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Form S-1 World Technology Corp.

July 13, 2018 5:26 PM EDT

 

As filed with the Securities and Exchange Commission on July 13, 2018

 

Registration No. 333-

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM S-1

 

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

 

WORLD TECHNOLOGY CORP.

(Exact name of registrant as specified in its charter)

 

Nevada   4899   46-1204713
(State or other jurisdiction of
incorporation or organization)
  (Primary standard industrial
classification code number)
  (I.R.S. employer
identification number)

 

600 Brickell Ave., Suite 1775
Miami, Florida 33131
(855)467-6500

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

Seán McVeigh
Chief Executive Officer
600 Brickell Ave., Suite 1775
Miami, Florida 33131
(855) 467-6500

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

Copies to:

 

Mitchell S. Nussbaum, Esq.
Angela M. Dowd, Esq.
Loeb & Loeb LLP
345 Park Avenue
New York, New York 10154
(212) 407-4000 – Telephone
(212) 407-4990 – Facsimile
Ralph De Martino, Esq.
Alec Orudjev, Esq.
Cavas S. Pavri, Esq.
Schiff Hardin LLP
901 K. Street, N.W., Suite 700
Washington D.C. 20001
 (202) 778-6400 – Telephone
(202) 778-6460 – Facsimile

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

 

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. x

 

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

 

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

 

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ¨   Accelerated filer ¨
Non-accelerated filer ¨ (Do not check if a smaller reporting company)   Smaller reporting company x
Emerging growth company x  

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act. ¨

 

CALCULATION OF REGISTRATION FEE

 

Title of Each Class of Securities to be Registered  Proposed Maximum
Aggregate Offering Price (1)
   Amount of
Registration Fee (1)
 
Common Stock, $0.001 par value(2)  $11,500,000   $1,431.75 
Warrants to purchase Common Stock(3)          
Common Stock issuable upon exercise of the Warrants $0.001 par value(2)     11,500,000    1431.75 
Representative’s Warrants to Purchase Common Stock and Warrants(3)(4)  $-   $ 
Common Stock underlying Representative’s Warrants, $.001 par value(2)(5)  $718,750    89.49 
Warrants included in Representative’s Warrants(3)          
Common Stock issuable upon exercise of Warrants underlying Representative’s Warrant $0.001 par value(2)(6)   575,000    71.59 
Total  $24,293,750    3,024.58(7)

 

(1)Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) under the Securities Act. Includes the aggregate offering price of additional shares that the underwriters have the right to purchase to cover over-allotments, if any.

 

(2)In accordance with Rule 416(a), the Registrant is also registering hereunder an indeterminate number of additional shares of common stock that shall be issuable pursuant to Rule 416 to prevent dilution resulting from stock splits, stock dividends or similar transactions.

 

(3)No fee is payable pursuant to Rule 457(g) under the Securities Act of 1933, as amended.

 

(4)We have agreed to issue warrants exercisable within five years after the effective date of this registration statement representing  5% of the total number of securities issued in the offering (the “Representative’s Warrants”) to Dawson James Securities, Inc., the representative of the underwriters (the ”Representative”). The Representative’s Warrants will be exercisable at a per share price equal to 125% of the common stock public offering price. Resales of the Representative’s Warrants on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended, are registered hereby. Resales of shares issuable upon exercise of the Representative’s Warrants are also being similarly registered on a delayed or continuous basis hereby. See “Underwriting.” In accordance with Rule 457(g) under the Securities Act, because the shares of the Registrant’s common stock underlying the Representative’s Warrants are registered hereby, no separate registration fee is required with respect to the warrants registered hereby.

 

(5)Represents the aggregate maximum offering price of the number of shares of common stock issuable upon exercise of the Representative’s Warrants.

 

(6)Represents the aggregate maximum offering price of the number of shares of common stock issuable upon exercise of the Warrants included in the Representative’s Warrants.

 

(7)Paid herewith.

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

 

 

 

 

 

The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state or other jurisdiction where the offer or sale is not permitted.

 

PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION, DATED JULY 13, 2018

 

                                            SHARES

of

COMMON STOCK

 

 and

WARRANTS TO PURCHASE UP TO            SHARES

OF COMMON STOCK

and

                             SHARES OF COMMON STOCK UNDERLYING THE WARRANTS

 

 

 

World Technology Corp.

 

We are offering an aggregate of          shares of our common stock, $0.001 par value per share, at a public offering price of $         per share, together with warrants to purchase up to       shares of our common stock (the “Warrants”). Each accompanying Warrant is to purchase one share of common stock. The common stock and Warrants will be separately issued but will be purchased together in this offering. Each full Warrant will have an exercise price of $       per share, will be exercisable upon issuance and will expire five years from the date on which such Warrants were issued. We are also offering the shares of common stock that are issuable from time to time upon exercise of the Warrants.

 

Our common stock is currently quoted on the OTC Pink Market under the symbol “WCOR”. On July 13, 2018, the last reported sales prices of our common stock on the OTC Pink Market was $4.25 per share. We have applied to list our common stock on the NASDAQ Capital Market under the symbol “WCOR”. There can be no assurance that our common stock will be approved for listing on the NASDAQ Capital Market. The closing of this offering is contingent upon the successful listing of our common stock on The NASDAQ Capital Market. The Warrants will not be listed for trading and no market for the Warrants is expected to develop. Without an active trading market, the liquidity of the Warrants will be limited.

 

 We are an “emerging growth company” as defined under the federal securities laws and, as such, have elected to comply with certain reduced public company reporting requirements for future filings

 

World Global Holdings Pte. Ltd. and its affiliates, including World Global Network Pte. Ltd., currently own approximately 75% of our common stock. Upon the closing of this offering, World Global Holdings Pte. and its affiliates will continue to own a combined controlling interest in us, and we will meet the definition of a “controlled company” under the corporate governance standards for NASDAQ listed companies and we will be eligible to utilize certain exemptions from the corporate governance requirements of the NASDAQ Stock Market.

 

Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 12 to read about factors you should consider before buying shares of our common stock and Warrants.

 

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

 

   Per Share and Warrant(2)   Total 
Public offering price  $       
Underwriting discounts and commissions (1)  $       
Proceeds to us, before expenses  $       

 

(1)We have agreed to reimburse the underwriters for other out-of-pocket expenses relating to this offering up to a maximum of $125,000 for all such expenses. - See “Underwriting” for a description of the compensation payable to the underwriters.

 

(2)The public offering price and underwriting discount correspond to an assumed public offering price per share of common stock of $          and an assumed public offering price per full warrant of $          .

 

In addition to the underwriting discounts and commissions described in the section entitled “Underwriting” on page 79 of this prospectus, we have agreed to issue to Dawson warrants, exercisable commencing 180 days immediately following the date of effectiveness of the registration statement of which this prospectus forms a part, and exercisable for a period of five years from the date of effectiveness of the registration statement of which this prospectus forms a part, to purchase shares of common stock and Warrants equal to 5% of the total number of shares and Warrants sold in this offering at a per share and Warrant price equal to 125% of the public offering price (the “Representative’s Warrants”). The registration statement of which this prospectus is a part also covers such Representative’s Warrants and the shares of common stock and Warrants issuable upon the exercise thereof and the shares of common stock issuable upon the exercise of such Warrants. We have granted the representative of the underwriters a 45day option to purchase up to                   additional shares of common stock and/or up to                     additional Warrants, in any combinations thereof, solely to cover over-allotments, if any, at the public offering price less the underwriting discount. If the underwriters exercise this option in full, the total underwriting discounts and commissions will be $                    , and the additional proceeds to us, before expenses, from the over-allotment option exercise will be $                         .

 

The underwriters expect to deliver the shares and Warrants against payment on or about            , 2018.

 

Prospectus dated            , 2018

 

Dawson James Securities, Inc.

 

 

 

 

TABLE OF CONTENTS

 

  Page
PROSPECTUS SUMMARY 1
RISK FACTORS 12
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS 34
USE OF PROCEEDS 36
DIVIDEND POLICY 36
MARKET PRICE OF OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS 37
CAPITALIZATION 38
DILUTION 39
SELECTED CONSOLIDATED FINANCIAL DATA 40
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 41
BUSINESS 48
MANAGEMENT 63
EXECUTIVE COMPENSATION 68
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 73
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE 71
DESCRIPTION OF SECURITIES 74
UNDERWRITING 79
LEGAL MATTERS 82
EXPERTS 82
WHERE YOU CAN FIND MORE INFORMATION 82
INDEX OF FINANCIAL STATEMENTS F-2

 

We have not authorized anyone to provide you with any information or to make any representation, other than those contained in this prospectus or any free writing prospectus we have prepared. We take no responsibility for, and provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares offered hereby, but only in circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is accurate only as of its date, regardless of the time of delivery of this prospectus or of any sale of our securities.

 

Neither we nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than the United States. You are required to inform yourself about, and to observe any restrictions relating to, this offering and the distribution of this prospectus.

 

Our logo and some of our trademarks and tradenames are used in this prospectus. This prospectus also includes trademarks, tradenames and service marks that are the property of other organizations. Solely for convenience, trademarks, tradenames and service marks referred to in this prospectus may appear without the ®, TM and SM symbols, but those references are not intended to indicate in any way that we will not assert to the fullest extent under applicable law our rights or the rights of the applicable licensor to these trademarks, tradenames and service marks.

 

We obtained the statistical data, market data and other industry data and forecasts described in this prospectus from market research, publicly available information and industry publications. Industry publications generally state that they obtain their information from sources that they believe to be reliable, but they do not guarantee the accuracy and completeness of the information. Similarly, while we believe that the statistical data, industry data and forecasts and market research are reliable, we have not independently verified the data, and we do not make any representation as to the accuracy of the information. We have not sought the consent of the sources to refer to their reports appearing or incorporated by reference in this prospectus.

 

 

 

 

PROSPECTUS SUMMARY

 

This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our Securities, you should carefully read this entire prospectus, including our financial statements and the related notes and the information set forth under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in each case included elsewhere in this prospectus. Unless the context otherwise requires, references to “World Technology”, “WCOR”, “we”, “our”, “us” or similar terminology in this prospectus refer on a historical basis to “World Technology Corp” on a consolidated basis with its former wholly-owned subsidiary and, since November 3, 2017, the date on which our wholly-owned subsidiary was dissolved, refer to World Technology Corp. Except as otherwise indicated, market data and industry statistics used throughout this prospectus are based on independent industry publications and other publicly available information.

 

Overview

 

We are a technology company that provides wearable devices for use in the quantified-self wellness  market. Our wearable devices and related applications provide our end-users with health related knowledge acquired through self-tracking. Our Life Sensing Technology uses state-of-the-art sensors, enhanced signal processing and algorithms to collect and process specific data from end-users; and it is embedded into Helo, our branded wearable devices that are designed, produced and sold into the wellness market through our exclusive marketing and distribution partner, World Global Network Pte. Ltd. and its distribution network (which we refer to herein as WGN). WGN is a direct-to-consumer, multi-level marketing company with operations in countries including the U.S., Singapore, Ireland, Thailand, India, the Philippines and Japan.  WGN is 50% owned by each of Fabio Galdi, who serves as our Chairman of the Board and Chief Technology Officer, and his brother, Gabriele Galdi. World Global Holdings Pte. Ltd., our largest stockholder, which we refer to as WGH, is 50% owned by Gabriele Galdi, 28% owned by Alfonso Galdi, the brother of Fabio Galdi and Gabriele Galdi, and 22% owned by Alessandro Senatore, who serves as a director of our company. Currently, WGH, WGN and their affiliates collectively own approximately 75% of our outstanding common stock.

 

Our strategic goal is to build a growing community of loyal Helo users in the wellness market who enjoy meaningful information from the user-friendly applications on their Helo. Since the initial commercial launch of the first Helo devices in the second half of 2016, we have shipped and been paid for over 570,000 units of Helo devices. Our Helo devices are being worn by end-users in North America, Asia and Europe. Helo is more than just a wearable device that measures steps, heart rate and blood pressure - what we believe differentiates Helo from other available wearable devices in the wellness sector is that our Life Sensing Technology captures and processes additional user biometric data, populating our databases and enabling novel applications including a non-invasive sugar trend monitoring and alcohol sensing applications that are currently under development.

 

Given the launch of our existing products and our strong sales and marketing relationship with WGN, we believe that we are well positioned to address specific market segments within the wellness market. We expect to enter the sugar trend wellness monitoring market in the latter part of 2018, following the launch of Helo Extense, a wirelessly connected device that will enable users of Helo LX and Helo LX+, an enhanced version of Helo LX with additional sensors that was launched in January 2018, to non-invasively monitor their sugar trends on demand. In 2019, we expect to launch a Helo device with continuous alcohol sensing capability by completing the development and integration of a miniaturized alcohol sensor in partnership with 1A SmartStart, LLC.

 

Our Technology

 

Life Sensing Technology is a proprietary technology that has been developed by our in-house team. It uses state-of-the-art sensors that are selected or customized to our specifications, and optimally configured for Helo devices. These sensors continuously collect specific user biometric data that is encrypted and securely uploaded to our cloud based storage platform where the data signal is processed using our proprietary algorithms and artificial intelligence to further refine the collected data. This ongoing data upload populates an ever-expanding bio-parameter database that we believe will have the potential to develop into a diverse and rich resource that will be highly sought after for wellness and health-related data mining, and third party software application (or App) development. Currently, controlled access to our user-anonymized version of this data is available via our Open Application Programming Interface (or OpenAPI) which delivers selected data to authorized third parties, enabling Helo Apps to query our database in real-time and providing data for research, product evaluation and other purposes. We are responsible for the data we provide and the third parties who access our data are responsible for interpreting our data and presenting it to end-users.

 

 1 

 

 

We believe that our data collection, user-approval and authorization to use this data is enhanced by the close customer relationship established by WGN and the Helo users, and this proximity enables us to secure permission to collect data on demand and to store, own and optimally analyze this data for in-house and third-party development. We believe that our access to the user through WGN’s exclusive direct sales model creates a protected market for our current product offerings and secures a ready market for our future product offerings currently in development.

 

Our Relationship with WGN

 

 WGN is a multi-level marketing company specializing in sales, marketing and distribution of technology products worldwide online. WGN has served as our distribution partner since 2014. In early 2016, WGN transitioned out of its worldwide mobile business to enter into the wearables market. Today, our Helo line of products is WGN’s primary offering. We believe that sales of Helo through the direct selling channel lends itself to a person-to-person promotion because although Helo is a technology product, its Apps provide meaningful information to the user that is of personal nature and well suited to encourage person to person discussion.

 

Mr. Fabio Galdi, our Chairman of the Board and Chief Technology Officer, and his brother Gabriele Galdi, each currently own 50% of WGN. Until May 2017, Fabio Galdi was the Chief Executive Officer of our company, and currently he serves as the Chief Executive Officer of WGN. Gabriele Galdi is also the owner of 50% of the outstanding equity of WGH, our largest stockholder and an affiliate of WGN.  The remaining 50% of WGH is owned by Alfonso Galdi, the brother of Fabio Galdi and Gabriele Galdi, who owns 28% of WGH, and Alessandro Senatore, a director of our company, who owns 22% of WGH. Currently, WGH, WGN and their affiliates collectively own approximately 75% of our outstanding common stock.  Consequently, certain conflicts of interest, which are more fully discussed below, may exist between our company, on the one hand, and WGN, on the other hand.

  

Based on our Strategic Partner Master Sales and Worldwide Distribution Agreement that we entered into with WGN on October 1, 2017, WGN places Helo orders with us on a prepaid basis at an agreed upon mark-up on our cost of manufacture. Once we receive orders from WGN, we authorize our supplier to fulfill these orders and notify WGN when their orders are ready for pickup or shipment.

 

We have granted WGN a non-exclusive license to use our brands (including the marks “Wor(l)d” and “Helo”), to promote sales of Helo devices to end-users in the wellness market worldwide as well as sales of Helo Apps to its users. We are in the process of amending our Strategic Partner Master Sales and Worldwide Distribution Agreement, to provide that in addition to our mark-up on Helo sales, we will receive a 30% net revenue share on all Helo App sales by WGN on Google Play Store, Apple’s App Store or directly downloaded from the Helo App Store. Currently, there are some free Apps available for download by Helo users, and we expect to generate revenues from user paid Helo Apps sales beginning in 2019.

 

The initial term of the Strategic Partner Master Sales and Worldwide Distribution Agreement with WGN is five years.  After the initial term, the Strategic Partner Master Sales and Worldwide Distribution Agreement shall renew automatically for an additional two year term and thereafter for additional one year terms unless either we or WGN provides written notice to the other party on or prior to 180 days before the expiration of the initial term of any renewal term of its intent to terminate the agreement at the end of the initial term or renewal term, as applicable.  Either party may also terminate the Strategic Partner Master Sales and Worldwide Distribution Agreement for cause, for non-payment or non-performance by the other party or in the event of the insolvency of the other party.

 

We believe that our exclusive partnership with WGN in the wellness market allows us to reach prospective end-users worldwide, and promote the benefits of a growing range of targeted paid Apps. These Apps have been designed by third party subject matter experts to provide users with specific, relevant and timely information so they can make appropriate lifestyle choices based on the current status of their continuously measured bio-parameters. We believe that users will self-select their Apps to meet their information requirements. We believe that this attribute will help build viral sales, loyalty to, and belief in, the Helo devices and will facilitate user endorsements and recommendations. In addition, WGN’s turnkey online direct sales business model provides users with the instant ability to make sales referrals for our products.

 

As WGH, WGN and their affiliates, currently collectively own approximately 75% of our outstanding common stock, these persons and entities have the ability to control the outcome of all matters submitted for stockholder action, including the approval of significant corporate transactions, the terms of, and matters relating to, our Strategic Partner Master Sales and Worldwide Distribution Agreement with WGN, among others.  They also have the ability to exert a controlling influence on our management, direction and policies, including the ability to appoint and remove our directors and officers.  At present, WGH and its affiliates have appointed individuals who are officers, executives, or directors of WGN and/or WGH as two of our three directors. These directors have fiduciary duties to both us and WGN and/or WGH and may become subject to conflicts of interest on certain matters where WGN and/or WGH’s interests may not be aligned with the interests of our minority stockholders.  In addition, because WGH and its affiliates (which include Mr. Gabriele Galdi and WGN) will hold more than 50% of our outstanding common stock following this offering, we meet the definition of a “controlled company” under the corporate governance rules for NASDAQ-listed companies.  Controlled companies are not required to have a majority of independent directors, nor are they required to have a compensation committee or an independent nominating function.  Although our current intention is to not avail ourselves of the controlled company exemption, we are eligible to do so and may determine to avail ourselves of these corporate governance exemptions in the future.

 

The Wearable Devices Market

 

Our current market is the quantified-self (i.e. self-knowledge through self-tracking) wellness market.  According to The Global Wellness Institute, the global wellness industry is a $3.7 trillion market and growth is expected to accelerate by 17% in the next five years. In addition, the worldwide wearables market is set to nearly double by 2021, according to International Data Corporation, with the wearable technology market expected to reach $51.6 billion by 2022.

 

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From a technology perspective, this market has been revolutionized by Bluetooth wearable devices coupled with smartphones that connect to the cloud which have opened up a vast array of new products and services. We believe that low power, full Internet of Things (or IoT) connectivity will also yield another wave of innovation, as users will no longer be tied to their smartphones for connectivity purposes. In addition, the decreasing costs of chips and other components, combined with miniaturization are also expected to expand the size of this market.

 

Market education by Fitbit, Apple and others has encouraged wearable device acceptance. Today, the key drivers of this market include technology improvements and the “self-care is the new healthcare” attitude phenomenon. We believe that increasing health and fitness awareness, combined with the rising share of an aging population, increasing incidences of chronic and lifestyle diseases and a focus on prevention rather than cure, will also increase the demand for quantified-self wellness products.

 

However, we also believe that the growth of the wellness market could be inhibited by factors that might have a negative impact on user perception, such as devices that generate data without giving insights into what that data signifies or devices that fail to correlate generated data with factors affecting digital health or devices that fail to provide actionable intelligence regarding a digital health outcome. It is our expectation that privacy and security concerns and evolving regulations in these areas will also have a material impact on the future of the quantified-self wellness market.

 

Healthcare/Digital Health Market

 

As technology matures and as wearables and sensors are further miniaturized, we believe that more novel applications for healthcare will be developed. We believe that we will witness integration of medical sensors into consumer electronics that will enable home-based medical data gathering and support remote care and preventive digital health programs with potential opportunities in areas such as wellness monitoring; safety monitoring; home rehabilitation; treatment efficacy assessment and early detection of disorders.

 

Sugar Trend Monitoring Market

 

The importance of blood glucose (also known as blood sugar) monitoring is that it currently serves as the main tool used to check diabetes control. We plan to provide a wearable device in the wellness sector that is non-invasive, blood free, and is capable of on-demand or continuous self-monitoring of the user’s sugar trends, and that does not require consumable components (such as lancets or patches that attach to the skin). If we are successful in introducing this device, we believe this will be a critical feature that will distinguish us from the other wearable devices that are currently available in the wellness market.

 

Our Products

 

Our Helo wearable devices have been designed to satisfy the demand from customers in the quantified-self wellness market. We have built a platform where both our Helo users leverage our device to monitor their wellness and where our Helo devices serve as a gateway to an automated data collection capability that we believe opens up the opportunity for the development of a huge range of wellness Apps and data mining opportunities.

 

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Since the fourth quarter of 2016, we have moved from supplying only a single sensor device for our Helo Classic and Helo LX models to providing multi-sensors for our Helo LX+ model that was launched in the first quarter of 2018.

 

We have worked to optimize our Life Sensing Technology and upgrade our Helo device from its Classic version to the current Helo LX, and introduced Helo LX+ in 2018 that offers more features to our users in the wellness market. We believe that our Helo LX and Helo LX+ (which was launched at the Consumer Electronics Show 2018 in Las Vegas in January 2018) are designed and are suitable for the worldwide quantified-self wellness market.

 

Our Mission and Growth Strategy

 

We seek to become a leading wellness wearable device and “big data” provider whereby our Helo users would benefit from the availability of new products and services (initially in the wellness sector and later in the healthcare market segment), developed from sharing their anonymized, aggregated, multi-ethnic, bio-parameter data in a structured way with authorized third parties.

 

We intend to grow our business by adopting the following strategies:

 

  · Increase unit sales to the wellness market by:

 

  o Rolling out new Helo models at different price points with functionalities that are tailored to end-users in the different wellness market segments;

 

  o Enhancing Helo’s functionality and features by continuing to fund Life Sensing Technology development and building new sensor technology partnerships, so we can introduce more sensors that could capture more data or partner with algorithm experts who help enhance the processing of the data that we already capture so that third parties can develop more creative Apps.

 

  · Supporting the development and sales of Helo Apps:

 

  o Based on our existing operating platform and as we continue to collect biometric data from Helo users, we believe that the data gathered using our Life Sensing Technology will create significant revenue opportunities for us as more subject matter experts and third-party App developers begin to access our data by the second half of 2018.

 

 

 4 

 

 

  o Facilitating the accelerated development of Helo Apps by third party developers through the addition of our own development team to streamline and continuously upgrade the OpenAPI so that the process is fully turnkey and self-service. In addition, we plan to regularly promote the leading apps on the Helo App Store, at events like the Consumer Electronics Show and via our distributor, WGN.

 

  · Entry into the healthcare market. If and when our Helo LX Pro is approved as a medical device by the FDA for the U.S. market (and other appropriate authorities in other international jurisdictions) and we are able to secure a suitable distribution partner, we intend to launch a complementary product line that is specifically designed for the healthcare market, that would provide user-appropriate information to the user and physician-appropriate information to the physician.

 

  · Launch of HeloPay. We plan to launch an IoT device (such as Helo 2 that is scheduled for delivery in 2019) that will have near field communication (NFC) technology, enabling HeloPay to work on Helo devices, with NFC and where Contactless Visa or MasterCard works, so we could offer instant worldwide payment capability for all HeloPay enabled devices.

 

Our Competitive Strengths

 

We believe that our strength comes from our understanding of the wellness market, our ability to anticipate end-user’s needs, our ability to further develop, integrate and monetize our Life Sensing Technology, our OpenAPI that allows third parties to develop novel, user targeted and responsive Helo Apps, our exclusive distribution model and the proprietary user database that we are able to build through the sale of Helo wearable devices by our exclusive distributor, WGN. We believe we have a scalable business platform that is conducive to potential growth in revenue and profitability, and we believe our business model will adapt well to changing market conditions.

  

Sales and Marketing

 

We believe that to obtain sales, we do not need a dedicated and expensive sales and marketing team as our current business model is to sell our Helo devices directly to WGN, who then sells the Helo devices to the end-users.

 

We believe WGN’s consultants and its peer-to-peer referral process is ideal for the sale of our Helo devices in the wellness market. Leveraging its online model, we believe WGN is capable of promoting our Helo devices worldwide efficiently and effectively as its consultants are motivated by the referral-based commission process to identify and reach out to people who they believe may be interested in our Helo wearable device and wish to make a purchase.

 

Our Competition

 

The wellness market is both evolving and fiercely competitive with a multitude of participants, including specialized consumer electronics companies, traditional health and fitness companies, traditional watch companies, broad-based consumer electronics companies and manufacturers of lower-cost devices. In addition, we compete with a wide range of stand-alone wellness and fitness related mobile apps that can be purchased or downloaded through mobile app stores. 

 

 5 

 

 

We are a small company that is relatively new to the wearable devices market, and we will continue to face significant competition from larger, more established companies. We believe we could be a niche player because of our exclusive distribution arrangement with WGN and our ability to leverage Life Sensing Technology (such as our non-invasive sugar trend monitoring technology, which is currently in development) to bring alternative wellness solutions to our end-users.

 

Risks Affecting Our Business

 

Investing in our securities involves significant risks and uncertainties. You should carefully consider the risks and uncertainties discussed under the section titled “Risk Factors” elsewhere in this prospectus before making a decision to invest in our securities. Certain of the key risks we face include, without limitation:

 

  · We have a limited operating history and have incurred net losses of $6,719,509 since the commencement of operations. Our company is therefore subject to the risks associated with new businesses;

 

  · We will require additional financing to fund our current business plan, even following this offering. The failure to obtain such financing may restrict our ability to grow or may cause our business to fail;

 

  · Due to the nature of our business model, we rely to a very significant extent on WGN as the sole distributor of our products and services. The loss of this relationship would severely harm our business;

 

  · Our products are manufactured by a single contract manufacturer, and the loss of our manufacturing relationship would have a material adverse effect on our business;

 

  · The quantified-self wellness market that we operate in is a highly competitive market. If we do not compete effectively in terms of technology, pricing, functionality and design, our prospects, operating results, and financial condition could be adversely affected;

 

  · Our directors, officers and principal stockholders collectively control a significant amount of our shares, and their interests may not align with the interests of our other stockholders;

 

  · The loss of the services of our key employees, particularly the services rendered by Mr. Seán McVeigh, our Chief Executive Officer, Mr. Anthony S. Chan, our Chief Financial Officer and Mr. Fabio Galdi, our Chief Technology Officer, could harm our business;

 

  · Fabio Galdi, the Chairman of our Board of Directors, is a major stockholder of WGN and therefore may become subject to conflicts of interest that may not be resolved in favor of our common stockholders;

 

  · The lack of public company experience of certain members of our management team could adversely impact our ability to comply with the reporting requirements of U.S. securities laws.

 

  · If we are unable to successfully develop and timely introduce new products and services or enhance existing products and services, our business may be adversely affected;

 

  · The market for quantified-self wellness devices is still in the relatively early stages of growth and if it does not continue to grow, grows more slowly than we expect, or fails to grow as large as we expect, our business and operating results could be harmed;

 

 

 6 

 

 

  · Our failure or inability to protect our intellectual property rights, or claims by others that we are infringing upon or unlawfully using their intellectual property could diminish the value of our brand and weaken our competitive position, and adversely affect our business, financial condition, operating results, and prospects;

 

  · Our business is subject to a variety of U.S. and foreign laws and regulations that are continuously evolving, including those related to privacy, data security, and data protection due to our collection, processing, and use of personal information and other user data, such as the E.U. Data Protection Directive which covers the transfer of personal data from the European Union to the United States;

 

  · We do not currently have an active public market for our securities. An active trading market may not develop for our securities, and you may not be able to sell your common stock at or above the offering price per share;

 

  · The market price of our common stock has been and will likely continue to be volatile, and you could lose all or part of your investment; and

 

  · If we are unable to implement and maintain effective internal control over financial reporting in the future, our ability to produce accurate financial statements could be impaired, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may decline.

  

If any of these or other risks and uncertainties occurs, our business, financial condition or results of operations may be materially adversely affected. In such case, the trading price of our common stock would likely decline, and you may lose all or part of your investment.

 

Emerging Growth Company Under the JOBS Act

 

As a company with less than $1.07 billion in revenues during our last fiscal year, we qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As an emerging growth company, we have elected to take advantage of reduced reporting requirements and are relieved of certain other significant requirements that are otherwise generally applicable to public companies. As an emerging growth company:

 

  · we may present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations;

 

  · we are exempt from the requirement to obtain an attestation and report from our auditors on whether we maintained effective internal control over financial reporting under the Sarbanes-Oxley Act;

 

  · we are permitted to provide less extensive disclosure about our executive compensation arrangements;

 

  · we are permitted to utilize the extended transition period for complying with new or revised accounting standards available to private companies; and

 

  · we are not required to give our stockholders non-binding advisory votes on executive compensation or golden parachute arrangements.

 

 7 

 

 

We may take advantage of these provisions until December 31, 2019 (the last day of the fiscal year following the fifth anniversary of our initial public offering) if we continue to be an emerging growth company. We would cease to be an emerging growth company if we have more than $1.07 billion in annual revenues, have more than $700 million in market value of our shares held by non-affiliates or issue more than $1.0 billion of non-convertible debt over a three-year period. We may choose to take advantage of some but not all of these reduced burdens. We have elected to provide two years of audited financial statements. Additionally, we have elected to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act.

 

Going Concern

 

Our independent registered public accounting firm has included a “going concern” paragraph in their opinion on our consolidated financial statements, expressing substantial doubt that we can continue as an ongoing business for the next twelve months. Our consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty. If we experience any unanticipated delay or difficulties in the manufacture of our Helo wearable devices or if we cannot secure the financing needed to continue as a viable business, our stockholders may lose some and/or all of their investment in us. We incurred $1,130,747 and $788,204 in net losses for the years ended December 31, 2017 and 2016, respectively; and $504,147 in net loss for the quarter ended March 31, 2018. As of March 31, 2018, we had an accumulated deficit of $6,719,509.

 

Our Corporate History and 2017 Reorganization

 

We were incorporated in the State of Nevada on October 22, 2010, under the name Halton Universal Brands Inc. Our initial business was acting as a brokerage, consulting and marketing firm specializing in brand consulting and new product strategy consulting for emerging brands.

 

Effective October 29, 2014:

 

  1. Power Clouds Inc. (formerly known as World Assurance Group, Inc., and which we refer to as PWCL) acquired 7,095,000 shares of our common stock, representing 98% of the then issued and outstanding share capital of our company, for cash consideration of $378,000;

 

  2. We discontinued our previously existing brokerage and brand consultancy business; and

 

  3. We acquired a mobile phone business and related assets from PWCL for consideration of $557,898, funded by way of debt from PWCL

 

We accounted for the October 29, 2014 transactions as a reverse merger of PWCL’s mobile phone business and related assets into the Company.

 

Effective on December 22, 2014 we changed our name from Halton Universal Brands, Inc. to World Media & Technology Corp.

 

On March 25, 2015, we issued 12,000,000 shares of our common stock to Mr. Fabio Galdi, our then Chief Executive Officer and majority stockholder and currently our Chairman of the Board and Chief Technology Officer, at $0.25 per share, for total proceeds of $3,000,000 in cash.

 

On March 30, 2015, we entered into a Common Stock Purchase Agreement with PayNovi Ltd., an Irish limited liability company (or PayNovi) and Anch Holdings Ltd., an Irish limited liability company (or Anch). Pursuant to the terms of the SPA, we purchased 350 shares of PayNovi’s common stock, which represented 35% of PayNovi’s issued and outstanding shares as of the closing date, for a purchase price consisting of 1,361,000 shares of our common stock, which represented 5% of our then total issued and outstanding shares, and 3,937,005 shares of PWCL’s common stock, which represented 5% of PWCL’s then total issued and outstanding shares.

 

 8 

 

 

In October 2015, PWCL distributed 14,021,122 of the 15,095,000 shares of our common stock held by PWCL to its stockholders. In December 2016, the remaining 1,073,878 shares of our common stock held by PWCL were transferred to World Global Cash Pte. Ltd., a wholly-owned subsidiary of WGN.

 

On October 5, 2016, we filed a Form 15 to suspend our duty to file reports under Sections 13 and 15(d) of the Securities Exchange Act of 1934, as amended. In order to enable our common stock to continue to trade on the OTC Pink Market after the filing of the Form 15, we have satisfied our obligations to make adequate current information publicly available within the meaning of Rule 144(c)(2) of the Securities Act of 1933, as amended, through the filing of Annual and Quarterly Reports and Supplemental Information with OTC Markets. Copies of these reports are publicly available on the OTC Disclosure and News Service.

 

On January 6, 2017, we issued 100 shares of our Series A Super Voting Preferred Stock to Fabio Galdi in exchange for the cancellation of $250,000 of unpaid management service fees.

 

On October 1, 2017, we, Fabio Galdi, WGN and WGN’s wholly owned subsidiary, World Global Assets Pte. Ltd., entered into a Stock Exchange, Debt Forgiveness and Intellectual Property Assignment Agreement. Pursuant to the terms of that Agreement, we issued 8,000,000 shares of our common stock to WGN. We also transferred 350 common stock shares of PayNovi to WGN and agreed to forgive the remaining outstanding balance $1,140,506 owed to us by WGN for borrowed money.

 

In exchange: (i) Fabio Galdi returned to us for cancellation all 100 shares of our Series A Super Voting Preferred Stock held by Fabio Galdi, (ii) Mr. Galdi forgave the amounts owed by the Company to him for past services rendered in the aggregate amount of $150,000, (iii) WGN assigned and transferred to us of all of its right, title and interest in and to certain technology, intellectual property and intellectual property rights, which rights comprise a key component of our current business, (iv) WGN and Mr. Galdi agreed not to source, promote or enter in to any agreement for any technology similar to our technology from any supplier other than our company and (v) WGN agreed to terminate and forego its exclusive relationship with Quality Technology Industrial Co. Ltd. and to purchase Helo devices directly from us upon the terms and subject to the conditions set forth in a Strategic Partner Master Sales and World Wide Distribution Agreement dated as of October 1, 2017 between us and WGN.

 

As a result of the October 1, 2017 transactions, our business model is more akin to a traditional wholesale model whereby our distributor, WGN, places its orders directly with us on a prepaid basis and, based on such orders, we will instruct our supplier to build and ship the Helo devices in accordance with the specifications furnished by WGN.

 

On December 4, 2017, we changed our name to World Technology Corp, with the stock symbol “WCOR” to re-position our company as a technology company.

 

Corporate Information

 

Our principal offices are located at 600 Brickell Avenue, Suite 1775, Miami, Florida 33131, and our telephone number is (855)-467-6500. Our website is https://www.worldcorp.com. The website address is intended to provide inactive, textual references only and the information on or that can be accessed through such website is not part of this prospectus.

 

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THE OFFERING

 

The following summary contains basic information about our securities and the offering and is not intended to be complete. It does not contain all the information that may be important to you. For a more complete understanding of our common stock and Warrants, you should read the section entitled “Description of Capital Stock” in this prospectus.

 

Common stock offered by us           shares of common stock
     
Common stock outstanding before this offering           shares of common stock
     
Common stock to be outstanding after this offering           shares of common stock (                shares of common stock if the underwriter exercises in full its overallotment option, assuming none of the Warrants issued in this offering are exercised)
     
Warrants offered by us   Warrants to purchase an aggregate of                shares of common stock. Each Warrant entitles the holder to purchase one share of common stock at an exercise price of $         per share, will be immediately exercisable and will expire on the fifth anniversary of the original issuance date, This prospectus also relates to the offering of the shares of common stock issuable upon exercise of the Warrants. We will not list the Warrants on any securities exchange or other trading market. Without a trading market, the liquidity of the Warrants will be limited.
     
Overallotment option   We have granted the underwriter an option to purchase up to         shares of our common stock and/or up to         additional Warrants, in any combinations thereof, at the public offering price, solely to cover over-allotments, if any. This option is exercisable, in whole or in part, for a period of 45days from the date of this prospectus.
     
Use of proceeds  

We estimate that the net proceeds from this offering will be approximately $10.0 million, before taking into account the proceeds to be received from any future exercise of the Warrants issued to investors in this offering and after deducting underwriting discounts and commissions and offering expenses payable by us. If the underwriter exercises its overallotment option in full, we estimate that the net proceeds from this offering will be approximately $       million, before taking into account the proceeds to be received from any future exercise of the Warrants issued to investors in this offering and after deducting underwriting discounts and commissions and offering expenses payable by us Although we will have broad discretion on the use of proceeds from this offering, we intend to use the net proceeds from this offering  for the following purposes:

(i) approximately $3.5 million for research and development;

(ii) approximately $1.5 million for talent recruitment and retention;

(iii) approximately $2.0 million for business development; and

(iv) the remainder for working capital and general corporate purposes and other general and administrative matters.

See "Use of Proceeds".

     
Dividend Policy   We have never declared or paid dividends on our common stock and currently do not anticipate declaring or paying any cash dividends on our common stock following this offering
     
Transfer Agent, Warrant Agent and Registrar   ClearTrust, LLC
     
Lockup agreements   See “Underwriting” for more information.
     
Risk factors   An investment in our company entails a high degree of risk.  See “Risk Factors” beginning on page 12 of this prospectus and the other information included in this prospectus for a discussion of factors you should carefully consider before investing in our securities.
     
OTC Pink MKT trading symbol   WCOR
     

Proposed NASDAQ symbol and listing

 

  We have applied to list our common stock on the NASDAQ Capital Market under the symbol "WCOR”. There can be no assurance that our application will be approved.  The closing of this offering is contingent upon the successful listing of our common stock on the NASDAQ Capital Market.

 

Unless we indicate otherwise, all information in this prospectus assumes no exercise by the underwriters of the overallotment option or of the Representative’s Warrants, and is based on 36,722,244 shares of common stock issued and outstanding as of July 13, 2018, and excludes:

 

·7,000,000 shares of common stock that are eligible for future option grants under our 2018 Stock Incentive Plan;

 

·              shares of common stock issuable upon the exercise of the Warrants offered hereby at an exercise price of $      per share; and

 

·             shares of common stock issuable upon the exercise of the Representative’s Warrants at an exercise price of $      per share, including              shares of common stock to be issued upon the exercise of Warrants included in the Representative’s Warrants at an exercise price of $      per share.

 

 10 

 

 

SUMMARY CONSOLIDATED FINANCIAL DATA

 

The following table includes (i) summary consolidated statements of operations data for the years ended December 31, 2017 and 2016 and the quarters ended March 31, 2018 (unaudited) and 2017 (unaudited) and (ii) summary consolidated balance sheet data as of December 31, 2017 and 2016 and March 31, 2018, derived from our audited and unaudited consolidated financial statements and related notes included elsewhere in this prospectus. Our consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States of America. Our historical results are not necessarily indicative of the results that may be expected in the future. You should read this information together with the sections entitled “Capitalization”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Selected Consolidated Financial Data”, and our consolidated financial statements and related notes included elsewhere in this prospectus. 

  

   Years Ended December
31,
   Three Months Ended
March 31,
 
   2017   2016   2018   2017 
Statements of Operations Data          (unaudited)   (unaudited) 
Total revenues  $4,110,000   $2,038,171   $2,463,500   $500,000 
Total cost of revenues   1,845,000    1,516,180    1,906,500    - 
Gross profit   2,265,000    521,991    557,000    500,000 
Total operating expenses   3,436,861    1,378,116    1,061,147    597,622 
Loss from operations   (1,171,861)   (856,125)   (504,147)   (97,622)
Total other income   41,114    67,921    -    13,554 
Net loss  $(1,130,747)  $(788,204)  $(504,147)  $(84,068)
Net loss per share: basic and diluted  $(0.04)  $(0.03)  $(0.01)  $(0.00)
Weighted-average number of common shares outstanding: basic and diluted   30,644,436    28,581,000    36,722,244    28,662,994 

 

   December 31,   March 
   2017   2016   31, 2018 
Balance Sheet Data          (unaudited) 
Total current assets  $1,992,761   $429,114   $1,601,122 
Total assets   2,021,049    1,305,939    1,627,511 
Total current liabilities   1,783,623    350,000    1,894,232 
Total liabilities   1,783,623    350,000    1,894,232 
Total stockholders’ equity (deficit)   237,426    955,939    (266,721)
Total liabilities and stockholders’ equity  $2,021,049   $1,305,939   $1,627,511 

 

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RISK FACTORS

 

An investment in our securities involves a number of very significant risks. You should carefully consider the following risks and uncertainties in addition to other information in this prospectus in evaluating our company and our business before purchasingour securities. Our business, operating results and financial condition could be seriously harmed as a result of the occurrence of any of the following risks. You could lose all or part of your investment due to any of these risks.

 

Risks Related To Our Financial Position

 

We have a limited operating history and have incurred significant losses since the commencement of operations. Our company is therefore subject to the risks associated with new businesses.

 

We commenced operations in May 2014 and have generated limited revenues to date. We incurred $1,130,747 and $788,204 in net losses for the years ended December 31, 2017 and 2016, respectively, and $504,147 in net loss for the quarter ended March 31, 2018. As of March 31, 2018, we had an accumulated deficit of $6,719,509.

 

We have a limited operating history upon which an evaluation of our future success or failure can be made. We have developed new Life Sensing Technology that has generated limited revenue and carries significant risks generally associated with the development and manufacturing and marketing of any new product or service. As these products are new in the market, there can be no certainty that customers will ultimately adopt the products and services we manufacture. Even if we do generate revenues from these new products in the future, these revenues may not be sufficient to cover our operating costs.

 

It is too early to predict if we will be able to generate significant revenues. Therefore, we are, and expect for the foreseeable future to be, subject to all the risks and uncertainties, inherent in a new business and the development and sale of new wearable devices and related software applications. As a result, we may be unable to fully develop, sell and derive material revenues from our products in the timeframes we project, if at all, and our inability to do so would materially and adversely impact our viability as a company. In addition, we still must establish certain functions necessary to operate our business, including finalizing our managerial and administrative structure, continuing product and technology development, implementing financial systems and controls and personnel recruitment.

 

Accordingly, you should consider our prospects in light of our limited operating history and the costs, uncertainties, delays and difficulties frequently encountered by companies in their initial revenue generating stages, particularly those in the wearable device sector. In particular, potential investors should consider that there is a significant risk that we will not be able to:

 

  · implement or execute our current business plan, or that our business plan is sound;

 

  · maintain our management team and Board of Directors;

 

  · raise sufficient funds in the capital markets or otherwise to effectuate our business plan; or

 

  · determine that our technologies that we have developed are commercially viable; and/or

 

If we are unable to manage these and similar risks, we may be unable to achieve sustainable revenues or net profits. If we cannot generate sufficient revenues to operate profitably, we will not be able to execute our business plan and our business may fail.

 

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Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern.

 

Our auditors have included a “going concern” paragraph in their opinion on our consolidated financial statements, expressing substantial doubt as to our ability to continue as an ongoing business for the next twelve months. Our consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty. If we experience any unanticipated delay or difficulties in the manufacture and distribution of our Helo wearable devices and if we cannot secure the financing needed to continue as a viable business, our stockholders may lose some or all of their investment in us.

 

We will require additional financing to fund our current business plan, even following this offering. The failure to obtain such financing may restrict our ability to grow or may cause our business to fail.

 

We have limited cash, and our working capital is dependent on the timing and size of the Helo orders that our sole exclusive distributor will place with us. Our current capital is not sufficient to enable us to execute our current business plans, and we will be required to obtain additional financing to fund our business operations. We may not have funds sufficient for additional investments in our business that we might want to undertake. We will require additional capital in the near and over the longer term.

 

We plan to pursue sources of such capital through various financing transactions and arrangements, including debt financing, equity financing, joint venturing of projects or other means. We may be unable to locate suitable financing transactions in the time period required or at all, or on terms we find attractive, and we may not obtain the capital we require by other means. If we do succeed in raising additional capital, the capital received may not be sufficient to fund our operations going forward without obtaining further additional financing.

 

Moreover, if we raise additional capital by issuing equity securities, the percentage ownership of our existing stockholders will be reduced, and accordingly our stockholders may experience substantial dilution. We may also issue equity securities that provide for rights, preferences and privileges senior to those of our common stock.

 

Debt financing, if obtained, may involve agreements that include liens on our assets, covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, could increase our expenses and require that our assets be provided as a security for such debt. Debt financing would also be required to be repaid regardless of our operating results.

 

Our ability to obtain needed financing may be impaired by conditions in the capital markets (both generally and in our industry in particular). Some of the contractual arrangements governing our operations may require us to maintain minimum capital, and we may lose our contract rights if we do not have the required minimum capital. If the amount of capital we are able to raise from financing activities is insufficient, we may be required to curtail our business plans or our business may fail, which in either case could result in the loss of your investment.

 

Risks Related to Our Business and Industry

 

The loss of the services of our key employees, particularly the services rendered by Mr. Seán McVeigh, our Chief Executive Officer, Mr. Anthony S. Chan, our Chief Financial Officer and Mr. Fabio Galdi, our Chairman and Chief Technology Officer, could harm our business.

 

Our success depends to a significant degree on the services rendered to us by our key employees. In particular, we are heavily dependent on the continued services of Mr. Seán McVeigh, our Chief Executive Officer, Mr. Anthony S. Chan, CPA, our Chief Financial Officer and Mr. Fabio Galdi, our Chairman and Chief Technology Officer. The loss of any key employees, including members of our senior management team, and our inability to attract highly skilled personnel with sufficient experience in our industry could harm our business. In addition, we do not maintain any “key-man” insurance policies on Mr. Seán McVeigh, Mr. Anthony S. Chan or any other employees.

 

 13 

 

 

If we fail to attract, train and retain sufficient numbers of qualified people, our prospects, business, financial condition and results of operations will be materially and adversely affected. In order to continue to provide quality products in our rapidly changing business, we believe it is important to attract and retain personnel with experience and expertise relevant to our business. Due to the level of technical expertise necessary to support our existing and new customers, our success will depend upon our ability to attract and retain highly skilled and seasoned professionals. Competition for highly skilled personnel is intense and there may be only a limited number of persons with the requisite skills to serve in these positions. Due to the competitive nature of the labor markets in which we operate, we may be unsuccessful in attracting and retaining these personnel. Our inability to attract and retain key personnel could adversely affect our ability to develop and manufacture our products.

 

The lack of public company experience of certain members of our management team could adversely impact our ability to comply with the reporting requirements of U.S. securities laws.

 

While our Chief Financial Officer has extensive public company experience, our Chief Executive Officer and other members of its senior management team only have limited public company experience, which could impair our ability to comply with legal and regulatory requirements such as those imposed by the Sarbanes-Oxley Act of 2002 or responsibilities such as complying with federal securities laws and making required disclosures on a timely basis. Any such deficiencies, weaknesses or lack of compliance could have a materially adverse effect on our ability to comply with the reporting requirements of the Securities Exchange Act of 1934, as amended, which is necessary to maintain our public company status. If we were to fail to fulfill those obligations, our ability to continue as a U.S. public company would be in jeopardy in which event you could lose your entire investment in our company.

 

The Chairman of our Board of Directors may become subject to conflicts of interest that may not be resolved in favor of our common stockholders.

 

The Chairman of our Board of Directors, Mr. Fabio Galdi is also a co-founder and the controlling stockholder of WGN. Such association may give rise to potential conflicts of interest, especially with regard to our key Strategic Partner Master Sales and World Wide Distribution Agreement with WGN.

 

Pursuant to Nevada law, directors of our company and controlling stockholders owe fiduciary duties to the company and its stockholders. Directors are required to exercise the duty of care and the duty of loyalty and to disclose any interest that they may have in any of our projects or opportunities. We intend to adopt a code of ethics and an audit committee charter, both of which will become effective upon the effectiveness of the registration statement to which this prospectus is a part. The code of ethics will provide that an interested director needs to refrain from participating in any discussion among senior officers of our company relating to an interested business and may not be involved in any proposed transaction with such interested business. Furthermore, the audit committee charter will provide that most related party transactions must be pre-approved by the audit committee, which will consist of only independent directors.

 

A majority of directors and certain of our officers live outside the United States, making it potentially difficult for an investor to enforce liabilities in foreign jurisdictions.

 

We are a Nevada corporation and, as such, are subject to the jurisdiction of the State of Nevada and the United States courts for purposes of any lawsuit, action or proceeding by investors herein.  An investor would have the ability to effect service of process on the Company within the United States.  However, a majority of our directors (namely Sean McVeigh and Alessandro Senatore) and certain of our executive officers (namely our CEO, Mr. McVeigh) are non-residents of the United States. Therefore, it may be difficult for investors to:

 

  · effect service of process within the United States against our non-U.S. resident directors or officer;

 

  · enforce U.S. court judgments based upon the civil liability provisions of the U.S. federal securities laws against any of the above referenced foreign persons in the United States;

 

  · enforce in foreign courts U.S. court judgments based on the civil liability provisions of the U.S. federal securities laws against the above foreign persons; and

 

 14 

 

 

  · bring an original action in foreign courts to enforce liabilities based upon the U.S. federal securities laws against the above foreign persons.

 

Due to the nature of our business model, we rely solely on WGN as the sole distributor of our products and services. The loss of this relationship would severely harm our business.

 

Pursuant to a Strategic Partner Master Sales and World Wide Distribution Agreement dated as of October 1, 2017, between us and WGN, which we refer to as the Master Sales Agreement., we have engaged WGN to act as the sole distributor of our Helo devices. As our sole distributor, WGN also provides marketing and promotion services for our devices in the health and wellness sector. WGN places Helo orders with us on a prepaid basis at our wholesale price, guaranteeing us a 30% gross margin. Our Helo devices are manufactured under contract by Quality Technology Industrial Co., Ltd. , which we refer to as QTI, a third-party based in China, and sold wholesale by us to WGN. WGN generates orders, sells and distributes Helo devices to its end-users worldwide. Once we receive the orders, we authorize QTI to fulfill them and notify WGN when their orders are ready for pickup or shipment. We have also granted WGN a non-exclusive license to use our brands to promote sales of Helo devices to end-users in the wellness market worldwide as well as sales of Helo Apps to their wearers. We are in the process of amending the Master Sales Agreement, to provide that we will receive a 30% net revenue share on all Helo App sales by WGN from the Google Play Store, Apple’s App Store or directly downloaded from the Helo App Store. WGN is owned by Mr. Fabio Galdi, our Chairman and Chief Technology Officer, and his brother.

 

Any failure by WGN to perform its obligation under the Master Sales Agreement including a failure to procure sufficient orders of our Helo devices from us to satisfy customer demand, a failure to adequately market our Helo devices and/or a failure to timely pay us the 30% gross margin on our devices could have a material adverse effect on our revenue and operating results and could impair the strength of our brand.

 

In addition, because of our dependence on WGN as the sole distributor of our Helo devices, any loss of our relationship with WGN, or any adverse change in the financial health of WGN that would affect its ability to perform its obligations under the Master Sales Agreement, would have a material adverse effect on our revenue, operating results and ability to run our business.

 

The terms of our agreements with affiliated entities including our Strategic Partner Master Sales and World Wide Distribution Agreement with WGN may not always be as favorable to us as the terms that may be obtained by arms’ length negotiation.

 

We currently are, and we anticipate that we will continue to be substantially dependent on our relationships with our affiliated entities, including WGN. We believe that our arrangement with WGN provides us with stability and transparency as opposed to entering into a variety of different arrangements with different distributors in various jurisdictions. Although we believe that the terms of our Master Sales Agreement are as favorable to us as what we could have obtained in an arm’s length transaction, there can be no assurance that this arrangement or any future agreements that we enter into with WGN or any other affiliated entity will be as favorable to us as we may be able to negotiate with unaffiliated parties.

 

Our products are manufactured by a single contract manufacturer, and the loss of our manufacturing relationship would have a material adverse effect on our business.

 

We rely on QTI as the sole contract manufacturer for our Helo devices. Our reliance on a sole contract manufacturer for our devices increases our risks since we do not currently have any alternative or replacement manufacturers. In the event of an interruption from the manufacturer, we may not be able to develop alternate or secondary sources without incurring material additional costs and substantial delays. Furthermore, these risks could materially and adversely affect our business if our manufacturer is impacted by a natural disaster or other interruption at a particular location because our contract manufacturer produces our products from a single location. In addition, our sole manufacturer may have more established relationships with our competitors and potential competitors, and as a result of such relationships, our manufacturer may choose to limit or terminate its relationship with us. If we experience significantly increased demand, or if we need to replace our sole manufacturer, we may be unable to supplement or replace manufacturing capacity on terms that are acceptable to us, which may undermine our ability to deliver our products to customers in a timely manner and adversely impact our revenue and operating results.

 

 15 

 

 

Because some of the key components in our products come from limited sources of supply, we are susceptible to supply shortages, long lead times for components, and supply changes, any of which could disrupt our supply chain.

 

Some of the key components used to manufacture our products come from limited sources of supply. Our sole manufacturer generally purchases these components on our behalf, subject to certain approved supplier lists, and we do not have any long-term arrangements with our suppliers. We are therefore subject to the risk of shortages and long lead times in the supply of these components and the risk that our suppliers discontinue or modify components used in our products. In addition, the lead times associated with certain components are lengthy and preclude rapid changes in quantities and delivery schedules. In the event of a component shortage or supply interruption from suppliers of these components, we may not be able to develop alternate sources in a timely manner. Developing alternate sources of supply for these components may be time-consuming, difficult, and costly and we may not be able to source these components on terms that are acceptable to us, or at all, which may undermine our ability to meet our requirements or to fill our orders in a timely manner. Any interruption or delay in the supply of any of these parts or components, or the inability to obtain these parts or components from alternate sources at acceptable prices and within a reasonable amount of time, would harm our ability to meet scheduled product deliveries to our sole distributor. This could cause delays in shipment of our products and adversely affect our operating results. In addition, increased component costs could result in lower gross margins. If we are unable to buy these components in quantities sufficient to meet our requirements on a timely basis, we will not be able to deliver products and services to our customers and users.

 

The quantified self-wellness market that we operate in is a highly competitive market. If we do not compete effectively in terms of technology, pricing, functionality and design, our prospects, operating results, and financial condition could be adversely affected.

 

The quantified self-wellness market is highly competitive and rapidly changing, with companies offering a variety of competitive products and services. We expect competition in our market to intensify in the future as new and existing competitors introduce new or enhanced products and services that are potentially more competitive than our products and services. The wellness devices market has a multitude of participants that develop or may develop products that compete in our targeted markets. Some of our competitors are much larger than we are and have significantly greater financial, development and marketing resources than we do including specialized consumer electronics companies, such as Fitbit, Garmin, Jawbone, Apple, and Misfit, traditional health and fitness companies, such as Adidas and Under Armour . In addition, many large, broad-based consumer electronic companies either compete in our market or adjacent markets or have announced plans to do so, including Google, LG, Microsoft, and Samsung. For example, Apple introduced the Apple Watch smartwatch in 2015, with broad-based functionalities, including some health and fitness tracking capabilities, and has sold a significant volume of its smartwatches since introduction. We may also face competition from manufacturers of lower-cost devices, such as Xiaomi and its Mi Band device, In addition, we compete with a wide range of stand-alone health and fitness-related mobile apps that can be purchased or downloaded through mobile app stores.

 

We believe many of our competitors and potential competitors have significant competitive advantages, including longer operating histories, ability to leverage their sales efforts and marketing expenditures across a broader portfolio of products and services, larger and broader customer bases, more established relationships with a larger number of suppliers, contract manufacturers, greater brand recognition, ability to leverage app stores which they may operate, and greater financial, research and development, marketing, distribution, and other resources than we do. Our competitors and potential competitors may also be able to develop products or services that are equal or superior to ours, achieve greater market acceptance of their products and services, and increase sales by utilizing different distribution channels than we do. These competitors may also be able to respond more rapidly than we can to new or emerging technologies or changes in customer requirements. They may also devote greater resources to the development, promotion and sale of their products than we do. Some of our competitors may aggressively discount their products and services in order to gain market share, which could result in pricing pressures, reduced profit margins, lost market share, or a failure to grow market share for us.

 

Our ability to operate will depend substantially upon our ability to enhance our products and Life Sensing Technologies and to develop and introduce, on a timely and cost-effective basis, new products and features that meet changing customer requirements and incorporate technological enhancements. If we are not able to compete effectively against our current or potential competitors, our prospects, operating results, and financial condition could be adversely affected.

 

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If we are unable to anticipate and satisfy consumer preferences in a timely manner, our business may be adversely affected.

 

Our success depends on our ability to anticipate and satisfy consumer preferences in a timely manner. All of our products are subject to changing consumer preferences that cannot be predicted with certainty. Consumers may decide not to purchase our products and services as their preferences could shift rapidly to different types of wellness wearable devices or away from these types of products and services altogether, and our future success depends in part on our ability to anticipate and respond to shifts in consumer preferences. In addition, our newer products and services that have additional features, may have higher prices than many of our earlier products and the products of some of our competitors, which may not appeal to consumers or only appeal to a smaller subset of consumers. It is also possible that competitors could introduce new products and services that negatively impact consumer preference for our connected health and fitness devices, which could result in decreased sales of our products and services and a loss in market share. Accordingly, if we fail to anticipate and satisfy consumer preferences in a timely manner, our business may be adversely affected.

 

If we are unable to successfully develop and timely introduce new products and services or enhance existing products and services, our business may be adversely affected.

 

We must continually develop and introduce new products and services and improve and enhance our existing products and services to maintain or increase our sales. The success of new or enhanced products and services may depend on a number of factors including, anticipating and effectively addressing consumer preferences and demand, timely and successful research and development, effective forecasting and management of product demand, effective management of manufacturing and supply costs, and the quality of or defects in our products.

 

The development of our products and services is complex and costly. Given the complexity, we occasionally have experienced, and could experience in the future, delays in completing the development and introduction of new and enhanced products and services. Problems in the design or quality of our products or services may also have an adverse effect on our brand, business, financial condition, and operating results. Unanticipated problems in developing products and services could also divert substantial research and development resources, which may impair our ability to develop new products and services and enhancements of existing products and services, and could substantially increase our costs. If new or enhanced product and service introductions are delayed or not successful, we may not be able to achieve an acceptable return, if any, on our research and development efforts, and our business may be adversely affected.

 

We may not be able to integrate new technologies and provide new services in a cost-efficient manner.

 

Our industry is subject to rapid and significant changes in technology, frequent new service introductions and evolving industry standards. We cannot predict the effect of these changes on our competitive position, our profitability or the industry generally. Technological developments may reduce the attractiveness of our products or make obsolete. If we fail to adapt successfully to technological advances or fail to obtain access to new technologies, we could lose customers and be limited in our ability to attract new customers and/or sell new services to our existing customers.

 

Integration of technologies, products or acquisitions ultimately may not provide the benefits originally anticipated by management and may distract the attention of our personnel from the operation of our business.

 

We strive continuously to improve the functionality of our products and services. As part of our business strategy, we may make investments in other companies, products, or technologies. We may not be able to find suitable acquisition candidates and we may not be able to complete acquisitions on favorable terms, if at all. If we do complete acquisitions, we may not ultimately strengthen our competitive position or achieve our goals, and any acquisitions we complete could be viewed negatively by users or investors. Acquisitions may disrupt our ongoing operations, divert management from their primary responsibilities, subject us to additional liabilities, increase our expenses, and adversely impact our business, financial condition, operating results, and cash flows. We may not successfully evaluate or utilize the acquired technology and accurately forecast the financial impact of an acquisition transaction. We may have to pay cash, incur debt, or issue equity securities to pay for any such acquisition, each of which could affect our financial condition or the value of our capital stock and could result in dilution to our stockholders. If we incur debt in connection with such acquisition, it could result in increased fixed obligations and could also subject us to covenants or other restrictions that would impede our ability to manage our operations. Acquisitions of businesses or technologies also involve operational risks. We may not be successful in integrating the acquired business or assets into our own. There may be difficulty in integrating technologies, in migrating customer bases and in integrating the products and distribution channels gained through acquisitions with our own. Successful integration of operations and technologies requires the dedication of management and other personnel, which may distract their attention from the day-to-day business, the development or acquisition of new technologies or products, and the pursuit of other business acquisition opportunities.

 

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The market for quantified-self wellness devices is still in the relatively early stages of growth and if it does not continue to grow, grows more slowly than we expect, or fails to grow as large as we expect, our business and operating results could be harmed.

 

The market for quantified-self wellness devices is relatively new and unproven, and it is uncertain whether these wearable wellness devices will sustain high levels of demand and wide market acceptance. Our success will depend to a substantial extent on the willingness of people to widely adopt these products and services. In part, adoption of our products and services will depend on the increasing prevalence of wearable wellness devices as well as new entrants to the quantified-self wellness device market to raise the profile of both the market as a whole and our own platform. Also, some individuals may be reluctant or unwilling to use these wellness devices because they have concerns regarding the risks associated with data privacy and security. If the wider public does not perceive the benefits of our connected health and fitness devices or chooses not to adopt them as a result of concerns regarding privacy or data security or for other reasons, then the market for these products and services may not further develop, it may develop more slowly than we expect, or it may not achieve the growth potential we expect it to, any of which would adversely affect our operating results. The development and growth of the market for health and fitness devices may also prove to be a short-term trend.

 

Our operating results could be materially harmed if we are unable to accurately forecast consumer demand for our products and services.

 

To ensure adequate product supply, we must accurately forecast demand for our products and services with the functionality that is demanded by consumers. Our ability to accurately forecast demand for our products and services could be affected by many factors, including an increase or decrease in customer demand for our products and services or for products and services of our competitors, product and service introductions by competitors, unanticipated changes in general market conditions, and the weakening of economic conditions or consumer confidence in future economic conditions. In the event that we were to experience rapid growth in demand for our quantified-self wellness devices, and particularly in connection with new product introductions, we could face challenges in delivering adequate and timely supplies of our products to satisfy the levels of customer demand. This could cause a shortage of products available for sale, which could negatively affect our revenue and operating results and impair the strength of our brand.

 

The failure to effectively manage the introduction of new or enhanced products may adversely affect our operating results.

 

We must successfully manage introductions of new or enhanced products. Introductions of new or enhanced products could adversely impact the sales of our existing products to consumers. For instance, consumers often purchase less of our existing products in advance of new product launches. Moreover, consumers may decide to purchase new or enhanced products instead of existing products. This could lead to excess inventory and discounting of our existing products. Accordingly, if we fail to effectively manage introductions of new or enhanced products, our operating results would be harmed.

 

Our products may not be accepted in the market or the market may not grow sufficiently to grow revenues.

 

Our products may not be widely accepted by the market. Customers may determine that our Helo devices are not comfortable, weigh too much or the size and format of the display is inappropriate.

 

Other factors that may affect market acceptance of our products and services include the reliability of these devices; our ability to implement upgrades and other changes without disrupting our service; the level of customization we offer; and the price, performance and availability of competing products and services. The market for these devices and services may not develop further, or may develop more slowly than we expect, either of which would negatively affect our ability to grow revenues, achieve profitability and generate positive cash flow.

 

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Our current and future products and services may experience quality problems from time to time that can result in adverse publicity, product recalls, litigation, regulatory proceedings, and warranty claims resulting in significant direct or indirect costs, decreased revenue and operating margin, and harm to our brand.

 

We sell complex products that could contain design and manufacturing defects in their materials, hardware, and firmware. These defects could include defective materials or components, or “bugs” that can unexpectedly interfere with the products’ intended operations. Although we extensively test new and enhanced products and services before their release, there can be no assurance we will be able to detect, prevent, or fix all defects.

 

Design defects may cause delays in product introductions and damage customer satisfaction and our reputation. Other potential problems within or outside of our control may arise from design defects or the use or misuse of our products, and may result in financial or other damages to our customers, for which we may be held responsible. Although our distributor may have license agreements with its customers that contain provisions designed to limit our exposure to potential claims and liabilities arising from customer problems, these provisions may not effectively protect us against such claims in all cases and in all jurisdictions. Our insurance coverage is not sufficient to protect against all possible product liability for defects. Failure to detect, prevent, or fix defects could also result in a variety of additional consequences including, a greater number of returns of products than expected, regulatory proceedings, product recalls, and litigation, which could have a material adverse effect on our business, operating results and financial condition

 

We have limited control over our contract manufacturer, and sole distributor, which subjects us to significant risks, including the potential inability to obtain or produce quality products on a timely basis or in sufficient quantity.

 

We have limited control over our contract manufacturers, and sole distributor, including aspects of their specific manufacturing processes and their other practices, which subjects us to significant risks, including the following:

 

  · inability to satisfy demand for our products;

 

  · reduced control over delivery timing and product reliability;

 

  · reduced ability to oversee the manufacturing process and components used in our products;

 

  · reduced ability to monitor compliance with our product manufacturing specifications;

 

  · reduced ability to develop comprehensive manufacturing specifications that take into account materials shortages, materials substitutions, and variance in the manufacturing capabilities of our third-party contract manufacturer;

 

  · price increases;

 

  · the failure of our contract manufacturer, or our sole distributor to perform its obligations to us for technical, market, or other reasons;

 

  · difficulties in establishing additional contract manufacturing relationships if we experience difficulties with our existing contract manufacturer;

 

  · shortages of materials or components;

 

  · potential misappropriation of our intellectual property;

 

  · exposure to natural catastrophes, political unrest, terrorism, labor disputes, and economic instability resulting in the disruption of trade from China where our products are manufactured;

 

  · changes in local economic conditions in countries where our suppliers, contract manufacturer, or logistics providers are located; and

 

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  · the imposition of new laws and regulations, including those relating to labor conditions, quality and safety standards, imports, duties, taxes, and other charges on imports, as well as trade restrictions and restrictions on currency exchange or the transfer of funds.

 

If there are defects in the manufacture of our products by our contract manufacturer, we may face negative publicity, government investigations, and litigation and we may not be fully compensated by our contract manufacturer for any financial or other liability that we suffer as a result.

 

Our success depends on our ability to maintain our brand. If events occur that damage our brand, our business and financial results may be harmed.

 

Our success depends on our ability to maintain the value of the “Helo” brand. The “Helo” name is integral to our business as well as to the implementation of our strategies for expanding our business. Maintaining, promoting, and positioning our brand will depend largely on the success of our marketing and merchandising efforts, our ability to provide consistent, high quality products and services, and our ability to successfully secure, maintain, and defend our rights to use the “Helo” mark and other trademarks important to our brand. Our brand could be harmed if we fail to achieve these objectives or if our public image or brand were to be tarnished by negative publicity. In addition, we believe that any occurrence of counterfeiting, imitation, or confusion with our brand could adversely affect our reputation, place negative pricing pressure on our products, reduce sales of our products, and impair the value of our brand. If we fail to successfully maintain, promote, and position our brand and protect our reputation or if we incur significant expenses in this effort, our business, financial condition and operating results may be adversely affected.

 

We may be unable to promote and maintain our brands.

 

We believe that establishing and maintaining the brand identities of our products is a critical aspect of attracting and expanding a large customer base. Promotion and enhancement of our brands will depend largely on our success in continuing to provide high quality products. If our customers and end users do not perceive our products to be of high quality, or if we introduce new products or enter into new business ventures that are not favorably received by our customers and end users, we will risk diluting our brand identities and decreasing their attractiveness to existing and potential customers.

 

Moreover, in order to attract and retain customers and to promote and maintain our brand equity in response to competitive pressures, we may have to increase substantially our financial commitment to creating and maintaining a distinct brand loyalty among our customers. If we incur significant expenses in an attempt to promote and maintain our brands, our business, results of operations and financial condition could be adversely affected.

 

We expect that new products and/or brands we develop will expose us to risks that may be difficult to identify until such products and/or brands are commercially available.

 

We are currently developing, and in the future will continue to develop, new products and brands, the risks of which will be difficult to ascertain until these products and/or brands are commercially available. Any negative events or results that may arise as we develop new products or brands may adversely affect our business, financial condition and results of operations.

 

An economic downturn or economic uncertainty may adversely affect consumer discretionary spending and demand for our products and services.

 

Our products and services are considered discretionary items for consumers. Factors affecting the level of consumer spending for such discretionary items include general economic conditions, and other factors, such as consumer confidence in future economic conditions, fears of recession, the availability and cost of consumer credit, levels of unemployment, and tax rates. As global economic conditions continue to be volatile or economic uncertainty remains, trends in consumer discretionary spending also remain unpredictable and subject to reductions. Unfavorable economic conditions may lead consumers to delay or reduce purchases of our products and services and consumer demand for our products and services may not grow as we expect. Our sensitivity to economic cycles and any related fluctuation in consumer demand for our products and services may have an adverse effect on our operating results and financial condition.

 

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We may not be able to effectively manage our growth that could negatively impact our brand and financial performance.

 

Because we have only a limited operating history, it is difficult to evaluate our current business and future prospects, including our ability to plan for and model future growth. If our operations grow at a rapid pace, we may experience difficulties in obtaining components for our products in quantities sufficient to meet market demand, as well as delays in production and shipments, as our products are subject to risks associated with third-party sourcing and manufacturing. We could also be required to continue to expand and upgrade our distribution functions and product development, to upgrade our management information systems and other processes and technology, and to obtain more space for a potentially expanded workforce. If we are unable to adapt to meet these and other evolving challenges, and if the current and future members of our management team do not effectively scale with our growth, we may experience erosion to our brand and the quality of our products and services may suffer.

 

In addition, our limited operating experience, combined with the rapidly evolving nature of the market in which we sell our products and services, substantial uncertainty concerning how these markets may develop, and other economic factors beyond our control, reduces our ability to accurately forecast quarterly or annual revenue. As such, any predictions about our future revenue and expenses may not be as accurate as they would be if we had a longer operating history or operated in a more developed and predictable market. Failure to manage our future growth effectively could have an adverse effect on our business, which, in turn, could have an adverse impact on our operating results and financial condition.

 

Cybersecurity risks could adversely affect our business, disrupt our operations, subject us to fines, lawsuits and loss of customers.

 

We rely on our electronic information systems and the Internet to perform the routine transactions to run our business. As part of our business, we capture the biometric data and geo-locations of end users of our products. We rely on third party vendors to maintain the security of this data. The data collection and storage aspect of our business is subject to threats to network and data security, which are increasingly diverse and sophisticated. Despite our efforts and processes to protect unauthorized access to this information and to prevent breaches, our devices, as well as our servers, computer systems, and those of third parties that we use in our operations are vulnerable to cybersecurity risks, including cyber attacks such as viruses and worms, phishing attacks, denial-of-service attacks, physical or electronic break-ins, employee theft or misuse, and similar disruptions from unauthorized tampering with our servers and computer systems or those of third parties that we use in our operations, which could lead to interruptions, delays, loss of critical data, and loss of consumer confidence. In addition, we may be the target of email scams that attempt to acquire sensitive information or company assets. Despite our efforts to create security barriers to such threats, we may not be able to entirely mitigate these risks. Any cyber attack that attempts to obtain our data and assets, disrupt our service, or otherwise access our systems, or those of third parties we use, if successful, could adversely affect our business, operating results, and financial condition, be expensive to remedy, and damage our reputation.  If our security systems are penetrated and confidential and or proprietary information is taken, we could be subject to fines, lawsuits and loss of customers.

 

Any material disruption of our information technology systems or those of third-party partners could materially damage user and business partner relationships, and subject us to significant reputational, financial, legal, and operational consequences.

 

We depend on our information technology systems, as well as those of third parties, to develop new products and services, operate our website, host and manage our services, store data, process transactions, respond to user inquiries, and manage inventory and our supply chain. Any material disruption or slowdown of our systems or those of third parties whom we depend upon, including a disruption or slowdown caused by our failure to successfully manage significant increases in user volume or successfully upgrade our or their systems, system failures, or other causes, could cause outages or delays in our services, which could harm our brand and adversely affect our operating results. In addition, such disruption could cause information, including data related to orders, to be lost or delayed which could—especially if the disruption or slowdown occurred during the holiday season—result in delays in the delivery of products to stores and users or lost sales, which could reduce demand for our merchandise, harm our brand and reputation, and cause our revenue to decline. If changes in technology cause our information systems, or those of third parties whom we depend upon, to become obsolete, or if our or their information systems are inadequate to handle our growth, we could lose users and our business and operating results could be adversely affected.

 

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We depend on a third-party data center service provider. Any disruption in the operation of the data center facilities or failure to renew these services could adversely affect our business.

 

Our services are hosted using data centers operated by a third party. We control neither the operation of the data centers nor our third-party data center service provider. We have entered into an agreement for the lease of our data centers with a third-party data center service provider. The third-party data center service provider may have no obligation to renew its agreement with us on commercially reasonable terms, or at all. If we are unable to renew this agreement or enter into a comparable agreement on commercially reasonable terms, we may be required to transfer our servers or data to new data center facilities or engage new service providers, and we may incur significant costs and a possible interruption in our platform in connection with doing so.

 

Our agreement with this service provider was effective as of February 1, 2018 and is on a month-to-month term. The agreement may be terminated by us prior to the expiration of any applicable term without further notice and without liability if the service provider fails in a material way to provide the service in accordance with the terms of the agreement and does not cure the failure within 10 days of our written notice. The agreement may be terminated by the service provider prior to the expiration of the applicable term without further notice and without liability upon the occurrence of various payment defaults or other material violations of the agreement, subject to applicable cure periods as stated in the agreement. In addition, either party may terminate the agreement effective upon delivery of written notice to the other party upon the insolvency, bankruptcy, failure to comply with any applicable laws in connection with its activities under the agreement.

 

Problems with our third-party data center service provider, the telecommunications network providers with whom they contract, or with the systems by which telecommunications providers allocate capacity among their users could adversely affect the experience of our users. Our third-party data center service provider could decide to close its facilities or cease providing us services without adequate notice. In addition, any financial difficulties, such as bankruptcy, faced by our third-party data center service provider or parties they contract with may have negative effects on our business, the nature and extent of which are difficult to predict. Additionally, any failure of our data centers to meet our needs for capacity could have an adverse effect on our business. Any changes in third-party service levels at our data centers or any errors, defects, disruptions, or other performance problems with our platform could harm our brand and may damage the data of our users.

 

Risks Related to Manufacturing in China

 

Changes in China’s economic, political and social conditions could have an indirect material adverse effect on our business, financial condition and results of operations.

 

We rely on a third party manufacturer in China. Accordingly, our business, financial condition, results of operations and prospects are significantly dependent on the economic, political and social conditions in China. The Chinese economy differs from the economies of developed countries in many respects, including the degree of government involvement, level of development, growth rate, control over foreign exchange, access to financing and allocation of resources. While China’s economy has experienced significant growth over the past 30 years, the growth has been uneven across different regions and periods and among various economic sectors in China. We cannot assure you that the ongoing evolution of economic, political and social conditions in China would not lead to events which may materially reduce our sales and profitability. Moreover, sustained economic growth in China over the past few years has resulted in a general increase in labor costs, and the inflationary environment that has led to employee discontent, which could result in materially higher compensation costs being paid to employees. In recent years, certain regions of China have been experiencing a labor shortage as migrant workers and middle level management seek better wages and working conditions elsewhere. This trend of labor shortages is expected to continue and will likely result in increasing wages as companies seek to keep their existing work forces. In addition, substantial competition in China for qualified and capable personnel may make it difficult for our sole third party manufacturer to recruit and retain qualified employees at its facilities. No assurance can be given that our sole third party manufacturer will not experience labor disturbances related to working conditions, wages or other reasons. Any labor shortages, strikes and other disturbances for the third party manufacturer may adversely affect our sale and future operating results and result in negative publicity and reputational harm Any interruption in our sole third party manufacturer’s ability to manufacture or transport our products could result in lost sales, limited sales growth and damage to our reputation in the market, all of which would adversely affect our business, financial condition and results of operations.  

 

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A disruption at the facilities of our sole manufacturer in China could materially adversely affect our business, financial condition and results of operations.

 

Our third party sole manufacturer is located in Shenzhen, China. The operation of its facilities involves many risks and uncertainties, including potential equipment failures, natural disasters, industrial accidents, power outages, interruptions and limitations in telecommunication services, product or material transportation delays or disruption and other business interruptions, any of which, were they to materialize, would adversely affect our business, financial condition and results of operations.

 

Risks Related to Our Intellectual Property

 

Our failure or inability to protect our intellectual property rights, or claims by others that we are infringing upon or unlawfully using their intellectual property could diminish the value of our brand and weaken our competitive position, and adversely affect our business, financial condition, operating results, and prospects.

 

We currently rely on a combination of trademark, trade secret, and confidentiality agreements and procedures and licensing arrangements, to establish and protect our intellectual property rights. We have devoted substantial resources to the development of our proprietary technologies and related processes. In order to protect our proprietary technologies and processes, we rely in part on trade secret laws and confidentiality agreements, non-compete, non-disclosure and assignment of inventions agreements and provisions, as appropriate, with our employees, licensees, consultants, independent contractors, commercial partners, and other advisors. These agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure or use of confidential information. We cannot be certain that the steps taken by us to protect our intellectual property rights will be adequate to prevent infringement of such rights by others, including imitation of our products and misappropriation of our brand. Additionally, the process of obtaining patent, copyright or trademark protection is expensive and time-consuming, and we may not be able to prosecute all necessary or desirable patent applications or apply for all necessary or desirable trademark applications at a reasonable cost or in a timely manner. We have applied for U.S. and foreign trademark registrations for the “Helo” brand and a variety of our product names, and will continue to evaluate the registration of additional trademarks as appropriate. However, we cannot guarantee that any of our pending trademark or patent applications will be approved by the applicable governmental authorities. Moreover, intellectual property protection may be unavailable or limited in some foreign countries where laws or law enforcement practices may not protect our intellectual property rights as fully as in the United States, and it may be more difficult for us to successfully challenge the use of our intellectual property rights by other parties in these countries. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and our failure or inability to obtain or maintain trade secret protection or otherwise protect our proprietary rights could adversely affect our business. If, for any reason, our intellectual property is disclosed or misappropriated, it could harm our ability to protect our rights and could have a material adverse effect on our business, financial condition and results of operations.

 

We may in the future be subject to patent infringement and trademark claims and lawsuits in various jurisdictions, and we cannot be certain that our products or activities do not violate the patents, trademarks, or other intellectual property rights of third-party claimants. Companies in the technology industry and other patent, copyright, and trademark holders seeking to profit from royalties in connection with grants of licenses own large numbers of patents, copyrights, trademarks, domain names, and trade secrets and frequently commence litigation based on allegations of infringement, misappropriation, or other violations of intellectual property or other rights. As we face increasing competition and gain an increasingly high profile, the intellectual property rights claims against us and asserted by us will likely grow.

 

Further, from time to time, we may receive letters from third parties alleging that we are infringing upon their intellectual property rights. Our technologies and other intellectual property may not be able to withstand such third-party claims, and successful infringement claims against us could result in significant monetary liability, prevent us from selling some of our products and services, or require us to change our branding. In addition, resolution of claims may require us to redesign our products, license rights from third parties at a significant expense, or cease using those rights altogether. We may in the future bring claims against third parties for infringing our intellectual property rights. Costs of supporting such litigation and disputes may be considerable, and there can be no assurances that a favorable outcome will be obtained. Patent infringement, trademark infringement, trade secret misappropriation, and other intellectual property claims and proceedings brought against us or brought by us, whether successful or not, could require significant attention of our management and resources and have in the past and could further result in substantial costs, harm to our brand, and have an adverse effect on our business.

 

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Risks Related to Regulations

 

We collect, store, process and use personal information and other customer data, which subjects us to governmental regulation and other legal obligations related to privacy, information security, and data protection, and any security breaches or our actual or perceived failure to comply with such legal obligations could harm our business.

 

We collect, store, process, and use personal information and other user data, and we rely on third parties that are not directly under our control to do so as well. Our users’ health and fitness-related data and other highly personal information may include, among other information, names, addresses, phone numbers, email addresses, payment account information, height, weight, and biometric information such as heart rates, sleeping patterns, GPS-based location, and activity patterns. Due to the volume and sensitivity of the personal information and data we manage and the nature of our products, the security features of our platform and information systems are critical. If our security measures, some of which are managed by third parties, are breached or fail, unauthorized persons may be able to obtain access to or acquire sensitive user data. If we or our third-party service providers, business partners, or third-party apps with which our users choose to share their data were to experience a breach of systems compromising our users’ sensitive data, our brand and reputation could be adversely affected, use of our products and services could decrease, and we could be exposed to a risk of loss, litigation, and regulatory proceedings. Depending on the nature of the information compromised, in the event of a data breach or other unauthorized access to or acquisition of our user data, we may also have obligations to notify users about the incident and we may need to provide some form of remedy, such as a subscription to a credit monitoring service, for the individuals affected by the incident. A growing number of legislative and regulatory bodies have adopted consumer notification requirements in the event of unauthorized access to or acquisition of certain types of personal data. Such breach notification laws continue to evolve and may be inconsistent from one jurisdiction to another. Complying with these obligations could cause us to incur substantial costs and could increase negative publicity surrounding any incident that compromises user data. Our users may also accidentally disclose or lose control of their passwords, creating the perception that our systems are not secure against third-party access. Additionally, if third-party service providers that host user data on our behalf experience security breaches or violate applicable laws, agreements, or our policies, such events may also put our users’ information at risk and could in turn have an adverse effect on our business. While we maintain insurance coverage that, subject to policy terms and conditions and a significant self-insured retention, is designed to address certain aspects of cyber risks, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise in the event we experience a security breach.

 

Our business is subject to a variety of U.S. and foreign laws and regulations that are continuously evolving, including those related to privacy, data security, and data protection due to our collection, processing, and use of personal information and other user data, such as the E.U. Data Protection Directive which covers the transfer of personal data from the European Union to the United States.

 

We are or may become subject to a variety of laws and regulations in the United States and abroad that involve matters central to our business, including laws and regulations regarding privacy, data protection, data security, data retention, consumer protection, advertising, electronic commerce, intellectual property, manufacturing, anti-bribery and anti-corruption, and economic or other trade prohibitions or sanctions. These laws and regulations are continuously evolving and developing. The scope and interpretation of the laws that are or may be applicable to us are often uncertain and may be conflicting, particularly with respect to foreign laws.

 

In particular, there are numerous U.S. federal, state, and local laws and regulations and foreign laws and regulations regarding privacy and the collection, sharing, use, processing, disclosure, and protection of personal information and other user data, the scope of which is changing, subject to differing interpretations, and may be inconsistent among different jurisdictions. We strive to comply with all applicable laws, policies, legal obligations, and industry codes of conduct relating to privacy, data security, and data protection. However, given that the scope, interpretation, and application of these laws and regulations are often uncertain and may be conflicting, it is possible that these obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices. Any failure or perceived failure to comply with our privacy or security policies or privacy-related legal obligations by us or third-party service-providers or the failure or perceived failure by third-party apps, with which our users choose to share their Helo data, to comply with their privacy policies or privacy-related legal obligations as they relate to the Helo data shared with them, or any compromise of security that results in the unauthorized release or transfer of personally identifiable information or other user data, may result in governmental enforcement actions, litigation, or negative publicity, and could have an adverse effect on our brand and operating results.

 

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We are in the process of developing solutions to ensure that data transfers from the E.U. to the United States provide adequate protections to comply with the E.U. Data Protection Directive. If we fail to develop such data transfer solutions, one or more national data protection authorities in the European Union could bring enforcement actions seeking to prohibit or suspend our data transfers to the United States and we could also face additional legal liability, fines, negative publicity, and resulting loss of business.

 

Certain health-related laws and regulations such as the Health Insurance Portability and Accountability Act of 1996, or HIPAA, and the Health Information Technology for Economic and Clinical Health Act, or HITECH, may have an impact on our business. In addition, changes in applicable laws and regulations may result in the user data we collect being deemed protected health information, or PHI, under HIPAA and HITECH. If we are unable to comply with the applicable privacy and security requirements under HIPAA and HITECH, we could be subject to claims, legal liabilities, penalties, fines, and negative publicity, which could harm our operating results.

 

Governments are continuing to focus on privacy and data security and it is possible that new privacy or data security laws will be passed or existing laws will be amended in a way that is material to our business. Any significant change to applicable laws, regulations, or industry practices regarding our users’ data could require us to modify our services and features, possibly in a material manner, and may limit our ability to develop new products, services, and features. Although we have made efforts to design our policies, procedures, and systems to comply with the current requirements of applicable state, federal, and foreign laws, changes to applicable laws and regulations in this area could subject us to additional regulation and oversight, any of which could significantly increase our operating costs.

 

The labeling, distribution, importation, marketing, and sale of our products are subject to extensive regulation by various U.S. state and federal and foreign agencies, including the CPSC, Federal Trade Commission, Food and Drug Administration, or FDA, Federal Communications Commission, and state attorneys general, as well as by various other federal, state, provincial, local, and international regulatory authorities in the countries in which our products and services are distributed or sold. If we fail to comply with any of these regulations, we could become subject to enforcement actions or the imposition of significant monetary fines, other penalties, or claims, which could harm our operating results or our ability to conduct our business.

 

The global nature of our business operations also create various domestic and foreign regulatory challenges and subject us to laws and regulations such as the U.S. Foreign Corrupt Practices Act, or FCPA, the U.K. Bribery Act, and similar anti-bribery and anti-corruption laws in other jurisdictions, and our products are also subject to U.S. export controls, including the U.S. Department of Commerce’s Export Administration Regulations and various economic and trade sanctions regulations established by the Treasury Department’s Office of Foreign Assets Controls. If we become liable under these laws or regulations, we may be forced to implement new measures to reduce our exposure to this liability. This may require us to expend substantial resources or to discontinue certain products or services, which would negatively affect our business, financial condition, and operating results. In addition, the increased attention focused upon liability issues as a result of lawsuits, regulatory proceedings, and legislative proposals could harm our brand or otherwise impact the growth of our business. Any costs incurred as a result of compliance or other liabilities under these laws or regulations could harm our business and operating results.

 

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Sales of future products that may be regulated by the FDA could be adversely affected if we fail to comply with the applicable requirements.

 

We may have future products that are regulated as medical devices. The medical device industry in the United States is regulated by governmental authorities, principally the FDA and corresponding state regulatory agencies. Before we can market or sell a new regulated product or make a significant modification to an existing medical device in the United States, we must obtain regulatory clearance or approval from the FDA, unless an exemption from pre-market review applies. The process of obtaining regulatory clearances or approvals to market a medical device can be costly and time consuming, and we may not be able to obtain these clearances or approvals on a timely basis, or at all, for future products. Any delay in, or failure to receive or maintain, clearance or approval for any medical device products under development could prevent us from generating revenue from these products. Medical devices, are also subject to numerous ongoing compliance requirements under the regulations of the FDA and corresponding state regulatory agencies, which can be costly and time consuming. For example, under FDA regulations medical device manufacturers are required to, among other things, (i) establish a quality system to help ensure that their products consistently meet applicable requirements and specifications, (ii) establish and maintain procedures for receiving, reviewing, and evaluating complaints, (iii) establish and maintain a corrective and preventive action procedure, (iv) report certain device-related adverse events and product problems to the FDA, and (v) report to the FDA the removal or correction of a distributed product. If we experience any product problems requiring reporting to the FDA or if we otherwise fail to comply with applicable FDA regulations or the regulations of corresponding state regulatory agencies, with respect to any future regulated products, we could jeopardize our ability to sell these products and could be subject to enforcement actions such as fines, civil penalties, injunctions, recalls of products, delays in the introduction of products into the market, and refusal of the FDA or other regulators to grant future clearances or approvals, which could harm our reputation, business, operating results, and financial condition.

 

Regulations related to conflict minerals may cause us to incur additional expenses and could limit the supply and increase the costs of certain metals used in the manufacturing of our products.

 

We are subject to requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which will require us to conduct due diligence on and disclose whether or not our products contain conflict minerals. The implementation of these requirements could adversely affect the sourcing, availability, and pricing of the materials used in the manufacture of components used in our products. In addition, we will incur additional costs to comply with the disclosure requirements, including costs related to conducting diligence procedures to determine the sources of minerals that may be used or necessary to the production of our products and, if applicable, potential changes to products, processes, or sources of supply as a consequence of such due diligence activities. It is also possible that we may face reputational harm if we determine that certain of our products contain minerals not determined to be conflict free or if we are unable to alter our products, processes, or sources of supply to avoid such materials.

 

Risks Related to the Ownership of Our Securities

 

We do not currently have an active public market for our securities. An active trading market may not develop for our securities, and you may not be able to sell your common stock at or above the offering price per share.

 

While our common stock is currently quoted on the OTC Pink Market, only a limited number of shares of common stock have traded to date and there is currently no active public market for our common stock.

 

We have applied to list our common stock on the NASDAQ Capital Market. However, we cannot predict the extent to which investor interest in our company will lead to the development of an active trading market in our common stock or how liquid that market might become. If such a market does not develop or is not sustained, it may be difficult for you to sell your shares of common stock at the time you wish to sell them, at a price that is attractive to you, or at all.

 

The trading market for our common stock in the future could be subject to wide fluctuations in response to several factors, including, but not limited to:

 

  · actual or anticipated variations in our results of operations;

 

  · our ability or inability to generate revenues or profit;

 

  · the number of shares in our public float; and

 

  · increased competition;

 

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Furthermore, our stock price may be impacted by factors that are unrelated or disproportionate to our operating performance. These market fluctuations, as well as general economic, political and market conditions, such as recessions, interest rates or international currency fluctuations may adversely affect the market price of our common stock.  Additionally, moving forward we anticipate having a limited number of shares in our public float, and as a result, there could be extreme fluctuations in the price of our common stock. The offering price per share has been determined through negotiation between us and representatives of the underwriter, and may not be indicative of the market prices that prevail after this offering. You may not be able to sell your common stock at or above the offering price per share

  

There is no public market for the Warrants to purchase common stock being offered by us in this offering.

 

There is no established public trading market for the Warrants being offered in this offering. The Warrants will not be listed for trading and no market for the Warrants is expected to develop. Without an active trading market, the liquidity of the Warrants will be limited.

 

The market price of our common stock has been and will likely continue to be volatile, and you could lose all or part of your investment.

 

The market price of our common stock may continue to fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

 

  · overall performance of the equity markets;

 

  · actual or anticipated fluctuations in our revenue and other operating results;

 

  · failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;

 

  · the departure of key personnel;

 

  · the economy as a whole and market conditions in our industry;

 

  · negative publicity related to problems in the manufacturing or distribution of our products or the real or perceived quality of our products, as well as the failure to timely launch new products that gain market acceptance;

 

  · rumors and market speculation involving us or other companies in our industry;

 

  · announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments;

 

  · new laws or regulations or new interpretations of existing laws or regulations applicable to our business;

 

  · lawsuits threatened or filed against us;

 

  · other events or factors, including those resulting from war, incidents of terrorism, or responses to these events; and

 

  · additional sales or issuance of shares of our common stock by us or our stockholders.

 

In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, stockholders have instituted securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business.

 

Future sales of our common stock, or the perception that future sales may occur, may cause the market price of our common stock to decline, even if our business is doing well.

 

Sales of substantial amounts of our common stock in the public market after this offering, or the perception that these sales may occur, could materially and adversely affect the price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. The shares of common stock sold in this offering will be freely tradable, without restriction, in the public market, except for any shares sold to our affiliates.

 

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In connection with this offering, we, our officers and directors and the holders of 5% or more of our currently outstanding shares of common stock have agreed, subject to certain exceptions, not to sell or transfer any shares of common stock for 180 days after the date of this prospectus without the consent of Dawson James Securities. However, Dawson James Securities may release these shares from any restrictions at any time. We cannot predict what effect, if any, market sales of shares held by any stockholder or the availability of shares for future sale will have on the market price of our common stock.

 

Approximately 2,236,631 shares of common stock may be sold in the public market by existing stockholders after the date of this prospectus and an additional 4,294,446 shares of common stock may be sold in the public market by existing stockholders on or about 181 days after the date of this prospectus, subject to volume and other limitations imposed under the federal securities laws. Sales of substantial amounts of our common stock in the public market after the completion of this offering, or the perception that such sales could occur, could adversely affect the market price of our common stock and could materially impair our ability to raise capital through offerings of our common stock. See the section entitled “Shares Eligible for Future Trading” for a more detailed description of the restrictions on selling shares of our common stock after this offering.

 

If you purchase our securities in this offering, you will incur immediate and substantial dilution in the book value of your investment.

 

The initial public offering price is substantially higher than the net tangible book value per share of our securities. Investors purchasing shares of common stock and Warrants in this offering will pay a price per share that substantially exceeds the book value of our tangible assets after subtracting our liabilities. As a result, investors purchasing shares and Warrants in this offering will incur immediate dilution of $                 per share, based on the initial public offering price of $           per share.

 

We may issue more shares in the future, which could result in additional dilution to existing stockholders.

 

Our Articles of Incorporation authorizes the issuance of up to a total of 75,000,000 shares of common stock and up to a total of 10,000 shares of preferred stock. Because we may need to raise additional capital, we may in the future sell substantial amounts of common stock or securities convertible into or exchangeable for common stock. These future issuances of equity or equity-linked securities, and any additional shares issued in connection with acquisitions, if any, may result in further dilution to investors. Such issuances may not require the approval of our stockholders unless required pursuant to the rules of the NASDAQ Capital Market.

 

We might not be able to maintain the listing of our common stock on the NASDAQ Capital Market.

 

We have applied to list our common stock on the NASDAQ Capital Market in connection with this offering. We will not consummate this offering if our application is not approved. However, there can be no assurance that we will be able to maintain the listing standards of that exchange, which includes requirements that we maintain our stockholders’ equity, total value of shares held by unaffiliated stockholders, and market capitalization above certain specified levels. If we fail to conform to the NASDAQ listing requirements on an ongoing basis, our common stock might cease to trade on the NASDAQ Capital Market exchange, and may move to the OTCQB or OTC Pink Markets operated by OTC Markets Group, Inc. These quotation services are generally considered to be markets that are less efficient, and to provide less liquidity in the shares, than the NASDAQ Capital Market.

 

Our directors, officers and principal stockholders collectively control a significant amount of our shares, and their interests may not align with the interests of our other stockholders.

 

Currently, our officers, directors and principal stockholders (which include Mr. Gabriele Galdi and WGH) collectively hold approximately 89% of total voting power in our company. They will continue to have a substantial control of us and we expect that they will collectively hold approximately            % of total voting power immediately after this offering. This significant concentration of share ownership and voting power may adversely affect or reduce the trading price of our common stock because investors often perceive a disadvantage in owning shares in a company with one or several controlling stockholders. Furthermore, our directors and officers, as a group, have the ability to significantly influence or control the outcome of all matters requiring stockholders’ approvals, including electing and removing directors and management and approving mergers or other business combination transactions.  These stockholders also have the ability to significantly influence or control over the approval of significant corporate transactions, including the terms of and matters relating to our Strategic Partner Master Sales and Worldwide Distribution Agreement with WGN.  These actions may be taken even if they are opposed by our other stockholders. This concentration of share ownership and voting power may also discourage, delay or prevent a change in control of our company, which could deprive our stockholders of an opportunity to receive a premium for their shares as part of a possible sale of our company.   In addition,  at the present time,  two of our three directors are also officers, executives or directors of WGH and/or WGN.  These individuals have fiduciary duties to both us and WGN and/or WGH and may become subject to conflicts of interest on certain matters where WGN and/or WGH’s interests may not be aligned with the interests of our minority stockholders.  For more information regarding our principal stockholders, see “Security Ownership of Certain Beneficial Owners and Management.”

 

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Although we do not intend to take advantage of the “controlled company” exemption to the corporate governance rules for NASDAQ-listed companies, for which we may be eligible upon the closing of this offering, we may in the future avail ourselves of this exemption, which could make our common stock less attractive to some investors or otherwise harm our stock price.

 

Upon the completion of this public offering, WGH and its affiliates (which include Mr. Gabriele Galdi and WGN) will hold more than 50% of our outstanding common stock. Because they will control a majority of our outstanding voting power, we will meet the definition of  a “controlled company” under the corporate governance rules for NASDAQ-listed companies.  Controlled companies are not required to have a majority of independent directors, nor are they required to have a compensation committee or an independent nominating function. Although our current intention is to not avail ourselves of the controlled company exemption, we are eligible to do so because we have a stockholder who, together with its affiliates will have control over a majority of our outstanding common stock. If in the future we determine to avail ourselves of these corporate governance exemptions, under circumstances where the interests of our controlling stockholder and its affiliates may differ from those of other stockholders, the other stockholders may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance rules for NASDAQ-listed companies, and our status as a controlled company could make our common stock less attractive to some investors or otherwise harm our stock price.

 

We do not intend to pay dividends in the foreseeable future. Any return on investment may be limited to the value of our common stock.

 

We have never paid any cash dividends and currently do not intend to pay any dividends for the foreseeable future. To the extent that we require additional funding currently not provided for in our financing plan, our funding sources may likely prohibit the payment of a dividend. Because we do not intend to declare dividends until we are profitable and cash flow positive from an operations perspective, any gain on an investment in our common stock will need to come through appreciation of the stock’s price.

 

We are an “emerging growth company” under the Jumpstart Our Business Startups Act. We are also a “smaller reporting company”. We cannot be certain if the reduced reporting requirements applicable to emerging growth companies and smaller reporting companies will make our shares of common stock less attractive to investors.

 

We are and will remain an “emerging growth company” until the earliest to occur of (a) the last day of the fiscal year during which its total annual revenues equal or exceed $1.07 billion (subject to adjustment for inflation), (b) the last day of the fiscal year following the fifth anniversary of its initial public offering, (c) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities, or (d) the date on which we are deemed a “large accelerated filer” (with at least $700 million in non-affiliated public float) under the Securities and Exchange Act of 1934 (or the Exchange Act).

 

For so long as we remain an “emerging growth company” as defined in the JOBS Act, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” as described in further detail in the risk factors below. We cannot predict if investors will find our shares of common stock less attractive because we will rely on some or all of these exemptions. If some investors find our shares of common stock less attractive as a result, there may be a less active trading market for its shares of common stock and its stock price may be more volatile.

 

If we avail ourselves of certain exemptions from various reporting requirements, our reduced disclosure may make it more difficult for investors and securities analysts to evaluate our company and may result in less investor confidence.

 

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The JOBS Act is intended to reduce the regulatory burden on “emerging growth companies”. We meet the definition of an “emerging growth company” and so long as we qualify as an “emerging growth company,” we will not be required to:

 

  · have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

 

  · comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

 

  · submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay” and “say-on-frequency;” and

 

  · disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation.

 

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

 

We are also currently a “smaller reporting company”, meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and have a public float of less than $75 million and annual revenues of less than $50 million during the most recently completed fiscal.

 

However, similar to “emerging growth companies”, “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; are not required to conduct say-on-pay and frequency votes until annual meetings occurring on or after January 21, 2013; and have certain other decreased disclosure obligations in their SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports. Decreased disclosures in our SEC filings due to our status as an “emerging growth company” or “smaller reporting company” may make it harder for investors to analyze the Company’s results of operations and financial prospects.

 

If we are unable to implement and maintain effective internal control over financial reporting in the future, our ability to produce accurate financial statements could be impaired, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may decline

 

We have not yet established an Audit Committee of our Board of Directors but we intend to do so prior to consummation of this offering in connection with our application to list our shares of common stock on the NASDAQ Capital Market. Our current directors are inexperienced with U.S. GAAP and the related internal control procedures required of U.S. public companies and no current member of our Board of Directors is considered an audit committee financial expert. We intend to appoint additional directors to our Board, effective as of the consummation of this offering, at least one of whom will be considered an audit committee financial expert.

 

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We were a public reporting company until October 5, 2016, the date on which we filed a Form 15 to suspend our duty to file reports under Sections 13 and 15(d) of the Exchange Act. In order to enable our common stock to continue to trade on the OTC Pink Market after the filing of the Form 15, we have satisfied our obligations to make adequate current information publicly available within the meaning of Rule 144(c)(2) of the Securities Act of 1933, as amended, through the filing of Annual and Quarterly Reports and Supplemental Information with OTC Markets. Copies of these reports are publicly available on the OTC Disclosure and News Service. These reports do not comply with the disclosure requirements of Form 10-K’s, 10-Q’s or 8-K’s.

 

As a result of this offering, we will become subject again to the information and reporting requirements of the Securities Exchange Act and, in accordance with this law, we will file periodic reports (Form 10-K’s, Form 10-Q’s and Form 8-K’s), proxy statements and other information with the Securities and Exchange Commission. Upon becoming a public reporting company, we will be required to maintain internal control over financial reporting and to report any material weaknesses in such internal control. We will also be required to establish and maintain effective disclosure controls. In addition, beginning with our first annual report on Form 10-K following this offering, we will be required to furnish a report by management on the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act. We are in the process of designing, implementing and testing the internal control over financial reporting required to comply with this obligation, which process is time consuming, costly and complicated. In addition, our independent registered public accounting firm will be required to attest to the effectiveness of our internal control over financial reporting beginning with our annual report on Form 10-K following the date on which we are no longer an “emerging growth company,” which may be up to five full years following the date of this offering. If we identify material weaknesses in our internal control over financial reporting, if we are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting when required, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could become subject to investigations by the stock exchange on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources.

 

There may be deficiencies with our internal controls that require improvements, and we will be exposed to potential risks from legislation requiring companies to evaluate controls under Section 404 of the Sarbanes-Oxley Act of 2002.

 

It may be time consuming, difficult and costly for us to develop and implement the additional internal controls, processes and reporting procedures required by the Sarbanes-Oxley Act. Currently, as a small company, we maintain our internal controls through a segregation of duties between our executive officers. With the exception of our Chief Financial Officer, our current officers and directors have limited experience in management of a publicly reporting company. This may be inadequate to have internal controls as we will rely heavily on direct management oversight of transactions, along with the use of external legal and accounting professionals.   We may need to hire additional financial reporting, internal auditing and other finance staff in order to develop and implement appropriate additional internal controls, processes and reporting procedures.

 

If we fail to comply in a timely manner with the requirements of Section 404 of the Sarbanes-Oxley Act regarding internal control over financial reporting or to remedy any material weaknesses in our internal controls that we may identify, such failure could result in material misstatements in our financial statements, cause investors to lose confidence in our reported financial information and have a negative effect on the trading price of our common stock.

 

Pursuant to Section 404 of the Sarbanes-Oxley Act and current SEC regulations, following the consummation of this offering, we will be required to prepare assessments regarding internal controls over financial reporting and, furnish a report by our management on our internal control over financial reporting.

 

We are in the process of determining whether our existing internal controls over financial reporting systems are compliant with Section 404. We will not be required to conduct the evaluation of effectiveness of our internal controls until the end of the fiscal year reported upon in our first annual report on Form 10-K following this offering. In addition, because we are a smaller reporting company, we are not required to obtain the auditor attestation of management’s evaluation of internal controls over financial reporting.

 

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This process of internal control evaluation and testing is likely to result in increased general and administrative expenses and may shift management time and attention from revenue-generating activities to compliance activities. While our management expects to expend significant resources in an effort to complete this important project, there can be no assurance that we will be able to achieve our objective on a timely basis. If it is determined that we are not in compliance with Section 404, we may be required to implement new internal control procedures and re-evaluate our financial reporting. Failure to achieve and maintain an effective internal control environment or complete our Section 404 certifications could have a material adverse effect on our ability to comply with our periodic reporting obligations under the Exchange Act and on our stock price.

 

In addition, in connection with our on-going assessment of the effectiveness of our internal control over financial reporting, we may discover “material weaknesses” in our internal controls as defined in standards established by the Public Company Accounting Oversight Board, or the PCAOB. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The PCAOB defines “significant deficiency” as a deficiency that results in more than a remote likelihood that a misstatement of the financial statements that is more than inconsequential will not be prevented or detected.

 

In the event that a material weakness is identified, we would be required to adopt and implement policies and procedures to address such material weaknesses. We may also need to employ additional qualified personnel to assist us in these efforts. The process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company. We cannot assure you that the measures we will take will remediate any material weaknesses that we may identify or that we will implement and maintain adequate controls over our financial process and reporting in the future.

 

We expect to incur significant costs as a result of operating as a public reporting company whose securities are listed on NASDAQ, and our management will be required to devote substantial time to compliance initiatives.

 

Following the consummation of this offering we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, the other rules and regulations of the Securities and Exchange Commission, and the rules and regulations of the NASDAQ Stock Market. We expect that the expenses that will be required in order to adequately meet our reporting and other obligations, including legal, accounting and financial compliance costs, will be material, and that compliance with the various reporting and other requirements applicable to public companies will require considerable time and attention of management. Any changes in the laws, rules and regulations affecting public companies could also result in increased costs to us as we respond to their requirements. These rules and regulations could also make it more difficult or more expensive for us to obtain certain types of insurance, including director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantial costs to obtain or maintain the same or similar coverage. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers. We cannot predict or estimate the amount or timing of additional costs we may incur in order to comply with such requirements.

  

The Warrants are speculative in nature.

