123.471 | ||||
| Venkata Boyapalli | 31.44% of the capital stock | 17,081.620 | ||||
| The Privately Held Trust | Option to purchase 58.37% of the capital stock | 31,713.022 | ||||
| Total | 100% of the capital stock | 53,918.113 | ||||
Schedule 2
INITIAL CONSIDERATION
| Seller | Common Stock | Series A Shares | ||||||
| Venkata Boyapalli | 63,716 | 16,760.205 | ||||||
| The Privately Held Trust | 118,293 | 31,116.296 | ||||||
| CentralLarkfieldKarin NA LLC | 19,111 | 5,027.065 | ||||||
| Total | 201,120 | 52,903.566 | ||||||
EXHIBIT A
TRANSACTION AGREEMENT TERMS1
| Structure |
The transaction agreement (this “Agreement” or the “definitive agreement”) will reflect a simultaneous sign and close transaction. The Parties shall cooperate in good faith and use commercially reasonable efforts to structure the purchase and sale of the Securities as a reorganization under Section 368(a) of the Internal Revenue Code, subject to applicable law; provided, however the transaction will be structured as a purchase of the Securities by Buyer from the Sellers as set forth in the Option Agreement unless a different structure is agreed upon by the Buyer and Sellers.
|
| Equity to be purchased by Buyer |
The Securities
|
| Consideration To Be Issued by Buyer to the Sellers |
The Option Exercise Shares
|
| Board / Officer Appointments |
Upon the Closing, the Buyer’s board of directors shall consist of five (5) members, including two board members nominated by G3. A majority of the members of the Board shall be independent directors (in accordance with the listing standards of Nasdaq).
Upon the Closing, the Buyer’s board of directors will appoint a new Chief Executive Officer and Chief Financial Officer identified by G3.
|
| Representations and Warranties |
The Sellers shall make customary representations and warranties, including those regarding title to securities, authority/capacity, non-contravention and investment representations substantially in the form set forth in the Option Agreement.
The Sellers and the Target Companies shall make customary representations and warranties, including representations and warranties in substantially the form of those listed below under Annex I (subject to delivery of disclosure schedules to the definitive agreement) and additional representations and warranties with respect to Due Organization, Subsidiaries, Organizational Documents, Authority, Non-Contravention, Capitalization, Financial Statements, Absence of Changes, Absence of Undisclosed Liabilities, Title to Assets, Real Property, Leasehold, Intellectual Property, Privacy, Material Contracts, Compliance, Permits, Legal Proceedings, Orders, Tax Matters, Employee and Labor Matters, Benefit Plans, Environmental Matters, Insurance, No Financial Advisors, Transactions with Affiliates, Anti-Bribery, Export Control and Sanctions Compliance, Outbound Investment Security Program and CFIUS.
The Buyer shall make customary representations and warranties, including representations and warranties with respect to Due Organization, Subsidiaries, Organizational Documents, Authority, Non-Contravention, Capitalization, SEC Filings, Financial Statements, Absence of Changes, Absence of Undisclosed Liabilities, Title to Assets, Real Property, Leasehold, Intellectual Property, Privacy, Material Contracts, Compliance, Permits, Legal Proceedings, Orders, Tax Matters, Employee and Labor Matters, Benefit Plans, Environmental Matters, Insurance, No Financial Advisors, Transactions with Affiliates, Anti-Bribery, Valid Issuance, Export Control and Sanctions Compliance, Outbound Investment Security Program and CFIUS.
All representations and warranties set forth in the definitive agreement will not survive the Closing.
|
| Required Consents and Notices |
All consents and notices required in connection with the Closing, including those disclosed on the disclosure schedules of the Company or the Buyer and those set forth on Annex II.
|
| Release |
The Sellers and the Target Companies will enter into a customary mutual release effective as of Closing.
|
| Governing Law |
New York
|
| Expenses | Except as otherwise agreed in the Option Agreement or the definitive agreement, each party shall bear its own fees and expenses in connection with the transactions contemplated hereby, whether or not the Closing occurs. |
| 1 | All capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Option Agreement to which this Exhibit A is attached. |
Annex I
Representations and Warranties of Target Companies and Sellers
(n) Financial Statements. G3 has provided to Buyer true and complete copies of the consolidated audited financial statements of G3 as of and for the two years ended December 31, 2025 (the “Audited Financials”), and reviewed financial statements as of and for the six months ended June 30, 2026 (collectively, the “Company Financials”). The Company Financials were prepared in accordance with GAAP (except as may be indicated in the notes to such financial statements and except that the unaudited financial statements may not contain footnotes and are subject to normal and recurring year-end adjustments, none of which is material) and fairly present, in all material respects, the financial position and operating results of G3 as of the dates and for the periods indicated therein. The Audited Financials were audited in compliance with standards promulgated by the U.S. Public Company Accounting Oversight Board. G3 maintains books and records consistent with the procedures described in Rule 13a-15 under the Securities Exchange Act of 1934, as amended. There have been no formal investigations regarding financial reporting or accounting policies and practices discussed with, reviewed by or initiated at the direction of the chief executive officer or the chief financial officer of G3, the board of directors of G3 or any committee thereof. G3 has not identified (i) any significant deficiency or material weakness in the design or operation of the system of internal accounting controls utilized by G3, (ii) any fraud, whether or not material, that involves G3, G3’s management or other employees who have a role in the preparation of financial statements or the internal accounting controls utilized by G3 or (iii) any claim or allegation regarding any of the foregoing
(o) Contracts. G3 has delivered or made available to Buyer accurate and complete copies of all material contracts of the Target Companies (the “Company Material Contracts”), including all amendments thereto. Neither any Target Company, as applicable, nor, to the knowledge of G3, as of the date of this Agreement any other party to a Company Material Contract, has breached, violated or defaulted under, or received notice that it breached, violated or defaulted under, any of the terms or conditions of any Company Material Contract in such manner as would permit any other party to cancel or terminate any such Company Material Contract, or would permit any other party to seek damages which would reasonably be expected to be material to any Target Company or its business, as applicable. As to the applicable Target Company, as of the date of this Agreement, each Company Material Contract is valid, binding, enforceable and in full force and effect. No person or entity has provided written notice to any Target Company to renegotiate, or change, any material amount paid or payable to any Target Company under any Company Material Contract or any other material term or provision of any Company Material Contract.
