Item
3.02.
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Unregistered
Sales of Equity Securities.
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As previously disclosed,
on September 30, 2013, Novo Healthnet Limited, a wholly owned subsidiary of the Company (“NHL”), issued five
debentures totaling approximately $5,114,327 (CAD$6,402,512) at August 31, 2017 in connection with the acquisition of certain
business assets. The holders of the debentures are current stockholders, officers and/or affiliates of the Company. The debentures
are secured by all the assets of the Company, accrue interest at 8% per annum and were originally due on September 30, 2016. On
December 2, 2017, the debenture holders agreed to extend the due date to September 30, 2019.
On
December 5, 2017, the debenture holders, NHL and the Company signed a binding letter of intent to convert no less than
75% of the respective debenture value plus any interest or fees owed to the Company’s common stock and a per share price
equal to the average price of the five trading days immediately preceding the date of conversion with a 10% premium added to the
calculated per share price.
On January 31, 2018, each
of the debenture holders entered into a debenture amendment with NHL and the Company pursuant to which (i) each debenture
holder agreed to convert 75% of the amount owed, both principal and interest, under the respective debenture into shares of Company
common stock in lieu of accepting a cash payment for 75% of the amount owed, both principal and interest, and (ii) NHL and
the Company agreed to issue to each debenture holder shares of common stock at a Canadian-to-United States dollar exchange
rate of 0.8111.
NHL and
ALMC-ASAP Holdings Inc. (“ALMC”) are a party to that certain loan agreement dated as of January 19, 2016, as amended
on November 23, 2016 (the “Loan Agreement”) totalling approximately $875,988 (CAD$1,080,000). On January 31,
2018, ALMC, NHL and the Company entered into an amendment to the Loan Agreement pursuant to which (i) ALMC agreed to convert
75% of the amount owed, both principal and interest, under the Loan Agreement into shares of Company common stock in lieu of accepting
a cash payment for 75% of the amount owed, both principal and interest, and (ii) NHL and the Company agreed that the
Company would issue to ALMC shares of the Company’s common stock at a Canadian-to-United States dollar
exchange rate of 0.8111.
As
a result, on January 31, 2018, the Company issued an aggregate of 12,452,346 shares of common stock to the debenture holders and
ALMC.
As of January 31, 2018,
following the issuance of the shares noted above upon partial conversion of the five debentures and the Loan Agreement,
there were 214,673,710 shares of Company common stock issued and outstanding.