 

The Warrants do not confer any rights of common stock ownership on its holders, such as voting rights or the right to receive dividends, but rather merely represent the right to acquire shares of common stock at a fixed price for a limited period of time. Specifically, commencing on the date of issuance, holders of the Warrants may exercise their right to acquire the shares of common stock and pay an exercise price of $___ per share, subject to certain adjustments, prior to the fifth anniversary of the date of issuance, after which date any unexercised Warrants will expire and have no further value. Moreover, following this offering, the market value of the Warrants, if any, is uncertain and there can be no assurance that the market value of the Warrants will equal or exceed their imputed offering price. There can be no assurance that the market price of our common stock will ever equal or exceed the exercise price of the Warrants, and consequently, whether it will ever be profitable for holders of the Warrants to exercise the Warrants.

 

Holders of the Warrants will have no rights as shareholders until such holders exercise their Warrants and acquire our common stock.

 

Until holders of the Warrants acquire our common stock upon exercise of the Warrants, holders of the Warrants will have no rights with respect to the shares of common stock underlying the Warrants. Upon exercise of the Warrants, the holders thereof will be entitled to exercise the rights of a holder of common stock only as to matters for which the record date occurs after the exercise date.

 

If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, our stock price and trading volume could decline.

 

The trading market for our common stock will depend, in part, on the research and reports that securities or industry analysts publish about us or our business. Securities and industry analysts do not currently, and may never, publish research on our company. If no securities or industry analysts commence coverage of our company, the trading price for our common stock would likely be negatively impacted. In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover us downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price would likely decline. In addition, if our operating results fail to meet the forecast of analysts, our stock price would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause our stock price and trading volume to decline.

 

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We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

 

Although we currently intend to use the net proceeds from this offering in the manner described in the section entitled “Use of Proceeds”, our management will have considerable discretion in the application of the proceeds received by us from this offering. You will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. You must rely on the judgment of our management regarding the application of the net proceeds of this offering. The net proceeds may be used for corporate purposes that do not improve our profitability or results of operations or that increase our common stock price. The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business or cause the price of our common stock to decline. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

 

Provisions in our charter documents and under Nevada law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management.

 

Certain provisions in our restated articles of incorporation and bylaws may have the effect of delaying or preventing a change of control or changes in our management. Our restated articles of incorporation and restated bylaws include provisions that:

 

  · permit the board of directors to fill any vacancies and newly-created directorships;

 

  · between successive annual meetings, permit the board of directors to appoint one or more additional directors but not more than 1/2 of the number of directors fixed at the last stockholder meeting at which directors were elected.

 

  · authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan;

 

  · provide that only the board of directors is authorized to call a special meeting of stockholders; and

 

  · provide that the board of directors is expressly authorized to make, alter, or repeal our bylaws.

 

Moreover, certain provisions of the Nevada Revised Statutes (or NRS) may discourage, delay, or prevent a change in control of our company. The “business combination” provisions of Sections 78.411 to 78.444, inclusive, of the Nevada Revised Statutes impose certain restrictions on mergers, business combinations, and other transactions between us and holders of 10% or more of our common stock. In addition The “control share” provisions of Sections 78.378 to 78.3793, inclusive, of the NRS prohibit an acquirer, under certain circumstances, from voting its “control shares” of an issuing corporation’s stock after crossing certain ownership threshold percentages, unless the acquirer obtains approval of the issuing corporation’s disinterested stockholders or unless the issuing corporation amends its articles of incorporation or bylaws within ten days of the acquisition to provide that the “control share” statute does not apply to the corporation or to the types of existing or future stockholders. See the section entitled “Description of Capital Stock” for additional information.

 

 33 

 

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

Some of the information in this prospectus contains forward-looking statements within the meaning of the federal securities laws. These statements may be found under “Prospectus Summary,” “Risk Factors,” Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.” Statements about our future plans and intentions, results, levels of activity, performance, goals, achievements or other future events constitute forward-looking statements. Wherever possible, words such as “may,” “will,” “should,” “could,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” or “potential” or the negative or other variations of these words, or similar words or phrases, have been used to identify these forward-looking statements. These statements reflect management’s current beliefs and are based on information available to management as at the date of this prospectus.

 

Forward looking statements in the prospectus may include but are not limited to statements about:

 

  · expectations of future operating results or financial performance;

 

  · expectations regarding the introduction of new products;

 

  · our plans for growth, future operations and acquisitions;

 

  · our plans to develop and commercialize our products;

 

  · anticipated trends in the quantified-self wellness sector and healthcare sector;

 

  · the size and growth potential of possible markets for our product candidates and our ability to serve those markets;

 

  · the rate and degree of market acceptance of any future products;

 

  · the accuracy of our estimates regarding expenses, future revenues, capital requirements and needs for additional financing and our ability to obtain additional financing;

 

  · our ability to attract strategic partners with development, regulatory and commercialization expertise;

 

  · our ability to enhance earnings and profitability;

 

  · our ability to comply with rules and regulations; and

 

  · expectations regarding the use of proceeds from this offering.

 

We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, including risks described in the section titled “Risk Factors” and elsewhere in this prospectus.

 

These risks are not exhaustive. Other sections of this prospectus may include additional factors that could harm our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for our management to predict all risk factors nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ from those contained in, or implied by, any forward-looking statements.

 

You should not rely upon forward-looking statements as predictions of future events. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur.

 

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this prospectus or to conform these statements to actual results or to changes in our expectations.

 

 34 

 

 

In addition, statements that “we believe” and similar statements reflect our current beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.

 

You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement of which this prospectus is a part with the understanding that our actual future results, levels of activity, performance and achievements may be different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

 

Forward-looking statements involve significant risk, uncertainties and assumptions. Although the forward-looking statements contained in this prospectus are based upon what management believes to be reasonable assumptions as of the date of this prospectus, we cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this prospectus and we assume no obligation to update or revise them to reflect new events or circumstances, except as required by law. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including:

 

  · announcements of new products or technologies, commercial relationships or other events relating to us or our industry or our competitors;

 

  · failure of any of our key products to gain market acceptance;

 

  · variations in our quarterly operating results;

 

  · perceptions of the prospects for the markets in which we compete;

 

  · changes in general economic conditions;

 

  · changes in securities analysts’ estimates of our financial performance;

 

  · regulatory developments in the United States and foreign countries;

 

  · fluctuations in stock market prices and trading volumes of similar companies;

 

  · news about the markets in which we compete or regarding our competitors;

 

  · terrorist acts or military action related to international conflicts, wars or otherwise;

 

  · sales of large blocks of our common stock, including sales by our executive officers, directors and significant stockholders;

 

  · additions or departures of key personnel; and

 

  · other factors that we discuss in this prospectus in the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this prospectus.

 

These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. If one or more of these factors materialize, or if any underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements. The forward-looking statements contained in this prospectus are excluded from the safe harbor protection provided by the Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act which does not extend to initial public offerings. You should read this prospectus and the documents that we have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we expect.

 

This prospectus also contains statistical data, estimates and forecasts that are based on independent industry publications or other publicly available information, while other information is based on our internal sources. Although we believe that these third-party sources referred to in this prospectus are reliable, neither we nor the underwriters have independently verified the information provided by these third parties. While we are not aware of any misstatements regarding any third-party information presented in this prospectus, their estimates, in particular, as they relate to projections, involve numerous assumptions, are subject to risks and uncertainties, and are subject to change based on various factors, including those discussed under “Risk Factors”.

 

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USE OF PROCEEDS

 

We estimate that the net proceeds from the sale of the shares of common stock and Warrants we are offering will be approximately $10.0 million. If the underwriters fully exercise the over-allotment option, we estimate the net proceeds of the common stock and Warrants we sell will be approximately $       million. “Net proceeds” is what we expect to receive after paying the underwriting discount and other expenses of the offering. These estimates exclude the proceeds, if any, from the exercise of the Warrants sold in this offering. If all of the Warrants sold in this offering were to be exercised in cash at an exercise price of $___ per share, we would receive additional net proceeds of approximately $____ million. We cannot predict when or if these Warrants will be exercised,

 

We intend to use the net proceeds from this offering for the following purposes :

 

  · Approximately $3.5 million on research and development as we continue to enhance our Life Sensing Technology;

 

  · Approximately $1.5 million on talent recruitment and retention as we align our staffing needs to accommodate our growth strategy and reduce the level and extent of outsourcing activities;

 

  · Approximately $2.0 million on business development, including potential strategic acquisitions or investment in companies, technologies, solutions or businesses that complement our business; and

 

  · The remainder for working capital and general corporate purposes, which may include technology upgrade, capital expenditures, improvement of corporate facilities, and other general and administrative matters.

 

The amounts and timing of these expenditures will vary depending on a number of factors, including the amount of cash generated by our operations, competitive developments, and the rate of growth, if any, of our business. We may find it necessary or advisable to use portions of the proceeds for other purposes, and we will have broad discretion in the application of the net proceeds.

 

Although we may use a portion of the proceeds for the acquisition of technologies, solutions or businesses that complement our business, we are not a party to any agreement or understanding as of the date of this prospectus to undertake any such transaction, and we cannot assure you that we will make any acquisitions or investments in the future.

 

Until we use the net proceeds of the offering, we will invest the funds in short-term, investment grade, interest-bearing securities, or in savings accounts. Our management will have broad discretion in the application of the net proceeds to us from this offering and investors will be relying on the judgment of our management regarding the application of the proceeds.

 

DIVIDEND POLICY

 

We have never declared or paid cash dividends on our capital stock. Our Board of Directors' ability to declare a dividend is subject to restrictions imposed by Nevada corporate law. Until we become profitable and are cash flow positive from an operations perspective, we intend to retain all available funds and future earnings, if any, to fund the development and expansion of our business. Once we have strengthened our balance sheet, enhanced our working capital and accumulated sufficient earnings, we do anticipate paying cash dividends on our capital stock. Any future determination related to our dividend policy will be made at the discretion of our board of directors and will depend upon our financial condition, operating results, capital requirements, and other factors that our board of directors deems relevant.

 

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MARKET PRICE OF OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS

 

Our common stock has been quoted on the OTC Pink Market under the symbol “WCOR” since December 4, 2017. From May 13, 2014 to December 21, 2014, our common stock was quoted on the Over-the Counter Bulletin Board (“OTCBB”) under the symbol “HNVB” and from December 22, 2014 to October 5, 2016, our common stock was quoted on the OTCBB under the symbol “WRMT”. From October 6, 2016 to December 4, 2017, our common stock was quoted on the OTC Pink Market under the symbol “WRMT”. Since December 4, 2017, our common stock has been quoted on the OTC Pink Market under the symbol “WCOR”.

 

The table below sets forth the high and low sale prices for our common stock as reported on the OTCBB and the OTC Pink Market, as applicable, during the periods indicated. The quotations below reflect inter-dealer prices and do not include retail markup, markdown or commissions. In addition, these quotations may not necessarily represent actual transactions.

 

2018  High   Low 
3rd Quarter (through July 13, 2018)  $4.29   $2.81 
2nd Quarter   $5.45   $1.82 
1st Quarter   $14.08   $3.15 

 

2017  High   Low 
4th Quarter  $24.00   $6.15 
3rd Quarter  $23.98   $19.37 
2nd Quarter  $24.99   $11.01 
1st Quarter  $24.90   $4.15 

 

2016  High   Low 
4th Quarter  $4.30   $1.50 
3rd Quarter  $4.00   $0.85 
2nd Quarter  $7.99   $1.80 
1st Quarter  $3.00   $0.08 

 

Stockholders

 

As of July 13, 2018, there were approximately 205 stockholders of record of our 36,722,244 outstanding shares of common stock. On July 13, 2018, the last reported sale price for our common stock as reported on the OTC Pink MKT was $4.25 per share.

 

Transfer Agent, Warrant Agent and Registrar

 

The transfer agent and registrar for the Company’s common stock and the warrant agent for our Warrants is ClearTrust, LLC, 16540 Pointe Village Dr., # 206, Lutz, FL 33558.

 

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CAPITALIZATION

 

The following table sets forth our cash and cash equivalents as well as capitalization as of March 31, 2018:

 

  · on an actual basis;

 

  · on a pro forma basis to give further effect to the issuance and sale by us of  shares of common stock and          Warrants in this offering at the assumed public offering price of $     per share and Warrant, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, excluding the proceeds, if any, from the exercise of the Warrants issued in this offering at an exercise price of $           per share.

 

You should read this table together with “Selected Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as our consolidated financial statements and related notes appearing elsewhere in this prospectus.

 

   As of March 31, 2018 
(In thousands, except for number of shares)  Actual   Pro Forma
(unaudited)
 
Cash  $663,055   $  
           
Total debt  $0   $  
           
Preferred stock, $0.001 par value; 10,000 shares authorized; none issued and outstanding, actual and pro forma, respectively  $      
           
Common stock, $0.001 par value; 75,000,000 shares authorized; 36,722,244 and                   shares issued and outstanding, actual and pro forma, respectively   36,722      
           
Additional paid-in capital   6,416,066      
           
Deficit   (6,719,509)     
           
Total stockholders' (deficit) equity  $(266,721)  $  
           
Total capitalization  $(266,721)  $  

 

The number of shares of common stock to be outstanding after this offering is based on 36,722,244 shares of common stock outstanding as of March 31, 2018, which does not include:

 

·7,000,000 shares of common stock that are eligible for future option grants under our 2018 Stock Incentive Plan;

 

·             shares of common stock issuable upon the exercise of the Warrants offered hereby at an exercise price of $           per share; and

 

·            shares of common stock issuable upon the exercise of the Representative’s Warrants at an exercise price of $           per share, including             shares of common stock to be issued upon the exercise of Warrants included in the Representative’s Warrants at an exercise price of $           per share.

 

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DILUTION 

 

Investors purchasing shares of our common stock and Warrants in this offering will experience immediate and substantial dilution in the as adjusted net tangible book value of their shares of common stock. Dilution in pro forma as adjusted net tangible book value represents the difference between the public offering price per share and the pro forma as adjusted net tangible book value per share of our common stock immediately after the offering.

 

The historical net tangible book value of our common stock as of March 31, 2018 was $(287,610) or $(0.01) per share. Historical net tangible book value per share of our common stock represents our total tangible assets (total assets less intangible assets) less total liabilities divided by the number of shares of common stock outstanding as of that date.

 

After giving effect to the issuance and sale of shares of common stock in this offering, at a public offering price of $                  per share, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma net tangible book value as of March 31, 2018 would have been approximately $          million, or $          per share of common stock, which excludes the Warrants to purchase common stock to be issued to investors in this offering. This amount represents an immediate increase in pro forma net tangible book value of $           per share to existing stockholders and an immediate dilution of $            per share to new investors purchasing our common stock in this offering.

 

The following table illustrates this dilution on a per share basis (based on all outstanding shares) to new investors:

 

Public offering price per share           $    
Net tangible book value per share before this offering as of March 31, 2018   $ (287,610 )        
Increase in net tangible book value per share attributable to new investors purchasing shares in this offering                
Pro forma net tangible book value per share after giving effect to this offering                
Dilution in pro forma net tangible book value per share to new investors participating in this offering           $    

 

The following table illustrates this dilution on a per share basis (based on the outstanding shares issued by the Company to directors, officers and affiliates) to new investors:

 

Public offering price per share           $    
Net tangible book value per share before this offering as of March 31, 2018   $ (287,610 )        
Increase in net tangible book value per share attributable to new investors purchasing shares in this offering                
Pro forma net tangible book value per share after giving effect to this offering                
Dilution in pro forma net tangible book value per share to new investors participating in this offering           $    

 

If the underwriters exercise their option in full to purchase an additional                  shares of common stock in this offering, the pro forma net tangible book value per share after the offering would be $                 per share, the increase in the pro forma net tangible book value per share to existing stockholders would be $                 per share and the dilution to new investors purchasing our common stock in this offering would be $                 per share.

 

The number of shares of common stock to be outstanding after this offering is based on 36,722,244 shares of common stock outstanding as of March 31, 2018, which does not include:

 

·7,000,000 shares of common stock that are eligible for future option grants under our 2018 Stock Incentive Plan;

 

·            shares of common stock issuable upon the exercise of the Warrants offered hereby at an exercise price of $        per share; and

 

·            shares of common stock issuable upon the exercise of the Representative’s Warrants at an exercise price of $        per share, including              shares of common stock to be issued upon the exercise of Warrants included in the Representative’s Warrants at an exercise price of $      per share.

 

In addition, we may choose to raise additional capital due to market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans. To the extent that we raise additional capital by issuing equity securities or convertible debt, your ownership will be further diluted.

 

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SELECTED CONSOLIDATED FINANCIAL DATA

 

The following table includes (i) summary consolidated statement of operations data for the years ended December 31, 2017 and 2016, and the quarters ended March 31, 2018 (unaudited) and 2017 (unaudited) and (ii) summary consolidated balance sheet data as of December 31, 2017 and 2016 and March 31, 2018, derived from our audited and unaudited consolidated financial statements and related notes included elsewhere in this prospectus. Our consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States of America. The results indicated below are not necessarily indicative of our future performance.

  

Certain operating expenses in these financial statements have been reclassified to conform to the presentation in the current condensed consolidated financial statements. These reclassifications had no impact upon the previously reported net losses.

 

You should read this information together with the sections entitled “Capitalization”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Selected Consolidated Financial Data”, and our consolidated financial statements and related notes included elsewhere in this prospectus. 

 

  

Years Ended

December 31,

   Three Months Ended
March 31,
 
   2017   2016   2018   2017 
Statements of Operations Data          (unaudited)   (unaudited) 
Total revenues  $4,110,000   $2,038,171   $2,463,500   $500,000 
Total cost of revenues   1,845,000    1,516,180    1,906,500    - 
Gross profit   2,265,000    521,991    557,000    500,000 
Total operating expenses   3,436,861    1,378,116    1,061,147    597,622 
Loss from operations   (1,171,861)   (856,125)   (504,147)   (97,622)
Total other income   41,114    67,921    -    13,554 
Net loss  $(1,130,747)  $(788,204)  $(504,147)  $(84,068)
Net loss per share: basic and diluted  $(0.04)  $(0.03)  $(0.01)  $(0.00)
Weighted-average number of common shares outstanding: basic and diluted   30,644,436    28,581,000    36,722,244    28,662,994 

 

   December 31,   March 31, 
   2017   2016   2018 
Balance Sheet Data          (unaudited) 
Total current assets  $1,992,761   $429,114   $1,601,122 
Total assets   2,021,049    1,305,939    1,627,511 
Total current liabilities   1,783,623    350,000    1,894,232 
Total liabilities   1,783,623    350,000    1,894,232 
Total stockholders’ equity (deficit)   237,426    955,939    (266,721)
Total liabilities and stockholders’ equity  $2,021,049   $1,305,939   $1,627,511 

 

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion and analysis of our Company’s financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the related notes included elsewhere in this Prospectus; and our consolidated financial statements and the related notes for the quarters ended March 31, 2018 and 2017 also included elsewhere in this Prospectus. This discussion and analysis contains forward-looking statements that involve risks and uncertainties. Actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors.

 

Overview

 

Headquartered in Miami, Florida, we are a technology company in the quantified-self wellness market segment. Leveraging our Life Sensing Technology, we design, produce and sell Helo, our branded wearable devices, through our exclusive marketing and distribution partner, World Global Network Pte. Ltd. and its distribution network (which we refer to as WGN).

 

Our business model is to monetize our Life Sensing Technology and leverage the sales and marketing capabilities of WGN to promote our Helo wearable devices to the quantified-self wellness market. Since its initial launch in the fourth quarter of 2016, Helo is being worn by end-users in North America, Asia and Europe. To-date, we have shipped and been paid for over 570,000 Helo devices that have been sold by WGN.

 

During 2015 and 2016, we derived revenues from sale of smartphones, services and airtime to end-users via our distribution partners, with revenues being generated upon delivery of products and services to the distribution partners. The smartphones were manufactured by a third-party supplier in China, and they were shipped directly to the Company’s distribution partners for onward delivery to end-users; mobile telecom services (“airtime”) was delivered to consumers via exclusive sales agreements with regional third-party distributors.

 

We changed our business model in the fourth quarter of 2016 when we executed the Preferred Supplier Agreement (or PSA) with our wearable device supplier Quality Technology Industrial Co., Ltd. (“QTI”) in October 2016. In accordance with the PSA, we granted a non-exclusive, revocable license to QTI to use and integrate our Life Sensing Technology in the manufacture of Helo, the wearable device. Under the PSA, QTI agreed to pay us a non-refundable fee of $4.00 per Helo Classic and $5.00 per Helo LX shipped from its manufacturing facility. From the fourth quarter of 2016 through the third quarter of 2017, we earned license fees based on the number of Helo devices shipped by QTI. The initial term of the PSA is 12 months, commencing October 1, 2017, which automatically extends for additional 12 month terms unless 60 day prior written notice to terminate is provided by either party at the end of the current term. Either party may terminate the PSA at any time for failure to cure a material default after the breaching party has been given 30 days’ notice to cure such default.

 

Effective October 1, 2017, and as a result of our corporate reorganization, we have been selling our Helo devices directly to WGN at a selling price equivalent to cost plus an agreed upon markup. Our business is akin to a traditional wholesale model whereby WGN will place its order directly with us on a prepaid basis, and based on such orders, we will instruct QTI to build and ship the Helo devices in accordance with WGN’s instructions.

 

Our business, working capital and cash flows from operations are dependent on the extent and timing of Helo orders that WGN will place with us. Any slowdown in WGN’s sales and marketing activities would have a significant impact on our ability to fund our research and development activities, and conduct as a going concern.

 

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Results of Operations

 

Year Ended December 31, 2017 Compared to Year Ended December 31, 2016

 

CONSOLIDATED STATEMENTS OF OPERATIONS

 

   For the Year Ended December 31, 
   2017   2016   Variance   % 
Revenues:                    
Products  $2,210,000   $1,418,626   $791,374    55.8 
Services   -    219,545    (219,545)   NM 
License fees   1,900,000    400,000    1,500,000    375.0 
Total revenues   4,110,000    2,038,171    2,071,829    101.7 
Costs of revenues                    
Products   1,845,000    1,434,058    410,942    28.7 
Services   -    82,122    (82,122)   NM 
Total cost of revenues   1,845,000    1,516,180    328,820    21.7 
Gross profit   2,265,000    521,991    1,743,009    333.9 
Gross margin   55.1%   25.6%          
Operating expenses:                    
Management fees - related party   774,205    350,000    424,205    121.2 
General and administrative   577,029    175,708    401,321    228.4 
Research and development   2,085,627    852,408    1,233,219    144.7 
Total operating expenses   3,436,861    1,378,116    2,058,745    149.4 
Operating loss   (1,171,861)   (856,125)   315,736    36.9 
Other income:                    
Interest income - related party   41,114    67,921    (26,807)   -39.5 
Net loss  $(1,130,747)  $(788,204)  $342,543    43.5 

 

Revenues. Our total revenues increased by $2,071,829 or 101.7% from $2,038,171 for the year ended December 31, 2016 to $4,110,000 for the comparable period in 2017. The increase was due mainly to higher license fees and higher revenues from product sales, partially offset by a decline in services revenues.

 

  · Revenues from product sales increased by $791,374 from $1,418,626 for the year ended December 31, 2016 to $2,210,000 for the same period in 2017. The increase was due mainly to the sale of Helo wearable devices that began in the fourth quarter of 2017 as a result of our corporate reorganization on October 1, 2017. In 2016, we sold our own branded dual SIM smartphones.

 

  · Revenues from services decreased from $219,545 for the year ended December 31, 2016 to zero for the same period of 2017. The decrease was due mainly to our decision to temporarily suspend the airtime business as we reorganized and realigned our product and service offerings in 2017.

 

  · Revenue from license fees increased by $1,500,000 from $400,000 for the year ended December 31, 2016 to $1,900,000 for the same period in 2017. In accordance with the PSA executed in October 2016, we recognized license fees of $1,900,000 for the year ended December 31, 2017 based on shipment of 380,000 units of Helo LX by our supplier and $400,000 for the year ended December 31, 2016 based on shipment of 100,000 units of Helo Classic by our supplier.

 

Gross Profit & Gross Margin

 

  · Our gross profit increased by $1,743,009 or 333.9% from $521,991 for the year ended December 31, 2016 to $2,265,000 for the same period of 2017. The increase was attributed to (1) higher gross profit from the sale of Helo wearable devices in 2017 as compared to the sale of smartphones and delivery of airtime services in 2016; and (2) the recognition of license fees on shipment of 380,000 units of Helo LX from Q1 to Q3 of 2017 as compared to 100,000 units of Helo Classic in Q4 of 2016.

 

  · Our gross margin was 55.1% for the year ended December 31, 2017, as compared to 25.6% for the same period in 2016. The improvement was attributable mainly to the change in our business model and revenue-mix in 2017 as a result of our corporate reorganization.

 

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Operating Expenses. Our total operating expenses increased by $2,058,745 or 149.4% from $1,378,116 for the year ended December 31, 2016 to $3,436,861 for the year ended December 31, 2017. The increase was due primarily due to (1) higher management services fees as we formalized of our professional services arrangement with a related party; (2) higher general and administrative expenses as we reorganized our business; and (3) higher research and development expenses in 2017. 

 

Management Fees — Related Party. Our management fees from related party increased by $424,205 or 121.2% from $350,000 for the year ended December 31, 2016 to $774,205 for the year ended December 31, 2017. The increase was due mainly to the formalization of our professional services arrangement with World Global Network Pte. Ltd. (“WGN”) in 2017 whereby WGN agreed to deliver management services covering product design, software and product development, and information technology at a fixed quarterly fee plus allocated costs of $130,000.

 

General and Administrative Expenses. Our general and administrative expenses increased by $401,321 or 228.4% from $175,708 for the year ended December 31, 2016 to $577,029 for the year ended December 31, 2017. The increase was due mainly to our corporate reorganization efforts that resulted in higher professional and consulting fees and the appointment of a new chief financial officer in 2017.

 

Research and Development Expenses. Our research and development expenses increased by $1,233,219 or 144.7% from $852,408 for the year ended December 31, 2016 to $2,085,627 for the year ended December 31, 2017. The increase was due mainly to the execution of the Exclusive License Agreement with Giner, Inc.in April 2017 whereby we agreed to fund Giner’s non-recurring engineering costs in the amount of $1.6 million related to the integration of its miniaturized transdermal alcohol sensor into our Helo products.

 

Operating Loss. Our operating loss increased by $315,736 or 36.9% from $856,125 for the year ended December 31, 2016 to $1,171,861 for the year ended December 31, 2017. The increase was due mainly to higher operating expenses driven by higher research and development expenses, partially offset by higher gross profit.

 

Other Income. Our interest income from a related party note decreased by $26,807 or 39.5% from $67,921 for the year ended December 31, 2016 to $41,114 for the year ended December 31, 2017. The decrease was due mainly to the forgiveness of the related party note in connection with the Exchange Agreement that was executed between us, Fabio Galdi and his related entities on October 1, 2017 as we reorganized our business.

  

Net Loss. As a result of the foregoing, our net loss increased by $342,543 or 43.5% from $788,204 for the year ended December 31, 2016, to a net loss of $1,130,747 for the year ended December 31, 2017.

 

For the Quarter Ended March 31, 2018 and March 31, 2017

 

   For the Quarter Ended March 31, 
   2018   2017   Variance   % 
Revenues                    
Products  $2,463,500   $-   $2,463,500    NM 
License fees   -    500,000    (500,000)   -100%
Total revenues   2,463,500    500,000    1,963,500    393%
Costs of revenues                    
Products   1,906,500    -    1,906,500    NM 
Total cost of revenues   1,906,500    -    1,906,500    NM 
Gross profit   557,000    500,000    57,000    11%
Gross margin   23%   100%          
Operating expenses:                    
Management fees - related party   205,000    230,500    (25,500)   -11%
General and administrative   834,588    87,122    747,466    858%
Research and development   21,559    280,000    (258,441)   -92%
Total operating expenses   1,061,147    597,622    463,525    78%
Operating loss   (504,147)   (97,622)   (406,525)   416%
Other income                    
Interest income - related party   -    13,554    (13,554)   -100%
Net loss  $(504,147)  $(84,068)  $(420,079)   500%

 

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Revenues. Our total revenues increased by $1,963,500 or 393% from $500,000 for the quarter ended March 31, 2017 to $2,463,500 for the comparable period in 2018. The increase was due mainly to the change in our business model as a result of our corporate reorganization in October 2017. During the first quarter of 2017, we earned license fees based on the number of Helo devices shipped by our supplier. However, during the first quarter of 2018, we earned product revenues from the sale of our Helo devices directly to our distributor.

 

  · Revenues from product sales increased by $2,463,500 from zero for the quarter ended March 31, 2017. The increase was due to the sale of 47,000 units of Helo wearable devices during the quarter ended March 31, 2018.

 

  · Revenue from license fees decreased by $500,000 from the quarter ended March 31, 2017 to zero for the same period in 2018. The decrease was due to the replacement of the license fee model by product sales effective October 1, 2017.

 

Gross Profit. Our gross profit increased by $57,000 or 11% from $500,000 for the quarter ended March 31, 2017 to $557,000 for the same period of 2018. The increase was due mainly to our corporate reorganization as we replaced the license fee model with product sales. 

 

Operating Expenses. Our total operating expenses increased by $463,525 or 78% from $597,622 for the quarter ended March 31, 2017 to $1,061,147 for the quarter ended March 31, 2018. The increase was due mainly to higher general and administrative expenses of $747,466 — driven mainly by our reorganization efforts and our plan to up-list the Company onto a national securities exchange, partially offset by a decrease in research and development (“R&D”) expenses of $258,441 due to timing of our product launches.

 

  · Management Fees from Related Party. Our management fees from related party decreased by $25,500 or 11% from $230,500 for the quarter ended March 31, 2017 to $205,000 for the quarter ended March 31, 2018. The decrease was due mainly to the formalization of our professional services arrangement with World Global Network Pte. Ltd. (“WGN”) whereby WGN agreed to deliver management services covering product design, software and product development, and information technology at a fixed quarterly fee plus allocated costs of $130,000.

 

  · General and Administrative Expenses. Our general and administrative expenses increased by $747,466 or 858% from $87,122 for the quarter ended March 31, 2017 to $834,588 for the quarter ended March 31, 2018. Higher general and administrative expenses during the first quarter of 2018 were driven mainly by our efforts to up-list the Company onto a national securities exchange and our corporate reorganization initiatives that resulted in higher legal, professional and consulting fees.

 

  · Research and Development Expenses. Our research and development expenses decreased by $258,441 or 92% from $280,000 for the quarter ended March 31, 2017 to $21,559 for the quarter ended March 31, 2018. Higher research and development expenses were incurred in the quarter ended March 31, 2017 as a result of our development of Helo LX+ that was launched in January 2018.

 

Operating Loss. Our operating loss increased by $406,525 or 416% from $97,622 for the quarter ended March 31, 2017 to $504,147 for the quarter ended March 31, 2018. The increase was due mainly to higher operating expenses related to our up-listing efforts and corporate reorganization initiatives.

 

Other Income. Our interest income from a related party note decreased by $13,554 or 100% from $13,554 for the quarter ended March 31, 2017 to zero for the quarter ended March 31, 2018. The decrease was due mainly to the forgiveness of the related party note in connection with the Exchange Agreement that was executed between us, Fabio Galdi and his related entities on October 1, 2017 as we reorganized our business.

  

Net Loss. As a result of the foregoing, our net loss increased by $420,079 or 500% from $84,068 for the quarter ended March 31, 2017, to a net loss of $504,147 for the quarter ended March 31, 2018.

 

Significant Accounting Policies 

 

We prepare the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (or US GAAP). These accounting principles require us to make judgments, estimates and assumptions on the reported amounts of assets and liabilities at the end of each fiscal period, and the reported amounts of revenues and expenses during each fiscal period. We continually evaluate these judgments and estimates based on our own historical experience, knowledge and assessment of current business and other conditions, our expectations regarding the future based on available information and assumptions that we believe to be reasonable.

 

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There have been no other material changes during the years ended December 31, 2017 and 2016, and for the quarters ended March 31, 2018 and 2017, in our significant accounting policies. The selection of critical accounting policies, the judgments and other uncertainties affecting application of those policies and the sensitivity of reported results to changes in conditions and assumptions are factors that should be considered when reviewing our financial statements. We believe the following accounting policies involve the most significant judgments and estimates used in the preparation of our consolidated financial statements.

 

Adoption of Recent Accounting Pronouncement

 

Effective January 1, 2018, we adopted the FASB Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 supersedes the revenue recognition requirements in FASB ASC 605, Revenue Recognition, and is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue, cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. The adoption of ASU 2014-09, using the modified retrospective approach, had no significant impact on the Company's results of operation, cash flows or financial position.

 

Revenue Recognition

 

We generate revenue from product sales to our exclusive distributor, WGN in accordance with the Strategic Partner Master Sales and Worldwide Distribution Agreement (the “Master Sales Agreement”) executed between the parties on October 1, 2017. All sales contracts with WGN are similarly structured in accordance with the Master Sales Agreement, and they create a performance obligation for the Company to transfer the finished products to WGN.

 

Product Sales: The Company designs and sells its own brand of wearable devices that are manufactured by a third-party supplier in China. These products are shipped directly to WGN for onward delivery to end-users. Title to the products passes to WGN on shipment from the supplier; and sales invoices are issued to WGN at agreed wholesale prices. WGN is responsible for providing initial warranty support to end-users and holds spare unit inventory to service any claims. WGN has the option to return faulty units once per quarter and the Company will issue credit for any returns. The Company recognizes revenues from product sales only upon shipment of products when control of such products is obtained by WGN. The Company determined that WGN obtains control of the product upon shipment when the title of such product and risk of loss transfers to the distributor. The Company accounts for shipping and handling costs as fulfillment costs and such amounts are classified as part of cost of revenues in its condensed consolidated statements of operations.

 

License Revenue: In accordance with the Preferred Supplier Agreement (“PSA”) executed in October 2016 between the Company and its wearable device supplier in China, the Company granted a non-exclusive, revocable license to its supplier to use and integrate its Life Sensing Technology in the manufacture of the Company’s wearable device, Helo. Under the PSA (which was effective from Q4 2016 to Q3 2017), the supplier agreed to pay the Company a non-refundable fee of $4.00 per Helo Classic and $5.00 per Helo LX shipped from its manufacturing facility. The Company recognized the license revenue upon confirmation and receipt of the shipping information from the supplier.

 

Basis of Consolidation

 

The consolidated financial statements for the years ended December 31, 2017 and 2016 and for the quarters ended March 31, 2018 and 2017 include the financials statements of World Technology Corp. and our wholly-owned subsidiary, Space Wireless Corp., which was dissolved on November 3, 2017. All intercompany accounts and transactions have been eliminated in consolidation

 

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Use of Estimates and Assumptions

 

The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods.  Estimates are adjusted to reflect actual experience when necessary. Significant accounting estimates reflected in our consolidated financial statements include revenue recognition, cost of revenues, allowance for doubtful accounts, and deferred income taxes. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates.

 

Liquidity and Capital Resources as of December 31, 2017 and 2016

 

Cash Flows and Working Capital

 

We have financed our operations primarily through cash flows from operations and financing activities as well as proceeds from related parties. As of December 31, 2017, we had $881,239 in cash that consisted of cash in banks located in the United States. The following table sets forth a summary of our cash flows for the periods indicated: 

 

  

For year ended
December 31,

 
   2017   2016 
Net cash used in operating activities  $(636,002)  $(243,528)
Net cash provided by (used in) financing activities  $1,488,127   $(107,313)
Net increase/(decrease) in cash  $852,125   $(350,841)
Cash at the beginning of year  $29,114   $379,955 
Cash at the end of year  $881,239   $29,114 

 

Operating Activities

 

Net cash used in operating activities was $636,002 for the year ended December 31, 2017, as compared to net cash used in operating activities of $243,528 for the comparable period in 2016. The increase of $392,474 in our operating cash outflows was attributable mainly to efforts to rebuild our business and reorganize our capital structure.

 

Financing Activities

 

Net cash provided by financing activities was $1,488,127 for the year ended December 31, 2017, and it was due mainly to the issuance of common stock during the year. Net cash used in financing activities was $107,313 for the year ended December 31, 2016, and it was due mainly to the net cash outflow to a related party.

 

Working Capital

 

The following table sets forth a summary of our working capital:

 

   December
31, 2017
   December
31, 2016
   Variance 
             
Total Current Assets  $1,992,761   $429,114   $1,563,647 
Total Current Liabilities  $1,783,623   $350,000   $1,433,623 
Working Capital  $209,138   $79,114   $130,024 
Current Ratio   1.12    1.23      

 

Total working capital amounted to $209,138 at December 31, 2017, as compared to $79,114 at December 31, 2016. Our current ratio decreased from 1.23 at December 31, 2016 to 1.12 at December 31, 2017. Our current financial conditions raise substantial doubt about our ability to continue as a going concern.

 

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Liquidity and Capital Resources as of March 31, 2018 and 2017

 

Cash Flows and Working Capital

 

We have financed our operations primarily through cash flows from operations and financing activities as well as proceeds from related parties. As of March 31, 2018, we had $663,055 in cash that consisted of cash in banks located in the United States. The following table sets forth a summary of our cash flows for the periods indicated: 

 

  

For the Quarter Ended

March 31,

 
   2018
(unaudited)
   2017
(unaudited)
 
Net cash used in operating activities  $(438,184)  $(496,568)
Net cash provided by financing activities  $220,000   $1,020,687 
Net (decrease)/increase in cash  $(218,184)  $524,119 
Cash in the beginning of period  $881,239   $29,114 
Cash at the end of period  $663,055   $553,233 

  

Operating Activities

 

Net cash used in operating activities was $438,184 for the quarter ended March 31, 2018, as compared to net cash used in operating activities of $496,568 for the comparable period in 2017. The slight decrease of $58,384 in our operating cash outflows was attributable mainly to efforts to rebuild our business.

 

Financing Activities

 

Net cash provided by financing activities was $220,000 for the quarter ended March 31, 2018, and it was due mainly to expenses paid by related parties. Net cash provided by financing activities was $1,020,687 for the quarter ended March 31, 2017 and it was due primarily of $655,932 of cash from sale of common stock and $463,309 of expenses paid by related parties; partially offset by payment of $100,000 to a major shareholder for past management fees.

 

Working Capital

 

The following table sets forth a summary of our working capital:

 

  

March 31,
2018
(unaudited)

  

December 31,
2017

   Variance 
Total Current Assets  $1,601,122   $1,992,761   $(391,639)
Total Current Liabilities  $1,894,232   $1,783,623   $110,609 
Working Capital (Deficit)  $(293,110)  $209,138   $(502,248)
Current Ratio   0.85    1.12      

 

Total working capital deficit amounted to $293,110 at March 31, 2018, as compared to a working capital of $209,138 at December 31, 2017. Our current ratio decreased from 1.12 at December 31, 2017 to 0.85 at March 31, 2018. Our current financial conditions raise substantial doubt about our ability to continue as a going concern.

 

We believe that, with the recent corporate reorganization, we could improve our cash flow from operations and enhance our ability to meet our anticipated cash needs, including cash needs for working capital and capital expenditures in 2018. However, our business, working capital and cash flows from operations are dependent on the extent and timing of Helo orders that WGN will place with us. Any slowdown in WGN’s sales and marketing activities would have a significant impact on our ability to fund our research and development activities, and conduct as a going concern. If WGN does not place any Helo orders with us, we may only be able to conduct our planned operations for a period of three to six months using currently available capital resources. We may also require additional cash due to changing business conditions or other future developments, including any investments or acquisitions we may decide to pursue. If our existing cash is insufficient to meet our requirements, we may seek to sell additional equity securities or borrow from banks. However, financing may not be available in the amounts we need or on terms acceptable to us, if at all. Assuming successful completion of this offering, we believe that we will have sufficient cash to fund our operations for the next two years.

 

We are developing new products and will seek additional funds to finance our immediate and long-term operations and business plan through debt and/or equity financing. The successful outcome of future financing activities cannot be determined at this time and there is no assurance that if achieved, the Company will have sufficient funds to execute its intended business plan. Ultimately, our ability to continue as a going concern is dependent upon our ability to attract new sources of capital, in order to attain a reasonable threshold of operating efficiency and achieve sustained profitable operations.

 

Off-Balance Sheet Commitments and Arrangements

 

We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as stockholders’ equity or that are not reflected in our condensed consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serve as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

 

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BUSINESS

 

Overview

 

We are a technology company that provides wearable devices for use in the quantified-self wellness market. Our wearable devices and related applications provide our end-users with self-knowledge through self-tracking. Our Life Sensing Technology uses state-of-the-art sensors, signal processing and proprietary algorithms to collect and process specific data from end-users; and it is embedded into Helo, our branded wearable devices that are designed, produced and sold into the wellness market through our exclusive marketing and distribution partner, World Global Network Pte. Ltd. and its distribution network, which we refer to herein as WGN.

 

WGN is a direct-to-consumer, multi-level marketing company with operations in countries including the U.S., Singapore, Ireland, Thailand, India, the Philippines, and Japan.  WGN is 50% owned by each of Fabio Galdi, who serves as our Chairman of the Board and Chief Technology Officer, and his brother, Gabriele Galdi. World Global Holdings Pte. Ltd., our largest stockholder, which we refer to as WGH, is 50% owned by Gabriele Galdi, 28% owned by Alfonso Galdi, the brother of Fabio Galdi and Gabriele Galdi, and 22% owned by Alessandro Senatore, who serves as a director of our company. Currently, WGH, WGN and their affiliates collectively own approximately 75% of our outstanding common stock.

 

Since the initial commercial launch of the first Helo devices in the second half of 2016, our Helo devices are being worn by end-users in North America, Asia and Europe. To date, we have shipped and been paid for over 570,000 units of Helo devices. Helo is more than just a wearable device that measures steps, heart rate and blood pressure - what we believe differentiates Helo from other available wearable devices in the wellness sector is our Life Sensing Technology that is embedded in every Helo. This technology encapsulates an increasing array of state-of –the-art sensors that capture a wide range of user biometric data, which is encrypted and uploaded to secure cloud storage where it is further processed, segregated and made available to third parties, enabling the development of novel applications (such as the non-invasive sugar trend monitoring and alcohol sensing applications that are currently under development) for Helo users.

 

Our strategic goal is to build a growing community of loyal Helo users in the wellness market who enjoy meaningful feedback from the user-friendly applications on their Helo and in return agree to share their data. Given the launch of our existing products and our strong sales and marketing relationship with WGN, we believe that we are well positioned to address specific market segments within the wellness market. We expect to enter the sugar trend wellness monitoring market in the latter part of 2018, following the launch of Helo Extense, a wirelessly connected device that will enable users of Helo LX and Helo LX+, an enhanced version of Helo LX with additional sensors that was launched in January 2018, to non-invasively monitor their sugar trends on demand. In 2019, we expect to launch a Helo device with all of the current Helo capabilities plus a continuous alcohol sensing capability by developing a miniaturized alcohol sensor in partnership with 1A SmartStart, LLC.

 

Our Technology

 

Life Sensing Technology is a proprietary technology that has been developed by our in-house team, leveraging our experience working together, building and successfully selling mobile devices and telecom services worldwide. Our Life Sensing Technology uses state-of-the-art sensors that are selected or customized to our specifications, and optimally configured for Helo devices. These sensors continuously collect specific user biometric data that is encrypted and securely uploaded to our cloud based storage platform where the data is processed using algorithms and artificial intelligence to further refine the data. This ongoing data upload populates an ever-expanding bio-parameter database that we believe will have the potential to develop into a diverse and rich database that will be highly desirable for wellness and health-related data mining, and third party software application (or App) development. Currently, controlled access to our user-anonymized version of this data is available via our Open Application Programming Interface (or OpenAPI) which delivers selected data to authorized third parties, enabling Helo Apps to query our database in real-time and providing data for research, product evaluation and other purposes. We are responsible for the data we provide and the third parties who access our data are responsible for interpreting our data. Helo Apps developers are entirely responsible for any information that they, as subject matter experts, present to Helo users who download their App.

 

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We believe that our data collection, user-approval and authorization to use this data is greatly enhanced by our close customer relationships developed by WGN, which enables us to secure permission to collect data on demand and to store, own and optimally analyze this data for in-house and third-party development. We believe that our access to the user through WGN’s exclusive direct sales model creates a protected market for our current product offerings and secures a ready market for our future product offerings currently in development.

 

Our Helo devices continuously gather data from our users and upload this data to populate a proprietary database built to enable our corporate partners to create new applications for our users, determine new insights and identify new trends generated from our user data. Our database contains extensive multi-ethnic, biometric and vital signs data that is restructured so that user data is anonymized. Our strategy is to make such data available to our corporate partners and third-party App developers, generating a possible new revenue stream in addition to revenues generated from sales of the Helo Apps and Helo devices.

 

Our Relationship with WGN

 

WGN has been in business since 2010 and has served as our distribution partner since 2014. In early 2016, WGN transitioned out of its worldwide mobile business to enter into the wearables market. Today, our Helo line of products is WGN’s primary offering. Sales of Helo through the direct selling channel lends itself to a person to person promotion because although it is a technology product, it provides meaning information that is fundamentally personal in nature.

 

WGN is a multi-level marketing company specializing in sales, marketing and distribution of technology products worldwide online. According to WGN, it had over 10,000 customers in June 2017 who were considered business builders and a total of 17,000 customers in Canada and USA. In January 2018, Business for Home ranked WGN as one of the 100 Solid Top MLM Companies. In February 2017, two of WGN’s business builders were ranked 2nd and 4th out of the top 10 earners according to Business for Home.

 

WGN is 50% owned by each of Fabio Galdi, who serves as our Chairman of the Board and Chief Technology Officer, and his brother, Gabriele Galdi. World Global Holdings Pte. Ltd., our largest stockholder, which we refer to as WGH, is 50% owned by Gabriele Galdi, 28% owned by Alfonso Galdi, the brother of Fabio Galdi and Gabriele Galdi, and 22% owned by Alessandro Senatore, who serves as a director of our company. Currently, WGH, WGN and their affiliates collectively own approximately 75% of our outstanding common stock.  Consequently, certain conflicts of interest, which are more fully discussed below, exist between our company on the one hand and WGN on the other hand.

 

Based on our Strategic Partner Master Sales and Worldwide Distribution Agreement with WGN that we entered into on October 1, 2017. WGN places Helo orders with us on a prepaid basis at an agreed-upon mark-up on our cost of manufacture. Once we receive orders from WGN, we authorize our supplier to fulfill these orders and notify WGN when their orders are ready for pickup or shipment.

 

We have also granted WGN a non-exclusive license to use our brands (including the marks “Wor(l)d” and “Helo”), to promote sales of Helo devices to end-users in the wellness market worldwide as well as sales of Helo Apps to its users. Under the terms of the Strategic Partner Master Sales and Worldwide Distribution Agreement, in addition to our mark-up on Helo sales, we will receive a 30% net revenue share on all Helo App sales by WGN on Google Play Store, Apple’s App Store or directly downloaded from Helo App Store. Currently, there are some free Apps available for download by Helo users, and we expect to generate revenues from user paid Helo Apps sales beginning in 2019.

 

The initial term of the Strategic Partner Master Sales and Worldwide Distribution Agreement with WGN is five years.  After the initial term,  the Strategic Partner Master Sales and Worldwide Distribution Agreement shall renew automatically for an additional two year term and thereafter for additional one year terms unless either we or WGN provides written notice to the other party on or prior to 180 days before the expiration of the initial term of any renewal term of its intent to terminate the agreement at the end of the initial term or renewal term, as applicable.  Either party may also terminate the Strategic Partner Master Sales and Worldwide Distribution Agreement for cause, for non-payment or non-performance by the other party or in the event of the insolvency of the other party.

 

We believe that our exclusive partnership with WGN allows us to reach prospective end-users worldwide, and promote the benefits of a growing range of targeted paid Apps. These Apps have been designed by third party subject matter experts to provide users with specific, relevant and timely information so they can make appropriate lifestyle choices based on the current status of their continuously measured bio-parameters. We believe that users will self-select their Apps to meet their information requirements. We believe that this attribute will help build viral sales, loyalty to, and belief in, the Helo devices and will facilitate user endorsements and recommendations. In addition, WGN’s turnkey online direct sales business model provides users with the ability to make sales referrals for our products.

 

As our exclusive marketing and distribution partner, WGN not only provides us with a fast-track go-to market strategy but also creates the potential for customer loyalty in a protected market that is incentivized by an individually rewarding commission-based referral program. According to WGN, the average commission earned by World Global Network Associates in the U.S. and Canada in 2017 was $410.60.  Over 4,700 of these Associates earned over $1,000, over 600 Associates earned over $10,000 and over 80 Associates earned over $50,000.

 

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The Wearable Devices Market

 

Quantified-Self Wellness Market

 

Our current market is the quantified-self wellness market (i.e., self-knowledge through self-tracking). According to The Global Wellness Institute, the global wellness industry is a $3.7 trillion market and growth is expected to accelerate by 17% in the next five years. In addition, the worldwide wearables market is set to nearly double by 2021, according to International Data Corporation, with the wearable technology market expected to reach $51.6 billion by 2022.

 

From a technology perspective, this market has been revolutionized by wearable devices with Bluetooth capabilities coupled with smartphones that connect to the cloud which have opened up a vast array of new products and services. We believe that low power, full Internet of Things (or IoT) connectivity will also yield another wave of innovation, as users will no longer be tied to their smartphones for connectivity purposes. In addition, the decreasing costs of chips and other components, combined with miniaturization are also expected to expand the size of this market.

 

Market education by Fitbit, Apple and others has encouraged wearable device acceptance. Today, the key drivers of this market include technology improvements and the “self-care is the new healthcare” attitude phenomenon. We believe that increasing health and fitness awareness, combined with the rising share of aging population, increasing incidences of chronic and lifestyle diseases and a focus on prevention rather than cure, will also increase the demand for quantified-self wellness products.

 

However, we also believe that the growth of the wellness market could be inhibited by factors that might have a negative impact on user perception, such as devices that generate data without giving insights into what that data signifies or devices that fail to correlate generated data with factors affecting digital health or devices that fail to provide actionable intelligence regarding a digital health outcome. It is our expectation that privacy and security concerns and evolving regulations in these areas will also have a material impact on the future of the quantified-self wellness market.

 

Healthcare/Digital Health Market

 

As technology matures and as wearables and sensors are further miniaturized, we believe that more novel applications for healthcare will be developed. We believe that we will witness integration of medical sensors into consumer electronics that will enable home-based medical data gathering and support remote care and preventive digital health programs, with potential opportunities in areas such as:

 

Health and Wellness Monitoring

 

  · Sensors and wearables that monitor physiological data of older people and individuals with chronic conditions can facilitate timely clinical interventions.

 

  · Some consumer-focused health and fitness sensors and wearables are widely used by enthusiastic individuals to gather quantified data about their health.

 

Safety Monitoring

 

  · Many sensors and wearables have been developed to detect falls, epileptic seizures and heart attacks in older people and susceptible individuals—and then send alarm signals to caregivers or emergency response teams.

 

Home Rehabilitation

 

  · Sensing technology is sometimes used in combination with interactive gaming and Virtual reality environments and augmented feedback systems to facilitate home-based rehabilitation for physiotherapy, patients with heart disease and ageing individuals.

 

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Treatment Efficacy Assessment

 

  · We believe that through the use of sensors and wearables, the efficacy of treatments and outcomes of clinical trials can be better assessed. Sensors can help to track physiological changes from chronic conditions, as well as the progress of treatments on a continuous basis.

 

  · Sensors are also used to monitor, assess and improve patient compliance with their treatment regimens.

 

Early Detection of Disorders

 

  · By combining physiological sensors with activity monitors and consumer-end electronic devices, we believe that this application of digital health can be used for early detection of symptoms and adverse changes in a patient’s health status - facilitating timely medical interventions.

 

Sugar Trend Monitoring Market

 

The importance of blood glucose (also known as blood sugar) monitoring is that it currently serves as the main tool used to check diabetes control. The current mainstream blood glucose measurement process is to use a lancing device on the side of the fingertip to obtain a drop of blood, touch the test strip to the drop of blood and wait for the result. Apart from being painful for the diabetic, there are health risks due to the invasive nature of the process as well as measurement compliance and recording issues.

 

We plan to provide a wearable device in the wellness sector that is non-invasive, blood free, and is capable of providing on-demand or continuous self-monitoring of the user’s sugar trend (i.e., not specific blood sugar reading) and that does not require consumable components (such as test strips, lancets that prick the skin or patches that attach to the skin). If we are successful in developing this device, we believe these are critical features that will distinguish us from the other wearable devices that are currently available in the wellness market.

 

Based on data from the American Diabetes Association and the 2017 National Diabetes Statistics Report, diabetes is a pervasive healthcare problem in the United States, which creates a large market for our potential continuous sugar trend monitoring feature. For example:

 

  · 30.3 million Americans, or 9.4% of the population, have diabetes, and $1 in every $5 health care dollars in the U.S. is spent caring for people with diabetes.

 

  · 1.5 million Americans are diagnosed with diabetes every year.

 

  · In 2015, 84.1 million Americans age 18 and older had pre-diabetes.

 

In addition, according to the International Diabetes Federation, 415 million people worldwide (1 in 11 people) have diabetes, consuming 12% of global health expenditure (or approximately $673 billion) in 2015. 

 

Although blood glucose monitoring is often associated with pre-diabetics or diabetics, we believe there is an even wider potential target market — those who do not have diabetes. This was highlighted in 2015, when the World Health Organization reaffirmed its previous recommendation that our intake of sugar — other than sugar that is naturally contained in fruits and vegetables – should not exceed ten percent of total energy intake, and that reducing our sugar consumption to less than five percent of total energy intake would bring additional health benefits. We believe that this and other research demonstrates that sugar trend monitoring can be an important opportunity in the wellness sector that we should pursue.

 

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Opportunity in Non-Invasive Sugar Trend Monitoring

 

There has been a focus by a number of our competitors as well as early stage companies on developing a continuous monitoring, non-invasive, non-inserted, blood glucose monitoring device. Our goal is to deliver a continuous monitoring, blood and needle free, no consumables, non-invasive, wearable sugar trend monitoring device for users in the wellness sector in early 2019. In the second half of 2018, we plan to deliver a Helo device with all these properties except that it will monitor the user’s sugar trend on-demand rather than continuously.

 

Our Products

 

Our Helo wearable devices have been designed to satisfy the demand from customers in the quantified-self wellness market. We have built a platform where both our Helo users leverage our device to monitor their wellness and where our Helo devices serve as a gateway to an automated data collection capability that we believe opens up the opportunity for the development of a huge range of wellness Apps and data mining opportunities.

 

 

Since the fourth quarter of 2016, we have sold over 570,000 Helo devices through WGN to the quantified-self wellness sector worldwide. During this time, we have moved from supplying only a single sensor device for our Helo Classic and Helo LX models to providing multi-sensors for our Helo LX+ models that were made available during the first quarter of 2018.

 

We have worked to optimize our Life Sensing Technology and upgrade our Helo device from its Classic version to the current Helo LX, which we introduced in 2018 that offers more features to our users in the wellness market. We believe that our Helo LX and Helo LX+ (which was launched at the Consumer Electronics Show 2018 in Las Vegas in January 2018) are designed and are suitable for the worldwide quantified-self wellness market.

 

  · Helo LX has an accelerometer and a photoplethysmography (or PPG) green sensor that non-invasively detects volumetric changes in peripheral blood vessels in the wrist. This PPG sensor enables Helo LX Apps to measure Heart Rate, Breath Rate, Mood/Energy and Steps, and it is also future-proofed by being “Plugin” enabled, so Apps developed in the future will be backward compatible for use by Helo LX users (see discussion on Helo Apps below).

 

  · Helo LX+ (which was launched in January 2018) has everything the Helo LX has, plus additional sensors that allow it to gather more user data which will increase functionality delivered to the user, such as enabling EKG analysis to be performed.

 

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  · Our Helo Extense, expected to be launched in the second half of 2018, will enable Helo LX and Helo LX+ users to non-invasively monitor their sugar trend on demand.

 

  · Helo LX Pro will be similar to the Helo LX+, but we intend to submit the Helo LX Pro to the FDA for its approval as a medical device in 2019. Once launched and following receipt of any required regulatory approvals, we believe that the Helo LX Pro Apps will be able to provide users with more detailed information than is currently provided by the Helo LX+ Apps.

 

 

  · We believe users who have Helo LX and who are involved in the WGN marketing business as consultants will seek to upgrade to Helo LX+ and newer Helo models, when released.

 

  · Under the right market conditions, our long-term plan is to extend our business into the healthcare sector if and when our Helo Pro wearable device is FDA approved, and assuming that we are able to secure a healthcare appropriate distribution platform for the device. There is no assurance that this plan can be achieved in 2019, if at all.

 

Our Mission and Growth Strategy

 

We seek to become a leading wellness wearable device and “big data” provider whereby our Helo users would benefit from the availability of new products and services (initially in the wellness sector and later in the healthcare market segment), developed from sharing their anonymized, aggregated, multi-ethnic, bio-parameter data in a structured way with authorized third parties.

 

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We intend to grow our business by adopting the following strategies:

 

  · Increase unit sales to the wellness market by:

 

  o Rolling out new Helo models (Helo LX+ was launched in January 2018 during the Consumer Electronics Show 2018 and first delivery to end-users was in the first quarter of 2018) at different price points with functionalities (such as non-invasive sugar trend monitoring) that are tailored to different end-users in the wellness market segments;

 

  o Enhancing Helo’s functionality and features by continuing to fund Life Sensing Technology development and building new sensor technology partnerships, so we can introduce more sensors that could capture more data (such as the launch of a Helo device with an integrated alcohol sensor, targeted for launch in 2019) or partner with algorithm experts who help enhance the processing of the data that we already capture so that third parties can develop more creative Apps.

 

  · Supporting the development and sales of Helo Apps:

 

  o Based on our existing operating platform and as we continue to collect biometric data from Helo users, we believe that the data gathered using our Life Sensing Technology will create significant revenue opportunities for us as more subject matter experts and third-party App developers begin to access our data by the second half of 2018.

 

  o Facilitating the accelerated development of Helo Apps by third party developers through the addition of our own development team to streamline and continuously upgrade the OpenAPI so that the process is fully turnkey and self-service. In addition, we plan to regularly promote the leading apps on the Helo App Store, at events like the Consumer Electronics Show and via our distributor, WGN.

 

  · Entry into the healthcare market. If and when our Helo LX Pro is approved as a medical device by the FDA in the U.S. (and appropriate regulatory authorities in other jurisdictions) and we are able to secure a suitable distribution partner, we intend to launch a complementary product line that is specifically designed for the healthcare market, that would provide user-appropriate information to the user and physician-appropriate information to the physician.

 

  · Launch of HeloPay. We plan to launch an IoT device (such as Helo 2 that is scheduled for delivery in 2019) that will have near field communication technology (NFC), activating HeloPay on Helo HeloPay enabled devices where Contactless Visa or MasterCard works (rather than being restricted by local, in-country banking agreements) so we could offer instant worldwide coverage to all Helo 2 users.

 

Potential Revenue from Helo App Sales

 

Currently, we offer our Helo devices to consumers in the wellness sector through our exclusive marketing and distribution partner, WGN. We will seek to expand our revenue model in the second half of 2018 by monetizing our Life Sensing Technology through sales of Helo Apps that are being developed by third parties for Helo device users.

 

If and when we become a big data provider, we hope to establish a secure platform for subject matter experts and software developers to access our user anonymized database of biometric and vital signs data from our Helo device users. This data is accessed using an OpenAPI that provides access to Helo user data so these third-party developers can analyze this data and provide useful, valuable and personal user information. If this information is suitably packaged in an intuitive, attractive App providing insights and meaning to user data, we believe our Helo device users will be interested in purchasing that App. In addition, if WGN Helo users find it beneficial and useful, they are likely to refer it to others in their networks and communities.

 

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Based on our planned revenue-share model, we believe that we will be entitled to 30% of the proceeds from Helo App net sales revenues, with the third party App developers and WGN sharing the remaining 70%. We anticipate that by early 2019, we will start to generate revenues from the sales of Helo Apps promoted by WGN.

 

Examples of some free Helo Apps are displayed on the screen shot of the Helo App Store below.

 

 

 

Our Competitive Strengths

 

We believe that our strength comes from our understanding of the wellness market, our ability to anticipate end-user’s needs, our ability to further develop, integrate and monetize our Life Sensing Technology, our OpenAPI platform that allows third party subject matter experts and App developers to create novel, useful and user-enticing Apps, our exclusive distribution model and the proprietary user database that we are able to build through the sale of Helo wearable devices by our exclusive distributor, WGN. We believe we have a scalable business platform that is conducive to potential growth in revenue and profitability, and we believe our business model will adapt well to changing market conditions.

 

Our target market is the intersection of wearable device manufacturers (e.g. Fitbit), medical and healthcare big data providers (e.g. IBM), wearable device designers (e.g. Apple) and professional multi-level marketers (e.g. NuSkin). We therefore believe we are positioned with the appropriate mix of in-house skills, capabilities, direct market access and focus to reach our targeted customers.

 

We also believe that the following competitive strengths enhance our position in the markets that we are currently competing in:

 

  · Proven Distribution Platform: Our exclusive marketing and distribution partner, WGN, a multi-level marketing company with a global footprint, is a recognized technology direct selling company.

 

  · Differentiated Business Model: Our business model is to design wearable devices that are intended to address the wellness needs of our various target customers at different price points by providing them with the specific functionalities they seek. By leveraging our ability to capture and aggregate biometric and vital sign data from our Helo device users and the third party developer’s ability to offer pertinent software applications that meet their needs, we believe we have a significant opportunity to differentiate ourselves from the current suppliers in the wellness market that is being served and validated by the likes of Fitbit. While we depend on WGN on revenue growth and increase in unit sales, we carry no inventory risk and our agreement with WGN currently provides a mark-up on our costs for products that they purchase from us.

 

  · Scalable Business Platform: We believe we have the structure for controlling our operating expenses and overhead as we seek to grow our business and establish (and thereafter improve) our operating profits. By keeping a relatively low headcount and optimizing the use of outsourced industry experts, subject matter experts, third party App developers, and working with preferred manufacturing partners, we have been able to attain our strategic and operational objectives without incurring significant overhead costs.

 

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Research and Development

 

In April 2017, we entered into an exclusive license agreement with Giner Inc., a research and technology company based in Massachusetts, pursuant to which Giner agreed to incorporate its miniaturized transdermal alcohol sensor (or TAS) into our Helo device and give us an exclusive license to use, market, sell and distribute the integrated Helo product in the consumer market. In exchange, we agreed to fund Giner’s non-recurring engineering costs related to the integration of the TAS technology into our product. Giner has also agreed to build a mobile software application for us with certain advanced features using TAS and other Helo data. In May of 2018 Giner sold its assets related to its transdermal alcohol sensor business to 1A Smartstart LLC. In connection with such sale, our exclusive license agreement was assigned to 1A Smartstart, LLC. In connection with such assignment, we entered into an addendum to our exclusive license agreement which revised the minimum volume requirements and exclusivity terms of that agreement.

 

The term of exclusive license agreement continues until December 31, 2022 (the “Initial Term”), subject to perpetual automatic annual renewal as follows: If we meet the target volume in Year 5, as set forth in the agreement, or maintain exclusivity by paying the shortfall fee, then the agreement will automatically renew for an additional year, with a new volume target to be negotiated and mutually agreed upon by both parties in good faith.  The agreement will continue to automatically renew for subsequent annual periods so long as we meet or exceed the volume target of the preceding year or pay the shortfall fee.  The target volume of each successive year after Year 5 shall not exceed an increase of 15% of the preceding year’s target volume, and such increase amount shall apply if the parties are not otherwise able to mutually agree on an increase.  Either party has a right to terminate the agreement if the other party fails to perform or comply fully with any material provision and such failure continues for 30 days thereafter.

 

Prior to October 1, 2017, except for the Giner agreement, all related research and development expenses, including costs incurred in the hardware and software development of Helo Classic, Helo LX and Helo LX+ were borne by WGN. In connection with our corporate reorganization on October 1, 2017, WGN assigned and transferred to us all of its rights, title and interest in and to certain technology, intellectual property and intellectual property rights.

 

We expect to spend approximately $1.2 million on research and development in fiscal 2018 and $2.0 million in 2019. We expect to fund our research and development from our working capital and proceeds from this offering.

 

Sales and Marketing

 

We believe that to obtain sales, we do not need a dedicated sales and marketing team as our current business model is to sell our Helo devices directly to WGN, who then sells the Helo devices to the end-users.

 

We believe WGN’s consultants and its peer-to-peer referral process is ideal for the sale of our Helo devices in the wellness market. Leveraging its online model (see example screen shot below), we believe WGN is capable of promoting our Helo devices worldwide efficiently and effectively as its consultants are motivated by the referral-based commission process to identify and reach out to people who they believe may be interested in our Helo wearable device and wish to make a purchase.

 

To create a sale, the WGN consultant provides the end-user with a consultant specific WGN online sales portal web address. This website brings the end-user to the WGN shopping cart (see below) where the customer can submit his/her order directly to WGN; and in the process, this order is tagged to the WGN consultant who made the introduction and that consultant gets paid a customer-referral commission by WGN.

 

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All WGN customers automatically get their own WGN online sales portal where they can access all product information, training manuals and referral commissions so they can in-turn become a WGN consultant, repeat the process and get paid a commission for successfully making a customer referral.

 

According to WGN, in 2017 almost one out of every three Helo customers in the U.S. and Canada have made at least one successful customer referral in 2017 for which they earned a commission.

 

We believe that our exclusive sales and distribution agreement with WGN provides us with a unique route to market that delivers multiple benefits across all markets:

 

  · Strong Brand and Channel Management: We work closely with WGN senior management in the creation and delivery of a consistent brand message domestically and internationally.

 

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  · Loyalty: Helo provides feedback to users of a personal nature, so WGN’s peer-to-peer business model provides a personal approach and an incentivized support system for the end-users should they require any level of support. We believe this approach builds loyalty within the WGN customer base and encourages repeat purchases.

 

  · Viral Growth: Given the numbers of users promoting the products online, the sales and marketing approach creates the potential for building brand awareness quickly and fostering viral sales growth because the whole process is automatic and fully scalable. Since WGN’s sales portal and customer creation process is automatic, end-user referrals can be done individually or in groups, using social media or traditional communication methods such as phone calls or even face-to-face meetings, and there are no geographical boundaries. Thus, customer referrals can be local, across the U.S. or international. In addition, there is no barrier to becoming a WGN consultant, and consultants are motivated by a commission-based referral model to drive unit sales. Also, in terms of fulfillment, once a customer places a Helo order, it is electronically communicated to a WGN logistic center where it is automatically fulfilled and dispatched for delivery by courier. WGN consultants are also incentivized to promote Helo Apps and in this case, when an end-user places an order, delivery is over the web providing instant delivery upon successful payment to WGN.

 

  · Speed to market: WGN online sales process and distribution model provides us with a receptive and ready market for new products that can be shipped to users as soon as they are manufactured.

 

While we rely on WGN to promote our Helo devices and the Helo Apps, we also undertake some selected events to build industry awareness of our company and the Helo brand and to seek out new potential market channel partners (that do not compete with WGN at any level) as well as technology partners, subject matter experts and big data customers. For example, in early January 2018, we launched the Helo LX+ in Las Vegas at the Consumer Electronics Show 2018, and previewed the non-invasive sugar trend monitoring technology as well as alcohol sensing technology.

 

Our Competition

 

The wellness market is both evolving and fiercely competitive, with a multitude of participants, including specialized consumer electronics companies such as Fitbit, Garmin, Jawbone and Misfit, traditional health and fitness companies such as Adidas and Under Armour, and traditional watch companies such as Fossil and Movado also participate in the market. In addition, many large, broad-based consumer electronics companies either compete in our market or adjacent markets or have announced plans to do so, including Apple, Google, LG, Microsoft and Samsung. For example, Apple sells the Apple Watch, which is a smartwatch with broad-based functionalities, including some health and fitness tracking capabilities, and has sold a significant volume of its Apple Watches since introduction.

 

In the wellness market, we also face competition from manufacturers of lower-cost devices, such as Xiaomi and its Mi Band devices. In addition, we compete with a wide range of stand-alone wellness and fitness related mobile apps that can be purchased or downloaded through mobile app stores.

 

We acknowledge that we are a small company that is relatively new to the wearable devices market, and we will continue to face significant competition from larger, more established companies. We believe we could be a niche player because of our exclusive distribution arrangement with WGN and our ability to leverage Life Sensing Technology (such as our non-invasive sugar trend monitoring technology) to bring alternative wellness solutions to our end-users.

 

Manufacturing

 

To appropriately manage our production risk, we periodically assess the experience, qualification and financial condition of our vendors and suppliers. Where feasible and appropriate, we will diversify our concentration risk by working with other qualified suppliers. Our Helo devices are currently manufactured under contract by Quality Technology Industrial Co., Ltd., a third-party based in Shenzhen, China, and sold wholesale by us to our exclusive distribution partner, WGN, who generates orders, sells and distributes our Helo devices to its end-users worldwide.

 

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We supply QTI with our Helo design and Life Sensing Technology so it can manufacture the Helo devices under contract. QTI has been involved in the development of the Helo production process as well as the development and oversight of the quality control process.

 

As our long-term business partner, QTI assists us not only in the selection of suitable material suppliers but also offers flexibility to accommodate unanticipated changes in our production schedule. Generally, we will secure our Helo device orders with an initial 10% deposit to QTI and then pay the remaining balance when the order has been manufactured and ready to ship. In this relationship, we retain all design, branding and intellectual property of the manufactured Helo devices.

 

Intellectual Property Strategy

  

In order to protect our intellectual property, we partition our supplier activities by managing our third-party supplier relationships so that we only help them build their expertise in their chosen area of specialization and they only retain IP rights to their activities. We rely on different partners to deliver different components of our products and our various partnerships do not collaborate with one another with respect to our products. For example, we supply our Life Sensing Technology to QTI, the third party who manufactures the Helo devices. Although user data is captured via a Helo device, the user data doesn’t reside on the device and it is not accessible through the hardware platform. Similarly, our software developers do not have access to the components of our Life Sensing Technology or manufacturing expertise.

 

In May 2017, we filed a provisional patent application (U.S. Provisional Application No. 62/501,995 Title: Personal Healthcare Device) for an early Helo device design and aspects of how it collects biometric data. In May 2018, we filed a corresponding full utility application and confirmed  that we wanted to file the PCT application to seek international patent protection for the underlying invention. It can take two years to receive the first action from USPTO. We are also in the process of applying for patents to cover the improvements to the device in the next iterations, and we are planning to pursue these applications in business relevant jurisdictions outside of the United States.

 

Similarly, we have filed trademark applications for Helo, Life Sensing Technology, Sugar Trend and HELO LIFE SENSING TECHNOLOGY both in the United States and jurisdictions outside the U.S. We also plan on filing additional applications in the near future to cover our various Helo marks, company name marks, logos, and slogans. It will take at least one year to complete the registration process, possibly longer.

 

Regulation

 

Presently, Helo devices are only sold in the quantified-self wellness market. Our Helo devices are intended for only general wellness use; they are non-invasive in nature and have no harmful lights. We believe Helo should be considered a General Wellness Product because it has an intended use that relates:

 

  · to maintaining or encouraging a general state of health or a healthy activity, or

 

  · the role of healthy lifestyle with helping to reduce the risk or impact of certain chronic diseases or conditions and where it is well understood and accepted that healthy lifestyle choices may play an important role in health outcomes for the disease or condition.

 

Where Helo Apps make a claim, it is intended that these Apps promote, track, and/or encourage choice(s), which, as part of a healthy lifestyle, may help reduce the risk of certain chronic diseases or conditions. We believe our Helo devices present a low risk to the safety of users and other persons and should be considered a low risk product from an FDA regulatory perspective.

 

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We plan to apply for appropriate FDA approval for Helo LX Pro as a medical device in 2019 so that we can satisfy what we believe to be the emerging demand for a Helo device that is suitable for the healthcare market. The components and the capabilities of the Helo LX Pro are the same as the Helo LX +; however, the difference will be in how the information is communicated to the user. Apps designed by third party developers for the Helo LX+ device will provide trends, such as green, amber and red indications. The Helo LX+ device doesn’t make any reference to diseases or conditions, however, our intention is for the Helo LX Pro device to be able to provide specific measurements as determined by algorithms as well as greater data interpretation of data for the user in a manner that complies with any applicable FDA and other regulatory guidelines.

 

Although Helo data is encrypted, restructured and segmented to render individual wear data anonymous, we seek to be proactive in terms of protecting our user’s personal data so that we stay ahead of the increasing trend towards providing legal protection for personal data. Examples of such legislation is the Health Insurance Portability and Accountability Act (HIPAA) in the US and in the EU, the General Data Protection Regulation (GDPR).

 

See “Risk Factors-Risks Related to Regulations” for a description of certain U.S. and foreign laws and regulations to which our business is or may be subject.

 

Employees

 

As an emerging business, our top priority is to maintain a scalable business platform that is conducive to growth without compromising our ability to operate efficiently and effectively and comply with the applicable rules and regulations. Where feasible and appropriate, we will continue to leverage outsourced professionals to support our daily operations.

 

As of the date of this prospectus, we have one full time officer and have outsourced management service agreements covering the following six positions: Chief Executive Officer; Chief Technology Officer; SVP – Production; SVP – Software Development; SVP- Design; and IT Manager. We have also outsourced our software development function to a company based in India that supports our Helo App Store and OpenAPI development. None of the employees are represented by a labor union.

 

Properties

 

We are headquartered at 600 Brickell Avenue, Suite 1775, Miami, Florida 33131, where we lease an office. We sublease this office space from WGN on a month-to-month basis at a monthly rent of $5,000. We believe that this space sufficient for our current needs. We do not currently lease or own any other facilities.

 

Legal Proceedings

 

We are not involved in any legal proceedings which management believes will have a material effect upon the financial condition of our company, nor are any such material legal proceedings anticipated. We are not aware of any contemplated legal or regulatory proceeding by a governmental authority in which we may be involved.

 

Corporate History and 2017 Reorganization

 

We were incorporated in the State of Nevada on October 22, 2010, under the name Halton Universal Brands Inc.. Our initial business was acting as a brokerage, consulting and marketing firm specializing in brand consulting and new product strategy consulting for emerging brands.

 

Effective October 29, 2014:

 

  1. Power Clouds Inc. (formerly known as World Assurance Group, Inc., and which we refer to as PWCL) acquired 7,095,000 shares of our common stock, representing 98% of the then issued and outstanding share capital of our company, for cash consideration of $378,000;

 

  2. We discontinued our previously existing brokerage and brand consultancy business; and

 

  3. We acquired a mobile phone business and related assets from PWCL for consideration of $557,898, funded by way of debt from PWCL

 

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We refer to the foregoing transactions as the October 2014 Transactions.

 

We accounted for the October 2014 Transactions as a reverse merger of PWCL’s mobile phone business and related assets into our company. This reverse merger was accounted for as a reverse capitalization with PWCL’s mobile phone business, the legally acquired business, being treated as the acquirer of our company for accounting and financial reporting purposes.

 

In November 2014, our then board of directors and a majority stockholders authorized a name change of our company from Halton Universal Brands, Inc. to World Media & Technology Corp. The name change became effective on December 22, 2014.

 

On March 5, 2015, we incorporated a wholly-owned subsidiary, Space Wireless Corp. (or Space Wireless) in Florida. Space Wireless was established to operate as a mobile virtual network business in the United States but it was dissolved on November 3, 2017, due to the fact that Space Wireless no longer had any operations, debts or liabilities.

 

On March 25, 2015, we issued 12,000,000 shares of our common stock to Mr. Fabio Galdi, our then Chief Executive Officer and currently our Chairman of the Board and Chief Technology Officer, at $0.25 per share, for total proceeds of $3,000,000 in cash.

 

On March 30, 2015, we entered into a Common Stock Purchase Agreement with PayNovi Ltd., an Irish limited liability company (or the PayNovi) and Anch Holdings Ltd., an Irish limited liability company (or Anch). Pursuant to the terms of the SPA, we purchased 350 shares of PayNovi’s common stock, which represented 35% of PayNovi’s issued and outstanding shares as of the closing date, for a purchase price consisting of 1,361,000 shares of our common stock, which represented 5% of our then total issued and outstanding shares, and 3,937,005 shares of PWCL’s common stock, which represented 5% of PWCL’s then total issued and outstanding shares. PayNovi operated in the mobile and online payments market, and offered products such as a mobile wallet, prepaid calling cards and online payment programs, as a white label, to its partners. The 35% investment in PayNovi was made to gain a strategic position in the mobile payments space and offer mobile wallet capabilities as part our SPACE wireless offerings. On September 30, 2015, we took an impairment charge of $1,376,208 to reduce the carrying value of our PayNovi shares to zero based due to operating losses incurred by PayNovi and the limited activities of its business operations.

 

In October 2015, PWCL distributed 14,021,122 of the 15,095,000 shares of our common stock held by PWCL to its stockholders. PWCL stockholders received one share of our common stock for every six PWCL shares of common stock held as of the record date, which was October 1, 2015. In December 2015, the remaining 1,073,878 shares of our common stock held by PWCL were transferred to World Global Cash Pte. Ltd., a wholly-owned subsidiary of WGN.

 

On October 5, 2016, we filed a Form 15 to suspend our duty to file reports under Sections 13 and 15(d) of the Securities Exchange Act of 1934, as amended. In order to enable our common stock to continue to trade on the OTC Pink Market after the filing of the Form 15, we have satisfied our obligations to make adequate current information publicly available within the meaning of Rule 144(c)(2) of the Securities Act of 1933, as amended, through the filing of Annual and Quarterly Reports and Supplemental Information with OTC Markets. Copies of these reports are publicly available on the OTC Disclosure and News Service.

 

On January 6, 2017, the Company issued 100 shares of Series A Super Voting Preferred Stock to Fabio Galdi in exchange for the cancellation of $250,000 of unpaid management service fees.

 

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2017 Corporate Reorganization

 

On October 1, 2017, we, Fabio Galdi, WGN and WGN’s wholly owned subsidiary, World Global Assets Pte. Ltd., entered into a Stock Exchange, Debt Forgiveness and Intellectual Property Assignment Agreement (which we refer to as the Reorganization Agreement).

 

Pursuant to the terms of the Reorganization Agreement, we issued 8,000,000 shares of our common stock to WGN. We also transferred 350 common stock shares of PayNovi to WGN and agreed to forgive the remaining outstanding balance ($1,140,506) owed by WGN for borrowed money.

 

In exchange: (i) Fabio Galdi returned to use for cancellation all 100 shares of our Series A Super Voting Preferred Stock held by Fabio Galdi, (ii) Mr. Galdi forgave the amounts owed by the Company to him for past services rendered in the aggregate amount of $150,000, (iii) WGN assigned and transferred to us of all of its right, title and interest in and to certain Technology, Intellectual Property and Intellectual Property Rights (as defined in the Reorganization Agreement), which rights comprise a key component of our current business, (iv) WGN and Mr. Galdi agreed not to source, promote or enter in to any agreement for any technology similar to our technology from any supplier other than our company and (v) WGN agreed to terminate and forego its exclusive relationship with Quality Technology Industrial Co. Ltd. and to purchase Helo devices directly from us upon the terms and subject to the conditions set forth in a Strategic Partner Master Sales and World Wide Distribution Agreement dated as of October 1, 2017 as more fully described below.

 

As a result of the Reorganization Agreement, our business model is more akin to a traditional wholesale model whereby our distributor, WGN, places its orders directly with us on a prepaid basis and, based on such orders, we will instruct our supplier to build and ship the Helo devices in accordance with the specifications furnished by WGN.

 

On December 4, 2017, we changed our name to World Technology Corp, with the stock symbol “WCOR” to re-position our company as a technology company.

 

Corporate Information

 

Our principal offices are located at 600 Brickell Avenue, Suite 1775, Miami, Florida 33131, and our telephone number is (855)-467-6500. Our website is https://www.worldcorp.com. The website address is intended to provide inactive, textual references only and the information on or that can be accessed through such website is not part of this prospectus.

 

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MANAGEMENT

 

The following table sets forth information concerning our executive officers and directors and their ages of the date of this prospectus:

 

Name   Age   Position
Seán McVeigh   54   Chief Executive Officer, Director, President and  Secretary
Anthony S. Chan   53   Chief Financial Officer
Fabio Galdi   45   Chief Technology Officer, Chairman of the Board of Directors
Alessandro Senatore   40   Director

 

The following is a brief account of the business experience during the past five years (and, in some instances, for prior years) of each director and executive officer of our Company

 

Seán McVeigh has served as our President, Chief Executive Officer and Director since May 12, 2017. Prior to joining the Company as our CEO, in 2014 he founded PayNovi Ltd, an international mobile payments and payment processing company and he was a Board Advisor to World Global Network Pte. Ltd. (WGN). Mr. McVeigh served as Chief Executive Officer and Secretary of World Assurance Group, Inc. (now named Power Clouds Inc.) (OTC:PWCL) from February 1, 2013 to March 5, 2014. In 2011, he founded and was CEO of AwaySIM Ltd., which provided mobile roaming solutions worldwide. Mr. McVeigh was the CEO of VoxLoc, a B2B voice biometric supplier that used its technology to secure online and remote transactions in over 50 countries. From 2005 to 2007, Mr. McVeigh was a founder and CEO of Dorkel, a mobile signaling company with international clients which company was sold in 2007 to Via One, a U.S. electronic point of sale provider. Mr. McVeigh was the SVP Sales and General Manager for Europe until 2010.  Mr. McVeigh’s previous roles included being a business advisor to a private investment fund in Eastern Europe, establishing a medical device research and marketing company, MediSolve, and managing a digital media company. He began his career with BP Chemicals rising to managing commercial and technical businesses units.  Mr. McVeigh holds an MBA degree from University College Dublin, an MSc degree by research from Trinity College Dublin and BA, BAI. (Honors) degrees in Mechanical and Manufacturing Engineering from Trinity College Dublin, Ireland. 

 

Anthony S. Chan has served as our Chief Financial Officer since October 2017. Mr. Chan is a seasoned CPA licensed in New York and an accomplished executive with almost 30 years of professional experience in auditing and SEC reporting, mergers and acquisitions, business turnaround, SOX and FCPA compliance and risk management. As a former audit and consulting partner, Mr. Chan has advised and audited public companies and privately-held organizations across various companies. Mr. Chan is the President of CA Global Consulting Inc., a company he co-founded in 2014. He was the Executive Vice President and Acting CFO of Sino-Global Shipping America, Ltd., a NASDAQ-listed company from 2013 to 2015. From 2012 until 2013, Mr. Chan was an audit partner with UHY LLP. From 2011 until 2012, he was an audit partner at Friedman LLP. From 2007 through 2011, he was a partner at Berdon LLP, an auditing firm. Mr. Chan currently serves on the Board of the New York State Society of Certified Public Accountants, and is a member of the editorial advisory board for the CPA Journal. Mr. Chan has a BA in Accounting and Economics from Queens College, City University of New York; and an MBA in Finance and Investments from Baruch College, City University of New York.

 

Fabio Galdi has served as our Chief Technology Officer since February 1, 2018. On October 29, 2014, Mr. Fabio Galdi was named our Chief Executive Officer, President and Secretary, and appointed as Chairman of the Board of Directors. On May 12, 2017 Mr. Galdi resigned from these positions, but was re-appointed as our Chairman of the Board on January 12, 2018. Mr. Galdi is currently the President and CEO of WGN, a multinational, direct selling wearables and technology products company based in Singapore and our sole distributor. Mr. Galdi is a computer science and telecommunications expert. He graduated in 1992 from the Technical and Industrial College at ITIS G. Marconi, Italy with a degree in Computer Science.

 

Mr. Galdi began his career as an Internet and technology entrepreneur. In 1994, he created the People's Network, an Internet start-up in Europe that became Italy’s second largest internet service provider and the fifth largest in Europe. In 1997 he exited this business. Mr. Galdi subsequently founded Mecotek International, an information technology company based in Singapore, where he was responsible for Product Strategy and set up manufacturing in China and Thailand in 2002 and partnered with Italy’s public administration to undertake one of their biggest custom-made, personal computer project, valued at more than 60 Million Euros. In 2005, he founded his first Network Marketing company specializing in Telecommunication, Telme Communication Pte Ltd., building operations in more than 50 countries, with over 250,000 subscribers and 75,000 distributors and over $100 million dollars in revenue. Mr. Galdi resigned from this company in 2009. Mr. Galdi served as Chief Executive Officer and Secretary of World Assurance Group, Inc. (now named Power Clouds Inc.)(OTC:PWCL) from March 5, 2014 to April 1, 2015, and as Chairman of the Board from March 5, 2014 to October 12, 2015.

 

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Alessandro Senatore has served as a director of our company since October 29, 2014.  Mr. Senatore was our Chief Operating Officer from October 29, 2014 until May 12, 2017 and Chief Operating Officer and Chief Technology Officer from May 12, 2017 until February 1, 2018. Currently, Mr. Senatore is Chief Operating Officer of WGN and a director at Luxa Holding Pte Ltd, a property investment company.

 

Mr. Senatore holds a degree in Computer Science in 1996 from the Technical and Industrial College ITIS B.Focaccia (Salerno, Italy) and a PhD in Computer Science in 2004 at the University of Salerno (Italy). In 2001, Mr Senatore started his first business, PubliRete, an IT company developing web portals and communication solutions over main media networks. In March 2004 he joined CRMPA (Research Center in Pure Mathematic Applied), a university research center working on mathematic models applied in new Information Technology concepts and also working on projects related to E-Learning and adaptive management of the Knowledge. In 2006 Mr. Senatore served as project manager of Business Intelligence at Sis-temi Corporation where he developed applications for various corporations, helping them to follow their business by controlling growth and risk factors. In 2007 he was Project Manager for IT Business tools Telme Pte. Ltd., a Singapore based network marketing and telecommunications company. In 2010, Mr Senatore co-founded World Global Network Pte Ltd. (WGN), where he was Chief Technology Officer from 2011 to 2014 and as Chief Operating Officer from 2015. From March 2014 to June 2015, Mr. Senatore was Chief Operating Officer and a member of the Board of Directors of World Global Network PLC, a public company based in the UK. He also served as Chief Operating Officer of Power Clouds Inc. (OTC: PWCL), and from March 2014 to October 2015 as a member of the Board of Directors of Power Clouds, Inc.

 

Except as set forth below, none of our directors or officers are related to each other. There are no arrangements or understandings with any of our principal stockholders, customers, suppliers, or any other person, pursuant to which any of our directors or executive officers were appointed.

 

Fabio Galdi, our Chairman of the Board and Chief Technology Officer, and his brother Gabriele Galdi, each currently own 50% of WGN. Until May 2017, Fabio Galdi was the Chief Executive Officer of our company, and currently he serves as the Chief Executive Officer of WGN. Gabriele Galdi is also the owner of 50% of the outstanding equity of WGH, our largest stockholder and an affiliate of WGN. The remaining 50% of WGH is owned by Alfonso Galdi, the brother of Fabio Galdi and Gabriele Galdi, who owns 28% of WGH, and Alessandro Senatore, our director, who owns 22% of WGH

 

Director Independence

 

Our Board of Directors may establish the authorized number of directors from time to time by resolution. Our Board of Directors is currently comprised of two members, both of whom stand for reelection annually by our stockholders.

 

We have applied to list our common stock on the NASDAQ Capital Market. The listing rules of this stock exchange generally require that a majority of the members of a listed company's board of directors, and each member of a listed company's audit, compensation and nominating and corporate governance committees, be independent within specified periods following the closing of an initial public offering.

 

[Our Board of Directors has determined that [_] are independent directors within the meaning of the NASDAQ corporate governance and other applicable listing requirements, and that no such directors have any relationships that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director]. The Company is in the process of identifying individuals believed to be qualified to become independent directors. At such time as we identify and appoint independent directors, we will apply the independence standards of the NASDAQ Stock Market.

 

In addition to the NASDAQ independence requirements, audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Securities and Exchange Act of 1934, as amended, or the Exchange Act, subject to the transition rule that is applicable to a newly public company. In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the Board of Directors, or any other board committee accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries; or be an affiliated person of the listed company or any of its subsidiaries.

 

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Controlled Company Exemption

 

Upon the completion of this offering, WGH and its affiliates (which include Mr. Gabriele Galdi and WGN) will hold more than 50% of our outstanding common stock following this offering.  As a result, we meet the definition of a “controlled company” within the meaning of the NASDAQ Listing Rules. Under these rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company is a “controlled company” and may elect not to comply with certain NASDAQ corporate governance requirements. We do not currently intend to rely on those exemptions afforded to a “controlled company;” nonetheless, we could potentially seek to rely on certain of those exemptions afforded to a “controlled company” in the future. See “Risk Factors — We are a “controlled company” within the meaning of the NASDAQ Listing Rules listing rules.”

 

Role of the Board of Directors in Risk Oversight

 

The Board of Directors is responsible for assessing the risks facing our Company and considers risk in every business decision and as part of our business strategy. The Board of Directors recognizes that it is neither possible nor prudent to eliminate all risk, and that strategic and appropriate risk-taking is essential for us to compete in our industry and in the global market and to achieve our growth and profitability objectives. Effective risk oversight, therefore, is an important priority of the Board of Directors.

 

While the Board of Directors oversees our risk management, management is responsible for day-to-day risk management processes. Our Board of Directors expects management to consider risk and risk management in each business decision, to proactively develop and monitor risk management strategies and processes for day-to-day activities and to effectively implement risk management strategies that are adopted by the Board of Directors. The Board of Directors expects to review and adjust our risk management strategies at regular intervals following the completion of the offering, or as needed.

 

Code of Business Conduct

 

Our Board of Directors has adopted a code of business conduct and ethics, the “Code of Business Conduct,” to ensure that our business is conducted in a consistently legal and ethical manner. Our policies and procedures cover all major areas of professional conduct, including employee policies, conflicts of interest, protection of confidential information, and compliance with applicable laws and regulations. The Code of Business Conduct is available at our website at www.worldcorp.com. The reference to our website address in this prospectus does not include or incorporate by reference the information on our website into this prospectus. We intend to disclose future amendments to certain provisions of our code of conduct, or waivers of these provisions, on our website or in public filings.

 

Board Committees

 

Upon completion of the offering, our Board of Directors will appoint an Audit Committee, Compensation Committee and a Nominating and Corporate Governance Committee, and will adopt charters for each of these committees.

 

Audit Committee

 

Upon the closing of this Offering, the Audit Committee will consist of three independent directors. The Audit Committee will assist the Board of Directors in discharging its responsibilities relating to the financial management of our Company and oversight of our accounting and financial reporting, our independent registered public accounting firm and their audits, our internal financial controls and the continuous improvement of our financial policies and practices. In addition, the Audit Committee will be responsible for reviewing and discussing with management our policies with respect to risk assessment and risk management. The responsibilities of the Audit Committee, which will be set forth in its charter, will include:

 

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·appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm;

 

  · pre-approving audit and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm;

 

  · reviewing and discussing with management and the independent registered public accounting firm our annual and quarterly financial statements and related disclosures;

 

  · coordinating the oversight and reviewing the adequacy of our internal control over financial reporting;

 

  · establishing policies and procedures for the receipt and retention of accounting-related complaints, whistleblowers, and concerns; and

 

  · reviewing and approving any related party transactions.

 

The expected composition of our Audit Committee will comply with all applicable requirements of the SEC and the listing requirements of the NASDAQ Capital Market. We intend to comply with future requirements to the extent they become applicable to us.

 

Compensation Committee

 

Upon the closing of this Offering, the Compensation Committee will consist of three independent directors. The Compensation Committee will assist the Board of Directors in setting and maintaining the Company’s compensation philosophy and in discharging its responsibilities relating to executive and other human resources hiring, assessment and compensation, and succession planning. The responsibilities of the Compensation Committee, which will be set forth in its charter, include:

 

  · reviewing and approving corporate goals and objectives relevant to compensation of our chief executive officer;

 

  · evaluating the performance of our chief executive officer in light of such corporate goals and objectives and determining the compensation of our chief executive officer;

 

  · determining the compensation of all our other officers and reviewing periodically the aggregate amount of compensation payable to such officers;

 

  · overseeing and making recommendations to the Board of Directors with respect to our incentive-based compensation and equity plans;

 

  · reviewing and making recommendations to the Board of Directors with respect to director compensation; and

 

  · appointing and overseeing any compensation consultants or advisors.

 

The expected composition of our Compensation Committee will comply with all applicable requirements of the SEC and the listing requirements of the NASDAQ Capital Market. We intend to comply with future requirements to the extent they become applicable to us.

 

Nominating and Corporate Governance Committee

 

Upon the closing of this Offering, the Nominating and Corporate Governance Committee will consist of three independent directors. The responsibilities of the Nominating and Corporate Governance Committee, which will be set forth in its charter, will include:

 

  · making recommendations to the Board of Directors regarding the size and composition of the Board of Directors;

 

  · recommending qualified individuals as nominees for election as directors;

 

  · reviewing the appropriate skills and characteristics required of director nominees;

 

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  · establishing and administering a periodic assessment procedure relating to the performance of the Board of Directors as a whole and its individual members; and

 

  · periodically reviewing the corporate governance guidelines and supervising the management representative charged with implementing the Company’s corporate governance procedures.

 

The expected composition of our Nominating and Corporate Governance Committee will comply with all applicable requirements of the SEC and the listing requirements of the NASDAQ Capital Market. We intend to comply with future requirements to the extent they become applicable to us.

 

Compensation Committee Interlocks and Insider Participation

 

None of the expected members of the Compensation Committee will or was at any time been an officer or employee. None of our executive officers serve or in the past fiscal year has served as a member of the Board of Directors or Compensation Committee of any other entity that has one or more executive officers serving as a member of our Board of Directors or expected to serve on the Compensation Committee.

 

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EXECUTIVE COMPENSATION

 

Summary Compensation Table

 

The following table provides information concerning the compensation of our named executive officers, for each of the last two completed fiscal years.

 

Name and
Principal
Position(1)
  Year  Salary
$
   Bonus
$
   Option
Based
Awards
$
   Stock
Awards
$
   Other
Compensation (2)
$
   Total
$
 
Seán McVeigh, President, Chief Executive Officer and Secretary and Former Acting Chief Financial Officer(2)  2017  $   $   $   $   $104,205   $104,205 
   2016  $   $   $   $   $   $ 
Anthony S. Chan, Chief Financial Officer(3) (1)  2017  $37,500   $25,000   $   $   $   $62,500 
   2016  $   $   $   $   $   $ 
Alessandro Senatore, Former Chief Operating Officer, Former Chief Technology Officer and Director (4)  2017  $   $   $   $   $   $ 
   2016  $   $   $   $   $   $ 
Fabio Galdi, Chairman and Chief Technology Officer
Former President, Chief Executive Officer and Secretary (5)
  2017  $150,000   $   $   $   $   $150,000 
   2016  $100,000   $   $   $   $250,000   $350,000 
Alfonso Galdi, Former Chief Financial Officer(6)  2017  $   $   $   $   $   $ 
   2016  $   $   $   $   $   $ 

 

(1)Our executive officers and their respective affiliates are and will continue to be reimbursed by us for any out-of-pocket expenses incurred in connection with activities conducted on our behalf.

(2)Was appointed Chairman, President, Chief Executive Officer and Secretary and Acting Chief Financial Officer effective May 12, 2017. Resigned as Acting Chief Financial Officer effective October 1, 2017. Resigned as Chairman on January 12, 2018. Mr. McVeigh’s services are provided to us through an Amended and Restated Professional Services Agreement dated as of February 1, 2018 with Anch Holdings Ltd. All amounts paid were paid to Anch.

(3)Was appointed Chief Financial Officer effective October 1, 2017.

(4)Was appointed Director effective October 29, 2014. Served as Chief Operating Officer from October 29, 2014 until May 12, 2017. Served as Chief Technology Officer from May 12, 2017 until his resignation on February 1, 2018.

(5)Served as Chairman, President, Chief Executive Officer and Secretary from October 29, 2014 until his resignation on May 12, 2017. Was re-appointed as Chairman on January 12, 2018. Was appointed the Chief Technology Officer on February 1, 2018. Mr. Galdi’s services are provided to us through an Amended and Restated Professional Services Agreement dated as of March 22, 2018 with World Global Network Corp. Compensation for 2016 represents a cash payment paid to Mr. Galdi in 2017 of $100,000 and the conversion of Mr. Galdi’s right to receive the additional $250,000 into the 100 shares of Series A Super Voting Preferred Stock that were issued to him in January 2017.

(6)Served as Chief Financial Officer from October 29, 2014 until his resignation on May 12, 2017.

 

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Director Compensation

 

None of our directors has received any compensation for services as a member of our Board of Directors during the past two fiscal years. Our directors are and will continue to be reimbursed by us for any out-of-pocket expenses incurred in connection with activities conducted on our behalf.

 

Benefit Plans

 

We have no retirement, pension, or profit sharing programs for the benefit of directors, officers or other employees, but our officers and directors may recommend adoption of one or more such programs in the future. We do not sponsor any qualified or non-qualified pension benefit plans, nor do we maintain any non-qualified defined contribution or deferred compensation plans.

 

2018 Stock Incentive Plan

 

On January 9, 2018, the Board of Directors and the holders of 85% of the Company’s outstanding common stock approved the Company’s 2018 Stock Incentive Plan (the “2018 Plan”). The 2018 Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, stock grants, and stock units (collectively, the “Awards”). Awards may be granted under the 2018 Plan to our employees, directors and consultants (collectively, the “Participants”). The maximum number of shares of common stock available for issuance under the 2018 Plan is 7,000,000 shares. The shares of common stock subject to stock awards granted under the 2018 Plan that expire, are forfeited because of a failure to vest, or otherwise terminate without being exercised in full will return to the 2018 Plan and be available for issuance under the 2018 Plan. To date, no Awards have been granted.

 

In the event of a corporate transaction or a change of control, outstanding Awards under the 2018 Plan may be assumed, continued, or substituted by the surviving corporation. If the surviving corporation does not assume, continue, or substitute such Awards, then (a) any stock awards that are held by individuals performing services for the Company immediately prior to the effective time of the transaction will become fully vested and exercisable and will be terminated if not exercised prior to the effective date of the transaction, and (b) all other outstanding stock awards will be terminated if not exercised on or prior to the effective date of the transaction.

 

The 2018 Plan is scheduled to terminate at our 2027 Annual Meeting of Stockholders. The termination of the 2018 Plan, or any amendment thereof, shall not impair the rights or obligations of any Participant under any Award previously granted under the 2018 Plan without the Participant’s consent, unless such modification is necessary or desirable to comply with any applicable law, regulation or rule. No Awards shall be granted under the 2018 Plan after the Plan’s termination. An amendment of the 2018 Plan shall be subject to the approval of our stockholders only to the extent such approval is otherwise required by applicable laws, regulations or rules.

 

Director and Officer Liability Insurance

 

We have purchased director and officer liability insurance that provides financial protection for our directors and officers in the event that they are sued in connection with the performance of their services and also provides employment practices liability coverage, which insures for harassment and discrimination suits.

 

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Employment and Professional Services Agreements

 

Effective as of October 1, 2017, we entered into an Amended and Restated Employment Agreement with Mr. Anthony S. Chan (the “Chan Employment Agreement”) pursuant to which Mr. Chan serves as  the Company's Chief Financial Officer. The initial term of the Chan Employment Agreement is one year. After the initial term, Mr. Chan’s employment shall be extended on a month to month basis unless the Chan Employment Agreement is terminated by either us or Mr. Chan. As consideration for such services, we agreed to pay Mr. Chan (i) an annual base salary of $150,000 and (ii) a signing bonus of $25,000. We also agreed to pay to Mr. Chan incentive bonus payments as follows, based upon the achievement of certain individual and corporate performance targets specified in the Chan Employment Agreement. In the event that we terminate Mr. Chan’s employment without “Cause” (as defined in the Chan Employment Agreement), Mr. Chan shall be entitled to receive severance payments equal to two month’s salary plus vacation and benefits payments. The Chan Employment Agreement contains certain non-solicitation, non-compete and confidentiality provisions. In addition, pursuant to the Chan Employment Agreement, Mr. Chan agreed that any trade secrets, inventions, improvements, patents, patent applications, or writings, and any program, system, or novel technique, whether or not capable of being trademarked, copyrighted or patented, obtained by him in the course of his employment with us, and relating to our business, property, methods or customers shall be and become our property.

 

Effective as of March 22, 2018, we entered into an Amended and Restated Professional Services Agreement (the “WGNC Services Agreement”) with World Global Network Corp (“WGNC”), a company controlled by Mr. Fabio Galdi our Chairman and Chief Technology Officer, with an initial term of one year, pursuant to which WGNC appoints Mr. Galdi and Mr. Galdi continues to be appointed as the Company's Chief Technology Officer. As consideration for such services, we agreed to pay WGNC (i) an annual base fee of $150,000 and (ii) a cash bonus of $75,000 upon meeting certain targets, which the Board shall review and determine.  In the event that we terminate this WGNC Services Agreement without “Cause” (as defined in the WGNC Services Agreement) WGNC shall be entitled to receive a penalty fee equal to two month’s fees . The WGNC Services Agreement contains certain non-solicitation, non-compete and confidentiality provisions. In addition, pursuant to the WGNC Services Agreement, WGNC agreed that any trade secrets, inventions, improvements, patents, patent applications, or writings, and any program, system, or novel technique, whether or not capable of being trademarked, copyrighted or patented, obtained by him in the course of his employment with us, and relating to our business, property, methods or customers shall be and become our property

 

Effective as of February 1, 2018, we entered into an Amended and Restated Professional Services Agreement (the “Anch Services Agreement”) with Anch Holdings Ltd. (“Anch”) pursuant to which Anch agreed to provide the professional management service to us. The Anch Services Agreement provides that such service will be provided by Seán McVeigh and that Mr. McVeigh shall continue to serve as our Chief Executive Officer and President. The Anch Services Agreement has an initial term of one year. As consideration for such services, we agreed to pay Anch (i) an annual base fee of $200,000 and (ii) a $100,000 cash bonus upon the achievement of certain individual and corporate performance targets specified in the Anch Services Agreement.  In the event that we terminate the Anch Services Agreement without “Cause” (as defined in the Anch Services Agreement), Anch shall be entitled to receive a penalty fee equal to two month’s fees.  The Anch Services Agreement contains certain non-solicitation, non-compete and confidentiality provisions. In addition, pursuant to the Anch Services Agreement, Anch agreed that any trade secrets, inventions, improvements, patents, patent applications, or writings, and any program, system, or novel technique, whether or not capable of being trademarked, copyrighted or patented, obtained by it in the course of performing professional services for us, and relating to our business, property, methods or customers shall be and become our property.

 

Except as set forth above, we do not have any employment agreements, professional services agreements or other related arrangements with any executive officer and we are not a party to any other contract, agreement, plan or arrangement (written or unwritten) that provides for payment following a change in an officer’s responsibilities or following a change in control.

 

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CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

 

The following is a description of transactions, since January 1, 2016, to which we have been a party and the amount involved exceeded $120,000, and in which any of our executive officers, directors or holders of more than 5% of any class of our voting securities, or an affiliate or immediate family member thereof, had a direct or indirect material interest, other than Employment Agreement and the Professional Services Agreements, which are described under “Executive and Director Compensation.”

 

We sublease office space at 600 Brickell Ave., Suite 1775, Miami, Florida 33131 for our operations from World Global Network Corp., a Florida corporation on a month-to-month basis. In accordance with the sublease agreement, we are charged rent and a cost allocation for the property at a fixed rate of $5,000 per month. World Global Network Corp. is controlled by Fabio Galdi, the Chairman of our Board of Directors and our Chief Technology Officer.

 

On December 10, 2015, our board of directors approved a short-term loan of $1,500,000 to WGN and WGN issued to us a $1,500,000 promissory note, accruing 5% annual interest and having a term of three months, which was subsequently extended to December 31, 2016 and again extended indefinitely. In September 2017, WGN agreed to a repayment plan with us whereby it will repay the remaining balance in equal installments over a period of six quarters. WGN is controlled by Fabio Galdi, the Chairman of our Board of Directors, our Chief Technology Officer and our largest stockholder. This promissory note was canceled on October 1, 2017 in connection with the execution of the Stock Exchange, Debt Forgiveness and Intellectual Property Assignment Agreement.

 

During the year ended December 31, 2016 we owed $350,000 to Fabio Galdi, for unpaid management services fees and expenses. In January 2017, we issued to Fabio Galdi 100 shares of our Series A Super Voting Preferred Stock in consideration for the cancelation of $250,000 of such amount. We paid the remaining $100,000 to Fabio Galdi in March 2017.

 

For the year ending December 31, 2017, we owed Fabio Galdi $150,000 representing unpaid management fees. This $150,000 amount was forgiven by Fabio Galdi in connection with execution of the Stock Exchange, Debt Forgiveness and Intellectual Property Assignment Agreement that was entered into on dated October 1, 2017.

 

During the year ended 2015 we entered into an eCommerce platform license with WGN. During the year ended December 31, 2016, we paid a $500,000 eCommerce platform license fee to WGN. WGN is controlled by Fabio Galdi the Chairman of our Board of Directors and our Chief Technology Officer.