(p) Compliance with Laws. Each Target Company is and has been in compliance in all material respects with all applicable laws, including all applicable clinical laboratory quality and data integrity standards, including the Public Health Service Act and its implementing regulations, the Health Care Laws and any other similar Law administered or promulgated by the FDA or other comparable governmental body or accrediting body responsible for governing the licensure and operation of clinical laboratories and billing for clinical laboratory services, except for any noncompliance, either individually or in the aggregate, which would not be material to Target Companies, taken as a whole. Each Target Company, as applicable, holds all required governmental authorizations and permits, including those required pursuant to any Health Care Law, which are material to the operation of the business of such Target Company, as applicable, as currently conducted. “Health Care Laws” means any laws relating to health care regulatory and reimbursement matters applicable to any Target Company, including, without limitation, (a) the Stark Law (42 U.S.C. § 1395nn) and all regulations promulgated thereunder, (b) the Anti-Kickback Statute (42 U.S.C. § 1320a-7b) and all regulations promulgated thereunder, (c) the False Claims Act (31 U.S.C. §§ 3729 et seq.), the criminal false claims statutes (18 U.S.C. §§ 287 and 1001), the Program Fraud Civil Remedies Act of 1986 (31 U.S.C. §§ 3801–3812), and the Civil Monetary Penalties Law (42 U.S.C. § 1320a-7a), including the Anti-Inducement Law (42 U.S.C. § 1320a-7a(a)(5)), (d) the Federal Food, Drug and Cosmetic Act and regulations issued thereunder by the United States Food and Drug Administration (“FDA” and collectively, the “FDCA”), (e) clinical laboratory quality and data integrity standards, including the Clinical Laboratory Improvement Amendments of 1988 (42 U.S.C. § 263a) and the regulations promulgated thereunder, (f) the Medicare Act, 42 U.S.C. § 1395 et seq. and all regulations promulgated thereunder, (g) federal laws governing Medicaid programs, 42 U.S.C. § 1396 et seq., and all regulations promulgated thereunder, (h) the Eliminating Kickbacks in Recovery Act of 2018 (18 U.S.C. § 220), (i) laws relating to the advertising or marketing of health care items or services, (j) state self-referral, anti-kickback, fee-splitting and patient brokering laws, (k) laws applicable to preclinical and clinical testing, genetic testing and the privacy of genetic testing results, including, without limitation, HIPAA and Part 2, (l) state laws governing the licensure and operation of clinical laboratories and billing for clinical laboratory services and the accreditation standards of the College of American Pathologists and other clinical and pathology laboratory accreditation bodies, and (m) the federal Controlled Substances Act (21 U.S.C. § 801 et seq.), all regulations promulgated thereunder, and all state controlled substance and drug diversion laws.
(q) Legal Proceedings. As of the date of this Agreement, there is no pending legal proceeding and, to the knowledge of G3, no Person has threatened in writing to commence any legal proceeding: (i) that involves any Target Company, any director, officer or executive employee of any Target Company (in his or her capacity as such) or any material assets owned or used by any Target Company, in each case, which is reasonably likely to have a material adverse effect on G3; or (ii) that challenges, or that would have the effect of preventing, delaying, making illegal or otherwise interfering with, the transactions contemplated hereby. There is no order, writ, injunction, judgment, investigation or decree to which any Target Company, or any of the material assets owned or used by any Target Company is subject.
EXHIBIT B
STOCK POWER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto [____________________] [___] shares of [CLASS OF STOCK], par value $0.0001 per share, of [_______], a [_______] corporation (the “Company”), standing in the name of the undersigned on the books of the Company and does hereby irrevocably constitute and appoint [______________] as attorney to transfer such stock on the books of the Company with full power of substitution.
| Dated: [______] |
EXHIBIT C
CONSENT OF SPOUSE
List of Omitted Schedules and Exhibits
1. Annex II – Required Consents and Notices
Exhibit 3.1
PROFUSA, INC.
CERTIFICATE OF DESIGNATION OF PREFERENCES,
RIGHTS AND LIMITATIONS
OF
SERIES A NON-VOTING CONVERTIBLE PREFERRED STOCK
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
THE UNDERSIGNED DOES HEREBY CERTIFY, on behalf of Profusa, Inc., a Delaware corporation (the “Corporation”), that the following resolution was duly adopted by the Board of Directors of the Corporation (the “Board of Directors”), in accordance with the provisions of Section 151 of the General Corporation Law of the State of Delaware (the “DGCL”), at a meeting duly called and held on July 30, 2026, which resolution provides for the creation of a series of the Corporation’s preferred stock, par value $0.0001 per share, which is designated as “Series A Non-Voting Convertible Preferred Stock,” with the preferences, rights and limitations set forth therein relating to dividends, conversion, redemption, dissolution and distribution of assets of the Corporation.
WHEREAS: the Amended and Restated Certificate of Incorporation of the Corporation, as amended (the “Certificate of Incorporation”), provides for a class of its authorized stock known as Preferred Stock, consisting of 1,000,000 shares, $0.0001 par value per share (the “Preferred Stock”), issuable from time to time in one or more series.
RESOLVED: that, pursuant to authority conferred upon the Board of Directors by the Certificate of Incorporation, (i) a new series of Preferred Stock of the Corporation be, and hereby is authorized by the Board of Directors, (ii) the Board of Directors hereby authorizes the issuance of 130,000.000 shares of “Series A Non-Voting Convertible Preferred Stock” pursuant to the terms of the Option Agreement, dated on or around the date hereof, by and among the Corporation, the equityholders of G3 Vision Labs Inc, a New Jersey corporation (“G3”), and solely for purposes of Sections 5, 8 and 10 thereof, G3, Med Screen Laboratories Inc., a New Jersey corporation, Dominion Diagnostics LLC, a Delaware limited liability company, and Acutis Diagnostics Inc., a New York corporation (the “Option Agreement”), and (iii) the Board of Directors hereby fixes the designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of such shares of Preferred Stock, in addition to any provisions set forth in the Certificate of Incorporation that are applicable to the Preferred Stock of all classes and series, as follows:
TERMS OF SERIES A NON-VOTING CONVERTIBLE PREFERRED STOCK
1. Definitions. For purposes hereof, the following terms shall have the following meanings:
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 of the Securities Act of 1933, as amended.
“Attribution Parties” means, with respect to each Holder, its Affiliates and any other Person whose beneficial ownership of Common Stock would be aggregated with such Holder’s for purposes of Section 13(d) of the Exchange Act, including shares held by any “group” of which such Holder is a member; provided, for the avoidance of doubt, that for purposes of Section 6.1 (including any Beneficial Ownership Statement delivered in accordance therewith) any group that may be formed solely by reason of the Option Agreement or other agreement or arrangement that will terminate upon the Corporation’s receipt of the Stockholder Approval shall be disregarded.
“Bloomberg” means the reporting service provided by Bloomberg L.P. or its subsidiaries or an equivalent, reliable reporting service mutually acceptable to and hereafter designated by the Required Holders (as defined below) and the Corporation.
“Business Day” means any day other than a Saturday, Sunday or other day on which banks in New York, New York or San Diego, California are authorized or obligated by law to be closed.
“Buy-In” shall have the meaning set forth in Section 6.4.4.
“Closing Sale Price” means, for any security as of any date, the last closing trade price for such security immediately prior to 4:00 p.m., New York City time, on the principal Trading Market where such security is listed or traded, as reported by Bloomberg, or if the foregoing do not apply, the last trade price reported for such security on the OTCQX Market, the OTCQB Market or Pink Open Market of OTC Markets Group (or, in each case, any successor to such market) (collectively, the “OTC Markets”), or, if no last trade price is reported for such security by Bloomberg and no last trade price is reported on an OTC Market, the average of the bid prices of any market makers for such security as reported on the OTC Markets. If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the “Closing Sale Price” of such security on such date shall be the fair market value as determined in good faith by the Board of Directors of the Corporation.
“Commission” means the United States Securities and Exchange Commission.
“Common Stock” means the Corporation’s common stock, par value $0.0001 per share, and stock of any other class of securities into which such securities may hereafter be reclassified or changed.
“Conversion Shares” means, collectively, the shares of Common Stock issuable upon conversion of the shares of Series A Non-Voting Preferred Stock in accordance with the terms hereof.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Governmental Body” means any: (a) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or quasi-governmental authority of any nature (including any governmental division, department, agency, commission, bureau, instrumentality, official, ministry, fund, foundation, center, organization, unit, body or Entity and any court or other tribunal, and for the avoidance of doubt, any taxing authority); or (d) self-regulatory organization (including Nasdaq).
“Holder” means a holder of shares of Series A Non-Voting Preferred Stock.
