Item 2.01 Completion of Acquisition or Disposition of Assets.
On December 17, 2021, we entered into a Stock Purchase Agreement (the
"Agreement") with CareClix Holdings, Inc., a Florida corporation ("SOLI"). On
December 31, 2031, under the terms of a Management Operating Agreement, we
agreed to a partial closing of the transaction set forth in the SPA (the
"Transaction") with the final closing to occur on the effectiveness of a
registration statement for the shares to be issued as part of the consideration.
In the partial closing, we acquired 100% ownership of the operating subsidiaries
of SOLI, which include CareClix, Inc., a Virginia corporation, CareClix
Services, Inc., a Florida corporation, MyCareClix, Inc., a Florida corporation,
and CareClix RPM, Inc., a Florida corporation (collectively, the "CareClix
Group"). In exchange for ownership of the CareClix Group, we will issue the
following securities to the common shareholders of SOLI:
50,000,000 shares of our common stock; and shares of a new class of preferred
stock to be designated as Series E Preferred Stock. The shares of Series E
Preferred stock to be designated and issued to the shareholders of CareClix
shall be up to approximately 2,100,000 Series E Preferred shares with a
convertibility ratio, under the current share structure, of 100 to 1 into our
shares of common stock with conversion occurring automatically when our Articles
of Incorporation have been amended to authorize sufficient common shares for the
conversion.
4,000,000 shares of our Series A Preferred Stock, over a period of time, to Mr.
Charles Scott, the Chairman and majority shareholder of SOLI, with 2,500,000
shares issued at the December 31, 2021 partial closing, 600,000 shares to be
issued 45 days after closing, and 900,000 shares to be issued 90 days after
closing. Shares of our Series A Preferred Stock, which are not convertible and
do not receive dividends, are entitled to cast 50 votes per share on all matters
submitted to the vote or consent of our shareholders.
Upon the final closing of the Transaction, the former shareholders of SOLI will
hold approximately seventy percent of our issued and outstanding common equity
on a fully diluted basis and will hold the majority of our total shareholder
voting power.
The final closing of the Transaction is subject to the effectiveness of a
registration statement on Form S-4 to be filed registering the issuance of our
shares of common stock and shares of Series E Preferred Stock to the common
shareholders of CareClix. We are undertaking to file the S-4 registration
statement, which will be filed as soon as a pending audit of the financial
statements of the acquired CareClix companies is completed.
Pending the final Closing, SOLI and LFER will complete the operational changes
under the Management Operating Agreement effective December 31, 2021, so that
the CareClix Group and LFER can begin acting as a unit pending the effective
date of the S-4 registration statement and issuance by LFER of the remainder of
the agreed consideration. In the event that the final closing is not completed
by May 31, 2022, unless extended by agreement, then the partial closing will be
rescinded and the CareClix Group will be returned to SOLI.
Following the final Closing, there will be no affiliation, as shareholder,
debtor, creditor or otherwise, between SOLI and LFER
As part of the partial closing of the transaction, 2,500,000 shares of Series A
voting preferred stock of LFER were issued to the current majority shareholder
of the Company as part of the consideration.
Item 5.01 Changes in Control of Registrant
Upon the final closing of the Transaction, the former shareholders of SOLI will
hold approximately seventy percent of our issued and outstanding common equity
on a fully diluted basis and will hold the majority of our total shareholder
voting power.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
As part of the Transaction, our Board of Directors increased the size of our
Board from 4 to 7 members and the following were appointed as additional members
of our Board:
Charles O. Scott
Mr. Scott was appointed Chief Executive Officer and Chairman of SOLI on June 21,
2017 and was majority its shareholder. Mr Scott now also has majority voting
control of LFER.. Mr. Scott founded Pay Yourself First, Inc. in 2011 and
currently serves as the CEO and Chairman. Mr. Scott also serves as an Executive
Director of Kramer Stromberg Financial Holdings, a company he founded in 1985.
Mr. Scott graduated from the University of Virginia in 1976.
S. John Korangy, MD, MPH, DABR
Board Certified Neuroradiologist. Pioneer in telemedicine. Founder of the
CareClix software platform. Has formulated standards and guidelines for the
practice of telemedicine and has authored papers on telemedicine and the
implementation of virtual health on a global basis. Dr. Korangy speaks
nationally about utilizing and deploying virtual health across the practice of
medicine. Previously, Dr. Korangy served as Chief Medical Officer for United
Radiology Services and served as Department Chairman as well. He has chaired and
served on numerous committees in hospitals, medical groups, and medical
societies. Dr. Korangy completed his medical degree at the George Washington
University where he also obtained a master's in public health. He completed his
medical training at Georgetown University, as well as at the National Institutes
of Health. He lives with his family in Potomac, MD.
