UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE TO
TENDER
OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
KYTO TECHNOLOGY AND LIFE SCIENCE, INC.
(Name of Subject Company (Issuer) and Filing Person (Offeror))
WARRANTS TO PURCHASE COMMON STOCK
(Title
of Class of Securities)
501572 200
(CUSIP
Number of Common Stock Underlying Warrants)
Paul Russo
Chief Executive Officer
Kyto Technology and Life Science, Inc.
13050 La Paloma Road
Los Altos Hills, CA 94022
Telephone: 650-204-7896
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Filing Person)
WITH COPY TO:
Terence Kelly, Esq.
Anthony Epps, Esq.
Dorsey & Whitney LLP
305 Lytton Avenue
Palo Alto, CA 94301
Telephone: (650) 857-1717
CALCULATION OF FILING FEE:
| Transaction valuation(1) | Amount of filing fee(1)(2) | |
| $9,580,002 | $888.07 |
| (1) | Estimated for purposes of calculating the amount of the filing fee only. An offer to amend and exercise warrants to purchase an aggregate of 4,790,001 shares of common stock (the “Exercise Offer”). The transaction value is calculated pursuant to Rule 0-11 using $2.00 per share of common stock, which represents the average of the high and low sales price of the common stock on March 30, 2022. |
| (2) | Calculated by multiplying the transaction value by .0000927 |
| ☐ | Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number or the Form or Schedule and the date of its filing. |
| Amount Previously Paid: N/A | Filing Party: N/A | |
| Form or Registration Number: N/A | Date Filed: N/A | |
| ☐ | Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
Check the appropriate boxes below to designate any transactions to which the statement relates:
| ☐ | third party tender offer subject to Rule 14d-1. |
| ☒ | issuer tender offer subject to Rule 13e-4. |
| ☐ | going private transaction subject to Rule 13e-3. |
| ☐ | amendment to Schedule 13D under Rule 13d-2. |
Check the following box if the filing is a final amendment reporting the results of a tender offer: ☐
The alphabetical subsections used in the Item responses below correspond to the alphabetical subsections of the applicable items of Regulation M-A promulgated under the federal securities laws.
If applicable, check the appropriate box(es) below to designate the appropriate note provision(s):
| ☐ | Rule 13e-4(i) (Cross-Border Issuer Tender Offer) |
| ☐ | Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) |
TABLE OF CONTENTS
| Item 1. | SUMMARY TERM SHEET | 1 |
| Item 2. | SUBJECT COMPANY INFORMATION | 1 |
| Item 3. | IDENTITY AND BACKGROUND OF FILING PERSON | 1 |
| Item 4. | TERMS OF THE TRANSACTION | 1 |
| Item 5. | PAST CONTRACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS | 1 |
| Item 6. | PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS | 1 |
| Item 7. | SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION | 2 |
| Item 8. | INTEREST IN SECURITIES OF THE SUBJECT COMPANY | 2 |
| Item 9. | PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED | 2 |
| Item 10. | FINANCIAL STATEMENTS | 2 |
| Item 11. | ADDITIONAL INFORMATION | 2 |
| Item 12. | EXHIBITS. | 3 |
| Item 13. | INFORMATION REQUIRED BY SCHEDULE 13E-3. | 3 |
| SIGNATURE | 4 | |
EX-99(a)(1)(A)
EX-99(a)(1)(B)
EX-99(a)(1)(C)
EX-99(a)(1)(D)
EX-99(a)(5)(A)
EX-99(a)(5)(B)
EX-99(a)(5)(C)
EX-99(a)(5)(D)
EX-99(a)(5)(E)
EX-99(a)(5)(F)
EX-99(a)(5)(G)
EX-99(a)(5)(H)
| i |
| Item 1. | SUMMARY TERM SHEET |
The information under the heading “Summary of Terms” in the Offer to Amend and Exercise (the “Exercise Offer”) filed as Exhibit (a)(1)(B) to this Schedule TO is incorporated herein by reference.
| Item 2. | SUBJECT COMPANY INFORMATION |
(a) The name of the subject company (issuer) and filing person (offeror) is Kyto Technology and Life Science, Inc., a Delaware corporation (the “Company”). The address and telephone number of its principal executive offices are 13050 La Paloma Road, Los Altos Hills, CA 94022, telephone 650-204-7896.
(b) As of March 31, 2022, the Company has outstanding warrants to purchase 1,596,667 shares of the Company’s common stock issued to investors with an exercise price of $1.20 per share (the “Original Warrants”).
Pursuant to the Exercise Offer, the Original Warrants will be amended to (i) reduce the exercise price of the Original Warrants to $0.40 per share of common stock in cash for the number of shares of Company common stock issuable therefor, (ii) shorten the exercise period of the Original Warrants so that they expire concurrently with the expiration of the Exercise Offer at 5:00 p.m. (Pacific Time) May 2, 2022, as we may extend it in our sole discretion (the “Expiration Date”), (iii) contain a lock-up provision that provides that neither the holder nor any affiliate of the holder will sell dispose or otherwise transfer, directly or indirectly any of the shares of common stock issuable upon exercise of the Amended Warrants without the prior written consent of the Company for a period of three months after the Expiration Date, (iv) remove the cashless exercise provisions from those Original Warrants which include such cashless exercise provisions and (v) increase the number of shares of Company common stock issuable upon the exercise of the Original Warrant to a number that is determined by multiplying the number of shares of Company common stock issuable upon the exercise of the Original Warrant by 3. There is no minimum participation requirement with respect to the Exercise Offer.
As of March 31, 2022, the Company had: (i) 16,327,692 shares of common stock outstanding; (ii) 550,000 shares of Series A Preferred Stock outstanding; (iii) 1,437,500 shares of Series A-1 Preferred Stock outstanding; (iv) 2,212,500 shares of Series A-2 Preferred Stock outstanding; (v) 562,344 shares of Series B Preferred Stock outstanding; (vi) 1,166,406 shares of Series B-1 Preferred Stock outstanding; (vii) 2,176,250 shares of Series B-2 Preferred Stock outstanding; (viii) 3,062,500 shares of Series B-3 Preferred Stock outstanding; (ix) outstanding warrants to purchase 1,596,667 shares of common stock (including the Original Warrants); and (x) outstanding options to purchase 2,195,000 shares of common stock issued pursuant to the Company’s stock and incentive plans
(c) No trading market exists for the Original Warrants or the Amended Warrants offered pursuant to the Exercise Offer. Information about the trading market and price of the Company’s common stock under Section 12: “Trading Market of Original Warrants, Amended Warrants and Common Stock” of the Exercise Offer is incorporated herein by reference.
| Item 3. | IDENTITY AND BACKGROUND OF FILING PERSON |
(a) The Company is the filing person and the subject company. The address and telephone number of each of the Company’s executive officers and directors is c/o 13050 La Paloma Road, Los Altos Hills, CA 94022, telephone 650-204-7896.
Pursuant to General Instruction C to Schedule TO promulgated by the United States Securities and Exchange Commission (the “SEC”), the following persons are executive officers, directors and/or control persons of the Company:
Name |
Position(s) | |
| Paul M. Russo, Ph.D. | Chief Executive Officer, Director | |
| Simon Westbrook | Chief Financial Officer |
| Item 4. | TERMS OF THE TRANSACTION |
(a) Information about the terms of the transaction under the headings “Summary of Terms” and “Description of Exercise Offer” of the Exercise Offer is incorporated herein by reference.
(b) See Item 8 below for a description of the executive officers, directors and affiliates who hold Original Warrants and who will have an opportunity to participate in the Exercise Offer on the same terms and conditions as the other holders of Original Warrants.
| Item 5. | PAST CONTRACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS |
(e) Not applicable.
| 1 |
| Item 6. | PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS |
(a) The information about the purposes of the transaction under Section 2: “Purposes of the Exercise Offer and Use of Proceeds” of the Exercise Offer is incorporated herein by reference.
(b) The Company intends to cancel the Original Warrants upon the exercise of the Original Warrants by the holders thereof. Pursuant to the Exercise Offer, Original Warrants that are not so exercised will remain outstanding pursuant to their original terms.
(c) No plans or proposals described in this Schedule TO or in any materials sent to the holders of the Original Warrants in connection with this Exercise Offer relate to or would result in the conditions or transactions described in Regulation M-A, Item 1006(c)(1) through (10).
| Item 7. | SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION |
(a) The information about the source of funds under Section 13: “Source and Amount of Funds” of the Exercise Offer is incorporated herein by reference.
