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Item 9.01
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Financial Statements and Exhibits
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Form 10 Information
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Item 7.
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Certain Relationships and Related Party Transactions, and Director Independence
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Item 10.
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Recent Sales of Unregistered Securities
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The information set forth in the following Current Report, when
considered in the light of the information previously reported in the above periodic reports, completes the Company’s Form
10 Information.
FORWARD LOOKING STATEMENTS
The following discussion, in addition to the
other information contained in this Current Report, should be considered carefully in evaluating our prospects. This Report (including
without limitation the following factors that may affect operating results) contains forward-looking statements (within the meaning
of Section 27A of the Securities Act of 1933, as amended (“Securities Act”) and Section 21E of the Securities Exchange
Act of 1934, as amended (“Exchange Act”) regarding us and our business, financial condition, results of operations
and prospects. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,”
“seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking
statements but are not the exclusive means of identifying forward-looking statements in this Report. Additionally, statements concerning
future matters such as revenue projections, projected profitability, growth strategies, possible changes in legislation and other
statements regarding matters that are not historical are forward-looking statements.
ADDITIONAL INFORMATION
You are urged to read this Current Report carefully.
This Current Report is not all-inclusive and does not contain all the information that you may desire in evaluating the Company.
You must conduct and rely on your own evaluation of the Company, including the merits and risks involved in making a decision to
invest in our stock. No representations or warranties of any kind are intended nor should any be inferred with respect to the economic
viability of the Company or with respect to any benefits, which may accrue as a result of an investment in the Company. The Company
does not in any way represent, guarantee or warrant an economic gain or profit with regard to our business. We do not in any way
represent or warrant the advisability of investing in our stock. Any projections, forecasts, or other forward-looking statements
or opinions contained in this Current Report constitute estimates by us based upon sources deemed to be reliable, but the accuracy
of this information is not guaranteed nor should you consider the information all-inclusive.
As used in this Current Report and unless otherwise
indicated, the terms “we,” “us,” “our,” the “Company,” and “BKUH” refer
to Bakhu Holdings Corp.
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Item 1.01
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Entry Into A Material Definitive Agreements.
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Efficacy Demonstration Laboratory Agreement
On June 10, 2020, Bakhu Holdings Corp. (“Bakhu”)
and the OZ Corporation entered into an Efficacy Demonstration Laboratory Agreement to memorialize understanding, and agreement
by and between Bakhu and OZ that commenced on or about May 1, 2020, under which Bakhu engaged OZ to continue preparation for and
completion of the Efficacy Demonstration required under that certain Patent and Technology License Agreement dated December 20,
2018, as amended and restated in that certain Amended and Restated Patent and Technology License Agreement dated December 31, 2019,
and as further amended from time to time (the “License Agreement”), by and between Cell Science Holding Ltd.,
a Cypress corporation (“Cell Science”), as Licensor and Bakhu, as Licensee.
Pursuant to the License Agreement Bakhu is required
to complete and pay the costs of an “Efficacy Demonstration” of the propriety science underlying the licensed
technology as specified in the License Agreement.
Bakhu has a class of equity securities registered
under Section 12(g) of the Securities Exchange Act of 1934 (the “Exchange Act”) and, as such, due to the regulatory
environment related to cannabis, wanted to avoid handling cannabis and cannabis components, products, or derivatives, which would
have been required if Bakhu were to undertake the Efficacy Demonstration itself. .
Bakhu, realizing the benefits resulting from
successful completion of the Efficacy Demonstration and in order to implement Bakhu’s business goal of sublicensing to third
parties the technology with which they can produce cannabis and cannabis components, products, or derivatives, engaged OZ to undertake
completion of the Efficacy Demonstration required under the License Agreement, on Bakhu’s behalf.