 

On October 1, 2017, we entered into a Stock Exchange, Debt Forgiveness and Intellectual Property Assignment Agreement with Fabio Galdi, WGN and World Global Assets Pte. Ltd. Pursuant to the terms of that agreement (i) we issued 8,000,000 restricted shares of common stock to WGN, (ii) we transferred 350 shares of the common stock of PayNovi Ltd. (a company that was owned by Seán McVeigh, our CEO, until February 1, 2018) to WGN and (iii) we forgave $1,140,506 of indebtedness for borrowed money owed to us by WGN. In exchange, (i) Fabio Galdi returned to us for cancellation the 100 shares of our Series A Super Voting Preferred Stock held by him, (ii) Fabio Galdi forgave the amounts owed by us to him for past services rendered in the aggregate amount of $150,000, (iii) WGN assigned and transferred to us all of its right, title and interest in and to certain technology, intellectual property and intellectual property rights, including computer software and hardware, certain trademarks and logos, and various domain names, (iv) WGN and Fabio Galdi agreed not to source, promote or enter in to any agreement for any technology similar to our technology from any supplier other than our company and (v) WGN agreed to terminate and forego its exclusive relationship with Quality Technology Industrial Co. Ltd. and to purchase Helo Devices directly from us upon the terms and subject to the conditions set forth in a Strategic Partner Master Sales and World Wide Distribution Agreement dated as of October 1, 2017 by and between us and WGN.

 

Pursuant to the Strategic Partner Master Sales and World Wide Distribution Agreement, we appointed WGN for an initial term of five years, as our preferred partner to promote, market, advertise, distribute and sell our products and services to customers worldwide. WGN agreed that we shall be the sole and exclusive provider of WGN’s requirements for all wearable devices, with or without embedded Life Sensing Technology and that WGN shall not obtain or distribute any products or services similar to our products and services from any third party or provide or develop such products on its own behalf.  Pursuant to this Agreement, we agreed not to supply any products to any direct sales (multi-level marketing) companies during the term of the Agreement and for a period of six months after its expiration.

 

The initial term of the Strategic Partner Master Sales and Worldwide Distribution Agreement with WGN is five years.  After the initial term,  the Strategic Partner Master Sales and Worldwide Distribution Agreement shall renew automatically for an additional two year term and thereafter for additional one year terms unless either we or WGN provides written notice to the other party on or prior to 180 days before the expiration of the initial term of any renewal term of its intent to terminate the agreement at the end of the initial term or renewal term, as applicable.  Either party may also terminate the Strategic Partner Master Sales and Worldwide Distribution Agreement for cause, for non-payment or non-performance by the other party or in the event of the insolvency of the other party.

 

The Strategic Partner Master Sales and Worldwide Distribution Agreement was negotiated by Sean McVeigh on our behalf and by Gabriele Galdi on behalf of WGN.  Pursuant to the Agreement,  WGN agreed to pay to us a purchase price per wearable device purchased equal to our cost plus 30%.  We believe that this arrangement with WGN provides us with stability and transparency as opposed to entering into a variety of different arrangements with different distributors in various jurisdictions.  

 

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The Stock Exchange, Debt Forgiveness and Intellectual Property Assignment Agreement and the Strategic Partner Master Sales and World Wide Distribution Agreement also provide for certain additional rights and obligations of the parties, including each party agreeing to certain provisions relating to confidentiality, intellectual property rights, indemnification and limitation of liability.

 

On October 1, 2017, we entered into a Platform License Agreement with WGN pursuant to which WGN agreed to grant us a perpetual, irrevocable, royalty free, non-transferrable, worldwide license (i) to use WGN’s software platform, including without limitation, its software and any code relating thereto, (ii) to use WGN’s intellectual property and (iii) to use, display, install, copy and create derivative works or otherwise exploit its software platform.

 

Indemnification Obligations

 

Our bylaws require us to indemnify our directors to the fullest extent not prohibited by Nevada law. Subject to certain limitations, our bylaws also require us to advance expenses incurred by our directors and officers. See the section titled “Item 14. Indemnification of Directors and Officers” of Part II of this registration statement for additional information.

 

Review, Approval, and Ratification of Transactions with Related Parties

 

Effective upon the completion of this offering, our Board of Directors will adopt a policy regarding the review and approval of transactions with directors, officers and holders of more than 5% of our voting securities. In evaluating related party transactions, the Board of Directors expects to establish a committee to review the proposed matters and make recommendations to the Board of Directors on the course of action, and in a case where a director is the related party, such individual abstains from voting to approve the transaction. We intend to put into place a related party transactions policy which will require, among other items, that such transactions must be approved by our Audit Committee or another independent body of our Board of Directors.

 

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table indicates beneficial ownership of our common stock as of the date of this prospectus by:

 

·Each person or entity known by us to beneficially own 5% or more of the outstanding shares of our common stock;

 

·Each executive officer and director of our company; and

 

·All of our executive officers and directors as a group.

 

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities.  Percentage of beneficial ownership is based on 36,722,244 shares of common stock outstanding as of July 12, 2018. Unless other indicated, the address of each beneficial owner listed below is c/o World Technology Corp., 600 Brickell Ave., Suite 1775, Miami, Florida 33131.

 

Stockholder  Shares
Beneficially
Owned
Before
Offering
   % of
Class
Before
Offering
   Shares
Beneficially
Owned
After
Offering
   % of
Class
After
Offering
Seán McVeigh (1)   2,607,564    7.1    2,607,564  
Fabio Galdi (2)   3,543,580    9.6    3,543,580    
Alessandro Senatore (3)   2,509,631    6.8    2,509,631    
Anthony S. Chan   -    -    -    
Jean Paul Salman (4)   2,500,000    6.8    2,500,000    
Alfonso Galdi (5)   3,513,483    9.6    3,513,483    
Gabriele Galdi (6)   18,000,000    49.0    18,000,000    
All Executive Officers and Directors as a Group Total (4 Persons) (7)   8,660,775    23.5    8,660,775    

 

(1)Includes 2,600,501 shares of common stock held by Anch Holdings Ltd., which is controlled by Mr. McVeigh and 7,063 shares of common stock held by Mr. McVeigh directly.

(2)Includes 3,274,080 shares of common stock held by Mr. Fabio Galdi and 269,500 shares of common stock held by World Global Network Pte. Ltd., which is controlled by Mr. Fabio Galdi.

(3)Includes 2,509,631 shares of common stock held by Mr. Senatore.

(4)Includes 2,500,000 shares of common stock held by Mr. Salman. Mr. Salman’s address of record is 4660 NW 102nd Ave., Suite 201, Doral, FL 33178.

(5)Includes 3,513,483 shares of common stock held by Mr. Alfonso Galdi.

(6)Includes 18,000,000 shares of common stock held by World Global Holdings Pte. Ltd., which is controlled by Mr. Gabriele Galdi.

(7)Includes 2,607,564 shares of common stock beneficially held by Mr. McVeigh, 3,543,580 shares of common stock beneficially held by Mr. Fabio Galdi and 2,509,631 shares of common stock beneficially held by Mr. Senatore,

  

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DESCRIPTION OF SECURITIES

 

General

 

The following summary includes a description of material provisions of our capital stock.

 

Authorized Capital Stock

 

Our authorized capital stock consists of 75,000,000 shares of common stock, par value $0.001 per share, of which there are 36,722,244 shares currently issued and outstanding and 10,000 shares of preferred stock, par value $0.001 per share, of which there are no shares currently issued and outstanding. The following summarizes the important provisions of our capital stock.

 

Common Stock

 

Holders of shares of common stock are entitled to one vote for each share on all matters to be voted on by the stockholders. Holders of common stock do not have cumulative voting rights. Holders of common stock are entitled to share ratably in dividends, if any, as may be declared from time to time by the Board of Directors in its discretion from funds legally available. In the event of a liquidation, dissolution or winding up of our company, the holders of common stock are entitled to share pro rata all assets remaining after payment in full of all liabilities.

 

Holders of common stock have no preemptive rights to purchase our common stock. There are no conversion or redemption rights or sinking fund provisions with respect to the common stock.

 

Preferred Stock

 

Our preferred stock may be issued in one or more series at the discretion of the Board of Directors. The Board of Directors has the authority to fix by resolution or resolutions the designations and the power, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, including without limitation, the dividend rate, conversion or exchange rights, redemption price and liquidation preference, of any series of shares of Preferred Stock and to fix the number of shares constituting any such series, and to increase or decrease the number of shares of any such series. We previously designated 100 of our authorized shares of preferred stock as Series A Super Voting Preferred Stock. Such shares were issued to Mr. Fabio Galdi on January 6, 2017 in exchange for the cancellation of $250,000 that we owed to Mr. Galdi. Effective October 1, 2017, all such shares of Series A Super Voting Preferred Stock were returned to us and cancelled.

 

Warrants

 

The Warrants to be issued in this offering entitle the registered holder to purchase one share of common stock at a price of $ per share, subject to adjustment as discussed below, immediately following the issuance of such warrant and terminating at 5:00 p.m., New York City time, five years after the closing of this offering.

 

The Warrants will be issued pursuant to a Warrant Agreement between us and ClearTrust LLC as warrant agent. Certain provisions of the Warrants are set forth herein but are only a summary and are qualified in their entirety by the relevant provisions of the Warrant Agreement, the form of which is filed as an exhibit to the registration statement of which this prospectus forms a part. The exercise price and number of shares of common stock issuable upon exercise of the Warrants may be adjusted in certain circumstances, including in the event of a share dividend or recapitalization, reorganization, merger or consolidation. However, the Warrants will not be adjusted for issuances of shares of common stock at prices below their exercise price.

 

The Warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price, by certified or official bank check payable to us, for the number of warrants being exercised. Holders of the Warrants will have the right to exercise the Warrants via a cashless exercise feature provided for in the Warrants if at the time of exercise of the Warrants there is not an effective registration statement and current prospectus for the issuance of the underlying common stock. The Warrant holders do not have the rights or privileges of holders of common stock or any voting rights until they exercise their Warrants and receive the common stock. After the issuance of common stock upon exercise of the Warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by shareholders.

 

A holder may not exercise any portion of a Warrant to the extent that the holder, together with its affiliates and any other person or entity acting as a group, would own more than 4.99% of our outstanding common stock after exercise, as such percentage ownership is determined in accordance with the terms of the warrant, except that upon at least 61 days’ prior notice from the holder to us, the holder may waive such limitation up to a percentage not in excess of 9.99%. No fractional shares of common stock will be issued upon exercise of the Warrants.

 

Anti-Takeover Effects of Nevada Law

 

The State of Nevada, where we are incorporated, has enacted statutes that could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to acquire us even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing market price. We have not opted out of these statutes.

 

Business Combinations

 

The “business combination” provisions of Sections 78.411 to 78.444, inclusive, of the Nevada Revised Statutes, or the “NRS”, generally prohibit a publicly traded Nevada corporation with at least 200 stockholders of record from engaging in various “combination” transactions with any interested stockholder for a period of four years after the date of the transaction in which the person became an interested stockholder, unless the transaction is approved by the board of directors before such person became an interested stockholder or the combination is approved by the board of directors and thereafter is approved at a meeting of the stockholders by the affirmative vote of stockholders representing at least 60% (for a combination within two years after becoming an interested stockholder) or a majority (for combinations between two and four years thereafter) of the outstanding voting power held by disinterested stockholders. Alternatively, a corporation may engage in a combination with an interested stockholder more than two years after becoming an interested stockholder if:

 

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·the consideration to be paid to the holders of the corporation’s stock, other than the interested stockholder, is at least equal to the highest of: (a) the highest price per share paid by the interested stockholder within the two years immediately preceding the date of the announcement of the combination or in the transaction in which it became an interested stockholder, whichever is higher, plus interest compounded annually, (b) the market value per share of common stock on the date of announcement of the combination and the date the interested stockholder acquired the shares, whichever is higher, or (c) for holders of preferred stock, the highest liquidation value of the preferred stock, if it is higher; and

 

·the interested stockholder has not become the owner of any additional voting shares since the date of becoming an interested stockholder except by certain permitted transactions.

 

A “combination” is generally defined to include (i) mergers or consolidations with the “interested stockholder” or an affiliate or associate of the interested stockholder, (ii) any sale, lease exchange, mortgage, pledge, transfer or other disposition of assets of the corporation, in one transaction or a series of transactions, to or with the interested stockholder or an affiliate or associate of the interested stockholder: (a) having an aggregate market value equal to 5% or more of the aggregate market value of the assets of the corporation, (b) having an aggregate market value equal to 5% or more of the aggregate market value of all outstanding shares of the corporation, or (c) representing more than 10% of the earning power or net income (determined on a consolidated basis) of the corporation, (iii) any issuance or transfer of securities to the interested stockholder or an affiliate or associate of the interested stockholder, in one transaction or a series of transactions, having an aggregate market value equal to 5% or more of the aggregate market value of all of the outstanding voting shares of the corporation (other than under the exercise of warrants or rights to purchase shares offered, or a dividend or distribution made pro rata to all stockholders of the corporation), (iv) adoption of a plan or proposal for liquidation or dissolution of the corporation with the interested stockholder or an affiliate or associate of the interested stockholder and (v) certain other transactions having the effect of increasing the proportionate share of voting securities beneficially owned by the interested stockholder or an affiliate or associate of the interested stockholder.

 

In general, an “interested stockholder” means any person who (i) beneficially owns, directly or indirectly, 10% or more of the voting power of the outstanding voting shares of a corporation, or (ii) is an affiliate or associate of the corporation that beneficially owned, within two years prior to the date in question, 10% or more of the voting power of the then-outstanding shares of the corporation.

 

Control Share Acquisitions

 

The “control share” provisions of Sections 78.378 to 78.3793, inclusive, of the NRS apply to “issuing corporations” that are Nevada corporations doing business, directly or through an affiliate, in Nevada, and having least 200 stockholders of record, including at least 100 of whom have addresses in Nevada appearing on the stock ledger of the corporation. The control share statute prohibits an acquirer, under certain circumstances, from voting its “control shares” of an issuing corporation’s stock after crossing certain ownership threshold percentages, unless the acquirer obtains approval of the issuing corporation’s disinterested stockholders or unless the issuing corporation amends its articles of incorporation or bylaws within ten days of the acquisition to provide that the “control share” statute does not apply to the corporation or to the types of existing or future stockholders. The statute specifies three thresholds: one-fifth or more but less than one-third, one-third but less than a majority, and a majority or more, of the outstanding voting power of a corporation. Generally, once an acquirer crosses one of the foregoing thresholds, those shares acquired in an acquisition or offer to acquire in an acquisition and acquired within 90 days immediately preceding the date that the acquirer crosses one of the thresholds, become “control shares” and such control shares are deprived of the right to vote until disinterested stockholders restore the right. In addition, the corporation, if provided in its articles of incorporation or bylaws, may cause the redemption of all of the control shares at the average price paid for such shares if the stockholders do not accord the control shares full voting rights. If control shares are accorded full voting rights and the acquiring person has acquired a majority or more of all voting power, all other stockholders who did not vote in favor of authorizing voting rights to the control shares are entitled to demand payment for the fair value of their shares in accordance with statutory procedures established for dissenters’ rights.

 

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Transfer Agent and Warrant Agent

 

The transfer agent for our common stock and the warrant agent for our Warrants is ClearTrust, LLC whose address is 16540 Pointe Village Dr., # 206, Lutz, FL 33558 and whose telephone number is (813) 235-4490.

 

Current Trading Symbol and Exchange Listing

 

Our common stock is quoted for trading on the OTC Pink Market under the symbol “WCOR.” We have applied to list our common stock on the NASDAQ Capital Market under the symbol “WCOR.” No assurance can be given that our application will be approved. If our application is not approved, we will not consummate this offering. The Warrants will not be listed for trading and no market for the Warrants is expected to develop. Without an active trading market, the liquidity of the Warrants will be limited

 

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SHARES ELIGIBLE FOR FUTURE SALE

 

Future sales of shares of our common stock in the public market, or the availability of such shares for sale in the public market, could adversely affect the market price of our common stock prevailing from time to time. As described below, only a limited number of shares are currently available for sale due to contractual and legal restrictions on resale. Nonetheless, sales of our common stock, or the perception that these sales could occur, could adversely affect prevailing market prices for our common stock and could impair our future ability to raise equity capital in the future.

 

Based on the number of shares outstanding as of                             , 2018, upon the closing of this offering,               shares of common stock will be outstanding, assuming no exercise of outstanding options or warrants and no exercise of the underwriters’ option to purchase additional shares. Of the outstanding shares, all of the shares of common stock sold in this offering (including pursuant to the underwriters’ exercise of their option to purchase additional shares) will be freely tradable, except that any shares held by our affiliates, as that term is defined in Rule 144 under the Securities Act, may only be sold in compliance with the limitations described below.

 

Of the remaining shares of our common stock outstanding after this offering,                    are restricted securities, as that term is defined in Rule 144 under the Securities Act, or are subject to lock-up agreements with us as described below. Following the expiration of the lock-up period, restricted securities may be sold in the public market only if registered or if their resale qualifies for exemption from registration described below under Rule 144 promulgated under the Securities Act.

 

Rule 144

 

In general, persons who have beneficially owned restricted shares of our common stock for at least six months, and any affiliate of ours who owns either restricted or unrestricted shares of our common stock, are entitled to sell their securities without registration with the Securities and Exchange Commission under an exemption from registration provided by Rule 144 under the Securities Act.

 

In general, a person who has beneficially owned restricted shares of our common stock for at least six months would be entitled to sell their securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the 90 days preceding, a sale and (ii) we have been subject to the Exchange Act periodic reporting requirements for at least 90 days before the sale. Persons who have beneficially owned restricted shares of our common stock for at least six months, but who are our affiliates at the time of, or any time during the 90 days preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of either of the following:

 

·1% of the number of shares of our common stock then outstanding, which will equal approximately                 shares immediately after the closing of this offering based on the number of shares of our common stock outstanding as of                 , 2018 and assuming no exercise of the underwriters’ option to purchase additional shares of our common stock; or

 

·the average weekly trading volume of our common stock on the NASDAQ Capital Market during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale;

 

provided, in each case, that we have been subject to the Exchange Act periodic reporting requirements for at least 90 days before the sale. Such sales both by affiliates and by non-affiliates must also comply with the manner of sale, current public information and notice provisions of Rule 144.

 

Rule 701

 

Rule 701 of the Securities Act, as currently in effect, permits any of our employees, officers, directors or consultants who purchased or receive shares from us pursuant to a written compensatory plan or contract to resell such shares in reliance upon Rule 144, but without compliance with certain restrictions. Subject to any applicable lock-up agreements, Rule 701 provides that affiliates may sell their Rule 701 shares under Rule 144 without complying with the holding period requirement of Rule 144 and that non-affiliates may sell such shares in reliance on Rule 144 without complying with the holding period, public information, volume limitation or notice requirements of Rule 144.

 

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Lock-Up Agreements

 

All of our directors, executive officers and certain of our principal stockholders are subject to lock-up agreements or market standoff provisions that, subject to certain exceptions, prohibit them from offering for sale, selling, contracting to sell, granting any option for the sale of, transferring or otherwise disposing of any shares of our common stock, options or warrants to acquire shares of our common stock or any security or instrument related to our common stock, or entering into any swap, hedge or other arrangement that transfers any of the economic consequences of ownership of our common stock, for a period of six (6) months following the date of this prospectus without the prior written consent of the representative of the underwriters. See the section of this prospectus titled “Underwriting.”

 

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UNDERWRITING

 

We have entered into an underwriting agreement with Dawson James Securities, Inc. with respect to the common stock and Warrants being offered. Subject to the terms and conditions of the underwriting agreement, we have agreed to sell to the underwriter, and the underwriter has agreed to purchase from us on a firm commitment basis, the number of shares of common stock and Warrants set forth opposite its name in the table below.

 

Underwriter  Number of
Shares and
Warrants
 
Dawson James Securities, Inc.    
Total     

 

The underwriters are committed to purchase all the common stock and Warrants offered by us if they purchase any such securities. The underwriters are not obligated to purchase the common stock and Warrants covered by the underwriters’ over-allotment option described below. The underwriters are offering the common stock and Warrants, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel, and other conditions contained in the underwriting agreement, such as the receipt by the underwriters of officer’s certificates and legal opinions. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.

 

We have granted to the underwriters an option to purchase up to       additional shares of common stock and/or up to [__] additional Warrants, in any combinations thereof, from us at the public offering price per security, less the underwriting discounts and commissions. The underwriters may exercise this option for 45 days from the date of this prospectus solely to cover sales of common stock and Warrants by the underwriters in excess of the total number set forth in the table above. We will pay the expenses associated with the exercise of the over-allotment option. Dawson James Securities, Inc., its officers and its registered representatives may participate in this offering on the same terms and conditions as the investors participating in this offering.

 

Because the Warrants will not be listed on a national securities exchange or other nationally recognized trading market, the underwriters will be unable to satisfy any over-allotment of shares and Warrants without exercising the underwriters’ over-allotment option with respect to the Warrants. As a result, the underwriters will exercise their over-allotment option for all of the Warrants which are over-allotted, if any, at the time of the initial offering of the shares and the Warrants. However, because our common stock will be publicly traded, the underwriters may satisfy some or all of the over-allotment of shares of our common stock, if any, by purchasing shares in the open market and will have no obligation to exercise the over-allotment option with respect to our common stock.

 

Discounts, Commissions and Expenses

 

The underwriter proposes to offer to the public the common stock and Warrants purchased pursuant to the underwriting agreement at the public offering price per share of common stock and Warrant on the cover page of this prospectus. The underwriter may offer some of the common stock and Warrants at such price less a concession of $ per share. After the shares and Warrants are released for sale to the public, the underwriter may change the offering price and other selling terms at various times.

 

The factors considered in determining the public offering price included the recent market price of our common stock, the general condition of the securities market at the time of this offering, the history of, and the prospects for, the industry in which we compete, our past and present operations and our prospects for future revenues.

 

The following table shows per share and total underwriting discounts and commissions we will pay in connection with the sale of the shares.

 

       Total with   Total without 
   Per share and
Warrant
   Over-
allotment
   without Over-
allotment
 
             
Public offering price  $   $   $ 
Underwriting discounts and commissions  $   $   $ 
Proceeds, before expenses, to us  $   $   $ 

 

We estimate the total expenses of this offering which will be payable by us, excluding the underwriting discount and the underwriter’s expenses payable by us, will be approximately $[_]. This estimate includes up to $125,000 of expenses of the underwriters (of which $25,000 was paid to the underwriters as an advance payment upon signing of the engagement letter in connection with this offering), which includes the fees and expenses of underwriters’ counsel. We have agreed to reimburse “blue sky” fees and expenses incurred in connection with this offering of $25,000. After deducting the underwriting discount and our estimated offering expenses, we expect the net proceeds from this offering to be approximately $       million.

 

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Right of First Refusal

 

Provided this offering is completed, for a period of twelve months from the closing date of this offering, Dawson James Securities, Inc. has a right of first refusal to act as our exclusive placement agent or lead underwriter and sole book runner, as applicable, in the event we decide to pursue an offering of our equity, equity-linked or debt securities during such period. In the event that Dawson elects to exercise its right of first refusal with respect to any such transaction during the 12-month period, it will be entitled to receive as its compensation at least 50% of the compensation payable to the underwriters or placement agents.

 

Tail Financing

 

Dawson will be entitled to underwriting fees under the underwriting agreement with respect to any public or private offering or other financing or capital-raising transaction of any kind to the extent that such financing is provided to us by investors whom Dawson had introduced to us during the engagement period, as well as any by investors who participated in this offering or within the twelve month period following the expiration or termination of the engagement agreement with Dawson or the completion of the offering.

 

Underwriters’ Warrants

 

We have also agreed to issue to the underwriter warrants to purchase a number of shares of our common stock and Warrants equal to 5% of the shares of common stock and Warrants and sold in this offering. The exercise price of such underwriter warrants will be equal to 125% of the public offering price set forth on the cover of this prospectus, exercisable commencing 180 days immediately following the date of effectiveness of the registration statement of which this prospectus forms a part, and exercisable for a period of five years from the date of effectiveness of the registration statement of which this prospectus forms a part. Such underwriter warrants may also be exercised on a cashless basis and will have unlimited piggy-back registration rights as well as customary anti-dilution provisions (for stock dividends, splits and regulations) consistent with FINRA Rule 5110. The registration statement of which this prospectus is a part also covers the Representative’s Warrants and the shares of common stock, Warrants and shares of common stock issuable upon the exercise of such Warrants issuable upon the exercise thereof. The Representative’s Warrants and the underlying securities have been deemed compensation by FINRA, and are therefore subject to FINRA Rule 5110(g)(1). In accordance with FINRA Rule 5110(g)(1), neither such warrants nor any securities issued upon exercise of the underwriter warrants may be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of such securities by any person for a period of 180 days immediately following the date of effectiveness or commencement of sales of the offering pursuant to which the Representative’s Warrants are being issued, except the transfer of any security:

 

·by operation of law or by reason of reorganization of our company;

·to any FINRA member firm participating in this offering and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction described above for the remainder of the time period;

·if the aggregate amount of our securities held by either an underwriter or a related person do not exceed 1% of the securities being offered;

·that is beneficially owned on a pro-rata basis by all equity owners of an investment fund, provided that no participating member manages or otherwise directs investments by the fund, and participating members in the aggregate do not own more than 10% of the equity in the fund; or

·the exercise or conversion of any security, if all securities received remain subject to the lock-up restriction set forth above for the remainder of the time period.

 

In addition, in accordance with FINRA Rule 5110(f)(2)(G), the Representative’s Warrants may not contain certain anti-dilution terms.

 

Lock-up Agreements

 

The underwriting agreement will provide that we will agree, for a period of nine months from the date of this offering, that we will not (a) offer, sell, or otherwise transfer or dispose of, directly or indirectly, any shares of our capital stock or any securities convertible into or exercisable or exchangeable for shares of our capital stock, except for the exercise of outstanding options and warrants, securities issued for compensation, shares we are contractually obligated to issue; or (b) file or caused to be filed any registration statement relating to the offering of any shares of our capital stock or any securities convertible into or exercisable or exchangeable for shares of our capital stock.

 

Pursuant to the terms of the underwriting agreement, our officers and directors have agreed, subject to certain exceptions, from the date of this prospectus until 180 days after the closing of this offering, not to sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase, make any short sale or otherwise dispose of or agree to dispose of, directly or indirectly, any common stock or common stock equivalents, establish or otherwise enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of the shares owned by the officers and directors or make any demand for or exercise any registration right with respect to any common stock or common stock equivalents. In addition, we have agreed, subject to certain exceptions, to not issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of common stock or common stock equivalents from the date of this prospectus until 180 days after the closing of this offering.

 

 80 

 

 

Indemnification

 

We have agreed to indemnify the underwriter and certain other persons against certain liabilities relating to or arising out of the underwriter’s activities under the underwriting agreement. We have also agreed to contribute to payments that the underwriter may be required to make in respect of such liabilities.

 

Price Stabilization, Short Positions and Penalty Bids

 

In order to facilitate the offering of our common stock, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of our common stock. In connection with the offering, the underwriters may purchase and sell our common stock in the open market. These transactions may include short sales, purchases on the open market to cover positions created by short sales and stabilizing transactions. Short sales involve the sale by the underwriters of a greater number of shares of common stock than they are required to purchase in the offering. “Covered” short sales are sales made in an amount not greater than the underwriters’ option to purchase additional common stock in the offering pursuant to the exercise of their over-allotment option to purchase only additional shares. The underwriters may close out any covered short position by either exercising the over-allotment option or purchasing common stock in the open market. In determining the source of common stock to close out the covered short position, the underwriters will consider, among other things, the price of common stock available for purchase in the open market as compared to the price at which they may purchase common stock through the over-allotment option. “Naked” short sales are sales in excess of the over-allotment option. The underwriters must close out any naked short position by purchasing common stock in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of our common stock in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of common stock made by the underwriters in the open market prior to the completion of the offering.

 

Similar to other purchase transactions, the underwriters’ purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of our common shares or preventing or retarding a decline in the market price of our common shares. As result, the price of our common stock may be higher than the price that might otherwise exist in the open market.

 

The underwriters have advised us that, pursuant to Regulation M of the Securities Act, they may also engage in other activities that stabilize, maintain or otherwise affect the price of our common shares, including the imposition of penalty bids. This means that if the representative of the underwriters purchases common stock in the open market in stabilizing transactions or to cover short sales, the representative can require the underwriters that sold those shares as part of this offering to repay the underwriting discount received by them.

 

Electronic Offer

 

This prospectus supplement and the accompanying prospectus may be made available in electronic format on Internet sites or through other online services maintained by the underwriter or its affiliates. In those cases, prospective investors may view offering terms online and may be allowed to place orders online. Other than this prospectus supplement and the accompanying prospectus in electronic format, any information on the underwriter’s or its affiliates’ websites and any information contained in any other website maintained by the underwriter or any affiliate of the underwriter is not part of this prospectus supplement, the accompanying prospectus or the registration statement of which this prospectus supplement and the accompanying prospectus form a part, has not been approved and/or endorsed by us or the underwriter and should not be relied upon by investors.

 

Other

 

The underwriter or its affiliates may engage in transactions with, and may perform, from time to time, investment banking and advisory services for us in the ordinary course of their business and for which they would receive customary fees and expenses. However, except as disclosed in this prospectus, we have no present arrangements with any of the underwriters for any further services.

 

 81 

 

 

LEGAL MATTERS

 

Loeb & Loeb LLP, will pass upon the validity of the shares of common stock and Warrants offered hereby. The underwriters are being represented by Schiff Hardin LLP.

 

EXPERTS

 

The financial statements of World Technology Corp. at December 31, 2017 and 2016, have been audited by Wei, Wei & Co., LLP, an independent registered public accounting firm, as set forth in their report thereon appearing elsewhere in this prospectus and are included in reliance upon such report given on the authority of such firm as an expert in accounting and auditing.

 

WHERE YOU CAN FIND MORE INFORMATION

 

We have filed with the SEC a registration statement on Form S-1 with respect to this offering of our common stock. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement, some items of which are contained in exhibits to the registration statement as permitted by the rules and regulations of the SEC. Statements contained in this prospectus as to the contents of any contract, agreement or other document are summaries of the material terms of that contract, agreement or other document. With respect to each of these contracts, agreements or other documents filed or incorporated by reference as an exhibit to the registration statement, reference is made to the exhibits for a more complete description of the matter involved. A copy of the registration statement, and the exhibits and schedules thereto, may be inspected without charge at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. Copies of these materials may be obtained by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities. The SEC maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address of the SEC’s website is http://www.sec.gov.

 

 82 

 

 

 

WORLD TECHNOLOGY CORP. AND SUBSIDIARY

 

CONSOLIDATED FINANCIAL STATEMENTS

 

FOR THE YEARS ENDED

DECEMBER 31, 2017 AND 2016

 

 F-1 

 

 

WORLD TECHNOLOGY CORP. AND SUBSIDIARY

 

Index to Consolidated Financial Statements

 

  Page
Report of Independent Registered Public Accounting Firm F-3 - F-4
Consolidated Balance Sheets at December 31, 2017 and 2016 F-5
Consolidated Statements of Operations for the Years Ended December 31, 2017 and 2016 F-6
Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended December 31, 2017 and 2016 F-7
Consolidated Statements of Cash Flows for the Years Ended December 31, 2017 and 2016 F-8
Notes to Consolidated Financial Statements F-9 - F-21

 

 F-2 

 

 

 

 Main Office

   133-10 39TH Avenue

   Flushing, NY 11354

   Tel. (718) 445-6308

   Fax. (718) 445-6760

 

 California Office

   36 W Bay State Street

   Alhambra, CA 91801

   Tel. (626) 282-1630

   Fax. (626) 282-9726

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

The Board of Directors and Stockholders of World Technology Corp. and Subsidiary

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheet of World Technology Corp. and Subsidiary (the “Company”) as of December 31, 2017 and 2016, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2017, and the related notes (collectively referred to as the financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of their operations and their cash flows for each of the years in the two-year period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.

 

Basis for Opinion

 

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

 F-3 

 

 

 

 

Emphasis of Matter – Going Concern

 

The accompanying consolidated financial statements have been prepared assuming that World Technology Corp. and Subsidiary will continue as a going concern. As more fully described in Note 3, the Company reported net losses of $1,130,747 and $788,204 for the years ended December 31, 2017 and 2016. At December 31, 2017, the Company has a deficit of $6,215,362. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regards to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.

 

/s/ Wei, Wei & Co., LLP  
 
We have served as the Company’s auditor since 2017. 
 
Flushing, New York
May 2, 2018

 

 F-4 

 

 

WORLD TECHNOLOGY CORP. AND SUBSIDIARY

 

CONSOLIDATED BALANCE SHEETS

 

   December 31, 
   2017   2016 
ASSETS          
           
Current assets:          
Cash and cash equivalents  $881,239   $29,114 
Accounts receivable   -    400,000 
Prepaid expenses   311,522    - 
Advance to supplier   800,000    - 
           
Total current assets   1,992,761    429,114 
           
Security deposit   5,500    - 
Intangible assets   22,788    - 
Due from related parties   -    876,825 
           
TOTAL ASSETS  $2,021,049   $1,305,939 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
           
Current liabilities:          
Payable to major shareholder  $-   $350,000 
Advance from customer   804,286    - 
Accounts payable and accrued expenses   357,481    - 
Due to related parties   621,856    - 
           
Total current liabilities   1,783,623    350,000 
           
TOTAL LIABILITIES   1,783,623    350,000 
           
Stockholders’ equity:          
Preferred stock, $0.001 par value; 10,000 shares authorized, None issued and outstanding   -    - 
Common stock, $0.001 par value; 75,000,000 shares authorized, 36,722,244 and 28,581,000 shares issued and outstanding at December 31, 2017 and 2016, respectively   36,722    28,581 
Additional paid-in capital   6,416,066    6,011,973 
Deficit   (6,215,362)   (5,084,615)
           
Total stockholders' equity   237,426    955,939 
           
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $2,021,049   $1,305,939 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 F-5 

 

 

WORLD TECHNOLOGY CORP. AND SUBSIDIARY

 

CONSOLIDATED STATEMENTS OF OPERATIONS

  

   Year Ended December 31, 
   2017   2016 
         
Revenues:          
Products  $2,210,000   $1,418,626 
Services   -    219,545 
Licence fees   1,900,000    400,000 
           
Total revenues   4,110,000    2,038,171 
           
Costs of revenues:          
Products   1,845,000    1,434,058 
Services   -    82,122 
           
Total cost of revenues   1,845,000    1,516,180 
           
Gross profit   2,265,000    521,991 
           
Operating expenses          
Management fees - related party   774,205    350,000 
General and administrative   577,029    175,708 
Resarch and development   2,085,627    852,408 
           
Total operating expenses   3,436,861    1,378,116 
           
Operating (loss)   (1,171,861)   (856,125)
           
Other income:          
Interest income - related party   41,114    67,921 
           
Net (loss)  $(1,130,747)  $(788,204)
           
Net loss per share - basic and diluted  $(0.04)  $(0.03)
           
Weighted average shares outstanding, basic and diluted   30,644,436    28,581,000 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 F-6 

 

 

WORLD TECHNOLOGY CORP. AND SUBSIDIARY

 

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

 

                   Additional         
   Common stock   Series A Preferred stock   paid-in         
   Shares   Amount   Shares   Amount   capital   Deficit   Total 
                             
Balance-January 1, 2016   28,581,000   $28,581    -    -   $6,011,973   $(4,296,411)  $1,744,143 
Net loss   -    -    -    -    -    (788,204)   (788,204)
                                    
Balance-December 31, 2016   28,581,000    28,581    -    -    6,011,973    (5,084,615)   955,939 
Issuance of common stock   141,244    141    -    -    1,129,811    -    1,129,952 
Issuance of Series A Preferred Stock   -    -    100    -    250,000    -    250,000 
Cancellation of Series A Preferred Stock per the Exchange Agreement   -    -    (100)   -    (250,000)   -    (250,000)
Inssuance of common stock and adjustments per the Exchange Agreement   8,000,000    8,000    -    -    (725,718)   -    (717,718)
Net loss   -    -    -    -    -    (1,130,747)   (1,130,747)
                                    
Balance-December 31, 2017   36,722,244   $36,722    -    -   $6,416,066   $(6,215,362)  $237,426 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 F-7 

 

 

WORLD TECHNOLOGY CORP. AND SUBSIDIARY

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

   Year Ended December 31, 
   2017   2016 
         
Cash flows from operating activities:          
Net loss  $(1,130,747)  $(788,204)
Adjustments to reconcile net income to net cash provided by provided by (used in) operating activities:          
Forgiveness of management fee per Exchange Agreement   150,000    - 
Change in operating assets and liabilities:          
Decrease (increase) in accounts receivable   400,000    (383,386)
Decrease in accounts receivable - related party   -    456,577 
(Increase) in prepaid expenses   (311,522)   - 
(Increase) decrease in advance to supplier   (800,000)   300,378 
(Increase) in security deposit   (5,500)   - 
Decrease in inventory   -    22,200 
(Decrease) increase in payable to major shareholder   (100,000)   350,000 
Increase in advance from customer   804,286    - 
Increase (decrease) in accounts payable and accrued expenses   357,481    (201,093)
           
Net cash provided by (used in) operating activities   (636,002)   (243,528)
           
Cash flows from financing activities:          
Interest on related party loan   (41,114)   (67,921)
Rent due to related party   60,000    60,000 
Expenses paid by related party   1,093,950    - 
Cash Repayment to related party   (754,661)   (500,000)
Cash received from related party   -    400,608 
Cash received for issuance of common stock   1,129,952    - 
           
Net cash provided by (used in) financing activities   1,488,127    (107,313)
           
Net change in cash   852,125    (350,841)
Cash, beginning of year   29,114    379,955 
           
Cash, end of year  $881,239   $29,114 
           
Supplemental disclosure of cash flow information:          
           
Cash paid for income taxes  $-   $- 
           
Cash paid for interest  $-   $- 
           
Noncash activities :          
Series A super voting preferred stock issued to Majority Shareholders for Payable  $250,000   $- 
Intangible assets received per the Exchange Agreement  $22,788   $- 
Forgiveness of loan per the Exchange Agreement  $1,140,506   $- 
Forgiveness of management fee per Exchange Agreement  $150,000   $- 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 F-8 

 

 

WORLD TECHNOLOGY CORP. AND SUBSIDIARY

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

Note 1. Organization and Business

 

History

 

World Technology Corp. (formerly World Media & Technology Corp., referred herein as the “Company” or “WCOR”) was incorporated in the State of Nevada on October 22, 2010, under the name Halton Universal Brands Inc. (“Halton”). Halton was originally a brokerage, consulting and marketing firm specializing in brand consulting and new product strategy consulting for emerging brands.

 

Effective October 29, 2014:

 

1)Power Clouds Inc. (“PWCL”), formerly World Assurance Group, Inc., acquired 7,095,000 shares of WCOR common stock, representing 98% of the Company’s issued and outstanding share capital, for cash consideration of $378,000,

  2) WCOR discontinued its previously existing brokerage and brand consultancy business, and

  3) WCOR acquired the SPACE technology business and related assets from PWCL for consideration of $557,898, funded by way of debt from PWCL (collectively “the October 29, 2014 Transactions”).

 

The Company accounted for the October 29, 2014 Transactions as a reverse merger of PWCL’s SPACE technology business and related assets into WCOR. This reverse merger was accounted for as a reverse capitalization with PWCL’s SPACE technology business, the legally acquired business, being treated as the acquirer of WCOR for accounting and financial reporting purposes.

 

In November 2014, the Company’s board of directors and a majority of the stockholders authorized a name change of the Company from Halton Universal Brands, Inc. to World Media & Technology Corp. The name change became effective with FINRA on December 22, 2014, and the Company’s ticker symbol was changed to WRMT as a result of the name change.

 

On March 5, 2015, the Company incorporated its wholly-owned subsidiary, Space Wireless Corp. (“Space Wireless”), in Florida. Space Wireless was set up to operate as the mobile virtual network business in the United States.

 

In October 2015, PWCL distributed 14,021,122 of the 15,095,000 shares of the Company’s common stock held by PWCL, the Company’s former parent company and former majority shareholder. PWCL shareholders received one share of the Company’s common stock for every six PWCL shares of common stock held as of the record date, which was October 1, 2015.

 

In December 2016, PWCL transferred its remaining 1,073,878 shares of the Company’s common stock to World Global Cash Pte. Ltd., a Singapore company owned and controlled at the time of this share transfer by Fabio Galdi, the Company’s major shareholder. In October 2017, Mr. Galdi sold World Global Cash Pte. Ltd.

 

On January 6, 2017, the Company issued 100 shares of its Series A Super Voting Preferred Stock to Fabio Galdi in exchange for the cancellation of $250,000 of unpaid management service fees.

 

Corporate Re-organization

 

On October 1, 2017, the Company, Fabio Galdi, World Global Network Pte. Ltd. (“WGN”) and WGN’s wholly owned subsidiary, World Global Assets Pte. Ltd., entered into a Stock Exchange, Debt Forgiveness and Intellectual Property Assignment Agreement (the “Exchange Agreement”). The main objective of the Exchange Agreement was to re-organize and restructure WCOR so that:

 

·WCOR will operate as a technology company that recognizes revenues and operating profits through the sale of its Helo wearable devices in the wellness market sector;
·WCOR will sell its Helo wearable devices exclusively to WGN at an agreed upon mark-up of the underlying production cost;
·WGN will have the exclusive right to sell the wearable devices to the end-users through its distribution network; and

 

 F-9 

 

 

  · WCOR will have the business model and ownership structure that is attractive to potential investors; and the opportunity to register its stock for potential sale in the public markets, raise additional capital, and up-list to Nasdaq.

 

Pursuant to the terms of the Exchange Agreement, the Company:

 

  · issued 8,000,000 shares of its common stock, par value $0.001 per share (“Common Stock”) to WGN;
  · transferred its equity investment in PayNovi Ltd. (i.e., 35% ownership interest in PayNovi which had no carrying value to WCOR) to WGN; and
  · agreed to forgive the remaining outstanding balance ($1,140,506) owed by WGN for borrowed money.

 

In exchange,

 

  · Mr. Galdi returned to WCOR for cancellation the 100 shares of the Company’s Series A Super Voting Preferred Stock held by him;
  · Mr. Galdi forgave the amounts owed by WCOR to him for past services rendered in the amount of $150,000;
  · WGN assigned and transferred to WCOR all of its right, title and interest in and to certain technology, intellectual property and intellectual property rights for the Helo wearable devices;
  · WGN and Mr. Galdi agreed not to source, promote or enter in to any agreement for any technology similar to WCOR’s Technology from any supplier other than WCOR; and
  · WGN agreed to terminate and forego its exclusive relationship with Quality Technology Industrial Co. Ltd. and to purchase Helo Devices directly from WCOR upon the terms and subject to the conditions set forth in the Strategic Partner Master Sales and World Wide Distribution Agreement dated October 1, 2017 between the Company and WGN.

 

The Exchange Agreement was treated as a capital reorganization since the transactions were all with the major shareholder and his related entities.

 

On November 3, 2017, the Company dissolved its wholly owned subsidiary, Space Wireless, due to the fact that the subsidiary no longer had any operations, assets or liabilities.

 

On December 4, 2017, the Company changed its name to World Technology Corp, with ticker symbol WCOR to re-position itself as a technology company that produces wearable devices for use in the wellness market segment.

 

Business

 

Headquartered in Miami, Florida, the Company designs, produces and previously sold its own range of integrated mobile technology products (such as SPACE Wireless smartphones in 2015 and 2016) through its exclusive marketing and distribution partner, WGN and WGN’s distribution network.

 

During 2015 and 2016, the Company derived revenues from sale of smartphones and airtime to end-users via its distribution partners, with revenues being generated upon delivery of products and services to its distribution partners. The smartphones were manufactured by a third-party supplier in China, and they were shipped directly to the Company’s distribution partners for onward delivery to end-users; mobile telecom services (“airtime”) was delivered to consumers via exclusive sales agreements with regional third-party distributors.

 

The Company changed its business model in the fourth quarter of 2016 when it executed the Preferred Supplier Agreement (“PSA”) with its wearable device supplier, Quality Technology Industrial Co., Ltd. (“QTI”) in October 2016. In accordance with the PSA, the Company granted a non-exclusive, revocable license to QTI to use and integrate its Life Sensing Technology in the manufacture of Helo, the wearable device. Under the PSA, QTI agreed to pay the Company a non-refundable fee of $4.00 per Helo Classic and $5.00 per Helo LX shipped from its manufacturing facility. From the fourth quarter of 2016 through the third quarter of 2017, the Company earned license fees based on the number of Helo devices shipped by QTI.

 

Effective October 1, 2017, and as a result of the corporate re-organization, the Company has been selling its Helo wearable devices directly to WGN at a selling price equivalent to cost plus an agreed upon markup. The Company’s business is akin to a traditional wholesale model whereby WGN will place its order directly with the Company on a prepaid basis, and based on such orders, the Company will instruct QTI to build and ship the Helo devices in accordance with WGN’s instructions.

 

 F-10 

 

 

Note 2. Summary of Significant Accounting Policies

 

Basis of Presentation

 

The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

 

Basis of Consolidation

 

The consolidated financial statements for the years ended December 31, 2017 and 2016 include the financials statements of World Technology Corp and its wholly-owned subsidiary, Space Wireless Corp. through November 3, 2017 when the subsidiary was dissolved. All intercompany accounts and transactions have been eliminated in consolidation.

 

Use of Estimates and Assumptions

 

The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are adjusted to reflect actual experience when necessary. Significant accounting estimates reflected in the Company’s consolidated financial statements include revenue recognition, cost of revenues, allowance for doubtful accounts, and deferred income taxes. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates.

 

Cash and Cash Equivalents

 

Cash and cash equivalents consist of cash on hand, and other highly liquid investments which are unrestricted as to withdrawal or use, and which have maturities of three months or less when purchased.

 

Fair Value Measurements

 

The Company follows the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures, which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

 

Level 1Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

 

Level 2Inputs other than quoted prices in Level 1 that are observable for the asset or liability in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

 

Level 3Unobservable inputs that reflect management’s assumptions based on the best available information.

 

The Company did not identify any assets and liabilities that are required to be presented on the consolidated balance sheets at fair value in accordance with the relevant accounting standards. The carrying amount of the Company’s cash and cash equivalents, accounts receivable, prepaid expenses, advance to suppliers, advance from customer, accounts payable and accrued expenses and due to related parties approximate their fair value because of the short-term nature of these instruments.

 

Equity Method Investment

 

The Company uses the equity method of accounting for its investment in PayNovi Ltd. (“PayNovi”) in accordance with FASB ASC Topic 323. The equity method is used for an entity over which the investor has significant influence by owning over 20% of the common stock but less than 50%.

 

The equity investment in PayNovi was written down to zero on September 30, 2015; and it was transferred to WGN on October 1, 2017 in connection with the Exchange Agreement.

 

 F-11 

 

 

Related Parties

 

The Company follows ASC subtopic 850-10 for the identification of related parties and disclosure of related party transactions. Pursuant to ASC 850-10-20, related parties include: (a) affiliates of the Company; (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. Based on an intercompany balances statement certified by Fabio Galdi allowing the net off of intercompany balances, debts and obligations owed between the companies owned and/or controlled by him, the Company has netted off its due to and due from account balances with these related parties.

 

Revenue Recognition

 

The Company follows ASC 605 for revenue recognition; and it recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.

 

The Company derived its revenues from sales of products and services to end-users via distribution partners, with revenues being generated upon delivery of the products or services to the distribution partners. Persuasive evidence of an arrangement was demonstrated via supporting invoices; service was considered provided when it was delivered to the customers.

 

Product Sales: The Company designed and sold its own range of integrated mobile technology products that were manufactured by a third-party supplier in China. These products were shipped directly to the Company’s distribution partners for onward delivery to end-users. Title to the products passed to the distributors on shipment from the supplier; and sales invoices were issued to the respective distributors at agreed wholesale prices. Distributors were responsible for providing initial warranty support to end-users and held spare unit inventory to service any claims. Distributors had the option to return faulty units once per quarter and the Company issued credit notes for any returns. Revenues recorded by the Company reflect the net amount of sales less any credits for returns in the period. The Company paid distributors certain incentives for promoting its products, which allowed the Company to quickly expand its distribution network and sales volume. The costs associated with these incentives were deducted from gross revenue in the consolidated statements of operations.

 

Services Revenue: The Company also provided mobile telecom services (“airtime”) to consumers via exclusive sales agreements with regional third-party distributors across the world in 2016. Services were initially paid for by the Company to its service providers and then billed on to the relevant distributors at an agreed fixed mark-up on the cost of the airtime actually used by end-users. Revenues recorded by the Company only included airtime that had already been consumed by end-users, had a known sales value, and payment could reasonably be assured. Revenues did not reflect any prepayments for unused airtime by end-users. Therefore, no accrual for unused minutes or deferred revenues were required by the Company as the distribution partners were responsible for any unused calling plan minutes and there was no obligation for the Company to deliver minutes beyond actual usage.

 

License Revenue: In accordance with the Preferred Supplier Agreement (“PSA”) executed in October 2016 between the Company and its wearable device supplier in China, the Company granted a non-exclusive, revocable license to its supplier to use and integrate its Life Sensing Technology in the manufacture of the Company’s wearable device, Helo. Under the PSA, the supplier agreed to pay the Company a non-refundable fee of $4.00 per Helo Classic and $5.00 per Helo LX shipped from its manufacturing facility. The Company recognized the license revenue upon confirmation and receipt of the shipping information from the supplier.

 

Accounts Receivable

 

Accounts receivable are presented at net realizable value. The Company maintains an allowance for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual receivable balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, the customers’ historical payment history, their current credit-worthiness and current economic trends. Accounts receivable are written off against the allowance after exhaustive efforts at collection.

 

 F-12 

 

 

At December 31, 2016, management evaluated its accounts receivable and determined that the amount was fully collectable and that no allowance for doubtful accounts was necessary. The Company had no bad debt expense during the years ended December 31, 2017 and 2016. The Company had no accounts receivable at December 31, 2017.

 

Advance to Supplier

 

In accordance with industry practices, the Company makes advance payments to its product or service suppliers. The advances are shown as a current asset and will be recorded as cost of revenues when the products are delivered.

 

Intangible Assets

 

In connection with the Exchange Agreement, WGN assigned and transferred to the Company all of its right, title and interest in and to certain technology, intellectual property and intellectual property rights for the Helo wearable devices on October 1, 2017. The amount capitalized consists primarily of legal fees incurred in registering the related trademarks. These intangible assets will be amortized on a straight-line basis over their estimated or remaining useful life of up to 10 years..

 

Advance from Customer

 

In accordance with industry practices, the Company collects advance payments from its customer to secure production of its products. The advance is shown as a current liability and will be recorded as revenues when the products are delivered.

 

Sales and Marketing

 

The Company utilizes a variety of marketing, sales and support activities to generate and cultivate ongoing demand for its products. The Company sells exclusively through WGN and its distribution network; and incurs promotional costs by way of distributor conferences and sponsoring industry events. Marketing costs are accounted in operating expenses as they are incurred.

 

Research and Development

 

The Company follows ASC subtopic 730-10 for research and development costs. Research and development costs are charged to expense when incurred. The Company’s research and development has primarily been focused on developing its products; the related research and development expenses included the design, parts sourcing and prototyping. The Company continues to outsource its development activities and will use expert consultants where required to ensure consistent iterations of products and related services.

 

For the years ended December 31, 2017 and 2016, the Company incurred $2,085,627 and $852,408 respectively, in research and development costs.

 

Intellectual Property

 

The Company’s ability to compete effectively is dependent in part upon its proprietary technology. Management relies on a combination of copyright, trademark and trade secret laws as well as non-disclosure agreements and other contractual restrictions, to establish and protect our proprietary rights. Employees and independent contractors are required to execute confidentiality and non-use agreements that transfer any rights they may have in copyrightable works or patentable technologies to us. In addition, prior to entering into discussions with potential business partners or customers regarding its business and technologies, the Company generally requires that such parties enter into non-disclosure agreements. If these discussions result in a license or other business relationships, the Company also generally requires that the agreement setting forth the parties’ respective rights and obligations include provisions for the protection of its intellectual property rights.

 

The Company’s does not currently have any patents but it has a few patent applications in process. Any future patent applications with respect to the Company’s technology may not be granted, and, if granted, patents may be challenged or invalidated. In addition, issued patents may not provide the Company with any competitive advantages and may be challenged by third parties. The Company’s practice is to affix copyright notices in its product literature in order to assert copyright protection for these work products.

 

 F-13 

 

 

Despite the Company’s efforts to protect its proprietary rights, unauthorized parties may attempt to duplicate aspects of our products or obtain and use information that we regard as proprietary. The Company’s steps to protect its proprietary technology may not be adequate to prevent misappropriation of such technology, and may not preclude competitors from independently developing products with functionality or features similar to our products. If the Company fails to protect its proprietary technology, its business, financial condition and results of operations could be harmed significantly.

 

Income Taxes

 

The Company utilizes ASC 740 Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Deferred taxes are also recognized for net operating losses that can be carried forward. A valuation allowance is established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

 

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company does not have any uncertain tax positions; and it does not have any unrecognized tax liabilities or benefits in accordance with the provisions of Section 740-10-25.

 

Currently, the 2014, 2015, and 2016 tax years are open and subject to examination by the taxing authorities. However, the Company is not currently under audit nor has the Company been contacted by any of the taxing authorities.

 

Net Income (Loss) per Common Share

 

Net loss per common share is computed pursuant to ASC section 260-10-45. Basic net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangements, stock options or warrants. Potentially dilutive shares are not included when there is a net loss because they would be anti-dilutive.

 

There were no potentially dilutive shares issued or outstanding during the two years ended December 31, 2017 and 2016.

 

Subsequent Events

 

The Company follows the guidance in ASC section 855-10-50 for disclosure of subsequent events. The Company evaluated subsequent events through May 2, 2018, which is the date the consolidated financial statements were available to be issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its consolidated financial statements issued when they are widely distributed to users, such as through filing them via OTC Markets Supplemental filings.

 

Recent Accounting Pronouncements

 

In September 2017, the FASB issued ASU 2017-13, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842). The main objective of this pronouncement is to clarify the effective date of the adoption of ASC Topic 606 and ASC Topic 842 and the definition of public business entity as stipulated in ASU 2014-09 and ASU 2016-02. ASU 2014-09 provides that a public business entity and certain other specified entities adopt ASC Topic 606 for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. All other entities are required to adopt ASC Topic 606 for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. ASU 2016-12 requires that “a public business entity and certain other specified entities adopt ASC Topic 842 for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. All other entities are required to adopt ASC Topic 842 for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020”. ASU 2017-13 clarifies that the SEC would not object to certain public business entities electing to use the non-public business entities effective dates for applying ASC 606 and ASC 842. ASU 2017-13, however, limits such election to certain public business entities that “otherwise would not meet the definition of a public business entity except for a requirement to include or inclusion of its financial statements or financial information in another entity’s filings with the SEC”. The Company expects that the adoption of this ASU would not have a material impact on its consolidated financial statements.

 

 F-14 

 

 

In May 2017, the FASB issued ASU 2017-09, Scope of Modification Accounting, which amends the scope of modification accounting for share-based payment arrangements, provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. For all entities, the ASU is effective for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. The Company does not expect that the adoption of this guidance will have a material impact on its consolidated financial statements.

 

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The amendments in this ASU clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Basically, these amendments provide a screen to determine when a set is not a business. If the screen is not met, the amendments in this ASU first, require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and second, remove the evaluation of whether a market participant could replace missing elements. These amendments take effect for public businesses for fiscal years beginning after December 15, 2017 and interim periods within those periods, and all other entities should apply these amendments for fiscal years beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The Company does not expect that the adoption of this guidance will have a material impact on its consolidated financial statements.

 

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other than Inventory, which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-06 will be effective for the Company in its first quarter of 2019. The Company does not expect that the adoption of this guidance will have a material impact on its consolidated financial statements.

 

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief. The Company does not expect the adoption of this guidance will have a material impact on its consolidated financial position, results of operations and cash flows.

 

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. In August 2015, the FASB issued ASU No. 2015-14, “Deferral of the Effective Date” (“ASU 2015-14”), which defers the effective date for ASU 2014-09 by one year. For public entities, the guidance in ASU 2014-09 will be effective for annual reporting periods beginning after December 15, 2017 (including interim reporting periods within those periods), and for all other entities, ASU 2014-09 will be effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. In March 2016, the FASB issued ASU No. 2016-08, “Principal versus Agent Considerations (Reporting Revenue versus Net)” (“ASU 2016-08”), which clarifies the implementation guidance on principal versus agent considerations in the new revenue recognition standard. In April 2016, the FASB issued ASU No. 2016-10, “Identifying Performance Obligations and Licensing” (“ASU 2016-10”), which reduces the complexity when applying the guidance for identifying performance obligations and improves the operability and understandability of the license implementation guidance. In May 2016, the FASB issued ASU No. 2016-12 “Narrow-Scope Improvements and Practical Expedients” (“ASU 2016-12”), which amends the guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes. In December 2016, the FASB further issued ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers” (“ASU 2016-20”), which makes minor corrections or minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The amendments are intended to address implementation and provide additional practical expedients to reduce the cost and complexity of applying the new revenue standard. These amendments have the same effective date as the new revenue standard. The Company assessed the potential impact of the adoption Topic 606 using the retrospective transition method, but does not expect that the adoption of this guidance will have a material impact on its financial statements. The Company believes that its current revenue recognition policies are generally consistent with the new revenue recognition standards set forth in ASU 2014-09. Potential adjustments to input measures are not expected to be pervasive to the Company’s contracts.

 

 F-15 

 

 

Note 3. Going Concern

 

As reflected in the consolidated financial statements, the Company reported a net loss of $1,130,747 and $788,204, for the years ended December 31, 2017 and 2016, respectively. At December 31, 2017, the Company had an accumulated deficit of $6,215,362. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

 

The Company is developing new products and will seek additional funds to finance its immediate and long-term operations and business plan through debt and/or equity financing. The successful outcome of future financing activities cannot be determined at this time and there is no assurance that if achieved, the Company will have sufficient funds to execute its intended business plan. Ultimately, the Company’s ability to continue as a going concern is dependent upon its ability to attract new sources of capital, in order to attain a reasonable threshold of operating efficiency and achieve sustained profitable operations.

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

 

Note 4. Concentration of Credit and Business Risk

 

The Company maintains its cash accounts at two commercial banks located in United States. The FDIC insures $250,000 per bank for the total of all depository accounts. As of December 31, 2017, the amount in excess of insured limits was approximately $517,000. The Company performs ongoing evaluation of its financial institutions to limit its concentration of risk exposure. Management believes this risk is not significant due to the financial strength of the financial institution utilized by the Company.

 

The following table represents major customers that individually accounted for more than 10% of the Company’s gross revenue for the years ended December 31:

 

   2017 
   Gross
Revenue
   Percentage   Accounts
Receivable
   Percentage 
                 
Customer 1 – Related Party  $2,210,000    53.8%  $-    -%
Customer 2   1,900,000    46.2%   -    -%

 

   2016 
   Gross
Revenue
   Percentage   Accounts
Receivable
   Percentage 
                 
Customer 1  $400,000    17.6%  $400,000    100%
Customer 2   285,545    12.6%   -    -%
Customer 3   364,525    16.0%   -    -%
Customer 4 – Related Party   304,425    13.4%   -    -%
Customer 5   568,316    25.0%   -    -%

 

Note 5. Stockholders’ Equity

 

Preferred Stock

 

On April 20, 2016, our Board of Directors adopted a resolution to amend our Articles of Incorporation which authorized the issuance of up to Ten Thousand (10,000) shares of preferred stock, par value of $0.001 per share (the "Preferred Shares"), for which the board of directors may fix and determine the designations, rights, preferences or other variations of each class or series within each class of the Preferred Shares. The holders of approximately 96% of our common stock approved the amendment by written consent. The amendment became effective with the Secretary of State of the State of Nevada on the close of business on May 12, 2016.

 

 F-16 

 

 

On January 6, 2017, the Company’s board of directors approved the authorization and issuance of 100 shares of Series A Super Voting Preferred Stock (the “Super Voting Preferred Stock”) to its former CEO, Fabio Galdi in exchange for the cancellation of $250,000 of unpaid management services fees owed to Mr. Galdi by the Company. A holder of the Super Voting Preferred Stock shall have one million votes for each share of Super Voting Preferred Stock held by him on all matters submitted to the shareholders. The Super Voting Preferred Stock has no conversion feature, and there is no distribution of assets to holders of any Series A Super Voting Preferred Stock upon liquidation. A holder of the Super Voting Preferred Stock is not entitled to receive dividends paid to the Company’s common stock holders.

 

The 100 shares of Series A Super Voting Preferred Stock held by Fabio Galdi were returned to the Company in connection with the Exchange Agreement executed on October 1, 2017.

 

Common Stock

 

As of December 31, 2017, the total number of common shares that the Company is authorized to issue is seventy-five million (75,000,000) shares, par value $0.001 per share, of which 36,722,244 are issued and outstanding.

 

Pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) provided by Regulation S or Section 4(2) of the Securities Act, the Company issued a total of 81,994 shares of restricted common stock to four accredited investors at $8 per share during March 2017 in exchange for $655,952; and 59,250 shares of restricted common stock to two accredited investors at $8 per share during July 2017 in exchange for $474,000. Cash proceeds from the common share issuances had been received by the Company.

 

Exchange Agreement

 

Pursuant to the Exchange Agreement with Fabio Galdi and his related entities executed on October 1, 2017, the Company issued 8,000,000 shares of its restricted common stock, par value $0.001 per share to WGN. The Exchange Agreement was treated as a capital reorganization since these transactions were all executed with the major shareholder and his related entities. The share issuance was accounted for as an equity transaction based on consideration of the following factors:

 

1)The main objective of the Exchange Agreement, which was to reorganize the Company’s business giving it right, title and interest in certain intellectual property and intellectual property rights for the Helo wearable devices, which were transferred to the Company.
2)The intent of the share issuance, which was to restructure the Company’s equity section whereby the super-voting preferred stock that Fabio Galdi previously held was converted into 8 million shares of restricted common stock.
3)The effect of these transaction was the net change in Mr. Galdi’s beneficial ownership, which increased from 75% as of September 30, 2017 to 80.8% as of October 1, 2017 after taking effect of the share issuance.
4)The elimination of certain amounts due to and due from Fabio Galdi and his related entities.

 

Note 6. Related Parties

 

From March 30, 2015 to September 30, 2017, the Company owned 35% of PayNovi, a company owned and controlled by the Company’s CEO, Sean McVeigh. The Company transferred its 35% ownership in PayNovi to WGN on October 1, 2017 in connection with the execution of the Exchange Agreement. During 2017, PayNovi advanced $50,000 to the Company which amount was repaid in full before December 31, 2017. This advance was short-term in nature and non-interest bearing.

 

Mr. McVeigh also owns and controls Anch Holdings Ltd., the company that received 1,361,000 shares of WCOR’s common stock and 3,907,005 shares of PWCL’s common stock in connection with the Company’s 35% equity investment in PayNovi on March 30, 2015.

 

World Global Network Pte. Ltd. (“WGN”), a Singapore-based company, is one of the Company’s distribution partners. WGN is owned and controlled by our CTO and current major shareholder, Mr. Fabio Galdi. In December 2016, PWCL transferred its remaining 1,073,878 shares of WCOR common stock to World Global Cash Pte. Ltd. On December 10, 2015, the Company’s board of directors approved a short-term promissory note of $1,500,000 to WGN, with 5% annual interest and a term of 3 months, which was subsequently extended to December 31, 2016 and again extended indefinitely. The Company recognized $41,114 and $67,921 of interest income during the year ended December 31, 2017 and 2016, respectively. During September 2017, WGN and the Company agreed to a repayment plan whereby the remaining balance would be repaid in equal instalments over a period of six quarters. The loan to WGN (with an outstanding balance of $1,140,506 at September 30, 2017) was forgiven on October 1, 2017 in connection with the Exchange Agreement

 

 F-17 

 

 

The Company subleases, on a month to month basis, facilities from World Global Network Corp. (“WGN Corp”), a Florida company, and will be charged rent for the property at a fixed rate of $5,000 per month. WGN Corp is controlled by Fabio Galdi, our major shareholder. The Company recognized $60,000 of rent expense for this lease during the years ended December 31, 2017 and 2016.

 

Due from (to) Related Parties

 

From time to time, WGN provides interest-free working capital advances to the Company on an as-needed basis.

 

Balance - December 31, 2015  $769,512 
Cash advance to WGN for eCommerce platform   500,000 
Repayment of loan by WGN   (400,608)
Unpaid interest on loan to WGN   67,921 
Rent due to WGN Corp   (60,000)
      
Balance - December 31, 2016   876,825 
R&D expenses and production costs paid by WGN   (545,000)
Management service fees and expenses paid by WGN   (520,000)
Legal fees and development fees paid by WGN   (28,950)
Interest on loan to WGN   41,114 
Forgiveness of loan to WGN as per Exchange Agreement   (1,140,506)
Payments to reduce amounts due to WGN   754,661 
Rent due to WGN Corp   (60,000)
Balance - December 31, 2017  $(621,856)

 

Payable to Major Shareholder

 

Fabio Galdi was the Company’s Chief Executive Officer, President, Chairman of the Board and Corporate Secretary until May 12, 2017. During, 2017, the Company owed Mr. Galdi $150,000 representing unpaid management fees which amount was forgiven by Mr. Galdi in connection with the execution of the Exchange Agreement. During the year ended December 31, 2016, the Company owed Mr. Galdi $350,000, representing unpaid management services fees and expenses. Of the $350,000 owed to Mr. Galdi, $250,000 was exchanged for 100 shares of the Company’s Series A Super Voting Preferred Stock in January 2017 (see Note 5) and the remaining $100,000 was paid in March 2017.

 

Family Relationships

 

There are no family relationships among the Company’s officers and directors, other than Fabio Galdi and Alfonso Galdi, the Company’s chief financial officer in 2016 and part of 2017, who are brothers.

 

Note 7. Income Taxes

 

Deferred Tax Assets

 

At December 31, 2017, the Company had net operating loss (“NOL”) carry–forwards for federal income tax purposes of approximately $4,786,000 that may be offset against future taxable income through 2037. No tax benefit has been reported with respect to these net operating loss carry-forwards in the accompanying consolidated financial statements because the Company believes that the realization of the Company’s net deferred tax assets of approximately $1,005,000, was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are fully offset by a valuation allowance.

 

 F-18 

 

 

Components of deferred tax assets at December 31, 2017 and 2016 are as follows:

 

   December 31, 
   2017   2016 
Net deferred tax assets:          
Expected income tax benefit from NOL carry forwards  $1,005,000   $1,913,000 
Less: valuation allowance   (1,005,000)   (1,913,000)
           
Deferred tax assets, net of valuation allowance  $-   $- 

 

The Company periodically evaluates the likelihood of the realization of deferred tax assets, and reduces the carrying amount of the deferred tax assets by a valuation allowance to the extent it believes it will not be realized. The Company considers many factors when assessing the likelihood of future realization of the deferred tax assets, including its results of operations, expectation of future income, and other relevant factors.

 

Deferred tax assets consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realization.

 

On December 22, 2017, the “Tax Cuts and Jobs Act” (“The Act”) was enacted. Under the provisions of the Act, the maximum U.S. corporate tax rate decreased to 21% beginning in 2018. The Company has remeasured its deferred taxes utilizing the lower enacted corporate tax rate of 21% for Federal purposes, resulting in a decrease of $908,106.

 

Income Tax Provision

 

A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows:

 

   For the Year Ended December 31, 
   2017   2016 
Tax at federal statutory rate   34.0%   34.0%
State and local taxes, net of federal benefit   3.6%   3.6%
Valuation allowance   (37.6)%   (37.6)%
Effective income tax rate   0.0%   0.0%

 

Note 8. Commitments and Contingencies

 

Commitments

 

The Company subleases facilities with WGN on a month-to-month basis. As per the sublease agreement, either party can terminate the sublease agreement after giving a 90-day written notice. The Company is charged rent and a cost allocation for the property at a fixed rate of $5,000 per month. The Company plans to continue this sublease arrangement at least until December 31, 2018.

 

In November 2017, the Company entered into a 1-year lease with a third party for an apartment in New York City. The apartment lease is effective from December 13, 2017 to December 12, 2018; the monthly rent is $5,500. The landlord required a security deposit of $5,500. The Company’s rent commitment for the apartment is $66,000 for the year ending December 31, 2018.

 

Litigation

 

In the ordinary course of business, the Company may from time to time be involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon the Company’s financial condition and/or results of operations. The Company is not currently involved in any litigation.

 

 F-19 

 

 

Exclusive License Agreement

 

On April 10, 2017, the Company and Giner Inc. (“Giner”), a Massachusetts company entered into an Exclusive License Agreement (the “ELA”). Pursuant to the ELA, Giner has agreed to incorporate its miniaturized transdermal alcohol sensor (“TAS”) into WCOR’s Helo product and give the Company an exclusive license to use, market, sell and distribute the integrated Helo product in the consumer market. In exchange, the Company agreed to fund Giner’s non-recurring engineering costs (“NRE”) related to the TAS integration work. Giner has also agreed to build a mobile software application with certain advanced features using TAS and other Helo data. The ELA provides for certain additional rights and obligations of the parties, including each party agreeing to certain provisions relating to confidentiality, intellectual property rights, representations and warranties, indemnification and limitation of liability. The Company’s total NRE funding amounted to $1.6 million, of which $750,000 was paid to Giner during the quarter ended June 30, 2017, $300,000 in July 2017, $275,000 in November 2017; and a total of $275,000 in March and April 2018. The $1.6 million was expensed as research and development costs.

 

The parties have also agreed to certain per unit pricing of $1 per unit and a minimum annual volume of the TAS units over the next five years in order for the Company to maintain its exclusive license of TAS from Giner.

 

Year Ending December 31,  Minimum
Requirements
 
2018  $200,000 
2019   500,000 
2020   1,000,000 
2021   2,000,000 
2022   3,000,000 
      
Total  $6,700,000 

 

Employment Agreement

 

Effective as of October 1, 2017, the Company entered into an employment agreement (as amended) with Mr. Anthony S. Chan with an initial term of 1 year, pursuant to which Mr. Chan was named the Company's Chief Financial Officer. As consideration for such services, upon execution of the Agreement, the Company agreed to pay (i) an annual base salary of $150,000, (ii) a signing bonus of $25,000, (iii) incentive bonus payments as follows, based upon certain individual and corporate performance targets being achieved: Milestone 1: Incentive bonus of $75,000 upon the effectiveness of the Company’s registration statement on Form S-1; Milestone 2: Incentive bonus of $75,000 upon successful up-listing to Nasdaq; Milestone 3: If Milestones 1 and 2 cannot be met, incentive bonus of $50,000, and (iv) severance payments equal to two month’s salary plus vacation and benefits payments.

 

Note 9. Subsequent Events

 

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers

 

Effective January 12, 2018, Sean McVeigh resigned as the Company's Chairman of the Board, but remains a member of the Company’s Board of Directors and remains the Company’s CEO, President and Corporate Secretary. Also effective January 12, 2018, and simultaneously with Mr. McVeigh’s resignation, Mr. Fabio Galdi was named the Company's Chairman of the Board.

 

Effective as of February 1, 2018, Alessandro Senatore resigned as the Company's Chief Technology Officer, but remains as a member of the Company’s Board of Directors. His resignation was not as a result of any disagreements with the Company. Also as of February 1, 2018 and simultaneously with Mr. Senatore’s resignation, Mr. Fabio Galdi was named the Company's Chief Technology Officer. Mr. Galdi also remains as the Company’s Chairman of the Board of Directors and is the Company’s majority beneficial shareholder.

 

 F-20 

 

 

Also effective as of February 1, 2018, the Company and Anch Holdings Ltd. (Anch) entered into a Professional Services Agreement (as amended) with an initial term of 1 year, pursuant to which Anch appoints Mr. McVeigh, as the Company's Chief Executive Officer. As consideration for such services, the Company agreed to pay Anch for Mr. McVeigh’s services (i) an annual base fee of $200,000, (ii) a $100,000 cash bonus upon achievement of certain performance based targets, which the Company’s Board shall determine and review, and (iii) a payment of $33,333 if the Agreement is terminated early by the Company without cause.

 

Effective as of March 22, 2018, the Company entered into a Professional Services Agreement (as amended) with World Global Network Corp. (“WGN Corp”), a Florida corporation beneficially owned and controlled by Fabio Galdi, our Chairman of the Board and shareholder, having an initial term of 1 year, pursuant to which Mr. Galdi will serve as the Company's Chief Technology Officer. As consideration for such services, upon execution of the Agreement, the Company agreed to pay WGN Corp for Mr. Galdi’s services (i) an annual base fee of $150,000, (ii) a cash bonus of $75,000 upon meeting certain targets, which the Board shall determine and review and determine, and (iii) a payment of $25,000, if the Agreement is terminated early by the Company without cause.

 

Establishment of Equity Incentive Plan

 

On January 9, 2018, the Board of Directors and 85% of the shareholders of World Technology Corp. approved the 2018 Stock Incentive Plan (the “2018 Plan”). The 2018 Plan provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, stock grants, and stock units (collectively, the “Awards”). Awards may be granted under the 2018 Plan to the Company’s employees, directors and consultants (collectively, the “Participants”). The maximum number of shares of common stock available for issuance under the 2018 Plan is 7,000,000 shares. The shares of common stock subject to stock awards granted under the 2018 Plan that expire, are forfeited because of a failure to vest, or otherwise terminate without being exercised in full will return to the 2018 Plan and be available for issuance under the 2018 Plan.

 

In the event of a corporate transaction or a change of control, outstanding awards under the 2018 Plan may be assumed, continued, or substituted by the surviving corporation. If the surviving corporation does not assume, continue, or substitute such Awards, then (a) any stock awards that are held by individuals performing services for the Company immediately prior to the effective time of the transaction will become fully vested and exercisable and will be terminated if not exercised prior to the effective date of the transaction, and (b) all other outstanding stock awards will be terminated if not exercised on or prior to the effective date of the transaction.

 

The 2018 Plan is scheduled to terminate at the Company’s 2027 Annual Meeting of Shareholders. The termination of the 2018 Plan, or any amendment thereof, shall not impair the rights or obligations of any Participant under any Award previously granted under the 2018 Plan without the Participant’s consent, unless such modification is necessary or desirable to comply with any applicable law, regulation or rule. No Awards shall be granted under the 2018 Plan after the Plan’s termination. An amendment of the 2018 Plan shall be subject to the approval of the Company’s shareholders only to the extent such approval is otherwise required by applicable laws, regulations or rules. The 2018 Plan was filed as an exhibit to the Company’s Supplemental Report filed with the OTC Markets on January 23, 2018.

 

Change of Control

 

Effective as of March 21, 2018, the Company’s majority shareholder, Chairman of the Board and CTO, Fabio Galdi, transferred his controlling ownership interest in World Global Holdings Pte. Ltd. (“WGH”) to Gabriele Galdi, his brother. WGH beneficially owns 49% of the common stock of WCOR. As a result of this share transfer, Gabriele Galdi holds a 50% ownership interest in WGH, while Alessandro Senatore continues to hold a 22% ownership interest in WGH and Alfonso Galdi continues to hold a 28% ownership interest in WGH. Fabio Galdi retains a 10% beneficial ownership interest in WCOR. Mr. Senatore also holds a direct 6.8% ownership interest in WCOR and Mr. Alfonso Galdi also directly holds a 9.6% ownership interest in WCOR.

 

 F-21 

 

 

WORLD TECHNOLOGY CORP. AND SUBSIDIARY

 

Index to Unaudited Condensed Consolidated Financial Statements

 

  Page
   
Condensed Consolidated Balance Sheets at March 31, 2018 and December 31, 2017 F-23
   
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2018 and 2017 F-24
   
Condensed Consolidated Statements of Changes in Shareholders’ (Deficit) Equity for the Three Months Ended March 31, 2018 F-25
   
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2018 and 2017 F-26
   
Notes to Unaudited Condensed Consolidated Financial Statements F-27-F-38

 

 F-22 

 

 

WORLD TECHNOLOGY CORP. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

   March 31,   December 31, 
   2018   2017 
   (Unaudited)     
ASSETS          
           
Current assets:          
Cash and cash equivalents  $663,055   $881,239 
Prepaid expenses   22,000    311,522 
Advance to supplier   916,067    800,000 
           
Total current assets   1,601,122    1,992,761 
           
Security deposit   5,500    5,500 
Intangible assets, net   20,889    22,788 
           
TOTAL ASSETS  $1,627,511   $2,021,049 
           
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY          
           
Current liabilities:          
Advance from customer  $519,066   $804,286 
Accounts payable and accrued expenses   533,310    357,481 
Due to related parties   841,856    621,856 
           
Total current liabilities   1,894,232    1,783,623 
           
TOTAL LIABILITIES   1,894,232    1,783,623 
           
Stockholders’ (deficit) equity:          
Preferred stock, $0.001 par value; 10,000 shares authorized, none issued and outstanding   -    - 
Common stock, $0.001 par value; 75,000,000 shares authorized, 36,722,244 shares issued and outstanding at March 31, 2018 and December 31,   36,722    36,722 
Additional paid-in capital   6,416,066    6,416,066 
Deficit   (6,719,509)   (6,215,362)
           
Total stockholders' (deficit) equity   (266,721)   237,426 
           
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY  $1,627,511   $2,021,049 

 

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

 

 F-23 

 

 

WORLD TECHNOLOGY CORP. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

   Three Months Ended March 31, 
   2018   2017 
         
Revenues:          
Products  $2,463,500   $- 
License fees   -    500,000 
           
Total revenues   2,463,500    500,000 
           
Costs of revenues:          
Products   1,906,500    - 
           
Gross profit   557,000    500,000 
           
Operating expenses          
Management fees - related party   205,000    230,500 
General and administrative   834,588    87,122 
Research and development   21,559    280,000 
           
Total operating expenses   1,061,147    597,622 
           
Operating loss   (504,147)   (97,622)
           
Other income:          
Interest income - related party   -    13,554 
           
Net loss  $(504,147)  $(84,068)
           
Net loss per share - basic and diluted  $(0.01)  $(0.00)
           
Weighted average shares outstanding, basic and diluted   36,722,244    28,662,994 

 

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

 

 F-24 

 

 

WORLD TECHNOLOGY CORP. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2018

(UNAUDITED)

 

           Additional         
   Common stock   paid-in         
   Shares   Amount   capital   Deficit   Total 
                     
Balance - December 31, 2017   36,722,244   $36,722   $6,416,066   $(6,215,362)  $237,426 
                          
Net loss   -    -    -    (504,147)   (504,147)
                          
Balance - March 31, 2018 - Unaudited   36,722,244   $36,722   $6,416,066   $(6,719,509)  $(266,721)

 

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

 

 F-25 

 

 

WORLD TECHNOLOGY CORP. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

 

   Three Months Ended March 31, 
   2018   2017 
         
Cash flows from operating activities:          
Net loss  $(504,147)  $(84,068)
Adjustments to reconcile net loss to net cash used in operating activities:          
Amortization expense   1,899    - 
Change in operating assets and liabilities:          
Increase in accounts receivable   -    (500,000)
Decrease in prepaid expenses   289,522    - 
Increase in advance to supplier   (116,067)   - 
Decrease in advance from customer   (285,220)   - 
Increase in payable to major shareholder   -    87,500 
Increase in accounts payable and accrued expenses   175,829    - 
           
Net cash used in operating activities   (438,184)   (496,568)
           
Cash flows from financing activities:          
Interest on related party loan   -    (13,554)
Rent due to related party   15,000    15,000 
Expenses paid by related party   205,000    463,309 
Cash paid to major shareholder   -    (100,000)
Cash received for issuance of common stock   -    655,932 
           
Net cash provided by financing activities   220,000    1,020,687 
           
Net change in cash   (218,184)   524,119 
Cash, beginning of year   881,239    29,114 
           
Cash, end of period  $663,055   $553,233 
           
Supplemental disclosure of cash flow information:          
           
Cash paid for income taxes  $-   $- 
           
Cash paid for interest  $-   $- 
           
Noncash activities:          
Series A super voting preferred stock issued to major shareholder  $   $250,000 

 

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

 

 F-26 

 

 

WORLD TECHNOLOGY CORP. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Note 1. Organization and Business

 

History

 

World Technology Corp. (formerly World Media & Technology Corp., referred to herein as the “Company” or “WCOR”) was incorporated in the State of Nevada on October 22, 2010, under the name Halton Universal Brands Inc. (“Halton”). Halton was originally a brokerage, consulting and marketing firm specializing in brand consulting and new product strategy consulting for emerging brands.

 

Effective October 29, 2014:

 

1)Power Clouds Inc. (“PWCL”) (formerly World Assurance Group, Inc.), acquired 7,095,000 shares of WCOR common stock, representing 98% of the Company’s issued and outstanding share capital, for cash consideration of $378,000,

 

2)WCOR discontinued its previously existing brokerage and brand consultancy business, and

 

3)WCOR acquired the SPACE technology business and related assets from PWCL for consideration of $557,898, funded by way of debt from PWCL (collectively “the October 29, 2014 Transactions”).

 

The Company accounted for the October 29, 2014 Transactions as a reverse merger of PWCL’s SPACE technology business and related assets into WCOR. This reverse merger was accounted for as a reverse capitalization with PWCL’s SPACE technology business, the legally acquired business, being treated as the acquirer of WCOR for accounting and financial reporting purposes.

 

In November 2014, the Company’s board of directors and a majority of the stockholders authorized a name change of the Company from Halton Universal Brands, Inc. to World Media & Technology Corp. The name change became effective with FINRA on December 22, 2014, and the Company’s ticker symbol was changed to WRMT as a result of the name change.

 

On March 5, 2015, the Company incorporated its wholly-owned subsidiary, Space Wireless Corp. (“Space Wireless”), in Florida. Space Wireless was set up to operate as the mobile virtual network business in the United States.

 

In October 2015, PWCL distributed 14,021,122 of the 15,095,000 shares of the Company’s common stock held by PWCL, the Company’s former parent company and former majority shareholder. PWCL shareholders received one share of the Company’s common stock for every six PWCL shares of common stock held as of the record date, which was October 1, 2015.

 

In December 2016, PWCL transferred its remaining 1,073,878 shares of the Company’s common stock to World Global Cash Pte. Ltd., a Singapore company owned and controlled at the time of this share transfer by Fabio Galdi, the Company’s major shareholder and Chief Executive Officer then and currently our Chairman of the Board and Chief Technology Officer. In October 2017, Mr. Galdi sold World Global Cash Pte. Ltd.

 

On January 6, 2017, the Company issued 100 shares of its Series A Super Voting Preferred Stock to Fabio Galdi in exchange for the cancellation of $250,000 of unpaid management service fees.

 

Corporate Re-organization

 

On October 1, 2017, the Company, Fabio Galdi, World Global Network Pte. Ltd. (“WGN”) and WGN’s wholly -owned subsidiary, World Global Assets Pte. Ltd., entered into a Stock Exchange, Debt Forgiveness and Intellectual Property Assignment Agreement (the “Exchange Agreement”). The main objective of the Exchange Agreement was to re-organize and restructure WCOR so that:

 

  · WCOR operates as a technology company that recognizes revenues and operating profits through the sale of its Helo wearable devices in the wellness market sector;

 

 F-27 

 

 

WORLD TECHNOLOGY CORP. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

  · WCOR sells its Helo wearable devices exclusively to WGN at an agreed upon mark-up of the underlying production cost;

 

  · WGN has the exclusive right to sell the wearable devices to the end-users through its distribution network; and

 

  · WCOR has the business model and ownership structure that is attractive to potential investors; and the opportunity to register its stock for potential sale in the public markets, raise additional capital, and up-list to Nasdaq.

 

Pursuant to the terms of the Exchange Agreement, the Company:

 

  · Issued 8,000,000 shares of its common stock, par value $0.001 per share (“Common Stock”) to WGN;

 

  · Transferred its equity investment in PayNovi Ltd. (i.e., 35% ownership interest in PayNovi which had no carrying value to WCOR) to WGN; and

 

  · Agreed to forgive the remaining outstanding balance ($1,140,506) owed by WGN for borrowed money.

 

In exchange,

 

  · Mr. Galdi returned to WCOR for cancellation the 100 shares of the Company’s Series A Super Voting Preferred Stock held by him;

 

  · Mr. Galdi forgave the amounts owed by WCOR to him for past services rendered in the amount of $150,000;

 

  · WGN assigned and transferred to WCOR all of its right, title and interest in and to certain technology, intellectual property and intellectual property rights for the Helo wearable devices;

 

  · WGN and Mr. Galdi agreed not to source, promote or enter into any agreement for any technology similar to WCOR’s Technology from any supplier other than WCOR; and

 

  · WGN agreed to terminate and forego its exclusive relationship with Quality Technology Industrial Co. Ltd. and to purchase Helo Devices directly from WCOR upon the terms and subject to the conditions set forth in the Strategic Partner Master Sales and World Wide Distribution Agreement dated October 1, 2017 between the Company and WGN.

 

The Exchange Agreement was treated as a capital reorganization since the transactions were all with the major shareholder and his related entities.

 

On November 3, 2017, the Company dissolved its wholly-owned subsidiary, Space Wireless, due to the fact that the subsidiary no longer had any operations, assets or liabilities.

 

On December 4, 2017, the Company changed its name to World Technology Corp, with ticker symbol WCOR, to re-position itself as a technology company that produces wearable devices for use in the wellness market segment.

 

Business

 

Headquartered in Miami, Florida, the Company designed, produced and previously sold its own range of integrated mobile technology products (such as SPACE smartphones in 2015 and 2016) through its exclusive marketing and distribution partner, WGN, and WGN’s distribution network.

 

The Company changed its business model in the fourth quarter of 2016 when it executed the Preferred Supplier Agreement (“PSA”) with its wearable device supplier, Quality Technology Industrial Co., Ltd. (“QTI”), in October 2016. In accordance with the PSA, the Company granted a non-exclusive, revocable license to QTI to use and integrate its Life Sensing Technology in the manufacture of Helo, the wearable device. Under the PSA, QTI agreed to pay the Company a non-refundable fee of $4.00 per Helo Classic and $5.00 per Helo LX shipped from its manufacturing facility. From the fourth quarter of 2016 through the third quarter of 2017, the Company earned license fees based on the number of Helo devices shipped by QTI.

 

 F-28 

 

 

WORLD TECHNOLOGY CORP. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Effective October 1, 2017, and as a result of the corporate re-organization, the Company has been selling its Helo wearable devices directly to WGN at a selling price equivalent to cost plus an agreed upon markup. The Company’s business is akin to a traditional wholesale model whereby WGN will place its order directly with the Company on a prepaid basis, and based on such orders, the Company will instruct QTI to build and ship the Helo devices in accordance with WGN’s instructions.

 

Note 2. Summary of Significant Accounting Policies

 

Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). Certain prior year balances have been reclassified to conform to the current year’s presentation. In the opinion of management, all adjustments, consisting of normal recurring adjustments considered necessary for a fair presentation of the condensed consolidated financial statements, have been included. Interim results are not necessarily indicative of results to be expected for the full year. The information included in this quarterly report should be read in conjunction with information included in the Company’s annual report for the year ended December 31, 2017, filed with the OTC on May 3, 2018.

 

Basis of Consolidation

 

The unaudited condensed consolidated financial statements for the three month ended March 31, 2017 include the financials statements of World Technology Corp. and our wholly-owned subsidiary, Space Wireless Corp., which was dissolved on November 3, 2017. All intercompany accounts and transactions have been eliminated in consolidation.

 

Use of Estimates and Assumptions

 

The preparation of the unaudited condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are adjusted to reflect actual experience when necessary. Significant accounting estimates reflected in the Company’s condensed consolidated financial statements include revenue recognition, cost of revenues, and deferred income taxes. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates.

 

Cash and Cash Equivalents

 

Cash and cash equivalents consist of cash on hand and other highly liquid investments which are unrestricted as to withdrawal or use, and which have maturities of three months or less when purchased.

 

Fair Value Measurements

 

The Company follows the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures, which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

 

Level 1Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

 

 F-29 

 

 

WORLD TECHNOLOGY CORP. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

  Level 2 Inputs other than quoted prices in Level 1 that are observable for the asset or liability in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

 

  Level 3 Unobservable inputs that reflect management’s assumptions based on the best available information.

  

The Company did not identify any assets and liabilities that are required to be presented on the consolidated balance sheets at fair value in accordance with the relevant accounting standards. The carrying amount of the Company’s cash and cash equivalents, accounts receivable, prepaid expenses, advance to suppliers, advance from customer, accounts payable and accrued expenses and due to related parties approximate their fair value because of the short-term nature of these instruments.

 

Revenue

 

Adoption of Recent Accounting Pronouncement

 

Effective January 1, 2018, the Company adopted the FASB Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 supersedes the revenue recognition requirements in FASB ASC 605, Revenue Recognition, and is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue, cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. The adoption of ASU 2014-09, using the modified retrospective approach, had no significant impact on the Company's results of operation, cash flows or financial position.

 

Revenue Recognition

 

The Company generates revenue from product sales to its exclusive distributor, WGN in accordance with the Strategic Partner Master Sales and Worldwide Distribution Agreement (the “Master Sales Agreement”) executed between the parties on October 1, 2017. All sales contracts with WGN are similarly structured in accordance with the Master Sales Agreement, and they create a performance obligation for the Company to transfer the finished products to WGN.

 

Product Sales: The Company designs and sells its own brand of wearable devices that are manufactured by a third-party supplier in China. These products are shipped directly to WGN for onward delivery to end-users. Title to the products passes to WGN on shipment from the supplier; and sales invoices are issued to WGN at agreed wholesale prices. WGN is responsible for providing initial warranty support to end-users and holds spare unit inventory to service any claims. WGN has the option to return faulty units once per quarter and the Company will issue credit for any returns. The Company recognizes revenues from product sales only upon shipment of products when control of such products is obtained by WGN. The Company determined that WGN obtains control of the product upon shipment when the title of such product and risk of loss transfers to the distributor. The Company accounts for shipping and handling costs as fulfillment costs and such amounts are classified as part of cost of revenues in its condensed consolidated statements of operations.

 

License Revenue: In accordance with the Preferred Supplier Agreement (“PSA”) executed in October 2016 between the Company and its wearable device supplier in China, the Company granted a non-exclusive, revocable license to its supplier to use and integrate its Life Sensing Technology in the manufacture of the Company’s wearable device, Helo. Under the PSA (which was effective from Q4 2016 to Q3 2017), the supplier agreed to pay the Company a non-refundable fee of $4.00 per Helo Classic and $5.00 per Helo LX shipped from its manufacturing facility. The Company recognized the license revenue upon confirmation and receipt of the shipping information from the supplier.

 

 F-30 

 

 

WORLD TECHNOLOGY CORP. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Income Taxes

 

The Company utilizes ASC 740 Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Deferred taxes are also recognized for net operating losses that can be carried forward. A valuation allowance is established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

 

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company does not have any uncertain tax positions; and it does not have any unrecognized tax liabilities or benefits in accordance with the provisions of Section 740-10-25.

 

Currently, the 2014, 2015, and 2016 tax years are open and subject to examination by the taxing authorities. However, the Company is not currently under audit nor has the Company been contacted by any of the taxing authorities.

 

Advance to Supplier

 

In accordance with industry practices, the Company makes advance payments to its supplier. The advances are shown as a current asset and will be recorded as cost of revenues when the products are delivered.

 

Advance from Customer

 

In accordance with industry practices, the Company collects advance payments from its customer to secure production of its products. The advance is shown as a current liability and will be recorded as revenues when the products are delivered. The Company as of March 31, 2018 has open orders for 40,000 units of Helo devices of which 20,000 units will be delivered by May 31, 2018.

 

Related Parties

 

The Company follows ASC subtopic 850-10 for the identification of related parties and disclosure of related party transactions. Pursuant to ASC 850-10-20, related parties include: (a) affiliates of the Company; (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. Based on an intercompany balances statement certified by Fabio Galdi allowing the net off of intercompany balances, debts and obligations owed between the companies owned and/or controlled by him, the Company has netted its due to and due from account balances.

 

 F-31 

 

 

WORLD TECHNOLOGY CORP. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Net Loss per Common Share

 

Net loss per common share is computed pursuant to ASC section 260-10-45. Basic net loss per common share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangements, stock options or warrants. Potentially dilutive shares are not included when there is a net loss because they would be anti-dilutive.

 

There were no potentially dilutive shares issued or outstanding during the three months ended March 31, 2018 and 2017.

 

Subsequent Events

 

The Company follows the guidance in ASC section 855-10-50 for disclosure of subsequent events. The Company evaluated subsequent events through May 14, 2018, which is the date the unaudited condensed consolidated financial statements were available to be issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its consolidated financial statements issued when they are widely distributed to users, such as through filing them via OTC Markets Supplemental filings.

 

Recent Accounting Pronouncements

 

In September 2017, the FASB issued ASU 2017-13, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842). The main objective of this pronouncement is to clarify the effective date of the adoption of ASC Topic 606 and ASC Topic 842 and the definition of public business entity as stipulated in ASU 2014-09 and ASU 2016-02. ASU 2014-09 provides that a public business entity and certain other specified entities adopt ASC Topic 606 for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. All other entities are required to adopt ASC Topic 606 for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. ASU 2016-12 requires that “a public business entity and certain other specified entities adopt ASC Topic 842 for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. All other entities are required to adopt ASC Topic 842 for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020”. ASU 2017-13 clarifies that the SEC would not object to certain public business entities electing to use the non-public business entities effective dates for applying ASC 606 and ASC 842. ASU 2017-13, however, limits such election to certain public business entities that “otherwise would not meet the definition of a public business entity except for a requirement to include or inclusion of its financial statements or financial information in another entity’s filings with the SEC”.

 

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The amendments in this ASU clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Basically, these amendments provide a screen to determine when a set is not a business. If the screen is not met, the amendments in this ASU first, require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and second, remove the evaluation of whether a market participant could replace missing elements. These amendments take effect for public businesses for fiscal years beginning after December 15, 2017 and interim periods within those periods, and all other entities should apply these amendments for fiscal years beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019.

 

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief. The Company does not expect the adoption of this guidance will have a material impact on its consolidated financial position, results of operations and cash flows.

 

 F-32 

 

 

WORLD TECHNOLOGY CORP. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Note 3. Going Concern

 

As reflected in the accompanying unaudited condensed consolidated financial statements, the Company reported a net loss of $504,147 for the three months ended March 31, 2018. At March 31, 2018, the Company had an accumulated deficit of $6,719,509 and a stockholder’s deficit of $266,721. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

 

The Company is developing new products and will seek additional funds to finance its immediate and long-term operations and business plan through debt and/or equity financing. The successful outcome of future financing activities cannot be determined at this time and there is no assurance that if achieved, the Company will have sufficient funds to execute its intended business plan. Ultimately, the Company’s ability to continue as a going concern is dependent upon its ability to attract new sources of capital, in order to attain a reasonable threshold of operating efficiency and achieve sustained profitable operations.

 

The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

 

Note 4. Concentration of Credit and Business Risk

 

The Company maintains its cash accounts at two commercial banks located in United States. The FDIC insures $250,000 per bank for the total of all depository accounts. As of March 31, 2018, the amount in excess of insured limits was approximately $299,000. The Company performs ongoing evaluation of its financial institutions to limit its concentration of risk exposure. Management believes this risk is not significant due to the financial strength of the financial institution utilized by the Company.

 

 The following table represents major customers that individually accounted for more than 10% of the Company’s gross revenue for the three months ended March 31:

 

   2018 
   Gross
Revenue
   Percentage   Accounts
Receivable
   Percentage 
                     
Customer 1- Related Party  $2,463,500    100%  $-    -%

 

   2017 
   Gross
Revenue
   Percentage   Accounts
Receivable
   Percentage 
                     
Customer 1-Third Party  $500,000    100%  $900,000    100%

 

 F-33 

 

 

WORLD TECHNOLOGY CORP. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Note 5. Stockholders’ (Deficit) Equity

 

Preferred Stock

 

On January 6, 2017, the Company’s board of directors approved the authorization and issuance of 100 shares of Series A Super Voting Preferred Stock (the “Super Voting Preferred Stock”) to its former CEO, Fabio Galdi in exchange for the cancellation of $250,000 of unpaid management services fees owed to Mr. Galdi by the Company. A holder of the Super Voting Preferred Stock shall have one million votes for each share of Super Voting Preferred Stock held by him on all matters submitted to the shareholders. The Super Voting Preferred Stock has no conversion feature, and there is no distribution of assets to holders of any Series A Super Voting Preferred Stock upon liquidation. A holder of the Super Voting Preferred Stock is not entitled to receive dividends paid to the Company’s common stock holders.

 

The 100 shares of Series A Super Voting Preferred Stock held by Fabio Galdi were returned to the Company in connection with the Exchange Agreement executed on October 1, 2017.

 

Common Stock

 

As of March 31, 2018, the total number of common shares that the Company is authorized to issue is seventy-five million (75,000,000) shares, par value $0.001 per share, of which 36,722,244 are issued and outstanding.

 

Pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) provided by Regulation S or Section 4(2) of the Securities Act, the Company issued a total of 81,994 shares of restricted common stock to four accredited investors at $8 per share during March 2017 in exchange for $655,952; and 59,250 shares of restricted common stock to two accredited investors at $8 per share during July 2017 in exchange for $474,000.

 

Exchange Agreement

 

Pursuant to the Exchange Agreement with Fabio Galdi and his related entities executed on October 1, 2017, the Company issued 8,000,000 shares of its restricted common stock, par value $0.001 per share to WGN. The Exchange Agreement was treated as a capital reorganization since these transactions were all executed with the major shareholder and his related entities. The share issuance was accounted for as an equity transaction based on consideration of the following factors:

 

1)The main objective of the Exchange Agreement was to reorganize the Company’s business giving it right, title and interest in certain intellectual property and intellectual property rights for the Helo wearable devices, which were transferred to the Company.

 

2)The intent of the share issuance, which was to restructure the Company’s equity section whereby the super-voting preferred stock that Fabio Galdi previously held was retired and converted into 8 million shares of restricted common stock.

 

3)The effect of these transactions was the net change in Mr. Galdi’s beneficial ownership, which increased from 75% as of September 30, 2017 to 80.8% as of October 1, 2017 after taking effect of the share issuance.

 

4)The elimination of certain amounts due to and due from Fabio Galdi and his related entities.

 

Note 6. Related Parties

 

From March 30, 2015 to September 30, 2017, the Company owned 35% of PayNovi, a company owned and controlled by the Company’s CEO, Sean McVeigh. The Company transferred its 35% ownership in PayNovi to WGN on October 1, 2017 in connection with the execution of the Exchange Agreement. During 2017, PayNovi advanced $50,000 to the Company which amount was repaid in full before December 31, 2017. This advance was short-term in nature and non-interest bearing.

 

 F-34 

 

 

WORLD TECHNOLOGY CORP. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Mr. McVeigh also owns and controls Anch Holdings Ltd., the company that received 1,361,000 shares of WCOR’s common stock and 3,907,005 shares of PWCL’s common stock in connection with the Company’s 35% equity investment in PayNovi on March 30, 2015.

 

World Global Network Pte. Ltd. (“WGN”), a Singapore-based company, is the Company’s distribution partner. WGN is owned and controlled by our Chairman of the Board, the Company's Chief Technology Officer and shareholder, Mr. Fabio Galdi. In December 2016, PWCL transferred its remaining 1,073,878 shares of WCOR common stock to World Global Cash Pte. Ltd., a company controlled by Fabio Galdi at the time. On December 10, 2015, the Company’s board of directors approved a short-term promissory note of $1,500,000 to WGN, with 5% annual interest and a term of 3 months, which was subsequently extended to December 31, 2016 and again extended indefinitely. The Company recognized $13,554 of interest income during the quarter ended March 31, 2017. During September 2017, WGN and the Company agreed to a repayment plan whereby the remaining balance would be repaid in equal installments over a period of six quarters. The loan to WGN (with an outstanding balance of $1,140,506 at September 30, 2017) was forgiven on October 1, 2017 in connection with the Exchange Agreement

 

The Company subleases, on a month to month basis, facilities from World Global Network Corp. (“WGN Corp”), a Florida company, and will be charged rent for the property at a fixed rate of $5,000 per month. WGN Corp is beneficially owned and controlled by Fabio Galdi, our Chairman of the Board, CTO and shareholder. The Company recognized $15,000 of rent expense for this lease during the three months ended March 31, 2018 and 2017, respectively.

 

Effective January 12, 2018, Sean McVeigh resigned as the Company's Chairman of the Board, but remains a member of the Company’s Board of Directors and remains the Company’s CEO, President and Corporate Secretary. Also effective January 12, 2018, and simultaneously with Mr. McVeigh’s resignation, Mr. Fabio Galdi was named the Company's Chairman of the Board.

 

Effective as of February 1, 2018, Alessandro Senatore resigned as the Company's Chief Technology Officer, but remains as a member of the Company’s Board of Directors. His resignation was not as a result of any disagreements with the Company. Also as of February 1, 2018 and simultaneously with Mr. Senatore’s resignation, Mr. Fabio Galdi was named the Company's Chief Technology Officer. Mr. Galdi also remains as the Company’s Chairman of the Board of Directors and is the Company’s majority beneficial shareholder.

 

Effective as of February 1, 2018, the Company and Anch Holdings Ltd. (Anch) entered into a Professional Services Agreement (as amended) with an initial term of 1 year, pursuant to which Anch appoints Mr. McVeigh, as the Company's Chief Executive Officer.

 

Effective as of March 22, 2018, the Company entered into a Professional Services Agreement (as amended) with WGN Corp. , having an initial term of 1 year, pursuant to which Mr. Galdi will serve as the Company's Chief Technology Officer. As consideration for such services, upon execution of the Agreement, the Company agreed to pay WGN Corp for Mr. Galdi’s services (i) an annual base fee of $150,000, (ii) a cash bonus of $75,000 upon meeting certain targets, which the Board shall determine and review and determine, and (iii) a payment of $25,000, if the Agreement is terminated early by the Company without cause.

 

Effective as of March 21, 2018, the Company’s shareholder, Chairman of the Board and CTO, Fabio Galdi, transferred his controlling ownership interest in World Global Holdings Pte. Ltd. (“WGH”) to Gabriele Galdi, his brother. WGH beneficially owns 49% of the common stock of WCOR. As a result of this share transfer, Gabriele Galdi holds a 50% ownership interest in WGH, while Alessandro Senatore continues to hold a 22% ownership interest in WGH and Alfonso Galdi continues to hold a 28% ownership interest in WGH. Fabio Galdi retains a 10% beneficial ownership interest in WCOR. Mr. Senatore also holds a direct 6.8% ownership interest in WCOR and Mr. Alfonso Galdi also directly holds a 9.6% ownership interest in WCOR.

 

 F-35 

 

 

WORLD TECHNOLOGY CORP. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Due to Related Parties

 

Balance – December 31, 2017  $(621,856)
Management service fees and expenses owed to WGN   (155,000)
CEO services fees owed to Anch   (50,000)
Rent due to WGN Corp   (15,000)
Balance – March 31, 2018  $(841,856)

 

Family Relationships 

 

There are no family relationships among the Company’s officers and directors, other than Fabio Galdi and Alfonso Galdi, the Company’s chief financial officer for part of 2017, who are brothers.

 

Note 7. Commitments and Contingencies

 

Commitments

 

The Company subleases facilities with WGN on a month-to-month basis. As per the sublease agreement, either party can terminate the sublease agreement after giving a 90-day written notice. The Company is charged rent and a cost allocation for the property at a fixed rate of $5,000 per month. The Company plans to continue this sublease arrangement at least until December 31, 2018.

 

In November 2017, the Company entered into a 1-year lease with a third party for an apartment in New York City. The apartment lease is effective from December 13, 2017 to December 12, 2018; the monthly rent is $5,500. The landlord required a security deposit of $5,500. The Company’s rent commitment for the apartment is $66,000 for the year ending December 31, 2018.

 

Litigation

 

In the ordinary course of business, the Company may from time to time be involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon the Company’s financial condition and/or results of operations. The Company is not currently involved in any litigation.

 

Exclusive License Agreement

 

On April 10, 2017, the Company and Giner Inc. (“Giner”), a Massachusetts company entered into an Exclusive License Agreement (the “ELA”). Pursuant to the ELA, Giner has agreed to incorporate its miniaturized transdermal alcohol sensor (“TAS”) into WCOR’s Helo product and give the Company an exclusive license to use, market, sell and distribute the integrated Helo product in the consumer market. In exchange, the Company has agreed to fund Giner’s non-recurring engineering costs (“NRE”) related to the TAS integration work. Giner has also agreed to build a mobile software application with certain advanced features using TAS and other Helo data. The ELA provides for certain additional rights and obligations of the parties, including each party agreeing to certain provisions relating to confidentiality, intellectual property rights, representations and warranties, indemnification and limitation of liability. The Company’s total NRE funding amounted to $1.6 million, of which $1,325,000 was paid to Giner during 2017; $90,000 in March 2018 and $185,000 in April 2018. These payments have been expensed as research and development costs.

 

 F-36 

 

 

WORLD TECHNOLOGY CORP. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

In order for the Company to maintain its exclusive license of TAS from Giner, the parties have also agreed to minimum TAS units to be purchased by the Company in 2018 and over the next four years at certain per unit pricing.

 

Year Ending December 31,  Minimum
Quantity
Requirements
 
2018   200,000 
2019   500,000 
2020   1,000,000 
2021   2,000,000 
2022   3,000,000 
      
Total   6,700,000 

 

In the event that the Company does not purchase these minimum quantities in any one year, it can retain the ELA by paying Giner $1 per each TAS unit shortfall.