(b) Not applicable.
(d) Not applicable.
| Item 8. | INTEREST IN SECURITIES OF THE SUBJECT COMPANY |
(a) As of March 31, 2022, there are outstanding Original Warrants to purchase an aggregate of 1,596,667 shares of common stock which are subject to this Exercise Offer. The Company’s executive officers, directors and control persons, as described below, hold the following Original Warrants and will be entitled to participate in the Exercise Offer on the same terms and conditions as the other holders of Original Warrants:
| Name | Position with the Company | Number of Original Warrants Held | Percentage of Original Warrants Held | |||||||||
| None | ||||||||||||
Except as set forth above, none of the Company’s other executive officers or directors hold Original Warrants.
| Item 9. | PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED |
(a) The Company may use the services of its officers and employees to solicit holders of the Original Warrants to participate in the Exercise Offer without additional compensation.
| Item 10. | FINANCIAL STATEMENTS |
(a) The financial information required by Item 1010(a) is included under Section 15 “Information Regarding Kyto Technology and life Science, Inc.” of the Exercise Offer, and as amended and supplemented, is incorporated by reference.
(b) The pro forma financial information required by Item 1010(b) is included under Section 16 “Accounting Consequences of the Exercise Offer” of the Exercise Offer, as amended and supplemented, and is incorporated by reference.
| Item 11. | ADDITIONAL INFORMATION |
(a) (1) There are no present or proposed contracts, arrangements, understandings or relationships between the Company and its executive officers, directors or affiliates relating, directly or indirectly, to the Exercise Offer.
(2) There are no applicable regulatory requirements or approvals needed for the Exercise Offer.
(3) There are no applicable anti-trust laws.
(4) The margin requirements of Section 7 of the Securities Exchange Act of 1934, as amended, and the applicable regulations are inapplicable.
(5) None.
(c) None.
| 2 |
| Item 12. | EXHIBITS. |
The following are attached as exhibits to this Schedule TO:
| (a) | (1)(A) | Letter to Holders of Original Warrants |
| (1)(B) | Offer to Amend and Exercise Warrants to Purchase Common Stock |
| (1)(C) | Form of Election to Participate |
| (1)(D) | Form of Notice of Withdrawal |
| (5)(A) | Annual Report on Form 10-K, as amended, containing audited financial statements for the fiscal years ended March 31, 2021, 2020 and 2019(as filed with the SEC on August 10, 2022 and amended on August 12, 2022 and incorporated herein by reference) |
| (5)(B) | Report on Form 10-Q for the quarter ended December 31, 2021 (as filed with the SEC on February 2, 2022 and incorporated herein by reference) |
(b) Not applicable.
(d) Not applicable.
(g) None.
(h) None.
| Item 13. | INFORMATION REQUIRED BY SCHEDULE 13E-3. |
Not Applicable.
| 3 |
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
| KYTO TECHNOLOGY AND LIFE SCIENCE, INC. | ||
| Date: March 31, 2022 | By: | /s/ Paul Russo |
| Name: | Paul Russo | |
| Title: | Chief Executive Officer | |
| 4 |
Exhibit (a)(1)(A)
[Company Letterhead]
Kyto
Technology and Life Science, Inc.
13050 La Paloma Road
Los Altos Hills, CA 94022
Telephone: 650-204-7896
April 1, 2022
To the Holders of the Original Warrants,
Kyto Technology and Life Science, Inc. (“we” or the “Company”) is offering you, as a holder of certain warrants to purchase common stock of the Company (the “Original Warrants”), the opportunity to amend and exercise such Original Warrants (i) at an exercise price of $0.40 per share of common stock in cash for the number of shares of Company common stock issuable therefor and (ii) for an increased number of shares of Company common stock equal to a number that is determined by multiplying the number of shares of Company common stock issuable upon the exercise of the Original Warrant multiplied by 3 subject to the terms and conditions set forth in the enclosed “Offer to Amend and Exercise Warrants to Purchase Common Stock of Kyto Technology and Life Science, Inc.” dated as of the date of this letter (the “Offer”) and prior to the Expiration Date (as defined below). All terms not defined in this letter shall have the meanings set forth in the Offer.
If any of the Original Warrants you hold include cashless exercise provisions, those Original Warrants will be amended to remove the cashless exercise provisions, and you will be required to pay the exercise price of your Original Warrants in cash.
The Amended Warrants will also contain a lock-up provision that provides that neither the holder nor any of its affiliates will sell dispose or otherwise transfer, directly or indirectly, any of the shares of common stock issuable upon exercise of the Amended Warrants without our prior written consent for a period of three months after the Expiration Date (as defined below).
The purposes of the Offer are to (1) encourage the participating holders to exercise the Original Warrants by significantly reducing both the exercise price and the exercise period of the Original Warrants, which will help us raise funds to support our operations and (2) reduce the number of outstanding warrants. We plan to use the funds obtained to fund our operations, including our reorganization as an “investment company” under the Investment Company Act of 1940 (the “Investment Company Act”), investment in early stage start-ups and other general corporate purposes.
The enclosed Offer together with the enclosed Election to Participate (including the instructions and other forms attached thereto) and Notice of Withdrawal constitute the “Offering Materials.” The Offering Materials provide important information regarding the Offer and instructions as to how you can participate and amend and exercise your Original Warrants. You should read all of the Offering Materials carefully before you decide whether to amend and exercise any of your Original Warrants. Also, please note that there is no minimum participation requirement on your part with respect to this Offer. Participation in this Offer requires both amendment of your Original Warrants and your exercise of the Amended Warrants, which will happen simultaneously should you choose to participate.
To amend and exercise an Original Warrant, you must deliver to us prior to the expiration of the Offer to Amend and Exercise, which is 5:00 p.m. (Pacific time) on May 2, 2022, as may be extended by us in our sole discretion (the “Expiration Date”): (i) a signed Election to Participate, (ii) a signed Acknowledgements and Representations and Warranties and (iii) a signed Accredited Investor Questionnaire, along with (iv) the aggregate exercise price in cash in the amount equal to $0.40 per share multiplied by the number of shares of common stock you elect to purchase. The cash exercise price may be tendered in the form of a check payable to Kyto Technology and Life Science, Inc. or by wire transfer to our account as set forth in the instructions to the Election to Participate. These items must be properly delivered, before the Expiration Date, to us at our corporate address indicated above or by email at legal@kytotech.com.
If you send your Election to Participate and subsequently change your mind and do not want to participate in the Offer, you may submit a Notice of Withdrawal to us at any time prior to the Expiration Date. The Notice of Withdrawal must be properly completed and must be returned to us on or prior to the Expiration Date. If you properly withdraw prior to the Expiration Date, we will return promptly your aggregate exercise price.
Thank you for your time in reviewing this opportunity.
| Very truly yours, | ||
| KYTO TECHNOLOGY AND LIFE SCIENCE, INC. | ||
| By: | /s/ Paul Russo | |
| Name: | Paul Russo | |
| Title: | Chief Executive Officer | |
Exhibit (A)(1)(B)
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE TRANSACTION CONTEMPLATED HEREIN; PASSED UPON THE MERITS OR FAIRNESS OF THE TRANSACTION; OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
OFFER
TO AMEND AND EXERCISE
WARRANTS TO PURCHASE COMMON STOCK
KYTO TECHNOLOGY AND LIFE SCIENCE, INC.
April 1, 2022
THE OFFER TO AMEND AND EXERCISE (AND ASSOCIATED WITHDRAWAL RIGHTS) WILL EXPIRE AT 5:00 P.M. (PACIFIC TIME) ON MAY 2, 2022 UNLESS THIS OFFER PERIOD IS EXTENDED.
Kyto Technology and Life Science, Inc., a Delaware corporation, is referred to in this Offer to Amend and Exercise as “we,” “us,” “Kyto” or the “Company,” and eligible holders of outstanding warrants are referred to as “you.”
We are offering to amend, upon the terms and subject to the conditions set forth herein, outstanding warrants to purchase up to an aggregate of 4,790,001 shares of common stock (the “Exercise Offer”), including outstanding warrants to purchase 1,596,667 shares of common stock with an exercise price of $1.20 per share and expiration date three years after August 29, 2019 (the “Original Warrants”).
The Original Warrants represent all of our outstanding series of warrants.
