Executive Officer and majority shareholder, Dr. Gregory Mongean and Christopher Dean (the "Members"). Pursuant to the Share Exchange Agreement, at the closing thereof (the "Closing") the Company agreed to exchange the outstanding membership interests of Unprescribed held by the Members for an aggregate of 25,000,000 shares of common stock of the Company. Ian Jenkins, the holder of 1,830,000 shares of common stock and 100 shares of Series A Preferred Stock, agreed to cancel such shares as of and at the Closing. Other than Mr. Jenkins, shareholders of Company's common stock hold approximately 109,907 shares, which will remain unchanged by the Share Exchange Agreement. In addition, at the Closing, the holders of an aggregate of approximately $1,357,000 of outstanding convertible notes issued by the Company have agreed to limit conversion of such debt to a maximum of 8,500,000 shares of common stock, or approximately 25% of the post-Closing outstanding shares of common stock, and the remaining debt will be cancelled.
At the Closing, two additional members of Unprescribed, Dr. Gregory Mongean and Christopher Dean, will become officers and directors of the Company.
The Share Exchange Agreement contemplates that the issuance of shares of our Common Stock to holders of Unprescribed's membership interests in connection therewith will be exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof, which exempts transactions by an issuer not involving any public offering, and Regulation D under that section, and that these securities, when issued, may not be offered or sold in the United States absent such registration or an applicable exemption from such registration requirements, and will be subject to further contractual restrictions on transfer as described in the Share Exchange Agreement.
The Share Exchange Agreement and the transactions contemplated thereby have been approved by the Board of Directors of the Company and the Members of Unprescribed.
The Share Exchange Agreement will terminate automatically if the transactions contemplated herein have not occurred by May 31, 2017, and it may be terminated by Unprescribed or the Company under certain specified circumstances.
All descriptions of the Share Exchange Agreement herein are qualified in their entirety by reference to the text thereof filed as Exhibit 2.1 hereto, which is incorporated herein by reference. The Share Exchange Agreement governs the contractual rights between the parties in relation to the transactions contemplated thereby and contains customary representations and warranties and pre- and post-closing covenants of each party. The Share Exchange Agreement is not intended to be, and should not be relied upon as, making disclosures regarding any facts and circumstances relating to the Company or Unprescribed. The Share Exchange Agreement is described in this Current Report on Form 8-K and attached as Exhibit 2.1 hereto only to provide investors with information regarding the terms and conditions of the Share Exchange Agreement, and, except for its status as a contractual document that establishes and governs the legal relationship among the parties thereto with respect to the transactions contemplated thereby, is not intended to provide any other factual information regarding the Company or Unprescribed or the actual conduct of their respective businesses during the pendency of the Share Exchange Agreement, or to modify or supplement any factual disclosures about the Company contained in any of the Company's public reports filed with the Securities Exchange Commission (the "SEC"). The representations and warranties contained in the Share Exchange Agreement have been negotiated with the principal purpose of establishing the circumstances under which a party may have the right not to consummate the transaction if the representations and warranties of the other party prove to be untrue due to a change in circumstance or otherwise, and of allocating risk between the parties, rather than establishing matters as facts. These representations, warranties and covenants were made as of specific dates and only for purposes of the Share Exchange Agreement, not for the benefit of any investors, and are subject to important exceptions and limitations, including a contractual standard of materiality different from that generally relevant to investors, and are qualified by information in confidential disclosure schedules that the parties exchanged in connection with the execution of the Share Exchange Agreement. The parties reserve the right to, but are not obligated to amend or revise the Share Exchange Agreement. Accordingly, investors should not rely on representations and warranties as characterizations of the actual state of facts, or for any other purpose, at the time they were made or otherwise.
This current report on Form 8-K is issued in accordance with Rule 135c under the Securities Act, and is neither an offer to sell any securities, nor a solicitation of an offer to buy, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
Convertible Promissory Note
On April 11, 2017, the Company issued a Convertible Promissory Note ("Note") to an accredited investor. The Note has an aggregate principal amount of $500,000, matures one year from the date of issuance (the "Maturity Date"), and bears an interest rate of 8% per annum. The holder may convert the Note at any time up to the Maturity Date into shares of the Company's common stock, par value $0.001 per share, at a conversion price equal to $1.00 per share. The Company may prepay the Note prior to the Maturity Date and/or the date of conversion without penalty upon receiving the written consent of the holder.