 

Employment and Professional Services Agreements

 

Effective as of October 1, 2017, the Company entered into an employment agreement (as amended) with Mr. Anthony S. Chan with an initial term of 1 year, pursuant to which Mr. Chan was named the Company's Chief Financial Officer. As consideration for such services, upon execution of the Agreement, the Company agreed to pay (i) an annual base salary of $150,000, (ii) a signing bonus of $25,000, (iii) incentive bonus payments as follows, based upon certain individual and corporate performance targets being achieved: Milestone 1: Incentive bonus of $75,000 upon the effectiveness of the Company’s registration statement on Form S-1; Milestone 2: Incentive bonus of $75,000 upon successful up-listing to Nasdaq; Milestone 3: If Milestones 1 and 2 cannot be met, incentive bonus of $50,000, and (iv) severance payments equal to two month’s salary plus vacation and benefits payments.

 

Effective as of February 1, 2018, the Company and Anch entered into a Professional Services Agreement (as amended) with an initial term of 1 year, pursuant to which Anch appoints Mr. McVeigh, as the Company's Chief Executive Officer. As consideration for such services, the Company agreed to pay Anch for Mr. McVeigh’s services (i) an annual base fee of $200,000, (ii) a $100,000 cash bonus upon achievement of certain performance based targets, which the Company’s Board shall determine and review, and (iii) a payment of $33,333 if the Agreement is terminated early by the Company without cause.

 

Effective as of March 22, 2018, the Company entered into a Professional Services Agreement (as amended) with WGN Corp, a Florida corporation beneficially owned by Fabio Galdi, our Chairman of the Board and shareholder, having an initial term of 1 year, pursuant to which Mr. Galdi will serve as the Company's Chief Technology Officer. As consideration for such services, upon execution of the Agreement, the Company agreed to pay WGN Corp for Mr. Galdi’s services (i) an annual base fee of $150,000, (ii) a cash bonus of $75,000 upon meeting certain targets, which the Board shall determine and review and determine, and (iii) a payment of $25,000, if the Agreement is terminated early by the Company without cause.

 

 F-37 

 

 

WORLD TECHNOLOGY CORP. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Note 8. Subsequent Events

 

The accompanying unaudited condensed consolidated financial statements were approved by management and available for issuance on May 15, 2018.

 

The Company has evaluated all events that occurred after the balance sheet date through the date when the unaudited condensed consolidated financial statements were issued on May 15, 2018 to determine if they must be reported. The management determined that there were no reportable subsequent events to be disclosed.

 

 F-38 

 

 

WORLD TECHNOLOGY CORP.

 

 

             Shares of Common Stock

Warrants to Purchase Up to              Shares of Common Stock

and

             Shares of Common Stock Underlying the Warrants

 

PROSPECTUS

 

 

Dawson James Securities, Inc 

 

 

 

Prospectus dated                           , 2018

 

 

 

 

PART II

 

INFORMATION NOT REQUIRED IN PROSPECTUS

 

Item 13. Other Expenses of Issuance and Distribution

 

The following table sets forth the various expenses, all of which will be borne by the registrant, in connection with the sale and distribution of the securities being registered, other than the underwriting discounts and commissions. All amounts shown are estimates except for the SEC registration fee and the FINRA filing fee.

 

SEC registration fee  $3,024.58 
FINRA filing fee  $*
NASDAQ filing fee    
Accounting fees and expenses  $*
Legal fees and expenses  $*
Printing and engraving fees  $*
Transfer agent, Warrant agent and registrar fees  $*
Miscellaneous  $*
Total:     

 

* To be provided by amendment.

 

Item 14. Indemnification of Directors and Officers.

 

Pursuant to Section 78.7502 of the Nevada Revised Statutes, we have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the Company, by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with the action, suit or proceeding if the person acted in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the conduct was unlawful. Our Articles of Incorporation and Bylaws provide that the registrant shall indemnify its directors and officers to the fullest extent permitted by the Nevada law.

 

With regard to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act of 1933, as amended, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or paid by a director, officer or controlling person of the Corporation in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the common shares being registered, we will, unless in the opinion of our counsel the matter has been settled by a controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by us is against public policy as expressed in the Securities Act of 1933, as amended, and will be governed by the final adjudication of such case.

 

Item 15. Recent Sales of Unregistered Securities.

 

The information below lists all of the securities sold by us during the past three years which were not registered under the Securities Act. All such share issuances were made pursuant to the exemption from registration contained in Section 4(2) of the Securities Act and/or Regulation S promulgated under the Securities Act as a transaction by an issuer not involving a public offering and by virtue of being issuances of securities by non-U.S. companies to non-U.S. citizens or residents, conducted outside the United States and not using any element of interstate commerce.

 

On March 25, 2015, the Company issued 12,000,000 shares of the Company’s common stock to Mr. Fabio Galdi, at $0.25 per share for total proceeds of $3,000,000.

 

On March 31, 2015, the Company issued 1,361,000 shares of the Company’s common stock to Anch Holdings, Ltd. as partial consideration for equity investment in PayNovi.

 

 II-1 

 

 

On January 6, 2017, the Company issued 100 shares of its Series A Super Voting Preferred Stock to Fabio Galdi in consideration for the cancellation of $250,000 in indebtedness owed by the Company to Mr. Galdi.

 

Between March 31, 2017 and July 6, 2017, the Company issued 141,244 shares of restricted common stock to six accredited investors at $8.00 per share for total proceeds of $1,129,952.

 

On October 1, 2017, the Company issued 8,000,000 shares of common stock to World Global Network Pte. Ltd in consideration for the return by Fabio Galdi of the 100 shares of Series A Super Voting Preferred Stock and the forgiveness of $150,000 of indebtedness owed by the Company to Fabio Galdi.

 

Item 16. Exhibits and Financial Statement Schedules.

 

(a)        The following exhibits are filed as part of this Registration Statement:

 

Number   Description
     
1.1   Form of Underwriting Agreement *
     
3.1   Articles of Incorporation
     
3.2   Bylaws
     
3.3   Certificate of Amendment filed with the Nevada Secretary of State on November 12, 2014
     
3.4   Certificate of Correction filed with the Nevada Secretary of State on December 2, 2014
     
3.5   Certificate of Amendment filed with the Secretary of State of the State of Nevada on May 9, 2016
     
3.6   Certificate of Amendment filed with the Secretary of State of the State of Nevada on January 12, 2017
     
3.7   Certificate of Amendment filed with the Secretary of State of the State of Nevada on November 22, 2017
     
4.1   Specimen Stock Certificate of Common Stock
     
4.2   Form of Representative’s Warrants (included in Exhibit 1.1)*
     
4.3   Form of Warrants (included in Exhibit 10.13) *
     
5.1   Legal opinion of Loeb & Loeb LLP*
     
10.1   Stock Exchange, Debt Forgiveness and Intellectual Property Assignment Agreement . dated October 1, 2017 by and among World Technology Corp., Fabio Galdi, World Global Network Pte. Ltd. and World Global Assets Pte. Ltd.
     
10.2   Strategic Partner Master Sales and World Wide Distribution Agreement dated October 1, 2017 by and among World Technology Corp. and World Global Network Pte. Ltd.
     
10.3   Exclusive License Agreement, dated as of April 10, 2017, by and between World Technology Corp. and Giner Inc.
     
10.4   Preferred Supplier Agreement dated as of October 1, 2017 by and between World Technology Corp. and Quality Technology Industrial Co., Ltd.

 

 II-2 

 

 

10.5   2018 Stock Incentive Plan of World Technology Corp.
     
10.6   Amended and Restated Employment Agreement effective as of October 1, 2017 by and between World Technology Corp. and Mr. Anthony S. Chan
     
10.7   Amended and Restated Professional Services Agreement effective as of February 1, 2018 by and between World Technology Corp. and Anch Holdings Ltd.
     
10.8   Amended and Restated Professional Services Agreement effective as of March 22, 2018 by and between World Technology Corp. and World Global Network Corp.
     
10.9   Platform License Agreement dated as of October 1, 2017 by and between World Technology Corp. and World Global Network Pte. Ltd.
     
10.10   Common Stock Purchase Agreement dated as of March 30, 2015 by and among PayNovi Ltd Anch Holdings Ltd., World Technology Corp. (f/k/a World Media & Technology Corp.) and World Assurance Group, Inc.
     
10.11   Form of Master Services Agreement dated February 1, 2018 by and between World Technology Corp. and Subhosting International LLC
     
10.12   Addendum to Exclusive License Agreement, dated  April 24, 2018 by and between World Technology Corp., Giner Inc. and 1A Smartstart, LLC
     
10.13   Form of Warrant Agreement dated ___, 2018 by and between World Technology Corp. and ClearTrust LLC, as Warrant Agent *
     
14.1   Code of Ethics Applicable To Directors, Officers And Employees
     
23.1   Consent of Wei, Wei & Co., LLP
     
23.2   Consent of Loeb & Loeb LLP (included in Exhibit 5.1)*
     
24.1   Power of Attorney (included on signature page of this Part II)

 

*To be filed by amendment

 

Item 17. Undertakings.

 

The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

 

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

 

The undersigned registrant hereby undertakes that:

 

(1)           For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

 

(2)           For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

 II-3 

 

 

(3)           To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

 

(i)  to include any prospectus required by Section 10(a)(3) of the Securities Act;

 

(ii)  to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

 

(iii)  to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

 

(4)           That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(5)           To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

(6)           That, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

 

(7)           That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

 

(i)  any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

 

(ii)  any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

 

(iii)  the portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

 

(iv)  any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

 

 II-4 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-1and has duly caused this registration statement or amendment thereto to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Miami, Florida, on July 13, 2018.

 

  WORLD TECHNOLOGY CORP.
     
  By: /s/ Seán McVeigh 
  Name: Seán McVeigh
  Title: Chief Executive Officer
    (Principal Executive Officer)

 

SIGNATURES AND POWER OF ATTORNEY

 

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates stated. Each person whose signature appears below hereby constitutes and appoints each of Seán McVeigh and Anthony Chan, as such person’s true and lawful attorney-in-fact and agent with full power and substitution for such person and in such person’s name, place and stead, in any and all capacities, to sign and to file with the Securities and Exchange Commission, any and all amendments and post-effective amendments to this registration statement, with exhibits thereto and other documents in connection therewith, including any registration statements or amendments thereto filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or any substitute therefor, may lawfully do or cause to be done by virtue thereof.

 

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature   Title   Date
         
/s/ Seán McVeigh   Chief Executive Officer, President and Director   July 13, 2018
Seán McVeigh   (Principal Executive Officer)    
         
/s/ Anthony S. Chan    Chief Financial Officer   July 13, 2018
Anthony S. Chan   (Principal Accounting and Financial Officer)    
         
/s/ Alessandro Senatore     Director   July 13, 2018
Alessandro Senatore        
         
/s/ Fabio Galdi    Chairman of the Board of Directors   July 13, 2018
Fabio Galdi        

 

 II-5 

 

Exhibit 3.1

 

 

 

 

 

 

 

 

Exhibit 3.2

 

BYLAWS

 

of

 

HALTON UNIVERSAL BRANDS INC.

 

(the “Corporation”)

 

ARTICLE I: MEETINGS OF SHAREHOLDERS

 

Section 1 - Annual Meetings

 

The annual meeting of the shareholders of the Corporation shall be held at the time fixed, from time to time, by the Board of Directors.

 

Section 2 - Special Meetings

 

Special meetings of the shareholders may be called by the Board of Directors or such person or persons authorized by the Board of Directors.

 

Section 3 - Place of Meetings

 

Meetings of shareholders shall be held at the registered office of the Corporation, or at such other places, within or without the State of Nevada as the Board of Directors may from time to time fix.

 

Section 4 - Notice of Meetings

 

A notice convening an annual or special meeting which specifies the place, day, and hour of the meeting, and the general nature of the business of the meeting, must be faxed, personally delivered or mailed postage prepaid to each shareholder of the Corporation entitled to vote at the meeting at the address of the shareholder as it appears on the stock transfer ledger of the Corporation, at least ten (10) days prior to the meeting. Accidental omission to give notice of a meeting to, or the non-receipt of notice of a meeting by, a shareholder will not invalidate the proceedings at that meeting.

 

Section 5 - Action Without a Meeting

 

Unless otherwise provided by law, any action required to be taken at a meeting of the shareholders, or any other action which may be taken at a meeting of the shareholders, may be taken without a meeting, without prior notice and without a vote if written consents are signed by shareholders representing a majority of the shares entitled to vote at such a meeting, except however, if a different proportion of voting power is required by law, the Articles of Incorporation or these Bylaws, than that proportion of written consents is required. Such written consents must be filed with the minutes of the proceedings of the shareholders of the Corporation.

 

Section 6 - Quorum

 

a)No business, other than the election of the chairman or the adjournment of the meeting, will be transacted at an annual or special meeting unless a quorum of shareholders, entitled to attend and vote, is present at the commencement of the meeting, but the quorum need not be present throughout the meeting.

 

b)Except as otherwise provided in these Bylaws, a quorum is two persons present and being, or representing by proxy, shareholders of the Corporation.

 

 

 

 

c)If within half an hour from the time appointed for an annual or special meeting a quorum is not present, the meeting shall stand adjourned to a day, time and place as determined by the chairman of the meeting.

 

Section 7 - Voting

 

Subject to a special voting rights or restrictions attached to a class of shares, each shareholder shall be entitled to one vote for each share of stock in his or her own name on the books of the corporation, whether represented in person or by proxy.

 

Section 8 - Motions

 

No motion proposed at an annual or special meeting need be seconded.

 

Section 9 - Equality of Votes

 

In the case of an equality of votes, the chairman of the meeting at which the vote takes place is not entitled to have a casting vote in addition to the vote or votes to which he may be entitled as a shareholder of proxyholder.

 

Section 10 - Dispute as to Entitlement to Vote

 

In a dispute as to the admission or rejection of a vote at an annual or special meeting, the decision of the chairman made in good faith is conclusive.

 

Section 11 - Proxy

 

a)Each shareholder entitled to vote at an annual or special meeting may do so either in person or by proxy. A form of proxy must be in writing under the hand of the appointor or of his or her attorney duly authorized in writing, or, if the appointor is a corporation, either under the seal of the corporation or under the hand of a duly authorized officer or attorney. A proxyholder need not be a shareholder of the Corporation.

 

b)A form of proxy and the power of attorney or other authority, if any, under which it is signed or a facsimiled copy thereof must be deposited at the registered office of the Corporation or at such other place as is specified for that purpose in the notice convening the meeting. In addition to any other method of depositing proxies provided for in these Bylaws, the Directors may from time to time by resolution make regulations relating to the depositing of proxies at a place or places and fixing the time or times for depositing the proxies not exceeding 48 hours (excluding Saturdays, Sundays and holidays) preceding the meeting or adjourned meeting specified in the notice calling a meeting of shareholders.

 

ARTICLE II: BOARD OF DIRECTORS

 

Section 1 - Number, Term, Election and Qualifications

 

a)The first Board of Directors of the Corporation, and all subsequent Boards of the Corporation, shall consist of not less than one (1) and not more than nine (9) directors. The number of Directors may be fixed and changed from time to time by ordinary resolution of the shareholders of the Corporation.

 

b)The first Board of Directors shall hold office until the first annual meeting of shareholders and until their successors have been duly elected and qualified or until there is a decrease in the number of directors. Thereinafter, Directors will be elected at the annual meeting of shareholders and shall hold office until the annual meeting of the shareholders next succeeding his or her election, or until his or her prior death, resignation or removal. Any Director may resign at any time upon written notice of such resignation to the Corporation.

 

 

 

 

c)A casual vacancy occurring in the Board may be filled by the remaining Directors.

 

d)Between successive annual meetings, the Directors have the power to appoint one or more additional Directors but not more than 1/2 of the number of Directors fixed at the last shareholder meeting at which Directors were elected. A Director so appointed holds office only until the next following annual meeting of the Corporation, but is eligible for election at that meeting. So long as he or she is an additional Director, the number of Directors will be increased accordingly.

 

e)A Director is not required to hold a share in the capital of the Corporation as qualification for his or her office.

 

Section 2 - Duties, Powers and Remuneration

 

a)The Board of Directors shall be responsible for the control and management of the business and affairs, property and interests of the Corporation, and may exercise all powers of the Corporation, except for those powers conferred upon or reserved for the shareholders or any other persons as required under Nevada state law, the Corporation’s Articles of Incorporation or by these Bylaws.

 

b)The remuneration of the Directors may from time to time be determined by the Directors or, if the Directors decide, by the shareholders.

 

Section 3 - Meetings of Directors

 

a)The President of the Corporation shall preside as chairman at every meeting of the Directors, or if the President is not present or is willing to act as chairman, the Directors present shall choose one of their number to be chairman of the meeting.

 

b)The Directors may meet together for the dispatch of business, and adjourn and otherwise regulate their meetings as they think fit. Questions arising at a meeting must be decided by a majority of votes. In case of an equality of votes the chairman does not have a second or casting vote. Meetings of the Board held at regular intervals may be held at the place and time upon the notice (if any) as the Board may by resolution from time to time determine.

 

c)A Director may participate in a meeting of the Board or of a committee of the Directors using conference telephones or other communications facilities by which all Directors participating in the meeting can hear each other and provided that all such Directors agree to such participation. A Director participating in a meeting in accordance with this Bylaw is deemed to be present at the meeting and to have so agreed. Such Director will be counted in the quorum and entitled to speak and vote at the meeting.

 

d)A Director may, and the Secretary on request of a Director shall, call a meeting of the Board. Reasonable notice of the meeting specifying the place, day and hour of the meeting must be given by mail, postage prepaid, addressed to each of the Directors and alternate Directors at his or her address as it appears on the books of the Corporation or by leaving it at his or her usual business or residential address or by telephone, facsimile or other method of transmitting legibly recorded messages. It is not necessary to give notice of a meeting of Directors to a Director immediately following a shareholder meeting at which the Director has been elected, or is the meeting of Directors at which the Director is appointed.

 

e)A Director of the Corporation may file with the Secretary a document executed by him waiving notice of a past, present or future meeting or meetings of the Directors being, or required to have been, sent to him and may at any time withdraw the waiver with respect to meetings held thereafter. After filing such waiver with respect to future meetings and until the waiver is withdrawn no notice of a meeting of Directors need be given to the Director. All meetings of the Directors so held will be deemed not to be improperly called or constituted by reason of notice not having been given to the Director.

 

 

 

 

f)The quorum necessary for the transaction of the business of the Directors may be fixed by the Directors and if not so fixed is a majority of the Directors or, if the number of Directors is fixed at one, is one Director.

 

g)The continuing Directors may act notwithstanding a vacancy in their body but, if and so long as their number is reduced below the number fixed pursuant to these Bylaws as the necessary quorum of Directors, the continuing Directors may act for the purpose of increasing the number of Directors to that number, or of summoning a shareholder meeting of the Corporation, but for no other purpose.

 

h)All acts done by a meeting of the Directors, a committee of Directors, or a person acting as a Director, will, notwithstanding that it be afterwards discovered that there was some defect in the qualification, election or appointment of the Directors, shareholders of the committee or person acting as a Director, or that any of them were disqualified, be as valid as if the person had been duly elected or appointed and was qualified to be a Director.

 

i)A resolution consented to in writing, whether by facsimile or other method of transmitting legibly recorded messages, by all of the Directors is as valid as if it had been passed at a meeting of the Directors duly called and held. A resolution may be in two or more counterparts which together are deemed to constitute one resolution in writing. A resolution must be filed with the minutes of the proceedings of the directors and is effective on the date stated on it or on the latest date stated on a counterpart.

 

j)All Directors of the Corporation shall have equal voting power.

 

Section 4 - Removal

 

One or more or all the Directors of the Corporation may be removed with or without cause at any time by a vote of two-thirds of the shareholders entitled to vote thereon, at a special meeting of the shareholders called for that purpose.

 

Section 5 - Committees

 

a)The Directors may from time to time by resolution designate from among its members one or more committees, and alternate members thereof, as they deem desirable, each consisting of one or more members, with such powers and authority (to the extent permitted by law and these Bylaws) as may be provided in such resolution. Each such committee shall serve at the pleasure of the Board of Directors and unless otherwise stated by law, the Certificate of Incorporation of the Corporation or these Bylaws, shall be governed by the rules and regulations stated herein regarding the Board of Directors.

 

b)Each Committee shall keep regular minutes of its transactions, shall cause them to be recorded in the books kept for that purpose, and shall report them to the Board at such times as the Board may from time to time require. The Board has the power at any time to revoke or override the authority given to or acts done by any Committee.

 

ARTICLE III: OFFICERS

 

Section 1 - Number, Qualification, Election and Term of Office

 

a)The Corporation’s officers shall have such titles and duties as shall be stated in these Bylaws or in a resolution of the Board of Directors which is not inconsistent with these Bylaws. The officers of the Corporation shall consist of a president, secretary, treasurer, and also may have one or more vice presidents, assistant secretaries and assistant treasurers and such other officers as the Board of Directors may from time to time deem advisable. Any officer may hold two or more offices in the Corporation, and may or may not also act as a Director.

 

 

 

 

b)The officers of the Corporation shall be elected by the Board of Directors at the regular annual meeting of the Board following the annual meeting of shareholders.

 

c)Each officer shall hold office until the annual meeting of the Board of Directors next succeeding his or her election, and until his or her successor shall have been duly elected and qualified, subject to earlier termination by his or her death, resignation or removal.

 

Section 2 - Resignation

 

Any officer may resign at any time by giving written notice of such resignation to the Corporation.

 

Section 3 - Removal

 

Any officer appointed by the Board of Directors may be removed by a majority vote of the Board, either with or without cause, and a successor appointed by the Board at any time, and any officer or assistant officer, if appointed by another officer, may likewise be removed by such officer.

 

Section 4 - Remuneration

 

The remuneration of the Officers of the Corporation may from time to time be determined by the Directors or, if the Directors decide, by the shareholders.

 

Section 5 - Conflict of Interest

 

Each officer of the Corporation who holds another office or possesses property whereby, whether directly or indirectly, duties or interests might be created in conflict with his or her duties or interests as an officer of the Corporation shall, in writing, disclose to the President the fact and the nature, character and extent of the conflict and abstain from voting with respect to any resolution in which the officer has a personal interest.

 

ARTICLE IV: SHARES OF STOCK

 

Section 1 - Certificate of Stock

 

a)The shares of the Corporation shall be represented by certificates or shall be uncertificated shares.

 

b)Certificated shares of the Corporation shall be signed, either manually or by facsimile, by officers or agents designated by the Corporation for such purposes, and shall certify the number of shares owned by the shareholder in the Corporation. Whenever any certificate is countersigned or otherwise authenticated by a transfer agent or transfer clerk, and by a registrar, then a facsimile of the signatures of the officers or agents, the transfer agent or transfer clerk or the registrar of the Corporation may be printed or lithographed upon the certificate in lieu of the actual signatures. If the Corporation uses facsimile signatures of its officers and agents on its stock certificates, it cannot act as registrar of its own stock, but its transfer agent and registrar may be identical if the institution acting in those dual capacities countersigns or otherwise authenticates any stock certificates in both capacities. If any officer who has signed or whose facsimile signature has been placed upon such certificate, shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer at the date of its issue.

 

c)If the Corporation issued uncertificated shares as provided for in these Bylaws, within a reasonable time after the issuance or transfer of such uncertificated shares, and at least annually thereafter, the Corporation shall send the shareholder a written statement certifying the number of shares owned by such shareholder in the Corporation.

 

 

 

 

d)Except as otherwise provided by law, the rights and obligations of the holders of uncertificated shares and the rights and obligations of the holders of certificates representing shares of the same class and series shall be identical.

 

e)if a share certificate:

 

(i)is worn out or defaced, the Directors shall, upon production to them of the certificate and upon such other terms, if any, as they may think fit, order the certificate to be cancelled and issue a new certificate;

 

(ii)is lost, stolen or destroyed, then upon proof being given to the satisfaction of the Directors and upon and indemnity, if any being given, as the Directors think adequate, the Directors shall issue a new certificate; or

 

(iii)represents more than one share and the registered owner surrenders it to the Corporation with a written request that the Corporation issue in his or her name two or more certificates, each representing a specified number of shares and in the aggregate representing the same number of shares as the certificate so surrendered, the Corporation shall cancel the certificate so surrendered and issue new certificates in accordance with such request.

 

Section 2 - Transfers of Shares

 

a)Transfers or registration of transfers of shares of the Corporation shall be made on the stock transfer books of the Corporation by the registered holder thereof, or by his or her attorney duly authorized by a written power of attorney; and in the case of shares represented by certificates, only after the surrender to the Corporation of the certificates representing such shares with such shares properly endorsed, with such evidence of the authenticity of such endorsement, transfer, authorization and other matters as the Corporation may reasonably require, and the payment of all stock transfer taxes due thereon.

 

b)The Corporation shall be entitled to treat the holder of record of any share or shares as the absolute owner thereof for all purposes and, accordingly, shall not be bound to recognize any legal, equitable or other claim to, or interest in, such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by law.

 

Section 3 - Record Date

 

a)The Directors may fix in advance a date, which must not be more than 60 days permitted by the preceding the date of a meeting of shareholders or a class of shareholders, or of the payment of a dividend or of the proposed taking of any other proper action requiring the determination of shareholders as the record date for the determination of the shareholders entitled to notice of, or to attend and vote at, a meeting and an adjournment of the meeting, or entitled to receive payment of a dividend or for any other proper purpose and, in such case, notwithstanding anything in these Bylaws, only shareholders of records on the date so fixed will be deemed to be the shareholders for the purposes of this Bylaw.

 

b)Where no record date is so fixed for the determination of shareholders as provided in the preceding Bylaw, the date on which the notice is mailed or on which the resolution declaring the dividend is adopted, as the case may be, is the record date for such determination.

 

 

 

 

Section 4 - Fractional Shares

 

Notwithstanding anything else in these Bylaws, the Corporation, if the Directors so resolve, will not be required to issue fractional shares in connection with an amalgamation, consolidation, exchange or conversion. At the discretion of the Directors, fractional interests in shares may be rounded to the nearest whole number, with fractions of 1/2 being rounded to the next highest whole number, or may be purchased for cancellation by the Corporation for such consideration as the Directors determine. The Directors may determine the manner in which fractional interests in shares are to be transferred and delivered to the Corporation in exchange for consideration and a determination so made is binding upon all shareholders of the Corporation. In case shareholders having fractional interests in shares fail to deliver them to the Corporation in accordance with a determination made by the Directors, the Corporation may deposit with the Corporation’s Registrar and Transfer Agent a sum sufficient to pay the consideration payable by the Corporation for the fractional interests in shares, such deposit to be set aside in trust for such shareholders. Such setting aside is deemed to be payment to such shareholders for the fractional interests in shares not so delivered which will thereupon not be considered as outstanding and such shareholders will not be considered to be shareholders of the Corporation with respect thereto and will have no right except to receive payment of the money so set aside and deposited upon delivery of the certificates for the shares held prior to the amalgamation, consolidation, exchange or conversion which result in fractional interests in shares.

 

ARTICLE V: DIVIDENDS

 

a)Dividends may be declared and paid out of any funds available therefore, as often, in such amounts, and at such time or times as the Board of Directors may determine and shares may be issued pro rata and without consideration to the Corporation’s shareholders or to the shareholders of one or more classes or series.

 

b)Shares of one class or series may not be issued as a share dividend to shareholders of another class or series unless such issuance is in accordance with the Articles of Incorporation and:

 

(i)a majority of the current shareholders of the class or series to be issued approve the issue; or

 

(ii)there are no outstanding shares of the class or series of shares that are authorized to be issued as a dividend.

 

ARTICLE VI: BORROWING POWERS

 

a)The Directors may from time to time on behalf of the Corporation:

 

(i)borrow money in such manner and amount, on such security, from such sources and upon such terms and conditions as they think fit,

 

(ii)issue bonds, debentures and other debt obligations either outright or as security for liability or obligation of the Corporation or another person, and

 

(iii)mortgage, charge, whether by way of specific or floating charge, and give other security on the undertaking, or on the whole or a part of the property and assets of the Corporation (both present and future).

 

b)A bond, debenture or other debt obligation of the Corporation may be issued at a discount, premium or otherwise, and with a special privilege as to redemption, surrender, drawing, allotment of or conversion into or exchange for shares or other securities, attending and voting at shareholder meetings of the Corporation, appointment of Directors or otherwise, and may by its terms be assignable free from equities between the Corporation and the person to whom it was issued or a subsequent holder thereof, all as the Directors may determine.

 

 

 

 

ARTICLE VII: FISCAL YEAR

 

The fiscal year end of the Corporation shall be fixed, and shall be subject to change, by the Board of Directors from time to time, subject to applicable law.

 

ARTICLE VIII: CORPORATE SEAL

 

The corporate seal, if any, shall be in such form as shall be prescribed and altered, from time to time, by the Board of Directors. The use of a seal or stamp by the Corporation on corporate documents is not necessary and the lack thereof shall not in any way affect the legality of a corporate document.

 

ARTICLE IX: AMENDMENTS

 

Section 1 - By Shareholders

 

All Bylaws of the Corporation shall be subject to alteration or repeal, and new Bylaws may be made by a majority vote of the shareholders at any annual meeting or special meeting called for that purpose.

 

Section 2 - By Directors

 

The Board of Directors shall have the power to make, adopt, alter, amend and repeal, from time to time, Bylaws of the Corporation.

 

ARTICLE X: DISCLOSURE OF INTEREST OF DIRECTORS

 

a)A Director who is, in any way, directly or indirectly interested in an existing or proposed contract or transaction with the Corporation or who holds an office or possesses property whereby, directly or indirectly, a duty or interest might be created to conflict with his or her duty or interest as a Director, shall declare the nature and extent of his or her interest in such contract or transaction or of the conflict with his or her duty and interest as a Director, as the case may be.

 

b)A Director shall not vote in respect of a contract or transaction with the Corporation in which he is interested and if he does so his or her vote will not be counted, but he will be counted in the quorum present at the meeting at which the vote is taken. The foregoing prohibitions do not apply to:

 

(i)a contract or transaction relating to a loan to the Corporation, which a Director or a specified corporation or a specified firm in which he has an interest has guaranteed or joined in guaranteeing the repayment of the loan or part of the loan;

 

(ii)a contract or transaction made or to be made with or for the benefit of a holding corporation or a subsidiary corporation of which a Director is a director or officer;

 

(iii)a contract by a Director to subscribe for or underwrite shares or debentures to be issued by the Corporation or a subsidiary of the Corporation, or a contract, arrangement or transaction in which a Director is directly or indirectly interested if all the other Directors are also directly or indirectly interested in the contract, arrangement or transaction;

 

(iv)determining the remuneration of the Directors;

 

(v)purchasing and maintaining insurance to cover Directors against liability incurred by them as Directors; or

 

(vi)the indemnification of a Director by the Corporation.

 

 

 

 

c)A Director may hold an office or place of profit with the Corporation (other than the office of Auditor of the Corporation) in conjuction with his or her office of Director for the period and on the terms (as to remuneration or otherwise) as the Directors may determine. No Director or intended Director will be disqualified by his or her office from contracting with the Corporation either with regard to the tenure of any such other office or place of profit, or as vendor, purchaser or otherwise, and, no contract or transaction entered into by or on behalf of the Corporation in which a Director is interested is liable to be voided by reason thereof.

 

d)A Director or his or her firm may act in a professional capacity for the Corporation (except as Auditor of the Corporation), and he or his or her firm is entitled to remuneration for professional services as if he were not a Director.

 

e)A Director may be or become a director or other officer or employee of, or otherwise interested in, a corporation or firm in which the Corporation may be interested as a shareholder or otherwise, and the Director is not accountable to the Corporation for remuneration or other benefits received by him as director, officer or employee of, or from his or her interest in, the other corporation or firm, unless the shareholders otherwise direct.

 

ARTICLE XI: ANNUAL LIST OF OFFICERS, DIRECTORS AND REGISTERED AGENT

 

The Corporation shall, within sixty days after the filing of its Articles of Incorporation with the Secretary of State, and annually thereafter on or before the last day of the month in which the anniversary date of incorporation occurs each year, file with the Secretary of State a list of its president, secretary and treasurer and all of its Directors, along with the post office box or street address, either residence or business, and a designation of its resident agent in the state of Nevada. Such list shall be certified by an officer of the Corporation.

 

ARTICLE XII: INDEMNITY OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS

 

a)The Directors shall cause the Corporation to indemnify a Director or former Director of the Corporation and the Directors may cause the Corporation to indemnify a director or former director of a corporation of which the Corporation is or was a shareholder and the heirs and personal representatives of any such person against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, actually and reasonably incurred by him or them including an amount paid to settle an action or satisfy a judgment inactive criminal or administrative action or proceeding to which he is or they are made a party by reason of his or her being or having been a Director of the Corporation or a director of such corporation, including an action brought by the Corporation or corporation. Each Director of the Corporation on being elected or appointed is deemed to have contracted with the Corporation on the terms of the foregoing indemnity.

 

b)The Directors may cause the Corporation to indemnify an officer, employee or agent of the Corporation or of a corporation of which the Corporation is or was a shareholder (notwithstanding that he is also a Director), and his or her heirs and personal representatives against all costs, charges and expenses incurred by him or them and resulting from his or her acting as an officer, employee or agent of the Corporation or corporation. In addition the Corporation shall indemnify the Secretary or an Assistance Secretary of the Corporation (if he is not a full time employee of the Corporation and notwithstanding that he is also a Director), and his or her respective heirs and legal representatives against all costs, charges and expenses incurred by him or them and arising out of the functions assigned to the Secretary by the Corporation Act or these Articles and each such Secretary and Assistant Secretary, on being appointed is deemed to have contracted with the Corporation on the terms of the foregoing indemnity.

 

c)The Directors may cause the Corporation to purchase and maintain insurance for the benefit of a person who is or was serving as a Director, officer, employee or agent of the Corporation or as a director, officer, employee or agent of a corporation of which the Corporation is or was a shareholder and his or her heirs or personal representatives against a liability incurred by him as a Director, officer, employee or agent.

 

 

 

 

CERTIFIED TO BE THE BYLAWS OF:

 

HALTON UNIVERSAL BRANDS INC.

 

per:

 

/s/ Elena Shmarihina
Elena Shmarihina, President

 

 

 

Exhibit 3.3

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 3.4

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 3.5

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 3.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 3.7

 

 

 

 

 

 

 

 

 

 

 

Exhibit 4.1

 

 

 

 

 

Exhibit 10.1

 

Stock Exchange,
Debt Forgiveness

and

Intellectual Property Assignment

Agreement

 

This Stock Exchange, Debt Forgiveness and Intellectual Property Assignment Agreement (“Agreement”), dated as of October 1, 2017 (the “Effective Date”), is entered into by and among World Media & Technology Corp., a Nevada corporation (“WRMT” or the “Assignee”), Fabio Galdi, an Italian citizen (“FG”), and World Global Network Pte. Ltd., a limited private company incorporated in Singapore, and its wholly owned subsidiary, World Global Assets Pte. Ltd., a limited private company incorporated in Singapore (collectively, World Global Network Pte. Ltd., World Global Assets Pte. Ltd. and FG shall be referred to herein as “WGN” or the “Assignor”) (each a “Party” and altogether, the “Parties”).

 

RECITALS

 

Whereas, the Parties desire to amend and restructure certain of the business transactions between and among themselves on the terms and subject to the conditions set forth in this Agreement; and

 

Whereas, WRMT desires to issue 8,000,000 shares of WRMT’s common stock, par value $0.001 per share (“Common Stock”) to WGN, to transfer 350 ordinary shares of common stock of PayNovi Limited, an Irish corporation (the “PayNovi Shares”) to WGN and forgive the remaining outstanding balance ($1,140,506) owed by WGN for borrowed money in consideration for:

(i)FG’s return to WRMT for cancellation the 100 shares of WRMT’s Series A Super Voting Preferred Stock held by FG,
(ii)the forgiveness by FG of amounts owed by WRMT to FG for past services rendered in the aggregate amount of $150,000,
(iii)WGN’s assignment and transfer to WRMT of all of its right, title and interest in and to certain Technology (as hereinafter defined), Intellectual Property (as hereinafter defined) and Intellectual Property Rights (as hereinafter defined), each as described on Exhibit A hereto
(iv)WGN and FG agree not to source, promote or enter in to any agreement for any technology similar to the Technology from any supplier other than WRMT and
(v)WGN’s agreement to terminate and forego its exclusive relationship with Quality Technology Industrial Co. Ltd. for the Technology and to purchase Helo Devices directly from WRMT upon the terms and subject to the conditions set forth in the Strategic Partner Master Sales and World Wide Distribution Agreement attached hereto as Exhibit B (the “Exclusive Distributor Agreement”).

 

 

 

  

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Now, Therefore, in consideration of the premises and of the covenants, representations, warranties and agreements herein contained, the Parties have agreed as follows:

 

AGREEMENT

 

Section 1. Construction and Interpretation

 

1.1.        Principles of Construction.

 

(a)          All references to Articles, Sections, subsections, Schedules and Appendixes are to Articles, Sections, subsections, Schedules and Appendixes in or to this Agreement unless otherwise specified. The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The term “including” is not limiting and means “including without limitations.”

 

(b)          The Section headings herein are for convenience only and shall not affect the construction hereof.

 

(c)          This Agreement is the result of negotiations among the Parties and has been reviewed by each Party’s counsel. Accordingly, this Agreement shall not be construed against any Party merely because of such Party’s involvement in its preparation.

 

(d)          Wherever in this Agreement the intent so requires, reference to the neuter, masculine or feminine shall be deemed to include each of the other, and reference to either the singular or the plural shall be deemed to include the other.

 

1.2         Definitions. For purposes hereof, the following terms when used herein shall have the respective meaning set forth below.

 

“Assigned Property” means the property listed in Exhibit A and all Technology, Intellectual Property and Intellectual Property Rights forming a part of, embodied, in or necessary for use of the property.

 

 

 

  

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Intellectual Property” means all technology and intellectual property, regardless of form, including without limitation: published and unpublished works of authorship, including without limitation audiovisual works, collective works, computer programs, compilations, databases, derivative works, literary works, maskworks, and sound recordings (“Works of Authorship”); inventions and discoveries, including without limitation articles of manufacture, business methods, compositions of matter, improvements, machines, methods, and processes and new uses for any of the preceding items (“Inventions”); words, names, symbols, devices, designs, and other designations, and combinations of the preceding items, used to identify or distinguish a business, good, group, product, or service or to indicate a form of certification, including without limitation logos, product designs, and product features (“Trademarks”); and information that is not generally known or readily ascertainable through proper means, whether tangible or intangible, including without limitation algorithms, customer lists, ideas, designs, formulas, know-how, methods, processes, programs, prototypes, systems, and techniques (“Confidential Information”).

 

Intellectual Property Rights” means all rights in, arising out of, or associated with Intellectual Property in any jurisdiction, including without limitation: rights in, arising out of, or associated with Works of Authorship, including without limitation rights in maskworks and databases and rights granted under the Copyright Act (“Copyrights”); rights in, arising out of, or associated with Inventions, including without limitation rights granted under the Patent Act (“Patent Rights”); rights in, arising out of, or associated with Trademarks, including without limitation rights granted under the Lanham Act (“Trademark Rights”); rights in, arising out of, or associated with Confidential Information, including without limitation rights granted under the Uniform Trade Secrets Act (“Trade Secret Rights”); rights in, arising out of, or associated with a person’s name, voice, signature, photograph, or likeness, including without limitation rights of personality, privacy, and publicity (“Personality Rights”); rights of attribution and integrity and other moral rights of an author (“Moral Rights”); and rights in, arising out of, or associated with domain names (“Domain Name Rights”).

 

“Lien” means any mortgage, charge, adverse right or claim, lien, lease, option, pledge, security interest, deed of trust, right of first refusal, easement, encumbrance, servitude, proxy, voting trust or restriction of any kind, including any restriction on use, voting, transfer, receipt of income, or exercise of any other attribute of ownership.

 

“Technology” means any and all technical information, Software, specifications, drawings, records, documentation, works of authorship or other creative works, ideas, knowledge, know-how, trade secrets invention disclosures or other data including works subject to Copyrights and maskworks (but does not include Trademarks or Patents.

 

 

 

  

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Section 2. The Transaction

 

2.1.        Consideration. WRMT hereby agrees to issue Eight Million (8,000,000) shares of restricted Common Stock (the “Acquired Shares”) to WGN in reliance on the representations and warranties contained herein, WRMT agrees to transfer the PayNovi Shares to WGN, and WRMT hereby agrees to forgive the total remaining outstanding balance of $1,140,506 due from WGN, subject to the terms and conditions of this Agreement, and in exchange,

i)           FG agrees to return to WRMT for cancellation the 100 shares of WRMT Series A Super Voting Preferred Stock held by FG,

ii)          FG agrees to forgive amounts owed by WRMT to FG for past services rendered in the aggregate amount of $150,000,

iii)         WGN agrees to assign and transfer all of its right, title and interest in and to the Assigned Property to WRMT

iv)         WGN and FG agree not to source, promote or enter in to any agreement for any technology similar to the Technology from any supplier other than WRMT, and

v)          WGN agrees to terminate and forego its exclusive relationship with Quality Technology Industrial Co. Ltd. (“QTI”) and purchase Helo Devices directly from WRMT upon the terms and subject to the conditions set forth in the Exclusive Distributor Agreement attached hereto as Exhibit B.

 

2.2.        Return of WRMT Series A Super Voting Preferred Stock; Issuance of WRMT Common Stock. On the Effective Date, simultaneously with the return to WRMT by FG of the 100 shares of WRMT Series A Super Voting Preferred Stock held by FG, which shares shall be duly endorsed for transfer to WRMT with executed stock powers and a medallion guaranteed attached, WRMT shall issue to WGN 8,000,000 shares of WRMT restricted Common Stock and WRMT shall transfer the PayNovi Shares to WGN. WGN shall provide written notice to WRMT no later than two business days prior to the Effective Date of the names and share amounts in which the certificates representing the Acquired Shares shall be issued on the Effective Date.

 

2.3.        Debt Forgiveness. Immediately upon the Effective Date, WRMT hereby forgives $1,140,506, the total amount currently due and outstanding from WGN forgives $150,000, the total amount currently owed from WRMT to FG for past services rendered.

 

 

 

  

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2.4         Property Assignment. Assignor hereby perpetually, irrevocably, and unconditionally assigns, transfers, and conveys to Assignee and its successors and assigns, all of Assignor’s right, title, and interest in and to the Assigned Property. Assignor further perpetually, irrevocably, and unconditionally assigns, transfers, and conveys to Assignee and its successors and assigns all claims for past, present and future infringement or misappropriation of the Intellectual Property Rights included in the Assigned Property, including all rights to sue for and to receive and recover all profits and damages accruing from an infringement misappropriation prior to the Effective Date as well as the right to grant releases for past infringements. Assignor hereby waives and agrees not to enforce all Moral Rights and all Personality Rights that Assignor may have in the Assigned Property. On the Effective Date, WRMT shall exclusively own all right, title, and interest in and to the Assigned Property.

 

2.5         Confidentiality. Assignor agrees that it shall not use any Confidential Information assigned as part of the Assigned Property except with the permission of Assignee for the benefit of Assignee. Assignor agrees that it shall not disclose any Confidential Information to third parties. Assignor agrees to take reasonable steps to maintain the confidentiality and secrecy of such Confidential Information and to prevent the unauthorized use or disclosure of such Confidential Information. Any breach of these restrictions will cause irreparable harm to Assignee and will entitle Assignee to injunctive relief in addition to all applicable legal remedies.

 

2.6         Exclusive Distributor. On the Effective Date (i) WGN shall terminate all of its Helo Device related supplier/manufacturing/distributor and licensing agreements, written or otherwise, with QTI effective as of midnight on September 30, 2017 (the “Transfer Time”) and (ii) WRMT and WGN shall execute and deliver the Exclusive Distributor Agreement,. As of the Transfer Time, WGN shall no longer purchase any Helo Devices directly from QTI or any technology similar to the Technology from any party other than WRMT. Instead, as of the Transfer Time WGN shall purchase all Helo Devices exclusively from WRMT upon price and other terms set forth in Exhibit B. At the Transfer Time WGN hereby agrees that all of WGN’s rights to Helo Device stock, components in assembly, raw materials and manufacturing moulds located at QTI’s facilities shall be assigned, transferred to and owned by WRMT.

 

 

 

  

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Section 3. Representations and Warranties

 

3.1.        Representations and Warranties of WRMT. WRMT hereby makes the following representations and warranties to WGN:

 

3.1.1      WRMT is a corporation duly organized and validly existing and in good standing under the laws of the State of Nevada. WRMT has the full right and all necessary corporate power and authority to conduct its business as it is presently being conducted and to execute and deliver this Agreement and the Exclusive Distributor Agreement and each instrument required to be executed and delivered by it in connection herewith and therewith and to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. Copies of the Articles of Incorporation and Bylaws of WRMT, and all amendments thereto, heretofore delivered to WGN are accurate and complete as of the date hereof.

 

3.1.2      The execution, delivery and performance of this Agreement and the Exclusive Distributor Agreement by WRMT and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action of WRMT, and no other corporate proceedings on the part of WRMT are necessary to authorize this Agreement, the Exclusive Distributor Agreementor any instrument required to be executed and delivered by it in connection therewith on or prior to the Effective Date or the consummation of the transactions contemplated hereby. Each of this Agreement and the Exclusive Distributor Agreement has been duly authorized, executed and delivered by WRMT and constitutes, a valid and binding obligation of WRMT enforceable against WRMT in accordance with its terms.

 

3.1.3      WRMT has full corporate power to issue and deliver the Acquired Shares to WGN in accordance with the terms of this Agreement and the issuance of the Acquired Shares in accordance with the terms of this Agreement has been duly authorized by the Board of Directors of WRMT. When issued in accordance with the terms of this Agreement, the Acquired Shares will be validly issued, fully paid and non-assessable and free and clear of all liens, encumbrances and restrictions on transfer other than those restrictions on transfer under the Securities Act of 1933, as amended and any applicable state securities laws.

 

3.1.4      The authorized capitalization of WRMT consists of 75,000,000 shares of Common Stock, and 10,000 shares of preferred stock, $0.001 par value per share. Immediately prior to the Effective Date there were issued and outstanding 28,722,244 shares of Common Stock and 100 shares of Series A Super Voting Preferred Stock.

 

3.1.5      As of the Effective Date, the Note being forgiven by WRMT hereunder has not been sold, assigned or repaid, and there is a $1,140,506 balance due on the Note, free and clear of all liens, mortgages, pledges, security interests, encumbrances or charges of any kind or description.

 

 

 

  

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3.1.6      As of the Effective Date, WRMT is the sole record holder and sole beneficial owner of the PayNovi Shares and has full corporate power to transfer and deliver the PayNovi Shares to WGN in accordance with the terms of this Agreement and this transfer has been duly authorized by the Board of Directors of WRMT. WRMT has good and valid title to the PayNovi Shares free and clear of all liens, encumbrances, pledges, claims, options, charges and assessments of any nature whatsoever, with full right and lawful authority to transfer the PayNovi Shares to WGN. No person has any preemptive right or right of first refusal with respect to any of the PayNovi Shares. There exists no voting agreement, voting trust, or outstanding proxy with respect to any of the PayNovi Shares. There are no outstanding rights, options, warrants, calls, commitments, or any other agreements of any character, whether oral or written, with respect to the PayNovi Shares.

 

3.2.        Representations and Warranties of FG. FG hereby makes the following representations and warranties to WRMT:

 

3.2.1      Title to the Shares. FG is the sole record holder and sole beneficial owner of 100 shares of Series A Super Voting Preferred Stock of WRMT (the “Shares”). FG has good and valid title to the Shares free and clear of all liens, encumbrances, pledges, claims, options, charges and assessments of any nature whatsoever, with full right and lawful authority to transfer the Shares to WRMT. No person has any preemptive right or right of first refusal with respect to any of the Shares. There exists no voting agreement, voting trust, or outstanding proxy with respect to any of the Shares. There are no outstanding rights, options, warrants, calls, commitments, or any other agreements of any character, whether oral or written, with respect to the Shares. The delivery to WRMT of certificates evidencing the transfer of the Shares pursuant to the provisions of this Agreement will transfer to WRMT good and marketable title thereto, free and clear of all liens, encumbrances, restrictions and claims of any kind.

 

3.2.2      The $150,000 amount being forgiven by FG hereunder has not been sold, assigned or repaid and is the total balance currently due to FG as of the Effective Date. FG hereby releases, waives and forever discharges, individually and collectively, WRMT and its current or former officers, directors, employees, agents, affiliates, predecessors, successors, assigns, subsidiaries and all persons acting through or with them (hereinafter collectively referred to as the “Releases”), from any and all claims, rights, demands, liabilities, causes of action, losses, counterclaims, obligations, third party claims, costs or expenses (including attorneys’ fees) of any kind whatsoever, known or unknown, fixed or contingent, suspected or unsuspected, that FG may now have or has ever had against the Releases.

 

 

 

  

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3.3         Representations and Warranties of WGN. WGN hereby makes the following representations and warranties to WRMT:

 

3.3.1      WGN has the requisite corporate power and authority to enter into and perform this Agreement and the Exclusive Distributor Agreement, to assign the Intellectual Property and to purchase the Acquired Shares and the PayNovi Shares being sold and transferred to it hereunder. The execution, delivery and performance of this Agreement and the Exclusive Distributor Agreement, by WGN and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action, and no further consent or authorization of WGN is required. Each of this Agreement and the Exclusive Distributor Agreement has been duly authorized, executed and delivered by WGN and constitutes, or shall constitute when executed and delivered, a valid and binding obligation of WGN enforceable against WGN in accordance with the terms thereof.

 

3.3.2      WGN represents and warrants to Assignee that: Assignor exclusively owns all right, title, and interest in and to the Assigned Property; Assignor has not granted, other than to QTI, which rights shall be terminated and regranted by WRMT pursuant to Section 2.5 above, and will not grant any licenses or other rights to the Assigned Property to any third party; the Assigned Property is free of any liens, encumbrances, security interests, and restrictions on transfer; to Assignor’s knowledge, the Intellectual Property that is assigned as part of the Assigned Property does not infringe Intellectual Property Rights of any third party; and there are no legal actions, investigations, claims, or proceedings pending or threatened relating to the Assigned Property.

 

3.3.3      Each of WGN and FG is, and will be at the time of the execution of this Agreement, a “accredited investor”, as such term is defined in Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”), is experienced in investments and business matters, has made investments of a speculative nature and has purchased securities of United States publicly-owned companies in the past and, with its representatives, has such knowledge and experience in financial, tax and other business matters as to enable WGN and FG to evaluate the merits and risks of and to make an informed investment decision with respect to the proposed purchase, which represents a speculative investment. Neither WGN nor FG is a “U.S. Person” as defined in Rule 902 of Regulation S promulgated under the Securities Act. WGN was not organized under the laws of any United States jurisdiction, and was not formed for the purpose of investing in securities not registered under the Securities Act. At the time the purchase order for this transaction was originated, each of WGN and FG was outside the United States. Each of WGN and FG has the authority and is duly and legally qualified to purchase and own the Acquired Shares. Each of FG and WGN is able to bear the risk of such investment for an indefinite period and to afford a complete loss thereof. The information set forth on the signature page hereto regarding each of FG WGN is accurate.

 

 

 

  

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3.3.4      On the Effective Date, WGN will acquire the Acquired Shares and the PayNovi Shares pursuant to the terms of this Agreement for its own account for investment only and not with a view toward, or for resale in connection with, the public sale or any distribution thereof. In making the decision to purchase the Acquired Shares and the PayNovi Shares, each of WGN and FG, has relied upon an independent investigation of the Company and has not relied upon any information or representations made by any third parties or upon any oral or written representations or assurances from the Company, its officers, directors or employees or any other representatives or agents of the Company, other than as set forth in this Agreement. Each of WGN and FG is familiar with the business, operations and financial condition of the Company and has had an opportunity to ask questions of, and receive answers from, the Company’s officers and directors concerning the Company and the terms and conditions of the offering and sale of the Acquired Shares and has had full access to such other information concerning the Company as WGN or FG has requested

 

3.3.5      No Public Market. Each of FG and WGN understands that there is no public market for the Acquired Shares or the PayNovi Shares and that no market may develop. Each of FG and WGN understands and acknowledges that WRMT is not under any obligation to register the Acquired Shares or the PayNovi Shares under the Securities Act or any state securities or “blue sky” laws. Each of FG and WGN acknowledges that at such time, if ever, as the Acquired Shares and/or the PayNovi Shares are registered, sales of such securities will be subject to state securities laws, and that any sales must comply in all respects with all applicable state securities laws, which may require any securities sold in such state to be sold through a registered broker-dealer or in reliance upon an exemption from registration.

 

Each of FG and WGN understands and agrees that the Acquired Shares and the PayNovi Shares have not been registered under the Securities Act or any applicable state securities laws, by reason of their issuance or transfer, as the case may be, in a transaction that does not require registration under the Securities Act (based in part on the accuracy of the representations and warranties of WGN and FG contained herein), and that such Acquired Shares and PayNovi Shares must be held indefinitely unless a subsequent disposition is registered under the Securities Act or any applicable state securities laws or is exempt from such registration.

 

 

 

  

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3.3.6      The Acquired Shares and the PayNovi Shares shall each bear the following or similar legend:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT, (B) TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (C) PURSUANT TO THE RESALE LIMITATIONS SET FORTH IN RULE 905 OF REGULATIONS S UNDER THE SECURITIES ACT, (D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT TO ANY OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.

 

3.3.7      The offer to issue the Acquired Shares was directly communicated to WGN. WGN is not purchasing the Acquired Shares or the PayNovi Shares as a result of or subsequent to any advertisement, article, notice or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio, or presented at any seminar or meeting.

 

3.3.8      Each of FG and WGN represents that the foregoing representations and warranties are true and correct as of the date hereof and agrees to indemnify WRMT of any misrepresentation upon which WRMT reasonably relies upon for the transactions contemplated in this Agreement. Unless WGN otherwise notifies WRMT prior to the Effective Date, the foregoing representations and warranties shall be true and correct as of the Effective Date.

 

 

 

  

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Section 4. Miscellaneous

 

4.1.        Assistance. Assignor will take all action and execute all documents as Assignee may reasonably request to effectuate the transfer of the Assigned Property and the vesting of complete and exclusive ownership of the Assigned Property in Assignee. In addition, Assignor will, at the request and sole cost and expense of Assignee, but without additional compensation, promptly sign, execute, make, and do all such deeds, documents, acts, and things as Assignee may reasonably require:

 

(a)          to apply for, obtain, register, maintain and vest in the name of Assignee alone (unless Assignee otherwise directs) Intellectual Property Rights protection relating to any or all of the Assigned Property in any country throughout the world, and when so obtained or vested, to renew and restore the same;

 

(b)          to defend any judicial, opposition, or other proceedings in respect of such applications and any judicial, opposition, or other proceedings or petitions or applications for revocation of such Intellectual Property Rights; and

 

(c)          to assist Assignee with the defense and enforcement of its rights in any registrations issuing from such applications and in all Intellectual Property Rights protection in the Intellectual Property.

 

4.2         Power of Attorney. If at any time Assignee is unable, for any reason, to secure Assignor’s signature on any letters patent, copyright, or trademark assignments or applications for registrations, or other documents or filings pertaining to any or all of the Assigned Property, whether because of Assignor’s unwillingness, or for any other reason whatsoever, Assignor hereby irrevocably designates and appoints Assignee and its duly authorized officers and agents as its agents and attorneys-in-fact, to act for and on its behalf and stead to execute and file any and all such applications, registrations, and other documents and to do all other lawfully permitted acts to further the prosecution thereon with the same legal force and effect as if executed by Assignor.

 

4.3         Indemnification of WGN. WRMT hereby agrees to defend, indemnify, and hold harmless WGN, and WGN’s officers, directors, shareholders, successors, and assigns, from and against all losses, liabilities, and costs including, without limitation, reasonable attorneys’ fees, expenses, penalties, judgments, claims and demands of every kind and character that WGN, its officers, directors, shareholders, successors, and assigns may incur, suffer, or be required to pay arising out of, based upon, or by reason of:

 

(i)          any of the representations or warranties made by WRMT herein being untrue or incorrect at the time such representation or warranty was made; and

 

(ii)         any breach or non-performance by WRMT of any of its covenants, agreements or obligations under, this Agreement or the Exclusive Distributor Agreement.

 

 

 

  

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4.4         Indemnification of WRMT. WGN hereby agrees to defend, indemnify, and hold harmless WRMT, and WRMT’s officers, directors, shareholders, successors, and assigns, from and against all losses, liabilities, and costs including, without limitation, reasonable attorneys’ fees, expenses, penalties, judgments, claims and demands of every kind and character that WRMT, its officers, directors, shareholders, successors, and assigns may incur, suffer, or be required to pay arising out of, based upon, or by reason of:

 

(i)          any of the representations, covenants, or warranties made by WGN herein being untrue or incorrect at the time such representation or warranty was made;

 

(iii)        any breach, default or non-performance by WGN of any of its covenants, agreements or obligations under this Agreement or the Exclusive Distributor Agreement; or

 

(iv)        any use by WGN, its officers, directors, shareholders, employees or consultants of the Assigned Property prior to the date of this Agreement.

 

4.5         Conduct of Claims.

 

(i)          Whenever a claim for indemnification shall arise under this Section as a result of a third party claim, the party seeking indemnification (the “Indemnified Party”), shall notify the party from whom such indemnification is sought (the “Indemnifying Party”) in writing of the Proceeding and the facts constituting the basis for such claim in reasonable detail; provided, that the Indemnified Party shall not be foreclosed by any failure to provide timely notice of the existence of a third party claim to the Indemnifying Party except to the extent that the Indemnifying Party has been materially prejudiced as a direct result of such delay;

 

(ii)         Such Indemnifying Party shall have the right to retain the counsel of its choice in connection with such Proceeding and to participate at its own expense in the defense of any such Proceeding; provided, however, that counsel to the Indemnifying Party shall not (except with the consent of the relevant Indemnified Party) also be counsel to such Indemnified Party. In no event shall the Indemnifying Party be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from its own counsel for all Indemnified Parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances; and

 

 

 

  

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(iii)         No Indemnifying Party shall, without the prior written consent of the Indemnified Parties (which consent shall not be unreasonably withheld), settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification could be sought under this Section unless such settlement, compromise or consent (A) includes an unconditional release of each Indemnified Party from all liability arising out of such litigation, investigation, proceeding or claim and (B) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any Indemnified Party.

 

4.6         Survival of the Representations, Warranties, etc. The respective representations, warranties, and agreements made herein by or on behalf of the Parties hereto shall survive the Effective Date and remain in full force and effect without limitation as to time, and the period during which a claim for indemnification may be asserted in connection therewith shall continue for the duration of the applicable statutes of limitation.

 

4.7         Disclosure. Except to comply with applicable securities laws and regulations, each of FG and WGN agrees that he or it will not make any public comments, statements, or communications with respect to, or otherwise disclose the execution of this Agreement or the Exclusive Distributor Agreement or the terms and conditions of the transactions contemplated by this Agreement or the Exclusive Distributor Agreement without the prior written consent of WRMT, which consent shall not be unreasonably withheld.

 

4.8         Notices. Any notice or other communication required or permitted under this Agreement shall be sufficiently given if delivered in person or sent by facsimile or by overnight registered mail, postage prepaid, addressed as follows:

 

If to World Media & Technology Corp.:

Attn: Seán McVeigh

600 Brickell Ave., Suite 1775

Miami, FL 33131

 

If to World Global Network Pte. Ltd.:

Attn: Fabio Galdi

6 Battery Road, #27-03

Singapore 049909

 

Or such other address or number as shall be furnished in writing by any such Party, and such notice or communication shall, if properly addressed, be deemed to have been given as of the date so delivered or sent by facsimile.

 

 

 

  

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4.9.        Parties in Interest. This Agreement may not be transferred, assigned or pledged by any Party hereto, other than by operation of law without the prior written consent of the other Parties. This Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and their respective heirs, executors, administrators, successors and permitted assigns.

 

4.10.      Entire Agreement. This Agreement and the other documents referred to herein contain the entire understanding of the Parties hereto with respect to the subject matter contained herein. This Agreement shall supersede all prior agreements and understandings between the Parties with respect to the transactions contemplated herein.

 

4.11.      Amendments. This Agreement may not be amended or modified orally, but only by an agreement in writing signed by all of the Parties.

 

4.12       Time is of Essence. With regard to all dates and time periods set forth in this Agreement, time of is of essence.

 

4.13.      Severability. In case any provision in this Agreement shall be held invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof will not in any way be affected or impaired thereby.

 

4.14.      Counterparts. This Agreement may be executed in any number of counterparts, including counterparts transmitted by telecopier, PDF or facsimile transmission, any one of which shall constitute an original of this Agreement. When counterparts of copies have been executed by all parties, they shall have the same effect as if the signatures to each counterpart or copy were upon the same document and copies of such documents shall be deemed valid as originals. The Parties agree that all such signatures may be transferred to a single document upon the request of any Party.

 

4.15       Remedies Cumulative. Any and all remedies set forth in this Agreement: (i) shall be in addition to any and all other remedies the Parties may have at law or in equity, (ii) shall be cumulative, and (iii) may be pursued successively or concurrently as each of the Parties may elect. The exercise of any remedy by any Party shall not be deemed an election of remedies or preclude such Party from exercising any other remedies in the future. The prevailing Party in any Related Proceeding shall be entitled to recover his or its reasonable attorneys’ fees and costs (including experts’ and witness fees and costs) from the unsuccessful Party.

 

4.16       Injunctive Relief. A breach of this Agreement may result in irreparable harm to Assignee and a remedy at law for any such breach will be inadequate, and in recognition thereof, Assignee will be entitled to injunctive and other equitable relief to prevent any breach or the threat of any breach of this Agreement by Assignor without showing or proving actual damages.

 

 

 

  

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4.17       Governing Law. Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the Rules of Arbitration of the International Chamber of Commerce, which Rules are deemed to be incorporated by reference into this clause. The number of arbitrators shall be one. The seat, or legal place, of arbitration shall be the State of New York, United States. The language to be used in the arbitration shall be English. The governing law of the contract shall be the substantive law of New York, United States.

 

***Signature page follows***

 

 

 

  

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In Witness Whereof, each of the Parties hereto has caused its/his name to be hereunto subscribed as of the day and year first above written.

 

  WRMT:
   
  World Media & Technology Corp.

 

  By: /s/ Seán McVeigh
  Name: Seán McVeigh
  Title: Chief Executive Officer

 

  WGN:
   
  World Global Network Pte. Ltd.

 

  By: /s/ Gabriele Galdi
   
  Name:  Gabriele Galdi
   
  Title:  Director

 

  World Global Assets Pte. Ltd.

 

  By: /s/ Fabio Galdi

 

  Name:  Fabio Galdi

 

  Title:  Director

 

  FG:

 

  By: /s/ Fabio Galdi
   
  Name:  Fabio Galdi

 

 

 

  

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EXHIBIT A

 

PROPERTY

 

All of the Technology, Intellectual Property and Intellectual Property Rights related to all prior and current versions of certain wearable devices known as Helo (“Helo Devices”), both in production and in development, including but not limited to the following elements:

 

1)Computer Software –
a)Glucose sensor/glucose algorithm assignment;
b)Alcohol sensor integration into Helo wearable device (Everything other than Giner’s portion of ownership);
c)Mosquito shield.
d)Blood oxygenation

 

2)Computer Hardware –
a)Helo Classic
b)Helo LX
c)Helo LX plus ;

See attached spec sheet

d)Helo AI

See spec sheet attached

 

3)The following Trademarks and Logos
a.Helo
b.Life Sensing Technology
c.Wor(l)d

 

4)License to access/use the Application Programming Interface (API)
a.See attached API Platform License Agreement

 

5)The following domain names:
a.Heloappstore.com
i.Including all rights to run the app store
b.Worldmediatechnology.com
i.Including all rights to run this website
c.Smartbands.com
i.Including all rights to run this website

 

See attached Domain Name Assignment Agreement

 

 

 

  

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EXHIBIT B

 

Strategic Partner Master Sales and World Wide Distribution Agreement

 

[to be inserted]

 

 

 

Exhibit 10.2

 

WORLD GLOBAL NETWORK PTE. LTD. - WORLD MEDIA & TECHNOLOGY CORP.

 

Strategic Partner Master Sales and World Wide Distribution Agreement

 

This World Media & Technology Corp, Strategic Partner Master Distribution Agreement (“Agreement”) is entered into as of the 1st day of October, 2017 (the “Effective Date”) by and between World Media & Technology Corp., a Nevada US corporation with its principal offices located at 600 Brickell World Plaza, Suite 1775, Miami, FL 33132 (“WRMT”), and World Global Network Pte Ltd, a Singapore company duly organized and existing under the laws of Singapore with its principal offices located at 6 Battery Road, #27-03, Singapore 049909, (“Partner”), each referred to as a “Party” and collectively referred to as the “Parties”.

 

RECITALS

 

A.WRMT is in the business of, among other things, developing intellectual property and know-how relating to sensor technology (Life Sensing Technology) which it integrates into its wearable devices that it manufacturers to capture human data which it enables third parties to use for data mining.

 

B.Partner is in the direct selling (multi level marketing) business and markets, distributes and sells technology products and services.

 

C.WRMT and Partner desire to enter into a mutually beneficial strategic partnership for the purposes of marketing, distributing and selling WRMT product and services world-wide.

 

AGREEMENT

 

In consideration of the following conditions set forth in this Agreement, the Parties agree to the following:

 

1.DEFINITIONS

 

The following terms shall have meaning ascribed to them below. All other capitalized terms used in this Agreement shall have the meaning given to them where defined in this Agreement.

 

1.1.Customers – WRMT end-users in the self-monitoring consumer market that are marketed or sold to by Partner.

 

1.2.Tier I Technical Support – Primary level of technical support provided by a Tier I Customer Support Representative (CSR) of the Partner.

 

1.3.Tier II Technical Support – Secondary level of technical support provided by a Tier II CSR of WRMT when the primary Tier I CSR of Customer is unable to resolve a Customer’s technical or other service affecting issue.

 

1.4.Fair Use – defines the Customer using the product or services consistent with normal patterns of usage for the type of Customer and not to exceed, on a repetitive basis, the normal usage patterns associated with the type of Customer.

 

1.5Products – Any wearable devices with embedded Life Sensing Technology or the data which these devices capture.

 

1.6Services – Any and all services directly or indirectly associated with Products, including WRMT’s OpenAPI, Connector or Big Data services as defined on WRMT’s website.

 

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1.7

Projections & Targets – Partner agrees to submit quarterly and annual order projections to WRMT 12 weeks prior to preceding quarter and calendar year end (Projections).

 

WRMT and Partner will agree quarterly and annual sales targets 8 weeks prior to preceding quarter and calendar year end (Targets).

 

8.Intellectual Property - means all technology and intellectual property, regardless of form, including without limitation: published and unpublished works of authorship, including without limitation audiovisual works, collective works, computer programs, compilations, databases, derivative works, literary works, maskworks, and sound recordings (“Works of Authorship”); inventions and discoveries, including without limitation articles of manufacture, business methods, compositions of matter, improvements, machines, methods, and processes and new uses for any of the preceding items (“Inventions”); words, names, symbols, devices, designs, and other designations, and combinations of the preceding items, used to identify or distinguish a business, good, group, product, or service or to indicate a form of certification, including without limitation logos, product designs, and product features (“Trademarks”); and information that is not generally known or readily ascertainable through proper means, whether tangible or intangible, including without limitation algorithms, customer lists, ideas, designs, formulas, know-how, methods, processes, programs, prototypes, systems, and techniques (“Confidential Information”).

 

1.9Intellectual Property Rights - means all rights in, arising out of, or associated with Intellectual Property in any jurisdiction, including without limitation: rights in, arising out of, or associated with Works of Authorship, including without limitation rights in maskworks and databases and rights granted under the Copyright Act (“Copyrights”); rights in, arising out of, or associated with Inventions, including without limitation rights granted under the Patent Act (“Patent Rights”); rights in, arising out of, or associated with Trademarks, including without limitation rights granted under the Lanham Act (“Trademark Rights”); rights in, arising out of, or associated with Confidential Information, including without limitation rights granted under the Uniform Trade Secrets Act (“Trade Secret Rights”); rights in, arising out of, or associated with a person’s name, voice, signature, photograph, or likeness, including without limitation rights of personality, privacy, and publicity (“Personality Rights”); rights of attribution and integrity and other moral rights of an author (“Moral Rights”); and rights in, arising out of, or associated with domain names (“Domain Name Rights”).

 

2.SCOPE

 

2.1.Appointment: WRMT hereby appoints Partner as its preferred partner to promote, market, advertise, distribute and sell Products and Services to Customers world-wide.

 

2.2.Acceptance: Partner hereby accepts appointment and shall use its best efforts to market and sell the Products and Services to the exclusion of all other products and services.

 

2.3.Branding of Services: Partner shall market and sell the Services under the Wor(l)d brand in accordance with the terms of this Agreement and as directed by WRMT from time to time.

 

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2.4.Customer Acceptance of Disclaimers and Terms: Partner agrees to obtain and enforce Customers’ agreement to certain disclaimers and terms as a requirement of obtaining the Products and Services. Partner agrees that the disclaimers and terms, as provided by WRMT from time to time, shall be in the form contained in Exhibit - End User Terms and Conditions, will include a complete description and disclaimer of the functionality. Partner may not amend the disclaimers and terms contained in Exhibit - End User Terms and Conditions, without the prior written agreement from WRMT.

 

2.5.Taxes: Partner is entirely responsible for its regulatory, government, state, local, federal and regional taxes (including any and all sales taxes), however designated, levied or based, on any product or service subscriber charges.

 

2.6.WRMT Disclaimer: Partner accepts that any advice or guidance provided by WRMT, including without limitation on Customer terms and conditions, current or future regulatory issues, is based solely on knowledge currently available to WRMT and should NOT be construed to be legal advice or to be complete or accurate. Partner acknowledges that any such advice or guidance provided by WRMT shall be deemed to be “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Partner acknowledges that actual results may differ materially from any such advice or guidance. Partner agrees that in light of the significant uncertainties in these forward-looking statements, Partner shall not regard these statements as a representation or warranty by WRMT or any other person that WRMT will achieve our objectives and plans in any specified timeframe, or at all. Partner shall be solely responsible for seeking and obtaining independent legal and regulatory advice and advising WRMT within 7 days of any breaches brought the attention of the Partner in writing.

 

2.7Exclusivity: WRMT shall be the sole and exclusive provider of Partner’s requirements for all wearable devices, with or without embedded Life Sensing Technology. Partner shall not obtain or distribute any products or services similar to WRMT products and services from any third party or provide or develop such products on its own behalf. Unless approved in advance by WRMT, Partner shall not market, sell or supply any other products or services to Customers under Partner registered company name, any associated trade name or brand and not supplied by WRMT but which could be construed as related to WRMT unless approved in writing by WRMT.

 

For the avoidance of doubt, WRMT:

 

-may offer its products and associated services to markets other than the customer self-care sector but under a different brand (not wor(l)d) and with a different form factor.

 

-agrees not supply any products to any direct sales (multi-level marketing) companies during the Term of this Agreement or for a further 6 months after expiry, unless this Agreement is terminated under clause 5.5.

 

2.8Partner Obligations: In addition to and consistent with the obligations associated with the appointment of Partner and as otherwise provided herein, Partner agrees to perform the following actions for WRMT Customers and Partner agrees to have sole responsibility for the activities detailed within this Section. Some of these activities may be outsourced, with the prior written approval of WRMT. Both Parties expect that these activities will be modified by mutual agreement from time-to-time as market and Customer requirements dictate, however this shall not relieve the Partner of any of the following obligations.

 

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i.Customer Acquisition: All activities associated with soliciting, acquiring and maintaining Customers, including but not limited to signature acceptance by End User to the Terms and Conditions, provisioning, order entry, billing, advising price changes, collecting payment, providing Customer service and primary Tier I Technical Support.

 

ii.Advising and obtaining written acknowledgement from all of its Customers regarding the limitations and functionality set forth in this Agreement;

 

iii.Communicating with Customers at Partner’s expense any and all regulatory requirements.

 

iv.Partner cannot alter those End User Terms and Conditions contained in Exhibit - End User Terms and Conditions, without the express written permission of WRMT.

 

v.Operating with all the necessary approvals and licenses to conduct its business in a manner compliant with legal requirements world-wide.

 

vi.Assist WRMT to secure local Product operational and necessary import license approvals world-wide and to notify WRMT in writing if any changes.

 

2.9Partner shall indemnify and hold WRMT and its subsidiaries, affiliates, officers, directors, employees, agents and insurers harmless from and against any and all losses, including but not limited to claims, demands, damages, costs, expenses, fines, liabilities or penalties of every kind, whether foreseeable or unforeseeable (including litigation costs and reasonable attorneys’ fees) arising out of a third party claim arising from or related to: (i) any negligent act or omission or willful misconduct of, or breach of its Agreement by, the Partner or its officers, directors, employees, agents or contractors (each, a “Partner Indemnitor”); or (ii) a Partner Indemnitor’s misrepresentation to a third party with respect to the Products, Services or support; (iii) a breach by a Partner Indemnitor of its agreement with a Customer; or (iv) a breach by a Partner Indemnitor of any agreement with an end user of the Product.

 

2.10WRMT Obligations: In addition to and consistent with the obligations otherwise provided herein, WRMT agrees to perform and have responsibility for the following:

 

i.Provide products and services in accordance with the Product Specification and Service Level Agreement and quality objectives set forth in Exhibit –Product and Services;

 

ii.Provide Tier II Product and Service Technical Support for Partner as set forth in Exhibit - Quality of Service and Tier II Technical Support.

 

iii.Obtaining, making and/or paying all governmental, regulatory and similar filings, licenses, applications or certificates related to the Service, if required and if notified in writing by Partner.

 

2.11Product and service restrictions: WRMT product and services are for use in the wellness sector and for Customer’s personal, self-monitoring. In the event WRMT suspects that any Customer is abusing Fair Use of the Service (as defined by WRMT from time to time), WRMT may terminate the service immediately and will provide a courtesy written electronic notification to Partner and Partner shall investigate, if requested by WRMT, to determine whether Customer is complying with Fair Use within three (3) business days. In the event Partner or WRMT determines that Customer is in violation of Fair Use, WRMT may terminate the Service immediately upon notification to the Partner.

 

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2.12Unauthorized or inappropriate use of WRMT product or related services: WRMT reserve the right to terminate any Customer product or service immediately in the event of unauthorized, illegal or inappropriate use of a WRMT product or related service. WRMT will provide a courtesy notification to the Partner.

 

2.13 Taxes, Fees, Governmental Charges, Regulatory Fees and other License Fees: The fees set forth in Exhibit – Terms and Customer Pricing, do not include any taxes, fees, duties, tariffs, universal service charges, or any other type of governmental or regulatory fees/taxes. All payments to WRMT under this Agreement shall be made without deduction of any mandatory governmental or regulatory fees and taxes that may be due. Partner is responsible for collecting (as an extra charge) any taxes, duties, fees or other charges, if any, that may be due in conjunction with importing Products and selling Products or Services to the Customers.

 

3.PRICING, ORDERING, SHIPMENT, PAYMENT AND BILLING DISPUTES

 

3.1.Pricing: Partner shall purchase the Products directly from WRMT on a prepaid basis; Partner shall pay a deposit at the same time that an order is submitted by Partner and balance of the order to be paid prior to shipping the Partner order. Prices paid by Partner to WRMT for Products and Services shall be as set forth in Exhibit - Terms and Customer Pricing.

 

3.2.Ordering: Orders shall be provided by Partner to WRMT and shall contain all information necessary for WRMT to supply Product and Service for Customers. Product and Service title transfers from WRMT to Partner when Product or Service is invoiced upon shipment.

 

3.3.Shipment: Partner is entirely responsible for shipping. All shipments of Product shall be made FOB WRMT Manufacturer’s plant and liability for loss or damage in transit, or thereafter, shall pass to Partner immediately upon Partner’s invoice. Partner shall be responsible to coordinate the delivery of Product from WRMT’s third party manufacturer to a common carrier for shipment. Shipping dates are approximate and are based, to a great extent, on prompt receipt by WRMT of all necessary ordering information from Partner. Partner shall bear all costs of transportation and insurance. WRMT shall not be in default by reason of any failure in its performance under this Agreement if such failure results from, whether directly or indirectly, fire, explosion, strike, freight embargo, Act of God or of the public enemy, war, civil disturbance, act of any government, de jure or de facto, or agency or official thereof, material or labor shortage, transportation contingencies, unusually severe weather, default of any other manufacturer or a supplier or subcontractor, quarantine, restriction, epidemic, or catastrophe, lack of timely instructions or essential information from Partner, or otherwise arisen out of causes beyond the control of the WRMT. Nor shall WRMT at any time be liable for any incidental, special or consequential damages.

 

4.OWNERSHIP AND ADVERTISING, INTELLECTUAL PROPRTY RIGHTS,

 

4.1.WRMT Intellectual Property: All Products, Services and all Intellectual Property and related Intellectual Property Rights therein or based thereon, now owned or developed by WRMT which may be licensed or used by Partner in connection with or a result of this Agreement shall remain sole and exclusive property of WRMT. Partner acquires no rights or licenses, express or implied, by virtue of this Agreement or the provision of the Products or Services.

 

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This Agreement does not transfer title of any of WRMT’s Intellectual Property or Intellectual Property Rights to Partner. WRMT shall remain the exclusive owner of all of its Intellectual Property and Intellectual Property Rights in and to its Products, any other software application of WRMT and any documentation or training materials provided by WRMT to Partner. Partner shall not manufacture, duplicate, reverse engineer, or decompile the Product or information relating thereto. Partner will immediately notify WRMT of any infringement, misappropriation or violation of any Intellectual Property or Intellectual Property Rights of WRMT that comes to Partner’s attention. Partner will not knowingly infringe, and will use its best efforts to preserve and protect WRMT’s interest in all such Intellectual Property Rights. In the event of any such infringement, misappropriation or violation relating to the activities of Partner or any of its officers, directors, employees, agents or contractors, Partner will take all steps reasonably necessary to terminate any such infringement, misappropriation or violation.

 

No Modifications. In no event shall Partner copy or modify, or aid a third party in copying or modifying, the source code, object code, or any part of the Product without the express written permission of WRMT. Partner shall deliver the Product and End User Agreement to its Customers in the same unopened package(s) as received by Partner from WRMT or its manufacturer.

 

4.2.Use of Marks.

(a) The Parties currently contemplate that Partner branding may appear in some fashion on or in Subscriber bills, reports, correspondence and related materials (collectively referred to as “Billing Materials”). Each Party acknowledges the other Party’s Trademark Rights in and to their respective Trademarks (collectively referred to as “Marks”). Nothing in this Agreement shall be construed to grant either Party any license to or rights in or to the other Party’s Marks, except as set forth in Section 4.2(b) below.

 

(b) WRMT hereby grants to Partner a non-exclusive, terminable right to use WRMT’s Trademarks solely with respect to Partner’s marketing, advertising and distributing of the Products and Services in accordance with the terms of this Agreement, included in Schedule B attached hereto and incorporated herein. Partner shall use the WRMT specific Trademark(s) (designated as “WRMT Marks”) according to the artwork standards and other requirements, which have been delivered, to Partner from WRMT, or as otherwise mutually agreed to between the Parties from time to time. WRMT shall be responsible for determining the artwork and communication standards related to the use of its WRMT Marks, which standards are attached hereto or shall have been delivered to Partner, as required, prior to the use of such Marks. WRMT shall have the right to comment on the use of its Marks and Partner shall take reasonable steps to modify the WRMT Marks as requested by WRMT. Partner shall have no right to use any WRMT Marks without the advance written consent of WRMT.

 

(c) The use of each Party’s Marks shall comply with any local laws or customs. Any goodwill generated by use of the Partner Marks shall accrue to the sole benefit of Partner. Any goodwill generated by use of the WRMT Marks shall accrue to the sole benefit of WRMT. Neither Party nor its subsidiaries, nor its successors in interest, shall (or shall cause others to) challenge, file suit or initiate proceedings, or contest in any other manner the other Party’s ownership rights or rights to use, or allow its subsidiaries to use such Party’s Marks to identify any goods of such Party and its subsidiaries.

 

(d) The owner or licensor of the Marks may discontinue the use of any or all of its Marks at its sole option. Upon termination of this Agreement, Partner will purge the WRMT Trademarks from all materials, letterheads, signs and any other media in which Partner displayed such Trademarks, and thereafter, neither Partner nor any parent, subsidiary or affiliate shall use either the WRMT Trademarks or like sounding or appearing names or marks in any fashion, anywhere.

 

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(e) Except as otherwise permitted herein, neither Party will use, or permit their respective employees, agents and subcontractors to use, the Marks of the other Party, or the other Party’s affiliates, whether registered or unregistered, without such Party’s prior written consent.

 

(f) Each Party hereby agrees to indemnify, defend and hold harmless the other Party and all of its officers, directors, employees, shareholders, consultants and third-party contractors from any liabilities as incurred by them as a result of any claim, statutory or at common law, arising from or related to any alleged infringement by the other Party, including without limitation any alleged contributory infringement, as a result of the other Party’s use of Trademarks or artwork provided to the other Party in connection with this Agreement.

 

4.3No Infringement. WRMT represents and warrants that it has the right to provide the Products and Services anticipated in this Agreement without infringing on any patents or copyrights that are owned or held by any third party. In the event of an injunction proceeding to prevent infringement, WRMT may terminate the supply of Product or Service with immediate effect and without penalty or recourse.

 

5.TERM AND TERMINATION, PERFORMANCE & DISPUTE RESOLUTION

 

5.1.Term: This Agreement shall commence on the Effective Date and continue for five (5) years or until terminated as provided herein (the “Initial Term”). On the first day after the completion of the Initial Term, this Agreement shall automatically renew for an additional period of two (2) year(s), and thereafter shall automatically renew for successive one (1) year terms, each (the “Renewal Term”) unless either Party notifies the other Party in writing, on or prior to one hundred and eighty (180) days before the expiration of the Initial Term or any Renewal Term, of its intent to terminate this Agreement at the conclusion of such Initial or Renewal Term.

 

5.2.Notice of Breach and Opportunity To Cure: No breach of this Agreement, including without limitation a breach of warranty hereunder, shall be actionable by either Party unless such Party has, as an express condition precedent to commencing such an action or proceeding, provided written notice to the Party in breach specifying the breach in reasonable detail and providing the Party in breach an amount of time to cure such breach as provided in the Termination for Cause clause below, and the Party in breach fails to cure the breach within such notice period.

 

5.3.Termination for Cause: In the event either Party to this Agreement shall be in material breach of this Agreement (other than for nonpayment which is governed by the Termination for Non-payment clause below) and the breaching Party fails to substantially cure such breach within thirty (30) days after its receipt of a written notice specifying the details of the breach, the Party not in breach of this Agreement may terminate this Agreement by giving prompt written notice of termination. To the extent a breach is cured within thirty (30) days, but the circumstances constituting the breach recur within sixty (60) days following the cure date then, upon notice of the recurring breach, the offending party shall have ten (10) days to cure the breach. If the recurring breach is not completely resolved within ten (10) days, then the other Party may terminate.

 

5.4.Termination for Non-payment: In the event Partner fails to pay all amounts due to WRMT in accordance with the terms of this Agreement, and such failure remains uncured after the expiration of thirty (30) days written notice to Partner, then WRMT may terminate this Agreement by providing Partner with written notice of termination.

 

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5.5.Termination for Insolvency: At the option of WRMT or Partner, this Agreement shall terminate immediately if:

 

i.A receiver is appointed for the other Party or its property;

 

ii.The other Party becomes insolvent or unable to pay its debts as they mature or ceases to pay its debts as they mature in the ordinary course of business, or makes an assignment for the benefit of creditors;

 

iii.Any proceedings are commenced by or for the other Party under any bankruptcy, insolvency or debtors’ relief law;

 

iv.Any proceedings are commenced against the other Party under any bankruptcy insolvency or debtor’s relief law, and such proceedings have not been vacated or set aside within sixty (60) days from the date of commencement thereof; or the other Party commences to dissolve under applicable corporate law statutes.

 

5.6Termination for non-performance: Partner shall submit Projections 12 week’s prior to each quarter end. WRMT & Partner shall agree Targets 8 weeks prior to each quarter end. Failure of Partner to achieve Targets in two consecutive quarters shall be considered termination for cause. Partner shall provide all Customer contact details within 5 working days if requested by WRMT and WRMT shall have the right to replace the Partner, without compensating the Partner.

 

6.GENERAL

 

6.1.Product Warranty, Disclaimer, and Limitation of Liability. Except for those contained in Section 4.5 above, WRMT makes no representations or warranties in relation to Product(s) of any kind to Partner. All warranties and representations regarding Product(s) are listed in the applicable End User Agreement and are for the benefit of the Customer. WRMT shall indemnify and hold Partner harmless for any claims arising out of the breach by WRMT of the End User Agreement subject to those same limitations within the End User Agreement. Except for each party’s indemnification obligations and either party’s breach of Confidentiality, IN NO EVENT SHALL EITHER PARTY BE LIABLE, DIRECTLY OR INDIRECTLY TO THE OTHER PARTY, FOR ANY SPECIAL, EXEMPLARY, INCIDENTAL, INDIRECT, CONSEQUENTIAL, PUNITIVE OR SIMILAR DAMAGES, FOR LEGAL FEES, LOSS OF DATA OR LOST PROFITS OR FOR ANY AMOUNT BEYOND THE AMOUNT ACTUALLY RECEIVED BY WRMT FROM PARTNER WITH RESPECT TO THE SPECIFIC END USER AGREEMENT FROM WHICH THE CLAIM ARISES. SOME JURISDICTIONS DO NOT ALLOW THE LIMITATION OR EXCLUSION OF LIABILITY FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES SO THE ABOVE LIMITATION OR EXCLUSION MAY NOT APPLY TO PARTNER. WRMT’S AGGREGATE LIABILITY FOR ANY AND ALL CLAIMS BROUGHT BY PARTNER SHALL NOT EXCEED THE TOTAL AMOUNT PAID BY PARTNER TO CORPORATION UNDER THIS AGREEMENT. WRMT SHALL NOT BE LIABLE FOR ANY CLAIMS, WARRANTIES OR REPRESENTATIONS MADE BY PARTNER THAT ARE NOT CONTAINED IN THE END USER AGREEMENT.

 

6.2.Assignment: Partner may not assign or otherwise transfer or convey any of its rights, duties or obligations under this Agreement without the prior written consent of WRMT. Any attempted assignment, transfer or delegation in contravention of this paragraph will be void and of no force and effect.

 

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6.3.No Waiver. No failure of either Party to exercise any power or right given either Party hereunder or to insist upon strict compliance by either Party with its obligations hereunder, and no custom or practice of the Parties at variance with the terms hereof shall constitute a waiver of either Party’s right to demand exact compliance with the terms hereof.

 

6.4.Excused Performance. Each Party shall be excused from performance, and shall have no liability beyond what is included in this Agreement, for any period and to the extent that such Party is prevented, hindered or delayed from performing any Services or other obligations under this Agreement, in whole or in part, as a result of a Force Majeure event.

 

6.5.Governing Law: Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the Rules of Arbitration of the International Chamber of Commerce, which Rules are deemed to be incorporated by reference into this clause. The number of arbitrators shall be one. The seat, or legal place, of arbitration shall be the State of New York, United States. The language to be used in the arbitration shall be English. The governing law of the contract shall be the substantive law of New York, United States

 

6.6.Independent Contractors: In performing their respective duties under this Agreement, each of the Parties will be operating as an independent contractor. Nothing contained herein will in any way constitute any association, partnership, or joint venture between the Parties hereto, or be construed to evidence the intention of the Parties to establish any such relationship. Neither Party will have the power to bind the other Party or incur obligations on the other Party’s behalf, without the other Party’s prior written consent.

 

6.7.Modification and Waiver: No modification to this Agreement, nor any waiver of any rights, will be effective unless assented to in writing by the Parties, and the waiver of any breach or default shall not constitute a waiver of any other rights hereunder or any subsequent breach or default.

 

6.8.Notices: Any required or permitted notices hereunder must be given in writing at the address of each Party set forth below, or to such other address as either Party may substitute by written notice to the other in the manner contemplated herein, by one of the following methods: hand delivery; registered, express, or certified mail, return receipt requested, or internationally recognized private express courier. Notices will be deemed given on the date received.

 

6.8.Severability: If for any reason any provision of this Agreement shall be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions of this Agreement shall remain in full force and effect.

 

6.9.Entire Agreement: This Agreement and the exhibits attached hereto constitute the entire and exclusive Agreement between the Parties hereto with respect to the subject matter hereof and supersede any prior agreements between the Parties with respect to such subject matter.

 

6.10.Construction: Whenever the singular number is used in this Agreement and when required by the context, the same shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa.

 

6.11.Headings: The headings in this Agreement are inserted only as a matter of convenience and for reference and in no way define, affect, limit, or describe the scope or intent of this Agreement.

 

6.12.Currency: All monetary amounts stated in this Agreement are stated in United States Dollars, and all amounts due hereunder shall be paid by Partner in United States Dollars.

 

WRMT WGN Distributor Agreement - Page 9

 

 

 

  

6.13.Counterparts: This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. The parties hereby agree that signatures transmitted and received via facsimile or other electronic means shall be treated for all purposes of this Agreement as original signatures and shall be deemed valid, binding and enforceable by and against both parties.

 

6.14.Terms Confidential: The Confidential Information and the terms and conditions of this Agreement are confidential and shall be treated as such by the Parties. The Partner will not disclose the Confidential Information, pricing terms, and services offered to ANY third parties. Notwithstanding the foregoing, however, Partner may disclose (i) to potential investors the Agreement in full provided Partner obtains a non disclosure agreement from its investor(s) that effectively limits the investor(s) from disclosing this Agreement to any party other than investor(s) (excluding bona-fide Venture Capital firms who have a policy not to sign non-disclosure agreements, but are held to professional standards of confidentiality; and (ii) such portions of this Agreement (excluding the schedules hereto unless expressly required to do so by governmental authorities or as required by the Federal Rules of Civil Procedure or any similar state or country law) as may be required for the filing of reports and forms with governmental agencies under applicable statutes and regulations;

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective authorized representatives as of the Effective Date.

 

World Global Network Pte Ltd. WORLD MEDIA & TECHNOLOGY CORP:
(“Partner”) (“WRMT”)

 

By: /s/ Gabriele Galdi   By:

/s/Seán McVeigh

 

Name: Gabriele Galdi   Name: Seán McVeigh
         
Title: CEO   Title: CEO

 

WRMT WGN Distributor Agreement - Page 10

 

 

 

 

 

Exhibit - Product and Services

 

Products and Services are as detailed on WRMT website, www.worldmediatech.com

 

Exhibit - Terms, Customer and Partner Pricing

 

Payment Terms:          All orders are prepaid and products are sold ex works. Partner prepays a 10% order with submission of its order and the pays the balance prior to preparation of order for shipping.

 

Partner Pricing:          Prices valid until further notice and may be subject to change unless confirmed with order and payment received.

 

1.Helo LX

 

Minimum order Quantity: 100,000 with at least 10,000 per skew.

 

Lead-time: Confirmed within 5 days of order.

 

Wholseale Price: $50 per unit for all orders received and fully paid by end of March, 2017. Thereafter, per unit pricing by product model be mutually agreed upon in writing by both parties, such that:

(1) WRMT’s wholesale price is not less than 15% of WGN’s lowest Customer price or

(2) WRMT’s gross margin is not less than:

$10 per unit or

30% of its wholesale price.

 

2.Helo LX+, Helo AI and other devices

To be confirmed on product launch date.

 

Exhibit - Quality of Service and Tier II Technical Support

 

To be agreed within 3 months of contract signing.

 

Exhibit - End User Terms and Conditions

 

The End User Terms and Conditions are detailed in the Helo Classic and Helo LX software and may be updated by WRMT from time to time. Partner should ensure that they are aware of all terms included within the agreement and any obligations to the Customer arising from these. World Media & Technology Corp cannot accept any responsibility or liability for any breach or omission arising within the End User Terms and Conditions attached.

 

Exhibit - World Branding Guidelines

 

To Be Provided by WRMT under separate cover.

 

WRMT WGN Distributor Agreement - Page 11

 

 

 

Exhibit 10.3

 

EXCLUSIVE LICENSE AGREEMENT

 

THIS EXCLUSIVE LICENSE AGREEMENT, dated April 10, 2017, (the “Effective Date”) by and between World Media & Technology Corp., a Nevada corporation with corporate headquarters located at 600 Brickell Ave., Suite 1775, Miami, Florida 33131 (“WRMT” or the “Licensee) and Giner, Inc., incorporated in the state of Massachusetts whose corporate office is located at 89 Rumford Ave., Newton, MA 02466 (“GI” or the “Licensor”). Each a “Party” and collectively the “Parties,” agree as follows:

 

RECITALS

 

WHEREAS, GI is a research and development orientated company, currently producing some 10,000 alcohol sensors per annum based on patented technology; GI has developed a miniaturized transdermal alcohol sensor (the “TAS”); and

 

WHEREAS, WRMT has an established route to consumer markets, and seeks to incorporate the TAS into WRMT’s Helo product and distribute it to the consumer self-monitoring market; and

 

WHEREAS, GI is the legal and beneficial owner of the TAS and its related Intellectual Property Rights as further described in Appendix B, attached hereto and incorporated herein (together, the “Licensed Products”) and is willing to license these Licensed Products exclusively to WRMT in a limited field on the terms set out in this License.

 

Now, Therefore, the Parties have reached the following agreement with respect to the License:

 

AGREEMENT

 

1INTERPRETATION:

 

1.1The definitions and rules of interpretation in this clause apply in this License.

 

Affiliate

Means, as it relates to WRMT, World Global Network, and any corporation or other business entity controlled by or in common control of a party. "Control" as used herein means ownership directly or through one or more Affiliates, of 55% or more of the shares of the share capital entitled to vote for the election of directors, in the case of any corporation, or 55% or more of the equity interests in the case of any other type of legal entity, status as a general partner in any partnership, or any other arrangement whereby a party controls or has the right to control the board of directors or equivalent governing body of a corporation or other entity.

 

“Big Data”

means any data outputs provided by GI’s Advanced App, including, but not limited to, user data for those users that consent to the use of their data, alcohol sensor raw signals, alcohol sensor converted signals, and any advanced algorithms outputs.

 

  

 1 
   
 

Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

Documentation

means any written materials supplied by Licensor, either in print or digital format, to be used in conjunction with the Licensed Products for purposes including, but not limited to, installation, operation, training, demonstration, and maintenance of the Licensed Products.

 

Integrated Product

means the alcohol monitoring device that is manufactured by WRMT, or a third party on its behalf, sometimes referred to herein as the “Helo or Helo 2.0 device or unit”, that contains the TAS unit supplied by GI, the TAS housing and the circuits and controls supplied by WRMT.

 

Intellectual Property Rightsor “IPR”

all patents, copyrights, design rights, trademarks, service marks, trade secrets, know-how, database rights and other rights in the nature of intellectual property rights (whether registered or unregistered) and all applications for the same, anywhere in the world; (ii) rights relating to innovations, know-how, trade secrets and confidential, technical and non-technical information; (iii) moral rights, mask work rights, author's rights, and rights of publicity; and (iv) other industrial, proprietary and intellectual property related rights (of every kind and nature throughout the world however designated and whether arising by operation of law, contract, license, or otherwise) and all registrations, initial applications, renewals, extensions, continuations, divisions, or reissues now or hereafter in force (including any rights in the foregoing) arising anywhere in the world, that exist as of the Effective Date or hereafter come into existence, regardless of whether or not such rights have been registered in jurisdictions in accordance with the relevant legislation.

 

“TAS unit” means the transdermal alcohol sensing component without the sensor housing or sensor housing stack-up.

 

1.2The headings in this License do not affect its interpretation. Save where the context otherwise requires, references to clauses and schedules are to clauses and schedules of this License.

 

1.3Unless the context otherwise requires:

 

1.3.1references to statutory provisions include those statutory provisions as amended or re-enacted; and

 

1.3.2references to any gender include all genders.

 

1.4In the case of conflict or ambiguity between any provision contained in the body of this License and any provision contained in the Schedule or appendices, the provision in the body of this License shall take precedence.

 

1.5Words in the singular include the plural and in the plural include the singular.

 

 2 
   
 

Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

2EXCLUSIVE LICENSE AGREEMENT AND TERM

 

2.1Licensor hereby grants to the Licensee and its Affiliates, from the Effective Date and during the Term:

 

(a)a world-wide, non-exclusive, license to operate, use, integrate and display the Licensed Products; and

 

(b)a world-wide, exclusive license to use, market, sell and distribute the Licensed Products solely (i) as contained in the Integrated Product, and (ii) in the consumer self-monitoring market.

 

(i)Market sectors not covered by the worldwide exclusive license granted to WRMT include the alcohol treatment market, the law enforcement market, the professionals monitoring market, the automotive market, and the academic research market. If a third-party purchaser of Helo devices begins selling in one of the excluded markets, WRMT will immediately inform GI upon knowledge of third-party purchaser entry into one of the excluded markets, and WRMT may continue selling Helo devices to the third-party purchaser only upon consent from GI.

 

2.2GI agrees to provide WRMT with a minimum of one hundred (100) TAS units for WRMT field testing by no later than July 1st, 2017, or one month from the date that WRMT’s design partners finalize the TAS design for integration into their Helo 2.0 alpha unit, whichever comes later.

 

2.3Within five (5) days of the Effective Date, GI shall provide a demonstration to WRMT of GI’s transdermal alcohol sensing capability by: (a) using the GI R&D prototype WrisTAS 7 device for self-monitoring of drinking events, or (b) a video or in-person demonstration of the GI miniaturized “waterless” prototype transdermal alcohol sensor at GI’s lab.

 

2.4Licensor hereby agrees to provide Licensee with: (a) all updates, enhancements, and upgrades to the Licensed Products, as and when made generally available by Licensor, and (b) the technical maintenance and support services as identified in Appendix D for the Term of the Agreement.

 

3CONSIDERATION

 

3.1NRE Funding.

 

a)WRMT, or a third party acceptable to GI, such approval not to be unreasonably withheld, agrees to fund the non-recurring engineering (“NRE”) costs according to the payment schedule as set forth in Appendix C1. GI’s approval of a third party to provide funding of the NRE will not relieve WRMT of its obligation to make the NRE funding payments set forth herein, and any failure of the third party to provide such funding shall constitute a breach of this Agreement by WRMT.

 

b)The initial outline of the NRE project milestones and subtasks are provided in the Appendix A Gantt chart, which will be updated monthly, upon mutual written consent of both parties, as the milestones and subtasks are completed or modified according to the project progression.

 

 3 
   
 

Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

c)GI will apply the revenue received Sensor Enablement Fee (Section 3.5) and the GI Advanced App Payments (Section 3.6) against the NRE cost up to a total of 50% of the total NRE cost. If GI enters one of the excluded markets (Section 2.1) with sales of TAS units that are the same or materially similar to the ion exchange membrane-based electrochemical TAS units developed under this NRE, GI will reimburse WRMT up to an additional 25% of the total NRE cost also paid back by the Sensor Enablement Fee and GI Advanced App Payments.

 

d)For the duration of the NRE, GI will provide WRMT with a monthly update on funds spent for GI internal R&D and for the automation system, including tasks accomplished during each monthly period. GI will also allow a third-party auditor to examine the NRE expenditures upon WRMT’s request. If, following an audit of Licensor’s records, it is determined that Licensor has materially overcharged WRMT, Licensor will promptly refund or credit WRMT’s account any excess amounts and will reimburse WRMT for any external auditor fees incurred by WRMT in its audit of Licensor’s records if WRMT has cause to audit Licensor. Any amounts that are billed in advance of a projected payment shall not constitute an overcharge. Licensor agrees to provide and agrees to require that its subcontractors and agents provide WRMT and its auditor’s access to such records. GI must notify WRMT in advance of any potential increase in NRE costs provided in Appendix C1, and if such an increase is accepted by WRMT in writing, then WRMT will pay the additional costs upfront up to a maximum of $160,000, and GI will fully reimburse WRMT for those additional costs from the revenue generated by the Sensor Enablement Fee (Section 3.5) and the GI Advanced App Payments (Section 3.6). GI will pay any NRE increase beyond $160,000.

 

e)WRMT will have the right to terminate the Agreement at the three (3), six (6), or nine (9) month payment dates, wherein all rights and obligations of the both Parties, including without limitation all licenses granted hereunder, will be terminated subject to the terms of this Agreement. However, obligations and rights under this Agreement or attached Appendix, which by their nature would reasonably continue beyond the Termination or expiration of this Agreement or Appendix (including those in the Sections entitled “Confidentiality” “Indemnification,” “Infringement,” and “Representations and Warranties”) will survive the Termination or expiration of this Agreement. Without limiting the foregoing, in the event of any such termination WRMT shall be obligated to pay GI for all NRE costs and expenses incurred prior to the date of such termination, to the extent not covered by the prior monthly payments.

 

f)If GI does not receive payment within 10 days of the three (3), six (6), or nine (9) month payment dates, Giner will issue a notice of non-payment and WRMT will have 20 days to make payment from the date the notice was issued. If the 20-day period has expired without payment from WRMT, GI has the right to stop work on the NRE and will not be held liable for any damages, including special, consequential, or punitive damages, due to delay(s) resulting from WRMT’s NRE non-payment. GI will have the right to collect any funds spent before the stoppage of work due to non-payment and not covered by previous NRE payments. The rights set forth in this Section are in addition to the termination rights set forth in Section 7 below.

 

 4 
   
 

Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

3.2WRMT agrees to buy transdermal alcohol sensors exclusively from GI according to the payment conditions set forth in this Section. WRMT will have the right to buy an alternative transdermal alcohol sensor (“Alternative TAS”) technology that is not materially the same or similar to GI’s ion exchange membrane based TAS unit offered on the market at a lesser unit price. GI will have the right of first refusal to match the price of the Alternative TAS, as follows:

 

a)In the event that WRMT proposes to purchase an Alternative TAS (a “Proposed Transaction”), then WRMT shall send to GI a notice in writing of all of the terms of the Proposed Transaction (such notice, the “Offer Notice”). The Offer Notice shall constitute an irrevocable offer of the Alternative TAS which is the subject of the Proposed Transaction (the “Offered Alternative Work”) to GI, on the basis described in the Proposed Transaction.

 

b)At any time within thirty (30) business days after receipt by GI of the Offer Notice (the “Option Period”), GI may elect to accept the offer with respect to any or all of the Offered Alternative Work under identical terms of the Proposed Transaction and shall give written notice of such election (the “Acceptance Notice”) to WRMT within the Option Period. The closing for any of the Offered Alternative Work by GI shall take place within thirty (30) days following the expiration of the Option Period. After the expiration of the Option Period, if GI has not provided to WRMT an Acceptance Notice for any or all of the Offered Alternative Work under identical terms of the Proposed Transaction, then WRMT may purchase such Offered Alternative Work on identical terms from third parties. However, in the course of negotiation with third parties, if the terms of the Proposed Transaction are materially modified, then WRMT shall again send an Offer Notice to GI outlining any such material modification of the Proposed Transaction (the “Revised Transaction”) and shall grant GI a new Offering Period in which to accept such Revised Transaction. If GI does not elect to accept the offer, then all rights and obligations under this Agreement shall terminate in accordance with Section 7.4. However, obligations and rights under this Agreement or attached Appendix, which by their nature would reasonably continue beyond the Termination or expiration of this Agreement or Appendix (including those in the Sections entitled “Consideration”, “Payment”, “Confidentiality” “Indemnification,” “Infringement,” and “Representations and Warranties”) will survive the Termination or expiration of this Agreement.

 

3.3Per Unit Pricing. WRMT agrees to pay GI a unit cost for each unit TAS sold to WRMT according to an annual volume-based sliding unit scale as set forth in Appendix C2.

 

3.4Minimum Volume Requirements. WRMT hereby guarantees that the aggregate amount of TAS units purchased by WRMT from GI under this Agreement during each of Year 1, 2, 3, 4 and Year 5, commencing January 1, 2018, or an earlier date if applicable, shall equal or exceed the amounts as set forth in Appendix C3, attached hereto.

 

a)If WRMT should fail to meet the yearly volume requirements, WRMT may retain exclusivity by paying One Dollar ($1.00) per TAS unit for the number of shortfall units not purchased in a given year.

 

b)In the event WRMT fails to meet the minimum volume requirements set forth in Appendix C3 and fails to pay the shortfall amount within 45 days from the end of the applicable year period, then, notwithstanding anything in this Agreement to the contrary, and at GI’s election and not obligation, (i) GI shall be free to appoint other distributors for its TAS units in the consumer self-monitoring market, (ii) WRMT’s exclusive rights to the sale, marketing, and distribution of Licensed Products shall become non-exclusive, and (iii) GI will have the right to exclusively license the Licensed Products for sale, marketing, and distribution in the consumer self-monitoring market (and this Agreement and all licenses granted to WRMT hereunder will terminate) upon payment to WRMT for 50% of the total NRE amounts actually paid by WRMT less any NRE repayments to WRMT according to the provisions in Section 3.1.