There is no minimum participation requirement with respect to this Exercise Offer.
Pursuant to the Exercise Offer, the Original Warrants will be amended (the “Amended Warrants”) to: (i) reduce the exercise price of the Original Warrants to $0.40 per share of common stock in cash for the number of shares of Company common stock issuable therefor, (ii) shorten the exercise period of the Original Warrants so that they expire concurrently with the expiration of the Exercise Offer at 5:00 p.m. (Pacific Time) on May 2, 2022 as we may extend it in our sole discretion (the “Expiration Date”), (iii) contain a lock-up provision that provides that neither the holder nor any affiliate of the holder will sell dispose or otherwise transfer, directly or indirectly any of the shares of common stock issuable upon exercise of the Amended Warrants without the prior written consent of the Company for a period of three months after the Expiration Date, (iv) remove the cashless exercise provisions from those Original Warrants which include such cashless exercise provisions and (v) increase the number of shares of Company common stock issuable upon the exercise of the Original Warrant to a number that is determined by multiplying the number of shares of Company common stock issuable upon the exercise of the Original Warrant by 3. Other than set forth above, the terms of the Original Warrants will remain unmodified and in full force and effect.
Holders may elect to amend some or all of their Original Warrants. If you choose not to participate in the Exercise Offer, your Original Warrants will remain in full force and effect, as originally issued.
The purpose of the Exercise Offer is to encourage the amendment and exercise of the Original Warrants to fund our operations, including our reorganization as an “investment company” under the Investment Company Act, investment in early stage start-ups and other general corporate purposes. We intend to accomplish this by providing the holders of the Original Warrants with the opportunity to obtain and exercise an Amended Warrant at a significantly reduced exercise price, as compared to the Original Warrants. Please see Section 2 “Purposes of the Exercise Offer and Use of Proceeds” below for a description of the purposes of the Exercise Offer.
The period during which Original Warrants may be amended and exercised on the terms described above will commence on April 1, 2022 (the date the materials relating to the Exercise Offer are first sent to the holders, referred to herein as the “Offer Date”) through the Expiration Date (the “Offer Period”).
We will agree to amend any or all Original Warrants held by eligible holders, upon the terms and subject to the conditions of the Exercise Offer and the attached Election to Participate (the “Election Form”).
THE DATE OF THIS EXERCISE OFFER IS April 1, 2022.
IMPORTANT PROCEDURES
This Exercise Offer together with the Election Form (including the instructions and other forms attached thereto) and Notice of Withdrawal constitute the “Offering Materials.” These Offering Materials provide important information regarding the Exercise Offer and instructions as to how you can participate and amend and exercise your Original Warrants. An election to participate in the Exercise Offer will result in both the amendment of your Original Warrant(s) and your exercise of the Amended Warrant(s). You should read all of the Offering Materials carefully before you decide whether to participate in the Exercise Offer, exercise an Amended Warrant and receive the number of shares of common stock issuable therefor.
To participate in the Exercise Offer, and to exercise an Amended Warrant and receive one and one half times the number of shares of Company common stock issuable therefor, you must deliver to us, before the Expiration Date, all of the following: (i) a signed Election Form, (ii) a signed Acknowledgements and Representations and Warranties and (iii) a signed Accredited Investor Questionnaire, along with (iv) the aggregate exercise price in cash in the amount equal to the number of shares of Company common stock issuable upon exercise of the Original Warrants the holder elects to exercise multiplied by $0.40 per share (collectively, the “Acceptance and Exercise Documents”). We do not view the representations and warranties to be made by warrant holders tendering their warrants that they have “reviewed the current business prospects, financial condition and operating history of the Company,” “had the opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the Exercise Offer,” and “received all the information they consider necessary or appropriate for deciding whether to accept the Exercise Offer” as a waiver of any potential liability that we may have under federal securities laws, and we agree not to assert that these provisions constitute a waiver of any such liability if a claim is made against us. The cash may be tendered in the form of a check payable to Kyto Technology and Life Science, Inc. or by wire transfer to our account as set forth in the instructions to the Election Form. Each of these items must be properly delivered, before the Expiration Date, to us at our corporate address:
Kyto Technology and Life Science, Inc.
13050 La Paloma Road
Los Altos Hills, CA 94022
Telephone: 650-204-7896
Email: legal@kytotech.com
If you properly tender (and do not validly withdraw) your Original Warrants and the other Acceptance and Exercise Documents on or prior to 5:00 p.m., Pacific Time on May 2, 2022, the Expiration Date of the Exercise Offer (or such later date and time if we extend the Exercise Offer), promptly following the Expiration Date, we intend to notify our transfer agent of our acceptance of your payment of the exercise price and your other Acceptance and Exercise Documents and issue and deliver to you the number of shares of common stock issuable under the Amended Warrant, as well as a replacement Original Warrant for any unexercised portion thereof. See Section 8 “Procedure for Participating in Exercise Offer and Exercising Amended Warrants” below.
If after tendering your Original Warrants and other Acceptance and Exercise Documents you change your mind and do not want to participate in the Exercise Offer, you may submit a Notice of Withdrawal to us at any time prior to the Expiration Date. The Notice of Withdrawal must be properly completed and must be returned to us on or prior to the Expiration Date. If you properly withdraw in a timely manner as set forth above, we will promptly: (i) cancel your signed copy of the Election Form and (ii) provide you with a check equal to the amount of cash you paid to exercise the Amended Warrant.
You may request additional copies of this document and any of the Offering Materials from us directly at our corporate address indicated above.
OUR BOARD OF DIRECTORS MAKES NO RECOMMENDATION AS TO WHETHER OR NOT YOU SHOULD PARTICIPATE IN THE EXERCISE OFFER. YOU MUST MAKE YOUR OWN DECISION WITH RESPECT TO THE EXERCISE OFFER. FOR QUESTIONS REGARDING TAX IMPLICATIONS OR OTHER INVESTMENT-RELATED QUESTIONS, YOU SHOULD TALK TO YOUR OWN ATTORNEY, ACCOUNTANT AND/OR FINANCIAL PLANNER.
WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR BEHALF AS TO WHETHER OR NOT YOU SHOULD PARTICIPATE IN THE EXERCISE OFFER. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS DOCUMENT.
THIS EXERCISE OFFER HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF HOLDERS OF ORIGINAL WARRANTS. DISTRIBUTION OF THIS EXERCISE OFFER TO ANY PERSON OTHER THAN SUCH HOLDERS AND THOSE PERSONS RETAINED TO ADVISE SUCH HOLDERS IS UNAUTHORIZED, AND ANY REPRODUCTION OF THIS EXERCISE OFFER OR RELATED DOCUMENTS, IN WHOLE OR IN PART, IS PROHIBITED.
CERTAIN OF THE SECURITIES BEING OFFERED PURSUANT TO THIS EXERCISE OFFER ARE BEING OFFERED PURSUANT TO EXEMPTIONS PROVIDED BY SECTION 4(a)(2) OF THE SECURITIES ACT OF 1933, AS AMENDED, REGULATION D THEREUNDER, CERTAIN STATE SECURITIES LAWS AND CERTAIN RULES AND REGULATIONS PROMULGATED THEREUNDER.
| -i- |
TABLE OF CONTENTS
| -ii- |
| Company: | Kyto Technology and Life Science, Inc., a Delaware corporation, with principal executive offices at 13050 La Paloma Road, Los Altos Hills, CA 94022. | |
| Eligible Original Warrants: | An aggregate of up to 1,596,667 outstanding Original Warrants, representing all of our outstanding series of warrants. | |
| Expiration Date: | 5:00 p.m., Pacific Time on May 2, 2022, as may be extended by us in our sole discretion. | |
| Terms of Amended Warrants: | Pursuant to the Exercise Offer, if the offer is accepted, the Original Warrants will be amended as described below:
New Exercise Price: The exercise price of the Original Warrants will be amended to $0.40 per share of common stock in cash for the number of shares of Company common stock issuable therefor.
New Termination Date: The termination date of the Original Warrants will be shortened to terminate concurrently with the Expiration Date for those warrants that are exercised, and will remain unchanged for unexercised warrants.
