Item
1.01 Entry into a Material Definitive Agreement.
Clearday,
Inc. (“Clearday” or the “Company”) entered into a factoring facility and to obtain additional financings in the
aggregate amount of approximately $95,000 prior to the payment of fees and expenses, including placement fees. The net proceeds
from these financings of approximately $92,150 will be used to fund innovative services at Clearday, including robotic services
and expansion of additional services to be provided in Clearday’s residential care communities.
A
subsidiary of Clearday: MCA Westover Hills Operating Company (“MCA Westover”), entered into a Purchase and Sale Agreement
(“Purchase Agreement”) with an institutional financing party (“Buyer”) to sell $141,550 of future receivables
(as defined by the Purchase Agreement), which include the future resident revenues in the residential care facility. MCA Westover paid
origination and other fees, which resulted in a net aggregate amount of approximately $2,850. The Purchase Agreement provides Buyer specified
customary collection procedures for the collection and remittance of the weekly payable amount including direct payments from a specified
authorized bank account of approximately $1,559.00 per day, which should result in a term for this facility of 90 days. The Purchase
Agreement expressly provides that the sale of the future receipts shall be construed and treated for all purposes as a true and complete
sale of receivables at a discount, and not a loan; that the title to the sold future sales is transferred to Buyer under such agreement
free and clear of all liens; and includes customary remedies that may be exercised by Buyer upon a breach or default, including payment
of attorney fees and costs of collection. Under the Purchase Agreement, MCA Westover granted a right of first refusal for other factoring
agreements for a two year period. The Purchase Agreement also provides customary provisions regarding, among other matters, representations,
warranties and covenants, further assurances, indemnification, arbitration, governing law and venue as well as a customary anti-stacking
provision. The Purchase Agreement also provides for the grant by MCA Westover of a security interest in the future receivables and other
related collateral under the Uniform Commercial Code in accounts and proceeds in the event that the future receipts are “accounts”
or “payment intangibles” under the Uniform Commercial Code.
An
officer of Clearday agreed to a Personal Performance Guarantee providing to Buyer her irrevocable, absolute, and unconditional personal
guaranty of all of the obligations under the Purchase Agreement to Buyer. Such guaranty provides customary provisions, including representations,
warranties and covenants. Affiliates of MCA Westover also executed this Purchase Agreement to guaranty the obligations of MCA Westover
under this facility.
The
foregoing descriptions of the Purchase Agreement and the related Personal Performance Guarantee are not complete and are qualified in
their entirety by reference to the full text of such agreements, filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated
herein by reference.
Forward
Looking Statements
This
communication contains forward-looking statements (including within the meaning of Section 21E of the Securities Exchange Act of 1934,
as amended, and Section 27A of the Securities Act of 1933, as amended) concerning the Company. These statements may discuss goals, intentions
and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise, based on current beliefs
of the management of the Company, as well as assumptions made by, and information currently available to, management. Forward-looking
statements generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and include
words such as “may,” “will,” “should,” “would,” “expect,” “anticipate,”
“plan,” “likely,” “believe,” “estimate,” “project,” “intend,”
and other similar expressions. Statements that are not historical facts are forward-looking statements. Forward-looking statements are
based on current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Actual
results could differ materially from those contained in any forward-looking statement as a result of various factors, including, without
limitation: the risks regarding the Company and its business, generally; risks related to the Company’s ability to correctly estimate
and manage its operating expenses and develop its innovate non-acute care businesses and the acceptance of its proposed products and
services, including with respect to future financial and operating results; the ability of the Company to protect its intellectual property
rights; competitive responses to the Company’s businesses including its innovative non-acute care business; unexpected costs, charges
or expenses; regulatory requirements or developments; changes in capital resource requirements; and legislative, regulatory, political
and economic developments. The foregoing review of important factors that could cause actual events to differ from expectations should
not be construed as exhaustive and should be read in conjunction with statements that are included herein and elsewhere, including the
risk factors included in the Company’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K filed with the SEC and the registration statement regarding the Company’s previously announced merger, that was filed
and declared effective. The Company can give no assurance that the actual results will not be materially different than those based on
the forward looking statements. Except as required by applicable law, the Company undertakes no obligation to revise or update any forward-looking
statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.