“Nasdaq” means The Nasdaq Stock Market LLC.
“Person” means any individual, corporation (including any non-profit corporation), partnership (including any general partnership, limited partnership or limited liability partnership), joint venture, estate, trust, company (including any company limited by shares, limited liability company or joint stock company), firm, society or other enterprise, association, organization or entity, or Governmental Body.
“Series A Non-Voting Liquidation Amount” means, with respect to each share of Series A Non-Voting Convertible Preferred Stock, an amount equal to $0.0001.
“Stockholder Approval” means the approval of the Stockholder Approval Matters by holders of Common Stock representing a majority of the votes cast by the stockholders present in person or represented by proxy at the Stockholders’ Meeting and entitled to vote thereon (provided that no Person receiving Common Stock in the transactions contemplated by the Option Agreement shall be entitled to vote such shares on the Stockholder Approval Matter).
“Stockholder Approval Matters” means such approval as may be required by the applicable rules and regulations of The Nasdaq Stock Market LLC (or any successor entity) from the stockholders of the Corporation to consent to the conversion of all of the shares of Series A Non-Voting Preferred Stock into shares of Common Stock pursuant to Section 6 of this Certificate of Designation.
“Stockholders’ Meeting” means a meeting of the stockholders of the Corporation at which the approval of the Stockholder Approval Matters is sought.
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“Trading Day” means a day on which shares of Common Stock are traded for any period on the principal Trading Market for the Common Stock. If the Common Stock is not listed or traded on any Trading Market, the term “Trading Day” shall mean a Business Day.
“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing).
2. Designation, Amount and Par Value. The series of Preferred Stock shall be designated as the Corporation’s Series A Non-Voting Convertible Preferred Stock (the “Series A Non-Voting Preferred Stock”) and the number of shares so designated shall be 130,000.000. Each share of Series A Non-Voting Preferred Stock shall have a par value of $0.0001 per share.
3. Dividends. Holders shall be entitled to receive, and the Corporation shall pay, dividends on shares of the Series A Non-Voting Preferred Stock (on an as-if-converted-to-Common-Stock basis, without regard to the Beneficial Ownership Limitation (as defined below)) equal to and in the same form, and in the same manner, as dividends (other than dividends on shares of the Common Stock payable in the form of Common Stock) actually paid on shares of the Common Stock when, as and if such dividends (other than dividends payable in the form of Common Stock) are paid on shares of the Common Stock. Other than as set forth in the previous sentence, no other dividends shall be paid on shares of Series A Non-Voting Preferred Stock, and the Corporation shall pay no dividends (other than dividends payable in the form of Common Stock) on shares of the Common Stock unless it simultaneously complies with the previous sentence.
4. Voting Rights.
4.1 Except as otherwise provided herein or as otherwise required by the DGCL, the Series A Non-Voting Preferred Stock shall have no voting rights. However, as long as any shares of Series A Non-Voting Preferred Stock are outstanding, the Corporation shall not, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series A Non-Voting Preferred Stock: (i) alter or change adversely the powers, preferences or rights given to the Series A Non-Voting Preferred Stock or alter or amend this Certificate of Designation, amend or repeal any provision of, or add any provision to, the Certificate of Incorporation or Amended and Restated Bylaws of the Corporation, or file any certificate of amendment, certificate of designations, preferences, limitations and relative rights of any series of Preferred Stock, in each case, if such action would adversely alter or change the preferences, rights, privileges or powers of, or restrictions provided for the benefit of the Series A Non-Voting Preferred Stock relative to the Common Stock, regardless of whether any of the foregoing actions shall be by means of amendment to the Certificate of Incorporation or by merger, consolidation, recapitalization, reclassification, conversion or otherwise, (ii) issue additional shares of Series A Non-Voting Preferred Stock or increase or decrease (other than by conversion) the number of authorized shares of Series A Non-Voting Preferred Stock, (iii) prior to the Automatic Conversion (as defined below), consummate either: (A) any Fundamental Transaction (as defined below) or (B) any merger or consolidation of the Corporation with or into another Person or any stock sale to, or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, share exchange or scheme of arrangement) with or into, another Person in which the stockholders of the Corporation immediately before such transaction do not hold at least a majority of the voting power of the capital stock of the Corporation or surviving corporation or the parent entity of the Corporation or surviving corporation immediately after such transaction or in which the Corporation or the surviving corporation issues securities in such transaction that represent, or are convertible into securities representing, more than a majority of the voting power of the Corporation immediately before such transaction (a “Change of Control Transaction”), (iv) prior to the Automatic Conversion, authorize or issue any class or series of stock that has powers, preferences or rights that are senior to those of the Series A Non-Voting Preferred Stock, (v) amend, waive or modify the Option Agreement in any manner that would be reasonably likely to prevent, impede or materially delay the Stockholder Approval or the Automatic Conversion (as defined below) or (vi) enter into any agreement with respect to any of the foregoing. Notwithstanding anything contained herein to the contrary, no approval under this Section 4.1 shall be required in connection with the consummation of the transactions contemplated by the Option Agreement, including the issuance of shares of Series A Non-Voting Preferred Stock thereunder or in connection with the issuance of up to an aggregate of 13,177.330 shares of Series A Non-Voting Preferred Stock to such Persons and in such amounts as the Board may determine in its discretion. Holders of shares of Common Stock acquired upon the conversion of shares of Series A Non-Voting Preferred Stock shall be entitled to the same voting rights as each other holder of Common Stock, except that such holders may not vote such shares upon the proposal for Stockholder Approval in accordance with Rule 5635 of the listing rules of Nasdaq.
4.2 Any vote required or permitted under Section 4.1 may be taken at a meeting of the Holders or through the execution of an action by written consent in lieu of such meeting, provided that the consent is executed by Holders representing a majority of the then-outstanding shares of Series A Non-Voting Preferred Stock.
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5. Rank; Liquidation.
5.1 The Series A Non-Voting Preferred Stock shall rank (i) senior to the Common Stock solely to the extent of the Series A Non-Voting Liquidation Amount per share and (ii) on parity with the Common Stock in all other respects, in each case, as to dividends or distributions of assets upon liquidation, dissolution or winding up of the Corporation, whether voluntarily or involuntarily.
5.2 Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”), each Holder shall be entitled to receive, prior and in preference to any distribution to the holders of Common Stock, out of the assets of the Corporation, whether capital or surplus, an amount equal to the Series A Non-Voting Liquidation Amount for each share of Series A Non-Voting Preferred Stock held by such Holder, plus an amount equal to any dividends declared on but unpaid to such shares (the “Preference Amount”). After payment in full of the Preference Amount to all Holders, the remaining assets of the Corporation available for distribution shall be distributed among the Holders and the holders of Common Stock, with each Holder receiving the same amount per share that a holder of Common Stock would receive if the Series A Non-Voting Preferred Stock were fully converted (disregarding for such purpose any Beneficial Ownership Limitations) to Common Stock, which amounts shall be paid pari passu with all holders of Common Stock. If, upon any such Liquidation, the assets of the Corporation shall be insufficient to pay the Preference Amount in full to all Holders, then all assets of the Corporation available for distribution shall be distributed ratably among the Holders in proportion to the full Preference Amount each such Holder would otherwise be entitled to receive. If, upon any such Liquidation, the assets of the Corporation remaining after payment in full of the Preference Amount shall be insufficient to pay the Holders and the holders of Common Stock the full amounts they would otherwise be entitled to receive, then all such remaining assets shall be distributed ratably to the Holders and the holders of Common Stock in accordance with the respective amounts that would be payable on all such securities if all amounts payable thereon were paid in full. For the avoidance of any doubt, a Fundamental Transaction shall not be deemed a Liquidation unless the Corporation expressly declares that such Fundamental Transaction shall be treated as if it were a Liquidation.