Lock-Up Period: The Amended Warrants will contain a lock-up provision that provides that neither the holder nor any affiliate of the holder which (x) had or has knowledge of the transactions contemplated by this Exercise Offer, (y) has or shares discretion relating to such holder’s investments or trading or information concerning such holder’s investments or (z) is subject to such holder’s review or input concerning such affiliate’s investments or trading (collectively, the “Affiliates”) will sell dispose or otherwise transfer, directly or indirectly (including, without limitation, any sales, short sales, swaps or any derivative transactions that would be equivalent to any sales or short positions) any of the shares of common stock issuable upon exercise of the Amended Warrants without the prior written consent of the Company for a period of three months after the Expiration Date. In addition, the Company may impose stop-transfer restrictions to enforce these restrictions and place a legend on any certificate representing the shares issued upon exercise of the Amended Warrants.
Removal of Cashless Exercise: Those Original Warrants which contain cashless exercise provisions will be amended to remove such provisions, and holders of those Original Warrants will be required to pay the exercise price of their Original Warrants in cash.
Increase Warrant Shares: The number of shares of Company common stock issuable upon the exercise of the Original Warrants shall be increased to a number equal to a number determined by multiplying the number of shares of Company common stock issuable upon the exercise of the Original Warrant by 3.
Other Terms: Except as set forth above, all other terms of the Amended Warrants will be the same as the terms of the Original Warrants. | |
| Partial Participation Permitted: | If Original Warrant holders choose to participate in the Exercise Offer, they may amend and exercise any or all of their Original Warrants pursuant to the terms of the Exercise Offer. We will issue a new Original Warrant exercisable for that number of shares of common stock that a holder elects to exclude from its acceptance of the Exercise Offer. |
| -1- |
| Conditions: | The Exercise Offer is subject to certain conditions, as described herein:
(i) As part of the Election Form, the holders of the Original Warrants must complete an Accredited Investor Questionnaire. In addition, as part of the Election Form, the holders of the Original Warrants are asked to make certain representations and warranties upon which the Company will rely in establishing that the transactions contemplated by the Exercise Offer are exempt from the registration requirements of the Securities Act and applicable state securities laws. The holders of the Original Warrants previously made substantially the same representations and warranties to the Company, including representations that they were “accredited investors,” in connection with the transactions in which such holders acquired the Original Warrants.
If you wish to participate in the Exercise Offer, but you are not able to make any of the representations set forth on page 2 of the Acknowledgements and Representations and Warranties, please reach out to us directly at our corporate address indicated in “Section 23. Information Requests” on page 25 to inform us which ones you are not able to make and why. Holders of the Original Warrants are not prohibited from tendering their Original Warrants, even if such holders are unable to make these representations and warranties and complete an Accredited Investor Questionnaire, including a representation that such holders are currently “accredited investors.”
If we receive a completed Accredited Investor Questionnaire from any holder that desires to participate indicating that such holder is no longer an “accredited investor,” then we will file and distribute to all holders of Original Warrants certain supplemental disclosures required by Regulation D under the Securities Act, which are not currently included in this Exercise Offer. In that case, we would extend the Expiration Date of the Exercise Offer, as required under the Exchange Act and the rules of the SEC thereunder.
In addition, if we determine, after reviewing the representations and warranties and Accredited Investor Questionnaires of all participating warrant holders, that a valid exemption is not available from the registration requirements of applicable federal and/or state securities laws, then we may determine that it is necessary to cancel the Exercise Offer in its entirety, and not to consummate any of the contemplated transactions, in order to comply with the requirements of applicable securities laws. In that case, all exercise payments previously received would be promptly returned to participating warrant holders, along with all Original Warrants, unexercised and outstanding pursuant to their original terms.
(ii) In addition, we are not making this Exercise Offer to, nor will we accept any Election Form from or on behalf of, Original Warrant holders in any jurisdiction in which the Exercise Offer or the exercise of the Amended Warrants would not be in compliance with the laws of such jurisdiction.
You may not elect to amend but not exercise your Original Warrants. Participation in this Exercise Offer requires both amendment of your Original Warrants and your exercise of the Amended Warrants, which will happen simultaneously should you choose to participate.
Original Warrants of holders that elect not to participate and exercise will remain outstanding pursuant to their original terms. | |
| Future Amendments to the Exercise Offer: | If we materially change the terms of the Exercise Offer we will extend the Expiration Date to the extent required under applicable law, including under the rules of the Exchange Act. | |
| How to Participate in the Exercise Offer: | To participate in the Exercise Offer and exercise an Amended Warrant and receive one and one half times the number of shares of Company common stock issuable therefor, you must deliver to us, before the Expiration Date, all of the Acceptance and Exercise Documents. The cash exercise price may be tendered in the form of a check payable to Kyto Technology and Life Science, Inc. or by wire transfer to our account as set forth in the instructions to the Election Form. All of the Acceptance and Exercise Documents must be properly delivered, before the Expiration Date, to us at our corporate address: |
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Kyto Technology and Life Science, Inc.
13050 La Paloma Road
Los Altos Hills, CA 94022
Email: legal@kytotech.com
Telephone: 650-204-7896
| Manner of Acceptance of Payment: | If you properly tender (and do not validly withdraw) your Original Warrants and the other Acceptance and Exercise Documents on or prior to 5:00 p.m., Pacific Time on May 2, 2022, the Expiration Date of the Exercise Offer (or such later date and time if we extend the Exercise Offer), promptly following the Expiration Date, we intend to notify our transfer agent of our acceptance of your payment of the exercise price and your other Acceptance and Exercise Documents and issue and deliver to you the number of shares of common stock issuable under the Amended Warrant as well as a replacement Original Warrant for any unexercised portion thereof. See Section 8 “Procedure for Participating in Exercise Offer and Exercising Amended Warrants” below. | |
| Withdrawal Rights: | If after tendering your Original Warrants and other Acceptance and Exercise Documents you change your mind and do not want to participate in the Exercise Offer, you may submit the Notice of Withdrawal to us. However, to be effective, the Notice of Withdrawal must be properly completed and must be returned to us prior to 5:00 p.m., Pacific Time May 2, 2022, the Expiration Date of the Exercise Offer (or such later date and time if we extend the Exercise Offer). Following the Expiration Date, you cannot withdraw your Election Form.
If you properly withdraw in a timely manner as set forth above, we will promptly: (i) cancel your signed copy of the Election Form and (ii) provide you with a check equal to the amount of cash you paid to exercise the Amended Warrant. | |
| Purposes of the Exercise Offer and Use of Proceeds: | The purposes of this Exercise Offer are as follows:
Fund Raising: Through the Exercise Offer we can raise funds to support our future operations and capital requirements by encouraging the participating holders to exercise their Original Warrants by significantly reducing the exercise price and shortening the exercise period. If all holders participate in the Exercise Offer and exercise an Amended Warrant, we would raise gross proceeds of approximately $1,916,000.40. The funds obtained will be used to fund our operations, including our reorganization as an “investment company” under the Investment Company Act, investment in early stage start-ups and other general corporate purposes.
Reduction of Share Overhang from Outstanding Warrants: In addition, the Exercise Offer can help us reduce the number of outstanding warrants. As of March 31, 2022, we had total outstanding warrants to purchase an aggregate of 1,596,667 shares of common stock at an amended weighted average exercise price of $1.20 per share. The sale of substantial amounts of our common stock upon exercise of outstanding warrants, or the perception that significant sales may occur in the future, could adversely affect the market price of our common stock and our ability to raise additional capital in the future. | |
| Resales of Warrant Shares: | The Original Warrants and the Amended Warrants are “restricted securities.” Restricted securities may not be sold by the holder absent registration, or an exemption from the registration requirements, under the Securities Act and the applicable securities laws of any other state or jurisdiction.
Since the Original Warrants were not issued in a registered direct offering, and the underlying shares of common stock are not the subject of a resale prospectus with respect thereto, the holder thereof will not be able to resell the shares of common stock issuable upon exercise of the related Amended Warrant, unless we file a registration statement (or a post-effective amendment to a Resale Registration Statement) to include such holder as a selling stockholder thereunder, except to the extent that such resale qualifies for an exemption from registration requirements under applicable securities laws, which may require a holding period of at least three months following the consummation of this Exercise Offer.
There is no established trading market for the Original Warrants or the Amended Warrants, and we do not intend to list the Original Warrants or the Amended Warrants for trading on any exchange or market.