On March 8, 2019, in furtherance of proceeding
with and conducting the Efficacy Demonstration under the License Agreement on behalf of Bakhu, OZ, Cell Science, and VO Leasing
Corp., a California corporation (“VOLC”), entered into that certain Research and Develop Agreement respecting
the Efficacy Demonstration (the “R&D Agreement”). VOLC is lessee of a facility located at 15614 Oxnard Avenue,
Sherman Oaks, California (the “Facility”) that is suitable for a laboratory to conduct research and development
of cannabis cell growing and cell growth technology relating to the Efficacy Demonstration. VOLC has represented that it has all
required and applicable licenses, regulatory authorizations, and consents from all governmental authorities required to conduct
the proposed activities involving cannabis and cannabis components, products, or derivatives at the Facility. The work to be undertaken
by or at the direction of OZ under the R&D Agreement, on behalf of Bakhu is intended to meet the requirements under the License
Agreement to complete an Efficacy Demonstration.
The foregoing summary descriptions of the terms
of the Efficacy Demonstration Laboratory Agreement is summaries only and does not purport to be complete, may not contain all information
that is of interest to the reader and is qualified in its entirety by reference to the full text thereof of such agreement, which
is incorporated herein as Exhibit 10.6, by reference.
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Item 5.06
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Change in Shell Company Status.
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With the entry into the material agreements
described and attached as exhibits to the Current Report on Form 8-K filed on December 27, 2018, the Company had material assets
and operations that entitled it to terminate its shell status as of that date. However, it did not elect to do so at that date
pending the completion of additional steps to build business operations based on its new material contracts and obtain additional
external financing. As a result of the Company entering into the additional material agreements, described and attached as exhibits
to the Periodic Reports filed on the dates set forth above and incorporated herein by reference, and the Company’s business
operations resulting therefrom, the Company is no longer a shell company as that term is defined in Rule 405 of the Securities
Act and Rule 12b-2 of the Exchange Act.
As noted in the above Introductory Statement,
certain of the information that is required by Item 5.06 has previously been reported, as that term is defined in Rule 12b-2 under
the Exchange Act (17 CFR 240.12b-2), in the following periodic reports.
FORM 10 DISCLOSURE
The information set forth in this Current Report,
when considered in the light of the above previously filed periodic reports which are incorporated herein by reference, completes
the Company’s Form 10 Information.
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Item 7.
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Certain Relationships and Related Party Transactions, and Director Independence
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Certain Relationships
The Company obtained
the license on of rights to the intellectual property on which its business is based was licensed from Cell Science Holding Ltd.,
which is owned 40% by Inter-M Traders Ltd., 30% by Mentone Ltd., and 30% by The OZ Corporation.
Inter-M Traders Ltd.,
is a family owned equity investment fund with its principal office in Cyprus and an office in New York City. Demetri Michalakis
owns a controlling interest in, and is the Managing Director of, Inter-M Traders Ltd.
Mr. Michalakis is the
father of Aristotle Popolizio
Aristotle Popolizio
is a Director of the Company, and also serves as the head of Investment Relations at Inter-M Traders Ltd., and leads a team in
research, raising capital and the development of operational risk management plans for Inter-M Traders Ltd.
Evripides (Roy) Drakos is a Director the Company, and is also a
shareholder of, and serves as an Investment Advisor for, Inter-M Traders Ltd.
Mentone Ltd., a company
organized under the laws of the United Kingdom is owned by Dr. Peter Whitton, Geoffrey Dixon, and Karl Watkin.
Dr. Peter Whitton, is a director the Company
and is also the inventor of the Licensed Science which is the subject of the Restated License set forth in Item 1.01 above, and
as a result of his ownership in Mentone Ltd., has an indirect interest in the Licensor, Cell Science Holding Ltd.
The OZ Corporation is a California corporation.