6. Conversion.
6.1 Automatic Conversion on Stockholder Approval. Effective as of 5:00 p.m. Eastern time on the third (3rd) Business Day after the date that the Corporation obtains the Stockholder Approval, each share of Series A Non-Voting Preferred Stock then outstanding shall automatically convert into a number of shares of Common Stock equal to the Conversion Ratio (as defined below), subject to the Beneficial Ownership Limitation applicable to the Holder thereof (the “Automatic Conversion”). The Corporation shall inform each Holder of the occurrence of the Stockholder Approval and the effective date of the Automatic Conversion within one (1) Business Day following such Stockholder Approval via the filing with the Commission of a Current Report on Form 8-K publicly disclosing the same. At least fifteen (15) days prior to the date of the Automatic Conversion or, in the case of an Additional Automatic Conversion (as defined below), at least ten (10) days prior to the date of such Additional Automatic Conversion, the Corporation shall request (a “Beneficial Ownership Request”) from each Holder a written notice (which may be provided by email) of the number of shares of Common Stock then beneficially owned by such Holder and any of its Attribution Parties (a “Beneficial Ownership Statement”). For such purposes, the number of shares beneficially owned by each Holder and its Attribution Parties will be determined in a manner consistent with Section 6.3 hereof. In determining the application of the Beneficial Ownership Limitation solely with respect to the Automatic Conversion and any Additional Automatic Conversion, the Corporation shall calculate beneficial ownership for each Holder taking into account the beneficial ownership by such Holder of: (x) the number of shares of Common Stock issuable to such Holder or its Attribution Parties in such Automatic Conversion or such Additional Automatic Conversion (as applicable), plus (y) any additional shares of Common Stock beneficially owned by such Holder or its Attribution Parties as set forth in such Holder’s Beneficial Ownership Statement and assuming the conversion of all shares of Series A Non-Voting Preferred Stock held by all other Holders less the aggregate number of shares of Series A Non-Voting Preferred Stock held by all other Holders that will not convert into shares of Common Stock on account of the application of any Beneficial Ownership Limitation applicable to any such other Holders. If, following the Corporation’s delivery of a Beneficial Ownership Request, a Holder does not provide a Beneficial Ownership Statement at least ten (10) days prior to the date of Stockholder Approval (or, in the case of an Additional Automatic Conversion, within five (5) days following the Corporation’s delivery of such Beneficial Ownership Request), the Corporation shall be entitled to presume such Holder’s beneficial ownership of Common Stock (excluding the Conversion Shares) to be zero. The shares of Series A Non-Voting Preferred Stock that are converted in the Automatic Conversion or any Additional Automatic Conversion are referred to as the “Converted Stock”. Each delivery of a Beneficial Ownership Statement by a Holder will constitute a representation by such Holder that the information therein is true and correct in all material respects and that such Holder has provided the information contained therein in a manner consistent with this paragraph. The Corporation shall be entitled to rely on the information contained in the Beneficial Ownership Statement delivered by a Holder unless and until such Holder notifies the Corporation, in writing, of any changes to the information contained therein. For the avoidance of doubt, any shares of Series A Non-Voting Preferred Stock that are not automatically converted pursuant to the Automatic Conversion as a result of a Beneficial Ownership Limitation shall remain outstanding until such shares of Series A Non-Voting Preferred Stock are converted pursuant to Section 6.2 or pursuant to an Additional Automatic Conversion (as defined below). From time to time following the date of the Automatic Conversion, but in no event more than once in any six (6)-month period, the Corporation may deliver written notice (an “Additional Automatic Conversion Notice”) to each holder of record of Series A Non-Voting Preferred stock that the Corporation is electing to effect additional automatic conversions of the Series A Non-Voting Preferred Stock into Common Stock (“Additional Automatic Conversions”) pursuant to this Section 6.1. Each Additional Automatic Conversion Notice shall include a request that each Holder deliver an updated Beneficial Ownership Statement (and shall constitute a Beneficial Ownership Request), and upon delivery thereof the Corporation and each Holder shall comply with the provisions of this Section 6.1 applicable to Additional Automatic Conversions. Each Additional Automatic Conversion shall be effective on the date specified by the Corporation in the Additional Automatic Conversion Notice; provided that such date shall be at least ten (10) days after the date of such Additional Automatic Conversion Notice. The Conversion Shares shall be issued as follows:
6.1.1 Converted Stock that is registered in book entry form shall be automatically cancelled upon the Automatic Conversion or any Additional Automatic Conversion and converted into the corresponding Conversion Shares, which shares shall be issued in book entry form to the Holders within one (1) Business Day following the effectiveness of the Automatic Conversion or Additional Automatic Conversion, as applicable, without any action on the part of the Holders.
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6.1.2 Converted Stock that is issued in certificated form shall be deemed converted into the corresponding Conversion Shares on the date of Automatic Conversion or Additional Automatic Conversion, as applicable, and the Holder’s rights as a holder of such shares of Converted Stock shall cease and terminate on such date, excepting only the right to receive the Conversion Shares within two (2) Business Days following the effectiveness of the Automatic Conversion or Additional Automatic Conversion, as applicable. Without delaying the delivery of the Conversion Shares, the Holder shall as soon as practicable (and in any event within three (3) Business Days) following the effectiveness of the Automatic Conversion or Additional Automatic Conversion, as applicable, tender to the Corporation (or its designated agent) the stock certificate(s) (duly endorsed) representing such certificated Converted Stock.
6.2 Conversion at Option of Holder. Subject to Section 6.1 and Section 6.4, each share of Series A Non-Voting Preferred Stock then outstanding shall be convertible, at any time and from time to time following 5:00 p.m. Eastern time on the third (3rd) Business Day after the date that the Stockholder Approval is obtained by the Corporation, at the option of the Holder thereof, into a number of shares of Common Stock equal to the Conversion Ratio, subject to the Beneficial Ownership Limitation (each, an “Optional Conversion”). Holders shall effect Optional Conversions by providing the Corporation with the form of conversion notice attached hereto as Annex A (a “Notice of Conversion”), duly completed and executed by such Holder. Provided (x) the Corporation’s transfer agent is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer program, and (y)the Conversion Shares issuable upon such conversion are not subject to affiliate or lock-up legends, the Notice of Conversion shall specify, at the Holder’s election, whether the applicable Conversion Shares shall be issued and delivered by (A) crediting such Conversion Shares to the account of the Holder’s prime broker with DTC through its Deposit/Withdrawal At Custodian system (a “DWAC Delivery”), (B) registering such Conversion Shares in the Holder’s (or its designee’s) name in book-entry form or (C) delivering physical stock certificates representing such Conversion Shares, issued in the name of the Holder (or its designee). The date on which an Optional Conversion shall be deemed effective (the “Conversion Date”) shall be the Trading Day that the Notice of Conversion, completed and executed, is sent via email to, and received prior to 5:00 p.m. (New York City time) by, the Corporation (with the Conversion Date in respect of any Notice of Conversion received by the Corporation at or after 5:00 p.m. (New York City time) on a Trading Day, or on any day that is not a Trading Day, being the Trading Day immediately succeeding the date of such receipt). The Holder shall not be required to physically surrender any stock certificate to the Corporation until the Holder has converted all of the Series A Non-Voting Preferred Stock represented by such certificate, in which case, the Holder shall surrender its stock certificate to the Corporation for cancellation no later than three (3) Trading Days following the date the final Notice of Conversion is delivered to the Corporation. Execution and delivery of a Notice of Conversion shall have the same effect as cancellation of the original stock certificate and issuance of a new stock certificate evidencing the right to purchase the remaining number of Conversion Shares, if any. The calculations set forth in the Notice of Conversion shall control in the absence of manifest or mathematical error.