In addition to the foregoing, the shares of common stock issuable upon exercise of the Amended Warrants will be subject to a contractual lock up restriction for a three-month period following the Expiration Date, as described under “Terms of Amended Warrants” above. |
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| Taxes: | We recommend that you consult with your own tax advisor with regard to the possibility of any federal, state, local or other tax consequences of the Exercise Offer. See Section 19 “Material U.S. Federal Income Tax Consequences” below for a discussion of the material U.S. federal income tax consequences of participating in the Exercise Offer. | |
| Interests of Directors and Executive Officers: | Certain of our directors and executive officers hold Original Warrants and may participate in the Exercise Offer on the same terms and conditions as the other holders of the Original Warrants. Please see Section 17 “Interests of Directors and Officers in the Exercise Offer” below. | |
| Historical and Pro Forma Financial Information | We have included our financial statements for the fiscal years ended March 31, 2021 and 2020 and for the quarterly period ended December 31, 2021 in this Exercise Offer. We have also included pro forma information reflecting the effect of the Exercise Offer. See Section 15 “Information about Kyto Technology and Life Science, Inc.” and Section 16 “Accounting Consequences of the Exercise Offer” below. | |
| Additional Information: | We have filed with the SEC a Tender Offer Statement on Schedule TO of which this Exercise Offer is a part. This Exercise Offer does not contain all of the information contained in the Schedule TO and the exhibits to the Schedule TO. We recommend that holders of the Original Warrants review the Schedule TO, including the exhibits, as well as the other materials that we have filed with the SEC, which can be accessed electronically on the SEC’s website at www.sec.gov, before making a decision on whether to participate in the Exercise Offer.
Our Board of Directors recognizes that the decision to participate in the Exercise Offer is an individual one that should be based on a variety of factors. The holders of the Original Warrants should consult with their respective professional advisors if they have questions about their financial or tax situation. The information about this Exercise Offer from us is limited to the Offering Materials.
We are subject to the information requirements of the Exchange Act and in accordance therewith file and furnish reports and other information with the SEC. All reports and other documents that we have filed with the SEC, including the Schedule TO relating to the Exercise Offer, or will file with the SEC in the future, can be accessed electronically on the SEC’s website at www.sec.gov. | |
| Information Requests: | Please direct questions or requests for assistance regarding this Exercise Offer, the Election Form, the Notice of Withdrawal or the other Offering Materials, in writing, to us at our corporate address: | |
Kyto Technology and Life Science, Inc. 13050 La Paloma Road Los Altos Hills, CA 94022 Email: legal@kytotech.com Telephone: 650-204-7896 |
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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS EXERCISE OFFER. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE INFORMATION DIFFERENT FROM THAT CONTAINED OR INCORPORATED BY REFERENCE IN THIS EXERCISE OFFER AND, IF PROVIDED, SUCH INFORMATION MUST NOT BE RELIED UPON.
ALTHOUGH OUR BOARD OF DIRECTORS HAS APPROVED THE EXERCISE OFFER, NEITHER THE COMPANY, ITS DIRECTORS, OFFICERS, ADVISORS OR AGENTS MAKES ANY RECOMMENDATION AS TO WHETHER YOU SHOULD ACCEPT THE EXERCISE OFFER. YOU SHOULD NOT CONSIDER THE BOARD’S APPROVAL TO BE A RECOMMENDATION AS TO WHETHER YOU SHOULD PARTICIPATE IN THE EXERCISE OFFER WARRANTS. YOU MUST MAKE YOUR OWN DECISION WHETHER TO ACCEPT THE EXERCISE OFFER.
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Investment in our common stock involves a substantial degree of risk and should be regarded as speculative. As a result, the purchase of our common stock should be considered only by persons who can reasonably afford to lose their entire investment. Before you elect to participate in the Exercise Offer, you should carefully consider the risks and uncertainties described below in addition to the other information in this Exercise Offer and other information incorporated herein by reference. You should also consider the risks, uncertainties and assumptions discussed under the heading “Risk Factors” included in our most recent annual report on Form 10-K, as amended, which is on file with the SEC and is incorporated herein by reference, and which may be amended, supplemented or superseded from time to time by other reports we file with the SEC in the future. Please see Section 22: “Additional Information” below for information about where to find such reports.
Additional risks and uncertainties of which we are unaware or which we currently believe are immaterial could also materially adversely affect our business, financial condition or results of operations. In any case, the trading price of our common stock could decline, and you could lose all or part of your investment. Please also read carefully Section 1 “Forward-Looking Statements” below.
Risks related to the Exercise Offer.
Our Board of Directors makes no recommendation with regard to whether you should accept the Exercise Offer.
Although our Board of Directors has approved the Exercise Offer, it makes no recommendation as to whether holders of Original Warrants should accept the Exercise Offer. We have not retained and do not intend to retain any unaffiliated representative to act solely on behalf of the holders of Original Warrants for purposes of negotiating the terms of the Exercise Offer. We cannot assure you that the value of the shares issued upon exercise of the Amended Warrants will in the future equal or exceed the exercise price per share of the Amended Warrants. We do not take a position as to whether you ought to participate in the Exercise Offer.
If you choose to participate in the Exercise Offer, you will be required to exercise your Amended Warrants for common stock, and you will be subject to all the risks associated with being a stockholder and give up the time value attributable to your Original Warrant.
The Amended Warrants will terminate if the holders do not exercise their Amended Warrants prior to the Expiration Date. If you choose to participate in the Exercise Offer, you will be required to exercise your Amended Warrants prior to the Expiration Date. As a result, you will be subject to all the risks and uncertainties set forth in these risk factors as a holder of our common stock. In addition, you will be giving up the time value attributable to your Original Warrant by exercising the Original Warrant, as amended, prior to its original expiration date.
The shares of common stock issuable upon exercise of the Amended Warrants will be “restricted securities.”
The shares of common stock issuable upon exercise of the Amended Warrants will be, “restricted securities.” Restricted securities may not be sold by the holder absent registration, or an exemption from the registration requirements, under the Securities Act and the applicable securities laws of any other state or jurisdiction. There is no established trading market for the Original Warrants or the Amended Warrants.
Since the Original Warrants were not issued in a registered direct offering, and the underlying shares of common stock are not the subject of a resale prospectus with respect thereto, the holder thereof will not be able to resell the shares of common stock issuable upon exercise of the related Amended Warrant, unless we file a registration statement (or a post-effective amendment to a Resale Registration Statement) to include such holder as a selling stockholder thereunder, except to the extent that such resale qualifies for an exemption from registration requirements under applicable securities laws, which may require a holding period of at least six months following the consummation of this Exercise Offer.
All of the shares of common stock issuable upon exercise of the Amended Warrants will be subject to a three-month contractual lock-up period.
The Amended Warrants will contain a lock-up provision that provides that neither the holder nor any of its Affiliates will sell dispose or otherwise transfer, directly or indirectly (including, without limitation, any sales, short sales, swaps or any derivative transactions that would be equivalent to any sales or short positions) any of the shares of common stock issuable upon exercise of the Amended Warrants without the prior written consent of the Company for a period of three-months after the Expiration Date. In addition, the Company may impose stop-transfer restrictions to enforce these restrictions and place a legend on any certificate representing the shares issued upon exercise of the Amended Warrants.
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Because we do not have any formal commitments from any of our warrant holders to participate in this Exercise Offer, we may not receive substantial proceeds from the exercise of warrants in this Exercise Offer, and the proceeds we do receive may not be sufficient to fund our business operations.
We do not have any binding commitments from any of our warrant holders to participate in this Exercise Offer, and we cannot assure you that any of our warrant holders will participate in the Exercise Offer with respect to any or all of their Original Warrants. Therefore, there is no certainty that any shares will be purchased upon exercise of Amended Warrants pursuant to this Exercise Offer and, accordingly, we may not receive substantial proceeds from the exercise of the warrants in this Exercise Offer. What proceeds we do receive may not be sufficient to fund our reorganization as an investment company under the Investment Company Act, our continued investment in early stage start-ups and other general corporate purposes. In that case, if we fail to raise additional funds on a timely basis, we may need to seek funding from alternative sources.
Income tax consequences of participation in the Exercise Offer.
We have not obtained and do not intend to obtain a ruling from the Internal Revenue Service (“IRS”) regarding the U.S. federal income tax consequences of the Exercise Offer. You should consult with your own tax advisor with regard to the possibility of any federal, state, local, non-U.S. or other tax consequences of the Exercise Offer. See Section 19 “Material U.S. Federal Income Tax Consequences” under “Description of the Exercise Offer” below.