 

 5 
   
 

Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

3.5Sensor Enablement Fee. In lieu of revenue-sharing payments generated by third-party API developers from the use of GI’s transdermal alcohol sensor software development kit, WRMT will provide an additional sensor enablement fee of $0.25 per sensor for the access to GI’s transdermal alcohol sensor by third-party apps.

 

3.6Giner Advanced App Payments. GI will receive 30% of the Net Revenue, as defined in Appendix F, generated by purchases, downloads or subscriptions of the advanced app developed by GI under the terms set forth in Section 4.3.

 

4WORK; ACCEPTANCE

 

4.1Labor and Materials. GI will furnish all supervision, labor, tools, power, transportation, material and supplies (collectively, the “Labor and Material”) specified in the applicable Statement of Work (“SOW”) except any items specifically listed in an Appendix E as being furnished by WRMT or others. It is GI’s duty to inspect all Labor and Material furnished by GI in connection with the Services rendered as part of the NRE (Appendix D), and to report all defects of which GI becomes aware in the performance of the Services. Such inspection will include inspection for defects that could cause property damage or personal injury. GI will not use any Labor and Material, or permit the same to be incorporated into the Services, which is defective or which would otherwise result in an unreasonable risk of harm to persons or property.

 

4.2GI shall perform the integration work as set forth in the Statement of Work (“SOW”) as set forth in Appendix E, and provide the deliverables to WRMT specified therein.

 

a)WRMT shall be the exclusive owner of all right, title, and interest in and to all the “Integration Work,” consisting solely of the Intellectual Property Rights related to the TAS housing design and specific electronic circuit layout (but not the electronic circuit schematic that is the subject of GI’s background intellectual property) that are integrated with the Helo device. Licensor hereby agrees to assign or have assigned to WRMT and hereby assigns all Intellectual Property Rights in and to the Integration Work. GI and WRMT agree to negotiate in good faith for the sale of the TAS housings to GI that are subject to the rights granted for the Integration Work.

 

4.3GI agrees to build a mobile software application using TAS and other Helo data, and this application shall have advanced features, such as a hangover alert, as set forth in more detail in the Statement of Work Appendix F (the “Advanced App”).

 

 6 
   
 

Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

a)GI shall be the exclusive owner of all right, title, and interest in and to the Advanced App, including, without limitation, all Intellectual Property Rights related thereto. Notwithstanding the foregoing, WRMT retains the rights to any data stored in, or generated through, the use of the Advanced App; see Section 6.3 below.

 

4.4Acceptance Procedure

 

a)Upon receipt of the Licensed Products and/or any other deliverables specifically contemplated by this Agreement, as applicable (each, a “Deliverable” and together, the “Deliverables”), WRMT will have thirty (30) business days from the date of receipt (“Acceptance Period”) in which to test and evaluate the Deliverable as specified in this Agreement, and determine whether it materially conforms to the Specifications. Before the end of the Acceptance Period, WRMT will provide GI with a written notice of acceptance of the Deliverable or a notice of rejection that (i) specifies in reasonable detail the material non-conformance(s) to the applicable Specifications that are the basis for the rejection, and (ii) is accompanied by test suites and test results, if applicable, evidencing such non-conformance(s). A failure of a Deliverable to operate in accordance with the applicable Specifications that is caused by other materials or devices, not supplied by GI, in which the Deliverable is integrated shall not constitute a failure of the Deliverable itself and shall not be grounds for rejection of the Deliverable. If GI does not receive such a notice of rejection during the Acceptance Period, the Deliverable will be deemed accepted.

 

b)If GI receives such a notice of rejection during the Acceptance Period, GI will use its best efforts to correct any material non-conformance(s) specified in the rejection notice and to deliver the corrected Deliverables Item to WRMT. The process set forth in this Section will continue until one of two events occur: (a) the Deliverables are accepted by WRMT; or (b) if (30) thirty business days after GI received the notice of rejection have passed without a response from GI, then Deliverables Item will be deemed not accepted. If (b) occurs, WRMT shall not be liable for any of the work performed by GI and shall be entitled to a refund of all monies previously paid for that particular Deliverables Item.

 

4.5WRMT will provide GI with any assistance and grant GI access to any information, subject to the confidentiality provisions set forth in this Agreement, GI requires to permit GI to bring the Deliverables to functionality described in the Appendices, the Specifications in the SOW and elsewhere. WRMT will ensure that all WRMT’s personnel who may be necessary or appropriate for the successful development, testing, and/or implementation of the Deliverable on reasonable notice, (i) be available to assist GI’s personnel by answering business, technical and operational questions and providing requested documents, guidelines, procedures in a timely manner; (ii) participate in progress related meetings; and (iii) contribute to system testing. WRMT is responsible for the results produced to its business and engineering requirements. WRMT shall not be liable for any delays in development or implementation of the Deliverables due to lack of assistance by WRMT or other factors beyond WRMT’s control.

 

4.6Shipment; Inspection

 

a)Purchase Orders. WRMT shall order TAS units (“Products”) by written notice to GI. Each order shall specify the number of units to be shipped, the type of units to be shipped, the desired method of shipment and the location. GI shall indicate its acceptance of such order by returning a signed copy to WRMT. GI agrees to ship units to WRMT as close as possible to the delivery schedule set forth in each order as accepted by GI, unless GI otherwise indicates in writing. GI shall not be required to honor any order that specifies a shipping date earlier than that approved in writing.

 

 7 
   
 

Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

b)WRMT Inspection; Rejection. WRMT shall inspect all Products promptly upon receipt thereof and may reject any defective Product, provided that WRMT shall (i) within the earlier of thirty (30) days after receipt of such alleged defective Product or ten (10) days after discovery of such alleged defect, notify the GI of its rejection and request a Return Material Authorization (‘RMA’) number and (ii) within ten (10) days of receipt of the RMA number from GI return such rejected Product to GI, freight prepaid and properly insured. Products not rejected within the foregoing time periods shall be deemed accepted by WRMT. In the event that GI determines that the returned Product is defective and properly rejected by WRMT, GI shall at its option, repair or replace such defective Product, or accept return for credit of such defective Product. GI shall return to WRMT, freight prepaid, all repaired or replaced Products properly rejected by WRMT. In the event that any rejected product is determined by GI to not be defective or to have been modified or subjected to unusual electrical or physical stress, misuse, abuse or unauthorized repair, WRMT shall reimburse GI for all costs and expenses related to the inspection, repair, if any, and return of such Product to WRMT.

 

c)Shipment. All shipments of Product shall be made FOB GI’s plant and liability for loss or damage in transit, or thereafter, shall pass to WRMT upon GI’s delivery of Product to a common carrier for shipment. Shipping dates are approximate and are based, to a great extent, on prompt receipt by GI of all necessary ordering information from WRMT. WRMT shall bear all costs of transportation and insurance and will promptly reimburse GI if GI prepays or otherwise pays for such expenses. GI shall not be in default by reason of any failure in its performance under this Agreement if such failure results from, whether directly or indirectly, fire, explosion, strike, freight embargo, Act of God or of the public enemy, war, civil disturbance, act of any government, de jure or de facto, or agency or official thereof, material or labor shortage, transportation contingencies, unusually severe weather, default of any other manufacturer or a supplier or subcontractor, quarantine, restriction, epidemic, or catastrophe, lack of timely instructions or essential information from WRMT, or otherwise arisen out of causes beyond the control of the GI. Nor shall the GI at any time be liable for any incidental, special or consequential damages.

 

4.7Payment

 

a)GI shall invoice WRMT for each order at WRMT’s address set forth in Section 17 below after shipment of such order by GI. WRMT shall pay GI net (30) thirty days from GI’s date of invoice. All payments will be made in U.S. Dollars. WRMT will advise GI of any billing discrepancies or disputes within ten (10) days after receiving the invoice.

 

b)In the event GI has not received payment within (30) thirty days and has not been notified of any billing discrepancies or disputes by WRMT, GI will shall have the right to discontinue manufacturing or supplying any products to WRMT. The rights set forth in this Section are in addition to the termination rights set forth in Section 7.

 

c)The Sensor Enablement Fee will be due and payable upon delivery of the TAS units to WRMT.

 

 8 
   
 

Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

  

d)The Advance App Payments shall be payable through WRMT’s payment processor, Paynovi, at the end of the month following the month in which the Advanced App was downloaded by an end user.

 

e)WRMT shall keep, and shall cause any third party payment processor, including Paynovi, to keep records of all transactions for which payments under the preceding subsections are due hereunder, in sufficient detail to enable such amounts to be verified, for a period of two (2) years from the date of payment of such fees. WRMT will permit, and shall cause its third party payment processors, including Paynovi to permit, such records to be inspected by an auditing firm selected by GI up to twice in each calendar year. All such examinations shall be made at GI’s expense, unless such an examination discloses an underpayment in excess of 5% of the amount actually due, in which event WRMT shall immediately pay the reasonable costs of such examination together with the amount due and owing.

 

5REPRESENTATIONS AND WARRANTIES

 

5.1Authority. Each Party represents and warrants that (A) it has obtained all necessary approvals, consents and authorizations to enter into this Exclusive License Agreement and to perform and carry out its obligations under this Exclusive License Agreement; (B) the person executing this Exclusive License Agreement on the party’s behalf has express authority to do so and to bind the party; (C) the execution, delivery, and performance of this Exclusive License Agreement does not violate any provision of any bylaw, charter, regulation, or any other governing authority of the party and is duly authorized by all necessary partnership or corporate action; and (D) this Exclusive License Agreement is a valid and binding obligation of the party.

 

5.2Attached as Schedule 5.4 is a list of any and all companies that have a contract or other licensing arrangement with GI for the use of GI’s transdermal alcohol sensor technology or related IPR. GI represents and warrants that it has no existing contracts or licensing agreements with KHN/BACtrack for the use of GI’s transdermal alcohol sensor technology and related IPR.

 

5.3GI hereby represents and warrants that as of the Effective Date it has ceased all communication with any other interested parties, and shall not solicit any new third parties, regarding its transdermal alcohol sensor technology in the consumer self-monitoring market. This non-communication period will expire as of August 31, 2017 or at the termination of this Agreement, whichever comes later. During the non-communication period, GI may enter discussions with third parties only for the excluded markets as listed in Section 2.1(b) above.

 

5.4Ownership. Licensor warrants that it owns or has sufficient rights in the Deliverables and any and all related Intellectual Property Rights to grant WRMT the licenses set forth herein. Licensor warrants that it has and will comply with all laws attendant upon its performance under this Agreement.

 

 9 
   
 

Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

5.5Claims or Demands. Licensor represents and warrants, to its knowledge, that there are no unresolved claims, demands or pending litigation, relating to the Licensed Products or the Intellectual Property Rights in the Licensed Products. Upon receipt of notice from a third party alleging any claim, including, but not limited to claims arising out of performance of activities under this Exclusive License Agreement or any infringement or misappropriation of any Intellectual Property Rights by use or license of Licensed Products, Licensor shall take all appropriate actions to handle the claim in accordance with the requirements of this Exclusive License Agreement. Licensor will immediately notify WRMT if, during the term of this Agreement, Licensor becomes aware of any action, suit or proceeding, pending or threatened, which may have a material adverse effect on Licensor’s ability to fulfill its obligations under this Agreement.

 

5.6Warranty of Services. Licensor warrants and represents that the NRE services performed by Licensor or its personnel shall be performed in a professional manner, in material compliance with the specifications given by WRMT, consistent with the best practices in Licensor’s industry and in a diligent, workmanlike, and expeditious manner.

 

5.7Licensor warrants to WRMT that at the time of delivery to WRMT the Deliverables furnished hereunder will be free from all liens and encumbrances, and will substantially conform to and perform in accordance with applicable Specifications and Performance Requirements, set forth in this Agreement. Any Deliverables that fail to perform in accordance with the applicable Specifications and Performance Requirements at the time of delivery shall be repaired or replaced by GI, free of charge, provided GI is notified of such failure within thirty (30) days following the date of delivery. In addition, if a Deliverable contains one or more original equipment manufacturer’s (“OEM”) warranty, Licensor represents that it has the authority to and does assign such OEM warranties to WRMT. Licensor further warrants that at the time of delivery to WRMT the Licensed Products will perform and be compatible with the Licensee’s technical environment, including hardware, operating system(s), software application(s), and networks specified by Licensee in the Specifications set forth in this Agreement. Licensor warrants that all Deliverables provided to WRMT hereunder will be tested prior to delivery to WRMT.

 

5.8The warranties set forth herein are extended solely to WRMT and WRMT is responsible for all warranties extended directly to end users of the Integrated Products. WRMT will not provide any warranties with respect to the TSA units integrated in the Integrated Products that exceed the warranties set forth herein without the prior written consent of GI.

 

5.9THE ABOVE ARE THE ONLY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, THAT ARE MADE BY GI AND GI DISCLAIMS ALL OTHER WARRANTIES, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY, TITLE, NON-INFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE. NO ORAL OR WRITTEN INFORMATION OR ADVICE GIVEN BY GI, ITS AGENTS OR EMPLOYEES SHALL CREATE A WARRANTY OR IN ANY WAY INCREASE THE SCOPE OF THE WARRANTIES IN THIS AGREEMENT.

 

5.10All obligations relating to the sale of an Integrated Product to an end user customer shall remain with WRMT GI will have no obligations with respect to the warranting of any Integrated Products, other than as may be expressly set forth in this Section. WRMT will invoice the end user customer for any payments that may become due from the customer, and WRMT will collect and receive payments from the end user customer on account of any such invoice.

 

 10 
   
 

Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

6INTELLECTUAL PROPERTY RIGHTS

 

6.1The Licensee acknowledges that all Intellectual Property Rights in the Licensed Products belong to the Licensor, and the Licensee shall have no rights in or to the Licensed Products other than the right to use it in accordance with the terms of this License. The Licensor’s Intellectual Property Rights comprise existing intellectual property as of the Effective Date of this Agreement, including, but is not limited to, US Nonprovisional Patent No. 5,944,661, US Provisional Patent No. 62/447,214 ,TAS units currently sold to collaborators and commercial partners, the WrisTAS 7 sensing component and all previous sensing component versions, the WrisTAS 7 device, a miniaturized “waterless” TAS sensing component, potentiostatic circuitry, electronic circuit layout and design for the TAS sensor, sensor hardware, sensor software, data analysis algorithms, calibration methods, calibration curves and values, and manufacturing know-how thereof. Licensor’s Intellectual Property Rights also comprise any future intellectual property developed related to Licensee’s transdermal alcohol sensor technology developed by Licensee.

 

6.2Licensor’s Marks. Licensor grants WRMT the right to use, reproduce, publish and display Licensor’s names, trademarks, service marks, designs, logos or symbols (“Licensor Marks”), including the Licensed Product names and Licensor’s Marks, in connection with the development, use, reproduction in promotional and marketing materials, content directories and indices, and electronic and printed advertising, newsletters and mailings and exhibitions, trade shows or equivalent events about Licensor and its relationship with WRMT. This Agreement gives WRMT a non-exclusive, royalty-free, limited license to reproduce Licensor Marks as reasonably necessary for the sole purpose of allowing WRMT to fully promote and market the Licensed Products pursuant to the terms of this Agreement. WRMT acknowledges and agrees that Licensor is the exclusive owner of Licensor Marks and that their use as provided in this Agreement will not create in WRMT any right, title or interest therein or to them.

 

6.3Notwithstanding the foregoing, the parties agree that the Integration Work and their related IPR, and any data stored in the Licensed Products, Advanced App or in relation thereto that relates to Licensee’s business or is generated through end user’s use of the Licensed Products or Advanced APP or is generated in the course of Licensee’s operations, including any ”Big Data”, or data structures or relationships is the exclusive property of Licensee.

 

a)GI will have the right of first refusal to match any proposal involving the exploitation of “Big Data” generated from GI’s TAS, as follows:

 

i)In the event that WRMT proposes to offer “Big Data” generated from GI’s TAS (a “Proposed Transaction”), then WRMT shall send to GI a notice in writing of all of the terms of the Proposed Transaction (such notice, the “Offer Notice”). The Offer Notice shall constitute an irrevocable offer of the Big Data which is the subject of the Proposed Transaction (the “Offered Big Data”) to GI, on the basis described in the Proposed Transaction.

 

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Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

ii)At any time within thirty (30) business days after receipt by GI of the Offer Notice (the “Option Period”), GI may elect to accept the offer with respect to any or all of the Offered Big Data under identical terms of the Proposed Transaction and shall give written notice of such election (the “Acceptance Notice”) to WRMT within the Option Period. The closing for any of the Offered Big Data by GI shall take place within thirty (30) days following the expiration of the Option Period. After the expiration of the Option Period, if GI has not provided to WRMT an Acceptance Notice for any or all of the Offered Big Data under identical terms of the Proposed Transaction, then WRMT may offer such Offered Big Data on identical terms to third parties. However, in the course of negotiation with third parties, if the terms of the Proposed Transaction are materially modified, then WRMT shall again send an Offer Notice to GI outlining any such material modification of the Proposed Transaction (the “Revised Transaction”) and shall grant GI a new Offering Period in which to accept such Revised Transaction.

 

6.4WRMT shall have the right of first refusal on a deal for any GI spin-off to transdermal sensing technology (e.g. a transdermal marijuana sensor, a transdermal carbon dioxide sensor, etc) (“Derivative Work”), as follows:

 

a)In the event that GI proposes to license, sell, assign or otherwise transfer ownership of Derivative Work (a “Proposed Transaction”), then GI shall send to WRMT a notice in writing of all of the terms of the Proposed Transaction (such notice, the “Offer Notice”). The Offer Notice shall constitute an irrevocable offer of the Derivative Work that is the subject of the Proposed Transaction (the “Offered Derivative Work”) to WRMT, on the basis described in the Proposed Transaction.

 

b)At any time within thirty (30) business days after receipt by WRMT of the Offer Notice (the “Option Period”), WRMT may elect to accept the offer with respect to any or all of the Offered Derivative Work under identical terms of the Proposed Transaction and shall give written notice of such election (the “Acceptance Notice”) to GI within the Option Period. The closing for any of the Offered Derivative Work by WRMT shall take place within thirty (30) days following the expiration of the Option Period. After the expiration of the Option Period, if WRMT has not provided to GI an Acceptance Notice for any or all of the Offered Derivative Work under identical terms of the Proposed Transaction, then GI may offer such Offered Derivative Work on substantially similar terms to third parties. However, in the course of negotiation with third parties, if the terms of the Proposed Transaction are materially modified, then GI shall again send an Offer Notice to WRMT outlining any such material modification of the Proposed Transaction (the “Revised Transaction”) and shall grant WRMT a new Offering Period in which to accept such Revised Transaction.

 

7TERM, TERMINATION AND RIGHT OF FIRST REFUSAL

 

7.1The term of this Agreement shall begin on the Effective Date and shall continue until December 31, 2022 (the “Initial Term”), subject to perpetual automatic annual renewal, as follows: If WRMT meets the target volume in Year 5, as set forth in Appendix C3, or maintains exclusivity by paying the shortfall fee, then the Agreement will automatically renew for an additional year, with a new volume target to be negotiated and mutually agreed upon by both parties in good faith. The Agreement will continue to automatically renew for subsequent annual periods so long as WRMT meets or exceeds the volume target of the preceding year or pays the shortfall fee. The target volume of each successive year after Year 5 shall not exceed an increase of fifteen percent (15%) of the preceding year’s target volume, and such increase amount shall apply if the parties are not otherwise able to mutually agree on an increase.

 

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Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

7.2This Agreement may be terminated by either party if the other party fails to perform fully, or comply fully, with any material provision of this Agreement and such failure continues for a period of 30 days after receipt of written notice of such non-conformance or noncompliance.

 

7.3At any time following the full payment to GI of the NRE, in the event that WRMT determines Helo 2.0 and successor products using the GI TAS is no longer financially viable, WRMT may terminate this Agreement, and GI will have the option for a period of eighteen (18) months from date of WRMT’s notice under this provision to buy back WRMT’s worldwide exclusive license for the consumer self-monitoring market for 50% of the total NRE amounts actually paid by to GI less any NRE repayments to WRMT according to the provisions in Section 3.1. Should GI choose not to exercise its option under this provision, (i) this Agreement shall remain in effect through the end of the then-current term, at which time this Agreement will terminate; (ii) all minimum volume purchase requirements shall expire, and (iii) the licenses granted to WRMT under Section 2.1 shall become non-exclusive for the consumer self-monitoring market.

 

7.4On termination:
a)all rights granted to the Licensee under this License shall cease;
b)the Licensee shall cease all activities authorised by this License; and
c)Upon early termination, GI will terminate all future work and return any and all unspent funds allocated for the completion of the project that have previously been paid to GI by WRMT.

 

8FORCE MAJEURE

 

No Party shall be liable to the other for any delay or non-performance of its obligations under this License arising from any cause beyond its reasonable control including, without limitation, any of the following: act of God, governmental act, war, fire, flood, explosion or civil commotion. For the avoidance of doubt, nothing in clause 8 shall excuse the Licensee from any payment obligations under this license.

 

9CONFIDENTIALITY AND PUBLICITY

 

9.1In connection with this Agreement, either Party may disclose to the other Party its Information. Information of a disclosing Party is confidential or proprietary only if it is clearly marked or otherwise identified by the disclosing Party as being confidential or proprietary, provided that if it is orally or visually disclosed (including Information conveyed to an answering machine, voice mail box or similar medium), the disclosing Party must designate it as confidential or proprietary within 30 days of disclosure. Notwithstanding the foregoing, a disclosing Party is not obligated to mark, identify, or so designate, Information that the disclosing Party discloses to or is otherwise obtained by the receiving Party’s employees, contractors, or representatives (i) who are located on the disclosing Party’s premises; (ii) who access the disclosing Party’s systems; or (iii) who otherwise obtain Information in connection with this Agreement, any such Information so disclosed is automatically deemed to be confidential and proprietary. Additionally, the failure to mark or designate information as being confidential or proprietary will not waive the confidentiality where it is reasonably obvious, under the circumstances surrounding disclosure, that the information is confidential or proprietary; any such information so disclosed or obtained is automatically deemed to be confidential and proprietary. Information provided by either Party to the other Party prior to the Effective Date of this Agreement in connection with the subject matter hereof, including any such Information provided under a separate non-disclosure agreement (howsoever denominated) is also subject to the terms of this Agreement. Neither Party has any obligation to the other Party with respect to Information that: i) at the time of disclosure was already known to the receiving Party free of any obligation to keep it confidential (as evidenced by the receiving Party’s written records prepared prior to such disclosure), ii) is or becomes publicly known through no wrongful act of the receiving Party (such obligations ceasing at the time such Information becomes publicly known), iii) is lawfully received from a third party, free of any obligation to keep it confidential, iv) is independently developed by the receiving Party or a third party, as evidenced by the receiving Party’s written records, and wherein such development occurred without any direct or indirect use of or access to the Information received from the disclosing Party, or v) the disclosing Party consents in writing to be free of restriction.

 

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Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

9.2With respect to the Information of the disclosing Party, the receiving Party must:

 

a)hold all such Information in confidence with the same degree of care with which it protects its own Information, but with no less than reasonably prudent care;

 

b)restrict disclosure of such Information solely to its employees, contractors, and agents with a need to know such Information, advise such persons of their confidentiality obligations under this Agreement with respect to the Information, and ensure that such persons are bound by obligations of confidentiality reasonably comparable to those imposed in this Agreement;

 

c)use such Information only as needed to perform its obligations under this Agreement;

 

d)except as necessary under Section 10.01(b)(iii), not copy, distribute, or otherwise use any such Information or allow anyone else to copy, distribute, or otherwise use such Information; and ensure that any and all copies bear the same notices or legends, if any, as the originals; and

 

e)upon the disclosing Party’s request, promptly return, or destroy all or any requested portion of the Information, including tangible and electronic copies, notes, summaries, extracts, mail or other communications, and provide written certification within fifteen business days to the disclosing Party that such Information has been returned or destroyed, provided that with respect to archival or back-up copies of Information that reside on the receiving Party’s systems, the receiving Party will be deemed to have complied with its obligations under this Section 9.2(b)(v) if it makes reasonable efforts to expunge from such systems, or to permanently render irretrievable, such copies.

 

9.3The terms of this License are confidential and may not be disclosed by either Party without the prior written consent of the other Party. Neither WRMT nor GI will issue a press release or otherwise disclose that the two companies are working together without the consent of the other party, provided that consent is not unreasonably withheld from the other party. Nothing in the foregoing, however, shall prohibit a party from making such disclosures to the extent deemed necessary under applicable federal, state or provincial securities laws or any rule or regulation of any securities exchange; in such event, however, the disclosing party shall use good faith efforts to consult with the other party prior to such disclosure. Notwithstanding anything to the contrary in this Agreement, GI understands and acknowledges that information related to the installation, operation, repair, or maintenance of the Deliverables will not be considered confidential or proprietary, and WRMT may disclose any such information for purposes of installing, operating, repairing, replacing, removing, and maintaining the Deliverables.

 

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Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

9.4A receiving Party’s obligations with respect to any particular Information of a disclosing Party remains in effect, for a period of five (5) years after the expiration or termination of this Agreement; provided, however, that with respect to trade secrets of a disclosing Party, the confidentiality obligations of the receiving Party shall remain in effect for so long as the disclosing Party continues to maintain the trade secrets as such.

 

10INDEMNIFICATION

 

10.1Definitions. For purposes of this Section 10:

 

Indemnified Parties” means WRMT and its Affiliates, as well as their agents, individually or collectively, as the case may be.

 

Accused Elements” means any products, hardware, software, systems, content, services, methods, documents, materials, data or information (or functionality therein) provided by or on behalf of GI.

 

10.2Infringement Indemnity. GI agrees to indemnify, hold harmless, and defend the Indemnified Parties against any costs, damages or expenses (each a “Loss”) resulting from, arising out of or relating to any allegation, threat, demand, claim or lawsuit brought by any third party (“Covered Claim”), regardless of whether such Covered Claim is meritorious, for infringement (including direct, contributory and induced infringement) of any patent, copyright, trademark, service mark, or other intellectual property right in connection with the Accused Elements, including, for example, any Covered Claim of i) infringement based on making or having made, repair, receipt, use, importing, sale or disposal (and offers to do any of the foregoing) of Accused Elements, (ii) misappropriation of any trade secret, proprietary or non-public information in connection with the Accused Elements (any and all such Loss referenced in this Section is referred to as a “Covered Loss”).

 

GI shall have no liability or obligation hereunder with respect to any Covered Claim if such Covered Claim is caused by (i) compliance with designs, guidelines, plans or specifications of WRMT; (ii) use of any Licensed Product by WRMT or its customers in an application or environment other than as specified in applicable Specifications; (iii) modification of any Licensed Product by any party other than GI or the combination, operation or use of any Licensed Product with other product(s) not supplied by GI; or (iv) use of any Licensed Product in the Integrated Product where the Licensed Product would not by itself be infringing. WRMT agrees to indemnify and hold harmless GI from and against all liabilities, obligations, costs, expenses and judgments, including court costs, reasonable attorneys’ fees and expert fees, arising out of any of the circumstances stated in this Section.

 

GI retains sole control over the defense and settlement of any Covered Claim. WRMT agrees to cooperate in every reasonable way with GI to facilitate the defense and may, at its option and at its own expense, participate with GI in the defense with counsel of its own choosing.

 

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Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

10.3Continued Use of Accused Elements Upon Injunction. Without in any manner limiting the foregoing indemnification, if, as a result of a Covered Claim, (1) Indemnified Parties’ rights under this Agreement are restricted or diminished; or (2) an injunction, exclusion order, or other order from a court, arbitrator or other competent tribunal or governmental authority preventing or restricting the Indemnified Parties’ use or enjoyment of the Accused Elements is issued, imminent, or reasonably likely to be issued, then, in addition to its other obligations set forth in this Section 10.3 GI, in any case at its sole expense and at no loss, cost or damage to the Indemnified Parties, agrees to use commercially reasonable efforts to obtain for the Indemnified Parties the right to continue using or conducting other activities with respect to the Accused Elements; provided that if GI is unable to obtain such right, GI must modified or replacement non-infringing Accused Elements that are equally suitable and functionally equivalent while retaining the quality of the original Accused Elements and complying fully with all the representations and warranties set forth in this Agreement; provided further that if GI is unable in this way to provide such modified or replacement non-infringing Accused Elements, WRMT will have the right, without prejudice to any other rights or remedies that WRMT has in contract, law or equity: (1) to terminate this Agreement; and (2) to require GI, as applicable, to remove, accept return of, or discontinue the provision of the Accused Elements, to refund to WRMT that portion of the purchase price thereof or other monies paid therefor amortized over a three (3) year period.

 

Notwithstanding any other provision of this Agreement to the contrary, should an injunction be issued against any person (whether or not stayed or currently in effect), affecting the Indemnified Parties’ ability to use or conduct other activities with respect to the Accused Elements, then the Indemnified Parties may require GI to seek the right to continue to use, or conduct other activities with respect to, the Accused Elements.

 

10.4Forbidden Settlements. GI is not authorized to settle any Covered Claim, in whole or in part, in a manner that would require any Indemnified Party to modify or discontinue its products or services (or offerings thereof), without WRMT’s prior written consent, which consent will not be unreasonably withheld.

 

10.5Exceptions. GI will not be liable or obligated to any of the Indemnified Parties for any Loss resulting from an Covered Claim if and to the extent that such Covered Claim is clearly based on, and would not have arisen but for:

 

a)use of the Accused Elements by the Indemnified Parties in a manner that constitutes an uncured material breach of an explicit prohibition in this Agreement; or

 

b)a modification or alteration of the Accused Elements by an Indemnified Party that is unauthorized by GI or the combination, operation or use of any Accused Element with other product(s) not supplied by GI; or

 

c)GI’s contractually required conformance to the Indemnified Party’s written specifications; or

 

(d)use of any Accused Element in the Integrated Product where the Accused Element would not by itself be infringing

 

WRMT agrees to indemnify and hold harmless GI from and against all liabilities, obligations, costs, expenses and judgments, including court costs, reasonable attorneys fees and expert fees, arising out of any of the circumstances stated in this Section 10.5.

 

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Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

10.6General Indemnity. Except where Licensor is obligated to indemnify the Indemnified Parties as set forth in this Section 10, without limiting any obligation of WRMT to indemnify Licensor under Section 10.5, Licensee (as the “Indemnifying Party”) will indemnify, hold harmless and defend Licensor (as the “Indemnified Party”) from and against any and all losses, damages, expenses (including reasonable attorneys’ and expert fees), claims, liabilities, suits or actions (“Claims”), arising from or in connection with, or resulting from, Licensee’s development, testing, marketing, sale and distribution of the Integrated Products. In addition to GI’s indemnification obligations set forth above, Licensor (as the “Indemnifying Party”) will indemnify, hold harmless and defend Licensee, including its Affiliates and agents (as the “Indemnified Party”) from and against any and all Claims, arising or resulting from or in connection with the intentional or grossly negligent acts or omissions of Licensor pursuant to this Agreement, whether carried out by Licensor’s employees, agents or subcontractors. Licensee shall not be obligated to indemnify Licensor with respect to any Claim is obligated to provide indemnification under this Section. The foregoing indemnification obligations require that: (i) the Indemnified Party shall notify the Indemnifying Party in writing of the Claim within a reasonable period of time after becoming aware of such claim or the Indemnifying Party’s potential culpability and (ii) the Indemnifying Party has primary control of the defense and all related settlement negotiations. Failure of the foregoing obligations shall affect the indemnification obligation only to the extent such failure materially and adversely impacts the ability of the Indemnifying Party to successfully defend against the Claims. The Indemnifying Party agrees that any settlement of such claim or cause of action shall release the Indemnified Party fully, absolutely, and finally from any liability related to such cause of action. The Indemnifying Party shall minimize, to the extent possible, publicity adverse to the Indemnified Party associated with any such settlement. The Indemnifying Party shall not agree to a settlement which names the Indemnified Party as culpable absent the prior written consent of the Indemnified Party. In the event that the Indemnifying Party, in the reasonable judgment of the Indemnified Party, lacks the financial resources to adequately and timely defend such claim or if the Indemnifying Party has indicated in writing its unwillingness to so defend such claim, the Indemnified Party may defend and the Indemnifying Party shall reimburse, all costs related to such defense.

 

10.8NOTWITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT TO THE CONTRARY (AND WHETHER OR NOT SUCH A PROVISION CONTAINS LANGUAGE THAT REPRESENTS ITSELF AS TAKING PRECEDENCE OVER OTHER PROVISIONS CONTRARY TO IT), WHETHER EXPRESS OR IMPLIED, NONE OF THE LIMITATIONS OF LIABILITY (INCLUDING ANY LIMITATIONS REGARDING TYPES OF OR AMOUNTS OF DAMAGES OR LIABILITIES) CONTAINED ANYWHERE IN THIS AGREEMENT WILL APPLY TO A PARTY’S OBLIGATIONS UNDER THIS SECTION 10.

 

11LIMITATION OF LIABILITY

 

Without limiting Indemnification and Confidentiality obligations set forth in this Agreement, in no event shall (i) either Party be liable to the other for any punitive, special, indirect, consequential or incidental damages arising out of this Agreement, however caused, based on any theory of liability, and (ii) GI’s aggregate liability for all direct damages arising out of the subject matter of this Agreement, whether in contract, tort or otherwise, exceed one hundred fifty percent (150%) the payment amounts actually received by GI from WRMT hereunder.

 

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Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

12WAIVER

 

No forbearance or delay by either Party in enforcing its rights shall prejudice or restrict the rights of that Party, and no waiver of any such rights or of any breach of any contractual terms shall be deemed to be a waiver of any other right or of any later breach.

 

13SEVERABILITY

 

If any provision of this License is judged to be illegal or unenforceable, the continuation in full force and effect of the remainder of the provisions shall not be prejudiced. The Parties will negotiate in good faith to replace the unenforceable provision with an enforceable provision with effect nearest to that of the provision being replaced.

 

14AMENDMENTS

 

Any amendment, waiver or variation of this License shall not be binding on the Parties unless set out in writing, expressed to amend this License and signed by or on behalf of each of the Parties.

 

15ASSIGNMENT

 

Except as otherwise provided in this Section, neither Party may assign this Exclusive License Agreement or any of its rights or obligations under this Agreement without the prior written approval of the other Party. Any attempted assignment, delegation or transfer without the necessary approval will be null and void. Notwithstanding the foregoing, either Party may assign or transfer this Agreement without the prior written approval of, but with no less than thirty (30) days prior written notice to, the other to a third party controlled by or under common control with the transferor; or (ii) in connection with a sale of all or substantially all of the Party’s assets or all or substantially all of the assets to which this Agreement relates, unless the sale occurs during the work to be performed as set forth in Section 3.1 above and the time period specified in Appendix E, in which case prior written approval is required. Any transferee must agree to be bound by the same rights and obligations to which the transferor is bound under this Agreement.

 

16THIRD PARTY RIGHTS

 

Notwithstanding any other provisions of this Agreement, nothing in this Agreement confers or purports to confer any right to enforce any of its terms on any person who is not a party to it. This Exclusive License Agreement is binding upon, inures to the benefit of, and is enforceable by the Parties and their respective successors and permitted assigns. Licensor agrees that Licensee Affiliates are intended third party beneficiaries of this Exclusive License Agreement and are entitled to rely upon all rights representations, warranties, and covenants made by Licensor herein to the same extent as if each affiliate were Licensee hereunder.

 

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Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

17NOTICES

 

Any notice required to be given pursuant to this Exclusive License Agreement shall be in writing, and shall be sent to the other Party marked for the attention of the person at the address set out for such Party in this Exclusive License Agreement. Notices may be sent by first-class mail or fax, with a confirmation email copy sent to the authorised email address at the time the notice is sent. Correctly addressed notices sent by first-class mail shall be deemed to have been delivered 72 hours after posting and correctly directed faxes shall be deemed to have been received instantaneously on transmission subject to receipt of an acknowledgement of successful transmission.

 

Notices shall be sent to:

 

Giner Inc.

89 Rumford Ave.Newton, MA 02466

Fax: 781-893-6470

Email: [email protected]

 

World Media & Technology Corp.

Address: 600 Brickell Ave., Suite 1775

Miami, Florida 33131

Email: [email protected]

 

18ENTIRE AGREEMENT

 

This Exclusive License Agreement contains the whole agreement between the Parties relating to the subject matter hereof and supersedes all prior agreements, arrangements and understandings between the Parties relating to that subject matter, including without limitation and previously executed confidentiality agreement.

 

19GOVERNING LAW AND JURISDICTION

 

a)This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed in accordance with the laws of the State of Delaware.

 

b)If a dispute arises out of or relates to this Agreement or its breach (the “Matter”), the parties agree to resolve the Matter as follows:

 

i)a party (the “Initiating Party”) shall submit written notice of the Matter to the other parties and request negotiation;

 

ii)the parties shall attempt in good faith to resolve any Matter arising out of or relating to this Agreement promptly by negotiation between representatives which the parties may appoint, and

 

iii)if the Matter has not been resolved within 30 days of a party’s request for negotiation, either party may request that the Matter be submitted to a sole mediator selected by the parties for mandatory mediation of not more than five days’ duration.

 

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Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

c)If the Matter has not been resolved by such mediation, either party may submit the Matter for binding arbitration, without limiting either Party’s right to seek appropriate injunctive relief, if the Parties are unable to promptly resolve a dispute informally or by mediation, the Party alleging a material breach (the “Moving Party”) may initiate arbitration by providing the other Party written notice of its intent to arbitrate. If the Parties are unable to agree upon an arbitrator within three business days of the Moving Party’s written notice to arbitrate, the Moving Party may request the American Arbitration Association (“AAA”) to appoint an arbitrator. The AAA will then select an arbitrator who can promptly proceed with and strive to conclude the arbitration as specified herein. If a dispute is submitted to an arbitrator, it must be finally resolved through binding arbitration in Santa Clara, California, according to the Commercial Arbitration Rules of the AAA, except as modified in this Agreement. The award rendered by the arbitrator is final and binding on the Parties and is deemed enforceable in any court having jurisdiction over the matter. The arbitration will be heard by a single arbitrator who must, by training, education, or experience, have knowledge of the general subject matter of this Agreement. The arbitrator will have only the power to award damages, injunctive relief and other remedies to the extent the same would be available in a court of law having jurisdiction of the matter, except that the arbitrator will not have the power to vary the provisions of this Agreement. The arbitrator must promptly commence the arbitration proceeding with the intent to conclude the proceedings and issue a written decision stating in reasonable detail the basis for the award, which must be supported by law and substantial evidence, as promptly as the circumstances demand and permit, but generally no later than ten weeks after the arbitrator’s appointment. Each Party acknowledges that it is giving up judicial rights to a jury trial, discovery and most grounds for appeal under the foregoing provision.

 

d)The parties shall not be entitled to rely on or introduce as evidence before any arbitral proceedings whether or not such proceedings relate to the Matter that is the subject of the negotiations:

 

i)views expressed or suggestions made by another party in respect of a possible settlement of the Matter;

 

ii)admissions or proposals made by another party in the course of negotiations; or

 

iii)the fact that the other party had indicated his willingness to accept a proposal for settlement made by another party.

 

e)The mediation and arbitration shall be held in Delaware. The parties, their representatives, the mediator and the arbitrator shall hold the existence, content and results of any negotiation, mediation or arbitration in confidence unless disclosure is required by law or regulation, and in such case the parties shall take reasonable precautions to only disclose what is required by the law or governmental regulation.

 

f)Any award of the Arbitration shall be final and binding on the parties and shall be enforceable in any court having jurisdiction over the party from whom enforcement is requested. The prevailing Party is entitled to recover from the non-prevailing Party the reasonable attorneys’ fees, expenses and costs incurred by the prevailing Party in any arbitration.

 

*** Signature Page to Follow ***

 

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Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

AGREED AND UNDERSTOOD:  
   
LICENSOR  
GINER, INC.  
     
By:    
     
Name:      
     
Title:      
     
Date:      
     
LICENSEE  
WORLD MEDIA & TECHNOLOGY CORP.  
     
DATE:    
     
By: /s/ Fabio Galdi  
Fabio Galdi  
Chief Executive Officer  

 

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Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

Appendix A

Gantt Chart

 

 

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Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

Appendix B

Description of the Licensed Products and related Intellectual Property Rights

 

The TAS unit.

 

The Advanced App.

 

The existing transdermal alcohol sensor (TAS) technology, any updates or enhancements thereto and any newly developed TAS technology, and their related Intellectual Property Rights

 

Consisting specifically of:

 

1.US Nonprovisional Patent No. 5,944,661 for the original transdermal alcohol sensor technology.

 

2.US Provisional Patent No. 62/447,214 for a data analysis algorithm that correlates transdermal alcohol sensor response to the user’s subjective feelings of intoxication.

 

3.GI expects to file a nonprovisional patent for the “waterless” transdermal alcohol sensor technology by mid-2017, which would be subject to this Agreement

 

4.All future patents related to the GI’s transdermal alcohol sensor technology occurring during the Term of this Agreement.

 

5.GI’s trade secrets related to transdermal alcohol sensor technology, including, but not limited to, TAS units currently sold to collaborators and commercial partners, the WrisTAS 7 sensing component and all previous sensing component versions, the WrisTAS 7 device, a miniaturized “waterless” TAS sensing component, potentiostatic circuitry, electronic circuit layout and design for the TAS sensor, sensor hardware, sensor software, data analysis algorithms, calibration methods, calibration curves and values, and manufacturing know-thereof.

 

6.GI’s trademark for “WrisTAS”.

 

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Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

Appendix C1

Funding Payment Schedule

 

$750K upon project startup

$300K 3 months after project startup

$275K 6 months after project startup

$275K 9 months after project startup

 

Project startup will be the Effective Date of this Agreement.

 

The first element of the NRE cost will provide for the automation/scale-up of the manufacturing process to support a capacity of at least 1million units per year.

 

The second element of the NRE cost will provide for design support to WRMT in integrating the sensor into the Helo 2.0 device, development of an advanced data analysis app, longevity and human testing of the prototype TAS device, and support for the integration of data analysis algorithms and calibration implemented into the Helo 2.0 device.

 

GI and WRMT recognize that specialized packaging may be needed for integrating the delivered TAS units into WRMT’s manufacturing system, and this specialized packaging may require additional NRE funding.

 

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Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

Appendix C2

 

Per Unit Pricing*

 

0 to 250K TAS units : $9/unit
250K+ to 500K TAS units : $8/unit
500K+ to 750K TAS units : $7/unit
750K+ to 1M TAS units :   $6/unit
1M+ to 2.5M TAS units: $5/unit
2.5M+ to 5M TAS units: TBD
5.0M+ TAS units: TBD
   
*K = thousand; M= Million  

 

If subsequent sales in a given year reach a new volume-based price range, GI will rebate the difference between the new volume-based price range and the volume-based price range of the previous sales. For instance, if WRMT initially purchases 250K at $9 per TAS unit and subsequently purchases 250K more at $8 per TAS unit, GI will provide a rebate to WRMT for the difference of $1 per TAS unit for the previous 250K TAS units purchased.

 

Appendix C3

 

Minimum Volumes*

 

Year 1: 200K TAS units

Year 2: 500K TAS units

Year 3: 1M TAS Units

Year 4: 2M TAS Units

Year 5: 3M TAS Units*

 

*1 year = 1 calendar year, starting on the date specified in Section 3.4.

* K= thousand; M = million

*WRMT and GI will negotiate in good faith for the purpose of establishing a joint venture upon 3 million in TAS unit sales.

 

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Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

APPENDIX D

 

GI Technical Support and Maintenance

 

During the NRE Phase, Giner shall supply the following technical support and maintenance:

 

1.All drawings related to the miniaturized “waterless” TAS unit and associated electronics.

 

2.Technical support will be provided to WRMT’s design partners for integrating the TAS unit and electronics into the Helo device.

 

3.Technical support for data collection algorithms, including a protocol for calibrating the TAS unit.

 

4.Feedback on Giner’s testing of the Helo 2.0 alpha device with the integrated TAS unit, including any modifications the TAS unit or associated electronics.

 

5.Technical support for integrating TAS sensor output from the CPU into Helo’s hardware SDK.

 

6.Technical support and drawings for the final TAS design to be integrated in the final commercial version of the Helo 2.0 device.

 

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Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

APPENDIX E

 

Integration Statement of Work

 

OVERALL TIMELINE:

 

Three (3) months to integrate the technology into Helo 2.0

Three (3) months rigorous testing

Three (3) months to finalize Beta product and launch mass production 100K – 1M units/year.

 

PROJECT DESCRIPTION:

 

A miniaturized “waterless” TAS sensor that is able to passively and non-invasively detect alcohol diffusing through the skinIt is expected that these sizes provided in the Specifications should be adequate for Helo 2.0 and it should be noted that further miniaturization could be costly and time consuming as a technology change and further testing would be required.

 

GI will supply the TAS units for the final commercial Helo 2.0 product and successor products. WRMT will supply the TAS housings and stack-up, approved by GI during the NRE design phase, for the final commercial Helo 2.0 product and successor products.

 

SPECIFICATIONS:

 

Packaged Sensor Dimensions: 0.580” in diameter and 0.220” in height, or less.
Sensing Component Dimensions: 0.380” in diameter and 0.020” in height, or less.
Membrane Tolerance: +/-5% the dimension of the final design.
Electrode Tolerance: +/-5% the dimensions of the final design.
Electrode Orientation: <2o the angle of the final design.
Alcohol Sensor Response: >2.0microAmps for a 10mg/dL standard calibration solution.
Resistance Testing: Each TAS unit will be checked for shorts or high resistance before shipment.

 

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Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

APPENDIX F

 

Advanced App

 

Project Description:

A mobile software application with transdermal alcohol response data in engineering units and with advanced features, such as a hangover alert

 

Specifications:

1. SDK Integration.  GI will provide access to all of the alcohol raw signal that is used in the Advanced App, to WRMT’s chosen Helo App Store developer via API so it can provide raw signal to other 3rd party API developers in WRMT’s SDK library.  

2. Login/Registration Page. GI will provide registration page with username and login.

3. Syncing Device. After initial registration, GI will have the user sync their Smartphone to the Helo to obtain the alcohol data (if the syncing was not done already through the main Helo app).

4. Data Transmission. The raw output from the alcohol sensor ADC on Toshiba CPU will be transmitted via BLE to the Smartphone, and used to calculate the %BAC values.

5. Sensor Calibration. GI will provide the calibration factors for each sensor used to convert the raw signal coming from the ADC. The calibration will be dynamic in that it will change over time, and Giner will supply the software algorithm to adjust the calibration

6. Advanced App Features. GI will provide one or more advanced app features, such as (1) a “Hangover Alert” that correlates a user’s subjective feelings of intoxication to their response curve and uses that correlation to offer an drinking pace alert during future events, and (2) an algorithm giving an estimate of time until sobriety while a user is drinking.

7. Graphical Data. GI will provide a graph of the user’s alcohol response over the last 8-24 hours.

8. Historical Data. GI will provide a summary of drinking behaviour, such as number of drinks and how often the user drinks, over a specified time period (e.g. over the previous year).

9 “Big Data” Transmission. For the user’s that consent to the use of their data, the app will send their user drinking data to WRMT’s “Big Data” storage system.

10. Payment System. For any user app payments, GI will integrate will PayNovi’s payment system.

11. OS Updates. GI will provide updates to the app as iOS and Android update their OS’s.

12. Device Updates. GI will update the app as new Helo versions become available from WRMT.

 

Timeline:

GI will provide pre-launch testing of the app estimated at ~6 months from startup. After the pre-launch testing, GI will make any necessary modifications and adjustments to the app, and the app will be finalized at least 1 week before the end of the 9-month NRE time period.

 

Consideration Terms:

a)GI will receive 30% of the Net Revenue generated by sales of the Advanced App developed by GI under the terms set forth in the Helo App Store Standard App Agreement which will be placed on the following website:  http://www.heloappstore.com/.”

 

a.Net Revenue means the total amount charged to, and received from, customers for an Advanced App sale, less all platform application download fees (using iTunes charges as the benchmark), taxes, customer charge-backs or refunds, and transactions processing fees (processing fees are capped at seven percent (7%) of the gross amount).

 

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This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

b)In lieu of revenue-sharing payments generated by third-party API developers from the use of GI’s transdermal alcohol sensor, WRMT will provide an additional sensor enablement fee of $0.25 per sensor for the use of GI’s transdermal alcohol sensor in third-party apps.

 

c)GI will apply the revenue received from purchases of the Advanced App and the sensor enablement fee against the NRE cost up to a total of 50% of the total NRE cost.

 

d)If GI enters one of the excluded markets that uses the transdermal alcohol sensor that is the same or materially similar to the design developed under this NRE and the excluded market generates sales up to 100K TAS units per year, GI will reimburse WRMT for additional 25% of the total NRE cost to be also paid back from the purchases of the Advanced App and the sensor enablement fee.

 

Schedule 5.4

 

Complete List of Contracts with GI

 

GI has an existing relationship with BI, Inc. for the purchase of WrisTAS 7 sensing components for use in the law enforcement market. GI has no long-term contract with BI, as BI generally places new orders for product about every two (2) months.

 

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Proprietary and Confidential

This Agreement and information contained therein is not for use or disclosure outside of WRMT, its Affiliates, and third party representatives, and GI except under written agreement by the contracting parties

 

 

 

Exhibit 10.4

 

Preferred Supplier Agreement

 

This Preferred Supplier Agreement (this “Agreement”) is entered into effective as of the  1st day of October, 2017 (the “Effective Date”), by and between Quality Technology Industrial Co. Ltd., a Chinese limited liability company with a principal business office in Room 201~203,2/F,Block B3, Ming You Industrial Products Procurement Center,#168 Bao Yuan Road, Baoan District, Shenzhen, China (“QTI”), and World Media & Technology Corp., a Nevada corporation with a principal business office in 600 Brickell Ave., Suite 1775, Miami, Florida 33131 United States (“WRMT”), who are sometimes also referred to, each individually, as a “party,” and collectively, as the “parties” to this Agreement.

 

Recitals

 

QTI is in the business of aggregating suppliers, assembling, manufacturing and selling high tech products used in various markets, including without limitation certain wearable devices used in the consumer self-monitoring market.

 

WRMT is in the business of, among other things, sourcing sensors, developing intellectual property and know-how relating to sensor technology (Life Sensing Technology) which it integrates into its wearable devices to capture human data.

 

QTI and WRMT have agreed that QTI will be WRMT’s preferred supplier for the wearable device(s) listed on Schedule A, attached to and made a part of this Agreement (the “Products”), on the terms and conditions set forth below.

 

Agreement

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, the parties agree as follows:

 

Definitions:

 

“Documentation” means any written materials supplied by WRMT, either in print or digital format, to be used in conjunction with the Products for purposes including, but not limited to, installation, integration, operation, training, demonstration, and maintenance of the Products.

 

“Intellectual Property Rights” means all patents, copyrights, design rights, trade marks, service marks, trade secrets, know-how, database rights and other rights in the nature of intellectual property rights (whether registered or unregistered) and all applications for the same, anywhere in the world; (ii) rights relating to innovations, know-how, trade secrets and confidential, technical and non-technical information; (iii) moral rights, mask work rights, author's rights, and rights of publicity; and (iv) other industrial, proprietary and intellectual property related rights (of every kind and nature throughout the world however designated and whether arising by operation of law, contract, license, or otherwise) and all registrations, initial applications, renewals, extensions, continuations, divisions, or reissues now or hereafter in force (including any rights in the foregoing) arising anywhere in the world, that exist as of the Effective Date or hereafter come into existence, regardless of whether or not such rights have been registered in jurisdictions in accordance with the relevant legislation.

 

 

 

 

“Timely Basis” means within sixty five (65) days from date of receipt of an order deposit, unless otherwise mutually agreed upon in writing by both Parties at time of order.

 

1. General Purpose and Scope

 

1.1 Preferred Supplier. Except as otherwise set forth in this Agreement, during the Term of this Agreement, QTI will be WRMT’s preferred supplier for the Products listed on Schedule A, for use or sale by WRMT. The parties may, by mutual written agreement, amend or modify Schedule A to add or delete Products from time-to-time.

 

1.2 Material; Product Specifications.

 

a)           QTI shall manufacture the Products using

 

i) WRMT’s Life Sensing Technology

 

ii) the WRMT Product Specifications

 

iii) the WRMT

 

- quality finish requirements

 

- product performance and packaging expectations, and

 

- failure notifications and rectification process

 

all as further described in Schedule C (together, the “Material”). The parties may, by mutual written agreement, amend or modify Schedule C from time-to-time.

 

b)           License Grant. WRMT hereby grants to QTI a non-exclusive, restricted, revocable license to use the Material for internal purposes only to integrate the Material into WRMT’s Products and manufacture the Products according to the Material from the Effective Date and during the Term.

 

c)           Ownership. As between the parties hereto, and subject to the licenses granted to QTI herein, WRMT owns and shall retain all right, title and interest in and to the Material, and all associated Documentation and all related modifications and derivative works, and all Intellectual Property Rights related thereto.

 

d)           QTI agrees not to copy, modify, translate, decompile, decrypt, extract, disassemble, or otherwise reverse engineer, or otherwise determine or attempt to determine source code or protocols from, the executable code of the Material, or to create any derivative works based upon the Material or Documentation, and agrees not to permit or authorize anyone else to do so. QTI also agrees that if any such works are created, they shall be deemed derivative works and as such are the sole and exclusive property of WRMT.

 

1.3 World and Helo Brand.

 

a)           All Products manufactured by QTI for resale under this Agreement will be branded under the World Brand, using the World and Helo product logo and the most current branding guidelines listed in Schedule B. Schedule B may be unilaterally amended or modified by WRMT from time-to-time.

 

 

 

 

b)           WRMT grants QTI the right to use, reproduce, publish and display the World and Helo names, trademarks, service marks, designs, logos or symbols (“World Brand”), in connection with the manufacture of the Products in accordance with the terms of this Agreement. This Agreement gives QTI a non-exclusive, royalty-free, limited license to reproduce the World Brand as reasonably necessary for the sole purpose of allowing QTI to manufacture the Products pursuant to the terms of this Agreement. QTI acknowledges and agrees that WRMT is the exclusive owner or licensor of the World Brand and that QTI’s use as provided in this Agreement will not create in QTI any right, title or interest therein or to the World Brand.

 

2. Obligations of QTI

 

2.1 Supply of Products. During the Term of this Agreement, QTI will use its best efforts to supply WRMT with Products on a Timely Basis. Upon receipt of a purchase order for Products from WRMT, QTI will arrange for the shipping of the Products. Title to the Products and the risk of loss will pass to WRMT when the Products are shipped out.

 

2.2 Documentation. QTI will prepare and deliver to WRMT the following documentation for the Products that QTI sells to WRMT:

 

(i) Bill of Materials and Product costing worksheets

 

(ii) supplier material data sheets and supplier batch details corresponding to Product production; and

 

(iii) QTI will also prepare and deliver to WRMT monthly shipment reports detailing all Products shipped in the prior month, together with supporting documentation no later than the 15th day of the following month.

 

2.3 Limited Warranties. QTI warrants only (i) that the Products sold to WRMT will be free from defects, conform to the quality specifications listed on Schedule C and are fit for their intended purpose and perform as specified for the period of time as is described in the Product’s specifications, as listed on Schedule C; and (ii) that the Products will not contain any components that QTI is not authorized to use or sell.

 

2.4 Conformity of Products. WRMT will have the right to reject any Products that do not conform to the quality specifications and requirements listed in Schedule C, by notifying QTI in writing within thirty (30) days after receipt the Products. WRMT can request replacement of rejected Product within the QTI established lead-time or a full refund from QTI, at WRMT’s option. If WRMT does not notify QTI that is has rejected a Product within thirty (30) days after receipt of the Product, then the Product will be presumed and deemed to be acceptable.

 

3. Obligations of WRMT

 

3.1 QTI as Preferred Supplier. As WRMT’s preferred supplier, it is WRMT’s intent to utilize QTI as its primary supplier for all Products, however, WRMT reserves the right to purchase similar or identical products from other suppliers based on, among other things, pricing, product availability, logistics, and any emerging WRMT requirements.

 

 

 

 

3.2 Facilitation of Orders. WRMT will use its good faith, reasonable efforts to provide QTI with the volumes, quantities, and specifications for Products, in order to facilitate QTI’s ability to provide the Products at competitive prices and in a timely manner.

 

4. Pricing, Inspection, Payments, and Related Terms

 

4.1 Pricing. WRMT will pay QTI on a per unit price by Product model where the price shall be mutually agreed upon in writing by both parties, confirmed by a QTI Product quotation at time of order followed by an invoice prior to payment.

 

4.2 Inspection. During the Term of this Agreement with seven (7) days prior notice, WRMT shall have the right to inspect QTI’s production facilities and in-stock Products once per calendar quarter to determine and verify that QTI is in compliance with the terms and conditions of this Agreement and is manufacturing the Product to the Product specifications and other requirements listed in Schedule C is being met. QTI will promptly grant such access and cooperate with WRMT in the inspection.

 

4.3 Billing and Payments. QTI will invoice WRMT 10% of the Product order value with each order and the remaining 90% prior to shipment, unless mutually agreed otherwise in writing.

 

5. Term and Early Termination

 

5.1 Term. Subject to earlier termination as set forth below, the initial term of this Agreement (the “Initial Term”) begins on the Effective Date, set forth above, and will end on the last day of the twelfth (12th) calendar month following the Effective Date (the “Initial Term End Date”).

 

5.2 Extensions of Term. Subject to earlier termination as set forth below, following the Initial Term End Date set forth in Section 5.1, the term of this Agreement will be automatically extended for successive terms, consisting of twelve (12) months each (the “Extension Terms”), unless either QTI or WRMT gives the other party written notice of an election not to extend the term of this Agreement beyond the Initial Term End Date, or beyond an Extension Term, at least sixty (60) days before the end of the then-current term.

 

5.3 Definition of Term. In this Agreement, the Initial Term and any Extension Terms (if the term of this Agreement is extended to include any Extension Terms as set forth above), will be sometimes collectively referred to as the “Term” of this Agreement.

 

5.4 Early Termination by QTI. QTI may terminate this Agreement upon written notice to WRMT if WRMT fails to cure any material default by WRMT under this Agreement within 30 days after QTI gives WRMT written notice of the default.

 

5.5 Early Termination by WRMT. WRMT may terminate this Agreement upon written notice to QTI if QTI fails to cure any material default by QTI under this Agreement within 30 days after WRMT gives QTI written notice of the default.

 

 

 

 

A material default by QTI includes, but is not limited to, the following:

 

A.QTI supplying Product(s) to anyone other than WRMT or a third party authorized in writing by WRMT;

 

B.QTI’s failure to meet the Product specifications and other requirements listed in Schedule C;

 

C.QTI’s failure to keep confidential WRMT Confidential Information in accordance with Section 6 below; or

 

D.QTI’s failure to supply the Products on a Timely Basis.

 

5.6 Immediate Termination. Either party may terminate this Agreement immediately upon written notice to the other party if (i) a petition for relief in bankruptcy is filed by or against the other party with the United States Bankruptcy Court without a dismissal of the petition within 30 days after the filing; (ii) a petition for relief is filed by or against the other party under any reorganization, arrangement, composition, readjustment, liquidation, or dissolution statute, law, or regulation providing for such relief, or any similar such relief, without a dismissal of the petition within 30 days after the filing; (iii) the other party makes an assignment for the benefit of its creditors; or (iv) the other party is adjudicated as bankrupt or insolvent.

 

5.7 Continuing Obligations. Upon the termination of this Agreement, the respective obligations of the parties under this Agreement will be of no further force and effect except that obligations or provisions of this Agreement which by their nature are intended to be surviving and continuing with respect to a party will survive the expiration or termination of this Agreement and will remain binding on the party until expressly released by the other party in writing.

 

6. Confidentiality

 

6.1 Protected Information. It is acknowledged that in connection with this Agreement, each party (the “Providing Party”) will be providing the other (the “Receiving Party”) with, or the Receiving Party will be given access to, written and other materials and proprietary information that is confidential to Providing Party. For purposes hereof, such materials and information will be referred to as “Protected Information,” and will mean and include all written or other confidential or proprietary information of Providing Party that Receiving Party may be provided with, apprised of, observe, or gain knowledge about, including but not limited to, all originals, drafts, copies, or reproductions (irrespective of the form) of any and all plans, technical information, processes, know-how, trade secrets, patent applications, data (technical and non-technical), formulas, patterns, compilations (including compilations of customer information), programs (including models), devices, methods (including design methods), techniques, drawings (including equipment drawings), financial information (including sales forecasts), pricing, lists of actual or potential customers or suppliers (including identifying information about those customers), business contacts and lists, marketing channels, operational information, planning or strategy information, research and development information, information about existing and future products, information about personnel matters, and other proprietary information, intellectual property, patents, trade secrets, or “know how” related in any manner to the Products or the business operations of Providing Party, whether or not marked or stamped “Confidential,” “Proprietary,” “Do Not Disclose,” or with a similar term or terms. Without limitation to the foregoing, Protected Information expressly means and includes, but is not limited to, WRMT’s Material, its custom sensors and its sensor technology, and all related Intellectual Property Rights and know-how.

 

 

 

 

6.2 Information Not Included. Notwithstanding anything to the contrary contained in this Agreement, the term “Protected Information” does not include any information that (i) at the time of disclosure to Receiving Party or thereafter, is or becomes generally available to and known by the public, other than as a result of an unauthorized disclosure by Receiving Party or its members, owners, employees, directors, officers, representatives, or agents, or (ii) was available to Receiving Party from a source other than Providing Party, on a non-confidential basis, provided that such source is not, and was not, bound by a confidentiality agreement or obligation with Providing Party, or (iii) has been independently developed by Receiving Party without violation of any of Receiving Party’s obligations to Providing Party, provided that in any of the foregoing cases, before using in any manner inconsistent with the terms of this Agreement any information regarding Providing Party that Receiving Party believes is not included in the Protected Information, Receiving Party must first advise Providing Party of the nature of the information and the reasons why Receiving Party believes the information is not subject to the limitations on use set forth in this Agreement.

 

6.3 Obligations of Confidentiality. Receiving Party will maintain the Protected Information in utmost confidence, and will not, without the prior written consent of Providing Party, disclose, furnish, or divulge the Protected Information, in whole or in part, to any person, firm, corporation, or entity of any nature, other than Providing Party or its representatives. Further, at no time that this Agreement remains in effect or at any time thereafter will Receiving Party, individually or jointly with others, for the benefit of Receiving Party or any third party, publish, disclose, use, or authorize anyone else to publish, disclose, or use, any of Providing Party’s Protected Information, without in each instance first obtaining the prior written consent of Providing Party. Upon termination of this Agreement for any reason, or at any other time upon Providing Party’s request, Receiving Party will forthwith (i) deliver to Providing Party (without retaining copies thereof) any and all writings and other property in Receiving Party’s possession or control relating to or containing Protected Information, and (ii) destroy all documents, memoranda, notes, and other writings whatsoever prepared by Receiving Party based on any of the Protected Information, and in such case, Receiving Party’s obligations of confidentiality contained herein will remain in effect for the maximum period allowed by law. QTI expressly acknowledges and agrees that as a material inducement to WRMT to enter into this Agreement, QTI will not use WRMT’s Protected Information, including but not limited to, the Material and its intellectual property, Confidential Information, and current or future Product design specifications or performance, to manufacture a similar product for a third party.

 

6.4 Injunctive Relief. Receiving Party acknowledges and agrees that any unauthorized disclosure or use will constitute a material breach of duty owed to Providing Party, and that in the event of a breach of this Agreement by Receiving Party, Providing Party’s right to seek recourse against Receiving Party will include, without limitation thereto, the right to obtain injunctive relief.

 

7. Indemnification

 

7.1 QTI will indemnify, defend, and hold WRMT and its owners, officers, directors, employees, and agents, and its authorized distributors and end user customers, and their respective successors and assigns (the “Indemnities”) harmless from and against all damages actually suffered, incurred, or realized by the Indemnities caused by, arising out of, or resulting from: (i) any misrepresentation, breach of warranty, or breach or default of any covenant or agreement made or undertaken by QTI in this Agreement; (ii) the Products, and (iii) injuries or damages to any person or entity or the property of any person or entity resulting from the intentional or grossly negligent acts or omissions of QTI pursuant to this Agreement, whether carried out by QTI’s employees, agents, or subcontractors. These obligations will survive the termination of this Agreement.

 

 

 

 

7.2 Definition of Damages. For purposes of this Agreement, “damages” means any and all liabilities, losses, damages, demands, assessments, claims, costs and expenses, whether known or unknown, now existing or hereafter arising, contingent or liquidated, including interest, awards, judgments, penalties, settlements, fines, costs of remediation, diminutions in value, costs and expenses incurred in connection with investigating and defending any claims or causes of action, including, without limitation, attorneys’ fees and expenses and all fees and expenses of consultants and other professionals. Notwithstanding the foregoing, however, the term “damages” will not include, and neither party will be obligated to pay or indemnify the other party for, damages that are unforeseeable, speculative, or consequential.

 

8. Arbitration of Disputes

 

Except as otherwise provided in this Agreement, if any dispute arises under this Agreement, it will be settled by binding arbitration in accordance with the provisions of this Section 8.

 

Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the Rules of Arbitration of the International Chamber of Commerce, which Rules are deemed to be incorporated by reference into this clause. The number of arbitrators shall be one. The seat, or legal place, of arbitration shall be New York, United States. The language to be used in the arbitration shall be English. The governing law of the contract shall be the substantive law of New York, United States.

 

The parties acknowledge that a breach of or a default under any of the terms and conditions of this Agreement may, in some cases, result in irreparable harm, and in such case, any remedies that the parties may have at law may be insufficient. Accordingly, the parties agree that in the case of a breach or default that could cause irreparable harm, nothing contained in this Section 8 will deny the aggrieved party of the right to seek injunctive relief in any court having jurisdiction.

 

9. Notices

 

All notices, demands, or other communications to be given or delivered under or by reason of the provisions of this Agreement will be in writing and will be deemed to have been given when delivered personally to the recipient, or when sent to the recipient by e-mail (receipt confirmed) or one business day after the date when sent to the recipient by reputable, express courier service (charges prepaid), or two business days after the date when mailed to the recipient by certified or registered mail return receipt requested and postage prepaid, and delivered or sent to the addresses or e-mail addresses set forth below:

 

 

 

 

  If to QTI: Quality Technology Industrial Co. Ltd.

Room 201~203,2/F,Block B3,Ming You Industrial Products Procurement Center,#168 Bao Yuan Road, Baoan District,Shenzhen,China

Attention: Ms Eva Zhou

E-Mail: [email protected]

 

  If to WRMT: World Media & Technology Corp.

600 Brickell Ave., Suite 1775

Miami, FL 33131

Attention: Seán McVeigh, CEO

E-Mail: [email protected]

 

A party may change its address for notices by giving the other party written notice of the change in the manner for giving notices set forth above.

 

10. Assignment

 

Neither this Agreement nor any right, interest, or obligation hereunder may be assigned or assignable by either party in whole or in part without the prior written consent of the other party, except (i) to a party’s parent, subsidiary, or affiliated company, or (ii) to an entity into which the party is merged or that otherwise acquires all or substantially all of the party’s assets. This provision will not be construed to prohibit QTI from assigning or transferring its rights to receive payments from WRMT under this Agreement to its bank or other financial institution. QTI will give WRMT prompt notice of any such assignment or transfer.

 

11. Force Majeure

 

Neither party will be responsible for failure or delay due to causes beyond its control in performing under this Agreement, except for the obligation of a party to make payments hereunder. These causes will include, but not be restricted to, fire, storm, flood, earthquake, explosion, accident, acts of any public enemy, war, rebellion, insurrection, sabotage, terrorism, epidemic, quarantine restrictions, transportation embargoes, or failures or delay in transportation, fuel or energy shortages, power interruptions or failures, acts of God, acts, rules, regulations, orders or directives of any government or political subdivision, agency or instrumentally thereof, or the order of any court, regulatory, or arbitral body of competent jurisdiction. The non-performing party will give prompt written notice to the other party of the reason for its failure or inability to perform and the extent and expected duration of its inability to perform. Upon cessation of such situation, the non-performing party will resume performance hereunder.

 

12. General Provisions

 

12.1 Expenses of Enforcement. In the event of a dispute or claim under or arising out of this Agreement, the prevailing party will be entitled to collect from the unsuccessful party all costs and expenses, including reasonable attorney’s fees, incurred by the prevailing party.

 

12.2 Default; Limitations on Damages. If a party breaches this Agreement, the other party may exercise any and all remedies available to the party under this Agreement and applicable law, including but not limited to the right to pursue a claim for damages and the right to compel specific performance. Notwithstanding the foregoing, however, neither party will be obligated to pay the other party damages that are unforeseeable, speculative, or consequential.

 

 

 

 

12.3 Severability. If any part of this Agreement is held to be indefinite, invalid, or otherwise unenforceable, the rest of the Agreement will continue in full force.

 

12.4 Binding Effect. This Agreement is binding on the parties and their heirs, successors, and assigns.

 

12.5 Best Efforts and Further Assurances. Subject to the terms and conditions of this Agreement, each of the parties agrees to use its best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper, or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement.

 

12.6 Survival. All representations, warranties, agreements, indemnities, and obligations made or undertaken by a party to this Agreement are material, have been relied upon the other parties, and will survive closing for the maximum period allowed by law.

 

12.7 Counterparts. This Agreement may be executed in multiple counterparts, each of which is considered an original, and all of which, together, will constitute one and the same agreement.

 

12.8 Exhibits. All exhibits and schedules attached to this Agreement are fully incorporated into this Agreement.

 

12.9 Entire Agreement; Amendments. This Agreement and the exhibits and schedules attached hereto constitute the final expression of agreement between the parties with respect to the subject matter hereof, and is a complete and exclusive statement of the terms and conditions of their relationship, and there are no other agreements or understandings, written or oral, between the parties with respect thereto. This Agreement supersedes all previous negotiations, discussions, and commitments with respect to the subject matter hereof. The parties agree that the terms of this Agreement will exclusively control the terms and conditions under which QTI will supply Products to WRMT and further agree that no purchase order, order form, invoice, or other document issued prior or subsequent to the date of this Agreement will be deemed to supplement, modify, or amend the terms and conditions hereof unless the document is signed by both parties and expressly and unambiguously indicates that it is an amendment of this Agreement. This Agreement may be amended only by a written instrument duly executed by the parties, and any condition to a party’s obligation hereunder may only be waived in writing by the other party.

 

12.10 Waiver. A party’s waiver of enforcement of any of this Agreement’s terms or conditions will be effective only if in writing. A party’s specific waiver will not constitute a waiver by that party of any earlier, concurrent, or later breach or default.

 

12.11 No Third Party Beneficiaries. This Agreement will not confer any rights or remedies on any person other than QTI and WRMT and their respective successors and permitted assigns.

 

 

 

 

12.12 No Agency or Partnership. Nothing contained in this Agreement will be deemed or construed to create a relationship of principal and agent or of partnership or of joint venture or of any association whatsoever between or among the parties.

 

12.13 Time is of the Essence. Time is of the essence of each and every provision of this Agreement.

 

IN WITNESS WHEREOF, the parties have executed this Agreement on this 1st day of October, 2017.

 

WORLD MEDIA & TECHNOLOGY CORP.   QUALITY TECHNOLOGY INDUSTRIAL CO. LTD.
     
By: /s/ Seán McVeigh   By: /s/ Eva Zhou
  Seán McVeigh     Eva Zhou
     
Its: Chief Executive Officer   Its: Chief Executive Officer

 

 

 

 

SCHEDULE A

 

Helo devices:

 

·Helo Classic
·Helo LX, LX+ and LX Pro
·Helo 2.0

 

SCHEDULE B

 

World and Helo Branding Guidelines

 

To Be Provided by WRMT under separate cover.

 

SCHEDULE C

 

To Be Provided by WRMT under separate cover.

 

1.Life Sensing Technology

 

2.Product Specifications

- Design specification

- Product Performance

- Packaging Expectations

 

 

 

Exhibit 10.5

 

WORLD TECHNOLOGY CORP.

2018 STOCK INCENTIVE PLAN

EFFECTIVE AS OF JANUARY 19, 2018

 

SECTION 1. INTRODUCTION.

 

The Company’s Board of Directors approved World Technology Corp.’s 2018 Stock Incentive Plan effective on January 19, 2018. The Company’s shareholders approved the Plan on January 19, 2018.

 

The purpose of the Plan is to promote the long-term success of the Company and the creation of shareholder value by offering Key Employees an opportunity to share in such long-term success by acquiring a proprietary interest in the Company.

 

The Plan seeks to achieve this purpose by providing for discretionary long-term incentive Awards in the form of Options (which may constitute Incentive Stock Options or Nonstatutory Stock Options), Stock Appreciation Rights, Stock Grants, and Stock Units.

 

The Plan shall be governed by, and construed in accordance with, the laws of the State of Nevada(except its choice-of-law provisions).

 

Capitalized terms shall have the meaning provided in Section 2 unless otherwise provided in this Plan or any related Stock Option Agreement, SAR Agreement, Stock Grant Agreement or Stock Unit Agreement.

 

SECTION 2. DEFINITIONS.

 

(a) “Affiliate” means any entity other than a Subsidiary, if the Company and/or one or more Subsidiaries own not less than 50% of such entity.

 

(b) “Award” means any award of an Option, SAR, Stock Grant or Stock Unit under the Plan.

 

(c) “Board” means the Board of Directors of the Company, as constituted from time to time.

 

(d) “Cashless Exercise” means, to the extent that a Stock Option Agreement so provides and as permitted by applicable law, a program approved by the Committee in which payment may be made all or in part by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker to sell Shares and to deliver all or part of the sale proceeds to the Company in payment of the aggregate Exercise Price and, if applicable, the amount necessary to satisfy the Company’s withholding obligations at the minimum statutory withholding rates, including, but not limited to, U.S. federal and state income taxes, payroll taxes, and foreign taxes, if applicable.

 

(e) “Cause” means, except as may otherwise be provided in a Participant’s employment agreement or Award agreement, a conviction of a Participant for a felony crime or the failure of a Participant to contest prosecution for a felony crime, or a Participant’s misconduct, fraud or dishonesty (as such terms are defined by the Committee in its sole discretion), or any unauthorized use or disclosure of confidential information or trade secrets, in each case as determined by the Committee, and the Committee’s determination shall be conclusive and binding.

 

   

 

 

(f) “Change In Control” except as may otherwise be provided in a Participant’s employment agreement or Award agreement, means the occurrence of any of the following:

 

(i) A change in the composition of the Board over a period of thirty-six consecutive months or less such that a majority of the Board members ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who either (A) have been Board members continuously since the beginning of such period or (B) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in clause (A) who were still in office at the time the Board approved such election or nomination; or

 

(ii) The acquisition, directly or indirectly, by any person or related group of persons (other than the Company or a person that directly or indirectly controls, is controlled by, or is under common control with, the Company) of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company representing more than 35% of the total combined voting power of the Company’s then outstanding securities pursuant to a tender or exchange offer made directly to the Company’s shareholders which the Board does not recommend such shareholders accept.

 

(g) “Code” means the Internal Revenue Code of 1986, as amended, and the regulations and interpretations promulgated thereunder.

 

(h) “Committee” means a committee described in Section 3.

 

(i) “Common Stock” means the Company’s common stock.

 

(j) “Company” means World Technology Corp., a Nevada corporation.

 

(k) “Consultant” means an individual who performs bona fide services to the Company, a Parent, a Subsidiary or an Affiliate, other than as an Employee or Director or Non-Employee Director.

 

(l) “Corporate Transaction” except as may otherwise be provided in a Participant’s employment agreement or Award agreement, means the occurrence of any of the following shareholder approved transactions:

 

(i) The consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if more than 50% of the combined voting power of the continuing or surviving entity’s securities outstanding immediately after such merger, consolidation or other reorganization is owned by persons who were not shareholders of the Company immediately prior to such merger, consolidation or other reorganization; or

 

(ii) The sale, transfer or other disposition of all or substantially all of the Company’s assets.

 

A transaction shall not constitute a Corporate Transaction if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transactions.

 

(m) “Covered Employees” means those persons who are subject to the limitations of Code Section 162(m).

 

   

 

 

(n) “Director” means a member of the Board who is also an Employee.

 

(o) “Disability” means that the Key Employee is classified as disabled under a long-term disability policy of the Company or, if no such policy applies, the Key Employee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.

 

(p) “Employee” means an individual who is a common-law employee of the Company, a Parent, a Subsidiary or an Affiliate.

 

(q) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(r) “Exercise Price” means, in the case of an Option, the amount for which a Share may be purchased upon exercise of such Option, as specified in the applicable Stock Option Agreement. “Exercise Price,” in the case of a SAR, means an amount, as specified in the applicable SAR Agreement, which is subtracted from the Fair Market Value in determining the amount payable upon exercise of such SAR.

 

(s) “Fair Market Value” means the market price of a Share as determined in good faith by the Committee. The Fair Market Value shall be determined by the following:

 

(i) If the Shares were traded over-the-counter or listed with NASDAQ on the date in question, then the Fair Market Value shall be equal to the last transaction price quoted by the NASDAQ system for the date in question or (ii) if the Common Stock is listed on the New York Stock Exchange, the American Stock Exchange or the OTC Markets on the date in question, the Fair Market Value is the closing selling price for the Common Stock as such price is officially quoted in the composite tape of transactions on the exchange determined by the Committee to be the primary market for the Common Stock for the date in question; provided, however, that if there is no such reported price for the Common Stock for the date in question under (i) or (ii), then such price on the last preceding date for which such price exists shall be determinative of Fair Market Value.

 

If neither (i) or (ii) are applicable, then the Fair Market Value shall be determined by the Committee in good faith on such basis as it deems appropriate.

 

Whenever possible, the determination of Fair Market Value by the Committee shall be based on the prices reported in the Western Edition of The Wall Street Journal. Such determination shall be conclusive and binding on all persons.

 

(t) “Fiscal Year” means the Company’s fiscal year.

 

(u) “Grant” means any grant of an Award under the Plan.

 

(v) “Incentive Stock Option” or “ISO” means an incentive stock option described in Code Section 422.

 

(w) “Key Employee” means an Employee, Director, Non-Employee Director or Consultant who has been selected by the Committee to receive an Award under the Plan.

 

   

 

 

(x) “Non-Employee Director” means a member of the Board who is not an Employee.

 

(y) “Nonstatutory Stock Option” or “NSO” means a stock option that is not an ISO.

 

(z) “Option” means an ISO or NSO granted under the Plan entitling the Optionee to purchase Shares.

 

(aa) “Optionee” means an individual, estate or other entity that holds an Option.

 

(bb) “Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date.

 

(cc) “Participant” means an individual or estate or other entity that holds an Award.

 

(dd) “Performance Goal” means an objective formula or standard determined by the Committee with respect to each Performance Period utilizing one or more of the following factors and any objectively verifiable adjustment(s) thereto permitted and preestablished by the Committee in accordance with Code Section 162(m): (i) operating income, operating cash flow and operating expense; (ii) earnings before interest, taxes, depreciation and amortization; (iii) earnings; (iv) cash flow; (v) market share; (vi) sales; (vii) revenue; (viii) profits before interest and taxes; (ix) expenses; (x) cost of goods sold; (xi) profit/loss or profit margin; (xii) working capital; (xiii) return on capital, equity or assets; (xiv) earnings per share; (xv) economic value added; (xvi) stock price; (xvii) price/earnings ratio; (xviii) debt or debt-to-equity; (xix) accounts receivable; (xx) writeoffs; (xxi) cash; (xxii) assets; (xxiii) liquidity; (xxiv) operations; (xxv) intellectual property (e.g., patents); (xxvi) product development; (xxvii) regulatory activity; (xxviii) manufacturing, production or inventory; (xxix) mergers and acquisitions or divestitures; (xxx) financings; (xxxi) customer satisfaction; and/or (xxxii) total shareholder return, each with respect to the Company and/or one or more of its affiliates or operating units. Awards issued to persons who are not Covered Employees may take into account other factors (including subjective factors).

 

(ee) “Performance Period” means any period not exceeding 36 months as determined by the Committee, in its sole discretion. The Committee may establish different Performance Periods for different Participants, and the Committee may establish concurrent or overlapping Performance Periods.

 

(ff) “Plan” means this World Technology Corp. 2018 Stock Incentive Plan, and as it may be amended from time to time.

 

(gg) Intentionally Omitted

 

(hh) “Re-Price” means that the Company has (i) lowered or reduced the Exercise Price of outstanding Options and/or outstanding SARs for any Participant(s), whether through amendment, cancellation, or replacement grants, or any other means, or (ii) repurchased for cash outstanding Options and/or outstanding SARs when the Exercise Price is greater than the Fair Market Value of the underlying Shares.

 

(ii) “SAR Agreement” means the agreement described in Section 8 evidencing each Award of a Stock Appreciation Right.

 

   

 

 

(jj) “SEC” means the Securities and Exchange Commission.

 

(kk) “Section 16 Persons” means those officers, directors or other persons who are subject to Section 16 of the Exchange Act.

 

(ll) “Securities Act” means the Securities Act of 1933, as amended.

 

(mm) “Service” means service as an Employee, Director, Non-Employee Director or Consultant. A Participant’s Service does not terminate when continued service crediting is required by applicable law. However, for purposes of determining whether an Option is entitled to continuing ISO status, a common-law employee’s Service will be treated as terminating ninety (90) days after such Employee went on leave, unless such Employee’s right to return to active work is guaranteed by law or by a contract. Service terminates in any event when the approved leave ends, unless such Employee immediately returns to active work. The Committee determines which leaves count toward Service, and when Service terminates for all purposes under the Plan. Further, unless otherwise determined by the Committee, a Participant’s Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant provides service to the Company, a Parent, Subsidiary or Affiliate, or a transfer between entities (the Company or any Parent, Subsidiary, or Affiliate); provided that there is no interruption or other termination of Service.

 

(nn) “Share” means one share of Common Stock.

 

(oo) “Stock Appreciation Right” or “SAR” means a stock appreciation right awarded under the Plan.

 

(pp) “Stock Grant” means Shares awarded under the Plan.

 

(qq) “Stock Grant Agreement” means the agreement described in Section 9 evidencing each Award of a Stock Grant.

 

(rr) “Stock Option Agreement” means the agreement described in Section 6 evidencing each Award of an Option.

 

(ss) “Stock Unit” means a bookkeeping entry representing the equivalent of one Share, as awarded under the Plan.

 

(tt) “Stock Unit Agreement” means the agreement described in Section 10 evidencing each Award of a Stock Unit.

 

(uu) “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.

 

(vv) “10-Percent Shareholder” means an individual who owns more than 10% of the total combined voting power of all classes of outstanding stock of the Company, its Parent or any of its Subsidiaries. In determining stock ownership, the attribution rules of Section 424(d) of the Code shall be applied.

 

   

 

 

SECTION 3. ADMINISTRATION.

 

(a) Committee Composition. The Board or a Committee appointed by the Board shall administer the Plan. Unless the Board provides otherwise, the Company’s Compensation Committee shall be the Committee. Members of the Committee shall serve for such period of time as the Board may determine and shall be subject to removal by the Board at any time. The Board may also at any time terminate the functions of the Committee and reassume all powers and authority previously delegated to the Committee.

 

The Committee shall have membership composition which enables (i) Awards to Section 16 Persons to qualify as exempt from liability under Section 16(b) of the Exchange Act and (ii) Awards to Covered Employees to qualify as performance-based compensation as provided under Code Section 162(m).

 

The Board may also appoint one or more separate committees of the Board, each composed of two or more directors of the Company who need not qualify under Rule 16b-3 or Code Section 162(m), that may administer the Plan with respect to Key Employees who are not Section 16 Persons or Covered Employees, respectively, may grant Awards under the Plan to such Key Employees and may determine all terms of such Awards.

 

Notwithstanding the foregoing, the Board shall constitute the Committee and shall administer the Plan with respect to Non-Employee Directors, shall grant Awards under the Plan to such Non-Employee Directors, and shall determine all terms of such Awards.

 

(b) Authority of the Committee. Subject to the provisions of the Plan, the Committee shall have full authority and sole discretion to take any actions it deems necessary or advisable for the administration of the Plan. Such actions shall include:

 

(i) selecting Key Employees who are to receive Awards under the Plan;

 

(ii) determining the type, number, vesting requirements and other features and conditions of such Awards and amending such Awards;

 

(iii) correcting any defect, supplying any omission, or reconciling any inconsistency in the Plan or any Award agreement;

 

(iv) accelerating the vesting, or extending the post-termination exercise term, of Awards at any time and under such terms and conditions as it deems appropriate;

 

(v) interpreting the Plan;

 

(vi) making all other decisions relating to the operation of the Plan; and

 

(vii) adopting such plans or subplans as may be deemed necessary or appropriate to provide for the participation by Key Employees of the Company and its Subsidiaries and Affiliates who reside outside the U.S., which plans and/or subplans shall be attached hereto as Appendices.

 

The Committee may adopt such rules or guidelines as it deems appropriate to implement the Plan. The Committee’s determinations under the Plan shall be final and binding on all persons.

 

   

 

 

(c) Indemnification. To the maximum extent permitted by applicable law, each member of the Committee, or of the Board, shall be indemnified and held harmless by the Company against and from (i) any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan or any Stock Option Agreement, SAR Agreement, Stock Grant Agreement or Stock Unit Agreement, and (ii) from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such claim, action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Articles of Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or under any power that the Company may have to indemnify them or hold them harmless.

 

SECTION 4. GENERAL.

 

(a) General Eligibility. Only Employees, Directors, Non-Employee Directors and Consultants shall be eligible for designation as Key Employees by the Committee, in its sole discretion.

 

(b) Incentive Stock Options. Only Key Employees who are common-law employees of the Company, a Parent or a Subsidiary shall be eligible for the grant of ISOs. In addition, a Key Employee who is a 10-Percent Shareholder shall not be eligible for the grant of an ISO unless the requirements set forth in Section 422(c)(5) of the Code are satisfied.

 

(c) Restrictions on Shares. Any Shares issued pursuant to an Award shall be subject to such rights of repurchase, rights of first refusal and other transfer restrictions as the Committee may determine, in its sole discretion. Such restrictions shall apply in addition to any restrictions that may apply to holders of Shares generally and shall also comply to the extent necessary with applicable law. In no event shall the Company be required to issue fractional Shares under this Plan.

 

(d) Beneficiaries. Unless stated otherwise in an Award agreement, a Participant may designate one or more beneficiaries with respect to an Award by timely filing the prescribed form with the Company. A beneficiary designation may be changed by filing the prescribed form with the Company at any time before the Participant’s death. If no beneficiary was designated or if no designated beneficiary survives the Participant, then after a Participant’s death any vested Award(s) shall be transferred or distributed to the Participant’s estate.

 

(e) Performance Conditions. The Committee may, in its discretion, include performance conditions in an Award or grant an Award upon the satisfaction of performance conditions. If performance conditions are included in Awards to Covered Employees, then such Awards may be subject to the achievement of Performance Goals established by the Committee. Such Performance Goals shall be established and administered pursuant to the requirements of Code Section 162(m). Before any Shares underlying an Award or any Award payments subject to Performance Goals are released to a Covered Employee with respect to a Performance Period, the Committee shall certify in writing that the Performance Goals for such Performance Period have been satisfied. Awards with performance conditions that are granted to Key Employees who are not Covered Employees need not comply with the requirements of Code Section 162(m).

 

   

 

 

(f) No Rights as a Shareholder. A Participant, or a transferee of a Participant, shall have no rights as a shareholder with respect to any Common Stock covered by an Award until such person has satisfied all of the terms and conditions to receive such Common Stock, has satisfied any applicable withholding or tax obligations relating to the Award and the Shares have been issued (as evidenced by an appropriate entry on the books of the Company or a duly authorized transfer agent of the Company).

 

(g) Termination of Service. Unless the applicable Award agreement or the applicable employment agreement provides otherwise, the following rules shall govern the vesting, exercisability and term of outstanding Awards held by a Participant in the event of termination of such Participant’s Service (in all cases subject to the expiration term of the Option or SAR as applicable): (i) upon termination of Service for any reason, all unvested portions of any outstanding Awards shall be immediately forfeited without consideration and the vested portions of any outstanding Stock Units shall be settled upon termination; (ii) if the Service of a Participant is terminated for Cause, then all unexercised Options and SARs, unvested portions of Stock Units and unvested portions of Stock Grants shall terminate and be forfeited immediately without consideration; (iii) if the Service of a Participant is terminated for any reason other than for Cause, death, or Disability, then the vested portion of his or her then-outstanding Options and/or SARs may be exercised by such Participant or his or her personal representative within three months after the date of such termination; or (iv) if the Service of a Participant is terminated due to death or Disability, the vested portion of his or her then-outstanding Options and/or SARs may be exercised within eighteen months after the date of termination of Service.

 

(h) Director Fees. Upon prior unanimous written consent by the Company’s Board of Directors, each Non-Employee Director may elect to receive a Stock Grant or Stock Unit under the Plan in lieu of payment of a portion of his or her regular annual retainer based on the Fair Market Value of the Shares on the date any regular annual retainer would otherwise be paid. For purposes of the Plan, a Non-Employee Director’s regular annual retainer shall not include any additional retainer paid in connection with service on any committee of the Board or paid for any other reason. Such an election may be for any dollar or percentage amount equal to at least 25% of the Non-Employee Director’s regular annual retainer (up to a limit of 100% of the Non-Employee Director’s regular annual retainer). The election must be made prior to the beginning of the annual board of directors cycle which shall be any twelve month continuous period designated by the Board. Any amount of the regular annual retainer not elected to be received as a Stock Grant or Stock Unit shall be payable in cash in accordance with the Company’s standard payment procedures. Shares granted under this Section 4(h) shall otherwise be subject to the terms of the Plan applicable to Non-Employee Directors or to Participants generally (other than provisions specifically applying only to Employees).

 

SECTION 5. SHARES SUBJECT TO PLAN AND SHARE LIMITS.

 

(a) Basic Limitations. The stock issuable under the Plan shall be authorized but unissued Shares. The aggregate number of Shares reserved for Awards under the Plan shall not exceed 7,000,000 Shares, subject to adjustment pursuant to Section 11.

 

(b) Additional Shares. If Awards are forfeited or are terminated for any other reason before being exercised or settled, then the Shares underlying such Awards, plus the number of additional Shares, if any, that counted against Shares available for issuance under the Plan in respect thereof at the time of Grant, shall again become available for Awards under the Plan. SARs shall be counted in full against the number of Shares available for issuance under the Plan, regardless of the number of Shares issued upon settlement of the SARs. In the event that withholding tax liabilities arising from an Award other than an Option or SAR are satisfied by the withholding of Shares by the Company, then the Shares so withheld, plus the number of additional Shares, if any, that counted against Shares available for issuance under the Plan in respect thereof at the time of Grant, shall again become available for Awards under the Plan. In the event that withholding tax liabilities arising from an Option or SAR are satisfied by the withholding of Shares by the Company, then the Shares so withheld shall not be added to the Shares available for Awards under the Plan. In addition, Shares that are exchanged by a Participant or withheld by the Company as full or partial payment in connection with the exercise or settlement of an Option or SAR shall not be available for subsequent Awards under the Plan and Shares repurchased on the open market with the proceeds of an Option exercise shall not again be made available for issuance under the Plan.

 

   

 

 

(c) Dividend Equivalents. Any dividend equivalents settled in Shares under the Plan shall be applied against the number of Shares available for Awards.

 

SECTION 6. TERMS AND CONDITIONS OF OPTIONS.

 

(a) Stock Option Agreement. Each Grant of an Option under the Plan shall be evidenced and governed exclusively by a Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions that are not inconsistent with the Plan and that the Committee deems appropriate for inclusion in a Stock Option Agreement (including without limitation any performance conditions). The provisions of the various Stock Option Agreements entered into under the Plan need not be identical. The Stock Option Agreement shall also specify whether the Option is an ISO or an NSO.

 

(b) Number of Shares. Each Stock Option Agreement shall specify the number of Shares that are subject to the Option and shall be subject to adjustment of such number in accordance with Section 11.

 

(c) Exercise Price. An Option’s Exercise Price shall be established by the Committee and set forth in a Stock Option Agreement. The Exercise Price of an Option shall not be less than 100% of the Fair Market Value (110% for ISO grants to 10-Percent Shareholders) on the date of Grant.

 

(d) Exercisability and Term. Each Stock Option Agreement shall specify the date when all or any installment of the Option is to become exercisable. The Stock Option Agreement shall also specify the term of the Option; provided that the term of an Option shall in no event exceed ten years from the date of Grant. Unless the applicable Stock Option Agreement provides otherwise, each Option shall vest and become exercisable with respect to 20% of the Shares subject to the Option upon completion of one year of Service measured from the vesting commencement date, the balance of the Shares subject to the Option shall vest and become exercisable in forty-eight equal installments upon completion of each month of Service thereafter, and the term of the Option shall be ten years from the date of Grant. A Stock Option Agreement may provide for accelerated vesting in the event of the Participant’s death, Disability, or other events. Notwithstanding any other provision of the Plan, no Option can be exercised after the expiration date provided in the applicable Stock Option Agreement and no Option may provide that, upon exercise of the Option, a new Option will automatically be granted.

 

(e) Modifications or Assumption of Options. Within the limitations of the Plan, the Committee may modify, extend or assume outstanding options or may accept the cancellation of outstanding options (whether granted by the Company or by another issuer) in return for the grant of new Options for the same or a different number of Shares, at the same or a different Exercise Price, and with the same or different vesting provisions. Notwithstanding the preceding sentence or anything to the contrary herein, the Committee may not Re-Price outstanding Options unless there is approval by the Company shareholders and, unless a modification is necessary or desirable to comply with any applicable law, regulation or rule, such modification of an Option shall not, without the consent of the Optionee, impair his or her rights or obligations under such Option.

 

   

 

 

(f) Assignment or Transfer of Options. Except as otherwise provided in the applicable Stock Option Agreement and then only to the extent permitted by applicable law, no Option shall be transferable by the Optionee other than by will or by the laws of descent and distribution. Except as otherwise provided in the applicable Stock Option Agreement, an Option may be exercised during the lifetime

 

of the Optionee only by the Optionee or by the guardian or legal representative of the Optionee. No Option or interest therein may be assigned, pledged or hypothecated by the Optionee during his or her lifetime, whether by operation of law or otherwise, or be made subject to execution, attachment or similar process.

 

SECTION 7. PAYMENT FOR OPTION SHARES

 

The entire Exercise Price of Shares issued upon exercise of Options shall be payable in cash at the time when such Shares are purchased, except as follows and if so provided for in an applicable Stock Option Agreement:

 

(i) Surrender of Stock. Payment for all or any part of the Exercise Price or Options may be made with Shares which have already been owned by the Optionee; provided that the Committee may, in its sole discretion, require that Shares tendered for payment be previously held by the Optionee for a minimum duration. Such Shares shall be valued at their Fair Market Value.

 

(ii) Cashless Exercise. Payment for all or any part of the Exercise Price may be made through Cashless Exercise at the Committee’s sole discretion.

 

(iii) Other Forms of Payment. Payment for all or any part of the Exercise Price may be made in any other form that is consistent with applicable laws, regulations and rules and approved by the Committee.

 

In the case of an ISO granted under the Plan, payment shall be made only pursuant to the express provisions of the applicable Stock Option Agreement. The Stock Option Agreement may specify that payment may be made in any form(s) described in this Section 7. In the case of an NSO granted under the Plan, the Committee may, in its discretion at any time, accept payment in any form(s) described in this Section 7.

 

SECTION 8. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS.

 

(a) SAR Agreement. Each Grant of a SAR under the Plan shall be evidenced and governed exclusively by a SAR Agreement between the Participant and the Company. Such SAR shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions that are not inconsistent with the Plan and that the Committee deems appropriate for inclusion in a SAR Agreement (including without limitation any performance conditions). A SAR Agreement may provide for a maximum limit on the amount of any payout notwithstanding the Fair Market Value on the date of exercise of the SAR. The provisions of the various SAR Agreements entered into under the Plan need not be identical. SARs may be granted in consideration of a reduction in the Participant’s compensation.

 

(b) Number of Shares. Each SAR Agreement shall specify the number of Shares to which the SAR pertains and shall be subject to adjustment of such number in accordance with Section 11.

 

   

 

 

(c) Exercise Price. Each SAR Agreement shall specify the Exercise Price which shall be established by the Committee. The Exercise Price of a SAR shall not be less than 100% of the Fair Market Value on the date of Grant.

 

(d) Exercisability and Term. Each SAR Agreement shall specify the date when all or any installment of the SAR is to become exercisable. The SAR Agreement shall also specify the term of the SAR which shall not exceed ten years from the date of Grant. Unless the applicable SAR Agreement provides otherwise, each SAR shall vest and become exercisable with respect to 20% of the Shares subject to the SAR upon completion of one year of Service measured from the vesting commencement date, the balance of the Shares subject to the SAR shall vest and become exercisable in forty-eight equal installments upon completion of each month of Service thereafter, and the term of the SAR shall be ten years from the date of Grant. A SAR Agreement may provide for accelerated vesting in the event of the Participant’s death, Disability, or other events. SARs may be awarded in combination with Options or Stock Grants, and such an Award shall provide that the SARs will not be exercisable unless the related Options or Stock Grants are forfeited. A SAR may be included in an ISO only at the time of Grant but may be included in an NSO at the time of Grant or at any subsequent time, but not later than six months before the expiration of such NSO. No SAR may provide that, upon exercise of the SAR, a new SAR will automatically be granted.

 

(e) Exercise of SARs. If, on the date when a SAR expires, the Exercise Price under such SAR is less than the Fair Market Value on such date but any portion of such SAR has not been exercised or surrendered, then such SAR shall automatically be deemed to be exercised as of such date with respect to such portion. Upon exercise of a SAR, the Participant (or any person having the right to exercise the SAR) shall receive from the Company (i) Shares, (ii) cash or (iii) any combination of Shares and cash, as the Committee shall determine at the time of Grant of the SAR, in its sole discretion. The amount of cash and/or the Fair Market Value of Shares received upon exercise of SARs shall, in the aggregate, be equal to the amount by which the Fair Market Value (on the date of exercise) of the Shares subject to the SARs exceeds the Exercise Price of those Shares.

 

(f) Modification or Assumption of SARs. Within the limitations of the Plan, the Committee may modify, extend or assume outstanding stock appreciation rights or may accept the cancellation of outstanding stock appreciation rights (including stock appreciation rights granted by another issuer) in return for the grant of new SARs for the same or a different number of Shares, at the same or a different Exercise Price, and with the same or different vesting provisions. Notwithstanding the preceding sentence or anything to the contrary herein, the Committee may not Re-Price outstanding SARs unless there is approval by the Company shareholders and, unless a modification is necessary or desirable to comply with any applicable law, regulation or rule, such modification of a SAR shall not, without the consent of the Participant, impair his or her rights or obligations under such SAR.

 

(g) Assignment or Transfer of SARs. Except as otherwise provided in the applicable SAR Agreement and then only to the extent permitted by applicable law, no SAR shall be transferable by the Participant other than by will or by the laws of descent and distribution. Except as otherwise provided in the applicable SAR Agreement, a SAR may be exercised during the lifetime of the Participant only by the Participant or by the guardian or legal representative of the Participant. No SAR or interest therein may be assigned, pledged or hypothecated by the Participant during his or her lifetime, whether by operation of law or otherwise, or be made subject to execution, attachment or similar process.

 

SECTION 9. TERMS AND CONDITIONS FOR STOCK GRANTS.

 

(a) Amount and Form of Awards. Awards under this Section 9 may be granted in the form of a Stock Grant. Each Stock Grant Agreement shall specify the number of Shares to which the Stock Grant pertains and shall be subject to adjustment of such number in accordance with Section 11. A Stock Grant may also be awarded in combination with NSOs, and such an Award may provide that the Stock Grant will be forfeited in the event that the related NSOs are exercised.

 

   

 

 

(b) Stock Grant Agreement. Each Stock Grant awarded under the Plan shall be evidenced and governed exclusively by a Stock Grant Agreement between the Participant and the Company. Each Stock Grant shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions that are not inconsistent with the Plan and that the Committee deems appropriate for inclusion in the applicable Stock Grant Agreement (including without limitation any performance conditions). The provisions of the various Stock Grant Agreements entered into under the Plan need not be identical.

 

(c) Payment for Stock Grants. Stock Grants may be issued with or without cash consideration or any other form of legally permissible consideration approved by the Committee.

 

(d) Vesting Conditions. Each Stock Grant may or may not be subject to vesting. Any such vesting provision may provide that Shares shall vest based on Service over time or shall vest, in full or in installments, upon satisfaction of performance conditions specified in the Stock Grant Agreement which may include Performance Goals pursuant to Section 4(e). Unless the applicable Stock Grant Agreement provides otherwise, each Stock Grant shall vest with respect to 20% of the Shares subject to the Stock Grant upon completion of each year of Service on each of the first through fifth annual anniversaries of the vesting commencement date. A Stock Grant Agreement may provide for accelerated vesting in the event of the Participant’s death, Disability, or other events.

 

(e) Assignment or Transfer of Stock Grants. Except as provided in the applicable Stock Grant Agreement, and then only to the extent permitted by applicable law, a Stock Grant awarded under the Plan shall not be anticipated, assigned, attached, garnished, optioned, transferred or made subject to any creditor’s process, whether voluntarily, involuntarily or by operation of law. Any act in violation of this Section 9(e) shall be void. However, this Section 9(e) shall not preclude a Participant from designating a beneficiary who will receive any vested outstanding Stock Grant Awards in the event of the Participant’s death, nor shall it preclude a transfer of vested Stock Grant Awards by will or by the laws of descent and distribution.

 

(f) Voting and Dividend Rights. The holder of a Stock Grant awarded under the Plan shall have the same voting, dividend and other rights as the Company’s other shareholders. A Stock Grant Agreement, however, may require that the holder of such Stock Grant invest any cash dividends received in additional Shares subject to the Stock Grant. Such additional Shares subject to the Stock Grant shall be subject to the same conditions and restrictions as the Stock Grant with respect to which the dividends were paid. Such additional Shares subject to the Stock Grant shall not reduce the number of Shares available for issuance under Section 5.

 

(g) Modification or Assumption of Stock Grants. Within the limitations of the Plan, the Committee may modify or assume outstanding stock grants or may accept the cancellation of outstanding stock grants (including stock granted by another issuer) in return for the grant of new Stock Grants for the same or a different number of Shares and with the same or different vesting provisions. Notwithstanding the preceding sentence or anything to the contrary herein, the Committee may not modify an outstanding Stock Grant such that the modification shall, without the consent of the Participant, impair his or her rights or obligations under such Stock Grant, unless such modification is necessary or desirable to comply with any applicable law, regulation or rule.

 

   

 

 

SECTION 10. TERMS AND CONDITIONS OF STOCK UNITS.

 

(a) Stock Unit Agreement. Each grant of Stock Units under the Plan shall be evidenced and governed exclusively by a Stock Unit Agreement between the Participant and the Company. Such Stock Units shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions that are not inconsistent with the Plan and that the Committee deems appropriate for inclusion in the applicable Stock Unit Agreement (including without limitation any performance conditions). The provisions of the various Stock Unit Agreements entered into under the Plan need not be identical. Stock Units may be granted in consideration of a reduction in the Participant’s other compensation.

 

(b) Number of Shares. Each Stock Unit Agreement shall specify the number of Shares to which the Stock Unit Grant pertains and shall be subject to adjustment of such number in accordance with Section 11.

 

(c) Payment for Stock Units. Stock Units shall be issued without consideration.

 

(d) Vesting Conditions. Each Award of Stock Units may or may not be subject to vesting. Any such vesting provision may provide that Shares shall vest based on Service over time or shall vest, in full or in installments, upon satisfaction of performance conditions specified in the Stock Unit Agreement which may include Performance Goals pursuant to Section 4(e). Unless the applicable Stock Unit Agreement provides otherwise, each Stock Unit shall vest with respect to 20% of the Shares subject to the Stock Unit upon completion of each year of Service on each of the first through fifth annual anniversaries of the vesting commencement date. A Stock Unit Agreement may provide for accelerated vesting in the event of the Participant’s death, Disability, or other events.

 

(e) Voting and Dividend Rights. The holders of Stock Units shall have no voting rights. Prior to settlement or forfeiture, any Stock Unit awarded under the Plan may, at the Committee’s discretion, carry with it a right to dividend equivalents. Such right entitles the holder to be credited with an amount equal to all cash dividends paid on one Share while the Stock Unit is outstanding. Dividend equivalents may be converted into additional Stock Units. Settlement of dividend equivalents may be made in the form of cash, in the form of Shares, or in a combination of both. Prior to distribution, any dividend equivalents shall be subject to the same conditions and restrictions as the Stock Units to which they attach and may not be paid until the applicable conditions and restrictions, including any performance conditions, are satisfied.

 

(f) Form and Time of Settlement of Stock Units. Settlement of vested Stock Units may be made in the form of (a) cash, (b) Shares or (c) any combination of both, as determined by the Committee at the time of the grant of the Stock Units, in its sole discretion. Methods of converting Stock Units into cash may include (without limitation) a method based on the average Fair Market Value of Shares over a series of trading days. Vested Stock Units may be settled in a lump sum or in installments. The distribution may occur or commence when the vesting conditions applicable to the Stock Units have been satisfied or have lapsed, or it may be deferred, in accordance with applicable law, to any later date. The amount of a deferred distribution may be increased by an interest factor or by dividend equivalents. Until an Award of Stock Units is settled, the number of such Stock Units shall be subject to adjustment pursuant to Section 11.