John R. Munoz is the sole owner, director, and officer of The OZ Corporation. The OZ Corporation and Mr. Munoz collectively, are
currently the beneficial owners of 18,739,397 shares of Common Stock representing 6.25%
of outstanding shares of Common Stock, and 4 shares of Series A Preferred Stock of the Company representing 100% of outstanding
shares of Series A Preferred Stock. Due to the super-voting rights of the Series A Preferred
Shares, the OZ Corporation and John R. Munoz have voting control of the Company. Additionally, and as a result of its ownership
in Cell Science, the OZ Corporation has an indirect interest in the Licensor, Cell Science.
Thomas K. Emmitt, a
director, the President, CEO, Chief Financial Officer and Secretary of the Company, also serves as in-house counsel to the OZ Corporation
Except as set forth
above, none of the above parties has, since our date of incorporation, had any material interest, direct or indirect, in any transaction
with us or in any presently proposed transaction that has or will materially affect us.
Related Party Transactions
The following transactions to which the Company
is a party, were entered into between related parties and are not, therefore, the result of arm’s length negotiations.
Patent and Technology License
As previously reported, the Company, as Licensee
and Cell Science, as Licensor, are parties to that certain Patent and Technology License Agreement dated December 20, 2018, as
amended and restated in that certain Amended and Restated Patent and Technology License Agreement dated December 31, 2019, and
as further amended from time to time (the “License Agreement”). As consideration for the grant of the License
with respect to the Licensed Science (as defined in the License Agreement, the Company issued 210,000,000 shares of Common Stock
of the Company, to the Licensor. As additional consideration for the grant of the License, the Company shall make a one-time payment
of $3,500,000 cash payment to Licensor, upon completion of the Efficacy Testing which results in at least the Standard Result claimed
by Licensor.
Efficacy Demonstration
Laboratory Agreement
As stated in Item 1.01 above, the Company and
the OZ Corporation are parties that that certain Efficacy Demonstration Laboratory Agreement which memorializes the understanding
and agreement by and between the Company and the OZ Corporation under which the Company engaged the OZ Corporation to undertake
the Efficacy Demonstration required under the License Agreement. Pursuant to the Efficacy Demonstration Laboratory Agreement the
Company will repay all costs incurred by the OZ Corporation in performing the Efficacy Demonstration in accordance with Efficacy
Demonstration Laboratory Agreement.
OZ Advances to the Company
The Company’s controlling
shareholder, the OZ Corporation has advanced or paid for certain expenses associated with the Company’s operations, or loan
monies to the Company. Such advance or loans are evidenced by a Promissory Note dated August 1, 2019. As of April 30, 2020, the
outstanding principal balance and accrued interest owing under the promissory note were $299,278 and $9,563, respectively.
Pursuant to the terms of the promissory note, the principal and accrued and unpaid simple interest at the rate of 6.0% per
annum (“Applicable Rate”) shall be due and payable on or before December 31, 2019 (the “Maturity Date”).
The principal amount of the promissory note shall be increased by the amount of any additional advances of funds made by The OZ
Corporation to the Company, from time to time, from the date of such advance. Provided that the Company is not in default, the
Company may extend the term of the promissory note by an addition 12 months by paying an extension fee of 1.00% of the outstanding
principal loan balance, which may at The OZ Corporation’s option be advanced and added to the then outstanding principal
balance. Under the terms of the promissory note, The OZ Corporation, at its option may, at any time, convert all or any portion
of the then unpaid principal balance and any unpaid accrued interest into shares of the Company’s common stock. The number
of shares of common stock to be issued upon such conversion shall be equal to the quotient obtained by dividing (i) the then unpaid
principal balance and any unpaid accrued interest of the promissory note being converted by (ii) 80% of the average closing price
of the common stock of the Company, for the ninety (90) trading days before the conversion date, rounded up to the nearest whole
share.
Consulting Services
On March 9, 2020,
the Company issued issue 11,061,816 restricted shares of Common Stock to the OZ Corporation in consideration of the consulting
and advisory services provided to the Company, valued at $553,091.