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6.3 Conversion Ratio. The “Conversion Ratio” for each share of Series A Non-Voting Preferred Stock shall be 1,000 shares of Common Stock issuable upon the conversion (the “Conversion”) of each share of Series A Non-Voting Preferred Stock (corresponding to a ratio of 1,000:1), subject to adjustment as provided herein.
6.4 Beneficial Ownership Limitation. Notwithstanding anything herein to the contrary, the Corporation shall not effect any conversion of any share of Series A Non-Voting Preferred Stock, including pursuant to Section 6.1, and a Holder shall not have the right to convert any portion of the Series A Non-Voting Preferred Stock, to the extent that, after giving effect to such attempted conversion, such Holder, together with such Holder’s Attribution Parties, would beneficially own a number of shares of Common Stock in excess of the Beneficial Ownership Limitation. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by each Holder and its Attribution Parties shall include the number of shares of Common Stock issuable upon conversion of the Series A Non-Voting Preferred Stock subject to the Notice of Conversion or Automatic Conversion, as applicable, with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon (i) conversion of the remaining, unconverted Series A Non-Voting Preferred Stock beneficially owned by such Holder or any of its Attribution Parties, and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Corporation (including any warrants) beneficially owned by such Holder or any of its Attribution Parties that are subject to a limitation on conversion or exercise similar to the limitation contained in this Section 6.4 (and provide for a maximum beneficial ownership percentage that is less than or equal to the Beneficial Ownership Limitation applicable to such Holder). For purposes of this Section 6.4, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the applicable rules and regulations of the Commission, and the terms “beneficial ownership” and “beneficially own” have the meanings ascribed to such terms therein. In addition, for purposes hereof, “group” has the meaning set forth in Section 13(d) of the Exchange Act and the applicable rules and regulations of the Commission. For purposes of this Section 6.4, in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (a) the Corporation’s most recent periodic or annual filing with the Commission, as the case may be, (b) a more recent public announcement by the Corporation that is filed with the Commission, or (c) a more recent notice by the Corporation or the Corporation’s transfer agent to the Holder setting forth the number of shares of Common Stock then outstanding. Upon the written request of a Holder (which may be by email), the Corporation shall, within two (2) Trading Days thereof, confirm in writing to such Holder (which may be via email) the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to any actual conversion or exercise of securities of the Corporation, including shares of Series A Non-Voting Preferred Stock, by such Holder or its Attribution Parties since the date as of which such number of outstanding shares of Common Stock was last publicly reported or confirmed to the Holder. The “Beneficial Ownership Limitation” shall initially be set at the discretion of each Holder to a percentage designated by such Holder by written notice to the Corporation and otherwise between 4.9% and 19.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock pursuant to the Automatic Conversion or such Notice of Conversion (as applicable), to the extent permitted pursuant to this Section 6.4. If a Holder has not designated its Beneficial Ownership Limitation at the time of issuance of the Series A Non-Voting Preferred Stock, the Beneficial Ownership Limitation shall initially be set at 9.9%. Each delivery of a Notice of Conversion by a Holder will constitute a representation by such Holder that it has evaluated the limitation set forth in this paragraph and determined that the issuance of the full number of shares of Common Stock requested in such Notice of Conversion is permitted under this paragraph (the “Beneficial Ownership Representation”). The Corporation shall be entitled to rely on the Beneficial Ownership Representation and any other representations made to it by the Holder in any Notice of Conversion regarding its Beneficial Ownership Limitation. Notwithstanding the foregoing, by written notice to the Corporation (email being sufficient), (1) which will not be effective until the sixty-first (61st) day after such written notice is delivered to the Corporation, the Holder may reset the Beneficial Ownership Limitation percentage to a higher percentage, not to exceed 19.99%, to the extent then applicable, and (2) which will be effective immediately after such notice is delivered to the Corporation, the Holder may reset the Beneficial Ownership Limitation percentage to a lower percentage than was in effect for such Holder prior to such written notice. Upon such a change by a Holder of the Beneficial Ownership Limitation, not to exceed 19.99%, the Beneficial Ownership Limitation may not be further amended by such Holder without first providing the minimum notice required by this Section 6.4.
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6.5 Mechanics of Conversion.
6.5.1 Delivery of Certificate or Electronic Issuance. Upon any Optional Conversion, not later than two (2) Trading Days after the applicable Conversion Date, or if the Holder requests the Conversion of shares of Series A Non-Voting Preferred Stock represented by physical stock certificate(s), fifteen (15) Trading Days after receipt by the Corporation of the original certificate(s) representing such shares of Series A Non-Voting Preferred Stock being converted, duly endorsed, and the accompanying Notice of Conversion (the “Share Delivery Date”), the Corporation shall either: (a) deliver, or cause to be delivered, to the converting Holder a physical certificate or certificates representing the number of Conversion Shares being acquired upon the conversion of shares of Series A Non-Voting Preferred Stock or a statement reflecting the registration of such Conversion Shares in the Holder’s (or its designee’s) name in book-entry form, as applicable, or (b) in the case of a DWAC Delivery (if so requested by the Holder and permitted hereunder), electronically transfer such Conversion Shares by crediting the account of the Holder’s prime broker with DTC through its DWAC system. If in the case of any Notice of Conversion such certificate or certificates or statements, as applicable, for the Conversion Shares are not delivered to or as directed by or, in the case of a DWAC Delivery (to the extent permitted hereunder), such shares are not electronically delivered to or as directed by, the applicable Holder by the Share Delivery Date, the applicable Holder shall be entitled to elect to rescind such Notice of Conversion by written notice to the Corporation at any time on or before its receipt of such certificate or certificates or statements for Conversion Shares or electronic receipt of such shares, as applicable, in which event the Corporation shall promptly return to such Holder any original Series A Non-Voting Preferred Stock certificate delivered to the Corporation and such Holder shall promptly return to the Corporation any Common Stock certificates or otherwise direct the return of any shares of Common Stock delivered to the Holder through the DWAC system or in book-entry notation on the books of the Corporation’s transfer agent, representing the shares of Series A Non-Voting Preferred Stock unsuccessfully tendered for conversion to the Corporation.
6.5.2 Obligation Absolute. Subject to Section 6.4 and subject to Holder’s right to rescind a Notice of Conversion pursuant to Section 6.5.1, the Corporation’s obligation to issue and deliver the Conversion Shares upon conversion of Series A Non-Voting Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by a Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by such Holder or any other Person of any obligation to the Corporation or any violation or alleged violation of law by such Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Corporation to such Holder in connection with the issuance of such Conversion Shares. Subject to Section 6.4 and subject to Holder’s right to rescind a Notice of Conversion pursuant to Section 6.5.1, in the event a Holder shall elect to convert any or all of its Series A Non-Voting Preferred Stock, the Corporation may not refuse conversion based on any claim that such Holder or anyone associated or affiliated with such Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and/or enjoining conversion of all or part of the Series A Non-Voting Preferred Stock of such Holder shall have been sought and obtained by the Corporation, and the Corporation posts a surety bond for the benefit of such Holder in the amount of 150% of the value of the Conversion Shares into which would be converted the Series A Non-Voting Preferred Stock which is subject to such injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to such Holder to the extent it obtains judgment. In the absence of such injunction, the Corporation shall, subject to Section 6.4 and subject to Holder’s right to rescind a Notice of Conversion pursuant to Section 6.5.1, issue Conversion Shares upon a properly noticed conversion.
