Item
1.01. Entry into a Material Definitive Agreement.
China
Quantum Memorandum of Understanding
On
April 8, 2018, Novo Healthnet Limited (“NHL”), a wholly owned subsidiary of Novo Integrated Sciences, Inc. (the
“Company”), executed a memorandum of understanding (“MOU”), effective March 26, 2018, with China Quantum
Life Science Technologies Holding Limited (“China Quantum”). Pursuant to the MOU, NHL and China Quantum agreed that
they would, on an exclusive basis for the term of the MOU, evaluate the possibility of executing a transaction, which includes:
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(i)
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a
commitment by China Quantum to purchase, on or before May 15, 2018, 10,000,000 shares of restricted Company common stock at
a purchase price of $0.50 per share, equal to an aggregate purchase price of $5,000,000,
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(ii)
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an
agreement that China Quantum will have one board seat on the Company’s board of directors, and
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(iii)
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an
agreement by NHL and China Quantum to form a joint venture entity named Novo China Health Group (the “Joint Venture”),
in which China Quantum will be the 70% owner and NHL will be the 30% owner, that will offer physical therapy, chiropractic,
rehabilitation, pain management and other holistic care within medical facilities in China.
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(iv)
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An
agreement by NHL and China Quantum that the Joint Venture can spin-off into a separate public company when the Joint Venture
reaches a level of financial performance and achieves other important milestones that the Joint Venture’s board of directors
deems it appropriate.
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The MOU has a term of
30 days from signing, unless terminated earlier in writing.
The
foregoing description of the MOU is a summary only and is qualified in its entirety by reference to the full text of such document,
filed herewith as Exhibit 10.1 and incorporated herein by reference.
Amendment
#3 to Brands Letter of Intent
As
previously disclosed by the Company in its Current Report on Form 8-K, as filed with the Securities and Exchange Commission on
January 2, 2018, on December 26, 2017, the Company entered into a binding letter of intent (the “LOI”) with Brands
International Corporation (“Brands”), pursuant to which the Company agreed to acquire 60% of the issued and outstanding
shares of Brands in exchange for the arrangement of secured debt financing in the amount of CAD$2,350,000 (approximately $1,873,256
per the Bank of Canada posted exchange rate of 0.7977 on December 29, 2017) arranged or provided by the Company (the “Acquisition”).
Upon completion of the Acquisition, the Company will own 60% of Brands’ issued and outstanding shares and Brands will be
a partially-owned subsidiary of the Company. In connection with the Acquisition, the Company will enter into a shareholder agreement
with Mark Rubinoff and a management agreement with Mark Rubinoff and DJ Rubinoff. In addition, pursuant to the terms of the LOI,
the Company agreed to provide Mark Rubinoff with a buyout structure for the remaining 40% of Brands’ shares with a trigger
date of 24 months from the closing of the Acquisition.
The
parties to the LOI agreed to proceed reasonably and in good faith toward negotiation and execution of a definitive acquisition
agreement, and to use their commercially reasonable best efforts to obtain necessary board, stockholder and regulatory approvals
and third party consents.
The
LOI provided for a termination date of January 30, 2018. The termination date was subsequently extended to April 20, 2018.
On
April 20, 2018, the Company and Brands executed Amendment #3 to the LOI, as amended (“Amendment #3”), that had the
effect of amending the LOI to extend the termination date to June 1, 2018. The terms of the LOI, as amended, otherwise remain
in full force and effect.
The
foregoing description of Amendment #3 is a summary only and is qualified in its entirety by reference to the full text of such
document, filed herewith as Exhibit 10.2 and incorporated herein by reference.