Company Facilities
The Company currently
uses the office space and equipment of The OZ Corporation and our Chief Executive Officer at no cost.
______________________
Except as set forth
above, the Company has not been a party to any transactions between persons who were, at the time of the transaction, an executive
officer, director, or principal stockholder of the Company.
Review, Approval or Ratification of Transactions with Related
Persons
The Company has no policies respecting the resolution
of conflicts of interests in transaction between related parties.
Promoters and Certain Control Persons
We are a smaller reporting company as defined
by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Director Independence
The Board currently has four members, Thomas
K. Emmitt, Dr. Peter Whitton, Aristotle Popolizio, and Evripides (Roy) Drakos. Based on the relationship of these directors as
set forth above, none of these Board members has met the independence requirements based upon the application of objective categorical
standards adopted by the Board. In making a determination regarding a Director’s independence, the Board considers all
relevant facts and circumstances, including the Director’s commercial, banking, consulting, legal, accounting, charitable
and familial relationships and such other criteria as the Board may determine from time to time.
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Item 10.
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Recent Sales of Unregistered Securities
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During the past three years preceding the Company
has issued securities without registration under the Securities Act on the terms and circumstances described below.
Fiscal Year Ending July 31, 2020
On March 9, 2020, the
Company issued 11,061,816 restricted shares of Common Stock to the OZ Corporation, in consideration of ongoing consulting and advisory
services provided to the Company, on terms as previously agreed to the Company and the OZ Corporation. The securities were issued
pursuant to an exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933. The OZ Corporation is an
“Accredited Investor” as defined under Rule 501 of Regulation D of the Act and has such knowledge and experience and
possessed such information as it deemed necessary to make an informed investment decision.
Fiscal Year Ended July 31, 2019
On April
7, 2019, the Company issued 7,000,000 restricted shares of Common Stock to Robert Stevens, the prior receiver, upon the conversion
of notes payable and accrued interest in the aggregate amount of $10,199. No underwriting discounts were given or commissions
paid in connection with this transaction. The shares were issued pursuant to an exemption
from registration provided by Section 4(a)(2) of the Securities Act of 1933. As former receiver of the Company, Mr. Stevens was
familiar with the Company’s business, financial condition and possessed the necessary information to make an informed investment
decision.
Fiscal Year Ended July 31, 2018
On December
20, 2018, the Company issued 210,000,000 restricted shares of common stock to the Licensor, Cell Science Holding Ltd., in consideration
of the grant of the license to the Company pursuant to the terms of the Original License between the Company and Licensor. No
underwriting discounts were given or commissions paid in connection with this transaction. The
shares were issued pursuant to an exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended
(the “Act’). The Licensor is an “Accredited Investor” as defined under Rule 501 of Regulation D of the
Act and has such knowledge and experience and possessed such information as it deemed necessary to make an informed investment
decision.
On August 8, 2018,
the Company issued four (4) shares of Series A Preferred Stock to the OZ Corporation, in satisfaction for consulting services rendered
by the Oz Corporation to the Company. No solicitation was made and no underwriting discounts were given or paid in connection with
this transaction. The shares were issued pursuant to an exemption from registration provided by Section 4(a)(2) of the Securities
Act of 1933, as amended (the “Act’). The OZ Corporation is an “Accredited Investor” as defined under Rule
501 of Regulation D of the Act and has such knowledge and experience and possessed such information as it deemed necessary to make
an informed investment decision.
On July 16, 2018, the
Company issued 720,000 restricted shares of common stock to Somerset Capital, Ltd., a limited company owned and controlled by Robert
Stevens, in satisfaction of debt of the Company in the amount of $44,019. No solicitation was made and no underwriting discounts
were given or paid in connection with this transaction. The shares were issued pursuant to an exemption from registration provided
by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Act’). As former executive officer of the Company
Mr. Stevens was intimately acquainted with the Company’s business plan and proposed activities at the time of issuance,
is an accredited investor and possessed information on the Company necessary to make an informed investment decision.