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6.5.3 Buy-In on Failure to Timely Deliver Certificates. If the Corporation fails to deliver to a Holder the applicable certificate or certificates or to effect a DWAC Delivery, as applicable, by the Share Delivery Date pursuant to Section 6.5.1 (other than a failure caused by incorrect or incomplete information provided by Holder to the Corporation or its transfer agent, the failure of the Holder’s prime broker to initiate a DWAC deposit or the application of the Beneficial Ownership Limitation), and if after such Share Delivery Date such Holder is required by its brokerage firm to purchase (in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by such Holder of the Conversion Shares which such Holder was entitled to receive upon the conversion relating to such Share Delivery Date (a “Buy-In”), then to the extent the Corporation has cash legally available therefor the Corporation shall (i) pay in cash to such Holder (in addition to any other remedies available to or elected by such Holder) the amount by which (x) such Holder’s total purchase price (including any brokerage commissions) for the shares of Common Stock so purchased exceeds (y) the product of (a) the aggregate number of shares of Common Stock that such Holder was entitled to receive from the conversion at issue multiplied by (b) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (ii) at the option of such Holder, either reissue (if surrendered) the shares of Series A Non-Voting Preferred Stock equal to the number of shares of Series A Non-Voting Preferred Stock submitted for conversion or deliver to such Holder the number of shares of Common Stock that would have been issued if the Corporation had timely complied with its delivery requirements under Section 6.5.1. For example, if a Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of shares of Series A Non-Voting Preferred Stock with respect to which the actual sale price (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause (i) of the immediately preceding sentence, the Corporation shall be required to pay such Holder $1,000. The Holder shall provide the Corporation with written notice, within three (3) Trading Days after the occurrence of a Buy-In, indicating the amounts payable to such Holder in respect of such Buy-In together with applicable confirmations and other evidence reasonably requested by the Corporation. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Corporation’s failure to timely deliver certificates representing shares of Common Stock upon conversion of the shares of Series A Non-Voting Preferred Stock as required pursuant to the terms hereof; provided, however, that the Holder shall not be entitled to both (A) require the reissuance of the shares of Series A Non-Voting Preferred Stock submitted for conversion for which such conversion was not timely honored and (B) receive the number of shares of Common Stock that would have been issued if the Corporation had timely complied with its delivery requirements under Section 6.5.1.
6.5.4 Reservation of Shares Issuable Upon Conversion. The Corporation covenants that at all times it will reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Series A Non-Voting Preferred Stock, subject to receipt of the Stockholder Approval, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holders, not less than such aggregate number of shares of Common Stock as shall be issuable (taking into account the adjustments of Section 7) upon the conversion of all outstanding shares of Series A Non-Voting Preferred Stock. The Corporation covenants that all shares of Common Stock that shall be issuable upon conversion of the Series A Non-Voting Preferred Stock shall, upon issue, be duly authorized, validly issued, fully paid and non-assessable.
6.5.5 Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of the Series A Non-Voting Preferred Stock, no certificates or scrip for any such fractional shares shall be issued and no cash shall be paid for any such fractional shares. Any fractional shares of Common Stock that a Holder of Series A Non-Voting Preferred Stock would otherwise be entitled to receive shall be aggregated with all fractional shares of Common Stock issuable to such Holder and any remaining fractional shares shall be rounded up to the nearest whole share. Whether or not fractional shares would be issuable upon such conversion shall be determined on the basis of the total number of shares of Series A Non-Voting Preferred Stock the Holder seeks to convert into Common Stock and the aggregate number of shares of Common Stock issuable upon such conversion.
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6.5.6 Transfer Taxes. The issuance of certificates for shares of the Common Stock upon conversion of the Series A Non-Voting Preferred Stock shall be made without charge to any Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificates; provided that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the registered Holder(s) of such shares of Series A Non-Voting Preferred Stock and the Corporation shall not be required to issue or deliver such certificates unless or until the Person or Persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid.
6.6 Status as Stockholder. Upon each Conversion Date, effective date of the Automatic Conversion, the effective date of each Additional Automatic Conversion, as applicable, (i) the shares of Series A Non-Voting Preferred Stock being converted shall be deemed converted into shares of Common Stock, and (ii) the Holder’s rights as a holder of such converted shares of Series A Non-Voting Preferred Stock shall cease and terminate, excepting only the right to receive DWAC Delivery of such shares of Common Stock or certificates or statements for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Corporation to comply with the terms of this Certificate of Designation. In all cases, the Holder shall retain all of its rights and remedies for the Corporation’s failure to convert Series A Non-Voting Preferred Stock. In no event shall the Series A Non-Voting Preferred Stock convert into shares of Common Stock prior to the Stockholder Approval.
7. Certain Adjustments.
7.1 Stock Dividends and Stock Splits. If the Corporation, at any time while any shares of Series A Non-Voting Preferred Stock are outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Corporation upon conversion of Series A Non-Voting Preferred Stock) with respect to the then outstanding shares of Common Stock; (ii) subdivides outstanding shares of Common Stock into a larger number of shares; or (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, then the Conversion Ratio shall be (a) multiplied by a fraction the numerator of which shall be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding immediately after such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately before such event (excluding any treasury shares of the Corporation) and (b) product thereof shall be rounded down to the nearest whole number. Any adjustment made pursuant to this Section 7.1 shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision or combination. If any such dividend or distribution is declared but does not occur, the Conversion Ratio shall be readjusted, effective as of the date the Corporation announces that such dividend or distribution shall not occur, to the Conversion Ratio that would then be in effect if such dividend or distribution had not been declared.
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7.2 Fundamental Transaction. If, at any time while any shares of the Series A Non-Voting Preferred Stock are outstanding, (i) the Corporation effects any merger or consolidation of the Corporation with or into another Person or any stock sale to, or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, share exchange or scheme of arrangement) with or into another Person (other than such a transaction in which the Corporation is the surviving or continuing entity and its Common Stock is not exchanged for or converted into other securities, cash or property), (ii) the Corporation effects any sale, lease, transfer or exclusive license of all or substantially all of its assets in one transaction or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Corporation or another Person) is completed pursuant to which more than 50% of the Common Stock not held by the Corporation or such Person is exchanged for or converted into other securities, cash or property, or (iv) the Corporation effects any reclassification of the Common Stock or any compulsory share exchange pursuant (other than as a result of a dividend, subdivision or combination covered by Section 7.1) to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a “Fundamental Transaction”), then, upon any subsequent conversion of shares of Series A Non-Voting Preferred Stock the converting Holder shall have the right to receive, in lieu of the right to receive Conversion Shares, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction (without regard to any Beneficial Ownership Limitation), the same kind and amount of securities, cash or property as such Holder would have been entitled to receive upon the occurrence of such Fundamental Transaction if such conversion of Series A Non-Voting Preferred Stock had occurred immediately prior to such Fundamental Transaction (the “Alternate Consideration”). For purposes of any such subsequent conversion, the determination of the Conversion Ratio shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Corporation shall adjust the Conversion Ratio in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then each Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of Series A Non-Voting Preferred Stock following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Corporation or surviving entity in such Fundamental Transaction shall file a new certificate of designations with the same terms and conditions and issue to the Holders new preferred stock consistent with the foregoing provisions and evidencing the Holders’ right to convert such preferred stock into Alternate Consideration. The terms of any agreement to which the Corporation is a party and pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 7.2 and ensuring that the Series A Non-Voting Preferred Stock (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. The Corporation shall cause to be delivered to each Holder, at its last address as it shall appear upon the stock books of the Corporation, written notice of any Fundamental Transaction at least twenty (20) calendar days prior to the date on which such Fundamental Transaction is expected to become effective or close. For the avoidance of doubt, in no event shall any exercise of any rights or the performance by the Corporation of its obligations pursuant to Option Agreement constitute a Fundamental Transaction.