We will have substantial discretion over the use of proceeds we receive from the exercise of Amended Warrants.
Our management will retain broad discretion over the use of proceeds from the Exercise Offer. See Section 2 “Purposes of the Exercise Offer and Use of Proceeds” below for a description of our present intentions with respect to the allocation of the proceeds resulting from exercise of the Amended Warrants. The amounts and timing of the expenditures may vary significantly depending on numerous factors. The occurrence of certain unforeseen events or changed business conditions, however, could result in the application of the proceeds resulting from the exercise of the Amended Warrants in a manner other than as described in this Exercise Offer.
Although we intend to apply to list our common stock on a national securities exchange, such as NASDAQ or NYSE American, our common stock may never be listed on a national securities exchange, which could limit investors’ ability to make transactions in our securities and an active trading market for our common stock may never develop.
We intend to apply to list our common stock on a national securities exchange, such as the NASDAQ Capital Market or NYSE American. We do not currently meet certain minimum standards for initial listing on a national securities exchange, such as the minimum standard for stockholders’ equity, which is $5.0 million (or $4.0 million under the market value of listed securities standard) for the NASDAQ Capital Market or $4.0 million for NYSE American. In addition we do not currently meet the minimum bid price requirement of $4.00 for the NASDAQ Capital Market and $2.00 for NYSE American. We cannot assure you that we will apply for listing on a national securities exchange or that if we so apply, we will be able to meet the applicable initial listing requirements. If our common stock is not listed for trading on a national securities exchange, we would continue to face significant material adverse consequences, including:
| ● | a limited availability of market quotations for our securities; |
| ● | reduced liquidity with respect to our securities; |
| ● | a determination that our shares of common stock are “penny stock” which will require brokers trading in our shares of common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our shares of common stock; |
| ● | a limited amount of news and analyst coverage for our company; and |
| ● | a decreased ability to issue additional securities or obtain additional financing in the future. |
A substantial number of shares of our common stock may be sold in the Exercise Offer, which could cause the price of our common stock to decline.
The sale of securities under this Exercise Offer and any future sales of a substantial number of shares of our common stock in the public market, or the perception that such sales may occur, could adversely affect the price of our common stock. We cannot predict the effect, if any, that market sales of those shares of common stock or the availability of those shares of common stock for sale will have on the market price of our common stock.
Our common stock is classified as “penny stock” and trading of our shares may be restricted by the SEC’s penny stock regulations.
Rules 15g-1 through 15g-9 promulgated under the Exchange Act impose sales practice and disclosure requirements on certain brokers-dealers who engage in transactions involving a “penny stock.” The SEC has adopted regulations which generally define “penny stock” to be any equity security that has a market price of less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our common stock is covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors.” The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules require that, prior to a transaction in a penny stock that is not otherwise exempt, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules may discourage investor interest in and limit the marketability of our common stock.
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DESCRIPTION OF THE EXERCISE OFFER
We are offering to amend outstanding warrants, upon the terms and subject to the conditions set forth herein, to purchase up to an aggregate of 4,790,001 shares of common stock (the “Exercise Offer”), including outstanding warrants to purchase 1,596,667 shares of common stock with an exercise price of $1.20 per share and expiration date of three years from August 19, 2019 (the “Original Warrants”).
The Original Warrants represent all of our outstanding series of warrants.
There is no minimum participation requirement with respect to this Exercise Offer.
Pursuant to the Exercise Offer, the Original Warrants will be amended (the “Amended Warrants”) to: (i) reduce the exercise price of the Original Warrants to $0.40 per share of common stock in cash for the number of shares of Company common stock issuable therefor, (ii) shorten the exercise period of the Original Warrants so that they expire concurrently with the expiration of the Exercise Offer at 5:00 p.m. (Pacific Time) on the Expiration Date, (iii) contain a lock-up provision that provides that neither the holder nor any affiliate of the holder will sell dispose or otherwise transfer, directly or indirectly any of the shares of common stock issuable upon exercise of the Amended Warrants without the prior written consent of the Company for a period of three months after the Expiration Date, (iv) remove the cashless exercise provisions from those Original Warrants which include such cashless exercise provisions and (v) increase the number of shares of Company common stock issuable upon the exercise of the Original Warrant to a number that is determined by multiplying the number of shares of Company common stock issuable upon the exercise of the Original Warrant by 3. Other than set forth above, the terms of the Original Warrants will remain unmodified and in full force and effect.
SECTION 1. FORWARD-LOOKING STATEMENTS
This Exercise Offer contains certain forward-looking statements that involve risks, uncertainties and assumptions that are difficult to predict. Words and expressions reflecting optimism, satisfaction or disappointment with current prospects, as well as words such as “believes,” “hopes,” “intends,” “estimates,” “expects,” “projects,” “plans,” “anticipates” and variations thereof, or the use of future tense, identify forward-looking statements, but their absence does not mean that a statement is not forward-looking. Our forward-looking statements are not guarantees of performance and actual results could differ materially from those contained in or expressed by such statements. In evaluating all such statements we urge you to specifically consider the various risk factors identified in this Exercise Offer, including the statements set forth in the sections titled “Risk Factors” or elsewhere in this Exercise Offer and in the documents incorporated or deemed incorporated herein by reference, any of which could cause actual results to differ materially from those indicated by our forward-looking statements.
We intend that all forward-looking statements made in this prospectus will be subject to the safe harbor protection of the federal securities laws pursuant to Section 27A of the Securities Act, to the extent applicable. Except as required by law, we do not undertake any responsibility to update these forward-looking statements to take into account events or circumstances that occur after the date of this prospectus. Additionally, we do not undertake any responsibility to update you on the occurrence of any unanticipated events which may cause actual results to differ from those expressed or implied by these forward-looking statements.
SECTION 2. PURPOSES OF THE EXERCISE OFFER AND USE OF PROCEEDS
Fund Raising. Through the Exercise Offer we can raise funds to support our operations, including our reorganization as an “investment company” under the Investment Company Act, investment in early stage start-ups and other general corporate purposes, by encouraging the participating holders to exercise their Original Warrants by significantly reducing the exercise price and shortening the exercise period. If all holders participate in the Exercise Offer and exercise an Amended Warrant, we would raise gross proceeds of approximately $1,916,000.
Reduction of Share Overhang from Outstanding Warrants. In addition, the Exercise Offer can help us reduce the number of outstanding warrants. As of March 31, 2022, we had outstanding warrants to purchase an aggregate of 1,596,667 shares of common stock at a weighted average exercise price of $1.20 per share. The sale of substantial amounts of our common stock upon exercise of outstanding warrants, or the perception that significant sales may occur in the future, could adversely affect the market price of our common stock and our ability to raise additional capital in the future. (i) 550,000 shares of common stock issuable upon conversion of outstanding Series A Preferred Stock outstanding; (ii) 1,437,500 shares of common stock issuable upon conversion of outstanding Series A-1 Preferred Stock outstanding; (iii) 2,212,500 shares of common stock issuable upon conversion of outstanding Series A-2 Preferred Stock outstanding; (iv) 624,844 shares of common stock issuable upon conversion of outstanding Series B Preferred Stock outstanding; (v) 1,166,406 shares of common stock issuable upon conversion of outstanding Series B-1 Preferred Stock outstanding; (vi) 2,176,250 shares of common stock issuable upon conversion of outstanding Series B-2 Preferred Stock outstanding; (vii) 3,000,000 shares of common stock issuable upon conversion of outstanding Series B-3 Preferred Stock outstanding; and (viii) outstanding options to purchase an aggregate of 2,195,000 shares of common stock at a weighted average exercise price of $0.07 per share. The exercise of such outstanding options and conversion of our Series A, A-1 and A-2 Preferred Stock and Series B, B-1, B-2 and B-3 Preferred Stock will result in dilution of the value of our shares.
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SECTION 3. ELIGIBLE ORIGINAL WARRANTS
The following Original Warrants are subject to the Exercise Offer:
i. 1,596,667 $1.20 Warrants expiring three years from August 19, 2019
The Exercise Offer will be open through 5:00 p.m., Pacific Time on May 2, 2022, as may be extended by us in our sole discretion.
SECTION 5. TERMS OF AMENDED WARRANTS
Pursuant to the Exercise Offer, the Original Warrants will be amended as described below:
New Exercise Price: The exercise price of the Original Warrants will be reduced to $0.40 per share, regardless of the current exercise price as of the date hereof, for the number of shares of Company common stock issuable therefor.