A third new member will be added to our Board of Directors shortly, as soon as
appropriate due diligence and consents are completed.
Item 5.03 Amendments to Articles of Incorporation or Bylaws
On December 31, 2021, our board of directors and a majority of the holders of
our Series A Preferred Stock approved an amendment to the Certificate of
Designation for Series A Preferred Stock increasing the number of authorized
shares of Series A Preferred Stock to a total of 5,200,000 shares. The purpose
of the amendment was to authorize sufficient shares of Series A Preferred Stock
to allow for the issuances required under the SPA with SOLI.
Also on December 31, 2021, our board of directors approved a Certificate of
Designation designating 2,500,000 shares as Series E Preferred Stock. After an
amendment to our Certificate of Incorporation to increase our authorized common
shares to no less than the total number of shares required to allow such
conversion, Series E Preferred Stock will convert automatically to common stock
at a ratio of 100 shares of common stock for each share of Series E Preferred
Stock. Series E Preferred Stock is entitled to vote as-if-converted to common
stock on all matters submitted to a vote or consent of our shareholders. Series
E Preferred Stock has no special dividend rights and ranks equally with our
common stock with respect to rights on liquidation, winding up and dissolution.
Item 8.01 Other Events.
On December 31, 2021, we completed a partial closing of the Transaction set
forth in the Stock Purchase Agreement ("SPA"), effective as of December 17,
2022. The initial partial closing of the Transaction with LFER, authorized the
transfer of the following subsidiaries of SOLI to LFER effective January 1,
2022:
1) CareClix Services, Inc, a Florida corporation
2) CareClix, Inc., a Virginia corporation
3) MyCareClix Inc., a Florida corporation
4) CareClix RPM, Inc., a Florida corporation
At the partial closing approved by the Board of Directors and a majority of
shareholders of SOLI, SOLI conveyed the four subsidiaries to LFER in
consideration for 4,000,000 shares of Series A voting preferred stock of LFER to
be issued directly to Charles Scott, majority shareholder of the Company and
completion of the remaining conditions to closing in the SPA, and LFER has
undertaken to issue directly to SOLI shareholders, (i) 50,000,000 common shares
of LFER to certain designated SOLI shareholders, on the basis of one LFER common
share for 50,000,000 common shares of SOLI outstanding at Closing and (ii) to
other SOLI designated shareholders, one Series E non-voting convertible
preferred share of LFER for each 100 common shares of SOLI held by the remaining
shareholders of SOLI outstanding at Closing, with convertibility of the Series E
preferred shares to equal 100 shares of our common stock for each share of such
preferred stock and with conversion occurring automatically when our Articles of
Incorporation have been amended to authorize sufficient common shares. We will
register the common .and Series E convertible preferred shares to be issued to
the SOLI shareholders and the Closing will be completed when that registration
statement is declared effective by the SEC. When the final closing has been
completed and the Series E preferred shares are converted into our common stock,
the net effect will be that each common shareholder of SOLI before the partial
closing will have received one share of our common stock for each common share
of SOLI outstanding before the Transaction. Mr. Scott, as majority shareholder
of SOLI before the partial Closing of the Transaction, will by virtue of the
Series A Preferred stock of LFER to be issued to him, be the voting majority
shareholder of LFER.
Pending the final Closing, SOLI and LFER will complete the operational changes
under a Management Operating Agreement effective December 31, 2021, so that the
CareClix subsidiaries and LFER can begin acting as a unit pending the effective
date of the S-4 registration statement and issuance by LFER of the balance of
the agreed consideration.
Item 9.01 Financial Statements and Exhibits.
9(a) Financial statements of businesses or funds acquired. The financial
statements of the four CareClix subsidiaries included in the Transaction have
been restated to a fiscal year ending May 31 from their calendar year reporting
to conform to the fiscal year of LFER and are being audited for the fiscal years
ended May 31 2019, 2020 and 2021. These audited financial statements will be
included in our Form S-4 to be filed to complete the transaction and in a
Current Report on Form 8-K to be filed following the complete closing of the
transaction on the effectiveness of our Form S-4.
9(d) Exhibits.
Exhibit No. Description
3.1 Certificate of Amendment to Certificate of Designation for Series
A Preferred Stock
3.2 Certificate of Designation for Series E Preferred Stock
10.1 Management Operating Agreement
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