Item 1.01.
Entry into a Material Definitive Agreement.
On December 18, 2017, MEG executed a Membership Purchase Agreement with Skin Scientific LLC, a Delaware Limited Liability Company (the “Selling Company” or “SS”) represented by Daniel Zachary Tanjeloff, purchasing all of the membership interests in SS for $127,500 in cash, debt and newly-issued preferred stock of MEG, with SS becoming a wholly-owned subsidiary of MEG. SS owns and operates the website,
https://getskinscientific.com,
to offer skin care products and solutions through advertisers and marketing affiliates to customers worldwide.
SS was formed as an Delaware LLC on May 16, 2016 and generated in excess of $4 million in revenue for the year 2017 by selling while label skin care products through suppliers and markets through its own brand, Skin Scientific, via website, Affiliate Networks and Social Media outlets as well as other online platforms such as Amazon.
Membership Purchase Agreement with Skin Scientific LLC,
The total consideration for the purchase of all of the SS membership interests, the $127,500 as defined below (the “
Consideration
”).
Payment of Consideration
. The Structure of the purchase price and payments is as follows:
(a) MEG paid a non-refundable $12,500 deposit at the date of the executed Letter of Intent on November 11, 2017.
(b) 1,175 Shares of Preferred B Stock were issued at closing. Each MEG Preferred B share carries voting and conversion rights equal to 1,000 shares of MEG common stock.
(c) MEG issued a Note Payable with a face amount of $100,000 payable in 24 equal monthly payments beginning 90 days from acquisition closing. The Note Payable bears interest at 6% per annum.
(d) MEG issued an interest-free Note Payable for $15,000) which is due and payable nine months from the closing date of this transaction.
(e) MEG and Seller agreed on a management consulting agreement the terms of which have yet to be determined.
(e) Seller allowed MEG to utilize existing merchant processing accounts until March 1, 2018 in exchange for $30,000 added to Seller’s reserve balance in his personal merchant processing accounts, which shall be paid through Skin Scientific LLC existing marketing and selling channels to Seller ahead of any payments made or reserves accrued on behalf of MEG.
(f) On January 3, 2018, MEG took assignment of the Skin Scientific LLC American Express $200,000 working capital credit line from previous seller.
The foregoing summary of certain terms of the Membership Purchase Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Exchange Agreement, a copy of which is attached hereto as Exhibit 10.12 and is hereby incorporated into this Current Report on Form 8-K (“Form 8-K”) by reference.