 

(g) Creditors’ Rights. A holder of Stock Units shall have no rights other than those of a general creditor of the Company. Stock Units represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Stock Unit Agreement.

 

   

 

 

(h) Modification or Assumption of Stock Units. Within the limitations of the Plan, the Committee may modify or assume outstanding stock units or may accept the cancellation of outstanding stock units (including stock units granted by another issuer) in return for the grant of new Stock Units for the same or a different number of Shares and with the same or different vesting provisions. Notwithstanding the preceding sentence or anything to the contrary herein, the Committee may not modify an outstanding Stock Unit such that the modification shall, without the consent of the Participant, impair his or her rights or obligations under such Stock Unit, unless such modification is necessary or desirable to comply with any applicable law, regulation or rule.

 

(i) Assignment or Transfer of Stock Units. Except as provided in the applicable Stock Unit Agreement, and then only to the extent permitted by applicable law, Stock Units shall not be anticipated, assigned, attached, garnished, optioned, transferred or made subject to any creditor’s process, whether voluntarily, involuntarily or by operation of law. Any act in violation of this Section 10(i) shall be void. However, this Section 10(i) shall not preclude a Participant from designating a beneficiary who will receive any outstanding vested Stock Units in the event of the Participant’s death, nor shall it preclude a transfer of vested Stock Units by will or by the laws of descent and distribution.

 

SECTION 11. PROTECTION AGAINST DILUTION.

 

(a) Adjustments. In the event of a subdivision of the outstanding Shares, a forward or reverse stock-split, a declaration of a dividend payable in Shares, a declaration of a dividend payable in a form other than Shares in an amount that has a material effect on the price of Shares, a combination or consolidation of the outstanding Shares (by reclassification or otherwise) into a lesser number of Shares, a recapitalization, a spin-off or a similar occurrence, the Committee shall make appropriate adjustments to the following:

 

(i) the number of Shares and the kind of shares or securities available for future Awards under Section 5;

 

(ii) the limits on Awards specified in Section 5;

 

(iii) the number of Shares and the kind of shares or securities covered by each outstanding Award; or

 

(iv) the Exercise Price under each outstanding SAR or Option.

 

(b) Participant Rights. Except as provided in this Section 11, a Participant shall have no rights by reason of any issue by the Company of stock of any class or securities convertible into stock of any class, any subdivision or consolidation of shares of stock of any class, the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class. If by reason of an adjustment pursuant to this Section 11 a Participant’s Award covers additional or different shares of stock or securities, then such additional or different shares and the Award in respect thereof shall be subject to all of the terms, conditions and restrictions which were applicable to the Award and the Shares subject to the Award prior to such adjustment.

 

(c) Fractional Shares. Any adjustment of Shares pursuant to this Section 11 shall be rounded down to the nearest whole number of Shares. Under no circumstances shall the Company be required to authorize or issue fractional shares and no consideration shall be provided as a result of any fractional shares not being issued or authorized.

 

   

 

 

SECTION 12. EFFECT OF A CORPORATE TRANSACTION.

 

(a) Corporate Transaction. In the event that the Company is a party to a Corporate Transaction, outstanding Awards shall be subject to the applicable agreement of merger, reorganization, or sale of assets. Such agreement may provide, without limitation, for the assumption or substitution of outstanding Options, SARs, or Stock Units by the surviving corporation or its parent, for the assumption of outstanding Stock Grant Agreements by the surviving corporation or its parent, for the replacement of outstanding Options, SARs, and Stock Units with a cash incentive program of the surviving corporation which preserves the spread existing on the unvested portions of such outstanding Awards at the time of the transaction and provides for subsequent payout in accordance with the same vesting provisions applicable to those Awards, for accelerated vesting of outstanding Awards, or for the cancellation of outstanding Options, SARs, and Stock Units, with or without consideration, in all cases without the consent of the Participant.

 

(b) Acceleration. The Committee may determine, at the time of grant of an Award or thereafter, that such Award shall become fully vested as to all Shares subject to such Award in the event that a Corporate Transaction or a Change in Control occurs. Unless otherwise provided in the applicable Award agreement, in the event that a Corporate Transaction occurs and any outstanding Options, SARs or Stock Units are not assumed, substituted, or replaced with a cash incentive program pursuant to Section 12(a) or any outstanding Stock Grant Agreements are not assumed pursuant to Section 12(a), then such Awards shall fully vest and be fully exercisable immediately prior to such Corporate Transaction. Immediately following the consummation of a Corporate Transaction, all outstanding Options, SARs and Stock Units shall terminate and cease to be outstanding, except to the extent that they are assumed by the surviving corporation or its parent.

 

(c) Dissolution. To the extent not previously exercised or settled, Options, SARs and Stock Units shall terminate immediately prior to the dissolution or liquidation of the Company.

 

SECTION 13. LIMITATIONS ON RIGHTS.

 

(a) No Entitlements. A Participant’s rights, if any, in respect of or in connection with any Award is derived solely from the discretionary decision of the Company to permit the individual to participate in the Plan and to benefit from a discretionary Award. By accepting an Award under the Plan, a Participant expressly acknowledges that there is no obligation on the part of the Company to continue the Plan and/or grant any additional Awards. Any Award granted hereunder is not intended to be compensation of a continuing or recurring nature, or part of a Participant’s normal or expected compensation, and in no way represents any portion of a Participant’s salary, compensation, or other remuneration for purposes of pension benefits, severance, redundancy, resignation or any other purpose.

 

Neither the Plan nor any Award granted under the Plan shall be deemed to give any individual a right to remain an employee, consultant or director of the Company, a Parent, a Subsidiary or an Affiliate. The Company and its Parents and Subsidiaries and Affiliates reserve the right to terminate the Service of any person at any time, and for any reason, subject to applicable laws, the Company’s Articles of Incorporation and Bylaws and a written employment agreement (if any), and such terminated person shall be deemed irrevocably to have waived any claim to damages or specific performance for breach of contract or dismissal, compensation for loss of office, tort or otherwise with respect to the Plan or any outstanding Award that is forfeited and/or is terminated by its terms or to any future Award.

 

(b) Shareholders’ Rights. A Participant shall have no dividend rights, voting rights or other rights as a shareholder with respect to any Shares covered by his or her Award prior to the issuance of such Shares (as evidenced by an appropriate entry on the books of the Company or a duly authorized transfer agent of the Company). No adjustment shall be made for cash dividends or other rights for which the record date is prior to the date when such Shares are issued, except as expressly provided in Section 11.

 

   

 

 

(c) Regulatory Requirements. Any other provision of the Plan notwithstanding, the obligation of the Company to issue Shares or other securities under the Plan shall be subject to all applicable laws, rules and regulations and such approval by any regulatory body as may be required. The Company reserves the right to restrict, in whole or in part, the delivery of Shares or other securities pursuant to any Award prior to the satisfaction of all legal requirements relating to the issuance of such Shares or other securities, to their registration, qualification or listing or to an exemption from registration, qualification or listing.

 

SECTION 14. WITHHOLDING TAXES.

 

(a) General. A Participant shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise in connection with his or her Award. The Company shall not be required to issue any Shares or make any cash payment under the Plan until such obligations are satisfied.

 

(b) Share Withholding. If a public market for the Company’s Shares exists, the Committee may permit a Participant to satisfy all or part of his or her withholding or income tax obligations by having the Company withhold all or a portion of any Shares that otherwise would be issued to him or her or by surrendering or attesting to all or a portion of any Shares that he or she previously acquired. Such Shares shall be valued based on the value of the actual trade or, if there is none, the Fair Market Value as of the previous day. Any payment of taxes by assigning Shares to the Company may be subject to restrictions, including, but not limited to, any restrictions required by rules of the SEC. The Committee may, in its discretion, also permit a Participant to satisfy withholding or income tax obligations related to an Award through Cashless Exercise or through a sale of Shares underlying the Award.

 

SECTION 15. DURATION AND AMENDMENTS.

 

(a) Term of the Plan. To the extent the Board approves an amendment to the Plan that requires shareholder approval, the amendment to the Plan shall become effective upon its approval by Company shareholders. The Plan shall terminate at the Company’s 2027 Annual Meeting of Shareholders and may be terminated on any earlier date pursuant to this Section 15.

 

(b) Right to Amend or Terminate the Plan. The Board may amend or terminate the Plan at any time and for any reason. The termination of the Plan, or any amendment thereof, shall not impair the rights or obligations of any Participant under any Award previously granted under the Plan without the Participant’s consent, unless such modification is necessary or desirable to comply with any applicable law, regulation or rule. No Awards shall be granted under the Plan after the Plan’s termination. An amendment of the Plan shall be subject to the approval of the Company’s shareholders only to the extent such approval is otherwise required by applicable laws, regulations or rules.

 

   

 

 

WORLD TECHNOLOGY CORP.

 

NOTICE OF GRANT OF STOCK OPTION

 

Notice is hereby given of the following option grant (the “Option”) made to purchase shares of World Technology Corp. (the “Company”) common stock: 

 

Optionee:        
Grant Date:        
Type of Option:   Nonstatutory Stock Option    
         
Grant Number:          
Number of Option Shares:       shares
Exercise Price: $     per share
First Vest Date:        
Expiration Date:        

 

Exercise Schedule. So long as Optionee’s Service continues, the Option shall vest and become exercisable with respect to (i) ______ (__%) of the option shares, as set forth above (the “Option Shares”) on the First Vest Date as set forth above and (ii) the balance of the Option Shares in ________________ installments upon Optionee’s completion of each additional _______ of Service over the _____________ period measured from the First Vest Date. In no event shall the Option vest and become exercisable for any additional Option Shares after Optionee’s cessation of Service.

 

Should Optionee request a reduction to his or her work commitment to less than thirty (30) hours per week, then the Company shall have the right to extend the period over which the Option shall thereafter vest and become exercisable for the Option Shares during the remainder of the Option term to the extent permitted under local law. In no event shall any extension of the exercise schedule, as set forth above (“Exercise Schedule”) for the Option Shares result in the extension of the expiration date, as set forth above, (“Expiration Date”) of the Option.

 

Optionee understands and agrees that the Option is offered subject to and in accordance with the terms of the World Technology Corp. 2018 Stock Incentive Plan (the “Plan”). Optionee further agrees to be bound by the terms of the Plan and the terms of the Option as set forth in the Stock Option Agreement (the “Agreement”) attached hereto.

 

No Employment or Service Contract. Nothing in this Notice or in the attached Agreement or in the Plan shall confer upon Optionee any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Parent, Subsidiary or Affiliate employing or retaining Optionee) or of Optionee, which rights are hereby expressly reserved by each, to terminate Optionee’s Service at any time for any reason, with or without cause to the extent permissible under local law.

 

Definitions. All capitalized terms in this Notice shall have the meaning assigned to them in this Notice, the attached Agreement or the Plan.

 

   

 

 

STOCK OPTION AGREEMENT

 

Recitals

 

A.    The Board has adopted the Plan for the purpose of retaining the services of selected Employees, non-employee members of the Board and Consultants.

 

B.    Optionee is to render valuable services to the Company (or a Parent, Subsidiary or Affiliate), and this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in connection with the Company’s grant of an option to Optionee.

 

C.    All capitalized terms in this Agreement shall have the meaning assigned to them in this Agreement, the attached Notice of Grant of Stock Option (the “Notice”), or the Plan.

 

NOW, THEREFORE, as a condition to and in consideration of the grant, vesting, and exercise of this Option and Optionee’s receipt of any Option Shares or any related benefit thereunder, it is hereby agreed as follows:

 

1.    Grant of Option. The Company hereby grants to Optionee, and Optionee hereby accepts from the Company, as of the grant date, as set forth in the Notice, (the “Grant Date”) an option to purchase up to the number of Option Shares specified in the Notice. By accepting (whether in writing, electronically or otherwise) this Option, or by otherwise receiving this Option, Option Shares, or any benefit relating thereto, the Optionee acknowledges that this Option and any Option Shares issued hereunder and the Optionee’s participation in the Plan are subject to such terms and conditions, and the Optionee agrees to such terms and conditions. The Option Shares shall be purchasable from time to time during the Option term specified in Paragraph 2 at the Exercise Price specified in the Notice.

 

2.    Option Term. This Option shall have a maximum term of __________ years [not to exceed (10) years] measured from the Grant Date and shall accordingly expire at the close of business on the Expiration Date, unless sooner terminated in accordance with Paragraph 4, 5 or 6.

 

3.    Non-Transferability. This Option shall not be anticipated, assigned, attached, garnished, optioned, transferred or made subject to any creditor’s process, whether voluntarily or involuntarily or by operation of law. Notwithstanding the foregoing, should the Optionee die while holding this Option, then this Option shall be transferred in accordance with Optionee’s will or the laws of descent and distribution.

 

4.    Dates of Exercise. This Option shall vest and become exercisable for the Option Shares in one or more installments as specified in the Notice. As the Option becomes exercisable for such installments, those installments shall accumulate and the Option shall remain exercisable for the accumulated installments until the Expiration Date or sooner termination of the Option term under Paragraph 5 or 6. As an administrative matter, the exercisable portion of this Option may only be exercised until the close of the Nasdaq Global Select Market on the Expiration Date or the earlier termination date under Paragraph 5 or 6 or, if such date is not a trading day on the Nasdaq Global Select Market, the last trading day before such date. Any later attempt to exercise this Option will not be honored. For example, if Optionee ceases to remain in Service as provided in Paragraph 5(i) and the date three (3) months from the date of cessation is Monday, July 4 (a holiday on which the Nasdaq Global Select Market is closed), Optionee must exercise the exercisable portion of this Option by 4:00 p.m. Eastern Daylight Time on Friday, July 1.

 

   

 

 

5.    Cessation of Service. The Option term specified in Paragraph 2 shall terminate (and this Option shall cease to be outstanding) prior to the Expiration Date should any of the following provisions become applicable:

 

(i)    Should Optionee cease to remain in Service for any reason (other than death, Disability or Cause and whether or not in breach of local labor laws) while this Option is outstanding, then Optionee shall have a period of three (3) months (commencing with the date of such cessation of Service) during which to exercise this Option, but in no event shall this Option be exercisable at any time after the Expiration Date.

 

(ii)    If Optionee dies while this Option is outstanding, then the Optionee’s designated beneficiary or, if no beneficiary was designated or properly designated or, if no designated beneficiary survives the Optionee, the Optionee’s estate (to the extent reasonably determinable) or other individual or entity entitled to receive the Option under applicable local law shall have the right to exercise this Option. Such right shall lapse, and this Option shall cease to be outstanding, upon the earlier of (A) the expiration of the eighteen (18) month period measured from the date of Optionee’s death or (B) the Expiration Date. Optionee may only make a beneficiary designation with respect to this Option if the Company has approved a process or procedure for such beneficiary designation for the local jurisdiction within which Optionee performs services for the Company or a Parent, Subsidiary or Affiliate. If no such beneficiary designation process or procedure has been approved by the Company, then, in the event of Optionee’s death, this Option may only be exercised by the Optionee’s estate (to the extent reasonably determinable) or other individual or entity entitled to receive the Option under applicable local law.

 

(iii)   Should Optionee cease Service by reason of Disability while this Option is outstanding, then Optionee shall have a period of eighteen (18) months (commencing with the date of such cessation of Service) during which to exercise this Option, but in no event shall this Option be exercisable at any time after the Expiration Date.

 

(iv)  During the limited period of post-Service exercisability, this Option may not be exercised in the aggregate for more than the number of vested Option Shares for which the Option is exercisable at the date the Optionee ceases to actively provide Service (not extended by any notice period mandated under local law). Upon the expiration of such limited exercise period or (if earlier) upon the Expiration Date, this Option shall terminate and cease to be outstanding for any vested Option Shares for which the Option has not been exercised. However, this Option shall, immediately as of the date the Optionee ceases to actively provide Service for any reason, terminate and cease to be outstanding with respect to any Option Shares in which Optionee is not otherwise at that time vested or for which this Option is not otherwise at that time exercisable.

 

(v)  Should Optionee’s Service be terminated for Cause or should Optionee otherwise engage in activities constituting Cause while this Option is outstanding, then this Option shall terminate immediately and cease to remain outstanding. In the event Optionee’s Service is suspended pending an investigation of whether Optionee’s Service will be terminated for Cause, all Optionee’s rights under the Option, including the right to exercise the Option, shall be suspended during the investigation period.

 

(vi)  For purposes of this Paragraph 5, in the event of Optionee’s cessation of Service for any reason (whether or not later found to be invalid or in breach of the employment laws in the jurisdiction where Optionee is employed or providing Service, or the terms of Optionee's employment or service agreement, if any), Optionee’s right to receive additional options or to vest in the Option will end as of the date the Optionee is no longer actively providing Service and will not be extended by any notice period mandated under local law (e.g., active Service would not include any period of “garden leave” or similar period pursuant to local law); the Company shall have the exclusive discretion to determine when an Optionee is no longer actively providing Service for purposes of this Option.

 

   

 

 

6.    Special Acceleration of Option.

 

(a)    This Option, to the extent outstanding at the time of a Corporate Transaction but not otherwise fully vested and exercisable, shall automatically accelerate so that this Option shall, immediately prior to the effective date of the Corporate Transaction, become vested and exercisable for all of the Option Shares at the time subject to this Option and may be exercised for any or all of those Option Shares as fully-vested Shares. No such acceleration of this Option, however, shall occur if and to the extent: (i) this Option is, in connection with the Corporate Transaction, either assumed by the successor corporation (or parent thereof) or replaced with a comparable option to purchase shares of the capital stock of the successor corporation (or parent thereof) or (ii) this Option is replaced with a cash incentive program of the successor corporation which preserves the spread existing on the unvested Option Shares at the time of the Corporate Transaction (the excess of the Fair Market Value of those Option Shares over the aggregate Exercise Price payable for such Shares) and provides for subsequent pay-out in accordance with the same Exercise Schedule set forth in the Notice. The determination of option comparability under clause (i) shall be made by the Committee, and such determination shall be final, binding and conclusive.

 

(b)    Immediately following the effective date of the Corporate Transaction, this Option shall terminate and cease to be outstanding, except to the extent assumed by the successor corporation (or parent thereof) in connection with the Corporate Transaction.

 

(c)    If this Option is assumed in connection with a Corporate Transaction, then the Committee shall appropriately adjust the number of shares and the kind of shares or securities covered by the Option and the Exercise Price immediately after such Corporate Transaction, provided the aggregate Exercise Price shall remain the same.

 

(d)    This Agreement shall not in any way affect the right of the Company to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

 

7.    Adjustment in Option Shares. In the event of a subdivision of the outstanding Shares, a declaration of a dividend payable in Shares, a declaration of a dividend payable in a form other than Shares in an amount that has a material effect on the price of Shares, a combination or consolidation of the outstanding Shares (by reclassification or otherwise) into a lesser number of Shares, a recapitalization, a spin-off or a similar occurrence, appropriate adjustments shall be made to (i) the total number and/or kind of shares or securities subject to this Option and (ii) the Exercise Price in order to reflect such change and thereby preclude a dilution or enlargement of benefits hereunder.

 

8.    Shareholder Rights. The holder of this Option shall not have any shareholder rights with respect to the Option Shares until such person shall have exercised the Option, paid the Exercise Price and become a holder of record of the purchased Shares.

 

   

 

 

9.    Manner of Exercising Option.

 

(a)    In order to exercise this Option with respect to all or any part of the Option Shares for which this Option is at the time exercisable, Optionee (or any other person or persons exercising the Option) must take the following actions:

 

(i)    Pay the aggregate Exercise Price for the purchased Shares in one or more of the following forms:

 

(A)    cash or check which, in the Company’s sole discretion, shall be made payable to a Company-designated brokerage firm or the Company; and

 

(B)    as permitted by applicable law, through a special sale and remittance procedure pursuant to which Optionee (or any other person or persons exercising the Option) shall concurrently provide irrevocable written instructions (I) to a Company-designated brokerage firm (or in the case of an executive officer or Board member of the Company, an Optionee-designated brokerage firm) to effect the immediate sale of the purchased Shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate Exercise Price payable for the purchased Shares plus, if applicable, the amount necessary to satisfy any Tax-Related Items (as defined in Paragraph 10 of this Agreement) and (II) to the Company to deliver the purchased Shares directly to such brokerage firm in order to complete the sale transaction.

 

(ii)    Furnish to the Company appropriate documentation that the person or persons exercising the Option (if other than Optionee) have the right to exercise this Option.

 

(iii)    Make appropriate arrangements with the Company (or a Parent, Subsidiary or Affiliate employing or retaining Optionee) for the satisfaction of all withholding or other obligations related to Tax-Related Items applicable to the Option grant, vesting, exercise or the sale of Shares, as applicable.

 

(b)    As soon as practical after the exercise date, the Company shall issue to or on behalf of Optionee (or any other person or persons exercising this Option) the purchased Option Shares, (as evidenced by an appropriate entry on the books of the Company or a duly authorized transfer agent of the Company), subject to the appropriate legends and/or stop transfer instructions.

 

(c)    In no event may this Option be exercised for any fractional Shares.

 

(d)    Notwithstanding any other provisions of the Plan, this Agreement or any other agreement to the contrary, if at the time this Option is exercised, Optionee is indebted to the Company (or any Parent, Subsidiary or Affiliate) for any reason, the following actions shall be taken, as deemed appropriate by the Committee:

 

(i)    any Shares to be issued upon such exercise shall automatically be pledged against Optionee’s outstanding indebtedness; and

 

(ii)    if this Option is exercised in accordance with subparagraph 9(a)(i)(B) above, the after tax proceeds of the sale of Optionee’s Shares shall automatically be applied to the outstanding balance of Optionee’s indebtedness.

 

   

 

 

10.    Responsibility for Taxes.

 

(a)Regardless of any action taken by the Company or Optionee's employer (the “Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to Optionee's participation in the Plan and legally applicable to Optionee (“Tax-Related Items”) is and remains Optionee's responsibility. Optionee further acknowledges that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option, including the grant, vesting or exercise of the Option, the subsequent sale of Shares acquired pursuant to such exercise and the receipt of any dividends; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Option to reduce or eliminate Optionee’s liability for Tax-Related Items or achieve any particular tax result. Further, if Optionee becomes subject to taxation in more than one jurisdiction, Optionee acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

 

(b)Prior to any relevant tax, withholding or required deduction event, as applicable, and in order to receive any Shares or other benefit in relation to the Option, Optionee agrees to make arrangements satisfactory to the Company for the satisfaction of any applicable Tax-Related Items of the Company and/or the Employer that arise in connection with the Option. In this regard, Optionee authorizes the Company and/or the Employer, or their respective agents, at their discretion, to satisfy any obligations related to Tax-Related Items by one or a combination of the following: (1) withholding all applicable Tax-Related Items from Optionee’s wages or other cash compensation paid to Optionee by the Company and/or the Employer; (2) withholding from proceeds of the sale of Shares acquired upon exercise of the Option either through a voluntary sale (specifically including where this Option is exercised in accordance with subparagraph 9(a)(i)(B) above) or through a mandatory sale arranged by the Company (on Optionee’s behalf pursuant to this authorization); or (3) withholding of Shares that would otherwise be issued upon exercise of the Option.

 

(c)Depending on the withholding method, the Company or Employer may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding amounts or other applicable withholding rates, including maximum applicable rates. If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, Optionee is deemed to have been issued the full number of Shares subject to the Option, notwithstanding that a number of the Shares are held back solely for the purpose of paying the Tax-Related Items. Optionee agrees to provide the Company and/or its stock plan broker/administrator with the information necessary to manage Optionee's Tax-Related Items withholding and acknowledges that should Optionee fail to provide such information on a timely basis, the Company and/or its stock plan broker/administrator may be obligated to withhold amounts from Optionee and it may be necessary for Optionee to seek a refund directly from the tax authorities.

 

(d)Finally, Optionee must pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of Optionee’s participation in the Plan or Optionee’s purchase of Shares that cannot be satisfied by the means previously described. The Company may refuse to honor the exercise and refuse to issue or deliver the Shares or the proceeds of the sale of the Shares if Optionee fails to comply with Optionee’s obligations in connection with the Tax-Related Items as described in this Paragraph.

 

   

 

 

11.    Tax and Legal Advice. Optionee represents, warrants and acknowledges that neither the Company nor Optionee’s Employer have made any warranties or representations to Optionee with respect to any Tax-Related Items, legal or financial consequences of the transactions contemplated by this Agreement, and Optionee is in no manner relying on the Company, the Employer or the Company’s or the Employer’s representatives for an assessment of such consequences. OPTIONEE UNDERSTANDS THAT THE LAWS GOVERNING THIS OPTION ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT OPTIONEE’S PROFESSIONAL TAX, LEGAL AND FINANCIAL ADVISOR REGARDING THIS OPTION. OPTIONEE UNDERSTANDS THAT THE COMPANY AND THE EMPLOYER ARE NOT PROVIDING ANY TAX, LEGAL, OR FINANCIAL ADVICE, NOR IS THE COMPANY OR THE EMPLOYER MAKING ANY RECOMMENDATION REGARDING OPTIONEE’S ACCEPTANCE OF THIS OPTION. NOTHING STATED HEREIN IS INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING TAXPAYER OR OTHER PENALTIES.

 

12.    Compliance with Laws and Regulations.

 

(a)    The exercise of this Option and the issuance of the Option Shares upon such exercise shall be subject to compliance by the Company and Optionee with all applicable laws, regulations and rules relating thereto, including all applicable regulations of any stock exchange (or the Nasdaq Global Select Market, if applicable) on which the Shares may be listed for trading at the time of such exercise and issuance and all applicable foreign laws.

 

(b)    The inability of the Company to obtain approval from any regulatory body having authority deemed by the Company to be necessary to the lawful issuance and sale of any Shares pursuant to this Option shall relieve the Company of any liability with respect to the non-issuance or sale of the Shares as to which such approval shall not have been obtained.

 

13.    Successors and Assigns. Except to the extent otherwise provided in Paragraphs 3, 5 and 6, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns and Optionee, Optionee’s assigns and the legal representatives, heirs and legatees of Optionee’s estate.

 

14.    Notices. Any notice required or permitted under the terms of this Agreement shall be in writing and shall be deemed sufficient when delivered personally or sent by confirmed email, telegram, or fax or forty-eight (48) hours after being deposited in the mail, as certified or registered mail, with postage prepaid, and addressed to the Company at the Company’s principal corporate offices or to the Optionee at the address maintained for the Optionee in the Company’s records or, in either case, as subsequently modified by written notice to the other party.

 

15.    Construction. The Notice, this Agreement, and the Option evidenced hereby (a) are made and granted pursuant to the Plan and are in all respects limited by and subject to the terms of the Plan, and (b) constitute the entire agreement between Optionee and the Company on the subject matter hereof and supersede all proposals, written or oral, and all other communications between the parties related to the subject matter. All decisions of the Committee with respect to any question or issue arising under the Notice, this Agreement or the Plan shall be conclusive and binding on all persons having an interest in this Option. The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

 

16.    Governing Law and Forum. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada without regard to the conflict of laws principles thereof. For purposes of litigating any dispute that may arise directly or indirectly from this Agreement, the parties hereby submit and consent to litigation in the exclusive jurisdiction of the State of Nevada and agree that any such litigation shall be conducted only in the courts of Nevadaor the federal courts for the United States for the Northern District of Nevadaand no other courts.

 

   

 

 

17.    Excess Shares. If the Option Shares covered by this Agreement exceed, as of the Grant Date, the number of Shares which may without shareholder approval be issued under the Plan, then this Option shall be void with respect to those excess shares, unless shareholder approval of an amendment sufficiently increasing the number of Shares issuable under the Plan is obtained in accordance with the provisions of the Plan and all applicable laws, regulations and rules.

 

18.    Further Instruments. The parties agree to execute such further instruments and to take such further action as may be reasonably necessary to carry out the purposes and intent of this Agreement.

 

19.    Authorization to Release and Transfer Necessary Personal Information.

 

(a) Optionee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Optionee’s personal information as described in this Agreement by and among, as applicable, the Employer, and the Company and its Parent, Subsidiaries and Affiliates for the exclusive purpose of implementing, administering and managing Optionee’s participation in the Plan.

 

(b) Optionee understands that the Company and the Employer may hold certain personal information about Optionee, including, but not limited to, Optionee’s name, home address and telephone number, date of birth, social insurance number (or any other social or national identification number), salary, nationality, job title, residency status, any Shares or directorships held in the Company, details of all options or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding (the “Data”) for the purpose of implementing, administering and managing the Optionee’s participation in the Plan. Optionee understands that Data may be transferred to the Company or any of its Parent, Subsidiaries or Affiliates, or to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in Optionee’s country or elsewhere, including outside the European Economic Area, and that the recipient’s country (e.g., the United States) may have different data privacy laws and protections than Optionee’s country. Optionee understands that Optionee may request a list with the names and addresses of any potential recipients of the Data by contacting Optionee’s local human resources representative. Optionee authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purposes of implementing, administering and managing Optionee’s participation in the Plan, including any requisite transfer of such Data to a broker or other third party assisting with the administration of the Option under the Plan or with whom Shares acquired pursuant to these Options or cash from the sale of such Shares may be deposited. Furthermore, Optionee acknowledges and understand that the transfer of the Data to the Company or any of its Parent, Subsidiaries or Affiliates, or to any third parties is necessary for Optionee's participation in the Plan.

 

(c) Optionee understands that Data will be held only as long as is necessary to implement, administer and manage Optionee’s participation in the Plan. Optionee understands that Optionee may, at any time, view the Data, request additional information about the storage and processing of the Data, require any necessary amendments to the Data or refuse or withdraw the consents herein by contacting Optionee’s local human resources representative in writing. Further, Optionee understands that he or she is providing the consents herein on a purely voluntary basis. If Optionee does not consent, or if Optionee later seeks to revoke consent, Optionee’s employment status or service and career with the Employer will not be affected; the only consequence of refusing or withdrawing Optionee’s consent is that the Company would not be able to grant Options or other equity awards, or administer or maintain such awards.  Optionee further acknowledges that withdrawal of consent may affect Optionee’s ability to vest in or realize benefits from the Options, and Optionee’s ability to participate in the Plan. For more information on the consequences of Optionee’s refusal to consent or withdrawal of consent, Optionee understands that Optionee may contact Optionee’s local human resources representative.

 

   

 

 

(d) The collection, use and transfer of Data for the purpose of implementing, administering and managing Optionee's participation in the Plan is conducted in accordance with the Company’s Global HR Data Protection Policy.

 

20.    No Entitlement or Claims for Compensation. As a condition to, and in consideration of, the grant, vesting, and exercise of this Option, and in receiving the Option, Option Shares, or any benefit relating to the Option, Optionee acknowledges and agrees that:

 

(a)    Optionee’s rights, if any, in respect of or in connection with this Option or any other Award are derived solely from the discretionary decision of the Company to permit Optionee to participate in the Plan and to benefit from a discretionary Award. The Plan may be amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan and this Agreement. By accepting this Option, Optionee expressly acknowledges that there is no obligation on the part of the Company to continue the Plan and/or grant any additional Awards to Optionee or benefits in lieu of Options or any other Awards even if Options have been granted repeatedly in the past. All decisions with respect to future Option grants, if any, will be at the sole discretion of the Committee.

 

(b)    This Option and the Shares subject to the Option are not intended to replace any pension rights or compensation and are not to be considered compensation of a continuing or recurring nature, or part of Optionee’s normal or expected compensation, and in no way represent any portion of Optionee’s salary, compensation or other remuneration for any purpose, including but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments, and in no event should be considered as compensation for, or relating in any way to, past services for the Company, the Employer or any Parent, Subsidiary or Affiliate. The value of the Option and the Shares subject to the Option are an extraordinary item that do not constitute compensation of any kind for services of any kind rendered to the Company, the Employer or any Parent, Subsidiary or Affiliate and which are outside the scope of Optionee’s written employment agreement (if any).

 

(c)     Optionee is voluntarily participating in the Plan.

 

(d)     Neither the Plan nor this Option or any other Award granted under the Plan shall be deemed to give Optionee a right to remain an Employee, Consultant or director of the Company, a Parent, Subsidiary or an Affiliate. The Employer reserves the right to terminate the Service of Optionee at any time, with or without cause, and for any reason.

 

(e)    The grant of the Option and Optionee's participation in the Plan will not be interpreted to form an employment contract or relationship with the Company, the Employer or any Parent, Subsidiary or Affiliate.

 

   

 

 

(f)     The future value of the underlying Shares is unknown and cannot be predicted with certainty. If the underlying Shares do not increase in value, the Option will have no value. If Optionee exercises the Option and obtains Shares, the value of the Shares acquired upon exercise may increase or decrease in value, even below the Exercise Price. Optionee also understands that neither the Company, nor the Employer or any Parent, Subsidiary or Affiliate is responsible for any foreign exchange fluctuation between the Employer’s local currency and the United States Dollar that may affect the value of this Option.

 

(g)     In consideration of the grant of the Option, no claim or entitlement to compensation or damages shall arise from forfeiture of the Option resulting from termination of Optionee’s Service by the Company or the Employer (for any reason whatsoever and whether or not in breach of local labor laws).

 

(h)    The Company may require Options granted hereunder be exercised with, and the Option Shares held by, a broker designated by the Company.

 

(i)    Optionee’s rights hereunder (if any) shall be subject to set-off by the Company for any valid debts the Optionee owes to the Company.

 

(j)    The Option and the benefits under the Plan, if any, will not automatically transfer to another company in the case of a merger, take-over or transfer of liability.

 

21.    Severability. If any provision of this Agreement is held to be unenforceable for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the parties to the extent possible. In any event, all other provisions of this Agreement shall be deemed valid and enforceable to the full extent possible.

 

22.    Waiver. Optionee agrees that a waiver by the Company of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by Optionee or any other participant.

 

23.    Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to Optionee’s current or future participation in the Plan by electronic means or to request Optionee’s consent to participate in the Plan by electronic means. Optionee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

 

24.    Language. If this Agreement or any other document related to the Plan is translated into a language other than English and the meaning of the translated version is different from the English version, the English version will take precedence.

 

25.    Appendix. Notwithstanding any provisions in this Agreement, the Option shall be subject to any special terms and conditions set forth in any Appendix to this Agreement for Optionee’s country of residence. Moreover, if Optionee relocates to one of the countries included in the Appendix, the special terms and conditions for such country will apply to Optionee, to the extent the Company determines that the application of such terms and conditions is necessary or advisable in order to comply with local law or facilitate the administration of the Plan. The Appendix constitutes part of this Agreement.

 

   

 

 

26.    Committee Policies. The Option shall be subject to any applicable special terms and conditions set forth in any applicable policy (and any amendments thereto) that the Committee (or a designee of the Committee) has adopted or will adopt in the future, including, but not limited to, any policy related to the vesting or transfer of equity awards.

 

27.    Imposition of Other Requirements. The Company reserves the right to impose other requirements on Optionee’s participation in the Plan, on the Option and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with local law or facilitate the administration of the Plan. Optionee agrees to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. Furthermore, Optionee acknowledges that the laws of the country in which Optionee is working at the time of grant, vesting and exercise of the Option or the sale of Shares received pursuant to this Agreement (including any rules or regulations governing securities, foreign exchange, tax, labor, or other matters) may subject Optionee to additional procedural or regulatory requirements that Optionee is and will be solely responsible for and must fulfill.

 

28.    Acceptance of Agreement. You may accept this Award either by (a) clicking on the “I agree” button below at any time before the First Vest Date or (b) doing nothing and your Award will be automatically accepted on your behalf on the First Vest Date.

 

* * * *

 

By accepting your Award in accordance with Section 28 of this Agreement, you agree to be bound by the terms and conditions of this Agreement.

 

PLEASE PRINT AND KEEP A COPY FOR YOUR RECORDS

 

   

 

 

WORLD TECHNOLOGY CORP.

 

STOCK GRANT AGREEMENT

 

This Stock Grant Agreement (the “Agreement”) is made and entered into as of the Grant Date (as defined below) by and between World Technology Corp., a Nevadacorporation (the “Company”), and you pursuant to the World Technology Corp. 2018 Stock Incentive Plan (the “Plan”). The material terms of this Stock Grant Award are as follows:

 

 

Employee ID:        
       
Grant Date:        
       
Grant Number:        
       
Restricted Shares:          
       
First Vest Date:     ,20________________  

 

To the extent any capitalized terms used in this Agreement are not defined, they shall have the meaning ascribed to them in the Plan. In the event of a conflict between the terms and provisions of the Plan and the terms and provisions of this Agreement, the Plan terms and provisions shall prevail.

 

In consideration of the mutual agreements herein contained and intending to be legally bound hereby, and as a condition to and in consideration of the grant, vesting, and settlement of the Stock Grant and your receipt of any Shares or any related benefit thereunder, the parties agree as follows:

 

1.    Restricted Shares. Pursuant to the Plan, the Company hereby transfers to you, and you hereby accept from the Company, a Stock Grant Award consisting of the Restricted Shares, on the terms and conditions set forth herein and in the Plan. By accepting (whether in writing, electronically or otherwise) the Stock Grant, or by otherwise receiving the Stock Grant, Shares, or any benefit relating thereto, you acknowledge that the Stock Grant and any Shares issued thereunder and your participation in the Plan are subject to such terms and conditions, and you agree to such terms and conditions.

 

2.    Vesting of Restricted Shares. So long as your Service continues, the Restricted Shares shall vest in accordance with the following schedule: [________________], unless otherwise provided by the Plan or Section 3 below. In the event of the termination of your Service for any reason, all unvested Restricted Shares shall be immediately forfeited without consideration. For purposes of facilitating the enforcement of the provisions of this Section 2, the Company may issue stop-transfer instructions on the Restricted Shares to the Company's transfer agent, or otherwise hold the Restricted Shares in escrow, until the Restricted Shares have vested and you have satisfied all applicable obligations with respect to the Restricted Shares, including any applicable tax withholding obligations set forth in Section 5 below. Any new, substituted or additional securities or other property which is issued or distributed with respect to the unvested Restricted Shares shall be subject to the same terms and conditions as are applicable to the unvested Restricted Shares under this Agreement and the Plan.

 

   

 

 

3.    Special Acceleration.

 

(a)    To the extent the Restricted Shares are outstanding at the time of a Corporate Transaction, but not otherwise fully vested, such Restricted Shares shall automatically accelerate immediately prior to the effective date of the Corporate Transaction and shall become vested in full at that time. No such acceleration, however, shall occur if and to the extent: (i) this Stock Grant Agreement is, in connection with the Corporate Transaction, assumed by the successor corporation (or parent thereof), or (ii) the Restricted Shares are replaced with a cash incentive program of the successor corporation which preserves the Fair Market Value of the Restricted Shares at the time of the Corporate Transaction and provides for subsequent pay-out in accordance with the vesting schedule set forth in Section 2 above.

 

(b)    Immediately following the effective date of the Corporate Transaction, this Stock Grant Agreement shall terminate and cease to be outstanding, except to the extent assumed by the successor corporation (or parent thereof) in connection with the Corporate Transaction.

 

(c)    If this Stock Grant Agreement is assumed in connection with a Corporate Transaction, then the Committee shall appropriately adjust the number of shares and the kind of shares or securities covered by this Stock Grant Agreement immediately after such Corporate Transaction.

 

(d)    This Stock Grant Agreement shall not in any way affect the right of the Company to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets.

 

4.    Restriction on Election to Recognize Income in the Year of Grant. Under Section 83 of the Code, the Fair Market Value of the Restricted Shares on the date the Restricted Shares vest will be taxable as ordinary income at that time. You understand, acknowledge and agree that, as a condition to the grant of this Award, you may not elect to be taxed at the time the Restricted Shares are acquired by filing an election under Section 83(b) of the Code with the Internal Revenue Service.

 

5.    Withholding Taxes. In order to receive any Shares or other benefit in relation to the Stock Grant, you agree to make arrangements satisfactory to the Company for the satisfaction of any applicable withholding tax obligations that arise in connection with the Restricted Shares which, at the sole discretion of the Company, may include (i) having the Company withhold Shares from the Restricted Shares held in escrow, or (ii) any other arrangement approved by the Company, in any case, equal in value to the amount necessary to satisfy any such withholding tax obligation. Such Shares shall be valued based on the Fair Market Value as of the day prior to the date that the amount of tax to be withheld is to be determined under applicable law. The Company shall not be required to release the Restricted Shares from the stop-transfer instructions or escrow unless and until such obligations are satisfied.

 

6.    Tax Advice. You represent, warrant and acknowledge that the Company has made no warranties or representations to you with respect to the income tax consequences of the transactions contemplated by this Agreement, and you are in no manner relying on the Company or the Company’s representatives for an assessment of such tax consequences. YOU UNDERSTAND THAT THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR REGARDING ANY STOCK GRANT AWARD. NOTHING STATED HEREIN IS INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING TAXPAYER PENALTIES.

 

7.    Non-Transferability of Restricted Shares. Restricted Shares which have not vested pursuant to Section 2 above shall not be anticipated, assigned, attached, garnished, optioned, transferred or made subject to any creditor's process, whether voluntarily or involuntarily or by the operation of law. However, this Section 7 shall not preclude you from designating a beneficiary who will receive any vested Restricted Shares in the event of your death, nor shall it preclude a transfer of vested Restricted Shares by will or by the laws of descent and distribution.

 

   

 

 

8.    Restriction on Transfer. Regardless of whether the transfer or issuance of the Restricted Shares has been registered under the Securities Act or has been registered or qualified under the securities laws of any state, the Company may impose additional restrictions upon the sale, pledge, or other transfer of the Restricted Shares (including the placement of appropriate legends on stock certificates and the issuance of stop-transfer instructions to the Company’s transfer agent) if, in the judgment of the Company and the Company’s counsel, such restrictions are necessary in order to achieve compliance with the provisions of the Securities Act, the securities laws of any state, or any other law.

 

9.    Stock Certificate Restrictive Legends. Stock certificates evidencing the Restricted Shares may bear such restrictive legends as the Company and the Company’s counsel deem necessary under applicable law or pursuant to this Agreement.

 

10.    Representations, Warranties, Covenants, and Acknowledgments. You hereby agree that in the event the Company and the Company’s counsel deem it necessary or advisable in the exercise of their discretion, the transfer or issuance of the Restricted Shares may be conditioned upon you making certain representations, warranties, and acknowledgments relating to compliance with applicable securities laws.

 

11.    Voting, Dividend and Other Rights. Subject to the terms of this Agreement, you shall have all the rights and privileges of a shareholder of the Company while the Restricted Shares are subject to stop-transfer instructions, or otherwise held in escrow, including the right to vote. To the extent any Restricted Shares have not vested pursuant to Section 2 above, no dividends or other distributions shall be accrued, paid or distributed to you.

 

12.    Authorization to Release and Transfer Necessary Personal Information.

 

(a)You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal information as described in this Agreement by and among, as applicable, the Employer, and the Company and its Parent, Subsidiaries and Affiliates for the exclusive purpose of implementing, administering and managing your participation in the Plan.

 

(b)You understand that the Company and the Employer may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number (or any other social or national identification number), salary, nationality, job title, residency status, any Shares or directorships held in the Company, details of all Awards or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding (the “Data”) for the purpose of implementing, administering and managing your participation in the Plan. You understand that the Data may be transferred to the Company or any of its Parent, Subsidiaries or Affiliates, or to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in your country or elsewhere, including outside the European Economic Area, and that the recipient’s country (e.g., the United States) may have different data privacy laws and protections than your country. You understand that you may request a list with the names and addresses of any potential recipients of the Data by contacting your local human resources representative. You authorize the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purposes of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data to a broker or other third party assisting with the administration of this Stock Grant Award under the Plan or with whom Shares acquired pursuant to this Stock Grant Award or cash from the sale of such Shares may be deposited. Furthermore, you acknowledge and understand that the transfer of the Data to the Company or any of its Parent, Subsidiaries or Affiliates, or to any third parties is necessary for your participation in the Plan.

 

   

 

 

(c)You understand that the Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that you may, at any time, view the Data, request additional information about the storage and processing of the Data, require any necessary amendments to the Data or refuse or withdraw the consents herein by contacting your local human resources representative in writing. Further, you understand that you are providing the consents herein on a purely voluntary basis. If you do not consent, or if you later seek to revoke your consent, your employment status or service and career with the Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing your consent is that the Company would not be able to grant you this Stock Grant Award or other equity awards, or administer or maintain such awards. You further acknowledge that withdrawal of consent may affect your ability to vest in or realize benefits from this Stock Grant Award and your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.

 

(d)The collection, use and transfer of Data for the purpose of implementing, administering and managing your participation in the Plan is conducted in accordance with the Company’s Global HR Data Protection Policy.

 

13.    No Entitlement or Claims for Compensation. As a condition to, and in consideration of, the grant, vesting, and settlement of the Stock Grant, and in receiving the Stock Grant, Shares, or any benefit relating to the Stock Grant, you acknowledge and agree that:

 

(a)    Your rights, if any, in respect of or in connection with this Stock Grant Award or any other Award is derived solely from the discretionary decision of the Company to permit you to participate in the Plan and to benefit from a discretionary Award. By accepting this Stock Grant Award, you expressly acknowledge that there is no obligation on the part of the Company to continue the Plan and/or grant any additional Awards to you. This Stock Grant Award is not intended to be compensation of a continuing or recurring nature, or part of your normal or expected compensation, and in no way represents any portion of your salary, compensation, or other remuneration for purposes of pension benefits, severance, redundancy, resignation or any other purpose.

 

(b)    Neither the Plan nor this Stock Grant Award or any other Award granted under the Plan shall be deemed to give you a right to remain an Employee, Consultant or director of the Company, a Parent, a Subsidiary or an Affiliate. The Company and its Parents and Subsidiaries and Affiliates reserve the right to terminate your Service at any time, with or without cause, and for any reason, subject to applicable laws, the Company’s Articles of Incorporation and Bylaws and a written employment agreement (if any), and you shall be deemed irrevocably to have waived any claim to damages or specific performance for breach of contract or dismissal, compensation for loss of office, tort or otherwise with respect to the Plan, this Stock Grant Award or any outstanding Award that is forfeited and/or is terminated by its terms or to any future Award.

 

(c)    You agree that the Company may require that Restricted Shares be held by a broker designated by the Company. In addition, you agree that your rights hereunder shall be subject to set-off by the Company for any valid debts you owe the Company.

 

   

 

 

14.    Governing Law and Forum. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevadawithout regard to the conflict of laws principles thereof. For purposes of litigating any dispute that may arise directly or indirectly from this Agreement, the parties hereby submit and consent to litigation in the exclusive jurisdiction of the State of Nevadaand agree that any such litigation shall be conducted only in the courts of Nevadaor the federal courts for the United States for the Northern District of Nevada and no other courts.

 

15.    Notices. Any notice required or permitted under the terms of this Agreement shall be in writing and shall be deemed sufficient when delivered personally or sent by confirmed email, telegram, or fax or forty-eight (48) hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed to the Company at the Company's principal corporate offices or to you at the address maintained for you in the Company's records or, in either case, as subsequently modified by written notice to the other party.

 

16.    Binding Effect. Subject to the limitations set forth in this Agreement, this Agreement shall be binding upon, and inure to the benefit of, the executors, administrators, heirs, legal representatives, successors, and assigns of the parties hereto.

 

17.    Severability. If any provision of this Agreement is held to be unenforceable for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the parties to the extent possible. In any event, all other provisions of this Agreement shall be deemed valid and enforceable to the full extent possible.

 

18.    Waiver. You agree that a waiver by the Company of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by you or any other participant.

 

19.    Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to your current or future participation in the Plan by electronic means or to request your consent to participate in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

 

20.     Committee Policies. This Stock Grant shall be subject to any special terms and conditions set forth in any applicable policy (and any amendments thereto) that the Committee (or a designee of the Committee) has adopted or will adopt in the future, including, but not limited to, any policy related to the vesting or transfer of equity awards.

 

21.    Acceptance of Agreement. You may accept this Award either by (a) clicking on the “I agree” button below at any time before the First Vest Date or (b) doing nothing and your Award will be automatically accepted on your behalf on the First Vest Date.

 

* * * *

 

By accepting your Award in accordance with Section 21 of this Agreement, you agree to be bound by the terms and conditions of this Agreement.

 

PLEASE PRINT AND KEEP A COPY FOR YOUR RECORDS

 

   

 

 

WORLD TECHNOLOGY CORP.

 

PERFORMANCE-BASED STOCK UNIT AGREEMENT

 

This Performance-Based Stock Unit Agreement (the “Agreement”) is made and entered into as of the Grant Date (as defined below) by and between World Technology Corp., a Nevada corporation (the “Company”), and you pursuant to the World Technology Corp. 2018 Stock Incentive Plan (the “Plan”). The material terms of this Stock Unit Award are as follows:

       
Employee ID:      
     
Grant Date:      
     
Grant Number:      
     
Target Amount of Performance-Based Stock Units:        
     
Vest Date:      

 

To the extent any capitalized terms used in this Agreement are not defined, they shall have the meaning ascribed to them in the Plan. In the event of a conflict between the terms and provisions of the Plan and the terms and provisions of this Agreement, the Plan terms and provisions shall prevail.

 

In consideration of the mutual agreements herein contained and intending to be legally bound hereby, and as a condition to and in consideration of the grant, vesting, and settlement of the Performance-Based Stock Units and your receipt of any Shares or any related benefit thereunder, the parties agree as follows:

 

1.    Performance-Based Stock Units. Pursuant to the Plan, the Company hereby grants to you and you hereby accept from the Company, Performance-Based Stock Units, each of which is a bookkeeping entry representing the equivalent in value of one (1) Share, on the terms and conditions set forth herein and in the Plan. By accepting (whether in writing, electronically or otherwise) the Performance-Based Stock Units, or by otherwise receiving the Performance-Based Stock Units, Shares, or any benefit relating thereto, you acknowledge that the Performance-Based Stock Units and any Shares issued thereunder and your participation in the Plan are subject to such terms and conditions, and you agree to such terms and conditions. The Target Amount of Performance-Based Stock Units stated above reflects the target number of Performance-Based Stock Units (the “Target Amount”). The number of Performance-Based Stock Units ultimately paid out to you will range from ___% to ____% of the Target Amount as determined (i) based upon the Company’s performance during the performance period against the performance goals as set forth in the Committee’s resolutions, dated __________________ (the “Performance Goals”) and (ii) by the basic formula contained in the attached Exhibit A. In accordance therewith, the Committee has the right, in its sole discretion and for any reason, to reduce or eliminate the number of Performance-Based Stock Units that would otherwise be payable hereunder pursuant to the immediately preceding sentence.

 

   

 

 

2.    Vesting of Performance-Based Stock Units. So long as your Service continues and subject to, and to the extent of, the satisfaction of the Performance Goals, the Performance-Based Stock Units shall vest in accordance with the following schedule: _________ (____%) of the total number of Performance-Based Stock Units earned, if any, pursuant to the satisfaction of the Performance Goals shall vest on the Vest Date, unless otherwise provided by the Plan or Sections 3(b) or 4 below. If you take a leave of absence, the Company may, at its discretion and to the extent permitted under applicable local law, either suspend vesting during the period of leave or pro-rate the Performance-Based Stock Units, notwithstanding the Company’s Vesting Policy for Leaves of Absence.

 

3.    Termination of Service.

 

(a)    Except as otherwise provided in Section 3(b) below or Section 4, in the event of the termination of your Service for any reason (whether or not in breach of local labor laws), all unvested Performance-Based Stock Units shall be immediately forfeited without consideration. For purposes of the preceding sentence, your right to vest in the Performance-Based Stock Units will terminate effective as of the date that you are no longer actively providing Service (or earlier upon your “Separation from Service” within the meaning of Code Section 409A) and will not be extended by any notice period mandated under local law (e.g., active Service would not include a period of “garden leave” or similar period pursuant to local law); the Company shall have the exclusive discretion to determine when you are no longer actively providing Service for purposes of the Performance-Based Stock Units.

 

(b)    In the event that you resign or your Service is terminated for any reason other than Cause on or after the date that (x) you have attained at least _____ (___) years of age and (y) your age plus your years of Service is at least equal to ____________ (_____), and so long as such resignation or the termination of your Service occurs no earlier than the ________ anniversary of the Grant Date (the satisfaction of the aforementioned conditions is referred to herein as “Retirement(1)”), all unvested Performance-Based Stock Units may be earned pursuant to the satisfaction of the Performance Goals, and shall vest in accordance with the vesting schedule set forth in Section 2 above, determined as if your Service had continued after your resignation or termination of Service, and shall be settled in accordance with Section 5(a); provided that any unsettled or unvested Performance-Based Stock Units shall be forfeited without consideration immediately upon the breach of any of the following conditions:

 

(i)    Unless prohibited by applicable law, you shall render, as an independent advisor or consultant and not as an Employee, such advisory or consulting services to the Company (or any Parent, Subsidiary or Affiliate) as shall reasonably be requested by the Company (or any Parent, Subsidiary or Affiliate), and such services shall not be terminated for Cause (for purposes of clarity, any request to provide such advisory or consulting services to the Company (or any Parent, Subsidiary or Affiliate) shall not be considered a continuation of “Service” unless the Company specifically provides that the continuation of services is a continuation of “Service” for purposes of this Section 3(b)).

 

(ii)    For a period of _____ (__) year beginning on the date of your termination of Service or during any period in which you provide independent advisory or consulting services to the Company (or any Parent, Subsidiary or Affiliate), you shall not directly or indirectly, individually or on behalf of other persons or entities, intentionally solicit or induce (a) any employee of the Company (or any Parent, Subsidiary or Affiliate) to leave the employee’s employment in order to accept employment with another person or entity or (b) any customer of the Company (or any Parent, Subsidiary or Affiliate) with whom you have worked in your capacity as an Employee prior to your termination of Service whose identity and/or any related information constitutes protected trade secrets (with such customers determined as of the date of the termination of your Service, to retain or use any other person or entity for the purpose of rendering services in competition with the Company (or any Parent, Subsidiary or Affiliate) or to purchase products from any business which, in the opinion of the Company (or any Parent, Subsidiary or Affiliate), competes with or is in conflict with the interests of the Company (or any Parent, Subsidiary or Affiliate), in either case, unless these restrictions are prohibited (whether in whole or in part) by applicable law.

 

   

 

 

(iii)    For a period of _____ (__) year beginning on the date of your termination of Service or during any period in which you provide independent advisory or consulting services to the Company (or any Parent, Subsidiary or Affiliate), you shall not render services for any organization or engage directly or indirectly in any business which, in the opinion of the Company, competes with or is in conflict with the interests of the Company (or any Parent, Subsidiary or Affiliate), unless this restriction is prohibited by applicable law.

 

(iv)    You shall not, without prior written authorization from the Company, use or disclose any confidential information or trade secrets concerning the Company (or any Parent, Subsidiary or Affiliate), in each case as determined by the Committee, and the Committee’s determination shall be conclusive and binding.

 

(c)    Notwithstanding any provisions to the contrary in this Agreement, in the event of the termination of your Service for Cause or in the event of the termination for Cause of any independent advisory or consulting services you may be providing as described in Section 3(b)(i), any unsettled or unvested Performance-Based Stock Units shall terminate and be forfeited immediately without consideration.

 

4.    Special Acceleration.

 

(a)    To the extent the Performance-Based Stock Units are outstanding at the time of a Corporate Transaction, such Performance-Based Stock Units shall automatically become vested in full at the Target Amount immediately prior to the effective date of the Corporate Transaction and settled in accordance with Section 5 below. No such accelerated vesting, however, shall occur if and to the extent: (i) these Performance-Based Stock Units are, in connection with the Corporate Transaction, either assumed by the successor corporation (or parent thereof) or replaced with comparable performance-based stock units of the successor corporation (or parent thereof), in each case, having a minimum payout equal to the Target Amount and preserving the settlement provisions set forth in Section 5 below or (ii) these Performance-Based Stock Units are replaced with a cash incentive program of the successor corporation which complies with Code Section 409A and, at a minimum, preserves the fair market value of the Performance-Based Stock Units at the time of the Corporate Transaction (based on the Target Amount) and provides for subsequent pay-out in accordance with the settlement provisions set forth in Section 5 below. The determination of the comparability of performance-based stock units under clause (i) shall be made by the Committee, and such determination shall be final, binding and conclusive.

 

 

(1)If you are subject to the employment protections of a country within the European Economic Area because you reside in such country or are otherwise subject thereto, “Retirement” shall mean your years of Service is at least equal to ______ (___), regardless of your age, and the provisions concerning Retirement shall apply to you so long as the termination of your Service occurs no earlier than the one-year anniversary of the Grant Date. In all cases, years of Service shall be determined based on the date you originally provided Service. If you previously terminated Service, but subsequently returned to Service prior to the Grant Date, you will receive credit for your prior Service.     

 

   

 

 

(b)    Immediately following the effective date of the Corporate Transaction, this Agreement shall terminate and cease to be outstanding, except as set forth in Section 5 below with respect to the settlement of Performance-Based Stock Units or to the extent assumed by the successor corporation (or parent thereof) in connection with the Corporate Transaction.

 

(c)    If this Agreement is assumed in connection with a Corporate Transaction, then the Committee shall appropriately adjust the number of units and the kind of shares or securities to be issued pursuant to this Agreement immediately after such Corporate Transaction.

 

(d)    This Agreement shall not in any way affect the right of the Company to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets.

 

5.    Settlement of Performance-Based Stock Units.

 

(a)    General Settlement Terms. The Performance-Based Stock Units, to the extent earned and vested hereunder (including, without limitation by reason of Retirement), shall be automatically settled in Shares on the Vest Date (which constitutes a fixed payment date for purposes of Code Section 409A) or, if earlier, upon the earliest to occur of the settlement events set forth below or in the Company’s Vesting Acceleration Policy for Death and Terminal Illness; it being understood that nothing herein shall limit the Company’s ability to amend or terminate such policy in its sole discretion and without your consent.

 

(b)    Corporate Transaction. If, as of the Grant Date, you have not satisfied and it is not possible for you to satisfy the age and Service Retirement conditions with respect to this Performance-Based Stock Unit award and this Performance-Based Stock Unit award is not assumed or replaced as described in Section 4(a) in connection with a Corporate Transaction, then the Performance-Based Stock Units shall be automatically settled in Shares immediately prior to the effective date of the Corporate Transaction instead of on the Vest Date.

 

(c)    The Company shall have no obligation to issue Shares pursuant to this Agreement unless and until you have satisfied any applicable tax and/or other obligations pursuant to Section 6 below and such issuance otherwise complies with all applicable law.

 

(d)    Notwithstanding anything in this Section 5 or in this Agreement, to the extent your Performance-Based Stock Units would otherwise be settled upon your Separation from Service, such settlement shall instead occur upon the Company’s first business day following the six-month anniversary of your Separation from Service.

 

(e)    Prior to the time that the Performance-Based Stock Units are settled, you shall have no rights other than those of a general creditor of the Company. The Performance-Based Stock Units represent an unfunded and unsecured obligation of the Company.

 

   

 

 

6.    Taxes.

 

(a)    Regardless of any action the Company or your employer (the “Employer”) takes with respect to any and all income tax, social taxes or insurance contributions, payroll tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you (“Tax-Related Items”), and as a condition to and in consideration of the grant, vesting, and settlement of the Performance-Based Stock Units, you acknowledge that the ultimate liability for all Tax-Related Items with respect to the Performance-Based Stock Units is and remains your responsibility and may exceed the amount actually withheld by the Company or the Employer. You further acknowledge that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Performance-Based Stock Units, including the grant, vesting or settlement of the Performance-Based Stock Units, or the subsequent sale of any Shares acquired at vesting or the receipt of any dividends with respect to such Shares; and (ii) do not commit to and are under no obligation to structure the terms or any aspect of the Performance-Based Stock Units to reduce or eliminate your liability for Tax-Related Items or achieve any particular tax result. Further, if you become subject to taxation in more than one jurisdiction between the Grant Date and the date of any relevant taxable event, you acknowledge that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

 

(b)    Prior to any relevant tax, withholding or required deduction event, as applicable, and in order to receive any Shares or other benefit in relation to the Performance-Based Stock Units, you agree to make arrangements satisfactory to the Company for the satisfaction of any applicable tax, withholding, required deduction and payment on account of any obligations of the Company and/or the Employer that arise in connection with the Performance-Based Stock Units. In this regard, you authorize the Company and/or the Employer, or their respective agents, at their discretion, to satisfy any obligations related to Tax-Related Items by one or a combination of the following: (1) withholding from your wages or other cash compensation payable to you by the Company or the Employer; (2) withholding from proceeds of the sale of Shares acquired upon settlement of the Performance-Based Stock Units either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf pursuant to this authorization); (3) withholding of Shares that would otherwise be issued upon settlement of the Performance-Based Stock Units; or (4) requiring you to satisfy the liability for Tax-Related Items by means of any other arrangement approved by the Company. If the obligation for Tax-Related Items is satisfied by withholding Shares, for tax purposes, you are deemed to have been issued the full number of Shares subject to the vested Performance-Based Stock Units, notwithstanding that a number of the Shares are held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of your participation in the Plan. You agree to provide the Company and/or its stock plan broker/administrator with the information necessary to manage your Tax-Related Items withholding and acknowledge that should you fail to provide such information on a timely basis, the Company and/or its stock plan broker/administrator may be obligated to withhold amounts from you and it may be necessary for you to seek a refund directly from the tax authorities. Depending on the withholding method, the Company or Employer may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding amounts or other applicable withholding rates.

 

(c)    Finally, you will pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of your participation in the Plan or your acquisition of Shares that cannot be satisfied by the means previously described. The Company shall not be required to issue or deliver Shares pursuant to this Agreement unless and until such obligations are satisfied.

 

7.    Tax and Legal Advice. You represent, warrant and acknowledge that neither the Company nor your Employer have made any warranties or representations to you with respect to any Tax-Related Items, legal or financial consequences of the transactions contemplated by this Agreement, and you are in no manner relying on the Company, your Employer or the Company’s or the Employer’s representatives for an assessment of such consequences. YOU UNDERSTAND THAT THE LAWS GOVERNING THIS AWARD ARE SUBJECT TO CHANGE. YOU SHOULD CONSULT YOUR OWN PROFESSIONAL TAX, LEGAL AND FINANCIAL ADVISOR REGARDING ANY PERFORMANCE-BASED STOCK UNITS. YOU UNDERSTAND THAT THE COMPANY AND YOUR EMPLOYER ARE NOT PROVIDING ANY TAX, LEGAL, OR FINANCIAL ADVICE, NOR IS THE COMPANY OR YOUR EMPLOYER MAKING ANY RECOMMENDATION REGARDING YOUR ACCEPTANCE OF THIS AWARD. NOTHING STATED HEREIN IS INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING TAXPAYER OR OTHER PENALTIES.

 

   

 

 

8.    Non-Transferability of Performance-Based Stock Units. Performance-Based Stock Units shall not be anticipated, assigned, attached, garnished, optioned, transferred or made subject to any creditor’s process, whether voluntarily or involuntarily or by operation of law.

 

9.    Restriction on Transfer. Regardless of whether the transfer or issuance of the Shares to be issued pursuant to the Performance-Based Stock Units has been registered under the Securities Act or has been registered or qualified under the securities laws of any state, the Company may impose additional restrictions upon the sale, pledge, or other transfer of the Shares (including the placement of appropriate legends on stock certificates and the issuance of stop-transfer instructions to the Company’s transfer agent) if, in the judgment of the Company and the Company’s counsel, such restrictions are necessary in order to achieve compliance with the provisions of the Securities Act, the securities laws of any state, or any other law including all applicable foreign laws.

 

10.    Restrictive Legends and Stop-Transfer Instructions. Stock certificates evidencing the Shares issued pursuant to the Performance-Based Stock Units may bear such restrictive legends and/or appropriate stop-transfer instructions may be issued to the Company’s transfer agent as the Company and the Company’s counsel deem necessary under applicable law or pursuant to this Agreement.

 

11.    Representations, Warranties, Covenants, and Acknowledgments. You hereby agree that in the event the Company and the Company’s counsel deem it necessary or advisable in the exercise of their discretion, the transfer or issuance of the Shares issued pursuant to the Performance-Based Stock Units may be conditioned upon you making certain representations, warranties, and acknowledgments relating to compliance with applicable laws.

 

12.    Voting and Other Rights. Subject to the terms of this Agreement, you shall not have any voting rights or any other rights and privileges of a stockholder of the Company unless and until the Performance-Based Stock Units are settled in Shares. In addition, you shall not have any rights to dividend equivalent payments with respect to Performance-Based Stock Units.

 

13.    Authorization to Release and Transfer Necessary Personal Information.

 

(a)    You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal information as described in this Agreement by and among, as applicable, the Employer, and the Company and its Parent, Subsidiaries and Affiliates for the exclusive purpose of implementing, administering and managing your participation in the Plan.

 

   

 

 

(b)    You understand that the Company and the Employer may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number (or any other social or national identification number), salary, nationality, job title, residency status, any Shares or directorships held in the Company, details of all Performance-Based Stock Units or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding (the “Data”) for the purpose of implementing, administering and managing your participation in the Plan. You understand that Data may be transferred to the Company or any of its Parent, Subsidiaries or Affiliates, or to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in your country or elsewhere, including outside the European Economic Area, and that the recipient’s country (e.g., the United States) may have different data privacy laws and protections than your country. You understand that you may request a list with the names and addresses of any potential recipients of the Data by contacting your local human resources representative. You authorize the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purposes of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data to a broker or other third party assisting with the administration of these Performance-Based Stock Units under the Plan or with whom Shares acquired pursuant to these Performance-Based Stock Units or cash from the sale of such Shares may be deposited. Furthermore, you acknowledge and understand that the transfer of the Data to the Company or any of its Parent, Subsidiaries or Affiliates, or to any third parties is necessary for your participation in the Plan.

 

(c)    You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that you may, at any time, view the Data, request additional information about the storage and processing of the Data, require any necessary amendments to the Data or refuse or withdraw the consents herein by contacting your local human resources representative in writing. Further, you understand that you are providing the consents herein on a purely voluntary basis. If you do not consent, or if you later seek to revoke your consent, your employment status or service and career with the Employer will not be affected; the only consequence of refusing or withdrawing your consent is that the Company would not be able to grant you Performance-Based Stock Units or other equity awards, or administer or maintain such awards.  You further acknowledge that withdrawal of consent may affect your ability to vest in or realize benefits from these Performance-Based Stock Units, and your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.

 

(d)    The collection, use and transfer of Data for the purpose of implementing, administering and managing your participation in the Plan is conducted in accordance with the Company’s Global HR Data Protection Policy.

 

14.    No Entitlement or Claims for Compensation. As a condition to, and in consideration of, the grant, vesting, and settlement of the Performance-Based Stock Units, and in receiving the Performance-Based Stock Units, Shares, or any benefit relating to the Performance-Based Stock Units, you acknowledge and agree that:

 

(a)    Your rights, if any, in respect of or in connection with these Performance-Based Stock Units or any other Award are derived solely from the discretionary decision of the Company to permit you to participate in the Plan and to benefit from a discretionary Award. The Plan may be amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan and this Agreement. By accepting these Performance-Based Stock Units, you expressly acknowledge that there is no obligation on the part of the Company to continue the Plan and/or grant any additional Performance-Based Stock Units to you or benefits in lieu of Restricted Stock Units, even if Performance-Based Stock Units have been granted repeatedly in the past. All decisions with respect to future grants of Performance-Based Stock Units, if any, will be at the sole discretion of the Committee.

 

   

 

 

(b)    The Performance-Based Stock Units and the Shares subject to the Performance-Based Stock Units are not intended to replace any pension rights or compensation and are not to be considered compensation of a continuing or recurring nature, or part of your normal or expected compensation, and in no way represent any portion of your salary, compensation or other remuneration for any purpose, including but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments, and in no event should be considered as compensation for, or relating in any way to, past services for the Company, the Employer or any Parent, Subsidiary or Affiliate. The value of the Performance-Based Stock Units is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company, the Employer or any Parent, Subsidiary or Affiliate and which is outside the scope of your written employment agreement (if any).

 

(c)    You acknowledge that you are voluntarily participating in the Plan.

 

(d)    Neither the Plan nor these Performance-Based Stock Units or any other Award granted under the Plan shall be deemed to give you a right to remain an Employee, Consultant or director of the Company, a Parent, Subsidiary or an Affiliate. The Employer reserves the right to terminate your Service at any time, with or without cause, and for any reason, subject to applicable laws, the Company’s Articles of Incorporation and Bylaws, and a written employment agreement (if any).

 

(e)    The grant of the Performance-Based Stock Units and your participation in the Plan will not be interpreted to form an employment contract or relationship with the Company, the Employer or any Parent, Subsidiary or Affiliate.

 

(f)    The future value of the underlying Shares is unknown and cannot be predicted with certainty and if you vest in the Performance-Based Stock Units and are issued Shares, the value of those Shares may increase or decrease. You also understand that neither the Company, nor the Employer or any Parent, Subsidiary or Affiliate is responsible for any foreign exchange fluctuation between your Employer’s local currency and the United States Dollar that may affect the value of this Award.

 

(g)    In consideration of the grant of the Performance-Based Stock Units, no claim or entitlement to compensation or damages shall arise from forfeiture of the Performance-Based Stock Units resulting from termination of your Service by the Company or the Employer (for any reason whatsoever and whether or not in breach of local labor laws) or from the Company’s determination that Performance Goals have not been satisfied in whole or in part and you irrevocably release the Company and the Employer from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, you shall be deemed irrevocably to have waived your entitlement to pursue such claim.

 

(h)    You agree that the Company may require Shares received pursuant to the Performance-Based Stock Units to be held by a broker designated by the Company.

 

(i)    You agree that your rights hereunder (if any) shall be subject to set-off by the Company for any valid debts you owe the Company.

 

(j)    The Performance-Based Stock Units and the benefits under the Plan, if any, will not automatically transfer to another company in the case of a merger, take-over or transfer of liability.

 

   

 

 

15.    Governing Law and Forum. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada without regard to the conflict of laws principles thereof. For purposes of litigating any dispute that may arise directly or indirectly from this Agreement, the parties hereby submit and consent to litigation in the exclusive jurisdiction of the State of Nevada and agree that any such litigation shall be conducted only in the courts of Nevada or the federal courts for the United States for the Northern District of Nevada and no other courts.

 

16.    Notices. Any notice required or permitted under the terms of this Agreement shall be in writing and shall be deemed sufficient when delivered personally or sent by confirmed email, telegram, or fax or forty-eight (48) hours after being deposited in the mail, as certified or registered mail, with postage prepaid, and addressed to the Company at the Company’s principal corporate offices or to you at the address maintained for you in the Company’s records or, in either case, as subsequently modified by written notice to the other party.

 

17.    Binding Effect. Subject to the limitations set forth in this Agreement, this Agreement shall be binding upon, and inure to the benefit of, the executors, administrators, heirs, legal representatives, successors, and assigns of the parties hereto.

 

18.    Severability. If any provision of this Agreement is held to be unenforceable for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the parties to the extent possible. In any event, all other provisions of this Agreement shall be deemed valid and enforceable to the full extent possible.

 

19.    Waiver. You agree that a waiver by the Company of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by you or any other participant.

 

20.    Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to your current or future participation in the Plan by electronic means or to request your consent to participate in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

 

21.    Language. If this Agreement or any other document related to the Plan is translated into a language other than English and the meaning of the translated version is different from the English version, the English version will take precedence.

 

22.    Appendix. Notwithstanding any provisions in this Agreement, the Performance-Based Stock Units shall be subject to any special terms and conditions set forth in any Appendix to this Agreement for your country of residence. Moreover, if you relocate to one of the countries included in the Appendix, the special terms and conditions for such country will apply to you, to the extent the Company determines that the application of such terms and conditions is necessary or advisable in order to comply with local law or facilitate the administration of the Plan. The Appendix constitutes part of this Agreement.

 

23.    Committee Policies. The Performance-Based Stock Units shall be subject to any special terms and conditions set forth in any applicable policy (and any amendments thereto) that the Committee (or a designee of the Committee) has adopted or will adopt in the future, including, but not limited to, any policy related to the vesting or transfer of equity awards.

 

   

 

 

24.    Imposition of Other Requirements.     The Company reserves the right to impose other requirements on your participation in the Plan, on the Performance-Based Stock Units and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with local law or facilitate the administration of the Plan. You agree to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. Furthermore, you acknowledge that the laws of the country in which you are working at the time of grant, vesting and settlement of the Performance-Based Stock Units or the sale of Shares received pursuant to this Agreement (including any rules or regulations governing securities, foreign exchange, tax, labor, or other matters) may subject you to additional procedural or regulatory requirements that you are and will be solely responsible for and must fulfill.

 

25.    Acceptance of Agreement. You may accept this Award either by (a) clicking on the “I agree” button below at any time before the Vest Date or (b) doing nothing and your Award will be automatically accepted on your behalf on the Vest Date.

 

* * * *

 

By accepting your Award in accordance with Section 25 of this Agreement, you agree to be bound by the terms and conditions of this Agreement.

 

PLEASE PRINT AND KEEP A COPY FOR YOUR RECORDS

 

   

 

 

Exhibit A

 

FORMULA FOR THE

 

WORLD TECHNOLOGY CORP.

 

PERFORMANCE-BASED STOCK UNIT AGREEMENT

 

WORLD TECHNOLOGY CORP.

 

STOCK UNIT AGREEMENT

 

This Stock Unit Agreement (the “Agreement”) is made and entered into as of the Grant Date (as defined below) by and between World Technology Corp., a Nevada corporation (the “Company”), and you pursuant to the World Technology Corp. 2018 Stock Incentive Plan (the “Plan”). The material terms of this Stock Unit Award are as follows:

         
Employee ID:        
     
Grant Date:        
     
Grant Number:        
     
Restricted Stock Units:        
     
First Vest Date:        

 

To the extent any capitalized terms used in this Agreement are not defined, they shall have the meaning ascribed to them in the Plan. In the event of a conflict between the terms and provisions of the Plan and the terms and provisions of this Agreement, the Plan terms and provisions shall prevail.

 

In consideration of the mutual agreements herein contained and intending to be legally bound hereby, and as a condition to and in consideration of the grant, vesting, and settlement of the Restricted Stock Units and your receipt of any Shares or any related benefit thereunder, the parties agree as follows:

 

   

 

 

1.Restricted Stock Units. Pursuant to the Plan, the Company hereby grants to you, and you hereby accept from the Company, Restricted Stock Units, each of which is a bookkeeping entry representing the equivalent in value of one (1) Share, on the terms and conditions set forth herein and in the Plan. By accepting (whether in writing, electronically or otherwise) the Restricted Stock Units, or by otherwise receiving the Restricted Stock Units, Shares, or any benefit relating thereto, you acknowledge that the Restricted Stock Units and any Shares issued thereunder and your participation in the Plan are subject to such terms and conditions, and you agree to such terms and conditions.

 

2.Vesting of Restricted Stock Units. So long as your Service continues, the Restricted Stock Units shall vest in accordance with the following schedule: [______________________], unless otherwise provided by the Plan or Section 4 below. If you take a leave of absence, the Company may, at its discretion, suspend vesting during the period of leave or pro-rate the Restricted Stock Units to the extent permitted under the employment laws in the jurisdiction where you are providing Service or under the terms of your employment or service agreement, if any, notwithstanding the Company’s Vesting Policy for Leaves of Absence.

 

3.Termination of Service. In the event of the termination of your Service for any reason (whether or not later found to be invalid or in breach of the employment laws in the jurisdiction where you are employed or providing Service, or the terms of your employment or service agreement, if any), all unvested Restricted Stock Units shall be immediately forfeited without consideration. For purposes of the preceding sentence, your right to vest in the Restricted Stock Units will terminate effective as of the date that you are no longer providing Service, and the Company shall have the exclusive discretion to determine when you are no longer providing Service for purposes of the Restricted Stock Units.

 

4.Special Acceleration.

 

(a)To the extent the Restricted Stock Units are outstanding at the time of a Corporate Transaction, such Restricted Stock Units shall automatically become vested in full immediately prior to the effective date of the Corporate Transaction. No such accelerated vesting, however, shall occur if and to the extent: (i) these Restricted Stock Units are, in connection with the Corporate Transaction, either assumed by the successor corporation (or parent thereof) or replaced with comparable restricted stock units of the successor corporation (or parent thereof) or (ii) these Restricted Stock Units are replaced with a cash incentive program of the successor corporation which complies with Code Section 409A and preserves the fair market value of the Restricted Stock Units at the time of the Corporate Transaction and provides for subsequent pay-out in accordance with the settlement provisions set forth in Section 5 below. The determination of the comparability of restricted stock units under clause (i) shall be made by the Committee, and such determination shall be final, binding and conclusive.

 

(b)Immediately following the effective date of the Corporate Transaction, this Agreement shall terminate and cease to be outstanding, except as set forth in Section 5 below with respect to the deferred settlement of Restricted Stock Units or to the extent assumed by the successor corporation (or parent thereof) in connection with the Corporate Transaction.

 

(c)If this Agreement is assumed in connection with a Corporate Transaction, then the Committee shall appropriately adjust the number of units and the kind of shares or securities to be issued pursuant to this Agreement immediately after such Corporate Transaction.

 

   

 

 

(d)This Agreement shall not in any way affect the right of the Company to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets.

 

5.Settlement of Restricted Stock Units. To the extent you are eligible but have not elected to defer settlement of the Restricted Stock Units, the Restricted Stock Units shall be automatically settled in Shares upon vesting of such Restricted Stock Units, provided that the Company shall have no obligation to issue Shares pursuant to this Agreement unless and until you have satisfied any applicable Tax-Related Items, as described and defined in Section 6 below, and such issuance otherwise complies with all applicable laws. To the extent you are eligible but have elected to defer settlement of the Restricted Stock Units, the vested portion of the Restricted Stock Units shall be settled in Shares upon the earlier of: (a) your separation from service within the meaning of Code Section 409A (“Separation from Service”) and (b) the fixed payment date elected by you, if any, at the time of such deferral (which shall be the first business day of a year no earlier than six years after the year of the Grant Date in accordance with procedures approved by the Committee), provided that the Company shall have no obligation to issue Shares pursuant to this Agreement unless such issuance complies with all applicable law. Notwithstanding the foregoing, to the extent your Restricted Stock Units would otherwise be settled upon your Separation from Service, such settlement shall instead occur upon the Company's first business day following the six-month anniversary of your Separation from Service. Prior to the time that the Restricted Stock Units are settled, you shall have no rights other than those of a general creditor of the Company. The Restricted Stock Units represent an unfunded and unsecured obligation of the Company.

 

6.Taxes.

 

(a)Regardless of any action the Company or your employer (the “Employer”) takes with respect to any and all income tax, social taxes or insurance contributions, payroll tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you (“Tax-Related Items”), and as a condition to and in consideration of the grant, vesting, and settlement of the Restricted Stock Units, you acknowledge that the ultimate liability for all Tax-Related Items with respect to the Restricted Stock Units is and remains your responsibility and may exceed the amount actually withheld by the Company or the Employer. You further acknowledge that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Restricted Stock Units, including the grant, vesting or settlement of the Restricted Stock Units, or the subsequent sale of any Shares acquired at vesting or the receipt of any dividends with respect to such Shares, and (ii) do not commit to and are under no obligation to structure the terms or any aspect of the Restricted Stock Units to reduce or eliminate your liability for Tax-Related Items or achieve any particular tax result. Further, if you become subject to taxation in more than one jurisdiction between the Grant Date and the date of any relevant taxable event, you acknowledge that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

 

   

 

 

(b)Prior to any relevant tax, withholding or required deduction event, as applicable, and in order to receive any Shares or other benefit in relation to the Restricted Stock Units, you agree to make arrangements satisfactory to the Company for the satisfaction of any applicable tax, withholding, required deduction and payment on account of any obligations of the Company and/or the Employer that arise in connection with the Restricted Stock Units. In this regard, you authorize the Company and/or the Employer, or their respective agents, at their discretion, to satisfy any obligations related to Tax-Related Items by one or a combination of the following: (1) withholding from your wages or other cash compensation payable to you by the Company or the Employer; (2) withholding from proceeds of the sale of Shares acquired upon settlement of the Restricted Stock Units either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf pursuant to this authorization); (3) withholding of Shares that would otherwise be issued upon settlement of the Restricted Stock Units; or (4) requiring you to satisfy the liability for Tax-Related Items by means of any other arrangement approved by the Company. If the obligation for Tax-Related Items is satisfied by withholding Shares, for tax purposes, you are deemed to have been issued the full number of Shares subject to the vested Restricted Stock Units, notwithstanding that a number of the Shares are held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of your participation in the Plan. You agree to provide the Company and/or its stock plan broker/administrator with the information necessary to manage your Tax-Related Items withholding and acknowledge that should you fail to provide such information on a timely basis, the Company and/or its stock plan broker/administrator may be obligated to withhold amounts from you and it may be necessary for you to seek a refund directly from the tax authorities. Depending on the withholding method, the Company or Employer may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding amounts or other applicable withholding rates, including maximum applicable rates.

 

(c)Finally, you will pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of your participation in the Plan or your acquisition of Shares that cannot be satisfied by the means previously described. The Company shall not be required to issue or deliver Shares pursuant to this Agreement unless and until such obligations are satisfied.

 

7.Tax and Legal Advice. You represent, warrant and acknowledge that neither the Company nor your Employer have made any warranties or representations to you with respect to any Tax-Related Items, legal or financial consequences of the transactions contemplated by this Agreement, and you are in no manner relying on the Company, the Employer or the Company’s or the Employer’s representatives for an assessment of such consequences. YOU UNDERSTAND THAT THE LAWS GOVERNING THIS AWARD ARE SUBJECT TO CHANGE. YOU SHOULD CONSULT YOUR OWN PROFESSIONAL TAX, LEGAL AND FINANCIAL ADVISOR REGARDING ANY RESTRICTED STOCK UNITS. YOU UNDERSTAND THAT THE COMPANY AND THE EMPLOYER ARE NOT PROVIDING ANY TAX, LEGAL, OR FINANCIAL ADVICE, NOR IS THE COMPANY OR THE EMPLOYER MAKING ANY RECOMMENDATION REGARDING YOUR ACCEPTANCE OF THIS AWARD. NOTHING STATED HEREIN IS INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING TAXPAYER OR OTHER PENALTIES.

 

8.Non-Transferability of Restricted Stock Units. Restricted Stock Units shall not be anticipated, assigned, attached, garnished, optioned, transferred or made subject to any creditor’s process, whether voluntarily or involuntarily or by operation of law.

 

9.Restriction on Transfer. Regardless of whether the transfer or issuance of the Shares to be issued pursuant to the Restricted Stock Units has been registered under the Securities Act or has been registered or qualified under the securities laws of any state, the Company may impose additional restrictions upon the sale, pledge, or other transfer of the Shares (including the placement of appropriate legends on stock certificates and the issuance of stop-transfer instructions to the Company’s transfer agent) if, in the judgment of the Company and the Company’s counsel, such restrictions are necessary in order to achieve compliance with the provisions of the Securities Act, the securities laws of any state, or any other law, including all applicable foreign laws.

 

10.Restrictive Legends and Stop-Transfer Instructions. Stock certificates evidencing the Shares issued pursuant to the Restricted Stock Units may bear such restrictive legends and/or appropriate stop-transfer instructions may be issued to the Company’s transfer agent as the Company and the Company’s counsel deem necessary under applicable law or pursuant to this Agreement.

 

   

 

 

11.Representations, Warranties, Covenants, and Acknowledgments. You hereby agree that in the event the Company and the Company’s counsel deem it necessary or advisable in the exercise of their discretion, the transfer or issuance of the Shares issued pursuant to the Restricted Stock Units may be conditioned upon you making certain representations, warranties, and acknowledgments relating to compliance with applicable laws.

 

12.Voting, Dividend and Other Rights. Subject to the terms of this Agreement and except as set forth below, you shall not have any voting rights or any other rights and privileges of a shareholder of the Company unless and until the Restricted Stock Units are settled in Shares. To the extent you have elected to defer settlement of the Restricted Stock Units, dividend equivalents shall only accrue after the vesting of the Restricted Stock Units and will be subject to the same conditions and restrictions as the Restricted Stock Units to which they attach as set forth in the Plan or this Agreement and will be settled in additional Shares upon the settlement of the Restricted Stock Units as set forth in Section 5 above.

 

13.Authorization to Release and Transfer Necessary Personal Information.

 

(a)You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal information as described in this Agreement by and among, as applicable, the Employer, and the Company and its Parent, Subsidiaries and Affiliates for the exclusive purpose of implementing, administering and managing your participation in the Plan.

 

(b)You understand that the Company and the Employer may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number (or any other social or national identification number), salary, nationality, job title, residency status, any Shares or directorships held in the Company, details of all Restricted Stock Units or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding (the “Data”) for the purpose of implementing, administering and managing your participation in the Plan. You understand that the Data may be transferred to the Company or any of its Parent, Subsidiaries or Affiliates, or to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in your country or elsewhere, including outside the European Economic Area, and that the recipient’s country (e.g., the United States) may have different data privacy laws and protections than your country. You understand that you may request a list with the names and addresses of any potential recipients of the Data by contacting your local human resources representative. You authorize the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purposes of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data to a broker or other third party assisting with the administration of these Restricted Stock Units under the Plan or with whom Shares acquired pursuant to these Restricted Stock Units or cash from the sale of such Shares may be deposited. Furthermore, you acknowledge and understand that the transfer of the Data to the Company or any of its Parent, Subsidiaries or Affiliates, or to any third parties is necessary for your participation in the Plan.

 

   

 

 

(c)You understand that the Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that you may, at any time, view the Data, request additional information about the storage and processing of the Data, require any necessary amendments to the Data or refuse or withdraw the consents herein by contacting your local human resources representative in writing. Further, you understand that you are providing the consents herein on a purely voluntary basis. If you do not consent, or if you later seek to revoke your consent, your employment status or service and career with the Employer will not be affected; the only consequence of refusing or withdrawing your consent is that the Company would not be able to grant you Restricted Stock Units or other equity awards, or administer or maintain such awards.  You further acknowledge that withdrawal of consent may affect your ability to vest in or realize benefits from these Restricted Stock Units and your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.

 

(d) The collection, use and transfer of Data for the purpose of implementing, administering and managing your participation in the Plan is conducted in accordance with the Company’s Global HR Data Protection Policy.

 

14.No Entitlement or Claims for Compensation. As a condition to, and in consideration of, the grant, vesting, and settlement of the Restricted Stock Units, and in receiving the Restricted Stock Units, Shares, or any benefit relating to the Restricted Stock Units, you acknowledge and agree that:

 

(a)Your rights, if any, in respect of or in connection with these Restricted Stock Units or any other Award are derived solely from the discretionary decision of the Company to permit you to participate in the Plan and to benefit from a discretionary Award. The Plan may be amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan and this Agreement. By accepting these Restricted Stock Units, you expressly acknowledge that there is no obligation on the part of the Company to continue the Plan and/or grant any additional Restricted Stock Units to you or benefits in lieu of Restricted Stock Units, even if Restricted Stock Units have been granted in the past. All decisions with respect to future grants of Restricted Stock Units, if any, will be at the sole discretion of the Committee.

 

(b)The Restricted Stock Units and the Shares subject to the Restricted Stock Units are not intended to replace any pension rights or compensation and are not to be considered compensation of a continuing or recurring nature, or part of your normal or expected compensation, and in no way represent any portion of your salary, compensation or other remuneration for any purpose, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments, and in no event should be considered as compensation for, or relating in any way to, past services for the Company, the Employer or any Parent, Subsidiary or Affiliate. The value of the Restricted Stock Units is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company, the Employer or any Parent, Subsidiary or Affiliate and which is outside the scope of your written employment or service agreement (if any).

 

(c)You acknowledge that you are voluntarily participating in the Plan.

 

(d)Neither the Plan nor these Restricted Stock Units or any other Award granted under the Plan shall be deemed to give you a right to remain an Employee, Consultant or director of the Company, a Parent, Subsidiary or an Affiliate. The Employer reserves the right to terminate your Service at any time, with or without cause, and for any reason.

 

   

 

 

(e)The grant of the Restricted Stock Units and your participation in the Plan will not be interpreted to form an employment contract or service relationship with the Company, the Employer or any Parent, Subsidiary or Affiliate.

 

(f)The future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty and if you vest in the Restricted Stock Units and are issued Shares, the value of those Shares may increase or decrease. You also understand that none of the Company, the Employer or any Parent, Subsidiary or Affiliate is responsible for any foreign exchange fluctuation between the Employer’s local currency and the United States Dollar that may affect the value of this Award.

 

(g)No claim or entitlement to compensation or damages shall arise from forfeiture of the Restricted Stock Units resulting from the termination of your Service by the Company or the Employer (for any reason whatsoever and whether or not later found to be invalid or in breach of the employment laws in the jurisdiction where you are employed or providing Service, or the terms of your employment or service agreement, if any) and, in consideration of the grant of the Award to which you are not otherwise entitled, you irrevocably agree never to institute any claim against the Employer, the Company or its Parent, Subsidiaries or Affiliates, waive your ability, if any, to bring any such claim, and release the Company and its Parent, Subsidiaries and Affiliates from any such claim; if notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by accepting the Award, you shall be deemed irrevocably to have agreed to not pursue such claim and agree to execute any and all documents necessary to request the withdrawal of such claim.

 

(h)You agree that the Company may require Shares received pursuant to the Restricted Stock Units to be held by a broker designated by the Company.

 

(i)You agree that your rights hereunder (if any) shall be subject to set-off by the Company for any valid debts you owe the Company.

 

(j)Unless otherwise provided in the Plan or this Agreement, or by the Company in its discretion, the Restricted Stock Units and the benefits evidenced by this Agreement do not create any entitlement to have the Restricted Stock Units transferred to, or assumed by, another company, nor to be exchanged, cashed out or substituted for in connection with any Corporate Transaction affecting the Common Stock.

 

15.Governing Law and Forum. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada without regard to the conflict of laws principles thereof. For purposes of litigating any dispute that may arise directly or indirectly from this Agreement, the parties hereby submit and consent to litigation in the exclusive jurisdiction of the State of Nevada and agree that any such litigation shall be conducted only in the courts of Nevada or the federal courts for the United States for the Northern District of Nevada and no other courts.

 

16.Notices. Any notice required or permitted under the terms of this Agreement shall be in writing and shall be deemed sufficient when delivered personally or sent by confirmed email, telegram, or fax or forty-eight (48) hours after being deposited in the mail, as certified or registered mail, with postage prepaid, and addressed to the Company at the Company’s principal corporate offices or to you at the address maintained for you in the Company’s records or, in either case, as subsequently modified by written notice to the other party.

 

   

 

 

17.Binding Effect. Subject to the limitations set forth in this Agreement, this Agreement shall be binding upon, and inure to the benefit of, the executors, administrators, heirs, legal representatives, successors, and assigns of the parties hereto.

 

18.Severability. If any provision of this Agreement is held to be unenforceable for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the parties to the extent possible. In any event, all other provisions of this Agreement shall be deemed valid and enforceable to the full extent possible.

 

19.Waiver. You agree that a waiver by the Company of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by you or any other participant.

 

20.Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to your current or future participation in the Plan by electronic means or to request your consent to participate in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

 

21.Language. If this Agreement or any other document related to the Plan is translated into a language other than English and the meaning of the translated version is different from the English version, the English version will take precedence.

 

22.Appendix. Notwithstanding any provisions in this Agreement, the Restricted Stock Units shall be subject to any special terms and conditions set forth in any Appendix to this Agreement for your country of residence. Moreover, if you relocate to one of the countries included in the Appendix, the special terms and conditions for such country will apply to you, to the extent the Company determines that the application of such terms and conditions is necessary or advisable in order to comply with local law or facilitate the administration of the Plan. The Appendix constitutes part of this Agreement.

 

23.Committee Policies. The Restricted Stock Units shall be subject to any special terms and conditions set forth in any applicable policy (and any amendments thereto) that the Committee (or a designee of the Committee) has adopted or will adopt in the future, including, but not limited to, any policy related to the vesting or transfer of equity awards.

 

24.Imposition of Other Requirements. The Company reserves the right to impose other requirements on your participation in the Plan, on the Restricted Stock Units and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with local law or facilitate the administration of the Plan. You agree to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. Furthermore, you acknowledge that the laws of the country in which you are working at the time of grant, vesting and settlement of the Restricted Stock Units or the sale of Shares received pursuant to this Agreement (including any rules or regulations governing securities, foreign exchange, tax, labor, or other matters) may subject you to additional procedural or regulatory requirements that you are and will be solely responsible for and must fulfill.

 

   

 

 

25.Acceptance of Agreement. You may accept this Award either by (a) clicking on the “I agree” button below at any time before the First Vest Date or (b) doing nothing and your Award will be automatically accepted on your behalf on the First Vest Date.

 

*    *    *    *

 

By accepting your Award in accordance with Section 25 of this Agreement, you agree to be bound by the terms and conditions of this Agreement.

 

PLEASE PRINT AND KEEP A COPY FOR YOUR RECORDS

 

   

 

 

PERFORMANCE RSU LETTER

 

[Date]

 

[Name]

 

[Address]

 

[Address]

 

Dear                          :

 

[introductory text]

 

Your leadership team has recommended that you receive a performance-based restricted stock unit (PRSU) right with a target of [                      ]. RSUs will be granted after the end of FY[      ] based upon the satisfaction of an FY[      ] performance condition.

 

The right to receive a grant of a restricted stock unit depends on World Technology Corp.’s satisfaction of certain [                      ] targets for FY[      ]. Assuming those targets are met or exceeded, the restricted stock units that you are granted will vest [                      ] percent on the date of grant and [                      ] percent on each of the next [              ] anniversaries of the date of grant thereafter, subject to your continued employment with World Technology Corp. or an affiliate on the applicable vesting date. On each vesting date, the vested units will be settled in World Technology Corp. common stock. In addition, in the unlikely event that a corporate transaction or change in control (each as defined in World Technology Corp.’s 2018 Stock Incentive Plan) is consummated during FY[      ] or prior to the Compensation Committee’s Certification regarding satisfaction of the FY[      ] performance conditions, the performance-based restricted stock unit right will be deemed fully earned at target (100%) immediately prior to the effective date of the corporate transaction or the change in control, as the case may be, and will be settled in fully vested World Technology Corp. common stock at that time.

 

Lastly, please note that, if you are employed outside the United States, the Compensation Committee can grant the PRSU Right to you, in its sole discretion, only if and as long as it is permitted and feasible to grant restricted stock units under the laws of the country in which you are employed. If local laws make the grant of restricted stock units illegal or impractical, World Technology Corp. will let you know as soon as possible. You are under no obligation to accept the PRSU Right or any restricted stock units that may subsequently be granted to you.

 

[concluding text]
 
Sincerely,
 

 

   

 

 

ACTION REQUIRED : MUST BE RETURNED BY [INSERT APPROPRIATE DATE]

 

 

Deferral Election for

Annual Equity Award

2018 Stock Incentive Plan

 

Name (Last, First, Middle Initial)   Employee Number

 

You may use this form to:

 

·Indicate the percentage of your annual restricted stock unit grant under the 2018 Stock Incentive Plan that you wish to defer. Your elected percentage will apply to each vesting installment of such grant.

 

·Designate the settlement timing of the deferred portion of your vested annual restricted stock unit grant.

 

PLEASE REMEMBER THAT ONCE YOU MAKE AN ELECTION TO DEFER A RESTRICTED STOCK UNIT GRANT, YOU CANNOT REVOKE THAT ELECTION.

 

Deferral Election     Please select if you wish to defer restricted stock units; fill in the appropriate blanks.
     
       Restricted Stock
Unit Grant
  I elect to defer                  % (you may only insert 25%, 50%, 75%, or 100%) of my annual restricted stock unit award anticipated to be granted under the 2018 Stock Incentive Plan (the “Plan”) on                      , 201      (subject to my continued employment with the Company or the Employer). I understand that this elected percentage will apply to each vesting installment of this grant.

 

   

 

 

Settlement Date *   Please complete this section to indicate settlement timing for the deferred portion of your vested annual restricted stock unit grant. You may only choose one alternative.
     

     

 

OR

 

Separation of Service

 

  I elect to defer the settlement of the deferred portion of my vested annual restricted stock unit grant to my Separation from Service (as defined in Section 409A of the Internal Revenue Code).
         
           Date Specific (subject to earlier settlement upon separation from service)   I elect to defer the settlement of the deferred portion of my vested annual restricted stock unit grant to the earlier of (i) my Separation from Service; or (ii) the first business day of 20              (insert a year no earlier than [ ] and no later than [ ].

 

*Any vested portion of the deferred portion of my restricted stock unit grant will be settled in shares of the Company’s common stock.

 

   

 

 

ACTION REQUIRED : MUST BE RETURNED BY [INSERT APPROPRIATE DATE]

 

Deferral Election for

Annual Equity Award

2018 Stock Incentive Plan

 

 

I understand:

 

·To the extent I do not elect to defer the settlement of my restricted stock unit grant, such portion of the restricted stock unit grant will be automatically settled in shares of the Company’s common stock upon the vesting of the restricted stock unit grant (subject to acceleration in certain cases), as more fully set forth in the Stock Unit Agreement.

 

·Any vested portion of the deferred restricted stock unit grant will be settled in shares of the Company’s common stock as elected by me above.

 

·If my Separation from Service occurs before my restricted stock unit grant vests, any unvested restricted stock units will be forfeited as of the date my Separation from Service occurs.

 

·“Separation from Service” is defined in Treasury Regulation Section 1.409A-1(h). While separation from service generally means termination of employment, a Separation from Service can also occur in the case of certain leaves of absence or upon a significant reduction in my work schedule. These events can trigger a “Separation from Service” resulting in the forfeiture of my unvested restricted stock units.

 

·Certain leaves of absence can result in the suspension of vesting of my unvested restricted stock units. If I take a leave of absence that suspends the vesting of my restricted stock units such that they are unvested as of the applicable distribution event (whether that is Separation from Service or a date specific I elected), my restricted stock units that are unvested at the time of such distribution event shall be forfeited.

 

·Any employment taxes that are due upon the vesting of my restricted stock unit grant (including the deferred portion of my grant) shall be deducted at the time of vesting by one or a combination of the following:

 

   

 

 

(1)withholding from my wages or other cash compensation payable to me by the Company or the Employer;

 

(2)withholding from proceeds of the sale of shares acquired upon settlement of the restricted stock units either through a voluntary sale or through a mandatory sale arranged by the Company (on my behalf pursuant to this authorization);

 

(3)withholding of shares that would otherwise be issued upon settlement of the restricted stock units; or

 

(4)requiring me to satisfy the liability for any employment taxes by means of any other arrangement approved by the Company.

 

·The receipt of shares of the Company’s common stock pursuant to any restricted stock unit grant will be taxed as ordinary income to me based on the value of the shares on the date the stock unit grant is settled and I receive shares of the Company’s common stock. This is true whether or not I elect to defer settlement of my restricted stock units.

 

·The settlement of the deferred portion of my annual restricted stock unit grant upon my Separation from Service will be delayed for six months.

 

ACKNOWLEDGED AND AGREED:

 

Signature of Participant Date

 

   

 

 

 

WORLD TECHNOLOGY CORP.

 

STOCK UNIT AGREEMENT

 

This Stock Unit Agreement (the “Agreement”) is made and entered into as of the Grant Date (as defined below) by and between World Technology Corp., a Nevada corporation (the “Company”), and you pursuant to the World Technology Corp. 2018 Stock Incentive Plan (the “Plan”). The material terms of this Stock Unit Award are as follows:

 

Grantee:      
       
Grant Date:      
       
Grant Number:      
       
Stock Units:      

 

To the extent any capitalized terms used in this Agreement are not defined, they shall have the meaning ascribed to them in the Plan. In the event of a conflict between the terms and provisions of the Plan and the terms and provisions of this Agreement, the Plan terms and provisions shall prevail.

 

In consideration of the mutual agreements herein contained and intending to be legally bound hereby, the parties agree as follows:

 

1.    Stock Units. Pursuant to the Plan, the Company hereby grants to you, and you hereby accept from the Company, Stock Units, each of which is a bookkeeping entry representing the equivalent in value of one (1) Share, on the terms and conditions set forth herein and in the Plan.

 

2.    Vesting of Stock Units. One-hundred percent (100%) of the total number of Stock Units granted pursuant to this Agreement shall vest on the Grant Date.

 

3.    Settlement of Stock Units. Stock Units shall be automatically settled in Shares upon your separation from service within the meaning of Code Section 409A (“Separation from Service”), provided that the Company shall have no obligation to issue Shares pursuant to this Agreement unless and until such issuance complies with all applicable law; provided further, such settlement shall occur no later than 30 days after your Separation from Service. Prior to the time that the Stock Units are settled in Shares upon your Separation from Service, you shall have no rights other than those of a general creditor of the Company. The Stock Units represent an unfunded and unsecured obligation of the Company.

 

   

 

 

4.    Tax Advice. You represent, warrant and acknowledge that the Company has made no warranties or representations to you with respect to the income tax consequences of the transactions contemplated by this Agreement, and you are in no manner relying on the Company or the Company’s representatives for an assessment of such tax consequences. YOU UNDERSTAND THAT THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR REGARDING ANY STOCK UNITS. NOTHING STATED HEREIN IS INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING TAXPAYER PENALTIES.

 

5.    Non-Transferability of Stock Units. Stock Units shall not be anticipated, assigned, attached, garnished, optioned, transferred or made subject to any creditor’s process, whether voluntarily or involuntarily or by operation of law.

 

6.    Restriction on Transfer. Regardless of whether the transfer or issuance of the Shares to be issued pursuant to the Stock Units has been registered under the Securities Act or has been registered or qualified under the securities laws of any state, the Company may impose additional restrictions upon the sale, pledge, or other transfer of the Shares (including the placement of appropriate legends on stock certificates and the issuance of stop-transfer instructions to the Company’s transfer agent) if, in the judgment of the Company and the Company’s counsel, such restrictions are necessary in order to achieve compliance with the provisions of the Securities Act, the securities laws of any state, or any other law.

 

7.    Stock Certificate Restrictive Legends. Stock certificates evidencing the Shares issued pursuant to the Stock Units may bear such restrictive legends as the Company and the Company’s counsel deem necessary under applicable law or pursuant to this Agreement.

 

8.    Representations, Warranties, Covenants, and Acknowledgments. You hereby agree that in the event the Company and the Company’s counsel deem it necessary or advisable in the exercise of their discretion, the transfer or issuance of the Shares issued pursuant to the Stock Units may be conditioned upon you making certain representations, warranties, and acknowledgments relating to compliance with applicable securities laws.

 

9.    Voting, Dividend and Other Rights. Subject to the terms of this Agreement and except as set forth below, you shall not have any voting rights or any other rights and privileges of a shareholder of the Company unless and until the Stock Units are settled upon your Separation from Service. Dividend equivalents shall accrue and will be subject to the same conditions and restrictions as the Stock Units to which they attach as set forth in the Plan or this Agreement and will be settled in additional Shares upon your Separation from Service.

 

10.    Authorization to Release Necessary Personal Information.

 

(a)    You hereby authorize and direct the Company to collect, use and transfer in electronic or other form, any personal information (the “Data”) regarding your service, the nature and amount of your compensation and the facts and conditions of your participation in the Plan (including, but not limited to, your name, home address, telephone number, date of birth, social security number (or any other social or national identification number), compensation, nationality, job title, number of Shares held and the details of all Awards or any other entitlement to Shares awarded, cancelled, exercised, vested, unvested or outstanding) for the purpose of implementing, administering and managing your participation in the Plan. You understand that the Data may be transferred to the Company or any of its Subsidiaries, or to any third parties assisting in the implementation, administration and management of the Plan, including any requisite transfer to a broker or other third party assisting with the administration of these Stock Units under the Plan or with whom Shares acquired pursuant to these Stock Units or cash from the sale of such shares may be deposited. You acknowledge that recipients of the Data may be located in different countries, and those countries may have data privacy laws and protections different from those in the country of your residence. Furthermore, you acknowledge and understand that the transfer of the Data to the Company or any of its Subsidiaries, or to any third parties is necessary for your participation in the Plan.

 

   

 

 

(b)    You may at any time withdraw the consents herein by contacting the Company’s local human resources representative in writing. You further acknowledge that withdrawal of consent may affect your ability to exercise or realize benefits from these Stock Units and your ability to participate in the Plan.

 

11.    Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada without regard to the conflict of laws principles thereof.

 

12.    Notices. Any notice required or permitted under the terms of this Agreement shall be in writing and shall be deemed sufficient when delivered personally or sent by confirmed email, telegram, or fax or forty-eight (48) hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed to the Company at the Company’s principal corporate offices or to you at the address maintained for you in the Company's records or, in either case, as subsequently modified by written notice to the other party.

 

13.    Binding Effect. Subject to the limitations set forth in this Agreement, this Agreement shall be binding upon, and inure to the benefit of, the executors, administrators, heirs, legal representatives, successors, and assigns of the parties hereto.

 

14.    Severability. If any provision of this Agreement is held to be unenforceable for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the parties to the extent possible. In any event, all other provisions of this Agreement shall be deemed valid and enforceable to the full extent possible.

 

   

 

 

NON-EMPLOYEE DIRECTOR ELECTIONS
INITIAL ANNUAL RETAINER & EQUITY GRANT

 

INITIAL ANNUAL RETAINER

 

The alternatives for the fiscal ________ initial annual retainer for non-employee members of the Board of Directors of World Technology Corp. (the “Company”) are:

 

·a non-deferred cash payment (default option),
·a deferred cash payment under the Company’s Deferred Compensation Plan (the “DCP”),
·a vested stock grant under the 2018 Stock Incentive Plan (the “Plan”), and/or
·a vested deferred stock unit (“DSU”) grant under the Plan.