New Termination Date: The termination date of the Original Warrants will be shortened to terminate concurrently with the Expiration Date.
Lock-Up Period: The Amended Warrants will contain a lock-up provision that provides that neither the holder nor any of its Affiliates will sell dispose or otherwise transfer, directly or indirectly (including, without limitation, any sales, short sales, swaps or any derivative transactions that would be equivalent to any sales or short positions) any of the shares of common stock issuable upon exercise of the Amended Warrants without the prior written consent of the Company for a period of three months after the Expiration Date. In addition, the Company may impose stop-transfer restrictions to enforce these restrictions and place a legend on any certificate representing the shares issued upon exercise of the Amended Warrants.
Removal of Cashless Exercise: Those Original Warrants which include cashless exercise provisions will be amended to remove such provisions. As a result, the holders of Original Warrants that include cashless exercise provisions will be required to pay the applicable exercise price of the Original Warrants in cash.
Increase Warrant Shares: The number of shares of Company common stock issuable upon the exercise of the Original Warrants shall be increased to a number equal to a number determined by multiplying the number of shares of Company common stock issuable upon the exercise of the Original Warrant by 3.
Other Terms: Except as set forth above all, other terms of the Amended Warrants will be the same as the terms of the Original Warrants.
SECTION 6. CONDITIONS TO THE EXERCISE OFFER
The Exercise Offer is subject to certain conditions, as described herein:
(i) As part of the Election Form, the holders of the Original Warrants must complete an Accredited Investor Questionnaire. In addition, as part of the Election Form, the holders of the Original Warrants are asked to make certain representations and warranties upon which the Company will rely in establishing that the transactions contemplated by the Exercise Offer are exempt from the registration requirements of the Securities Act and applicable state securities laws. The holders of the Original Warrants previously made substantially the same representations and warranties to the Company, including representations that they were “accredited investors,” in connection with the transactions in which such holders acquired the Original Warrants.
If you wish to participate in the Exercise Offer, but you are not able to make any of the representations set forth on page 2 of the Acknowledgements and Representations and Warranties, please reach out to us directly at our corporate address indicated in “Section 23. Information Requests” on page 18 to inform us which ones you are not able to make and why. Holders of the Original Warrants are not prohibited from tendering their Original Warrants, even if such holders are unable to make these representations and warranties and complete an Accredited Investor Questionnaire, including a representation that such holders are currently “accredited investors.”
If we receive a completed Accredited Investor Questionnaire from any holder that desires to participate indicating that such holder is no longer an “accredited investor,” then we will file and distribute to all holders of Original Warrants certain supplemental disclosures required by Regulation D under the Securities Act, which are not currently included in this Exercise Offer. In that case, we would extend the Expiration Date of the Exercise Offer, as required under the Exchange Act and the rules of the SEC thereunder.
In addition, if we determine, after reviewing the representations and warranties and Accredited Investor Questionnaires of all participating warrant holders, that a valid exemption is not available from the registration requirements of applicable federal and/or state securities laws, then we may determine that it is necessary to cancel the Exercise Offer in its entirety, and not to consummate any of the contemplated transactions, in order to comply with the requirements of applicable securities laws. In that case, all exercise payments previously received would be promptly returned to participating warrant holders, along with all Original Warrants, unexercised and outstanding pursuant to their original terms.
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(ii) In addition, we are not making this Exercise Offer to, nor will we accept any Election Form from or on behalf of, Original Warrant holders in any jurisdiction in which the Exercise Offer or the exercise of the Amended Warrants would not be in compliance with the laws of such jurisdiction.
You may not elect to amend but not exercise your Original Warrants. Participation in this Exercise Offer requires both amendment of your Original Warrants and your exercise of the Amended Warrants, which will happen simultaneously should you choose to participate.
Original Warrants of holders that elect not to participate and exercise will remain outstanding pursuant to their original terms.
SECTION 7. EXTENSION OF EXERCISE OFFER PERIOD; TERMINATION; AMENDMENTS
We expressly reserve the right, in our sole discretion and at any time or from time to time, to extend the Expiration Date.
There can be no assurance, however, that we will exercise our right to extend the Exercise Offer. Amendments to the Exercise Offer will be made by written notice thereof to the holders of the Original Warrants. Material changes to information previously provided to holders of the Original Warrants in this Exercise Offer or in documents furnished subsequent thereto will be disseminated to holders of Original Warrants.
If we materially change the terms of the Exercise Offer or the information concerning the Exercise Offer, or if we waive a material condition of the Exercise Offer, we will extend the Exercise Offer to the extent required under applicable law, including under the rules of the Exchange Act. The minimum period during which an offer must remain open following any material change in the terms of the Exercise Offer or information concerning the Exercise Offer (other than a change in price or change in percentage of securities sought, all of which require up to ten (10) additional business days) will depend on the facts and circumstances, including the relative materiality of such terms or information.
SECTION 8. PROCEDURE FOR PARTICIPATING IN EXERCISE OFFER, EXERCISING AMENDED WARRANTS
To participate in the Exercise Offer and exercise an Amended Warrant and receive one and one half times the number of shares of Company common stock issuable therefor, you must deliver to us, before the Expiration Date, all of the following: (i) a signed Election Form, (ii) a signed Acknowledgements and Representations and Warranties and (iii) a signed Accredited Investor Questionnaire, along with (iv) the aggregate exercise price in cash in the amount equal to $0.40 per share multiplied by the number of shares of common stock the holder elects to purchase (collectively, the “Acceptance and Exercise Documents”). We do not view the representations and warranties to be made by warrant holders tendering their warrants that they have “reviewed the current business prospects, financial condition and operating history of the Company,” “had the opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the Exercise Offer,” and “received all the information they consider necessary or appropriate for deciding whether to accept the Exercise Offer” as a waiver of any potential liability that we may have under federal securities laws, and we agree not to assert that these provisions constitute a waiver of any such liability if a claim is made against us. The cash exercise price may be tendered in the form of a check payable to Kyto Technology and Life Science, Inc. or by wire transfer to our account as set forth in the instructions to the Election Form. Each of these items must be properly delivered before the Expiration Date to us at our corporate address:
Kyto Technology and Life Science, Inc.
13050 La Paloma Road
Los Altos Hills, CA 94022
Email: legal@kytotech.com
Telephone: 650-204-7896
SECTION 9. MANNER OF ACCEPTANCE OF PAYMENT AND ISSUANCE OF SHARES
If you properly tender (and do not validly withdraw) your Original Warrants and the other Acceptance and Exercise Documents on or prior to 5:00 p.m., Pacific Time on May 2, 2022 the Expiration Date of the Exercise Offer (or such later date and time if we extend the Exercise Offer), promptly following the Expiration Date, we intend to notify our transfer agent of our acceptance of your payment of the exercise price and your other Acceptance and Exercise Documents and issue and deliver to you the number of shares of common stock issuable under the Amended Warrant, as well as a replacement Original Warrant for any unexercised portion thereof. See Section 8 “Procedure for Participating in Exercise Offer and Exercising Amended Warrants” below.
If after tendering your Original Warrants and other Acceptance and Exercise Documents you change your mind and do not want to participate in the Exercise Offer, you may submit the Notice of Withdrawal to us. However, to be effective, the Notice of Withdrawal must be properly completed and must be returned to us before 5:00 p.m., Pacific Time on May 2, 2022, the Expiration Date of the Exercise Offer (or such later date and time if we extend the Exercise Offer). Following the Expiration Date, you cannot withdraw your Election Form.
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If you properly withdraw in a timely manner as set forth above, we will promptly: (i) cancel your signed copy of the Election Form and (ii) provide you with a check equal to the amount of cash you paid to exercise of the Amended Warrant.
SECTION 11. RESALES OF WARRANT SHARES
The Original Warrants and the Amended Warrants are, and the shares of common stock issuable upon exercise of the Original Warrants or Amended Warrants will be, “restricted securities”. Restricted securities may not be sold by the holder absent registration, or an exemption from the registration requirements, under the Securities Act and the applicable securities laws of any other state or jurisdiction.
Since the Original Warrants were not issued in a registered direct offering, and the underlying shares of common stock are not the subject of a resale prospectus with respect thereto, the holder thereof will not be able to resell the shares of common stock issuable upon exercise of the related Amended Warrant, unless we file a registration statement (or a post-effective amendment to a Resale Registration Statement) to include such holder as a selling stockholder thereunder, except to the extent that such resale qualifies for an exemption from registration requirements under applicable securities laws, which may require a holding period of at least three months following the consummation of this Exercise Offer.