7.3 Calculations. All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 7, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Corporation) issued and outstanding.
8. Redemption. The shares of Series A Non-Voting Preferred Stock shall not be redeemable; provided, however, that the foregoing shall not limit the ability of the Corporation to purchase or otherwise deal in such shares to the extent otherwise permitted hereby and by law.
9. Transfer. A Holder may transfer any shares of Series A Non-Voting Preferred Stock, together with the accompanying rights set forth herein, held by such Holder without the consent of the Corporation; provided that such transfer is in compliance with applicable securities laws, the terms of any contract between the Holder making such transfer and the Corporation, the terms of the Option Agreement, in the case of any Holder of shares of Series A Non-Voting Preferred Stock originally issued pursuant to the Option Agreement. The Corporation shall in good faith (i) do and perform, or cause to be done and performed, all such further acts and things, and (ii) execute and deliver all such other agreements, certificates, instruments and documents, in each case, as any holder of Series A Non-Voting Preferred Stock may reasonably request in order to carry out the intent and accomplish the purposes of this Section 9. The transferee of any shares of Series A Non-Voting Preferred Stock shall be subject to the Beneficial Ownership Limitation applicable to the transferor as of the time of such transfer.
10. Series A Non-Voting Preferred Stock Register. The Corporation shall maintain or cause its transfer agent to maintain, at the Corporation’s principal executive offices or the offices of such transfer agent (or such other office or agency of the Corporation as the Corporation may designate by notice to the Holders in accordance with Section 11), a register for the Series A Non-Voting Preferred Stock (the “Share Register”), in which the Corporation shall record (i) the name, address, and electronic mail address of each holder in whose name the shares of Series A Non-Voting Preferred Stock have been issued and (ii) the name, address, and electronic mail address of each transferee of any shares of Series A Non-Voting Preferred Stock. The Corporation may deem and treat the registered Holder of shares of Series A Non-Voting Preferred Stock as the absolute owner thereof for the purpose of any conversion thereof and for all other purposes. The Corporation shall keep the register open and available at all times during regular business hours for inspection by any holder of Series A Non-Voting Preferred Stock or his, her or its legal representatives.
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11. Notices. Any notice or other communication required or permitted by the provisions of this Certificate of Designation to be given to a Holder of shares of Series A Non-Voting Preferred Stock shall be mailed, postage prepaid, to the post office address provided in the Option Agreement or last shown on the records of the Corporation (including the Share Register), or given by electronic communication in compliance with the provisions of the DGCL, and shall be deemed sent upon such mailing or electronic transmission.
12. Book-Entry; Certificates. The Series A Non-Voting Preferred Stock will be issued in book-entry form; provided that, if a Holder requests that such Holder’s shares of Series A Non-Voting Preferred Stock be issued in certificated form, the Corporation will instead issue a stock certificate to such Holder representing such Holder’s shares of Series A Non-Voting Preferred Stock. To the extent that any shares of Series A Non-Voting Preferred Stock are issued in book-entry form, references herein to “certificates” shall instead refer to the book-entry notation relating to such shares.
13. Waiver. Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designation shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate of Designation or a waiver by any other Holders, except as expressly set forth in this Section 13. The failure of the Corporation or a Holder to insist upon strict adherence to any term of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive that party (or any other Holder) of the right thereafter to insist upon strict adherence to that term or any other term of this Certificate of Designation. Any waiver by the Corporation or a Holder must be in writing. Notwithstanding any provision in this Certificate of Designation to the contrary, any provision contained herein and any right of the Holders of Series A Non-Voting Preferred Stock granted hereunder may be waived as to all shares of Series A Non-Voting Preferred Stock (and the Holders thereof) upon the written consent of the Holders of a majority of the shares of Series A Non-Voting Preferred Stock then outstanding (the “Required Holders”); provided, however, that the Beneficial Ownership Limitation applicable to a Holder, and any provisions contained herein that are related to such Beneficial Ownership Limitation, cannot be modified, waived or terminated without the consent of such Holder and in no event shall such modification, waiver or termination have the result of increasing any Beneficial Ownership Limitation in an amount in excess of 19.99%; provided further, that any proposed waiver that would, by its terms, have a disproportionate and materially adverse effect on the rights, privileges, duties, obligations or limitations applicable to any Holder(s) (in its (or their) capacity as such) shall require the consent of such Holder(s).
14. Severability. Whenever possible, each provision hereof shall be interpreted in a manner as to be effective and valid under applicable law, but if any provision hereof is held to be prohibited by or invalid under applicable law, then such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or otherwise adversely affecting the remaining provisions hereof.
15. Status of Converted Series A Non-Voting Preferred Stock. If any shares of Series A Non-Voting Preferred Stock shall be converted, redeemed or otherwise acquired by the Corporation, such shares shall, to the fullest extent permitted by applicable law, be retired and cancelled upon such acquisition, and shall not be reissued as a share of Series A Non-Voting Preferred Stock.
16. Fractional Shares of Series A Non-Voting Preferred Stock. Shares of Series A Non-Voting Preferred Stock may be issued in fractions up to the nearest one thousandth of a share that entitle the Holder, in proportion to such Holder’s fractional shares, to exercise voting rights as set forth herein, receive dividends, participate in distributions and have the benefit of all other rights of Holders.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, Profusa, Inc. has caused this Certificate of Designation of Preferences, Rights and Limitations of Series A Non-Voting Convertible Preferred Stock to be duly executed by its Chief Financial Officer on July 31, 2026.
| PROFUSA, INC. | ||
| By: | /s/ Fred Knechtel | |
| Name: | Fred Knechtel | |
| Title: | Chief Financial Officer | |
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ANNEX A
NOTICE OF CONVERSION
(TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF SERIES A NON-VOTING CONVERTIBLE PREFERRED STOCK)
The undersigned Holder hereby irrevocably elects to convert the number of shares of Series A Non-Voting Preferred Stock indicated below, represented in book-entry form, into shares of common stock, par value $0.0001 per share (the “Common Stock”), of Profusa, Inc., a Delaware corporation (the “Corporation”), as of the date written below. If securities are to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. Capitalized terms utilized but not defined herein shall have the meaning ascribed to such terms in that certain Certificate of Designation of Preferences, Rights and Limitations of Series A Non-Voting Convertible Preferred Stock (the “Certificate of Designation”) filed by the Corporation with the Secretary of State of the State of Delaware on July 31, 2026.
As of the date hereof, the number of shares of Common Stock beneficially owned by the undersigned Holder (together with such Holder’s Attribution Parties), including the number of shares of Common Stock issuable upon conversion of the Series A Non-Voting Preferred Stock subject to this Notice of Conversion, but excluding the number of shares of Common Stock which are issuable upon (A) conversion of the remaining, unconverted Series A Non-Voting Preferred Stock beneficially owned by such Holder or any of its Attribution Parties, and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Corporation (including any warrants) beneficially owned by such Holder or any of its Attribution Parties that are subject to a limitation on conversion or exercise similar to the limitation contained in Section 6.4 of the Certificate of Designation, is less than its Beneficial Ownership Limitation. For purposes hereof, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the applicable regulations of the Commission. In addition, for purposes hereof, “group” has the meaning set forth in Section 13(d) of the Exchange Act and the applicable regulations of the Commission.