 

If you make no elections below, you will receive your full initial annual retainer in non-deferred cash.

 

I, being a prospective newly elected or appointed non-employee member of the Board of Directors of the Company, hereby make the below elections with respect to my initial annual retainer for the first year (or partial year) of Board service commencing on the date of my election or appointment as a non-employee member of the Board of Directors of the Company. (The Election Amount must total 100%.)

 

Alternative  

Election Amount

(0% to 100%, in
increments of 25%)

 

Election under the DCP
Separation from Service

         

Non-Deferred Cash

(default option)

 

 %

(e.g. 0%, 25%, 50%,
75% or 100%)

  N/A
         
Deferred Cash under the
Deferred Compensation Plan
        %  

I elect to receive my DCP account balance (choose one of the options below):

¨ as soon as practicable after my “Separation from Service,” but no later than 30 days after my Separation from Service.

¨ as soon as practicable in the calendar year following the calendar year of my “Separation from Service,” but no later than January 31.

         
Vested Stock Grant         %   N/A
         

Vested DSU Grant

        %   N/A
         
TOTAL   100%    

 

   

 

 

I understand the following:

 

·If I elect to receive deferred cash under the DCP:

oI authorize the Company to share my personal information with the third-party DCP administrator so that the DCP administrator can begin the enrollment process in order for me to make investment and beneficiary elections pursuant to the terms of the DCP.

oI will receive my DCP account balance in a cash lump sum, taxable as ordinary income, pursuant to my election above. If I make no election, I will receive my DCP account balance as soon as practicable after my “Separation from Service” within the meaning under Section 409A of the Internal Revenue Code, which generally will be the date my service as a member of the Board of Directors of the Company terminates; provided however, such payment date will be no later than 30 days after my Separation from Service.

 

·If I elect to receive a vested stock grant, the shares will be granted on the date of my election or appointment as a non-employee member of the Board of Directors of the Company based on the closing value of the Company’s common stock on such date (the “Fair Market Value”), the shares will be taxed as ordinary income to me based on the Fair Market Value, and I will receive the shares as soon as practicable after that date.

·If I elect to receive a vested DSU grant:

oThe DSU grant will be granted on the date of my election or appointment as a non-employee member of the Board of Directors of the Company based on the Fair Market Value.
oThe DSU grant will be settled in shares of the Company’s common stock on, or as soon as practicable after, my Separation from Service; provided however, such settlement shall occur no later than 30 days after my Separation from Service.
oDividend equivalents will accrue on the DSU grant and will be credited as additional DSUs to be settled in additional shares of the Company’s common stock on, or as soon as practicable after, my Separation from Service; provided however, such settlement shall occur no later than 30 days after my Separation from Service.
oReceipt of shares of the Company’s common stock pursuant to the DSU grant will be taxed as ordinary income to me based on the value of the shares on the date the DSU grant is settled and I receive shares of the Company’s common stock.

 

   

 

 

 

[INITIAL EQUITY GRANT ELECTION ON NEXT PAGE]

 

INITIAL EQUITY GRANT

 

I further (check one) (i) ¨ ELECT or (ii) ¨ DO NOT ELECT to defer the issuance of my initial stock grant of fully vested shares of stock anticipated to be granted under the 2018 Stock Incentive Plan (the “Plan”) on the date of my election or appointment in connection with my initial election or appointment as a non-employee member of the Board of Directors of the Company for the year of Board service commencing on such date.

 

I understand the following:

 

·If I do not elect to defer the issuance of my initial stock grant, the shares will be granted on the date of my election or appointment as a non-employee member of the Board of Directors of the Company based on the closing value of the Company’s common stock on such date (the “Fair Market Value”), the shares will be taxed as ordinary income to me based on the Fair Market Value, and I will receive the shares as soon as practicable after that date.

·If I elect to defer the issuance of my initial stock grant:
oThe grant will not be issued in shares of the Company’s common stock as set forth above, but instead will be granted as a fully vested deferred stock unit (“DSU”) on the date of my election or appointment as a non-employee member of the Board of Directors of the Company based on the Fair Market Value.
oThe DSU grant will be settled in shares of the Company’s common stock on, or as soon as practicable after, my “Separation from Service” within the meaning under Section 409A of the Internal Revenue Code; provided however, such settlement shall occur no later than 30 days after my Separation from Service.
oDividend equivalents will accrue on the DSU grant and will be credited as additional DSUs to be settled in additional shares of the Company’s common stock on, or as soon as practicable after, my Separation from Service; provided however, such settlement shall occur no later than 30 days after my Separation from Service.
oReceipt of shares of the Company’s common stock pursuant to the DSU grant will be taxed as ordinary income to me based on the value of the shares on the date the DSU grant is settled and I receive shares of the Company’s common stock.

 

* * * * *

 

I understand that these elections will be effective only if received by the Company’s Legal Department on or before the date of my election or appointment.

 

         
Signature of Non-Employee Director   Date    

 

* Because individual circumstances vary, World Technology Corp. cannot provide tax advice and you should consult with your own tax advisor regarding the income tax consequences of your potential elections.

 

   

 

 

NON-EMPLOYEE DIRECTOR ELECTIONS
ANNUAL RETAINER & EQUITY GRANT

 

ANNUAL RETAINER

 

The alternatives for the fiscal ________ annual retainer (anticipated to be $75,000) for non-employee members of the Board of Directors of World Technology Corp. (the “Company”) are:

 

·a non-deferred cash payment (default option),
·a deferred cash payment under the Company’s Deferred Compensation Plan (the “DCP”),
·a vested stock grant under the 2018 Stock Incentive Plan (the “Plan”), and/or
·a vested deferred stock unit (“DSU”) grant under the Plan.

 

If you make no elections below, you will receive your full annual retainer in non-deferred cash.

 

I, being a non-employee member of the Board of Directors of the Company, hereby make the below elections with respect to my annual retainer for the next year of Board service commencing at the next Annual Meeting of Shareholders. (The Election Amount must total 100%.)

 

Alternative  

Election Amount

(0% to 100%, in
increments of 25%)

 

Election under the DCP

Separation from Service

         

Non-Deferred Cash

(default option)

 

 

      %

(e.g. 0%, 25%, 50%, 75% or 100%)

  N/A
         
Deferred Cash under the
Deferred Compensation Plan
        %  

I elect to receive my DCP account balance (choose one of the options below):

as soon as practicable after my “Separation from Service,” but no later than 30 days after my Separation from Service.

as soon as practicable in the calendar year following the calendar year of my “Separation from Service,” but no later than January 31.

         
Vested Stock Grant         %   N/A
         

Vested DSU Grant

        %   N/A
         
TOTAL    100%    

 

   

 

 

I understand the following:

 

·If I elect to receive deferred cash under the DCP:

oI authorize the Company to share my personal information with the third-party DCP administrator so that the DCP administrator can begin the enrollment process in order for me to make investment and beneficiary elections pursuant to the terms of the DCP.
oI will receive my DCP account balance in a cash lump sum, taxable as ordinary income, pursuant to my election above. If I make no election, I will receive my DCP account balance as soon as practicable after my “Separation from Service” within the meaning under Section 409A of the Internal Revenue Code, which generally will be the date my service as a member of the Board of Directors of the Company terminates; provided however, such payment date will be no later than 30 days after my Separation from Service.

 

·If I elect to receive a vested stock grant, the shares will be granted on the date of the Annual Meeting of Shareholders based on the closing value of the Company’s common stock on such date (the “Fair Market Value”), the shares will be taxed as ordinary income to me based on the Fair Market Value, and I will receive the shares as soon as practicable after that date.
·If I elect to receive a vested DSU grant:

oThe DSU grant will be granted on the date of the Annual Meeting of Shareholders based on the Fair Market Value.
oThe DSU grant will be settled in shares of the Company’s common stock on, or as soon as practicable after, my Separation from Service; provided however, such settlement shall occur no later than 30 days after my Separation from Service.
oDividend equivalents will accrue on the DSU grant and will be credited as additional DSUs to be settled in additional shares of the Company’s common stock on, or as soon as practicable after, my Separation from Service; provided however, such settlement shall occur no later than 30 days after my Separation from Service.
oReceipt of shares of the Company’s common stock pursuant to the DSU grant will be taxed as ordinary income to me based on the value of the shares on the date the DSU grant is settled and I receive shares of the Company’s common stock.

 

[ANNUAL EQUITY GRANT ELECTION ON NEXT PAGE]

 

   

 

 

ANNUAL EQUITY GRANT

 

I further (check one) (i) ¨ ELECT or (ii) ¨ DO NOT ELECT to defer the issuance of my annual stock grant of fully vested shares of stock anticipated to be granted under the 2018 Stock Incentive Plan (the “Plan”) on the date of the next Annual Meeting of Shareholders for the year of Board service commencing at the next Annual Meeting of Shareholders.

 

I understand the following:

 

·If I do not elect to defer the issuance of my annual stock grant, the shares will be granted on the date of the Annual Meeting of Shareholders based on the closing value of the Company’s common stock on such date (the “Fair Market Value”), the shares will be taxed as ordinary income to me based on the Fair Market Value, and I will receive the shares as soon as practicable after that date.
·If I elect to defer the issuance of my annual stock grant:
oThe grant will not be issued in shares of the Company’s common stock as set forth above, but instead will be granted as a fully vested deferred stock unit (“DSU”) on the date of the Annual Meeting of Shareholders based on the Fair Market Value.
oThe DSU grant will be settled in shares of the Company’s common stock on, or as soon as practicable after, my “Separation from Service” within the meaning under Section 409A of the Internal Revenue Code; provided however, such settlement shall occur no later than 30 days after my Separation from Service.
oDividend equivalents will accrue on the DSU grant and will be credited as additional DSUs to be settled in additional shares of the Company’s common stock on, or as soon as practicable after, my Separation from Service; provided however, such settlement shall occur no later than 30 days after my Separation from Service.
oReceipt of shares of the Company’s common stock pursuant to the DSU grant will be taxed as ordinary income to me based on the value of the shares on the date the DSU grant is settled and I receive shares of the Company’s common stock.

 

* * * * *

 

I understand that these elections will be effective only if received by _______________ on or before _________ [December 31, [PRECEDING YEAR]].

 
         
Signature of Non-Employee Director   Date    

 

* Because individual circumstances vary, World Technology Corp. cannot provide tax advice and you should consult with your own tax advisor regarding the income tax consequences of your potential elections.

 

   

 

 

WORLD TECHNOLOGY CORP.

 

VESTING ACCELERATION POLICY

 

FOR

 

DEATH AND TERMINAL ILLNESS

 

Unless and until the Compensation Committee of the Board of Directors of World Technology Corp. determines otherwise, the following policy shall be applied to all outstanding equity awards issued under any equity plan maintained World Technology Corp. or any World Technology Corp. subsidiary, including outstanding equity awards and/or equity plans assumed by World Technology Corp. in connection with its acquisition of companies, and held by any employee of World Technology Corp. or any World Technology Corp. subsidiary (each such award shall be referred to herein as an “equity award”), except to the extent that the application of such policy would be prohibited any applicable law, rule or regulation or would result in adverse legal or tax consequences thereunder.

 

For purposes of this policy:

 

·the value of stock options and stock appreciation rights is based on the difference between the exercise price of the equity awards and the closing price of World Technology Corp.’s stock on the date of the employee’s death or terminal illness, as applicable, or if such day is not a trading day, the last trading day prior to the date of death or terminal illness, as applicable;

 

·the value of stock grants, stock units, and unvested shares previously acquired pursuant to equity awards (such shares are referred to herein as “unvested equity award shares”) is based on the difference between the purchase price, if any, and the closing price of World Technology Corp.’s stock on the date of the employee’s death or terminal illness, as applicable, or if such day is not a trading day, the last trading day prior to the date of death or terminal illness, as applicable;

 

·“unvested equity award shares” includes outstanding and unvested performance-based restricted stock or stock unit awards and the accelerated vesting of such awards will be deemed to occur at target levels, subject to the specified limits below; and

 

·to the extent the vesting of any performance-based restricted stock or stock unit award is accelerated pursuant to this policy, the award will be settled upon the death or terminal illness of an employee, as the case may be, except that if the applicable award is subject to Section 409A of the Internal Revenue Code (“Code Section 409A”) and such terminal illness does not qualify as a “Disability” within the meaning of Code Section 409A, then the award will instead be settled on the fixed payment date following the end of the performance period on which the applicable award is normally paid out.

 

   

 

 

ACCELERATION UPON DEATH OF EMPLOYEE

 

Upon the death of an employee, World Technology Corp. will accelerate the vesting of the employee’s outstanding equity awards and any unvested equity award shares up to a specified limit based on the value of the equity awards and/or shares on the date of death. The limit on the amount of accelerated vesting is the greater of: (a) one-hundred percent (100%) of the unvested equity awards and/or unvested equity award shares up to a total value of $10 million; or (b) up to one year of vesting from the date of death as to all unvested equity awards and/or unvested equity award shares. For example, if an employee held unvested options for 100,000 shares with an exercise price of $1 which would vest in four annual installments of 25,000 shares, and the closing price of World Technology Corp.’s stock on the date of the employee’s death was $101, all 100,000 of the shares would become vested (100,000 shares x $100 (the difference between $101 and $1) = $10,000,000).

 

ACCELERATION UPON TERMINAL ILLNESS OF EMPLOYEE

 

Upon the terminal illness of an employee, World Technology Corp. will accelerate the vesting of the employee’s outstanding equity awards and any unvested equity award shares up to a specified limit based on the value of the equity awards and/or shares on the date of the terminal illness. An employee will be considered terminally ill upon the approval by World Technology Corp.’s employee life insurance provider of the accelerated life insurance benefit which indicates 12 months or less to live. When a request is made to accelerate the vesting of an employee’s outstanding equity awards and early life insurance payouts are not also requested, an employee will be considered terminally ill upon the approval by World Technology Corp.’s external, independent medical review vendor (which may include World Technology Corp.’s employee life insurance provider). The date of terminal illness will be the date the determination is made by World Technology Corp.’s employee life insurance provider or World Technology Corp.’s external, independent medical review vendor. The limit on the amount of accelerated vesting is the greater of: (a) one-hundred percent (100%) of the unvested equity awards and/or unvested equity award shares up to a total value of $10 million; or (b) up to one year of vesting from the date of the terminal illness as to all unvested equity awards and/or unvested equity award shares. For example, if an employee holds unvested options for 100,000 shares with an exercise price of $1 which would vest in four annual installments of 25,000 shares, and the closing price of World Technology Corp.’s stock on the date that the employee is determined to be terminally ill was $101, all 100,000 of the shares would become vested (100,000 shares x $100 (the difference between $101 and $1) = $10,000,000).

 

   

 

 

WORLD TECHNOLOGY CORP.

 

VESTING POLICY

 

FOR

 

LEAVES OF ABSENCE

 

Unless and until the Compensation Committee of the Board of Directors of World Technology Corp. determines otherwise, the following policy shall be applied to all outstanding equity awards issued under any equity plan maintained World Technology Corp. or any World Technology Corp. subsidiary, including outstanding equity awards and/or equity plans assumed by World Technology Corp. in connection with its acquisition of companies, and held by any employee of World Technology Corp. or any World Technology Corp. subsidiary (each such award shall be referred to herein as an “equity award”), except to the extent that the application of such policy would be prohibited by any applicable law, rule or regulation or would result in adverse legal or tax consequences thereunder.

 

90 DAYS CONTINUED VESTING ON AUTHORIZED LEAVES OF ABSENCE

 

The exercise or vesting schedule in effect for any outstanding equity award and any unvested shares previously acquired pursuant to any equity award (such shares referred to herein as “unvested equity award shares”) held by an employee at the time of the employee’s commencement of an authorized leave of absence shall continue to vest and/or become exercisable in accordance with the vesting schedule set forth in the applicable equity award agreement during the period the employee remains on such authorized leave of absence; provided that, in no event shall any employee be entitled to vest for more than 90 days of authorized leaves of absence during any rolling 12-month period (the “LOA Limit”).

 

If an employee exceeds the LOA Limit during any rolling 12-month period, the unvested equity award shares held by such an employee shall be suspended immediately following the expiration of the LOA Limit and the equity award and any unvested equity shares shall not vest and/or become exercisable for any additional shares during the remainder of the rolling 12-month period.

 

 

   

 

 

WORLD TECHNOLOGY CORP.

 

TRANSFER POLICY

 

FOR

 

DIVORCE

 

Unless and until the Compensation Committee of the Board of Directors of World Technology Corp. determines otherwise, the following policy shall be applied to all equity awards issued under any equity plan maintained World Technology Corp. or any World Technology Corp. subsidiary, including equity awards and/or equity plans assumed by World Technology Corp. in connection with its acquisition of companies, and held by any employee of World Technology Corp. or any World Technology Corp. subsidiary (each such award shall be referred to herein as an “equity award”), except to the extent that the application of such policy would be prohibited by the applicable equity plan, equity award agreement or any applicable law, rule or regulation.

 

PROHIBITION ON TRANSFER OF EQUITY AWARDS UPON DIVORCE

 

Except as provided below, equity awards and any unvested shares acquired pursuant to equity awards shall not be anticipated, assigned, attached, garnished, optioned, transferred or made subject to any creditor’s process in connection with the divorce of the holder of such equity award or shares. Equity awards and any unvested shares acquired pursuant to equity awards may be transferred by an executive officer of World Technology Corp. only to the extent required by a domestic relations order, as defined by the Internal Revenue Code or Title I of the Employee Retirement Income Security Act, or the rules thereunder, in settlement of marital property rights by any court of competent jurisdiction.

 

   

 

Exhibit 10.6

 

EMPLOYMENT AGREEMENT

AS AMENDED AND RESTATED

 

This Employment Agreement, as amended and restated (the “Agreement”) effective 1st October, 2017, is by and among World Media & Technology Corp. (now named World Technology Corp.), a Nevada corporation (the “Company”), and Anthony S. Chan, whose primary residence is located at 47-29 158th Street, Flushing, New York 11358, United States (the “Executive”).

 

NOW THEREFORE, in consideration of the mutual covenants and promises contained herein and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows:

 

1.Nature of Employment.

 

a.Duties and Responsibilities. Executive shall serve as the Chief Financial Officer of the Company during the term of this Agreement. Executive shall have such general executive powers and active management over the property, business, and affairs of the Company as is consistent with the offices of the Chief Financial Officer of a public company, and to include and not be limited to assistance in the Company’s up-listing process, development of internal control over financial reporting, evaluation of M&A opportunities, participation in the Company’s road shows and investor presentations, and implementation of the Company's business initiatives and growth strategies, all subject to the direction of the Chief Executive Officer and the Company’s Board of Directors (the “Board”). Executive shall report to the Chief Executive Officer.

 

b.Other Business Activities. Executive will devote his time, attention and best efforts to the Company’s business. Notwithstanding the foregoing, Executive shall be entitled to engage in other consulting activities for the Executive’s own account, as Executive may elect from time to time while employed hereunder, including without limitation to charitable, community and other consulting or business activities, provided that such other activities do not materially interfere with the performance of the Executive’s duties, and provided that such activities do not violate Section 4 of this Agreement.

 

2.Compensation.

 

a.Base Salary. Executive’s base salary shall be at an annual rate of one hundred fifty thousand dollars ($150,000), subject to normal withholding. Such salary shall be paid in substantially equal installments on the 15th and last day of each month. The Executive’s base salary and incentive bonus shall be reviewed annually starting the earlier of within 60 days from the NASDAQ up-listing date or December 31, 2018.

 

b.Sign-on Bonus: Executive shall be paid a $25,000 sign-on bonus within 10 business days of the effective date of this employment agreement.

 

c.Incentive Bonus. For undertaking this executive position and for other good and valuable consideration, the Executive shall be paid the following incentive bonuses if he meets the milestones as described below:
1.Milestone 1: Incentive bonus of $75,000 to be paid no later than 15 days after the Company’s Form S-1 declared effective by the SEC;
2.Milestone 2: Incentive bonus of $75,000 to be paid no later than 15 days after the Company’s successful up-listing to NASDAQ;
3.In the event the Company’s planned up-listing process is delayed solely by market conditions or other factors beyond Executive’s control, which results in the up-listing to NASDAQ not being completed by September 30, 2018, the Executive shall be paid an incentive bonus of $50,000 no later than December 30, 2018.

 

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d.Vacation. Executive shall be entitled to receive twenty business days (4 weeks) of paid vacation annually. Executive may schedule his vacations at his discretion so long as the timing of such vacations does not interfere with his responsibilities to the Company. Executive shall also be entitled to five paid sick days annually, and paid holidays as per the Company plan. One week of unused vacation time may be carried over to the next year.

 

e.Benefits. The Company does not currently offer any medical, dental or other employee benefit programs to any of its employees. Executive shall be entitled to enroll in any employee benefit plans that the Company creates. Executive will be eligible to participate in all future employee benefit programs. In the absence of such medical, dental and other employee benefit programs, the Company agrees to reimburse Executive $1,328 per month.

 

f.Expenses. The Company shall reimburse Executive for all reasonable business-related expenses incurred by Executive in connection with his employment with the Company, including entertainment, travel, meals, and lodging in accordance with the policies, practices, and procedures in effect generally with respect to other peer executives of the Company.

 

3.Term and Termination and Termination Payments.

 

a.Term. The Agreement shall commence on the Effective Date (the “Commencement Date”), and continue for one year (Initial Term). After the Initial Term, the Agreement automatically renews month to month thereafter.

 

b.Termination.

 

i.By Death. Executive's employment with the Company shall terminate automatically upon Executive's death.

 

ii.By Disability. The Company may terminate Executive's employment with the Company during any period in which Executive is considered by the Company to be disabled. Executive shall be considered "disabled" if, in the sole opinion of the Company, as determined in good faith, Executive is prevented, after reasonable accommodation by the Company, from properly performing his duties due to a mental or physical illness for a period of 180 days in the aggregate in any 12-month period.

 

iii.For Cause. Notwithstanding any other provision contained in this Agreement, the Company may terminate this Agreement immediately, at any time, for Cause. For purposes of this Agreement, "Cause" shall mean any of the following: (i) the conviction of a felony, or a crime involving dishonesty or moral turpitude; (ii) fraud, misappropriation or embezzlement; or (iii) willful failure or gross negligence in the performance of assigned duties, which failure or negligence continues for more than thirty (30) days following written notice of such failure or negligence.

 

c.Obligations of Executive on Termination.

 

i.Executive acknowledges and agrees that all property, including keys, credit cards, books, manuals, records, reports, notes, contracts, customer lists, Confidential Information as defined in this Agreement, copies of any of the foregoing, and any equipment furnished to Executive by the Company, belong to the Company and shall be promptly returned to the Company upon termination of employment.

 

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ii.Upon termination of employment, Executive shall be deemed to have resigned from all offices and directorships then held with the Company.

 

iii.Executive acknowledges and agrees that Executive will comply with all of the surviving terms of this Agreement, specifically including, but not limited to, Sections 4 through 7 of this Agreement.

 

d.Obligations of the Company on Termination.

 

i.For Any Reason. Upon termination of this Agreement for any reason, the Company's obligations to Executive under this Agreement shall include (a) the prorated payment of Executive's salary through the date of termination to the extent not paid by then; (b) the payment of earned and accrued bonus or incentive payments due Executive, if any, at the time of termination under any bonus or incentive plans in which Executive participated prior to termination; (c) the payment of any unused accrued vacation through the date of termination; and (d) the payment of any reimbursable business expenses that were documented by Executive prior to termination in accordance with the Company's policies as set forth in paragraph 2.e. of this Agreement and that were not reimbursed by the Company at the time of the termination of this Agreement.

 

ii.Death or Disability. If Executive's employment is terminated by reason of Executive's death or disability, this Agreement shall terminate and the Company will have no further obligation to Executive, except as otherwise provided by law or by paragraph 3(d)(i) of this Agreement.

 

iii.Without Cause. If Executive's employment is terminated by the Company without Cause, this Agreement shall terminate and the Company shall pay to the Executive severance pay equal to two months base salary in addition to its obligations as stated in paragraphs 2(d), 2(e) and 3(d)(i) of this Agreement.

 

iv.For Cause. If Executive's employment is terminated for Cause, this Agreement shall terminate and the Company will have no further obligation to Executive, except as otherwise provided by law or by paragraphs 3(d)(i), 2(d) and 2(e) of this Agreement.

 

e.Termination by either Party. Either Party may terminate this Agreement for any reason upon thirty (30) days prior written notice.

 

f.Termination Payments. In the event of any termination of this Agreement pursuant to Section 3.b.iii hereof, then the Company shall have no further payment obligations to Executive hereunder, except for wages, vacation and benefits accrued to date and/or provided by applicable law.

 

4.Agreement Not to Compete.

 

a.Executive agrees not to compete with the Company in the operation of the Business which is defined as developing, marketing and/or selling/licensing products and services that meet with the regulatory requirements for the wellness, medical device and health care industry.

 

b.For the purposes of this Agreement, the “Non-Competition Period” shall mean a period of two (2) years following the termination of Executive’s employment with the Company, or any current or future Company Affiliate.

 

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5.Non-Solicitation. During the Non-Solicitation Period (as hereinafter defined), the Executive shall not in any manner solicit or hire any employees or consultants of the Company, or any Company Affiliate, which shall include employees or consultants: (i) with continuing contracts with the Company or a Company Affiliate; (ii) retained, employed or engaged by the Company or a Company Affiliate but without continuing contracts; or (iii) whose contracts expire or otherwise terminate for any reason preceding or following the first day of the Non-Solicitation Period. During the Non-Solicitation Period, Executive will not influence or attempt to influence any customers or suppliers of the Company, or other third parties doing business with of the Company, to divert their business to any individual or entity then in competition with the Company. During the Non-Solicitation Period, Executive will not disrupt, damage, impair, or interfere with the business of the Company in any way. Executive further agrees not to make any negative or disparaging statements about the Company, its affiliates, employees or representatives to any third party. For the purposes of this Agreement, the “Non-Solicitation Period” shall mean a period of two (2) years following the termination of the Executive’s employment with the Company, or any current or future Company Affiliate.

 

6.Confidential Information. You acknowledge and agree that your employment with Company is conditioned upon your execution of a separate Confidentiality Agreement in the form attached to this Agreement as Exhibit A (the “Confidentiality Agreement”) which prohibits the unauthorized use or disclosure of Company’s confidential information. You agree that you will comply with the provisions of that Confidentiality Agreement. You further agree that Company may change or amend its Confidentiality Agreement from time to time in its discretion. You agree to sign any amended Confidentiality Agreement(s) which may be issued by Company as a condition of your continued employment with Company.

 

7.Covenant to Report; Ownership of Trade Secrets and other Intellectual Property.

 

a.All written materials, records and documents made by the Executive or coming into his possession during the course of his employment by Company concerning the business or affairs of the Company shall be the sole property of the Company; and, upon the termination of his employment or upon the request of the Company, the Executive shall promptly deliver the same to the Company.

 

b.Executive agrees that any trade secret, invention, improvement, patent, patent application, or writing, and any program, system, or novel technique, whether or not capable of being trademarked, copyrighted or patented), obtained by Executive in the course of employment with the Company, and relating to the business, property, methods or customers of the Company, shall be and become the property of the Company, and Executive hereby transfers and assigns to the Company any rights he may have or acquire in any of the foregoing. Executive agrees to give the Company prompt written notice of his acquisition of any such trade secret, invention, improvement, patent, patent application, writing, program, system, or novel technique and to execute such instruments or transfer, assignment, conveyance, or confirmation and such other documents and to do all appropriate lawful acts as may be requested by the Company to transfer, assign, confirm, and perfect in the Company all legally protectable rights in such trade secret, invention, improvement, patent, patent application, writing, program, system, or novel technique.

 

8.Arbitration:

 

a.Arbitrable Claims. The following claims are covered by this arbitration provision (“Arbitrable Claims”): any and all claims for wages or other compensation; any and all contract or tort claims; any and all claims arising from or related to your employment or the termination of your employment with Company; and any and all claims for discrimination or harassment under any local, state or federal common or statutory law, based on race, color, sex, religion, national origin, ancestry, age, marital status, medical condition, physical or mental disability, sexual orientation or any other protected characteristic. You and Company agree to settle by final and binding arbitration all such Arbitrable Claims that Company may have against you or that you may have against Company or against any of its related entities, or against any then current or former officer, director, employee or agent of Company, in their capacity as such or otherwise. If this arbitration provision is held to be void or unenforceable with respect to a particular claim or class of claims, that fact shall not affect the validity or enforceability of the arbitration provisions with respect to any other claim or class of claims. YOU AND COMPANY ACKNOWLEDGE AND AGREE THAT BY SIGNING THIS AGREEMENT, YOU AND COMPANY HAVE VOLUNTARILY ELECTED TO ARBITRATE ALL ARBITRABLE CLAIMS RATHER THAN LITIGATE THEM IN A JUDICIAL FORUM AND THAT YOU AND COMPANY ARE GIVING UP THE RIGHT TO A JURY TRIAL AND TO A TRIAL IN A COURT OF LAW.

 

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b.Procedure. All Arbitrable Claims shall be settled by final and binding arbitration in accordance with the employment dispute resolution rules of the American Arbitration Association (“AAA”) in effect at the time the demand for arbitration is made. Such arbitration shall be filed with the AAA and shall be heard in New York. The arbitrator shall apply, as applicable, federal or New York substantive law and law of remedies. New York Code of Civil Procedure, which provides for certain discovery rights, shall apply to any arbitration. In reaching a decision, the arbitrator shall have no authority to change, extend, modify or suspend any of the terms of this Agreement but shall have the authority to order injunctive and/or other equitable relief. A judgment upon any award rendered by the arbitrator may be entered in any court having jurisdiction. Either you or Company may bring an action in any court of competent jurisdiction, if necessary, to compel arbitration under this arbitration provision, to obtain preliminary relief in support of claims to be prosecuted in arbitration or to enforce an arbitration award.

 

9.No Assignment. This Agreement is personal to Executive, and Executive may not assign any rights or delegate any responsibilities hereunder without the prior written consent of the Company.

 

10.Waiver or Modification. No provision of this Agreement may be modified, amended, or waived unless in writing and signed by you and Company. A waiver of any one provision shall not be deemed to be a waiver of any other provision.

 

11.Survival. It is the express intention and agreement of the parties hereto that the provisions of this Agreement that are intended to survive the ending of your employment shall survive the ending of your employment.

 

12.Severability. Should any provision of this Agreement be held invalid, void, or unenforceable for any reason, such adjudication shall in no way affect any other provision of this Agreement or the validity or enforcement of the remainder of the Agreement and the provision affected shall be curtailed only to the extent necessary to bring it within the applicable requirements of the law.

 

13.Governing Law. This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed in accordance with the laws of the State of New York.

 

14.Entire Agreement. This Agreement and the Confidentiality Agreement which you will be required to sign as a condition of your employment constitute the complete understanding between you and Company concerning the terms of your employment. All prior representations, agreements, arrangements and understandings between or among you and representatives of Company, whether oral or written, have been fully and completely merged herein and are fully superseded by this Agreement.

 

15.Executive acknowledges that he has read and understands this Agreement, and agrees that he has freely and voluntarily entered into this Agreement without duress or undue influence imposed on him of any kind.

 

16.This Agreement may be executed via facsimile or e-mail in counterparts, and each facsimile or e-mail counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned.

 

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IN WITNESS WHEREOF, the parties hereto hereby execute this Agreement by their duly authorized representatives on the dates set forth below.

 

World Technology Corp. EXECUTIVE: Anthony S. Chan
   
By: /s/ Sean McVeigh   By: /s/ Anthony S. Chan  
   
Name: Sean McVeigh  
   
Title: CEO  
   
Date: 5/14/18   Date: 5/14/18  

 

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Exhibit 10.7

 

PROFESSIONAL SERVICES AGREEMENT

AS AMENDED AND RESTATED

 

This Professional Services Agreement, as amended and restated (the “Agreement”) effective February 1, 2018, is by and among World Technology Corp., a Nevada corporation (the “Company”), and Anch Holdings Ltd., an Irish limited liability company with registered address at 13 Classon House, Dundrum, Dublin 14 Ireland (“Anch”).

 

NOW THEREFORE, in consideration of the mutual covenants and promises contained herein and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows:

 

1.Engagement. The Company hereby retains ANCH to perform executive management services, and ANCH hereby accepts such retention and agrees to do and perform executive management services upon the terms and conditions set forth herein. Sean McVeigh will be the designated individual for the term of this agreement

 

a.Professional Services. ANCH shall designate Sean McVeigh as the individual of ANCH to have the title, duties and responsibilities of the Chief Executive Officer (“Executive”) of the Company. Executive shall serve as the Chief Executive Officer (CEO) of the Company during the term of this Agreement. Executive shall have such general executive powers and active management over the property, business, and affairs of the Company as is consistent with the offices of the CEO of a public company, all subject to the direction of the Company’s Board of Directors (the “Board”). Executive shall have the necessary authority to make any representation for or execute a contract on behalf of the Company.

 

b.Other Business Activities. Executive will devote his time, attention and best efforts to the Company’s business. Notwithstanding the foregoing, Executive shall be entitled to engage in other consulting activities for the Executive’s own account, as Executive may elect from time to time during the term of this Agreement, including without limitation to charitable, community and other consulting or business activities, provided that such other activities do not materially interfere with the performance of the Executive’s duties, and provided that such activities do not violate Section 4 of this Agreement.

 

2.Compensation.

 

a.Base Fee. The Company shall pay to Anch a base fee at an annual rate of Two Hundred Thousand Dollars ($200,000), Such fee shall be paid in substantially equal installments on the first day of each month. Anch’s base fee and incentive bonus shall be reviewed annually starting January 1, 2019.

 

b.Incentive Bonus: The Company shall pay to Anch a One Hundred Thousand Dollar ($100,000) cash bonus if Executive meets certain performance-based criterion which is described in Exhibit A, attached hereto and incorporated herein.

 

c.Expenses. The Company shall reimburse Anch for all reasonable business-related expenses incurred by Executive in connection with his services to the Company, including entertainment, travel, meals, and lodging. To obtain reimbursement, expenses must be submitted promptly with appropriate supporting documentation in accordance with Company's policies to be provided to ANCH.

 

3.Term and Termination and Termination Payments.

 

a.Term. The Agreement shall commence on the Effective Date (the “Commencement Date”), and continue for one year (Initial Term). After the Initial Term, the Agreement automatically renews month to month thereafter.

 

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b.Termination. For Cause. Notwithstanding any other provision contained in this Agreement, the Company may terminate this Agreement immediately, at any time, for Cause. For purposes of this Agreement, "Cause" shall mean any of the following: (i) the conviction of a felony, or a crime involving dishonesty or moral turpitude; (ii) fraud, misappropriation or embezzlement; or (iii) willful failure or gross negligence in the performance of assigned duties, which failure or negligence continues for more than thirty (30) days following written notice of such failure or negligence.

 

c.Obligations of Executive on Termination.

 

i.Executive acknowledges and agrees that all property, including keys, credit cards, books, manuals, records, reports, notes, contracts, customer lists, Confidential Information as defined in this Agreement, copies of any of the foregoing, and any equipment furnished to Executive by the Company, belong to the Company and shall be promptly returned to the Company upon termination of this Agreement.

 

ii.Upon termination of this Agreement, Executive shall be deemed to have resigned from all offices and directorships then held with the Company.

 

iii.Executive acknowledges and agrees that Executive will comply with all of the surviving terms of this Agreement, specifically including, but not limited to, Sections 4 through 7 of this Agreement.

 

d.Obligations of the Company on Termination.

 

i.For Any Reason. Upon termination of this Agreement for any reason, the Company's obligations to Anch under this Agreement shall include (a) the prorated payment of the base fee through the date of termination to the extent not paid by then; (b) the payment of earned and accrued bonus or incentive payments due to Anch if any, at the time of termination under any bonus or incentive plans in which Anch participated prior to termination; and (c) the payment of any reimbursable business expenses that were documented by Anch prior to termination in accordance with the Company's policies as set forth in paragraph 2.e. of this Agreement and that were not reimbursed by the Company at the time of the termination of this Agreement.

 

ii.Without Cause. If this Agreement is terminated by the Company without Cause, this Agreement shall terminate and the Company shall pay to Anch a penalty fee equal to two months base fees.

 

iii.For Cause. If this Agreement is terminated for Cause, this Agreement shall terminate and the Company will have no further obligation to Anch or the Executive.

 

e.Termination by either Party. Either Party may terminate this Agreement for any reason upon thirty (30) days prior written notice.

 

f.Termination Payments. In the event of any termination of this Agreement pursuant to Section 3.b. hereof, then the Company shall have no further payment obligations.

 

4.Agreement Not to Compete.

 

a.Anch agrees not to compete with the Company in the operation of the Business which is defined as developing, marketing and/or selling/licensing products and services that meet with the regulatory requirements for the wellness, medical device and health care industry.

  

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b.For the purposes of this Agreement, the “Non-Competition Period” shall mean a period of two (2) years following the termination of this Agreement.

 

5.Non-Solicitation. During the Non-Solicitation Period (as hereinafter defined), Anch shall not in any manner solicit or hire any employees or consultants of the Company, or any Company Affiliate, which shall include employees or consultants: (i) with continuing contracts with the Company or a Company Affiliate; (ii) retained, employed or engaged by the Company or a Company Affiliate but without continuing contracts; or (iii) whose contracts expire or otherwise terminate for any reason preceding or following the first day of the Non-Solicitation Period. During the Non-Solicitation Period, Anch will not influence or attempt to influence any customers or suppliers of the Company, or other third parties doing business with of the Company, to divert their business to any individual or entity then in competition with the Company. During the Non-Solicitation Period, Anch will not disrupt, damage, impair, or interfere with the business of the Company in any way. Anch further agrees not to make any negative or disparaging statements about the Company, its affiliates, employees or representatives to any third party. For the purposes of this Agreement, the “Non-Solicitation Period” shall mean a period of two (2) years following the termination of this Agreement.

 

6.Confidential Information. Anch acknowledges and agrees that this Agreement is conditioned upon Executive’s execution of a separate Confidentiality Agreement in the form attached to this Agreement as Exhibit B (the “Confidentiality Agreement”) which prohibits the unauthorized use or disclosure of Company’s confidential information. Anch agrees that it and its officers and employees will comply with the provisions of that Confidentiality Agreement. Anch further agrees that Company may change or amend its Confidentiality Agreement from time to time in its discretion. Anch agrees to sign any amended Confidentiality Agreement(s) which may be issued by Company from time to time.

 

7.Covenant to Report; Ownership of Trade Secrets and other Intellectual Property.

 

a.All written materials, records and documents made by the Executive or coming into his possession during the term of this Agreement concerning the business or affairs of the Company shall be the sole property of the Company; and, upon the termination of this Agreement or upon the request of the Company, the Executive shall promptly deliver the same to the Company.

 

b.Executive agrees that any trade secret, invention, improvement, patent, patent application, or writing, and any program, system, or novel technique, whether or not capable of being trademarked, copyrighted or patented), obtained by Executive during the term of this Agreement, and relating to the business, property, methods or customers of the Company, shall be and become the property of the Company, and Executive hereby transfers and assigns to the Company any rights he may have or acquire in any of the foregoing. Executive agrees to give the Company prompt written notice of his acquisition of any such trade secret, invention, improvement, patent, patent application, writing, program, system, or novel technique and to execute such instruments or transfer, assignment, conveyance, or confirmation and such other documents and to do all appropriate lawful acts as may be requested by the Company to transfer, assign, confirm, and perfect in the Company all legally protectable rights in such trade secret, invention, improvement, patent, patent application, writing, program, system, or novel technique.

 

8.INDEPENDENT CONTRACTOR RELATIONSHIP. ANCH’s relationship with the Company is that of an independent contractor, and nothing in this Agreement is intended to, or should be construed to, create a partnership, agency, venture or employment relationship. ANCH is solely responsible for filing on a timely basis all tax returns and payments required to be made with any federal, state, or local tax authority with regard to the performance of services and receipt of fees under this Agreement. ANCH is solely responsible for, and must maintain adequate records of expenses incurred and fees received in the course of performing services under this Agreement. The Company will report all amounts paid to ANCH to applicable federal, state, and local tax agencies, among others, as required by law, including, but not limited to the Internal Revenue Service.

 

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9.Arbitration:

 

a.Arbitrable Claims. To the fullest extent permitted by law, ANCH and Company agree to arbitrate any controversy, claim or dispute between them arising out of or in any way related to this Agreement, and any disputes upon termination of this Agreement, including but not limited to breach of contract, tort, discrimination, harassment, and any claims for violation of any local, state or federal law, statute, regulation or ordinance or common law. Anch and Company agree to settle by final and binding arbitration all such Arbitrable Claims that Company may have against Anch or that Anch may have against Company or against any of its related entities, or against any then current or former officer, director, employee or agent of Company, in their capacity as such or otherwise. If this arbitration provision is held to be void or unenforceable with respect to a particular claim or class of claims, that fact shall not affect the validity or enforceability of the arbitration provisions with respect to any other claim or class of claims. ANCH AND COMPANY ACKNOWLEDGE AND AGREE THAT BY SIGNING THIS AGREEMENT, ANCH AND COMPANY HAVE VOLUNTARILY ELECTED TO ARBITRATE ALL ARBITRABLE CLAIMS RATHER THAN LITIGATE THEM IN A JUDICIAL FORUM AND THAT ANCH AND COMPANY ARE GIVING UP THE RIGHT TO A JURY TRIAL AND TO A TRIAL IN A COURT OF LAW.

 

b.Procedure. Any dispute arising out of or in connection with this Agreement, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the Rules of Arbitration of the International Chamber of Commerce, which Rules are deemed to be incorporated by reference into this clause. The number of arbitrators shall be one. The seat, or legal place, of arbitration shall be New York, United States. The language to be used in the arbitration shall be English. The governing law of the contract shall be the substantive law of New York, United States. In reaching a decision, the arbitrator shall have no authority to change, extend, modify or suspend any of the terms of this Agreement but shall have the authority to order injunctive and/or other equitable relief. A judgment upon any award rendered by the arbitrator may be entered in any court having jurisdiction. Either Anch or Company may bring an action in any court of competent jurisdiction, if necessary, to compel arbitration under this arbitration provision, to obtain preliminary relief in support of claims to be prosecuted in arbitration or to enforce an arbitration award.

 

10.No Assignment. Anch may not assign any rights or delegate any responsibilities hereunder without the prior written consent of the Company.

 

11.Waiver or Modification. No provision of this Agreement may be modified, amended, or waived unless in writing and signed by Anch and Company. A waiver of any one provision shall not be deemed to be a waiver of any other provision.

 

12.Survival. It is the express intention and agreement of the parties hereto that the provisions of this Agreement that are intended to survive the termination of this Agreement shall survive.

 

13.Severability. Should any provision of this Agreement be held invalid, void, or unenforceable for any reason, such adjudication shall in no way affect any other provision of this Agreement or the validity or enforcement of the remainder of the Agreement and the provision affected shall be curtailed only to the extent necessary to bring it within the applicable requirements of the law.

 

14.Governing Law. This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed in accordance with the laws of the State of New York.

 

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15.Entire Agreement. This Agreement and the Confidentiality Agreement which Executive will be required to sign constitute the complete understanding between Anch and Company. All prior representations, agreements, arrangements and understandings between or among Anch and representatives of Company, whether oral or written, have been fully and completely merged herein and are fully superseded by this Agreement.

 

16.This Agreement may be executed via facsimile or e-mail in counterparts, and each facsimile or e-mail counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned.

 

IN WITNESS WHEREOF, the parties hereto hereby execute this Agreement by their duly authorized representatives on the dates set forth below.

 

World Technology Corp. Anch Holdings Ltd.
   
By: /s/ Anthony Chan   By: /s/ Sean McVeigh  
   
Name: Anthony Chan Name: Sean McVeigh
   
Title: Chief Financial Officer Title:   President
   
Date: 5/14/18   Date: 5/14/18  

 

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EXHIBIT A

 

SECT. 2(b)

CASH INCENTIVE BONUS

 

Anch may be paid a One Hundred Thousand Dollar ($100,000) cash bonus upon the Company’s successful up-listing to NASDAQ, which the Board shall review and determine 60 days after the up-listing process has been completed.

 

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Exhibit 10.8

 

PROFESSIONAL SERVICES AGREEMENT

AS AMENDED AND RESTATED

 

This Professional Services Agreement, as amended and restated (the “Agreement”) is effective as of March 22, 2018, and is by and among World Technology Corp., a Nevada corporation (the “Company”), and World Global Network Corp., a Florida company with registered address at 600 Brickell Ave., Suite 1775, Miami, FL 33131 (“WGNC”).

 

This Agreement constitutes the entire agreement between the parties hereto pertaining to the position of Chief Technology Officer of the Company, and this Agreement supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties and with Fabio Galdi individually.

 

NOW THEREFORE, in consideration of the mutual covenants and promises contained herein and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows:

 

1.Engagement. The Company hereby retains WGNC to perform executive management services, and WGNC hereby accepts such retention and agrees to do and perform executive management services upon the terms and conditions set forth herein. Fabio Galdi will be the designated individual for the term of this agreement

 

a.Professional Services. WGNC shall designate Fabio Galdi as the individual of WGNC to have the title, duties and responsibilities of the Chief Technology Officer (“Executive”) of the Company. Executive shall serve as the Chief Technology Officer (CTO) of the Company during the term of this Agreement. Executive shall have such general executive powers and active management over the property, business, and affairs of the Company as is consistent with the offices of the CTO of a public company, all subject to the direction of the Company’s Board of Directors (the “Board”). Executive shall have the necessary authority to make any representation for or execute a contract on behalf of the Company.

 

b.Other Business Activities. Executive will devote his time, attention and best efforts to the Company’s business. Notwithstanding the foregoing, Executive shall be entitled to engage in other consulting activities for the Executive’s own account, as Executive may elect from time to time during the term of this Agreement, including without limitation to charitable, community and other consulting or business activities, provided that such other activities do not materially interfere with the performance of the Executive’s duties, and provided that such activities do not violate Section 4 of this Agreement.

 

2.Compensation.

 

a.Base Fee. The Company shall pay to WGNC a base fee at an annual rate of One Hundred Fifty Thousand Dollars ($150,000). Such fee shall be paid in substantially equal installments on the first day of each month. WGNC’s base fee and incentive bonus shall be reviewed annually starting January 1, 2019.

 

b.Incentive Bonus: The Company shall pay to WGNC a Seventy Five Thousand Dollar ($75,000) cash bonus if Executive meets certain performance-based criterion which is described in Exhibit A, attached hereto and incorporated herein.

 

c.Expenses. The Company shall reimburse WGNC for all reasonable business-related expenses incurred by Executive in connection with his services to the Company, including entertainment, travel, meals, and lodging. To obtain reimbursement, expenses must be submitted promptly with appropriate supporting documentation in accordance with Company's policies to be provided to WGNC.

 

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3.Term and Termination and Termination Payments.

 

a.Term. The Agreement shall commence on the Effective Date (the “Commencement Date”), and continue for one year (Initial Term). After the Initial Term, the Agreement automatically renews month to month thereafter.

 

b.Termination. For Cause. Notwithstanding any other provision contained in this Agreement, the Company may terminate this Agreement immediately, at any time, for Cause. For purposes of this Agreement, "Cause" shall mean any of the following: (i) the conviction of a felony, or a crime involving dishonesty or moral turpitude; (ii) fraud, misappropriation or embezzlement; or (iii) willful failure or gross negligence in the performance of assigned duties, which failure or negligence continues for more than thirty (30) days following written notice of such failure or negligence.

 

c.Obligations of Executive on Termination.

 

i.Executive acknowledges and agrees that all property, including keys, credit cards, books, manuals, records, reports, notes, contracts, customer lists, Confidential Information as defined in this Agreement, copies of any of the foregoing, and any equipment furnished to Executive by the Company, belong to the Company and shall be promptly returned to the Company upon termination of this Agreement.

 

ii.Upon termination of this Agreement, Executive shall be deemed to have resigned from all offices and directorships then held with the Company.

 

iii.Executive acknowledges and agrees that Executive will comply with all of the surviving terms of this Agreement, specifically including, but not limited to, Sections 4 through 7 of this Agreement.

 

d.Obligations of the Company on Termination.

 

i.For Any Reason. Upon termination of this Agreement for any reason, the Company's obligations to WGNC under this Agreement shall include (a) the prorated payment of the base fee through the date of termination to the extent not paid by then; (b) the payment of earned and accrued bonus or incentive payments due to WGNC if any, at the time of termination under any bonus or incentive plans in which WGNC participated prior to termination; and (c) the payment of any reimbursable business expenses that were documented by WGNC prior to termination in accordance with the Company's policies as set forth in paragraph 2.e. of this Agreement and that were not reimbursed by the Company at the time of the termination of this Agreement.

 

ii.Without Cause. If this Agreement is terminated by the Company without Cause, this Agreement shall terminate and the Company shall pay to WGNC a penalty fee equal to two months base fees.

 

iii.For Cause. If this Agreement is terminated for Cause, this Agreement shall terminate and the Company will have no further obligation to WGNC or the Executive.

 

e.Termination by either Party. Either Party may terminate this Agreement for any reason upon thirty (30) days prior written notice.

 

f.Termination Payments. In the event of any termination of this Agreement pursuant to Section 3.b. hereof, then the Company shall have no further payment obligations.

 

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4.Agreement Not to Compete.

 

a.WGNC agrees not to compete with the Company in the operation of the Business which is defined as developing, marketing and/or selling/licensing products and services that meet with the regulatory requirements for the wellness, medical device and health care industry.

 

b.For the purposes of this Agreement, the “Non-Competition Period” shall mean a period of two (2) years following the termination of this Agreement.

 

5.Non-Solicitation. During the Non-Solicitation Period (as hereinafter defined), WGNC shall not in any manner solicit or hire any employees or consultants of the Company, or any Company Affiliate, which shall include employees or consultants: (i) with continuing contracts with the Company or a Company Affiliate; (ii) retained, employed or engaged by the Company or a Company Affiliate but without continuing contracts; or (iii) whose contracts expire or otherwise terminate for any reason preceding or following the first day of the Non-Solicitation Period. During the Non-Solicitation Period, WGNC will not influence or attempt to influence any customers or suppliers of the Company, or other third parties doing business with of the Company, to divert their business to any individual or entity then in competition with the Company. During the Non-Solicitation Period, WGNC will not disrupt, damage, impair, or interfere with the business of the Company in any way. WGNC further agrees not to make any negative or disparaging statements about the Company, its affiliates, employees or representatives to any third party. For the purposes of this Agreement, the “Non-Solicitation Period” shall mean a period of two (2) years following the termination of this Agreement.

 

6.Confidential Information. WGNC acknowledges and agrees that this Agreement is conditioned upon Executive’s execution of a separate Confidentiality Agreement in the form attached to this Agreement as Exhibit B (the “Confidentiality Agreement”) which prohibits the unauthorized use or disclosure of Company’s confidential information. WGNC agrees that it and its officers and employees will comply with the provisions of that Confidentiality Agreement. WGNC further agrees that Company may change or amend its Confidentiality Agreement from time to time in its discretion. WGNC agrees to sign any amended Confidentiality Agreement(s) which may be issued by Company from time to time.

 

7.Covenant to Report; Ownership of Trade Secrets and other Intellectual Property.

 

a.All written materials, records and documents made by the Executive or coming into his possession during the term of this Agreement concerning the business or affairs of the Company shall be the sole property of the Company; and, upon the termination of this Agreement or upon the request of the Company, the Executive shall promptly deliver the same to the Company.

 

b.Executive agrees that any trade secret, invention, improvement, patent, patent application, or writing, and any program, system, or novel technique, whether or not capable of being trademarked, copyrighted or patented), obtained by Executive during the term of this Agreement, and relating to the business, property, methods or customers of the Company, shall be and become the property of the Company, and Executive hereby transfers and assigns to the Company any rights he may have or acquire in any of the foregoing. Executive agrees to give the Company prompt written notice of his acquisition of any such trade secret, invention, improvement, patent, patent application, writing, program, system, or novel technique and to execute such instruments or transfer, assignment, conveyance, or confirmation and such other documents and to do all appropriate lawful acts as may be requested by the Company to transfer, assign, confirm, and perfect in the Company all legally protectable rights in such trade secret, invention, improvement, patent, patent application, writing, program, system, or novel technique.

 

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8.INDEPENDENT CONTRACTOR RELATIONSHIP. WGNC’s relationship with the Company is that of an independent contractor, and nothing in this Agreement is intended to, or should be construed to, create a partnership, agency, venture or employment relationship. WGNC is solely responsible for filing on a timely basis all tax returns and payments required to be made with any federal, state, or local tax authority with regard to the performance of services and receipt of fees under this Agreement. WGNC is solely responsible for, and must maintain adequate records of expenses incurred and fees received in the course of performing services under this Agreement. The Company will report all amounts paid to WGNC to applicable federal, state, and local tax agencies, among others, as required by law, including, but not limited to the Internal Revenue Service.

 

9.Arbitration:

 

a.Arbitrable Claims. To the fullest extent permitted by law, WGNC and Company agree to arbitrate any controversy, claim or dispute between them arising out of or in any way related to this Agreement, and any disputes upon termination of this Agreement, including but not limited to breach of contract, tort, discrimination, harassment, and any claims for violation of any local, state or federal law, statute, regulation or ordinance or common law. WGNC and Company agree to settle by final and binding arbitration all such Arbitrable Claims that Company may have against WGNC or that WGNC may have against Company or against any of its related entities, or against any then current or former officer, director, employee or agent of Company, in their capacity as such or otherwise. If this arbitration provision is held to be void or unenforceable with respect to a particular claim or class of claims, that fact shall not affect the validity or enforceability of the arbitration provisions with respect to any other claim or class of claims. WGNC AND COMPANY ACKNOWLEDGE AND AGREE THAT BY SIGNING THIS AGREEMENT, WGNC AND COMPANY HAVE VOLUNTARILY ELECTED TO ARBITRATE ALL ARBITRABLE CLAIMS RATHER THAN LITIGATE THEM IN A JUDICIAL FORUM AND THAT WGNC AND COMPANY ARE GIVING UP THE RIGHT TO A JURY TRIAL AND TO A TRIAL IN A COURT OF LAW.

 

b.Procedure. Any dispute arising out of or in connection with this Agreement, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the Rules of Arbitration of the International Chamber of Commerce, which Rules are deemed to be incorporated by reference into this clause. The number of arbitrators shall be one. The seat, or legal place, of arbitration shall be Florida, United States. The language to be used in the arbitration shall be English. The governing law of the contract shall be the substantive law of Florida, United States. In reaching a decision, the arbitrator shall have no authority to change, extend, modify or suspend any of the terms of this Agreement but shall have the authority to order injunctive and/or other equitable relief. A judgment upon any award rendered by the arbitrator may be entered in any court having jurisdiction. Either WGNC or Company may bring an action in any court of competent jurisdiction, if necessary, to compel arbitration under this arbitration provision, to obtain preliminary relief in support of claims to be prosecuted in arbitration or to enforce an arbitration award.

 

10.No Assignment. WGNC may not assign any rights or delegate any responsibilities hereunder without the prior written consent of the Company.

 

11.Waiver or Modification. No provision of this Agreement may be modified, amended, or waived unless in writing and signed by WGNC and Company. A waiver of any one provision shall not be deemed to be a waiver of any other provision.

 

12.Survival. It is the express intention and agreement of the parties hereto that the provisions of this Agreement that are intended to survive the termination of this Agreement shall survive.

 

13.Severability. Should any provision of this Agreement be held invalid, void, or unenforceable for any reason, such adjudication shall in no way affect any other provision of this Agreement or the validity or enforcement of the remainder of the Agreement and the provision affected shall be curtailed only to the extent necessary to bring it within the applicable requirements of the law.

 

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14.Governing Law. This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed in accordance with the laws of the State of Florida.

 

15.Entire Agreement. This Agreement and the Confidentiality Agreement which Executive will be required to sign constitute the complete understanding between WGNC and Company. All prior representations, agreements, arrangements and understandings between or among WGNC and representatives of Company, whether oral or written, have been fully and completely merged herein and are fully superseded by this Agreement.

 

16.This Agreement may be executed via facsimile or e-mail in counterparts, and each facsimile or e-mail counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned.

 

IN WITNESS WHEREOF, the parties hereto hereby execute this Agreement by their duly authorized representatives on the dates set forth below.

 

World Technology Corp. World Global Network Corp.
   
By: /s/ Sean McVeigh   By: /s/ Fabio Galdi
   
Name: Sean McVeigh Name: Fabio Galdi  
   
Title: Chief Executive Officer Title:  President
   
Date: 05/14/18   Date: 5/14/18  

  

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EXHIBIT A

 

SECT. 2(b)

CASH INCENTIVE BONUS

 

WGNC may be paid a Seventy Five Thousand Dollar ($75,000) cash bonus upon specific performance based targets set by the Chief Executive Officer (the “Targets”); the Targets will be reviewed and finalized by the Board within 15 days after the Targets have been set by the CEO.

 

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Exhibit 10.9

 

PLATFORM LICENSE AGREEMENT

 

This PLATFORM LICENSE AGREEMENT (this “Agreement”) is made and entered into as of October 1, 2017 (the “License Effective Date”), between World Global Network Pte. Ltd., a limited private company incorporated in Singapore, (the “Licensor”), and World Media & Technology Corp., a Nevada corporation (the “Licensee,” and together with the Licensor, the “Parties” and each a “Party”). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in that certain Stock Exchange, Debt Forgiveness and Intellectual Property Assignment Agreement between Licensor and Licensee, dated simultaneously herewith (the “SEDFIP Agreement”).

 

RECITALS

 

A. Licensor and Licensee entered into the SEDFIP Agreement, pursuant to which Licensee acquired certain Intellectual Property from Licensor as described in the SEDFIP Agreement.

 

B. In connection with the transactions contemplated by the SEDFIP Agreement, Licensee desires to obtain from Licensor, and Licensor desires to grant to Licensee, a license to the Platform (as defined below).

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:

 

ARTICLE I
DEFINITIONS

 

Section 1.1 Definitions. The following terms shall have the meanings set forth below:

 

Components” means all of the existing proprietary and third party components to the Platform, including software or other information and technology that is embodied in the Platform, as described in Schedule A hereto.

 

Documentation” means any written, printed or otherwise recorded or stored material that relates to the Platform, including technical specifications, source code annotations, training and support materials, descriptions of the principles of operation of source code, other instructions.

 

Improvement” means any invention, modification, addition, derivative work, enhancement, revision, translation, abridgment or expansion to or arising from a work, or any other form in which a work or any part thereof, may be recast, transformed, or adapted.

 

Licensee Improvements” means Improvements to the Platform conceived, crafted, acquired or made by or on behalf of Licensee after the date hereof, including all intellectual property rights therein or thereto.

 

Licensor Improvements” means Improvements to the Platform conceived, crafted, acquired or made by or on behalf of Licensor after the date hereof, including all intellectual property rights therein or thereto.

 

Licensor Intellectual Property” means any existing or hereafter acquired or arising Intellectual Property that is now or hereafter owned by or licensed to Licensor and that is embodied in or protects the Platform; provided that, in the case of any such Intellectual Property that is licensed to Licensor from a third party, such Intellectual Property will be included in the Licensed Intellectual Property only to the extent that Licensor has the right to sublicense such Intellectual Property to Licensee within the scope of the license granted hereunder. For the avoidance of doubt, “Licensor Intellectual Property” includes all Intellectual Property owned by Licensor that is used in the Business on or before the Closing Date and that does not constitute a Purchased Asset.

 

Platform” means (a) the Licensor’s software platform (in both source code and object code form), as it exists on the License Effective Date, as more fully described on Schedule A, (b) the Components, (c) the Documentation, (d) Improvements to the Platform, the Components or the Documentation, as each were made by or on behalf of Licensor prior to the License Effective Date, and (e) any Improvements to the Platform, the Components or the Documentation that were made available by Licensee to Licensor pursuant to Section 2.4 below. The Platform includes (i) the software and (ii) any code relating thereto (including code to modules) that is partially implemented or under-development as of the License Effective Date or otherwise made available pursuant to Section 2.4 below.

 

 

 

 

ARTICLE II
LICENSE

 

Section 2.1 License Grant. Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee and Licensee’s Affiliates, (a) an exclusive, irrevocable, perpetual, non-sublicensable (except as permitted in Section 2.2), non-transferable (except as permitted in Section 8.9), fully paid up, royalty-free, worldwide right and license (i) to use and exploit the Licensor Intellectual Property and (ii) to use, display, install, copy, create derivative works or otherwise exploit the Platform, and (b) a non-exclusive, irrevocable, perpetual, non- sublicensable (except as permitted in Section 2.2), non-transferable (except as permitted in Section 8.9), fully paid up, royalty-free, worldwide right and license (i) to use and exploit the Licensor Intellectual Property and (ii) to use, display, install, copy, create derivative works or otherwise exploit the Platform. Except as provided otherwise in Sections 2.1, 2.2, or 8.9, Licensee and Licensee’s Affiliates may not disclose to or provide any third party access to, use of, or rights in or to, the Platform or any Licensor Intellectual Property, except as third parties may access or use the Platform in the ordinary course of Licensee’s business.

 

Section 2.2 Sublicensing and Third Parties. Licensee and Licensee’s Affiliates shall have the right to grant (a) third parties engaged by Licensee or Licensee’s Affiliates a sublicense to the rights granted in Section 2.1, to provide hosting, support or development services for Licensee or Licensee’s Affiliates relating to the Platform, provided that the sublicense may be granted with respect to source code of the Platform only if the sublicensee agrees to confidentiality obligations at least as restrictive as those set forth in Article VII and an acknowledgement of Licensee’s ownership of the Intellectual Property in and to the Platform and any Licensor Improvements, (b) end users the right to use and interface with an object code version of the Platform, and (c) partners, content providers and other third parties the right to use, access and interface with the Platform through an application program interface (“API”). Each Party shall establish, maintain and enforce policies and procedures to safeguard and protect the Platform and Licensor Intellectual Property which are no less rigorous than reasonable standards relating to such Party’s confidential and proprietary information. Each Party will be responsible for all acts and omissions of its employees, representatives, Affiliates, and other third parties (including their employees and representatives) who have access to the Platform, Licensor Intellectual Property, or the source code relating thereto as if such acts or omissions were such Party’s acts or omissions.

 

Section 2.3 Delivery. On or as soon as practicable following the License Effective Date, Licensor shall deliver to Licensee, via a delivery method reasonably requested by Licensee, a copy of the Platform and all materials contained therein.

 

Section 2.4 Access to Updates. Licensor shall disclose to Licensee at no additional cost, any and all updates to the source code which Licensee may pull and copy from the Licensor’s environment and incorporate into the Licensee’s environment as and if desired and at Licensee’s discretion and risk.

 

Section 2.5 Ownership. Subject to the terms hereof and the licenses granted hereunder, Licensor will have and retain sole and exclusive ownership of, and all right, title and interest in, the Licensor Improvements, and Licensee shall have no right, license or interest therein. Licensee will have and retain sole and exclusive ownership of, and all right, title and interest in, the Licensee Improvements, and Licensor shall have no right, license or interest therein.

 

Section 2.6 Disclosure of Improvements and Developments. Other than as provided in Section 2.4 above, Licensor will have no obligation to disclose to Licensee any Licensor Improvements. Licensee will have no obligation to disclose to Licensor any Licensee Improvements.

 

Section 2.7 Acknowledgements. Licensee acknowledges and agrees the Licensor is not in the business of commercially licensing the Platform or providing any services relating to the Platform to third parties and that the Platform may contain errors. LICENSOR SHALL NOT HAVE ANY DUTIES OR RESPONSIBILITIES UNDER THIS AGREEMENT OTHER THAN THOSE SPECIFICALLY SET FORTH IN THIS AGREEMENT AND NO IMPLIED OBLIGATIONS SHALL BE READ INTO THIS AGREEMENT. LICENSOR RETAINS ALL RIGHT, TITLE, AND INTEREST IN AND TO THE PLATFORM NOT EXPRESSLY LICENSED UNDER THIS AGREEMENT.

 

 

 

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

Section 3.1 Licensor Representation and Warranties. Licensor:

 

(a) Represents to Licensee that Licensor has the full right, power and authority, including the necessary Intellectual Property rights, to enter into this Agreement, to undertake the transactions contemplated hereby and to grant the licenses granted herein;

 

(b) Represents and warrants to Licensee that Licensor’s grant of the license and rights to Licensee hereunder does not, and will not infringe or misappropriate any third party’s tangible property rights, Intellectual Property rights existing on the License Effective Date, or personal rights and Licensor has not received any notice or claim on or before the License Effective Date asserting that the Platform infringes or misappropriates, suggesting that the Licensor, due to its use or exploitation of the Platform, consider licensing, or demanding that the Licensor license, from any person, or refrain from using, any Intellectual Property of a third party, nor to the knowledge of the Licensor is there reasonable basis therefor;

 

(c) Represents to Licensee that neither the Platform nor any Licensor Intellectual Property is subject to any litigation, judgment, decree, stipulation or other dispute as of the License Effective Date, nor to the knowledge of Licensor is any such dispute threatened;

 

(d) Represents and warrants to Licensee that no third parties hold or have been granted by Licensor intellectual property rights in the Platform or Licensor Intellectual Property that would conflict with the rights granted to Licensee herein or which does, or with the passage of time, or exercise of an option or springing right, would materially adversely affect the rights granted to Licensee hereunder;

 

(e) Represents to Licensee that other than as described on Schedule E, the rights granted under Section 2.1 hereof and the materials delivered under Section 2.3 hereof constitute all of the rights and materials necessary to operate the Platform (including rights with respect to software licensed from third parties) as such Platform has been operated by Licensor during the 6 months prior to the License Effective Date;

 

(f) Represents to Licensee that, as of the License Effective Date, no use of open source software code in connection with the Platform or integration of open source software code into the Platform has triggered any requirement that (i) the source code to the Platform be publicly disclosed or (ii) that the Platform has become open source;

 

(g) Warrants to Licensee that Licensor has used commercially reasonable efforts to prevent the introduction of, and to the knowledge of Licensor the Platform does not contain any, software viruses, time or logic bombs, trojan horses, worms, timers or clocks, trap doors or other malicious computer instructions, devices or techniques in the Platform as delivered to Licensee pursuant to Section 2.3;

 

(h) Represents to Licensee that, to the knowledge of Licensor, the Platform as delivered to Licensee pursuant to Section 2.3 is free from material bugs and material errors.

 

(i) Represents to Licensee that the source code and Documentation delivered to Licensee pursuant to Section 2.3 is consistent with the source code and Documentation used by Licensee for its internal purposes;

 

 

 

 

ARTICLE IV
INDEMNIFICATION

 

Section 4.1 By Licensor. Licensor shall defend, indemnify and hold harmless the Licensee and the Representatives of Licensee from and against any and all Losses asserted against, incurred, sustained or suffered by Licensee and/or the Representatives of Licensee as a result of, arising out of or relating to a claim that the Platform or any Licensor Intellectual Property as delivered to Licensor by Licensee infringes or misappropriates the Intellectual Property of any third party existing as of the License Effective Date (each a “Infringement Claim”’); provided, however that Licensor shall have no obligation to Licensee under this section with respect to any Infringement Claim arising twenty four (24) months after the License Effective Date or to the extent arising from (i) a Licensee Improvement or any modifications to the Platform or any Licensor Intellectual Property made by or on behalf of Licensee or at Licensee’s request; (ii) Licensee’s breach of this Agreement, but only to the extent the third party infringement that is at issue in such Infringement Claim or Losses would not have occurred or have existed but for such breach; (iii) Licensee’s or its Affiliates’ or sublicensees’ use of the Platform or any Licensor Intellectual Property in a manner not reasonably contemplated by Licensor, but only to the extent the third party infringement that is at issue in such Infringement Claim or Losses would not have occurred or have existed but for such non-contemplated use; (iv) Licensee’s or its Affiliates’ or sublicensees’ use of the Platform or any Licensor Intellectual Property, but only to the extent the infringement that is at issue in such Infringement Claim or Losses would not have occurred or have existed but for such use; (v) the combination of the Platform and Licensor Intellectual Property with any Licensee or third party software or other intellectual property, in each case, not provided by Licensor, but only to the extent the infringement that is at issue in such Infringement Claim or Losses would not have occurred or have existed but for such combination. If the Platform or any Licensor Intellectual Property becomes the subject of any Infringement Claim or injunction, Licensor may (at its option), do one of the following to mitigate the Losses relating to the Infringement Claim: (x) procure for the Licensee (at Licensor’s expense) the right to continue using the impacted portions of the Platform or Licensor Intellectual Property, or (y) replace or modify the impacted portions of the Platform or Licensor Intellectual Property so that it becomes non- infringing without substantially compromising functions, features, or performance of the Platform or the Licensor Intellectual Property.

 

Licensor shall indemnify, save and hold harmless Licensee and their respective representatives, from and against any and all costs, losses (including without limitation diminution in value), taxes, liabilities, obligations, damages, lawsuits, deficiencies, claims, demands, and expenses (whether or not arising out of third-party claims), reasonable attorneys’ fees and all amounts paid in investigation, defense or settlement of any of the foregoing (herein, “Damages”), incurred in connection with, arising out of, resulting from or incident to (1) any breach of any representation or warranty or the inaccuracy of any representation made by the Licensor in or pursuant to this Agreement, (2) any breach of any covenant or agreement made by the Licensor in or pursuant to this Agreement, or (3) operation of the Platform.

 

Section 4.2 Procedures. The indemnified Party shall promptly notify the indemnifying Party in writing of any claim, action, demand or lawsuit for which the Indemnified Party intends to claim indemnification hereunder (provided, however, that the failure to give such notice shall not relieve the indemnifying Party from its obligations hereunder, except to the extent that the indemnifying Party is prejudiced by such delay). The indemnifying Party has the right to take control of the defense of all actions that are indemnified against hereunder; provided, however, Licensee shall not have the right to settle or compromise any claim without the written consent of the Licensor, which consent shall not be unreasonably withheld or delayed. The indemnified Party shall cooperate with the indemnifying Party and its legal representatives in the investigation and defense of any action covered by this indemnification.

 

ARTICLE V
TERM AND TERMINATION

 

Section 5.1 Term. The term of this Agreement shall commence as of the License Effective Date and shall continue in perpetuity.

 

Section 5.2 No Termination. The licenses granted hereunder shall be irrevocable and perpetual, shall not be terminable by Licensor and shall continue in full force and effect indefinitely, provided, however, if Licensee materially breaches its obligations under this Agreement by disclosing the source code or Documentation to an unauthorized third party, then Licensor may bring a legal action against the Licensee seeking (i) injunctive relief to prohibit such action (or a reoccurrence of the same or similar breach), but not injunctive relief to prohibit Licensee’s own use of the Platform or Documentation in accordance with this Agreement, and (ii) monetary damages. Except as otherwise described above, Licensor shall not have, and Licensor hereby irrevocably waives, the right to seek injunctive or equitable relief against the Licensee, including any remedy that would involve rescission or other termination of this Agreement or any of the licenses granted hereunder.

 

 

 

 

ARTICLE VI
LIMITATION ON LIABILITY

 

Section 6.1 DAMAGE DISCLAIMER. EXCEPT AS PROVIDED BELOW IN THIS ARTICLE VI, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY CONSEQUENTIAL, INDIRECT, INCIDENTAL, PUNITIVE, OR SPECIAL DAMAGES WHATSOEVER, INCLUDING WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION, AND THE LIKE, ARISING OUT OF THIS AGREEMENT, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

Section 6.2 GENERAL DAMAGE CAP. EXCEPT AS PROVIDED BELOW IN THIS ARTICLE VI, IN NO EVENT SHALL EITHER PARTY BE LIABLE IN THE AGGREGATE UNDER THIS AGREEMENT OR WITH RESPECT TO THE PLATFORM OR LICENSOR INTELLECTUAL PROPERTY FOR ANY DAMAGES OR LOSSES IN EXCESS OF: (A) FOR CLAIMS ARISING BEFORE THE 24TH MONTH AFTER THE LICENSE EFFECTIVE DATE, FIFTEEN MILLION DOLLARS ($15,000,000) OR (B) FOR CLAIMS ARISING ON OR AFTER THE 24TH MONTH AFTER THE LICENSE EFFECTIVE DATE, ONE HUNDRED DOLLARS ($100). A PARTY SHALL NOT BE PERMITTED TO BRING A CLAIM UNDER THIS AGREEMENT AND UNDER THE SEDFIP AGREEMENT FOR THE SAME CAUSE OF ACTION OR EVENT GIVING RISE TO LIABILITY AND LIABILITIES SUBJECT TO THE DAMAGES CAP SET FORTH IN CLAUSE 6.2(A) APPLY AGAINST AND REDUCE THE APPLICABLE LIMITS UNDER THE SEDFIP AGREEMENT IF A PARTY COULD HAVE BROUGHT SUCH CAUSE OF ACTION THEREUNDER INSTEAD OF THIS AGREEMENT.

 

Section 6.3 EXCLUSIONS. Sections 6.1 shall not apply with respect to damages or losses arising from (i) infringement, misappropriation, unauthorized use, or unauthorized disclosure of the Platform or any Licensor Intellectual Property, (ii) Licensor’s or Licensor’s Affiliate’s breach of its exclusivity obligations, or (iii) a breach of Section 2.1 or 2.2. Section 6.2 shall not apply with respect to damages or losses arising from (x) infringement, misappropriation, unauthorized use, or unauthorized disclosure of the Platform or any Licensor Intellectual Property, (y) Licensor’s or Licensor’s Affiliate’s breach of its exclusivity obligations, or (z) a breach of Section 2.1 or 2.2; provided, however, a Party’s liability for damages or losses for any infringement, misappropriation, unauthorized use, or unauthorized disclosure or other acts or omissions by unaffiliated third parties engaged by such Party or its Affiliates will be subject to a cap of $ 15,000,000 for the first twenty four (24) months after the License Effective Date and a cap of $5,000,000 thereafter (the “Special Caps”). Sections 6.1 and 6.2 and the Special Caps shall not apply with respect to fraud with intent to deceive, willful misrepresentation, and willful misconduct.

 

ARTICLE VII
CONFIDENTIAL INFORMATION

 

Each of the Parties shall hold, and shall cause its Representatives to hold, in confidence all documents and information furnished to it by or on behalf of the other party in connection with the transactions contemplated hereby pursuant to the terms of the SEDFIP Agreement, which shall continue in full force and effect following the License Effective Date. Licensee further acknowledges and agrees that the Platform and Licensor Intellectual Property are Confidential Information of Licensor under such SEDFIP Agreement and may not be used or disclosed, except as expressly authorized or licensed by Licensor.

 

ARTICLE VIII
MISCELLANEOUS

 

Section 8.1 Amendment and Modification. This Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing specifically designated as an amendment hereto, signed on behalf of each party.

 

Section 8.2 Waiver. No failure or delay of either party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the parties hereunder are cumulative and are not exclusive of any rights or remedies which they would otherwise have hereunder. Any agreement on the part of either party to any such waiver shall be valid only if set forth in a written instrument executed and delivered by a duly authorized officer on behalf of such party.

 

 

 

 

Section 8.3 Notices. All notices, requests, claims, demands and other communications under this Agreement shall be given or made and shall be deemed to have been given in accordance with Section 10.5 of the SEDFIP Agreement.

 

Section 8.4 Interpretation. When a reference is made in this Agreement to a Section, Article, Schedule or Exhibit, such reference shall be to a Section, Article, Schedule or Exhibit of this Agreement unless otherwise indicated. Any table of contents or headings contained in this Agreement or in any Schedule are for convenience of reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Any capitalized terms used in any Schedule but not otherwise defined therein shall have the meaning as defined in this Agreement. All Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth herein. The word “including” and words of similar import when used in this Agreement will mean “including, without limitation,” unless otherwise specified.

 

Section 8.5 Entire Agreement. This Agreement (including the Schedules hereto) and the SEDFIP Agreement and its Exhibits and ancillary agreements constitute the entire agreement, and supersedes all prior written agreements, arrangements, communications and understandings and all prior and contemporaneous oral agreements, arrangements, communications and understandings between the Parties with respect to the subject matter hereof. If there are any conflicts between the terms and provisions of this Agreement and the SEDFIP Agreement, the terms and provisions of this Agreement shall control.

 

Section 8.6 No Third-Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person other than the parties, their Affiliates and their respective successors and permitted assigns any legal or equitable right, benefit or remedy of any nature under or by reason of this Agreement.

 

Section 8.7 Governing Law. Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the Rules of Arbitration of the International Chamber of Commerce, which Rules are deemed to be incorporated by reference into this clause. The number of arbitrators shall be one. The seat, or legal place, of arbitration shall be the State of New York, United States. The language to be used in the arbitration shall be English. The governing law of the contract shall be the substantive law of New York, United States.

 

Section 8.8 Injunctive Relief. A breach of this Agreement may result in irreparable harm to Licensee and a remedy at law for any such breach will be inadequate, and in recognition thereof, Licensee will be entitled to injunctive and other equitable relief to prevent any breach or the threat of any breach of this Agreement by Licensor without showing or proving actual damages.

 

Section 8.9 Assignment: Successors. Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of law or otherwise, by either party without the prior written consent of the other party, and any such assignment without such prior written consent shall be null and void; provided, however, that the Licensee may assign this Agreement to any Affiliate of the Licensee without the prior consent of the Licensor. Following any such assignment, Licensee shall cease all use of the Platform and provide Licensor notice of such assignment. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns.

 

Section 8.10 Severability. Whenever possible, each provision or portion of any provision of this Agreement shall be interpreted in such manner as to be effective and valid under Applicable Law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any Applicable Law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or portion of any provision in such jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.

 

 

 

 

Section 8.11 Enforcement. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Each of the parties shall be entitled to specific performance of the terms hereof, including an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in the Court of Chancery located in the State of Delaware (or, if such court lacks subject matter jurisdiction, in any appropriate state or federal court within the State of Delaware), this being in addition to any other remedy to which such party is entitled at law or in equity. Each of the parties hereby further waives (a) any defense in any Action for specific performance that a remedy at law would be adequate and (b) any requirement under any law to post security as a prerequisite to obtaining equitable relief.

 

Section 8.12. Counterparts; Electronic Signatures. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party. A facsimile, PDF or other electronic signature of this Agreement shall be valid and have the same force and effect as a manually signed original.

 

Section 8.13 No Presumption Against Drafting Party. Each of the Licensor and the Licensee acknowledges that each party to this Agreement has been represented by legal counsel in connection with this Agreement and the transactions contemplated by this Agreement. Accordingly, any rule of law or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the drafting party has no application and is expressly waived.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

World Media & Technology Corp.   World Global Network Pte. Ltd.
     
By:     By:  
  /s/ Seán McVeigh      
Name: Seán McVeigh   Name:  
         
Title: Chief Executive Officer   Title:  

 

 

 

 

Exhibit 10.10

 

COMMON STOCK PURCHASE AGREEMENT

 

This Common Stock Purchase Agreement (this “Agreement”) is dated as of March 30, 2015 by and between PayNovi Ltd., an Irish limited liability company (the “Company”), Anch Holdings Ltd., an Irish limited liability company (the “Seller”), and World Media & Technology Corp., a corporation organized and existing under the laws of Nevada (the “Purchaser”) and a majority owned subsidiary of World Assurance Group, Inc., a Nevada corporation (“Parent”).

 

PRELIMINARY STATEMENT

 

WHEREAS, the Seller is the sole shareholder of the Company who owns and/or controls in the aggregate 1,000 common shares of the Company, which represents 100% of the total issued and outstanding capital stock of the Company.

 

On the terms and subject to the conditions set forth in this Agreement, the Seller desires to sell to the Purchaser, and the Purchaser desires to purchase from the Seller, Three Hundred Fifty (350) shares of the Company’s Common Stock which represents thirty five percent (35%) of the Company’s total issued and outstanding shares as of the Closing Date (the “Company Shares”), for a Purchase Price consisting of One Million Three Hundred Sixty One Thousand (1,361,000) shares of the Purchaser’s common stock which represents five percent (5%) of the Purchaser’s total issued and outstanding shares as of the Closing Date (the “Purchaser Shares”), and Three Million Nine Hundred Thirty Seven Thousand and Five (3,937,005) shares of the Parent’s common stock which represents five percent (5%) of the Parent’s total issued and outstanding shares of the Closing Date (the “Parent Shares”) (the Purchaser Shares and the Parent Shares together shall mean the Purchase Price), as set forth in this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company, the Seller and the Purchaser, intending to be legally bound, agree as follows:

 

Section 1.        Definitions.

 

1.1         Definitions. In addition to the terms defined elsewhere in this Agreement, the following terms have the meanings set forth in this Section 1.1:

 

Action” means any action, arbitration, audit, examination, investigation, inquiry, proceeding, hearing, litigation, arbitration or suit (whether civil, criminal, administrative, judicial or investigative, whether formal or informal, and whether public or private) commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Authority or arbitrator.

 

Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act; provided that (a) the Company and its Subsidiaries will not be deemed an Affiliate of Purchaser or its Subsidiaries and (b) the Purchaser and its Subsidiaries will not be deemed an Affiliate of the Company or its Subsidiaries.

 

A Person will be deemed the “Beneficial Owner” of, to “Beneficially Own” or have “Beneficial Ownership” of any securities (and correlative terms will have correlative meanings):

 

(a)         which such Person or any of such Person’s Affiliates beneficially own, directly or indirectly, for purposes of Section 13(d) of the Exchange Act and Regulations 13D and 13G thereunder;

 

(b)         which such Person or any of such Person’s Affiliates has (i) the right to acquire (whether such right is exercisable immediately or only after the passage of time or the fulfillment of a condition or both) pursuant to any agreement, arrangement or understanding (whether or not in writing), or upon the exercise of conversion rights, exchange rights, warrants, options or otherwise or (ii) the right to vote, alone or in concert with others, pursuant to any agreement, arrangement or understanding (whether or not in writing);

 

 

 

 

(c)         which are beneficially owned, directly or indirectly, by any other Person with which such Person or any of such Person’s Affiliates has any agreement, arrangement or understanding (whether or not in writing) for the purpose of acquiring, holding, voting or disposing of any securities of the Company; or

 

(d)         which are the subject of, or the reference securities for or that underlie any derivative transaction entered into by such Person, or derivative security (including options) acquired by such Person, which gives such Person the economic equivalent of ownership of an amount of such securities due to the fact that the value of the derivative is directly or indirectly determined by reference to the price or value of such securities, without regard to whether (i) such derivative conveys any voting rights in such securities to such Person, (ii) the derivative is required to be, or capable of being, settled through delivery of such securities or (iii) such Person may have entered into other transactions that hedge the economic effect of such derivative.

 

In determining the number of shares deemed Beneficially Owned by virtue of the operation of clause (d) above, the subject Person will be deemed to Beneficially Own (without duplication) the number of shares that are synthetically owned pursuant to such derivative transactions or such derivative securities. The number of shares that are synthetically owned will be the notional or other number of shares in respect of such derivative transactions or securities that is specified in a filing by such Person or any of such Person’s Affiliates with the SEC or in the documentation evidencing such derivative transactions or securities, and in any case (or if no such number of shares is specified in any filing or documentation), as reasonably determined by the Board of Directors in good faith to be the number of shares that are synthetically owned pursuant to such derivative transactions or securities.

 

Change of Control” means, with respect to a Person, directly or indirectly (a) a consolidation, merger or similar business combination involving such Person in which the holders of voting securities of such Person immediately prior thereto are not the holders of a majority in interest of the voting securities of the surviving Person in such transaction, (b) a sale, lease or conveyance of all or substantially all of the assets, or of 35% or more of the outstanding voting securities, of such Person in one transaction or a series of related transactions, (c) any Person or group becomes the Beneficial Owner of 35% or more of the outstanding voting securities of such Person, or (d) a majority of the seats on the board of directors of such Person cease to be occupied by Persons who either (i) are members of the board of such Person on the date hereof or (ii) are elected by, or nominated by, the board of such Person (or a committee thereof) for election to the board of such Person.

 

Confidential Information” means all confidential or proprietary information and data of the Disclosing Party or its Affiliates, disclosed or otherwise made available to the Recipient or its Representatives in connection with this Agreement, whether disclosed before or after the date of this Agreement and whether disclosed electronically, orally or in writing or through other methods made available to the Recipient or its Representatives. Notwithstanding the foregoing, for purposes of this Agreement, Confidential Information will not include any information which the Recipient demonstrates by clear and convincing evidence is (a) at the time of disclosure in the public domain or thereafter enters the public domain without any breach of this Agreement by the Recipient or any of its Representatives, (b) known by the Recipient before the time of disclosure, as shown by prior written or electronic records, other than as a result of a prior disclosure by the Disclosing Party or its Affiliates or the Disclosing Party’s Representatives, (c) obtained from a Third Party who is in lawful possession thereof and does not thereby breach an obligation of confidence to the Disclosing Party regarding such information, or (d) developed by or for the Recipient or its Representatives through their independent efforts without use of Confidential Information; provided that, in each of the foregoing clauses (a) through (d), such information will not be deemed to be within the foregoing exceptions merely because such information is embraced by more general knowledge that is publicly known or in the Recipient’s possession, and no combination of features will be deemed to be within the foregoing exceptions merely because individual features are publicly known or in the Recipient’s possession, unless the particular combination itself and its principle of operations are in the public domain or in the Recipient’s possession without the use of or access to Confidential Information.

 

 

 

 

 

Contract” means any legally binding bond, debenture, note, mortgage, indenture, guarantee, license, lease, purchase or sale order or other contract, commitment, agreement, instrument, obligation, arrangement, understanding, undertaking, permit, concession or franchise (each including all amendments thereto).

 

Disclosing Party” means the party disclosing or making available Confidential Information (either directly or indirectly through such party’s Representatives) to the Recipient or the Recipient’s Representatives.

 

Disclosure Schedule” means the Disclosure Schedule of the Company delivered concurrently with this Agreement.

 

Encumbrance” means any lien (statutory or otherwise), charge, encumbrance, mortgage, pledge, hypothecation, security interest, deed of trust, option, preemptive right, right of first refusal or first offer, title defect or other adverse claim of any third party.

 

Equity Securities” means (a) capital stock or other equity interests (including shares of Common Stock) of the Company and (b) options, warrants or other securities that are directly or indirectly convertible into, exchangeable for or exercisable for capital stock or other equity interests of the Company.

 

Exchange Act” means the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder.

 

Excluded Securities” means any securities that are issued by the Company (a) pursuant to any employment contract, employee or benefit plan, stock purchase plan, stock ownership plan, stock option or equity compensation plan or other similar plan where stock is being issued or offered to a trust, other entity or otherwise, to or for the benefit of any employees, potential employees, officers or directors of the Company or any of its Subsidiaries or (b) as consideration in a business combination or other merger or acquisition transaction.

 

Governmental Authority” means any (a) nation, region, state, county, city, town, village, district or other jurisdiction, (b) federal, state, local, municipal, foreign or other government, (c) governmental or quasi-governmental authority of any nature (including any governmental agency, commission, branch, department or other entity and any court, arbitrator or other tribunal), (d) multinational organization exercising judicial, legislative or regulatory power, (e) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power of any nature of any federal, state, local, municipal, foreign or other government, or (f) regulatory or self-regulatory organization (including the Nasdaq Global Select Market and the Financial Industry Regulatory Authority).

 

Intellectual Property” means all (a) patents, patent applications, and invention disclosures, and all related continuations, continuations-in-part, divisionals, reissues, re-examinations, substitutions, and extensions thereof, (b) trademarks, service marks, names, corporate names, trade names, domain names, logos, slogans, trade dress, design rights, and other similar designations of source or origin, together with the goodwill symbolized by any of the foregoing, (c) copyrights and copyrightable subject matter, (d) rights in computer programs (whether in source code, object code, or other form), algorithms, databases, compilations and data, technology supporting the foregoing, and all documentation, including user manuals and training materials, related to any of the foregoing, (e) trade secrets and all other confidential or proprietary information, ideas, know-how, inventions, processes, formulae, models, and methodologies, (f) rights of publicity, privacy, and rights to personal information, (g) moral rights and rights of attribution and integrity, and (h) all applications and registrations, and any renewals, extensions and reversions, for the foregoing.

 

knowledge” means, with respect to the Company, the actual knowledge of the executive officers of the Company listed on Section 1.2 of the Disclosure Schedule after reasonable inquiry within the scope of their respective functional responsibilities.

 

Laws” means any foreign, federal, state and local laws, statutes, ordinances, rules, regulations, orders, judgments, injunctions and decrees.

 

 

 

 

Material Adverse Effect” means any event, change, circumstance, condition, state of facts, effect or other matter, individually or collectively with one or more other events, changes, circumstances, conditions, state of facts, effects or other matters, that have had, or reasonably would be expected to have, a material adverse effect on (a) the business, assets, liabilities, financial condition or results of operations of the Company and its Subsidiaries, taken as a whole, or (b) the ability of the Company to consummate timely the transactions contemplated by the Transaction Documents; provided that, solely in the case of clause (a), none of the following events, changes, circumstances, conditions, state of facts, effects or other matters, either alone or in combination, will constitute, or be considered in determining whether there has been, a Material Adverse Effect: (i) any outbreak or escalation of war or major hostilities or any act of terrorism, (ii) changes in laws, rules, regulations, GAAP or the interpretation thereof, (iii) changes that generally affect the industry in which the Company and its Subsidiaries operate, (iv) changes in financial markets, general economic conditions (including prevailing interest rates, exchange rates, commodity prices and fuel costs) or political conditions, (v) changes in the trading price or trading volume of the Common Stock (it being understood that the facts and circumstances underlying any such changes that are not otherwise expressly excluded in (i) through (viii) herein from the definition of a “Material Adverse Effect” may be considered in determining whether there has been a Material Adverse Effect), (vi) failure by the Company to meet any published or internally prepared projections, budgets, plans or forecasts of revenues, earnings or other financial performance measures or operating statistics (it being understood that the facts and circumstances underlying any such failure that are not otherwise expressly excluded in (i) through (viii) herein from the definition of a “Material Adverse Effect” may be considered in determining whether there has been a Material Adverse Effect), in the case of each of (i) through (vi), solely to the extent arising after the date of this Agreement, (vii) any action taken by the Company or its Subsidiaries to the extent expressly required by this Agreement, (viii) the execution or delivery of this Agreement, the consummation of the transactions contemplated by this Agreement or the public announcement with respect to any of the foregoing (it being understood that for purposes of Sections 3.3 and 4.2, effects resulting from or arising in connection with the matters set forth in (vii) and (viii) of this definition will not be excluded in determining whether a Material Adverse Effect has occurred or reasonably would be expected to occur), or (ix) as set forth on Section 1.3 of the Disclosure Schedule, except, solely in the case of clauses (i) through (iv), to the extent those events, changes, circumstances, conditions, states of facts, effects or other matters, have a disproportionate effect on the Company and its Subsidiaries, taken as a whole, as compared to other companies operating in the industry in which the Company and its Subsidiaries operate.

 

Organizational Documents” means, with respect to any entity, the certificate or articles of incorporation and bylaws of such entity, or any similar organizational documents of such entity.

 

Person” means an individual or firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

Recipient” means the party receiving or otherwise having access to the Confidential Information (either directly or indirectly through such party’s Representatives) from the Disclosing Party or the Disclosing Party’s Representatives.

 

Representatives” means, as to any Person, its Affiliates and its and their respective directors, officers, employees, agents, attorneys, accountants and financial advisors.

 

SEC” means the United States Securities and Exchange Commission.

 

Securities Act” means the Securities Act of 1933 and the rules and regulations promulgated thereunder.

 

Subsidiary” means, with respect to a specified Person, any corporation or other Person of which securities or other interests having the power to elect a majority of that corporation’s or other Person’s board of directors or similar governing body, or otherwise having the power to direct the business and policies of that corporation or other Person (other than securities or other interests having such power only upon the happening of a contingency that has not occurred) are held by the specified Person or one or more of its Subsidiaries. When used in this Agreement without reference to a particular Person, “Subsidiary” means a Subsidiary of the Company.

 

Third Party” means any Person other than the Company, Purchaser or their respective Affiliates.

 

 

 

 

Transaction Documents” means this Agreement, all exhibits and schedules to this Agreement, and any other documents, certificates or agreements executed in connection with the transactions contemplated by this Agreement.

 

1.3           Construction. Any reference in this Agreement to a “Section,” “Exhibit” or “Schedule” refers to the corresponding Section, Exhibit or Schedule of or to this Agreement, unless the context indicates otherwise. The table of contents and the headings of Sections are provided for convenience only and are not intended to affect the construction or interpretation of this Agreement. All words used in this Agreement are to be construed to be of such gender or number as the circumstances require. The words “including,” “includes” or “include” are to be read as listing non-exclusive examples of the matters referred to, whether or not words such as “without limitation” or “but not limited to” are used in each instance.

 

Where this Agreement states that a party “shall,” “will” or “must” perform in some manner or otherwise act or omit to act, it means that the party is legally obligated to do so in accordance with this Agreement. Any reference to a statute is deemed also to refer to any amendments or successor legislation as in effect at the relevant time. Any reference to a contract or other document as of a given date means the contract or other document as amended, supplemented and modified from time to time through such date. Any words (including capitalized terms defined herein) in the singular will be held to include the plural and vice versa and words (including capitalized terms defined herein) of one gender will be held to include the other gender as the context requires. The terms “hereof,” “herein” and “herewith” and words of similar import will, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement. All references to any period of days will be deemed to be to the relevant number of calendar days unless otherwise specified. All references herein to “$” or dollars will refer to United States dollars, unless otherwise specified.

 

Section 2.        Purchase and Sale.

 

2.1           Purchase and Sale of Shares. The Seller hereby agrees to sell to the Purchaser, and the Purchaser, in reliance on the representations and warranties contained herein, and subject to the terms and conditions of this Agreement, agrees to purchase from the Seller the Company Shares for a total purchase price of 1,361,000 shares of the Purchaser’s common stock which represents five percent (5%) of the Purchaser’s total issued and outstanding shares as of the Closing Date (the “Purchaser Shares”), and 3,937,005 shares of the Parent’s common stock which represents five percent (5%) of the Parent’s total issued and outstanding shares of the Closing Date (the “Parent Shares”) (the Purchaser Shares and the Parent Shares together shall mean, the “Purchase Price”).

 

2.2           Closing and Closing Date. The closing of the purchase, sale and transfer of the Company Shares in exchange for the Purchaser Shares and the Parent Shares (the “Closing”) will take place at the offices of Purchaser, at 10:00 a.m., local time, as soon as practicable but in any event not later than March 31, 2015 and the date on which the last of the conditions set forth in Section 7 has been satisfied or waived (other than those conditions that by their nature can only be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions), or at such other time and place as the Company and the Purchaser may agree in writing. The date on which the Closing actually occurs is referred to in this Agreement as the “Closing Date.”

 

2.3           Closing Deliveries.

 

(a)           At the Closing, the Seller will deliver or cause to be delivered to the Purchaser the following:

 

(i)         a certificate executed by a duly authorized officer of the Seller certifying (A) that the conditions set forth in Sections 7.1(a) and 7.1(b) have been satisfied and (B) the number of Company Shares calculated in accordance with this Agreement; and

 

(ii)         a certificate of the Company Shares duly endorsed for transfer or with executed stock powers medallion guaranteed attached to be released and delivered to Purchaser, evidencing the Company Shares registered in the name of the Purchaser.

 

 

 

 

(b)           At the Closing, the Purchaser will deliver or cause to be delivered to the Company the following:

 

(i)         a certificate executed by a duly authorized officer of the Purchaser and the Parent certifying that the conditions set forth in Sections 7.2(a) and 7.2(b) have been satisfied; and

 

(ii)         a certificate evidencing the Purchaser Shares registered in the name of the Seller and a certificate evidencing the Parent Shares registered in the name of the Seller.

 

Section 3.             Representations and Warranties of the Company. The Company and the Seller represent and warrant to the Purchaser and the Parent that, as of the date of this Agreement and as of the Closing:

 

3.1         Organization and Qualification. The Company and each of its Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own, lease, operate and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any of its Subsidiaries is in violation nor default of any of the provisions of its respective Organizational Documents. The Company and each of its Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not have or reasonably be expected to have a Material Adverse Effect, and no Action has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification. Complete and accurate copies of the Company’s Organizational Documents, each as in effect as of the date of this Agreement, have previously been made available to the Purchaser.

 

3.2         Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into the Transaction Documents and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby, have been duly authorized by all necessary action on the part of the Company and no stockholder approval or other proceedings on the part of the Company are necessary to authorize the Transaction Documents or to consummate the transactions contemplated hereby and thereby. Each Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (a) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other Laws of general application affecting enforcement of creditors’ rights generally, (b) as limited by Laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (c) insofar as indemnification and contribution provisions may be limited by applicable Law.

 

3.3         No Conflicts. The execution, delivery and performance by the Company of the Transaction Documents, the issuance and sale of the Company Shares and the consummation by the Company of the transactions contemplated hereby and thereby to which it is a party do not and will not (a) conflict with or violate any provision of the Organizational Documents of the Company or its Subsidiaries, (b) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Encumbrance upon any of the properties or assets of the Company or its Subsidiaries pursuant to, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, indenture or other instrument to which the Company or any of its Subsidiaries is a party or by which any property or asset of the Company or any of its Subsidiaries is bound or affected or (c) subject to obtaining the Required Approvals, conflict with or result in a violation, in any material respect, of any permit, license, Law or other restriction of any Governmental Authority to which the Company or any of its Subsidiaries is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or any of its Subsidiaries is bound or affected, except in the case of clause (b), for matters that would not, individually or in the aggregate, have a Material Adverse Effect.

 

3.4         Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any Governmental Authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents and the consummation of the transactions contemplated hereunder or thereunder, other than such filings as are required to be made under applicable country of incorporation, federal and state securities laws (collectively, the “Required Approvals”).

 

 

 

 

3.5         Title to the Company Shares. The Seller is the record holder and beneficially owns 100% of the capital stock of the Company, free and clear of all liens, encumbrances, pledges, claims, options, charges and assessments of any nature whatsoever, with full right and lawful authority to transfer the Company Shares to Purchaser. No person has any preemptive rights or rights of first refusal with respect to any of the Company Shares. There exists no voting agreement, voting trust, or outstanding proxy with respect to any of the Company Shares. Other than disclosed by the Seller to the Purchaser, there are no outstanding rights, options, warrants, calls, commitments, or any other agreements of any character, whether oral or written, with respect to the Company Shares. The Seller has full power to transfer and deliver the Company Shares to the Purchaser in accordance with the terms of this Agreement. The delivery to the Purchaser of certificates evidencing the transfer of the Company Shares pursuant to the provisions of this Agreement will transfer to the Purchaser good and marketable title thereto, free and clear of all liens, encumbrances, restrictions and claims of any kind.

 

3.6         Capitalization.

 

(a)         As of March 30, 2015, the authorized capital stock of the Company consists of (a) 100,000 shares of Common Stock, of which 1,000 shares were issued and outstanding. All of the outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable. There are no stockholders agreements, voting trusts, voting agreements or other similar agreements or understandings with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders. Except as contemplated under this Agreement, no Person has any outstanding commitments, rights of first offer or refusal, anti-dilution rights, preemptive rights, rights of participation or any similar right to participate in the transactions contemplated by the Transaction Documents. There are no outstanding subscriptions, options, warrants, scrip rights to subscribe to, calls, phantom stock rights, rights of first offer or refusal, rights to require redemption or repurchase, preemptive rights, anti-dilution rights, registration rights, rights of participation, or commitments, or understandings of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire any, Equity Securities or other securities of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional Equity Securities or other securities of the Company or its Subsidiaries. The issuance and sale of the Company Shares will not obligate the Company to issue Equity Securities or other securities of the Company or its Subsidiaries to any Person (other than the Purchaser) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities.

 

(b)         Section 3.6(b) of the Disclosure Schedule includes a list of all of the Subsidiaries of the Company. All the outstanding shares of capital stock of, or other equity interests in, each such Subsidiary have been validly issued and are fully paid and non-assessable and are, except as set forth in Section 3.6(b) of the Disclosure Schedule, owned directly or indirectly by the Company, free and clear of all Encumbrances. Except as set forth in Section 3.6(b) of the Disclosure Schedule, neither the Company nor any of its Subsidiaries directly or indirectly owns any equity or similar interest in, or any interest convertible into or exchangeable or exercisable for, any corporation, partnership, joint venture or other business association or entity, that is or would reasonably be expected to be material to the Company and its Subsidiaries taken as a whole.

 

(c)         The Company has no outstanding bonds, debentures, notes or other obligations, the holders of which have the right to vote (or are convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter.

 

 

 

 

3.7           Financial Statements. The Company has, at the date of execution of this Agreement, and will have at the Closing Date, certain management accounts as set forth in Disclosure Schedule 3.7, including monthly revenues, gross margins and net income (the “Management Accounts”). The accounts receivable set forth in the Management Accounts, and all accounts receivable arising since the date of the Management Accounts, represent bona fide claims of the Company against debtors for sales, services performed or other charges arising on or before the date hereof, and all the goods delivered and services performed which gave rise to said accounts were delivered or performed in accordance with the applicable orders, contracts or customer requirements.

 

3.8           Litigation. There is not, and there has not been, any Action pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries or any of their respective properties, assets, officers or directors before or by any Governmental Authority which (a) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the issuance or sale of the Shares, or (b) has had or would, if there were an unfavorable decision, reasonably be expected to have, a Material Adverse Effect, or has resulted or would reasonably be expected to result in criminal liability with respect to the Company, any of its Subsidiaries or any of its or their directors or officers, nor is there, nor has there been, any judgment, order or decree outstanding against the Company or any of its Subsidiaries or any of their respective properties, assets, officers or directors that, individually or in the aggregate, has had or, if adversely resolved, would reasonably be expected to have, any of the effects described in clauses (a) or (b) above.

 

3.9           Intellectual Property.

 

(a)           Section 3.9(a) of the Disclosure Schedule sets forth a complete and accurate list of all material U.S. and foreign applications and registrations (including issued patents) for any Intellectual Property owned by the Company and its Subsidiaries. The Company or one of its Subsidiaries is the sole and exclusive owner of each such application and registration, and the foregoing applications and registrations are in effect and subsisting and, to the knowledge of the Company, valid.

 

(b)           The Company and its Subsidiaries own, or have a valid right to use, all material items of Intellectual Property used or held for use in, or necessary to conduct, their respective businesses (i) as conducted as of the date of this Agreement and (ii) to the Company’s knowledge, with respect to material products as to which the Company has announced an intention to launch. All material items of Intellectual Property owned by the Company are owned free and clear of Encumbrances. To the Company’s knowledge, no Person is infringing, diluting, misappropriating or otherwise violating any Intellectual Property owned by the Company or its Subsidiaries, and no such claims are pending or threatened against any Person by the Company or its Subsidiaries.

 

3.10         No Undisclosed Liabilities. Neither the Company nor any of its Subsidiaries has any liabilities or obligations of any nature, whether accrued, absolute, contingent or otherwise, known or unknown, whether due or to become due and whether or not required to be recorded or reflected on a balance sheet, except (a) to the extent accrued or reserved against in the Financial Statements of the Company and its Subsidiaries attached hererto, (b) for liabilities and obligations incurred in the ordinary course of business consistent with past practice, (c) for liabilities and obligations incurred in connection with or expressly contemplated by this Agreement and (d) for liabilities that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

 

3.11         Compliance with Law.

 

(a)           Except for matters that, individually or in the aggregate, (A) have not and would not reasonably be expected to have a Material Adverse Effect or (B) has not resulted and would not reasonably be expected to result in criminal liability with respect to the Company, any of its Subsidiaries or any of its or their directors or officers, (i) the Company and its Subsidiaries are, and have been, in compliance with all applicable Laws and Company permits, (ii) the Company and its Subsidiaries hold all permits necessary for the lawful conduct of their business and the ownership and operation of their assets and properties as conducted as of the date of this Agreement and (iii) no Action, demand, inquiry or investigation has occurred or been pending or threatened in writing, alleging that the Company or any of its Subsidiaries is not in compliance with any applicable Law or permit.

 

(b)           (i) the Company and its Subsidiaries and, to the knowledge of the Company, its Affiliates, directors, officers and employees have complied in all material respects with the U.S. Foreign Corrupt Practices Act of 1977 and any other applicable foreign or domestic anticorruption or antibribery Laws (collectively, the “Fraud and Bribery Laws”), and (ii) neither the Company, nor any of its Subsidiaries or Affiliates, or its or their directors, officers or employees, nor, to the knowledge of the Company, any of its or their agents or other representatives acting on their behalf have directly or indirectly, in each case, taken action in violation of the Fraud and Bribery Laws.

 

 

 

 

3.12         Contracts. (a) Each Material Contract is a valid, binding and legally enforceable obligation of the Company or one of the Company’s Subsidiaries, as the case may be, and, to the knowledge of the Company, of the other parties thereto, except, in each case, as enforcement may be limited by bankruptcy, insolvency, reorganization or similar Laws affecting creditors’ rights generally and by general principles of equity, (b) each such Material Contract is in full force and effect, and (c) none of the Company or any of its Subsidiaries is (with or without notice or lapse of time, or both) in material breach or default under any such Material Contract and, to the knowledge of the Company, no other party to any such Material Contract is (with or without notice or lapse of time, or both) in material breach or default thereunder. None of the Company or its Subsidiaries is party to any Contract that would, after giving effect to the transactions contemplated by this Agreement (other than the potential transactions contemplated by Section 2.7 of the Commercial Agreement), restrict in any respect (including by way of exclusivity obligation) the ability of Purchaser or its Affiliates to compete in any business or with any Person or in any geographical area.

