Item 1.01 Entry into a Material Definitive Agreement.
Effective January 15, 2021 (the "Effective Date"), CipherLoc Corporation (the
"Company") entered into a Settlement Agreement and Mutual General Release (the
"Settlement Agreement") with the Carmel Trust (the "Trust"), the Carmel Trust II
("Trust II"), James LaGanke, individually ("LaGanke") and as Trustee of both the
Trust and Trust II ("Trustee," and collectively with the Trust, Trust II, and
LaGanke, the "Carmel Parties"). The Settlement Agreement relates to the action
titled CipherLoc Corporation vs. Michael De La Garza, MSR, LLC, and James
LaGanke, as CipherLoc Corporation vs. Michael De La Garza, MSR, LLC, and James
LaGanke, as Trustee of the Carmel Trust II, Civil Action No. 1:19-CV-01147-LY,
currently pending in United States District Court for the Western District of
Texas, Austin Division. Under the Settlement Agreement, the foregoing action is
to be dismissed with prejudice.
Pursuant to the Settlement Agreement, the Carmel Parties agreed to, among other
things, the return of (i) 1,000,000 shares of Series A Preferred Stock of the
Company, par value $0.01 per share (the "Preferred Stock"), and (ii) 127,500
shares of the Company's common stock, $0.01 par value per share (together with
the Preferred Stock, the "Forfeited Stock"), held by the Carmel Parties to the
Company's treasury. The Company agreed to pay the Carmel Parties an aggregate
sum of $50,000 (the "Settlement Amount") payable on or before fifteen (15)
business days after (i) the execution of the Settlement Agreement by the Carmel
Parties, (ii) actual receipt by the Company of the Forfeited Stock and
consummation of the deliveries contemplated by the Settlement Agreement, and
(iii) the receipt by the Company of a completed Internal Revenue Service form
W-9 from both LaGanke and his law firm.
In exchange for the consideration described above, and subject to the terms and
conditions set forth in the Settlement Agreement, the Company and the Carmel
Parties mutually agreed to grant each other a general release.
The foregoing description of the Settlement Agreement is qualified in its
entirety by reference to the text of such agreement, which is filed as Exhibit
10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On January 19, 2021, Zeynep Young resigned as a member of the Company's board of
directors in order to take a new leadership role.
Ms. Zeynep's resignation was not the result of any disagreement with the
Company, any matter related to the Company's operations, policies or practices,
the Company's management or the Company's board of directors.
Item 8.01 Other Events.
On January 19, 2021, the Company issued a press release in connection with Ms.
Zeynep's resignation. A copy of the press release is attached hereto as Exhibit
99.1 and is incorporated herein by reference.
On January 20, 2021, the Company issued a press release in connection with the
Settlement Agreement. A copy of the press release is attached hereto as Exhibit
99.2 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number Description
10.1 Settlement Agreement, effective January 15, 2021
99.1 Press release, dated January 19, 2021
99.2 Press release, dated January 20, 2021
-2-
© Edgar Online, source Glimpses