CONVERSION CALCULATIONS:
| Date to Effect Conversion: |
| Number of shares of Series A Non-Voting Preferred Stock owned prior to Conversion: |
| Number of shares of Series A Non-Voting Preferred Stock to be Converted: |
| Number of shares of Common Stock to be Issued: |
| Address for delivery of physical certificates: |
If shares are to be issued in book entry form, please so indicate by checking the following box: ☐
For DWAC Delivery, please provide the following:
| Broker No.: |
| Account No.: |
| [HOLDER] |
| By: | ||
| Name: | ||
| Title: |
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Exhibit 99.1
Profusa Announces Signing of Option Agreement for the
Acquisition of a Commercial Stage Diagnostics Company, G3 Vision Labs
BERKELEY, Calif., July 31, 2026 (GLOBE NEWSWIRE) -- Profusa, Inc. (Nasdaq: PFSA), a digital health company pioneering next-generation biosensing technologies, announces the signing of an Option Agreement (the “Agreement”) which provides Profusa the right and option, but not the obligation, subject to satisfaction of the conditions described below, to acquire G3 Vision Labs, Inc. (“G3”) and its subsidiaries, Med Screen Laboratories Inc., Dominion Diagnostics LLC and Acutis Diagnostics Inc. G3’s 2025 Net Revenues are estimated, based on unaudited management information, to be approximately $111 million. The Agreement formalizes the arrangement between Profusa and G3 that was announced earlier this week. The option is exercisable at any time on or prior to the date that G3 delivers specified financial information and for 90 days thereafter, subject to the satisfaction of certain conditions as described below. If the option is exercised, the combined company is expected to operate as a public diagnostics company with national CLIA-certified laboratories, recurring revenues from a diversified base of providers serving addiction treatment, pain management, and behavioral health.
“This Agreement provides Profusa with a significant opportunity, subject to satisfaction of the specified conditions, to acquire the growing regional diagnostics business of G3,” said Jack Stover, Executive Chairman and CEO of Profusa, Inc.
Pursuant to the Agreement, Profusa’s ability to exercise the option is subject to satisfaction of, among other items, the following conditions: (i) Profusa shall have consummated, or received binding commitments to consummate, one or more financings resulting in aggregate gross proceeds to Profusa or G3 of at least $30 million; (ii) certain indebtedness of G3 shall be refinanced, repaid, or otherwise satisfied (or the lenders shall have consented to the exercise of the option); (iii) Profusa’s Certificate of Designation of Preferences, Rights and Limitations of Series A Non-Voting Convertible Preferred Stock shall be in effect; (iv) approval in accordance with applicable rules of the Nasdaq Stock Market, LLC (“Nasdaq”) of the conversion of the Preferred Stock (as defined below) into shares of Profusa’s common stock and of the transactions contemplated by the Option Agreement by the requisite holders of Profusa’s common stock at a duly convened meeting of Profusa’s stockholders; (v) no suspension or removal from listing of Profusa’s common stock on Nasdaq, and no initiation or threatening of any proceedings for any of such purposes or delisting, shall have occurred; and (vi) any and all obligations of any Seller as guarantor, co-obligor or surety for any indebtedness of G3 and its subsidiaries shall have been terminated and released in full, without any liability to such Seller from and after the Closing.
As consideration for the option, Profusa issued to G3 stockholders the following consideration: (i) 201,120 shares of Profusa common stock; and (ii) 52,903.566 shares of a newly-designated series of non-voting convertible preferred stock (the “Preferred Stock”), which is convertible into Profusa common stock subject to a stockholder approval by Profusa’s stockholders as required under the applicable Nasdaq Listing Rules (the “Stockholder Approval”) ((i) and (ii) together, the “Consideration”). If Profusa exercises the option contemplated by the Agreement, the counterparties will be entitled to receive an additional 53,918.113 shares of the Preferred Stock. Each share of the Preferred Stock is convertible into 1,000 shares of Profusa’s common stock, subject to receipt of the Stockholder Approval. If Profusa does not satisfy the conditions listed above and the option remains unexercised, G3 stockholders will retain the Consideration. Entry into the Agreement and the transactions contemplated thereby will not constitute a change of control.
Tungsten Advisors served as the financial advisor to Profusa. Katten Muchin Rosenman LLP is serving as legal counsel to Profusa. K&L Gates LLP is serving as legal counsel to G3 Vision Labs.
Additional details regarding the Agreement, the Consideration and the Preferred Stock are set forth in the Current Report on Form 8-K that Profusa expects to file with the SEC in connection with this announcement. The shares of common stock and Preferred Stock described in this press release were offered and sold in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), and have not been registered under the Securities Act or any state securities laws. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities, nor will there be any sale of securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
About Profusa
Profusa is a digital health company developing a new generation of tissue-integrated sensors to detect and continuously transmit actionable, medical-grade data for personal and medical use. With its long-lasting, injectable, and affordable biosensors and intelligent data platform, Profusa aims to provide people with a personalized biochemical signature rooted in data that clinicians can trust and rely on. For more information, please visit www.profusa.com.
“LUMEE”, “PROFUSA” and the PROFUSA logo are registered trademarks of Profusa, Inc. in the United States, Canada, European Union, China, Japan, South Korea, and Australia.
About G3
G3 provides laboratory testing solutions, clinical insight, and reporting tools that help healthcare teams make informed treatment decisions, streamline workflows, and improve patient outcomes. Its CLIA-certified and CAP/CLIA accredited national medical laboratories provide molecular diagnostic tests for infectious disease and urine and blood clinical toxicology testing, with a client base serving addiction treatment, pain management, and behavioral health providers across the country.
Special Note Regarding Forward-Looking Statements
Certain statements in this press release may be considered “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or future financial or operating performance of Profusa, including statements regarding the transaction, and the conditions to the exercise of the option under the Agreement, Profusa’s strategic plans, the proposed business combination with G3, the operating results of G3 and its subsidiaries, the terms and amounts of the financing to be obtained in connection with the business combination. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “future,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “propose,” “seek,” “should,” “strive,” “will,” or “would” or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which may be beyond the control of Profusa and could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including, without limitation, risks related to Profusa’s ability to satisfy the conditions of the Agreement and to integrate G3 and its subsidiaries into Profusa’s business, the risk that customer demand may be less than expected, the risks in the business combination that would result from the option exercise, as well as the risks in complying with the representations, warranties and covenants set forth in the Agreement, and risks related to the completion and terms of the contemplated financings, the risk that Profusa does not receive the Stockholder Approval, the dilutive effect on existing stockholders of the issuance of shares of common stock and Preferred Stock as consideration for the Agreement and, if the option is exercised, upon conversion of the Preferred Stock, and the risk that G3’s indebtedness is not refinanced, repaid or otherwise satisfied on acceptable terms or at all. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Profusa and its management, are inherently uncertain. There are risks and uncertainties described more fully in Profusa’s public filings from time to time with the U.S. Securities and Exchange Commission (the “SEC”), including its most recent Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. These filings may identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Profusa cannot assure you that the forward-looking statements in this communication will prove to be accurate.
Investor and Media Contact
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