 

3.13         Brokers and Finders. No brokerage or finder’s fees or commissions are or will be payable by the Company or the seller to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents.

 

3.14         Own Account. The Seller is acquiring the Purchaser Shares and the Parent Shares (for purposes of Sections 3.14 3.18 only, the “Shares”) as principal for its own account for investment only and not with a view to or for distributing or reselling the Shares or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of the Shares and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of any of the Shares.

 

3.15         Seller Status. At the time the Seller was offered the Shares, it was, and as of the date of this Agreement it is, and as of the Closing Date it will be, an “accredited investor” as defined in Regulation D, Rule 501(a), promulgated under the Securities Act, or (ii) not a U.S. Person as defined in Rule 902 of Regulation S promulgated under the Securities Act and as set forth in Exhibit 2 - Investor Suitability Questionnaire attached hereto and made a part hereof.

 

3.16         Experience of the Seller. The Seller has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment. The Seller has had the opportunity to review the SEC Reports and to ask questions of, and receive answers from, the officers of the Purchaser and the Parent concerning the Purchaser, the Parent and the Shares. The Seller understands that its investment in the Shares involves a significant degree of risk, including a risk of total loss of the Seller’s investment. The Seller understands that the market price of the Common Stock has been volatile and that no representation is being made as to the future value of the Common Stock. The Seller is able to bear the economic risk of an investment in the Shares and is able to afford a complete loss of such investment.

 

3.17        Restricted Securities. The Seller understands that the Shares are being offered and sold to it in reliance upon specific exemptions from the registration requirements of the Securities Act and state securities laws and that the Purchaser and the Parent is relying upon the truth and accuracy of, and the Seller’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Seller set forth herein in order to determine the availability of such exemptions and the eligibility of the Seller to acquire the Shares. The Seller understands that, until such time as a Registration Statement has been declared effective or the Shares may be sold pursuant to Rule 144 under the Securities Act without any restriction as to the number of securities as of a particular date that can then be immediately sold, the certificates evidencing the Shares will bear a restrictive legend in substantially the following form:

 

 

 

 

“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES AND OTHER JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS. THE TRANSFER OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN A COMMON STOCK PURCHASE AGREEMENT BETWEEN THE COMPANY AND THE PURCHASER OF SUCH SECURITIES. THE COMPANY AND ITS TRANSFER AGENT WILL NOT BE OBLIGATED TO RECOGNIZE OR GIVE EFFECT TO ANY TRANSFER MADE IN VIOLATION OF SUCH RESTRICTIONS. A COPY OF SUCH RESTRICTIONS MAY BE OBTAINED FROM THE COMPANY UPON WRITTEN REQUEST.”

 

The Seller understands that no federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Shares or the fairness or suitability of the investment in the Shares nor have such authorities passed upon or endorsed the merits of the offering of the Shares.

 

3.18         Certain Transactions. Since the initial date the Seller was contacted by or on behalf of the Purchaser and Parent regarding the offering of the Shares by the Purchaser and the Parent, neither the Seller nor any of its Affiliates, nor any “group” of Persons (as such term is used in and construed under Sections 13(d)(3) and 14(d)(2) of the Exchange Act) of which it or any of its Affiliates is a member, has established or increased, directly or indirectly, a put equivalent position, as defined in Rule 16(a)-1(h) under the Exchange Act, with respect to the Purchaser’s or the Parent’s equity securities. Immediately prior to the entry into this Agreement, the Seller is not the Beneficial Owner of and does not have the right to acquire any Equity Securities

 

3.19         No Other Representations and Warranties. The representations and warranties set forth in this Section 3 are the only representations and warranties made by the Company and the Seller with respect to the Shares or any other matter relating to the transactions contemplated by this Agreement. The Company and the Seller each acknowledges that except as set forth in Section 4, neither the Purchaser nor any director, officer, employee, agent or Representative of the Purchaser makes any representation or warranty, either express or implied, concerning the transactions contemplated by this Agreement.

 

Section 4.           Representations and Warranties of the Purchaser and the Parent. The Purchaser and the Parent, severally, represent and warrant to the Company and the Seller that, as of the date of this Agreement and as of the Closing:

 

4.1           Organization; Authority. The Purchaser and the Parent are each a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada, with the requisite power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of each of the Transaction Documents and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of the Purchaser. Each Transaction Document to which it is a party has been (or upon delivery will be) duly executed by the Purchaser, and when delivered by the Purchaser in accordance with the terms hereof and thereof, will constitute the legal, valid and binding obligation of the Purchaser, enforceable against it in accordance with its terms, except (a) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (c) insofar as indemnification and contribution provisions may be limited by applicable law.

 

 

 

 

4.2           No Conflicts. The execution, delivery and performance by the Purchaser of the Transaction Documents and the consummation by it of the transactions contemplated hereby and thereby to which it is a party do not and will not (a) conflict with or violate any provision of the Purchaser’s certificate or articles of incorporation, bylaws or other organizational documents, (b) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Encumbrance upon any of the properties or assets of the Purchaser pursuant to, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any material agreement, indenture or other instrument to which the Purchaser or any of its Subsidiaries is a party or by which any property or asset of the Purchaser is bound or affected, or (c) subject to obtaining the Required Approvals, conflict with or result in a violation of any Law or other restriction of any Governmental Authority to which the Purchaser or any of its Subsidiaries is subject (including federal and state securities laws and regulations), or by which any property or asset of the Purchaser or any of its Subsidiaries is bound or affected; except in the case of each of clauses (b) and (c), such as could not have or reasonably be expected to result in (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business or condition (financial or otherwise) of the Purchaser or (iii) a material adverse effect on the Purchaser’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document.

 

4.3           Own Account. The Purchaser is acquiring the Company Shares as principal for its own account for investment only and not with a view to or for distributing or reselling the Company Shares or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of the Company Shares and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of any of the Company Shares ..

 

4.4           Purchaser Status. At the time the Purchaser was offered the Company Shares, it was, and as of the date of this Agreement it is, and as of the Closing Date it will be, an “accredited investor” as defined in Regulation D, Rule 501(a), promulgated under the Securities Act, or (ii) not a U.S. Person as defined in Rule 902 of Regulation S promulgated under the Securities Act and as set forth in Exhibit 2 - Investor Suitability Questionnaire attached hereto and made a part hereof.

 

4.5           Experience of the Purchaser. The Purchaser has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment. The Purchaser has had the opportunity to review the Financial Statements of the Company and to ask questions of, and receive answers from, the officers of the Company concerning the Company and the Shares. The Purchaser understands that its investment in the Shares involves a significant degree of risk, including a risk of total loss of the Purchaser’s investment. The Purchaser is able to bear the economic risk of an investment in the Shares and is able to afford a complete loss of such investment.

 

4.6           Restricted Securities. The Purchaser understands that the Shares are being offered and sold to it in reliance upon specific exemptions from the registration requirements of the Securities Act and state securities laws and that the Company is relying upon the truth and accuracy of, and the Purchaser’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of the Purchaser to acquire the Shares. The Purchaser understands that, until such time as a Registration Statement has been declared effective or the Shares may be sold pursuant to Rule 144 under the Securities Act without any restriction as to the number of securities as of a particular date that can then be immediately sold, the certificates evidencing the Shares will bear a restrictive legend in substantially the following form:

 

“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES AND OTHER JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS. THE TRANSFER OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN A COMMON STOCK PURCHASE AGREEMENT BETWEEN THE COMPANY AND THE PURCHASER OF SUCH SECURITIES. THE COMPANY AND ITS TRANSFER AGENT WILL NOT BE OBLIGATED TO RECOGNIZE OR GIVE EFFECT TO ANY TRANSFER MADE IN VIOLATION OF SUCH RESTRICTIONS. A COPY OF SUCH RESTRICTIONS MAY BE OBTAINED FROM THE COMPANY UPON WRITTEN REQUEST.”

 

 

 

 

The Purchaser understands that no federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Company Shares or the fairness or suitability of the investment in the Company Shares nor have such authorities passed upon or endorsed the merits of the offering of the Company Shares.

 

4.8           Certain Transactions. Since the initial date the Purchaser was contacted by or on behalf of the Company regarding the offering of the Company Shares by the Company, neither the Purchaser or any of its Affiliates, nor any “group” of Persons (as such term is used in and construed under Sections 13(d)(3) and 14(d)(2) of the Exchange Act) of which it or any of its Affiliates is a member, has established or increased, directly or indirectly, a put equivalent position, as defined in Rule 16(a)-1(h) under the Exchange Act, with respect to the Company’s equity securities. Immediately prior to the entry into this Agreement, the Purchaser is not the Beneficial Owner of and does not have the right to acquire any Equity Securities.

 

4.9           Issuance of the Parent Shares; Exemption from Registration. The Parent Shares are duly authorized and, when issued and paid for in accordance with this Agreement will be duly and validly issued, fully paid and nonassessable, free and clear of all Encumbrances. Subject to, and in reliance on, the representations, warranties and covenants made herein by the Company, the issuance of the Parent Shares in accordance with the terms and on the bases of the representations and warranties set forth in this Agreement, is exempt from registration under the Securities Act and otherwise issued in compliance with all Laws

 

4.10         Issuance of the Purchaser Shares; Exemption from Registration. The Purchaser Shares are duly authorized and, when issued and paid for in accordance with this Agreement will be duly and validly issued, fully paid and nonassessable, free and clear of all Encumbrances. Subject to, and in reliance on, the representations, warranties and covenants made herein by the Company, the issuance of the Purchaser Shares in accordance with the terms and on the bases of the representations and warranties set forth in this Agreement, is exempt from registration under the Securities Act and otherwise issued in compliance with all Laws

 

4.11         Brokers and Finders. No brokerage or finder’s fees or commissions are or will be payable by the

Purchaser or Parent to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents.

 

4.12         No Other Representations and Warranties. The representations and warranties set forth in this Section 4 are the only representations and warranties made by the Purchaser and Parent with respect to the transactions contemplated by this Agreement. The Purchaser and Parent each acknowledges that, except as set forth in Section 3, neither the Company, the Seller nor any director, officer, employee, agent or Representative of the Company makes any representation or warranty, either express or implied, concerning the Shares or the transactions contemplated by this Agreement.

 

Section 5.            Covenants of the Parties.

 

5.1            Public Disclosure. Neither the Company, the Seller nor the Purchaser nor Parent will, nor permit any of their respective Affiliates or Representatives to, issue any press release or make any other public announcement or disclosure relating to this Agreement without the prior written approval of the other party (such consent not to be unreasonably withheld, conditioned or delayed), unless required by applicable Law or securities listing standards (upon advice of counsel to the disclosing party) in which case to the extent practicable and permitted by applicable Law, the party will provide the other party with an opportunity to review such press release or other announcement prior to issuance, distribution or publication.

 

 

 

 

5.2           Confidentiality.

 

(a)           The Recipient agrees to receive all Confidential Information in strict confidence and to use the Confidential Information for the sole purpose of performing its obligations under this Agreement in accordance with this Agreement and not to use the Confidential Information for any other purpose. Without limiting the foregoing, the Recipient agrees to protect the Confidential Information against disclosure to Third Parties, using the same standard of care that the Recipient applies to protect its own most highly confidential information (which in no event will be less than a reasonable standard of care). The Recipient agrees not to disclose the Confidential Information to any Person other than: (i) its Representatives who are directly concerned, working on, advising on or consulted in connection with the Recipient’s obligations hereunder and whose knowledge of the Confidential Information is reasonably considered to be necessary for such purposes, or (ii) as required by applicable Law or an order by a Governmental Authority or any requirements of stock market or exchange or other regulatory body having competent jurisdiction; provided, except where not permitted by Law, the Recipient will give the Disclosing Party reasonable advance notice of such required disclosure, and will reasonably cooperate with the Disclosing Party, in order to allow the Disclosing Party an opportunity to oppose, or limit the disclosure of the Confidential Information or otherwise secure confidential treatment of the Confidential Information required to be disclosed; provided further, that if disclosure is ultimately required, the Recipient will furnish only that portion of the Confidential Information which, based upon advice of legal counsel, the Recipient is required to disclose in compliance with any such requirement. Recipient will ensure that Recipient’s Representatives are informed of the confidentiality provisions of this Agreement and are obligated to use and hold in confidence the Confidential Information in a manner consistent with the obligations of the Recipient under this Agreement prior to Recipient’s Representatives receiving any access to the Disclosing Party’s Confidential Information. The Recipient hereby assumes full responsibility and liability to the Disclosing Party for any breach of this Agreement and any unauthorized use or disclosure of Confidential Information by any of Recipient’s Representatives.

 

(b)           Upon termination of this Agreement, the Recipient will, within 30 days after receipt of written notice from the Disclosing Party, at the election of the Recipient, return or destroy, or cause to be returned or destroyed (as applicable), all Confidential Information of the Disclosing Party provided to the Recipient or its Representatives hereunder and all copies thereof, as well as all copies of all documents made by the Recipient’s Representatives containing or based upon Confidential Information (which, for avoidance of doubt, constitute Confidential Information for purposes of this Agreement).

 

If the Recipient elects that the Confidential Information be destroyed, then upon such destruction the Recipient will provide a certificate of destruction certifying compliance with this Section 5.2(d) to the Disclosing Party within 30 days after receipt of the original notice from the Disclosing Party requesting the destruction of Confidential Information. For clarity, in the case of compilations or reports containing the Disclosing Party’s Confidential Information, only that part containing said Confidential Information will be destroyed or returned. Notwithstanding anything to the contrary in this Section 5.2(d), the Recipient will not be required to return or destroy copies of Confidential Information solely to the extent (i) the Recipient is required by applicable Law to retain such Confidential Information, (ii) such Confidential Information is stored in automated electronic backup systems of the Recipient or its Affiliates (provided that no use or disclosure in violation of this Section 5.2 will be made of such Confidential Information retained or stored pursuant to clauses (i) or (ii) at any time), or (iii) such Confidential Information is reasonably necessary to enable the Recipient to enforce its rights or remedies, or otherwise comply with its obligations, hereunder (and then solely for such purpose and provided that no other use or disclosure in violation of this Section 5.2 will be made of such retained Confidential Information). Notwithstanding anything to the contrary herein, Recipient shall be permitted to disclose Confidential Information to actual or prospective lenders, acquirers, merger counterparties or investors in equity (including any of their respective advisors) to the extent reasonably required in connection with their respective evaluation of an actual or potential financing, acquisition, merger or investment transaction involving the Recipient or its Affiliates, subject to such Persons being bound by reasonably appropriate obligations of confidentiality (it being agreed that Recipient assumes full responsibility and liability to the Disclosing Party for any breach of this Section 5.2 and any unauthorized use or disclosure of Confidential Information by such Persons).

 

5.3           Consents and Filings.

 

(a)           The parties will use their respective reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under applicable Law to consummate and make effective in the most expeditious manner possible the transactions contemplated by this Agreement, including (i) the preparation and filing of all forms, registrations and notices required to be filed to consummate such transactions, (ii) taking all actions necessary to obtain (and cooperating with each other in obtaining) any consent, authorization, order or approval of, or any exemption by, any Governmental Authority and (iii) the execution and delivery of any additional instruments necessary to consummate the transactions contemplated by this Agreement and to fully carry out the purposes of this Agreement.

 

 

 

 

(b)           In furtherance of the foregoing, the parties to this Agreement will cooperate with each other in connection with the making of all such filings and use reasonable best efforts to (i) furnish all information required for any application or other filing to be made pursuant to any applicable Law in connection with the transactions contemplated by this Agreement, (ii) keep the other party informed in all material respects of any material communication received by such party from, or given by such party to, any Governmental Authority and of any material communication received or given in connection with any proceeding by a private party, in each case relating to the transactions contemplated by this Agreement, (iii) consult with the other party prior to taking a position, and permit the other parties to review and discuss in advance, and consider in good faith the views of the other in connection with any analyses, appearances, presentations, memoranda, briefs, white papers, arguments, opinions and proposals before making or submitting any of the foregoing to any Governmental Authority by or on behalf of either party in connection with any investigations or proceedings related solely to this Agreement or the transactions contemplated by this Agreement or given in connection with any proceeding by a private party and (iv) consult with the other party in advance of any meeting or conference with, any Governmental Authority relating to the transactions contemplated by this Agreement or in connection with any proceeding by a private party relating thereto, and give the other party the opportunity to attend and participate in such meetings and conferences (unless prohibited by such Governmental Authority).

 

Notwithstanding the foregoing, the Company and the Purchaser may, as each deems advisable and necessary, reasonably designate any competitively sensitive material provided to the other under this Section 5.3(b) as “Counsel Only Material.” Such materials and the information contained therein will be given only to the outside counsel of the recipient and will not be disclosed by outside counsel to employees, officers, directors or consultants of the recipient or any of its Affiliates unless express permission is obtained in advance from the source of the materials (the Company or the Purchaser, as the case may be) or its legal counsel. Each of the Company and the Purchaser will cause its respective outside counsels to comply with this Section 5.3(b). Notwithstanding anything to the contrary in this Section 5.3(b) materials provided to the other party or its counsel may be redacted to remove references concerning the valuation of the Company, privileged communications and competitively sensitive information.

 

5.4            Information Rights.

 

(a)            From and after the date hereof and for so long after the Closing as the Purchaser holds any Company Shares, the Company will provide the Purchaser upon its request with (a) copies of all reports, schedules, forms, statements and other documents required to be filed with or furnished to the SEC, (b) other publicly available financial and news information produced by the Company, (c) such information concerning the Company and its Subsidiaries as the Purchaser may reasonably request (in a manner so as to not unreasonably interfere in any material respect with the normal business operations of the Company and without requiring the Company to incur any material cost not reimbursed by the Purchaser). In addition, upon the request of the Purchaser from time to time, the Company will cause members of its senior management to meet with members of the senior management of the Purchaser (in person or by conference telephone as agreed by the parties) to provide the Purchaser with a presentation regarding developments relating to the Company’s business and to respond to questions from the Purchaser. No investigation conducted, however, will affect or be deemed to modify any representation or warranty made in this Agreement. Notwithstanding any other provision of this Agreement, neither the delivery of any notice or information pursuant to this Agreement, nor any information known or available to any party or inquiry conducted prior to or after the date of this Agreement, will limit or otherwise affect the remedies available to such party.

 

(b)            All information requested by Purchaser and provided by or on behalf of the Company under this Section 5.4 will be subject to the provisions of Section 5.2. Nothing contained in this Section 5.4 will require the Company to take any action that would, after consultation with counsel, constitute a waiver of the attorney-client or similar privilege or violate confidentiality obligations owing to third parties; provided that if any information is withheld by the Company or any of its Subsidiaries pursuant to the foregoing, the Company will (i) inform the Purchaser as to the general nature of what is being withheld and (ii) use its reasonable best efforts to (A) accommodate any request from the Purchaser for information pursuant to this Section 5.4 in a manner that does not result in such a waiver or violation or (B) obtain the required consent of such third party to provide such access or disclosure.

 

 

 

 

5.5           Conduct of Business by the Company. The Company agrees that, from the date of this Agreement until the Closing, neither the Company nor any of its Subsidiaries will, except as set forth in the Disclosure Schedule or as specifically contemplated in this Agreement, directly or indirectly:

 

(a)            amend or otherwise change its Organizational Documents in a manner adverse to the Purchaser;

 

(b)           issue, sell, pledge, dispose of, grant, encumber, or authorize the issuance, sale, license, pledge, disposition, grant or encumbrance of, (i) any shares of any class of share capital or other ownership interest of the Company or any of its Subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any such shares or any other ownership interest (including any phantom interest), of the Company or any of its Subsidiaries (other than (A) the issuance of shares of Common Stock upon the exercise or vesting of Equity Securities outstanding as of the date of this Agreement issued pursuant to the Equity Compensation Plans and (B) the grant of securities pursuant to employee or director stock award or incentive compensation or similar plans, or in connection with employment offers in the ordinary course, in all cases under this clause (B), in an aggregate amount not to exceed 1.0% of the issued and outstanding Equity Securities) or (ii) any material assets of the Company or any of its Subsidiaries;

 

(c)           take any action to adopt or implement a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring or other reorganization, other than any such actions taken with respect to the Subsidiaries of the Company in the ordinary course of business;

 

(d)          declare, set aside, make or pay any dividend or other distribution, payable in cash, securities, property or otherwise, or dividends by wholly-owned Subsidiaries of the Company to the Company or to other wholly-owned Subsidiaries;

 

(e)           reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock;

 

(f)            knowingly take any actions or omit to take any actions that would or would reasonably be expected to (i) result in any of the conditions set forth in Section 7 not being satisfied, (ii) result in new or additional required approvals from any Governmental Authority that would reasonably be expected to prevent or materially delay the consummation of the transactions contemplated by the Transaction Documents or (iii) materially impair, interfere with, hinder or delay the ability of the Company or the Purchaser to consummate the transactions contemplated by the Transaction Documents; or

 

(g)          enter into any agreement or otherwise make a commitment to do any of the foregoing.

 

Nothing contained in this Agreement will give the Purchaser, directly or indirectly, rights to control or direct the Company’s or its Subsidiaries’ operations.

 

5.6           Indemnification. Subject to Section 9.5, from and after the Closing, the Company will defend, protect, indemnify and hold harmless the Purchaser and each of the Affiliates of the Purchaser, and its and their respective directors, officers, employees, representatives and agents (the “Indemnitees”), to the fullest extent lawful from and against any and all Actions, causes of action, suits, claims, losses (including losses from the diminution of value of any securities issued to Purchaser pursuant to the Transaction Documents), costs, penalties, fees, judgments, amounts paid in settlement, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of or relating to (a) any inaccuracy in or misrepresentation or breach of any representation or warranty made by the Company in the Transaction Documents (other than in the Commercial Agreement, which matters are addressed therein) (in each case, without giving effect to any “materiality” or “Material Adverse Effect” qualifications) or (b) any breach of any covenant, agreement or obligation of the Company contained in the Transaction Documents (other than in the Commercial Agreement, which matters are addressed therein). Notwithstanding the foregoing, except in the case of fraud, the Company will have no duty to indemnify the Indemnitees for Indemnified Liabilities (i) unless and until the aggregate Indemnified Liabilities for which it would otherwise be liable under this Agreement exceed an amount equal to 1% of the Purchase Price paid by the Purchaser for the Shares (at which point the Company will be liable only for Indemnified Liabilities in excess of such amount) or (ii) in the aggregate in excess of the Purchase Price paid by the Purchaser for the Shares.

 

 

 

 

Section 6             Intentionally Omitted.

 

Section 7.            Closing Conditions.

 

7.1           Conditions to the Obligation of the Purchaser. The obligation of the Purchaser to complete the transactions contemplated by this Agreement is subject to the satisfaction of, or compliance with, on or before the Closing Date, each of the following conditions (any of which may be waived by the Purchaser, in whole or in part):

 

(a)           the representations and warranties of the Company in Section 3 that are qualified by “materiality” or “Material Adverse Effect” must be true and correct in all respects and the representations and warranties of the Company in Section 3 that are not so qualified must be true and correct in all material respects (provided that the representations and warranties of the Company in Section 3.6 must be true and correct in all but de minimis respects), in each case, as of the date of this Agreement and as of the Closing (except to the extent any such representation or warranty speaks as of the date of this Agreement or any other specific date, in which case such representation or warranty must have been so true and correct as of such date);

 

(b)           all of the covenants and agreements the Company is required to perform or comply with under this Agreement on or before the Closing Date must have been duly performed and complied with in all material respects;

 

(c)           there must not be in effect any federal, state, local, municipal, foreign, international, multinational or other law, statute, rule, regulation, ordinance or code or any order, injunction, judgment, decree, ruling, assessment or arbitration award of any Governmental Authority that would prohibit or make illegal the consummation of the transactions contemplated by this Agreement or cause the transactions contemplated by this Agreement to be rescinded following consummation; and

 

(d)           since the date of this Agreement, no Material Adverse Effect shall have occurred.

 

7.2           Conditions to the Obligation of the Company. The obligation of the Company to complete the transactions contemplated by this Agreement is subject to the satisfaction of, or compliance with, on or before the Closing Date, each of the following conditions (any of which may be waived by the Company, in whole or in part):

 

(a)           the representations and warranties of the Purchaser and the Parent in Section 4 that are qualified by “materiality” or “material adverse effect” must be true and correct in all respects and the representations and warranties of the Purchaser and Parent in Section 4 that are not so qualified must be true and correct in all material respects, in each case, as of the date of this Agreement and as of the Closing (except to the extent any such representation or warranty speaks as of the date of this Agreement or any other specific date, in which case such representation or warranty must have been so true and correct as of such date);

 

(b)           all of the covenants and agreements the Purchaser and Parent are required to perform or comply with under this Agreement on or before the Closing Date must have been duly performed and complied with in all material respects;

 

(c)           there must not be in effect any federal, state, local, municipal, foreign, international, multinational or other law, statute, rule, regulation, ordinance or code or any order, injunction, judgment, decree, ruling, assessment or arbitration award of any Governmental Authority that would prohibit or make illegal the consummation of the transactions contemplated by this Agreement or cause the transactions contemplated by this Agreement to be rescinded following consummation.

 

Section 8.            Intentionally Omitted.

 

 

 

 

Section 9.            Miscellaneous.

 

9.1           Fees and Expenses. Whether or not the transactions contemplated by this Agreement are consummated, each party will pay its own direct and indirect expenses incurred by it in connection with the preparation and negotiation of this Agreement and the consummation of the transactions contemplated by this Agreement, including all fees and expenses of its advisors and representatives.

 

9.2           Notices. All notices, requests, consents and other communications under this Agreement to any party must be in writing and are deemed duly delivered when (a) delivered if delivered personally or by nationally recognized overnight courier service (costs prepaid), (b) sent by facsimile with confirmation of transmission by the transmitting equipment (or, the first Business Day following such transmission if the date of transmission is not a Business Day) or (c) received or rejected by the addressee, if sent by United States of America certified or registered mail, return receipt requested; in each case to the following addresses or facsimile numbers and marked to the attention of the individual (by name or title) designated below (or to such other address, facsimile number or individual as a party may designate by notice to the other parties):

 

If to the Company: PayNovi Ltd.
    Address: 13 Classon House
    Dundrum, Dublin 14
    Ireland
    Facsimile:
    Attention:     Sean McVeigh
     
If to the Seller: Anch Holdings Ltd.
    Address: 13 Classon House
    Dundrum, Dublin 14
    Ireland
    Facsimile:
    Attention:     Sean McVeigh
     
If to the Purchaser: World Media & Technology Corp.
    600 Brickell Ave., Suite 1775
    Miami, Florida 33131
    Facsimile:
    Attention:     Fabio Galdi, CEO
     
With a copy (which will World Assurance Group, Inc.
not constitute notice) to: 375 Park Ave., Suite 2607
    New York, NY 10152
    Facsimile:
    Attention:     Chief Financial Officer

 

9.3           Entire Agreement. The Transaction Documents and the Confidentiality Agreement, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

 

9.4          Amendments and Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Purchaser or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement will be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor will any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.

 

 

 

 

9.5           Survival. All representations and warranties contained in this Agreement will survive the Closing until the 18-month anniversary of the Closing Date; provided that the representations and warranties set forth in (and any claim arising from an inaccuracy or breach of) Section 3.1 (Organization and Qualification), Section 3.2 (Authorization; Enforcement), Section 3.5 (Issuance of the Shares; Exemption from Registration), Section 3.6 (Capitalization), Section 3.17 (Brokers and Finders), Section 4.1 (Organization; Authority) and Section 4.9 (Brokers and Finders) will survive the Closing indefinitely. The right of any party to assert a claim for indemnification relating to the breach of any covenant or agreement contained in this Agreement to the extent required to be performed or complied with prior to the Closing Date will survive the Closing until the 18-month anniversary of the Closing Date. All covenants contained in this Agreement required to be performed or complied with in whole or in part after the Closing Date will survive the Closing until the expiration of the applicable statute of limitations or for such shorter period specified in this Agreement. All claims for indemnification under this Agreement must be asserted pursuant to a written claim notice given prior to the expiration of the applicable survival period set forth in this Section 9.5; provided that any representation, warranty, covenant or agreement that is the subject of a claim for indemnification which is asserted pursuant to a written claim notice given after the Closing Date within the survival periods specified in this Section 9.5 will survive until, but only for purposes of, the resolution of such claim.

 

9.6           Successors and Assigns. This Agreement will be binding upon the parties and their respective successors and assigns and will inure to the benefit of the parties and their respective successors and permitted assigns. The Company may not assign or delegate this Agreement or any rights or obligations hereunder without the prior written consent of the Purchaser. The Purchaser may not assign or delegate this Agreement or any rights or obligations hereunder without the prior written consent of the Company; provided that the Purchaser may assign and delegate any of its rights and obligations under this Agreement to an Affiliate of the Purchaser if such Affiliate agrees in writing to be bound by the terms of this Agreement. None of the rights granted to the Purchaser pursuant to this Agreement or any of the other Transaction Documents may be exercised by any Person, other than the Purchaser or any Affiliate of the Purchaser to which such rights are assigned in accordance with this Section 9.6 (so long as such assignee continues to be an Affiliate of the Purchaser); provided that the Purchaser may assign its rights under Section 6 to any Person that acquires Securities from the Purchaser (other than in a public offering or a sale pursuant to Rule 144) in compliance with the provisions of this Agreement representing more than 1% of the Company’s then outstanding Common Stock if such Person agrees in writing to be bound by the terms of this Agreement (in which case, the Purchaser will have no liability or obligation with respect to the obligations of the assignee hereunder). Subject to the foregoing, the Purchaser will remain primarily liable for the performance of all obligations of the Purchaser under the Transaction Documents notwithstanding any assignment pursuant to this Section 9.6.

 

9.7           No Third-Party Beneficiaries. Except for the Indemnitees under Section 5.9, this Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

9.8           Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein will remain in full force and effect and will in no way be affected, impaired or invalidated. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

 

9.9           Remedies. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement are not performed by any party in accordance with their specific terms or were otherwise breached by such party. The parties accordingly agree that, in addition to any other remedy to which the parties are entitled at law or in equity, each party is entitled to injunctive relief to prevent breaches of this Agreement by the other party and otherwise to enforce specifically the provisions of this Agreement against the other party. Each party expressly waives any requirement that the other party obtain any bond or provide any indemnity in connection with any action seeking injunctive relief or specific enforcement of the provisions of this Agreement.

 

 

 

 

9.10         Business Days. If the last or appointed day for the taking of any action or the expiration of any right required or granted in this Agreement or any other Transaction Document is not a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

 

9.11         Construction. The parties agree that each of them and their respective counsel has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party will not be employed in the interpretation of the Transaction Documents or any amendments hereto.

 

9.12         Governing Law and Venue. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents will be governed by and construed and enforced in accordance with the internal procedural and substantive laws of the State of Florida, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the construction, validity, enforcement and interpretation of this Agreement or any other Transaction Document (whether brought against a party to this Agreement or its respective Affiliates, directors, officers, stockholders, employees or agents) will be solely and exclusively subject to the jurisdiction (a) in the United States District Court for the State of Florida and (b) in a state court of the State of Florida located in the County of Miami. Each party hereby irrevocably and unconditionally submits to the exclusive jurisdiction of the foregoing courts for the adjudication of any dispute arising in connection with this Agreement or any other Transaction Document and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service will constitute good and sufficient service of process and notice thereof. Nothing contained herein will be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

9.13         WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY.

 

9.14         Counterparts and Execution. This Agreement may be executed in two or more counterparts, all of which when taken together will be considered one and the same agreement and will become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature will create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

 

9.15         Further Assurances. At any time or from time to time after the Closing, the parties agree to cooperate with each other, and at the request of the other party, to execute and deliver any further instruments or documents and to take all such further action as the other party may reasonably request in order to evidence or effectuate the consummation of the transactions contemplated by this Agreement and to otherwise carry out the intent of the parties hereunder or thereunder.

 

(Signature Page Follows)

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective authorized signatories as of the date first indicated above.

 

PAYNOVI LTD.  
     
By: /s/ Sean McVeigh  
Name: Sean McVeigh  
Title:    

 

ANCH HOLDINGS LTD.  
     
By: /s/ Sean McVeigh  
Name: Sean McVeigh  
Title:    

 

WORLD MEDIA & TECHNOLOGY CORP.  
     
By: /s/ Fabio Galdi  
Name: Fabio Galdi  
Title: Chief Executive Officer  

 

WORLD ASSURANCE GROUP, INC.  
     
By: /s/ Alfonso Galdi  
Name: Alfonso Galdi  
Title: Chief Financial Officer  

 

 

 

 

Exhibit 10.11

  

MASTER SERVICES AGREEMENT

 

Subhosting International LCC Word Technology Corp.
_______________________________ _______________________________
(“Subhosting”) (“Customer”)
19211 E. 21th Terr 600 Brickell Ave., Suite 1775
S. Independence, 64057, MO, Miami, FL 33131
USA USA
Phone: +866-958-7275 Phone: +855-467-6500

 

 

 

Subject to Section 6.1 hereof, this Master Services Agreement (this “MSA”) is made between Subhosting and Customer as of the latter-dated signature below (the “Effective Date”) and consists of the general terms and conditions set forth on the following pages and all current and future schedules attached hereto or which will subsequently be added as provid-ed herein. The general terms below together with the Schedules and all other related Schedules, Order Forms, agreements, amendments and attachments between SUBHOSTING and Customer collectively are the “Agreement.”

 

 

 

GENERAL TERMS AND CONDITIONS

 

1. DEFINITIONS

 

Capitalized terms used but not defined elsewhere in this Agreement will have the meanings set forth below:

 

Affiliate” means, as to any Person, any Subsidiary of such Person and any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person and includes each officer or director or general partner of such Person, and each Person who is the beneficial owner of 5% or more of any class of voting Stock of such Person. For the purposes of this definition, “control” means the possession of the power to direct or cause the direction of management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

 

Subhosting Software” means software provided by Subhosting as specified on a Schedule or Order Form and that may be accessed by Customer solely in connection with the use of the Services, but that is not licensed to Customer.

 

Customer Software” means any software, other than Subhosting Software, required to perform the Services. Customer Software includes Third-Party Software.

 

“Data Center” means the data center facility located at Atlanta, which is operated and controlled by Subhosting, and at which Subhosting shall provide the majority of the Services.

 

Deliverables” means support, code, documents or other materials created by Subhosting and required to be delivered to Customer pursuant to a Schedule or Order Form. “Deliverables” does not include Software.

 

 

 

  

Fully Implemented Date” means the date on which Subhosting notifies Customer (including, without limitation, by e-mail) that Customer’s Services and/or application has been implemented.

 

Governmental Authority” means any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

 

Hardware” means servers, telecommunications and other equipment that are listed in an exhibit to this Agreement and that are to be supplied either by Subhosting (“Subhosting Hardware”) or Customer (“Customer Hardware”), as set forth in such exhibit, for the purpose of rendering the Services.

 

Person” means an individual, partnership, corporation (including, without limitation, a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity or a Governmental Authority.

 

Professional Services” means Services provided to Customer pursuant to a professional-services Schedule.

 

Order Form” means the document describing the Services to be provided by SUBHOSTING to Customer pursuant to a Schedule under this Agreement, the pricing for such Services and the term during which such Services are to be provided to Customer.

 

Schedule” means any attachment to this MSA (including, without limitation, an Order Form) that describes at least (a) the Services to be performed, (b) the Software and Hardware to be provided by each party in connection with the Services, (c) each party’s responsibilities with respect to the Services to be provided and the fees associated with such Services, Software or Hardware.

 

Service Outage” means the total number of Actual Operational Minutes during any 5-day period divided by the total number of Possible Operational Minutes in such period, expressed as a percentage, has fallen below 98.5%.

 

Services” means the services (excluding Subhosting Software and Hardware, unless otherwise set forth in the applicable Schedule) to be provided to Customer by Subhosting, and shall include, but not be limited to, Subhosting’s provision of equipment cabinet space, computer equipment, including but not limited to servers, electrical power, air-conditioning for equipment cooling, telecommunications connectivity to circuits, network connection (together, referred to as the “Customer’s Systems”), and all other services to be provided by Subhosting pursuant to and in accordance with this Agreement.

 

SLA” means a service-level agreement attached to the applicable Schedule setting forth the credits available to Customer for downtime for any Covered Services.

 

Software” means Subhosting Software and Customer Software, including, without limitation, software applications, database software, operating-system software and/or remote access software.

 

Subhosting Master Services Agreement

 

 

Subsidiary” means, with respect to any Person, any corporation, partnership or other business entity of which an aggregate of 50% or more of the outstanding Stock having ordinary voting power to elect a majority of the board of directors, managers, trustees or other controlling persons, is, at the time, directly or indirectly, owned or controlled by such Person and/or one or more Subsidiaries of such Person (irrespective of whether, at the time, Stock of any other class or classes of such entity shall have or might have voting power by reason of the happening of any contingency).

 

Term” means the term that is set forth in a Schedule, whether such term is entered into as of the Effective Date of this Agreement or subsequently thereto, and that may be amended or extended by subsequent Schedules.

 

Third-Party Software” means any Software that is owned by a third party and licensed by Customer either from a third-party vendor or through Subhosting pursuant to a separate agreement, Schedule or a Software Schedule, as applicable, and excludes Subhosting Software.

 

2. ACCEPTABLE USAGE POLICY (AUP)

 

THIS AUP GOVERNS THE USE OF SUBHOSTING’S WEB HOSTING SERVICE. VIOLATION OF THIS AUP MAY RESULT IN SUSPENSION OR TERMINATION OF YOUR SERVICE. IN THE EVENT OF A DISPUTE BETWEEN YOU AND SUBHOSTING REGARDING THE INTERPRETATION OF THIS AUP, SUBHOSTING’S INTERPRETATION, IN ITS REASONABLE COMMERCIAL JUDGMENT, SHALL GOVERN. IF YOU HAVE ANY QUESTIONS REGARDING THIS AUP, CONTACT [email protected].

 

The AUPs are not exhaustive and Subhosting reserves the right to modify the AUPs at any time, effective upon either the posting of the modified AUPs to www.subhosting.netor notification of the modified AUPs.

 

By registering for and using the services, and thereby accepting the terms and conditions of the Terms of Service Agreement or its equivalent, you agree to abide by the AUPs as modified from time to time. Any violation of the AUPs may result in the suspension or termination of your account or such other action as Subhosting deems appropriate. An unlisted activity may also be a violation of the AUPs if it is illegal, irresponsible, or disruptive use of the Internet. No credits will be issued for any interruption in service resulting from policy violations.

 

Offensive Content

 

You may not publish or transmit via Subhosting’s service any content that Subhosting reasonably believes:

 

- constitutes child pornography;

 

- is excessively violent, incites violence, threatens violence, or contains harassing content or hate speech;

 

- is unfair or deceptive under the consumer protection laws of any jurisdiction, including chain letters and pyramid schemes;

 

- is defamatory or violates a person’s privacy;

 

- creates a risk to a person’s safety or health, creates a risk to public safety or health, compromises national security, or interferes with a investigation by law enforcement;

 

Subhosting Master Services Agreement

 

 

- improperly exposes trade secrets or other confidential or proprietary information of another person;

 

- is intended to assist others in defeating technical copyright protections;

 

- clearly infringes on another person’s trade or service mark, patent, or other property right;

 

- promotes illegal drugs, violates export control laws, relates to illegal gambling, or illegal arms trafficking;

 

- is otherwise illegal or solicits conduct that is illegal under laws applicable to you or to Subhosting; or

 

- is otherwise malicious, fraudulent, or may result in retaliation against Subhosting by offended viewers.

 

Content (published or transmitted) via Subhosting’s service includes Web content, e-mail, bulletin board postings, chat, and any other type of posting or transmission that relies on any Internet service provided by Subhosting.

 

Security

 

You must take reasonable security precautions. You must protect the confidentiality of your password, and you should change your password periodically.

 

Bulk Commercial E-Mail

 

You must obtain Subhosting’s advance approval for any bulk commercial e-mail, which will not be given unless you are able to demonstrate all of the following to Subhosting’s reasonable satisfaction:

 

- Your intended recipients have given their consent to receive e-mail via some affirmative means, such as an opt-in procedure;

 

- Your procedures for soliciting consent include reasonable means to ensure that the person giving consent is the owner of the e-mail address for which the consent is given;

 

- You retain evidence of the recipient’s consent in a form that may be promptly produced on request, and you honour recipient’s and Subhosting’s requests to produce consent evidence within 72 hours of receipt of the request.

 

- The body of the e-mail must describe how the e-mail address was obtained, for example, "You opted in to receive this e-mail promotion from our Web site or from one of our partner sites," and information on how to request evidence of the consent, for example, "If you would like to learn more about how we received your e-mail address please contact us at [email protected]"

 

- You have procedures in place that allow a recipient to easily revoke their consent such as a link in the body of the e-mail, or instructions to reply with the word 'Remove' in the subject line. Revocations of consent are honoured within 72 hours, and you notify recipients that their revocation of their consent will be honoured in 72 hours;

 

- You must post an '[email protected]' e-mail address on the first page of any Web site associated with the e-mail, you must register that address at abuse.net, and you must promptly respond to messages sent to that address;

 

- You must have a Privacy Policy posted for each domain associated with the mailing;

 

- You have the means to track anonymous complaints;

 

Subhosting Master Services Agreement

 

 

- You may not obscure the source of your e-mail in any manner. Your e-mail must include the recipients e-mail address in the body of the message or in the "TO" line of the e-mail; and

 

- You otherwise comply with the CAN SPAM Act and other applicable law.

 

These policies apply to messages sent using your Subhosting service, or to messages sent from any network by you or any person on your behalf that directly or indirectly refer the recipient to a site hosted via your Subhosting service. In addition, you may not use a third-party e-mail service that does not practice similar procedures for all its customers.

 

You must comply with the rules of any other network you access or participate in using your Subhosting's services.

 

Subhosting may test and otherwise monitor your compliance with its requirements, including requesting opt-in information from a random sample of your list at any time.

 

Material Protected by Copyright

 

You may not publish, distribute, or otherwise copy in any manner any music, software, art, or other work protected by copyright law unless:

 

- you have been expressly authorized by the owner of the copyright for the work to copy the work in that manner;

 

- you are otherwise permitted by established United States copyright law to copy the work in that manner.

 

Subhosting will terminate the service of repeat copyright infringers.

 

Copyright Infringement Notice (Digital Millennium Copyright Act)

 

If you believe your copyright is being infringed by a person using the Subhosting network, please send your notice of copyright infringement to [email protected]

 

Your notice must include the following:

 

- Your name and address as registered with the U.S. copyright office

 

- A physical or electronic signature of a person authorized to act on behalf of the owner of an exclusive right that is allegedly infringed;

 

- Identification of the copyrighted work claimed to have been infringed, or if multiple copyrighted words at a single site are covered by a single notification, a representative list of such works at that site;

 

- Identification of the material that is claimed to be infringing or to be the subject of infringing activity and that is to be removed or access to which is to be disabled, and information reasonably sufficient to permit Subhosting to locate the material;

 

- Information reasonably sufficient to permit Subhosting to contact you, such as an address, telephone number, and, if available, an e-mail address;

 

- A statement that you have a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, the copyright owner’s agent, or the law;

 

Subhosting Master Services Agreement

 

 

- A statement that the information in the notification is accurate, and under penalty of perjury that you are authorized to act on behalf of the owner of an exclusive right that is allegedly infringed.

 

Other

 

You must have valid and current information on file with your domain name registrar for any domain hosted on the Subhosting network.

 

Internet Abuse

 

You may not engage in illegal, abusive, or irresponsible behaviour, including:

 

- Unauthorized access to or use of data, systems or networks, including any attempt to probe, scan or test the vulnerability of a system or network or to breach security or authentication measures (including those belonging to Subhosting and its customers) without express authorization of the owner of the system or network;

 

- monitoring data or traffic on any network or system without the authorization of the owner of the system or network;

 

- Interference with service to any user, host or network including, without limitation, mail bombing, flooding, deliberate attempts to overload a system and broadcast attacks;

 

- Use of an Internet account or computer without the owner’s authorization, including, but not limited to Internet scanning (tricking other people into releasing their passwords), password robbery, security hole scanning, and port scanning;

 

- Forging of any TCP-IP packet header or any part of the header information in an e-mail or a newsgroup posting; or

 

- Any conduct that is likely to result in retaliation against the Subhosting’s network.

 

- Use of Subhosting’s network in a way that unreasonably interferes with Subhosting’s other customers use of the network

 

Violations of this policy may be reported directly to the FBI's Infrastructure Protection & Computer Intrusion Squad. Subhosting will cooperate fully with any civil and/or criminal litigation arising from the violation of this policy.

 

Newsgroup, Chat Forums, Other Networks

 

You must comply with the rules and conventions for postings to any bulletin board, chat group or other forum in which you participate, such as USENET groups including their rules for content and commercial postings. These groups usually prohibit the posting of off-topic commercial messages, or mass postings to multiple forums.

 

INDIRECT OR ATTEMPTED VIOLATIONS OF THE POLICY, AND ACTUAL OR ATTEMPTED VIOLATIONS BY A THIRD PARTY ON BEHALF OF AN Subhosting CUSTOMER OR A CUSTOMER'S END USER, SHALL BE CONSIDERED VIOLATIONS OF THE POLICY BY SUCH CUSTOMER OR END USER. WE RESERVE THE RIGHT TO LEVY FINES OF $500 to $5000 US$ PER INCIDENCE OF ANY VIOLATION OF OUR POLICIES

 

For Example: If you are hosting a bulk email site on Subhosting servers and you use another ISP to SPAM from in order to reference your Subhosting site by IP address or domain name, you are violating Subhosting policy and possibly the law. If you have been granted telnet access to Subhosting servers, multiple telnet log-ones are strictly prohibited and you must come from a valid IP address. Forgery is against the law. Any type of denial of service attack from valid or invalid addresses is a violation of Subhosting security policy and against the law. If you have been granted password privileges for FTP or telnet, sharing your password with an unauthorized user or third party is strictly prohibited. Violation of Subhosting SPAM policy may be reported to [email protected]

 

Subhosting Master Services Agreement

 

 

IP Address Overlap
Subhosting administers the network on which customer servers reside. The customer cannot use IP addresses which were not assigned to them by Subhosting staff. Any server found using IPs which were not officially assigned will be suspended from network access until such time as the IP addresses overlap can be corrected.

 

IRC
Subhosting does not allow the use of IRC on the Subhosting network. This includes, but is not limited to, the use of IRC clients, server software, bots or anything related to IRC. Violators' servers will be suspended.

 

Network Performance
Subhosting accounts operate on shared resources. Excessive use or abuse of these shared network resources by one customer may have a negative impact on all other customers. Misuse of network resources in a manner which impairs network performance is prohibited by this policy and may result in termination of your account.

 

You may not use network-intensive programs, such as peer-to-peer or audio/video streaming applications, which negatively impact other customers or the performance of Subhosting systems or networks. Subhosting reserves the right to terminate or limit such activities.

 

Billing
The customer understands that the customer is responsible for paying for any network resources that are used to connect the customer's server to the Internet. The customer may request that the customer's server be disconnected from the Internet, but the customer will still be responsible for paying for any network resources used up to the point of suspension or cancellation.

 

Suspension
Subhosting reserves the right to suspend network access to any customer if, in the judgment of the Subhosting network administrators, the customer's server is the source or target of the violation of any of the ot is not assured. In extreme cases, law enforcement will be contacting regarding the activity. All fees paid in advance of cancellation are non-refundable if Subhosting institutes its right of cancellation. Any violation of policies which results in extra costs will be billed to the customer (i.e. transfer, space etc.).

 

Indemnification
The customer acknowledges its indemnification obligations under the Subhosting Terms of Service. Violations of this AUP may result in significant civil and criminal liability of customer.

 

Disclaimer of Responsibility
Subhosting is under no duty to look at each customer's or user's activities to determine if a violation of the AUPs has occurred, nor do we assume any responsibility through our AUPs to monitor or police Internet-related activities. Subhosting disclaims any responsibility for any such inappropriate use and any liability to any person or party for any other person's or party's violation of this policy.

 

All Sub-Networks, resellers and managed servers of Subhosting must adhere to the above policies. Failure to follow any term or condition will be grounds for immediate Cancellation.

Subhosting Master Services Agreement

 

 

INDIRECT OR ATTEMPTED VIOLATIONS OF THE AUPs AND ACTUAL OR ATTEMPTED VIOLATIONS BY A THIRD PARTY ON YOUR BEHALF SHALL BE CONSIDERED VIOLATIONS OF THESE AUPs BY YOU.

 

Inquiries regarding this policy should be directed to Subhosting at [email protected]

 

her terms of the AUPs or for any other reason which Subhosting chooses. If inappropriate activity is detected, all accounts of the Customer in question will be deactivated until an investigation is complete. Prior notification to the Customer is not assured. In extreme cases, law enforcement will be contacting regarding the activity. The customer will not be credited for the time the customer's machines were suspended. The Customer will be credited on a prorated basis based on the monthly fees the Customer pays for the servers that are suspended for the time the Customer's machines were suspended.

 

3. TERMS OF SERVICE (TOS)

 

This Subhosting Terms of Service (this "Agreement") and the Subhosting Acceptable Use Policy ("AUP") govern your purchase and use of all Subhosting services (collectively, the "Services"), as described in the Order Form(s) submitted by you and accepted by Subhosting ("Service Order"). Acceptance of any terms or conditions different from those contained herein by Subhosting will not be deemed by provision of service, but only by electronic or written signature of an officer of Subhosting.

 

You must register and accept the terms of this Agreement and the AUP in order to use the Services.

 

BY CLICKING ON THE "I ACCEPT" BUTTON BELOW, AND/OR REGISTERING FOR AND USING THE SERVICES, YOU ACKNOWLEDGE THAT YOU HAVE READ THIS AGREEMENT AND THE AUP, AND AGREE TO BE BOUND BY ALL TERMS AND CONDITIONS OF THIS AGREEMENT AS WELL AS ALL POLICIES AND GUIDELINES OF THE AUP, WHICH ARE INCORPORATED HEREIN BY REFERENCE.

 

Subhosting may modify any of the terms and conditions contained in this Agreement and the AUP, at any time, in its sole discretion. Any modifications are effective upon posting of the revisions on the Subhosting web site (the "Site"). Your continued use of the Services following Subhosting posting of any modifications constitutes your acceptance of the modifications. If you do not agree to the terms of any modification, do not continue to use the services and immediately notify Subhosting of your termination of this Agreement in the manner described in the section below.

 

Subhosting agrees to furnish services to the Subscriber, subject to the following TOS (Terms of Service).

 

The Use of Subhosting's service constitutes acceptance and agreement to Subhosting's AUP as well as Subhosting's TOS (Terms of Service).

 

3.1. Services

 

Subject to the terms of this Agreement, and contingent on Customer's satisfaction of Subhosting's credit approval requirements, Subhosting agrees to provide the Services described in the Order for the fees stated in the Order.

 

3.2. Fire Protection

 

Subhosting’s fire protection measures maintained at the Data Center shall be in accordance with customary industry standards. Such measures maintained by Subhosting shall, at a minimum, be compliant with requirements set by applicable city ordinances, building codes, and any other applicable rule or ordinance related to fire safety and prevention. Subhosting shall provide such inspection, testing, and maintenance of the fire suppression systems as are reasonably necessary to assure satisfactory performance in the event of an emergency.

 

Subhosting Master Services Agreement

 

 

3.3. Security Protection

 

Subhosting shall be responsible for developing and maintaining physical security measures for the Data Center and for the Customer’s Systems that define specific requirements in regard to monitoring controls and procedures assigned for the security and safety of the Customer Systems and are consistent with customary industry standards. If at any time Subhosting becomes aware that any of the security measures in place for any portion of the Data Center or any portion of the Customer’s Systems are compromised or otherwise violated or may be inadequate, Subhosting shall provide notice of such event as soon as reasonably practicable to Customer in accordance with such notification and escalation call lists as Customer shall have, from time to time, provided to Subhosting. In the event of a breach of the security measures, upon reasonable request, Subhosting shall permit Customer to inspect the automatic security logs within twenty-four (24) hours following the receipt of such notice.

 

3.4. Notice of and Liability for Loss

 

If at any time Subhosting becomes aware that any of the Customer’s Systems have been lost, damaged, destroyed or come into the possession of a third party and such possession is not in accordance with this Agreement, Subhosting shall provide notice of such event as soon as reasonably practicable to Customer. Subhosting shall be liable for repair and/or replacement costs relating to the Customer’s Systems in the event of any loss, damage or destruction to the Customer’s Systems caused by (i) the gross negligence of or willful misconduct of Subhosting or any of its agents or representatives or (ii) a breach by Subhosting of either Section 3.2 or 3.2 above, Fire Protection or Security Protection.

 

3.5. Investigations

 

Subhosting agrees to reasonably cooperate with any reasonable investigation by or on behalf of Customer or its insurers relating to any loss, damage, destruction or unauthorized use of any of the Customer’s Systems during the Term. Subhosting further agrees to reasonably cooperate with Customer in any litigation or prosecution against a third party arising in connection with any loss, damage, destruction or unauthorized use of any of the Customer’s Systems during the Term.

 

3.6. Data Center Access

 

. Except with the advance written consent of Subhosting and Customer, Customer’s access to the Data Center shall be limited solely to the Representatives. Subscriber and its Representatives shall cooperate with and comply with all reasonable and published security and safety measures provided to Customer by Subhosting from time to time, including the use of entry and exit logs and agreements, key cards, voice, photo, biometric or other personal identification recognition devices, and other mechanisms and devices for registering, tracking, and limiting access to the Data Center. The Representatives will comply with all Applicable Laws, with the standards and practices of the telecommunications industry and with all of Instinet’s reasonable and published security procedures, rules, requirements and safety practices provided in writing to Subscriber from time to time. Instinet reserves the right to revoke the entry privileges of any Representative at any time if the exercise of such right is reasonable, and Instinet shall use commercially reasonable efforts to notify Subscriber in advance of any such determination and to reasonably cooperate with Subscriber in an effort to remedy such situation and/or allow access by one or more replacement Representatives.

 

Subhosting Master Services Agreement

 

 

3.7. Scheduled and Emergency Maintenance

 

Subhosting shall conduct routine scheduled maintenance of the Data Center according to the annual maintenance schedule for the Data Center, which shall be provided to Customer prior to or on the Effective Date. In the event of any change to the routine scheduled maintenance, Subhosting shall notify Customer thereof no less than five (5) days prior to the revised date for such scheduled maintenance. In the event that an urgent, mission-critical maintenance situation arises, Instinet shall immediately notify Customer if it will affect any portion of the Customer’s Systems. Any such emergency maintenance, not caused by the actions or omissions of Subhosting, shall not constitute a breach of this Agreement. During such scheduled and emergency maintenance periods, Subhosting shall use its commercially reasonable efforts to minimize interruption to performance of the Services. Customer agrees to reasonably cooperate with Subhosting during scheduled and emergency maintenance periods

 

3.8. Term 

 

The initial service term of the Agreement shall begin on the date that Subhosting generates an e-mail message to Customer announcing the activation of the Customer's account (the " Service Commencement Date ") and shall continue for the number of months stated in the Order (the " Initial Term "). Upon expiration of the Initial Term, this Agreement shall automatically renew for up to three successive renewal terms of the same length as the Initial Term (each a " Renewal Term ") unless Subhosting or Customer provides the other with written notice of non-renewal at least thirty (30) days prior to the expiration of the Initial Term or then-current Renewal Term, as applicable. The Initial Term and any Renewal Term may be referred to collectively in this Agreement as the " Term."

 

4. PAYMENTS & REFUND POLICY

 

4.1 Fees

 

Fees are payable in advance on the first day of each billing cycle. Customer's billing cycle shall be monthly or annually as indicated on the Order, beginning on the Service Commencement Date. Subhosting may require payment for the first billing cycle before beginning service. If the Order provides for credit/debit card billing, Customer authorizes Subhosting to bill subsequent fees to the credit/debit card on or after the first day of each successive billing cycle during the Term of this Agreement; otherwise Subhosting will invoice Customer via electronic mail to the Primary Customer Contact listed on the Order. Invoiced fees may be issued on or before the 1 st day of each billing cycle, and the fees shall be due on the 14 th day following invoice date, but in no event earlier than the first day of each billing cycle.

 

Payments must be made in United States dollars. Customer is responsible for providing Subhosting with changes to billing information (such as credit card expiration, change in billing address) At its option, Subhosting may accrue charges to be made to a credit/debit card until such charges exceed $10.00. Subhosting may charge interest on overdue amounts at the lesser of 1.5% per month or the maximum non-usurious rate under applicable law. Subhosting may suspend the service without notice if payment for the service is overdue. Fees not disputed within sixty (60) days of due date are conclusively deemed accurate. Customer agrees to pay Subhosting's reasonable reinstatement fee following a suspension of service for non-payment, and to pay Subhosting's reasonable costs of collection of overdue amounts, including collection agency fees, attorney fees and court costs.

 

Subhosting Master Services Agreement

 

 

4.2 Fee Increases

 

Subhosting may increase its fees for services effective the first day of a Renewal Term by giving notice to Customer of the new fees at least forty five (45) days prior to the beginning of the Renewal Term, and if Customer does not give a notice of non-renewal as provided in Section 2 above, the Customer shall be deemed to have accepted the new fee for that Renewal Term and any subsequent Renewal Terms (unless the fees are increased in the same manner for a subsequent Renewal Term).

 

4.3 Taxes

 

At Subhosting's request Customer shall remit to Subhosting all sales, VAT or similar tax imposed on the provision of the services (but not in the nature of an income tax on Subhosting), regardless of whether Subhosting fails to collect the tax at the time the related services are provided.

 

4.4 Early Termination

 

Customer acknowledges that the amount of the fee for the service is based on Customer's agreement to pay the fee for the entire Initial Term, or Renewal Term, as applicable. In the event Subhosting terminates the Agreement for Customer's breach of the Agreement in accordance with Section 9 (Termination), or Customer terminates the service other than in accordance with Section 9 (Termination) for Subhosting's breach, the unpaid fees for each billing cycle remaining in the Initial Term or then-current Renewal Term, as applicable, are due on the business day following termination of the Agreement.

 

4.5 Refund policy

 

Within 45 days from the purchase date, we will fully refund the cost of your order If you are not 100% satisfied with our services towards you.

 

5. LAW/AUP

 

Customer agrees to use the service in compliance with applicable law and Subhosting's Acceptable Use Policy posted at https://www.subhosting.net/aup.html (the "AUP"), which is hereby incorporated by reference in this Agreement. Customer agrees that Subhosting may, in its reasonable commercial judgment consistent with industry standards, amend the AUP from time to time to further detail or describe reasonable restrictions and conditions on Customer's use of the Services. Amendments to the AUP are effective on the earlier of Subhosting's notice to Customer that an amendment has been made, or the first day of any Renewal Term that begins subsequent to the amendment. Customer agrees to cooperate with Subhosting's reasonable investigation of any suspected violation of the AUP. In the event of a dispute between Subhosting and Customer regarding the interpretation of the AUP, Subhosting's commercially reasonable interpretation of the AUP shall govern.

 

Subhosting Master Services Agreement

 

 

5.1. Customer Information

 

Customer represents and warrants to Subhosting that the information he, she or it has provided and will provide to Subhosting for purposes of establishing and maintaining the service is accurate. If Customer is an individual, Customer represents and warrants to Subhosting that he or she is at least 18 years of age. Subhosting may rely on the instructions of the person listed as the Primary Customer Contact on the Order with regard to Customer's account until Customer has provided a written notice changing the Primary Customer Contract.

 

6. WARRANTIES, DISCLAIMERS AND LIMITATION OF DAMAGES

 

6.1 By Customer

 

Customer represents and warrants to Subhosting that (a) the execution, delivery and performance by Customer of this Agreement and the consummation of the transactions contemplated hereby (i) are within Customer’s corporate or analogous powers, (ii) have been duly authorized by all necessary corporate or other action, (iii) do not and will not (A) violate any applicable laws, rules and regulations, and all orders, judgments, decrees or other determinations of any Governmental Authority (collectively, “Requirements of Law”) or arbitrator that are applicable to, or binding upon, such Person or any of its property or to which such Person or any of its property is subject, or (B) conflict with or result in the breach of, or constitute a default under, or result in or permit the termination or acceleration of, any contractual obligation of Customer, and (iv) do not require the consent of, authorization by, approval of, notice to, or filing or registration with, any Governmental Authority or any other Person, other than those that have been obtained or made and copies of which have been delivered to Subhosting, and each of which on the date hereof is in full force and effect; (b) this Agreement has been—and any Schedule to which Customer is a party, upon delivery thereof, will have been—duly executed and delivered by Customer; (c) this Agreement is—and any Schedule to which Customer is or becomes a party, upon delivery thereof, will be—the legal, valid and binding obligation of Customer, enforceable against Customer in accordance with its terms; (d) Customer will use the Services and Subhosting Software in compliance with all Requirements of Law and in accordance with this Agreement and the Acceptable-Use Policy; (e) Customer has the right and authority to provide Subhosting with the Customer Software, Customer Hardware and other materials supplied by Customer for the purpose of enabling Subhosting to deliver the Services; and (f) Customer will not market, solicit, enable or sell, or attempt to market, solicit, enable or sell, any service also offered by Subhosting to any other Subhosting customers or partners located in any facility in which Subhosting provides any Services without Subhosting’s prior written consent.

 

6.2 By Subhosting

 

Subhosting represents, warrants and covenants as follows: (i) it is duly organized, validly existing, and in good standing under the laws of the jurisdiction of its organization; (ii) it has full power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement; (iii) this Agreement constitutes the valid and legally binding obligation of it enforceable in accordance with its terms and conditions (subject to applicable bankruptcy laws and laws generally affecting the rights of creditors); and (iv) its execution and delivery of this Agreement and its performance or receipt of the Services (as applicable) will not (1) violate (or constitute an event which, with the giving of notice, the passage of time, or both, would violate) any provision of its charter, bylaws or other governing document, or (2) conflict with, result in a breach of, or constitute a default under (or constitute an event which, with the giving of notice, the passage of time, or both, would conflict with, result in a breach of, or constitute a default under) any other agreement or arrangement or any law, regulation, order or decree by which it or any of its property is bound.

 

Subhosting Master Services Agreement

 

 

Subhosting further represents and warrants that it shall provide the Services in a good or workmanlike manner, with professional diligence and skill, and in accordance with the requirements of this Agreement and customary industry standards.

 

Subhosting represents and warrants to Customer that (a) Subhosting will comply with all applicable laws, rules and regulations in delivering the Services (including, without limitation, any privacy and computer laws), and (b) Subhosting has the right and authority to use and provide Customer with ac- cess to the Subhosting Software in rendering the Services hereunder.

 

Subhosting represents, warrants and covenants that (a) it has the legal right and authority, and will continue to own or maintain the legal right and authority, during the term of this Agreement, to place the Customer’s Systems at the Data Center as contemplated under this Agreement; (b) neither Subhosting nor any of its agents or representatives shall unreasonably, negligently or intentionally interfere with Customer’s Systems or Customer’s remote maintenance and use of any of Customer’s Systems located at the Data Center; (c) all equipment, materials and other tangible items placed at the Data Center shall be maintained in compliance with all applicable manufacturer specifications regarding safety; (d) Subhosting shall not, without the prior written consent of Customer, allow any third party access to Customer’s Systems or to the data located on Customer’s Systems; (e) Subhosting shall, at its own expense, keep the Customer’s Systems in good repair, appearance and condition, other than normal wear and tear.

 

6.3 Disclaimer of Warranties

 

Subhosting DOES NOT WARRANT OR REPRESENT THAT THE SERVICES WILL BE UNINTERRUPTED, ERROR-FREE, OR COMPLETELY SECURE. TO THE EXTENT PERMITTED BY APPLICABLE LAW Subhosting DISCLAIMS ANY AND ALL WARRANTIES INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NONINFRINGEMENT. TO THE EXTENT PERMITTED BY APPLICABLE LAW, ALL SERVICES ARE PROVIDED ON AN "AS IS" BASIS.  

 

6.4 Limitation of Damages

 

NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY LOST PROFITS, OR ANY INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE LOSS OR DAMAGE OF ANY KIND, OR FOR DAMAGES THAT COULD HAVE BEEN AVOIDED BY THE USE OF REASONABLE DILIGENCE, ARISING IN CONNECTION WITH THE AGREEMENT, EVEN IF THE PARTY HAS BEEN ADVISED OR SHOULD BE AWARE OF THE POSSIBILIY OF SUCH DAMAGES.

 

NOTWITHSTANDING ANYTHING ELSE IN THE AGREEMENT TO THE CONTRARY, THE MAXIMUM AGGREGATE LIABILITY OF Subhosting AND ANY OF ITS EMPLOYEES, AGENTS OR AFFILIATES, UNDER ANY THEORY OF LAW (INCLUDING BREACH OF CONTRACT, TORT, STRICT LIABILITY, AND INFRINGEMENT) SHALL BE A PAYMENT OF MONEY NOT TO EXCEED THE AMOUNT PAYABLE BY CUSTOMER FOR THREE MONTHS OF SERVICE.

 

Subhosting Master Services Agreement

 

 

7. SUSPENSION/TERMINATION

 

7.1 Suspension of Service

 

Customer agrees that Subhosting may suspend services to Customer without notice and without liability if: (i) Subhosting reasonably believes that the services are being used in violation of the AUP; (ii) Customer fails to cooperate with any reasonable investigation of any suspected violation of the AUP; (iii) Subhosting reasonably believes that the suspension of service is necessary to protect its network or its other customers, or (iv) as requested by a law enforcement or regulatory agency. Customer shall pay Subhosting's reasonable reinstatement fee if service is reinstituted following a suspension of service under this subsection.

 

7.2 Termination

 

The Agreement may be terminated by Customer prior to the expiration of the Initial Term or any Renewal Term without further notice and without liability if Subhosting fails in a material way to provide the service in accordance with the terms of the Agreement and does not cure the failure within ten (10) days of Customer's written notice describing the failure in reasonable detail. The Agreement may be terminated by Subhosting prior to the expiration of the Initial Term or any Renewal Term without further notice and without liability as follows: (i) upon ten (10) days’ notice if Customer is overdue on the payment of any amount due under the Agreement; (ii) Customer materially violates any other provision of the Agreement, including the AUP, and fails to cure the violation within thirty (30) days of a written notice from Subhosting describing the violation in reasonable detail; (iii) upon one (1) days’ notice if Customer's Service is used in violation of a material term of the AUP more than once, or (iv) upon one (1) days’ notice if Customer violates Section 5 (Customer Information) of this Agreement. Either party may terminate this agreement upon ten (10) days advance notice if the other party admits insolvency, makes an assignment for the benefit of its creditors, files for bankruptcy or similar protection, is unable to pay debts as they become due, has a trustee or receiver appointed over all or a substantial portion of its assets, or enters into an agreement for the extension or readjustment of all or substantially all of its obligations.

 

7.3 Termination for Default

 

Either party may terminate this Agreement effective upon delivery of written notice to the other party if (a) the other party is insolvent or has a petition in bankruptcy filed against it; (b) the other party is adjudicated a bankrupt; (c) the other party makes a general assignment for the benefit of its creditors; (d) the other party has a receiver, trustee or agent appointed with respect to its business or any significant portion thereof; (e) the other party otherwise ceases to do business in any manner which would affect the other party’s performance under this Agreement; (f) with respect to Subhosting, a Service Outage has occurred; (g) the other party has failed to comply with any Applicable Laws in connection with its activities under this Agreement; or (h) the other party is in breach of any other provision of this Agreement and fails to correct and cure such breach within thirty (30) days after the terminating party provides notice of such breach. Upon termination of this Agreement, Customer shall be obligated to pay no more than the amounts owing to Subhosting for Services performed in accordance with this Agreement up to the effective date of termination, and if fees or costs are calculated on a monthly, quarterly or other periodic basis, then Customer shall only be liable for the pro rata portion thereof up to the effective date of termination.

 

Subhosting Master Services Agreement

 

 

7.4 Post-Termination Services

 

In connection with the termination or expiration of the Agreement, for any reason or for no reason, Subhosting shall reasonably cooperate with Customer to minimize any adverse effect on Customer or its Affiliates or their respective customers, and perform those other obligations set forth in this Agreement to be performed by Instinet upon the termination or expiration of this Agreement

 

7.5 Renewal

 

All Schedules shall automatically renew for successive terms (each a “Renewal Term”) equal in length to the then-current term. For Schedules that have a term of three months or more, either party may give notice of nonrenewal by providing the other party with written notice 90 days prior to the last day of such term. For Schedules that have a term that is less than three months, either party may give notice of nonrenewal by providing the other party written notice 30 days prior to the last day of such term.

 

7.6 Month-to-Month Term

 

Notwithstanding anything to the contrary in this Agreement, if, upon Customer’s notice of termination or nonrenewal of the then-current term, this Agreement continues on a month-to-month term or if Customer specifically requests a month-to-month term, then the monthly recurring fees for all such month-to-month Services shall automatically increase by 20% over the fees immediately prior to such month-to-month term and the payment terms shall be 15 days in advance of each month.

 

8. INDEMNIFICATION

 

Customer agrees to indemnify and hold harmless Subhosting, Subhosting's affiliates, and each of their respective officers, directors, agents, and employees from and against any and all claims, demands, liabilities, obligations, losses, damages, penalties, fines, punitive damages, amounts in interest, expenses and disbursements of any kind and nature whatsoever (including reasonable attorneys fees) brought by a third party under any theory of legal liability arising out of or related to the actual or alleged use of Customer's services in violation of applicable law or the AUP by Customer or any person using Customer's log on information, regardless of whether such person has been authorized to use the services by Customer.

 

Subhosting, at its sole expense, hereby agrees to be liable for and to indemnify, hold harmless and (at the election of Customer) defend (with counsel reasonably acceptable to Customer) Customer, its Affiliates, and their respective directors, officers, members, partners, employees, agents and representatives, from and against any and all debts, liabilities, losses, costs and expenses, including reasonable attorneys’ fees (collectively, “Losses”), to the extent arising out of or in any way related to, in whole or in part, in connection with: (i) any misappropriation of any intellectual property or proprietary rights arising out of the Customer’s Systems; (ii) any personal injury or tangible property damage to the extent caused by the negligence or willful misconduct of Subhosting; (iii) any third-party’s alleged ownership or possessory interest, lien, trust, pledge, or security interest in the Customer’s Systems, including any attempt by such third party to take possession of the Customer’s Systems; or (iv) Subhosting’s or its agents or representatives’ fraud, gross negligence or willful misconduct. Subhosting shall notify Customer of any matter with respect to which Customer or any other Person indemnified hereunder is entitled to seek indemnification from Subhosting under this Section promptly after Subhosting becomes aware of such matter. To the extent requested by Subhosting, Customer agrees to reasonably cooperate with Subhosting and its counsel in connection with any such matter, provided that Subhosting shall reimburse Customer for any expenses associated with the same. Each of Customer and Subhosting shall use reasonable efforts to keep the other party informed at all times as to the status of its efforts with respect to any matter covered hereby and to consult with the other party concerning its efforts.

 

Subhosting Master Services Agreement

 

 

9. SERVICE LEVEL AGREEMENT (SLA)

 

9.1. Applicability

 

This Web Site Availability Service Level Agreement applies to YOU if YOU have ordered *any* hosting plans ("Service") and YOU are in good financial standing with Subhosting.

 

Service Level Agreements. In addition to the terms set forth in this Agreement, Subhosting shall use commercially reasonable efforts to perform the Services in accordance with the Service Level Agreements. In the event of any material failure by Subhosting to perform the services in accordance with the Service Level Agreement Customer shall have a credit in the amount equal to the pro rata amounts paid or payable by Customer for the duration of any non-compliance with the Service Level Agreements, which Subscriber may apply against payment of the fees and charges payable by the Customer to Subhosting in a subsequent calendar month; provided, that in the event that this Agreement expires or terminates, Subhosting shall pay an amount equal to any unused credits to Customer within ten (10) days after such termination or expiration. Provided, that (i) nothing herein shall impair Customer’s rights to terminate this Agreement in accordance with its terms, whether pursuant to failure to perform in accordance with the Service Level Agreements or otherwise, and (ii) nothing herein shall affect Subhosting’s liability under this Agreement or any remedies of Customer with respect to the same.

 

Effect of Failure to Perform to Service Level Agreements.

Liquidated Damages. The parties acknowledge and agree that, because of the unique nature of the Services contemplated by this Agreement, it is difficult or impossible to determine with precision the specific amount of damages that might be incurred by Customer as a result of a failure of Subhosting to meet the Service Level Agreements. It is further understood and agreed by the parties that Customer shall be damaged by such failure of Subhosting to meet the Service Level Agreements, that it would be impracticable or extremely difficult to fix the actual damages resulting therefrom, that any credits that become payable are in the nature of liquidated damages, and not penalties, and are fair and reasonable under the circumstances, and that such payments represent a reasonable estimate of fair compensation for the losses that may reasonably be anticipated from Subhosting’s failure to meet the Service Level Agreements; provided, however, that nothing in this section shall affect Customer’s rights under the last sentence of the above provision: Service Level Agreements.

 

Subhosting Master Services Agreement

 

 

9.2. Service Guarantee

 

Subhosting Service will be available to the Internet (see definitions below) 99.9995% of any given month.

 

Credits

 

Outage Credits:

 

Any period of inaccessibility due to power failure, internet network failure, or other failure lasting longer than 30 minutes will be credit as follows:

 

·0-30 minutes: No Credit

 

·30-60 minutes: 3% of monthly base fee, excluding any add-on services

 

·Each additional 60 minutes; 3% of monthly base fee, excluding any add-on services, not to exceed 50% of one month's base fee.

 

In order for YOU to receive a credit on YOUR account, YOU must request such credit within seven (7) business days after YOU experienced no service availability. YOU must request credit by sending an email message to [email protected] outlining your IP address, incident start, incident end and the support ticket ID you used when troubleshooting the issue. Credits will usually be applied within ninety (90) days of YOUR credit request. Credit to your account shall be YOUR sole and exclusive remedy for any outage related to your service including those caused by gross negligence by Subhosting or its staff.

 

9.3 Restrictions

 

Credits shall not be provided to YOU in the event that YOU have no service availability resulting from (i) scheduled maintenance, (ii) YOUR behavior or the performance or failure of YOUR equipment, facilities, software, scripts, code, or applications, or (iii) circumstances beyond Subhosting's reasonable control, including, without limitation, acts of any governmental body, war, insurrection, sabotage, embargo, fire, flood, strike or other labor disturbance, interruption of or delay in transportation, unavailability of interruption or delay in telecommunications or third party services (including DNS propagation), failure of third party software or hardware or inability to obtain raw materials, supplies, or power used in or equipment needed for provision of YOUR service.

 

9.4 Limitations

 

On-line problems occur continuously. There might come a time when you cannot access your service or any other service. This is not necessarily due to a failure of the Subhosting Network or hardware. Subhosting's monitoring agents are the sole determinate of the uptime of our service, and not any one client's experience. Managed customers can be affected by outages, being a managed customer does not constitute preferential treatment under this SLA.

 

9.5. Definitions

 

·Internet - Any network outside of Subhosting's internal network

 

·Support - Subhosting's support team, reachable via https://www.subhosting.net/client/.

 

·Billing - Subhosting's billing team, reachable via [email protected]

 

Subhosting Master Services Agreement

 

 

10.INSURANCE

 

1.1.       Subhosting Minimum Insurance Levels

 

Subhosting agrees to keep in full force and effect during the term of this Agreement (a) a broad form Commercial General Liability Insurance policy providing for coverage of at least one million dollars ($1,000,000.00) per occurrence, subject to an aggregate cap of two million dollars ($2,000,000.00), for bodily injury and property damage. In addition, Subhosting agrees to keep in full force and effect during the term of this Agreement a Worker’s Compensation Insurance policy consistent with the policy that Subhosting maintains for its employees generally. Such policies (i) shall be written on an “occurrence” policy form and not on a “claims made” form; (ii) shall be primary and not contributory with the other party’s liability insurance, if any; (iii) shall provide for not less than thirty (30) days advance written notice to the other party from the insurer or insurers, if more than one, of any cancellation, nonrenewal, or material change in coverage or available limits of liability; and (iv) shall be issued by an insurance company with a rating of no less than A-V in the current Best’s Insurance Guide, or otherwise be acceptable to the other party, and admitted to engage in the business of insurance in the state in which the Services are actually provided. Each party’s Commercial General Liability Insurance coverage may be provided by a combination of primary, excess, and umbrella policies, provided that those policies are concurrent in all respects regarding the coverage afforded by the policies. The coverage of any excess or umbrella policy must be at least as broad as the coverage of the primary policy.

 

1.2.       Certificates of Insurance

 

Subhosting shall (a) deliver to the Customer certificates of insurance which evidence the minimum levels of insurance set forth above; and (b) cause its insurance provider(s) to name the other party as an additional insured and to notify the other party in writing of the effective date of such coverage. Subhosting shall deliver the certificates of insurance required by this Section to the Customer within thirty (30) days of the Effective Date; again at least ten (10) days before the expiration date of any applicable policy; and again on renewal of any applicable policy.

 

1.3.       Obligations Continue Regardless of Insurance

 

The insurance requirements set forth in this Agreement are independent of each party’s indemnification and other obligations under this Agreement and shall not be construed or interpreted in any way to restrict, limit or modify each party’s indemnification and other obligations or to limit each party’s liability under this Agreement.

 

1.4.       Waiver of Subrogation Rights

 

Each party agrees to cause the insurance companies issuing its insurance policies to waive any subrogation rights that those insurance companies may have against the other party, or its insurers, by way of contract or otherwise.

 

11. GENERAL

 

11.1 Relationship of Parties

 

Nothing in this Agreement will be construed to imply a joint venture, partnership or agency relationship between the parties, and Subhosting will be considered an independent contractor when performing Services under this Agreement.

 

Subhosting Master Services Agreement

 

 

11.2 Assignment

 

The rights and liabilities of the parties hereto will bind and inure to the benefit of their permitted successors and assigns. Neither party shall have the right to assign this Agreement without the prior written consent of the other party. Approval for any assignment is contingent on the assignee meeting the credit approval criteria of the consenting party.

 

11.3 Affiliates and Contractors

 

Customer may extend the benefits of this Agreement only to its Affiliates; provided, however, that, in such event, Customer shall be obligated to pay Subhosting any additional fees based on the number of users, changes to requirements for the hosting environment, or other changes to requirements that increase the cost of delivery of Services by Subhosting. Customer shall ensure that its Affiliates and authorized third-party contractors comply with the terms and conditions of this Agreement, and Customer shall be liable for the acts and omissions of such parties. Subhosting may use subcontractors in delivering the Services.

 

11.4 Complete Understanding; Modification

 

This Agreement constitutes the entire agreement between the parties relating to its subject matter, supersedes all prior agreements and understandings between the parties, oral or written, with respect to its subject matter and may not be changed unless mutually agreed upon in writing by both parties.

 

11.5 Severability

 

If any provision of this Agreement is held to be invalid, illegal or unenforceable, the remaining provisions shall remain in full force and effect.

 

11.6 Schedules

 

A Schedule or amendment to this MSA may add new or additional terms and conditions. Except as provided above, in the event of any conflict or inconsistency between the provisions of this MSA and those of a Schedule, the Schedule shall prevail.

 

11.7 Notices

 

Notices to Subhosting under the Agreement shall be given via electronic mail to the e-mail address posted for customer support on https://www.subhosting.net/client/contact.php. Notices to Customer shall be given via electronic mail to the individual listed as the Primary Customer Contact on the Order. Notices are deemed received on the day transmitted, or if that day is not a business day, on the first business day following the day delivered. Customer may change his, her or its notice address by a notice given in accordance with this Section.

 

11.8. Force Majeure

 

Subhosting shall not be in default of any obligation under the Agreement if the failure to perform the obligation is due to any event beyond Subhosting's control, including, without limitation, significant failure of a portion of the power grid, significant failure of the Internet, natural disaster, war, riot, insurrection, epidemic, strikes or other organized labor action, terrorist activity, or other events of a magnitude or type for which precautions are not generally taken in the industry.

 

Subhosting Master Services Agreement

 

 

11.9 Privacy Policy 

 

This policy covers how we use your personal information. We take your privacy seriously and will take all measures to protect your personal information. 

 

Any personal information received will only be used to fill your order. We will not sell or redistribute your information to anyone.

 

11.10 Miscellaneous

 

Each party acknowledges and agrees that the other party retains exclusive ownership and rights in its trademarks, service marks, trade secrets, inventions, copyrights, and other intellectual property. Neither party may use the other party's name or trade mark without the other party's prior written consent. The parties intend for their relationship to be that of independent contractors and not a partnership, joint venture, or employer/employee. Neither party will represent itself to be agent of the other. Each party acknowledges that it has no power or authority to bind the other on any agreement and that it will not represent to any person that it has such power or authority. This Agreement may be amended only by a formal written agreement signed by both parties. The terms on Customer's purchase order or other business forms are not binding on Subhosting unless they are expressly incorporated into a formal written agreement signed by both parties. A party's failure or delay in enforcing any provision of the Agreement will not be deemed a waiver of that party's rights with respect to that provision or any other provision of the Agreement. A party's waiver of any of its right under the Agreement is not a waiver of any of its other rights with respect to a prior, contemporaneous or future occurrence, whether similar in nature or not. The captions in the Agreement are not part of the Agreement, but are for the convenience of the parties. The following provisions will survive expiration or termination of the Agreement: Fees, indemnity obligations, provisions limiting liability and disclaiming warranties, provisions regarding ownership of intellectual property, these miscellaneous provisions, and other provisions that by their nature are intended to survive termination of the Agreement.

 

11.11 Ownership of Equipment

 

All Customer’s Systems for the purpose of providing the Services is the sole property of Subhosting or its assigns. Notwithstanding anything in this Agreement to the contrary, Subhosting assumes the responsibility for the risk of loss and liability for all damages to, or loss of, (i) the Customer’s Systems from all causes. Except as may be otherwise agreed to by the parties in writing, Customer shall be liable for securing all necessary rights and licenses for software, programs or code placed on Customer’s Systems other than any of the foregoing placed on Customer’s Systems by Subhosting or its agents or representatives. Except as may be otherwise agreed by the parties in writing, Subhosting disclaims any and all liability for the content on such Subscriber Systems. Customer will promptly and thoroughly respond to any notices that the content on the Customer’s Systems violates the Digital Millennium Copyright Act, 17 U.S.C. § 101 et. seq. or any other law, rule or regulation.

 

Subhosting Master Services Agreement

 

 

11.12 Headings

 

Section headings in this Agreement are for convenience of reference only, do not form a part of this Agreement and shall not affect the meaning or interpretation of this Agreement.

 

IN WITNESS WHEREOF, the parties have executed this MSA by their duly authorized representatives.

 

______________________________________________________________________________

 

SUBHOSTING International LL WORLD TECHNOLOGY CORP.
   
Signature _____________________________ Signature _____________________________
   
Printed Name _________________________ Printed Name _________________________
   
Title ________________________________ Title ________________________________
   
Date _______________________________ Date _______________________________

 

Subhosting Master Services Agreement

   

 

Exhibit 10.12

 

ADDENDUM TO EXCLUSIVE LICENSE AGREEMENT

 

THIS ADDENDUM TO EXCLUSIVE LICENSE AGREEMENT, (this "Addendum”) dated April 24, 2018 by and between World Technology Corporation, f/k/a World Media & Technology Corp., a [Nevada] corporation (the "Licensee"), and Giner, Inc., a Massachusetts corporation (the "Giner") amends that Exclusive License Agreement, dated April 10, 2017, by and between the Licensee and Licensor (the "Original Agreement"). Any capitalized term not defined in this Addendum shall have the meaning ascribed to it in the Original Agreement.

 

RECITALS

 

WHEREAS, Licensor intends to enter into an Asset Purchase Agreement (the"Purchase Agreement”) between Licensor and IA Smart Start, LLC ("Smart Start”), pursuant to which Licensor shall sell assets related to its transdermal alcohol sensor business (the closing date of the transactions contemplated herein, the "Effective Date"). The term "Licensor" as used herein and in the Original Agreement shall refer to Giner for all periods prior to Effective Date, and Smart Start for all periods following the Effective Date. Smart Start, by signing below, agrees to assume the rights and obligations as Licensor under the Original Agreement and this Addendum, as of the Effective Date.

 

WHEREAS, as part of the assets being sold to Smart Start, Licensor intends to transfer and assign the Original Agreement, and Smart Start will become responsible for all of the obligations of Licensor under the Original Agreement.

 

WHEREAS, Licensee, prior to the assignment of the Original Agreement, wishes to amendthe Original Agreement to add certain additional terms to the Original Agreement, which terms shall become part of the Original Agreement, and shall bind Licensor and any assigns, including Smart Start.

 

NOWTHEREFORE, the Parties agree as of the Effective Date, as follows:

 

AGREEMENT

 

Licensor' s obligations under the Original Agreement is hereby amended to include following:

 

1.1 Provided that Licensee supplies a beta Helo device with an integrated or inserted TAS that offers BLE or loT connectivity via OpenAPI (or equivalent) to Licensor by at least October 1, 2018, Licensor shall make the Advanced App available in the Helo App Store no later than January 1, 2019, and Licensor shall provide maintenance of the AdvancedApp, as required for it to operate in accordance with its intended function, for at least nine (9) months from the date of its availability in the Helo App Store.

 

2.       AME.ND MENT OF SECTION 3.4. The ability of Licensee to maintain the exclusivity arrangement in the Original Agreement is hereby amended with the addition of the following

 

 

 

 

2.1       If Licensee fails to purchase the minimum volume for Year I, Licensee shall pay Licensor the shortfall amount according to the terms set forth in Section 3.4 in order to maintain exclusivity. However, the shortfall amount paid in Year I will be applied against any purchases in the first six (6) months of Year 2 commencing on January 1, 2019. For instance, if only 100K TAS are purchased in Year I and Licensee pays an additional shortfall amount of $100K to maintain exclusivity, the additional shortfall amount of $100K will be applied against TAS unit purchases in the first 6 months of Year 2. If no additional TAS units are purchased in the first six (6) months of Year 2, then the shortfall amount shall be retained by Licensor and shall not be applied against any purchases after July 1, 2019.

 

2.2       The Licensee' s obligation to "purchase" the minimum volume shall be understood to mean submission of an order or multiple orders for the minimum volume, with delivery dates on or prior December 31 of the applicable calendar year, subject to the requirement of Section

3.1 of this Addendum.

 

2.3       Except as specifically set forth in this Addendum, the terms and conditions for the yearly minimum volume requirements to maintain exclusivity shall remain as specified in Section 3.4 and Appendix C3 of the Original Agreement.

 

3.           ADDENDUM TO SECTION 4.6. Section 4.6 of the original Agreement is hereby amended to include the following:

 

3.1       Any order for Products submitted to Licensor under Section 4.6(a) of the Original Agreement shall include a delivery schedule requiring initial delivery of units no less than six (6) months from the date of such order.

 

3.2       If, prior to July 1, 2019, Licensee submits an order for Products requesting fewer than 250,000 units in a single order, or submits a series of orders for Products that, in the aggregate, request fewer than 500,000 units, Licensor hereby warrants that such order(s) shall be satisfied within the delivery schedule (subject to Section 3.1 of this Addendum) set forth in the applicable order(s). If Licensor fails to deliver the Products within the stated delivery schedule for any reason other than due to Licensee's actions or inaction, Licensor hereby agrees that Licensee may terminate this Agreement for cause.

 

4.           CONSENT TO ASSIGNMENT In accordance with Section 15 of the Original Agreement, Licensee hereby agrees and consents to the assignment by Giner of this Addendum and the Original Agreement and all rights and obligations hereunder and thereunder to Smart Start and hereby waives any notice or waiting period with respect to such assignment. Smart Start hereby agrees to assume all of the rights and obligations of Giner under the Original Agreemen,t and as Licensor thereunder and under this Addendum.

 

S.MISCELLANEOUS

 

S.1       This Addendum is subject to the closing of the transactions contemplated by the Purchase Agreement, and shall take effect on and as of the Effective Date. In the event that the Purchase Agreement is terminated or the parties thereto abandon the negotiation thereof, this Addendum shall have no force and effect.

 

 

 

 

S.2       Except for the changes made by this Addendum, all terms of the Original Agreement remain unchanged.

 

S.3       This Addendum and the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and in accordance with the laws of the state of Delaware.

 

S.4       This Amendment may be executed in two or more counterparts, each of which shall be deemed an original and all of which together constitute one instrument

 

 

 

 

LICENSEE:   LICENSORS
     
WORLD TECHNOLOGY CORPORATION   GINER, INC.
     
By: /s/  Sean McVeigh   By: /s/ Cortney Mittelsteadt
     
Name: Sean McVeigh   Name: Cortney Mittelsteadt
         
Title: CEO   Title: CEO
     
  1A SMART START LLC
     
    By: /s/ Matthew T. Strausz
       
    Name: Matthew T. Strausz
       
    Title: CEO

 

 

 

Exhibit 14.1

 

WORLD TECHNOLOGY CORP.

 

(“WCOR”)

CODE OF ETHICS FOR PRINCIPAL EXECUTIVE OFFICERS AND SENIOR FINANCIAL OFFICERS

 

WCOR expects the highest possible ethical conduct from its principal executive officers and senior financial officers. Your full compliance with this Code and with WCOR’s Code of Business Conduct & Ethics is mandatory. You are expected (i) to foster a culture of transparency, integrity and honesty, and (ii) to ensure that everyone in your organization also fully complies with this Code.

 

In accordance with the rules of the U.S. Securities and Exchange Commission, any change to, or waiver of, this Code must be immediately publicly disclosed.

 

Conflicts of Interest

 

In order to maintain the highest degree of integrity in the conduct of WCOR’s business and your independent judgment, you must avoid any personal activity, investment or association that creates a conflict between your interests and the interests of WCOR, or that could appear to interfere with good judgment concerning WCOR’s best interests. You may not exploit your position or relationship with WCOR for personal gain. You should avoid even the appearance of such a conflict. For example, there is a likely conflict of interest if you:

 

·cause WCOR to engage in business transactions with relatives or friends;

·use nonpublic WCOR, client or vendor information for personal gain by you, relatives or friends (including securities transactions based on such information);

·have more than a modest financial interest in WCOR’s vendors, clients or competitors;

·receive a loan, or guarantee of obligations, from WCOR or a third party as a result of your position at WCOR; or

·compete, or prepare to compete, with WCOR while still employed by WCOR.

 

There are a variety of other situations in which a conflict of interest may arise. If you have concerns about any situation, follow the steps outlined in the Section on "Reporting Violations."

 

As a WCOR principal executive officer or senior financial officer, it is imperative that you avoid any investment, interest or association that interferes, might interfere, or might appear to interfere, with your independent exercise of judgment in WCOR’s best interests.

 

Engaging in any conduct that represents a conflict of interest is strictly prohibited.

 

 

 

 

Accurate Periodic Reports

 

As you are aware, full, fair, accurate, timely and understandable disclosures in WCOR’ periodic reports is legally required and is essential to the success of its business. Please exercise the highest standard of care in preparing such reports in accordance with the following guidelines:

 

·All WCOR accounting records, as well as reports produced from those records, must be in accordance with the laws of each applicable jurisdiction.

·All records must fairly and accurately reflect the transactions or occurrences to which they relate.

·All records must fairly and accurately reflect, in reasonable detail, WCOR’ assets, liabilities, revenues and expenses.

·WCOR’ accounting records must not contain any false or intentionally misleading entries.

·No transactions should be intentionally misclassified as to accounts, departments or accounting periods.

·All transactions must be supported by accurate documentation in reasonable detail and recorded in the proper account and in the proper accounting period.

·No information should be concealed from the internal auditors or the independent auditors.

 

Compliance with WCOR’ system of internal accounting controls is required.

 

Compliance

 

You are expected to comply with both the letter and spirit of all applicable governmental laws, rules and regulations, as well as in accordance with the highest standards of business ethics. You have a responsibility that includes creating a culture of high ethical standards and commitment to compliance; maintaining a work environment that encourages employees to raise concerns; and promptly addressing employee compliance concerns.

 

If you have questions about this Code, you should seek guidance from the General Counsel. If you fail to comply with this Code, with WCOR’ Code of Business Conduct and Ethics, and/or with any applicable laws, you will be subject to disciplinary measures, up to and including immediate discharge from WCOR.

 

Reporting Violations

 

Your conduct can reinforce an ethical atmosphere and positively influence the conduct of fellow associates. If you are powerless to stop suspected misconduct or discover it after it has occurred, you must report it to the appropriate level of management at your location.

 

If you are still concerned after speaking with your local management or feel uncomfortable speaking with them (for whatever reason), you must (anonymously, if you wish) send a detailed note, with relevant documents, to World Technology Corp., Attn.: Board of Directors, 600 Brickell Ave., Suite 1775, Miami, FL 33131. Telephone: 855-467-6500 or via email to [email protected].

 

Your calls, detailed notes and/or emails will be dealt with confidentially. You have the commitment of WCOR and of WCOR’ Board of Directors that you will be protected from retaliation.

 

 

 

 

Conclusion

 

In the final analysis you are the guardian of WCOR’ ethics. While there are no universal rules, when in doubt ask yourself:

 

·Will my actions be ethical in every respect and fully comply with the law and with WCOR policies?

·Will my actions have the appearance of impropriety?

·Will my actions be questioned by my supervisors, associates, clients, family and the general public?

·Am I trying to fool anyone, including myself, as to the propriety of my actions?

 

If you are uncomfortable with your answer to any of the above, you should not take the contemplated actions without first discussing them with your local management. If you are still uncomfortable, please follow the steps outlined above in the Section on "Reporting Violations."

 

Any associate who ignores or violates any of WCOR’ ethical standards, and any manager who penalizes a subordinate for trying to follow these ethical standards, will be subject to corrective action, including immediate dismissal. However, it is not the threat of discipline that should govern your actions. WCOR expects you to share its belief that a dedicated commitment to ethical behavior is the right thing to do, is good business, and is the surest way for WCOR to remain a world class company.

 

 

 

 

Exhibit 14.2

 

CODE OF BUSINESS CONDUCT & ETHICS

 

Statement by Chief Executive Officer

 

Ethics are important to World Technology Corp. (“WCOR” or the “Company”) and each of its employees. WCOR is committed to the highest ethical standards and to conducting its business with the highest level of integrity. Personally, I believe this commitment is at the core of the values that make WCOR great.

 

An uncompromising adherence to ethical excellence is integral to creating and sustaining a World Class culture at WCOR. It provides the necessary strong foundation on which World Class products and service is built and on which it can grow and prosper.

 

Each WCOR employee is responsible for the consequences of his or her actions. We must each be the guardian of WCOR’S ethics.

 

Leaders in WCOR have the extra responsibility of setting an example by their personal performance and an attitude that conveys our ethical values. That example leads us to treat everyone - employees, clients, prospects, vendors and competitors - with honesty and respect.

 

If you are unsure of the appropriate action, take advantage of our open door, informal environment and raise your concerns with management or, if you are still uncomfortable, follow the processes outlined in this Code of Business Conduct & Ethics.

 

Sean McVeigh
Chief Executive Officer

 

 

Ethics

 

WCOR and each of its employees, wherever they may be located, must conduct their affairs with uncompromising honesty and integrity. Business ethics are no different than personal ethics. The same high standard applies to both. As an WCOR employee you are required to adhere to the highest standard regardless of local custom.

Employees are expected to be honest and ethical in dealing with each other, with clients, vendors and all other third parties. Doing the right thing means doing it right every time.

You must also respect the rights of your fellow employees and third parties. Your actions must be free from discrimination, libel, slander or harassment. Each person must be accorded equal opportunity, regardless of age, race, sex, sexual preference, color, creed, religion, national origin, marital status, veteran's status, handicap or disability.

Misconduct cannot be excused because it was directed or requested by another. In this regard, you are expected to alert management whenever an illegal, dishonest or unethical act is discovered or suspected. You will never be penalized for reporting your discoveries or suspicions.

The following statements concern frequently raised ethical concerns. A violation of the standards contained in this Code of Business Conduct & Ethics will result in corrective action, including possible dismissal.

 

 

 

 

Conflicts of Interest

 

You must avoid any personal activity, investment or association which could appear to interfere with good judgment concerning WCOR’S best interests. You may not exploit your position or relationship with WCOR for personal gain. You should avoid even the appearance of such a conflict. For example, there is a likely conflict of interest if you:

 

·cause WCOR to engage in business transactions with relatives or friends;

·use nonpublic WCOR, client or vendor information for personal gain by you, relatives or friends (including securities transactions based on such information);

·have more than a modest financial interest in WCOR’S vendors, clients or competitors;

·receive a loan, or guarantee of obligations, from WCOR or a third party as a result of your position at WCOR; or

·compete, or prepare to compete, with WCOR while still employed by WCOR.

 

There are a variety of other situations in which a conflict of interest may arise. If you have concerns about any situation, follow the steps outlined in the Section on "Reporting Ethical Violations."

 

Gifts, Bribes and Kickbacks

 

Other than for modest gifts given or received in the normal course of business (including travel or entertainment), neither you nor your relatives may give gifts to, or receive gifts from, WCOR’S clients and vendors. Other gifts may be given or accepted only with prior approval of your senior management. In no event should you put WCOR or yourself in a position that would be embarrassing if the gift was made public.

Dealing with government employees is often different than dealing with private persons. Many governmental bodies strictly prohibit the receipt of any gratuities by their employees, including meals and entertainment. You must be aware of and strictly follow these prohibitions.

Any employee who pays or receives bribes or kickbacks will be immediately terminated and reported, as warranted, to the appropriate authorities. A kickback or bribe includes any item intended to improperly obtain favorable treatment.

 

Loans

 

You may not request or accept a loan or payroll advance from WCOR.

 

Improper Use or Theft of WCOR Property

 

Every employee must safeguard WCOR property from loss or theft, and may not take such property for personal use. WCOR property includes confidential information, software, computers, office equipment, and supplies. You must appropriately secure all WCOR property within your control to prevent its unauthorized use. Use of WCOR’S electronic communications systems must conform with WCOR’S E-mail Content Policy as set forth in the Employee Handbook, which, among other things, precludes using such systems to access or post material that: is pornographic, obscene, sexually-related, profane or otherwise offensive; is intimidating or hostile; or violates WCOR policies or any laws or regulations. Employees may make limited non-business use of WCOR’S electronic communications systems, provided that such use: (i) is occasional; (ii) does not interfere with the employee's professional responsibilities; (iii) does not diminish productivity; and (iv) does not violate this Policy or WCOR’S E-mail Content Policy.

 

Covering Up Mistakes; Falsifying Records

 

Mistakes should never be covered up, but should be immediately fully disclosed and corrected. Falsification of any WCOR, client or third party record is prohibited.

 

Protection of WCOR, Client or Vendor Information

 

You may not use or reveal WCOR, client or vendor confidential or proprietary information to others. Additionally, you must take appropriate steps — including securing documents, limiting access to computers and electronic media, and proper disposal methods — to prevent unauthorized access to such information. Proprietary and/or confidential information, among other things, includes: business methods, pricing and marketing data, strategy, computer code, screens, forms, experimental research, information about, or received from, WCOR’S current, former and prospective clients, vendors and employees.

 

Gathering Competitive Information

 

You may not accept, use or disclose the confidential information of our competitors. When obtaining competitive information, you must not violate our competitors' rights. Particular care must be taken when dealing with competitors' clients, ex-clients and ex-employees. Never ask for confidential or proprietary information. Never ask a person to violate a non-compete or non-disclosure agreement. If you are uncertain, the Corporate Legal Department can assist you.

 

 

 

 

Sales: Defamation and Misrepresentation

 

Aggressive selling should not include misstatements, innuendo or rumors about our competition or their products and financial condition. Do not make unsupportable promises concerning WCOR’S products.

 

Use of WCOR and Third Party Software

 

WCOR and third party software may be distributed and disclosed only to employees authorized to use it, and to clients in accordance with terms of a WCOR agreement.

 

WCOR and third party software may not be copied without specific authorization and may only be used to perform assigned responsibilities.

 

All third-party software must be properly licensed. The license agreements for such third party software may place various restrictions on the disclosure, use and copying of software.

 

Developing Software

 

Employees involved in the design, development, testing, modification or maintenance of WCOR software must not tarnish or undermine the legitimacy and "cleanliness" of WCOR’S products by copying or using unauthorized third party software or confidential information. You may not possess, use or discuss proprietary computer code, output, documentation or trade secrets of a non-WCOR party, unless authorized by such party. Intentional duplication or emulation of the "look and feel" of others' software is not permissible.

 

Fair Dealing

 

No WCOR employee should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair-dealing practice.

 

Fair Competition and Antitrust Laws

 

WCOR must comply with all applicable fair competition and antitrust laws. These laws attempt to ensure that businesses compete fairly and honestly and prohibit conduct seeking to reduce or restrain competition. If you are uncertain whether a contemplated action raises unfair competition or antitrust issues, the Corporate Legal Department can assist you.

 

Securities Trading

 

It is usually illegal to buy or sell securities using material information not available to the public. Persons who give such undisclosed "inside" information to others may be as liable as persons who trade securities while possessing such information. Securities laws may be violated if you, or any relatives or friends trade in securities of WCOR, or any of its clients or vendors, while possessing "inside" information. Please see WCOR’S Insider Trading Policy for more details on this issue. If you are still uncertain, the Corporate Legal Department can assist you.

 

Political Contributions

 

No company funds may be given directly to political candidates. You may, however, engage in political activity with your own resources on your own time.

 

Retention of Business Records

 

WCOR business records must be maintained for the periods specified in the WCOR Record Retention Policy (available on the WCOR Employee Portal) or the more specific policies of your business unit. Records may be destroyed only at the expiration of the pertinent period. In no case may documents involved in a pending or threatened litigation, government inquiry or under subpoena or other information request, be discarded or destroyed, regardless of the periods specified in the Record Retention Policy. In addition, you may never destroy, alter, or conceal, with an improper purpose, any record or otherwise impede any official proceeding, either personally, in conjunction with, or by attempting to influence, another person.

 

Waivers

 

The Code of Business Conduct & Ethics applies to all WCOR employees and its Board of Directors. There shall be no waiver of any part of the Code, except by a vote of the Board of Directors or a designated committee, which will ascertain whether a waiver is appropriate and ensure that the waiver is accompanied by appropriate controls designed to protect WCOR.

 

In the event that any waiver is granted, the waiver will be disclosed as required under applicable law and regulations, and posted on the WCOR website, thereby allowing the WCOR shareholders to evaluate the merits of the particular waiver.

 

Reporting Violations

 

Your conduct can reinforce an ethical atmosphere and positively influence the conduct of fellow employees. If you are powerless to stop suspected misconduct or discover it after it has occurred, you must report it to the appropriate level of management at your location.

 

 

 

 

If you are still concerned after speaking with your local management or feel uncomfortable speaking with them (for whatever reason), you must (anonymously, if you wish) send a detailed note, with relevant documents, to World Technology Corp., Attn.: Board of Directors, 600 Brickell Ave., Suite 1775, Miami, FL 33131. Telephone: 855- 467-6500

 

Your calls, detailed notes and/or emails will be dealt with confidentially. You have the commitment of WCOR and the WCOR Board of Directors that you will be protected from retaliation.

 

No Rights Created

 

This Code of Ethics is a statement of the fundamental principles and key policies and procedures that govern WCOR’S employees in the conduct of WCOR’S business. It is not intended to and does not constitute an employment contract or assurance of continued employment, and does not create any rights to any employee, client, supplier, competitor, shareholder or any other person or entity.

 

Conclusion

 

In the final analysis you are the guardian of WCOR’S ethics. While there are no universal rules, when in doubt ask yourself:

 

·Will my actions be ethical in every respect and fully comply with the law and with WCOR policies?

·Will my actions have the appearance of impropriety?

·Will my actions be questioned by my supervisors, employees, clients, family and the general public?

·Am I trying to fool anyone, including myself, as to the propriety of my actions?

 

If you are uncomfortable with your answer to any of the above, you should not take the contemplated actions without first discussing them with your local management. If you are still uncomfortable, please follow the steps outlined above in the Section on "Reporting Violations."

Any employee who ignores or violates any of WCOR’S ethical standards, and any manager who penalizes a subordinate for trying to follow these ethical standards, will be subject to corrective action, including immediate dismissal. However, it is not the threat of discipline that should govern your actions. We hope you share our belief that a dedicated commitment to ethical behavior is the right thing to do, is good business, and is the surest way for WCOR to become and remain a world class company.

 

 

 

 

Exhibit 23.1

 

 

 

 

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

We hereby consent to the inclusion in this registration statement on Form S-1/A No. 2 of our report dated May 2, 2018 relating to the consolidated financial statements of World Technology Corp. and Subsidiary (formerly, World Media & Technology Corp. and Subsidiary) as of December 31, 2017 and 2016, and for the years then ended.

 

We also consent to the reference to our firm under the caption “Experts” in such registration statement.

 

/s/ Wei, Wei & Co., LLP

 

Flushing, New York

July 13, 2018

 

 

 

 

 



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