On June 11, 2018, the
Company issued 70,614,117 restricted shares of common stock to the OZ Corporation, at a price of $0.05 per share, in consideration
of consulting services provided to the Company by the OZ Corporation valued at $3,530,706. No solicitation was made and no underwriting
discounts were given or paid in connection with this transaction. The shares were issued pursuant to an exemption from registration
provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Act’). The OZ Corporation is an “Accredited
Investor” as defined under Rule 501 of Regulation D of the Act and has such knowledge and experience and possessed such information
as it deemed necessary to make an informed investment decision.
On May 15, 2018
the Company issued 335,000 restricted shares common stock to the OZ Corporation, at price of $1.00 per share, in cash. No solicitation
was made and no underwriting discounts were given or paid in connection with this transaction. The shares were issued pursuant
to an exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Act’).
The OZ Corporation is an “Accredited Investor” as defined under Rule 501 of Regulation D of the Act and has such knowledge
and experience and possessed such information as it deemed necessary to make an informed investment decision.
On January 12, 2018 the Company affected a 1-for-200
reverse split of the Company’s issued and outstanding common stock which reduced the outstanding shares from approximately
45,000,000 shares to 260,037 shares outstanding. In connection with the split, any shareholder who owned shares as of the record
date and would have received less than 100 post-split shares after effecting the split, received 100 post-split shares.
As of July 31, 2009
and through January 12, 2018, there were 45,000,000 shares of common stock issued and outstanding.
****** END OF FORM 10 DISCLOSURE ******
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Item 8.01
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Other Information
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The Company’s Standard Industrial Classification
(SIC) Code has changed from 1040 – Gold & Silver Ores to 6794- Patent Owners and Lessors.
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Item 9.01
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Financial Statements and Exhibits
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(a)
Financial Statements. We incorporate by reference
in this Current Report the Financial Statements included in the following periodic reports previously filed by the Company:
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·
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Our Annual Report on Form 10-K, for the fiscal year ended July 31, 2019;
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·
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Our Amended Annual Report on Form 10-K/A, for the fiscal year ended July 31, 2019;
and
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·
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Our Quarterly Reports on Form 10-Q, and any amendments thereto, for the quarterly periods
ended October 31, 2019 and January 31, 2020.
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(d) Exhibits.
The following exhibits are either filed as a part hereof or are incorporated by reference. Exhibit numbers correspond to the numbering
system in Item 601 of Regulation S-K.
Exhibit
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Number
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Description of Exhibit
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3(i)
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Amended and Restated Articles of Incorporation (1)
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3(ii)
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Amended and Restated By-laws (1)
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3(iii)
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Certificate of Designation of Series A Preferred Stock (1)
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3(iv)
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Certificate of Designation of Series B Preferred Stock (1)
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10.1
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Patent and Technology License Agreement dated December 20, 2018 (2)
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10.2
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Amended and Restated Patent and Technology License Agreement dated December 31, 2019 (3)
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10.3
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CBD Biotech Sublicense dated January 5, 2020 (5)
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10.4
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Strategic Alliance Agreement between CBD Biotech and ICS dated April 17, 2020 (4)
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10.5
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Sublicense Agreement between CBD Biotech and ICS dated April 22, 2020 (4)
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10.6
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Efficacy Demonstration Laboratory Agreement between the Company and the OZ Corporation (5)
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21.1
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Subsidiaries (5)
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(1) Incorporated
by reference from our Current Report on Form 8-K filed with the SEC on August 22, 2018
(2) Incorporated by reference from our Current Report
on Form 8-K filed with the SEC on December 27, 2018
(3) Incorporated by reference from our Current Report
on Form 8-K filed with the SEC on January 14, 2020
(4) Incorporated by reference from our Current Report
on Form 8-K filed with the SEC on April 27, 2020
(5) Filed herewith