Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On July 13, 2020, our Board of Directors filled a vacancy and appointed Michael
Kaplan to the Board of Directors. Mr. Kaplan is currently not expected to be
named as a member of any committees of our Board of Directors.
Mr. Kaplan's compensation as a director for the initial twelve months will
consist of One Million (1,000,000) Warrants which will vest at the rate of
83,333 Warrants per month for the initial eleven months and the balance in the
twelfth month, provided he is a director on each vesting date, with the initial
tranche vesting on the day he takes office and then on each monthly anniversary
of such date thereafter. Each Warrant will be exercisable for 36 months after it
vests and will be exercisable at a price of $0.18 per share. If he remains in
office beyond twelve months, commencing with month thirteen, his compensation
will be similar to the majority of the directors then in office.
Prior to Mr. Kaplan's appointment to the Board of Directors, on July 7, 2020 we
entered into (i) a Subscription Agreement with Mr. Kaplan to sell to him one
million (1,000,000) shares of Common Stock at a purchase price of $0.20 per
share for a total purchase price of $200,000, which shares shall be purchased in
twelve (12) equal monthly installments of 83,333 shares (the last installment to
cover 83,337 shares) with the initial purchase occurring on the date thereof and
subsequent instalments on each monthly anniversary thereafter (ii) a Consulting
Agreement with Mr. Kaplan to award him, as full compensation for two (2) years
of service, warrants to purchase two million (2,000,000) shares of Common Stock
at an exercise price of $0.18 per share, which was the closing price of our
common stock on such date, and (iii) an arrangement with Mr. Kaplan that in the
event he raises outside investment in the Company in the amount of $500,000 -
$2,000,000, he will receive one Warrant for each dollar he so raises.
Effective August 1, 2020 Mr. Kaplan will also have the title Chief Marketing
Officer with authority to oversee the Company's sales and marketing operations,
and responsibility for developing oversight processes and procedures.
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