There is no established trading market for the Original Warrants or the Amended Warrants, and we do not intend to list the Original Warrants or the Amended Warrants for trading on any exchange or market.
In addition to the foregoing, the shares of common stock issuable upon exercise of the Amended Warrants will be subject to a contractual lock up restriction for a three-month period following the Expiration Date, as described under “Section 5. Terms of Amended Warrants” above.
SECTION 12. TRADING MARKET OF ORIGINAL WARRANTS, AMENDED WARRANTS AND COMMON STOCK
There is no established trading market for the Original Warrants or the Amended Warrants.
Our common stock is presently quoted on the OTCQB of the OTC Markets marketplace under the trading symbol KBPH. Historically, trading in our stock has been very limited and the trades that have occurred cannot be characterized as amounting to an established public trading market. As a result, the trading prices of our common stock may not reflect the price that would result if our stock was actively traded.
SECTION 13. SOURCE AND AMOUNT OF FUNDS
Because this transaction is solely an offer to holders to amend their outstanding Original Warrants, there are no funds or other consideration being paid to participants. We will use existing working capital to pay the fees and expenses associated with this Exercise Offer.
SECTION 14. TRANSACTIONS AND AGREEMENTS CONCERNING ORIGINAL WARRANTS
[Not applicable.]
SECTION 15. INFORMATION REGARDING KYTO TECHNOLOGY AND LIFE SCIENCE, INC.
The following summary highlights selected information regarding Kyto Technology and Life Science, Inc. Because it is a summary, it does not contain all of the information you should consider before making a decision to participate in the Exercise Offer or exercise your Amended Warrant. Before making an investment decision, you should read the entire Exercise Offer carefully, including the “Risk Factors” section above and the other materials incorporated by reference in Section 22: “Additional Information” below.
Overview
Kyto Technology and Life Science, Inc. (the “Company”) was formed as a Florida corporation on March 5, 1999 under the name of B Twelve Inc. In August 2002, the Company changed its name from B Twelve, Inc. to Kyto BioPharma Inc. and in May 2018, the name was changed again to Kyto Technology and Life Science, Inc. In July 2019 the Company was re-incorporated as a Delaware company.
The Company was originally formed to acquire and develop innovative minimally toxic and non-immunosuppressive proprietary drugs for the treatment of cancer, arthritis, and other autoimmune diseases and had been looking at a number of strategies to become active. In April, 2018, the Board adopted a new business plan focused on the development of early stage technology and life science businesses through early stage investment funding. The Company has recruited a number of experienced investment consultants from a network that includes angel investors, corporate managers, and successful entrepreneurs across a number of technology and life science products and markets and relies on input from these advisors in conducting due diligence and making investment decisions. In order to offset the risk in early stage investing, the Company works with angel investment groups and participates only after these groups have completed due diligence and committed to invest, and does not typically invest more than $250,000 in any single investment.
| -11- |
Generally, the Company’s investments represent less than 5% ownership interests, and the Company therefore has no effective control or influence over the management or commercial decisions of the Companies in which it invests. The Company plans to generate revenue from realized gains from the sale of the businesses in which it has invested. Generally, it is expected that investments will be realized from an exit within a period of four years following investment. Such sales are outside its control and depend on M&A transactions which may result in cash or equity proceeds. Accordingly, it is difficult to forecast revenue, net income, and cash flow.
The Company has no regular employee, full-time or part-time, except the chief executive officer of Kyto Technology and Life Science, Inc..
For additional information regarding Kyto Technology and Life Science, Inc., you should also review the materials that we have filed with the SEC and have listed in Section 22: “Additional Information” below.
Corporate Information
Kyto Technology and Life Science, Inc. is a Delaware corporation with its principal business office at 13050 La Paloma Road, Los Altos Hills, CA 94022. Our website can be found at www.kytotech.com. We do not intend to incorporate any contents from our website into this prospectus.
Financial Information
Our audited financial statements for our fiscal years ended March 31, 2021 and 2020 included in our Annual Report on Form 10-K filed with the SEC on August 10, 2021, as amended on August 12, 2021, and our unaudited financial statements for the fiscal quarter ended December 31, 2021, included in our Quarterly Reports on Form 10-Q filed with the SEC on February 22, 2022, incorporated by reference herein. Please see Section 22: “Additional Information” below for instructions on how you can obtain copies of our SEC filings, including filings that contain our financial statements.
The following table sets forth audited summarized consolidated historical financial data as of and for the years ended March 31, 2020 and 2019. The information presented below has been derived from the consolidated financial statements included in our Annual Report on Form 10-K described above and should be read together with those consolidated financial statements and the notes related thereto, as well as the sections of such annual reports entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
| Year Ended March 31, | ||||||||
| 2021 | 2020 | |||||||
| Statement of Operations Data: | ||||||||
| Investment Income | ||||||||
| Interest and other income | $ | 0 | $ | 14,150 | ||||
| Total expenses | $ | 768,842 | $ | 726,503 | ||||
| Net investment loss | $ | (768,842 | ) | $ | (712,353 | ) | ||
| Basic gain (loss) per share | $ | .06 | $ | (.13 | ) | |||
| Diluted gain or loss per share | $ | .02 | $ | (.13 | ) | |||
| Basic weighted average common shares | 6,808,684 | 5,836,832 | ||||||
| Diluted weighted average common shares outstanding | 21,847,107 | 5,836,832 | ||||||
| Balance Sheet Data: | ||||||||
| Current assets | $ | 1,607,759 | $ | 2,699,755 | ||||
| Noncurrent assets | $ | 6,821,407 | $ | 2,665,499 | ||||
| Current liabilities | $ | 1,436,003 | $ | 32,144 | ||||
The following table sets forth unaudited summarized consolidated historical financial data as of and for the quarters ended December 31, 2021 and 2020. The information presented below has been derived from the consolidated financial statements included in our Quarterly Report on Form 10-Q described above and should be read together with those consolidated financial statements and the notes related thereto, as well as the sections of such quarterly reports entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
| -12- |
| Quarter Ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| Statement of Operations Data: | ||||||||
| Investment Income | ||||||||
| Interest and other income | $ | 0 | $ | 5 | ||||
| Total expenses | $ | 371,714 | $ | 332,716 | ||||
| Net investment loss | $ | (371,714 | ) | $ | (332,711 | ) | ||
| Basic gain (loss) per share | $ | .02 | $ | .00 | ||||
| Diluted loss per share | $ | .02 | $ | (.00 | ) | |||
| Basic weighted average common shares outstanding | 13,287,621 | 8,528,007 | ||||||
| Diluted weighted average common shares outstanding | 13,287,621 | 19,272,128 | ||||||
| Balance Sheet Data: | ||||||||
| Current assets | $ | 901,787 | $ | 600,204 | ||||
| Noncurrent assets | $ | 12,156,511 | $ | 5,882,441 | ||||
| Current liabilities | $ | 146,675 | $ | 83,102 | ||||
Certain pro forma financial information relating to this Exercise Offer is presented below in Section 16: “Accounting Consequences of the Offer” below.
SECTION 16. ACCOUNTING CONSEQUENCES OF THE EXERCISE OFFER
Assuming full participation, this Exercise Offer would result in gross proceeds to the Company, and corresponding increases to cash and stockholders’ equity, of approximately $1,916,000.40.
This estimated pro forma non-cash interest expense and corresponding increase in shareholders’ equity could be higher or lower depending on the level and mix of participating holders of Original Warrants and our closing stock price on the Expiration Date.
SECTION 17. INTERESTS OF DIRECTORS AND EXECUTIVE OFFICERS IN THE EXERCISE OFFER
As of March 31, 2022, there were outstanding Original Warrants to purchase an aggregate of 1,596,667 shares of common stock. None of our executive officers and directors hold Original Warrants and none will be entitled to participate in the Exercise Offer on the same terms and conditions as the other holders of Original Warrants.
Name |
Position with the Company |
Number of Original Warrants Held |
Percentage of Original Warrants Held | |||
| None. | ||||||
SECTION 18. LEGAL MATTERS AND REGULATORY APPROVALS
We are not aware of any license or regulatory permit material to our business that might be adversely affected by the Exercise Offer and the issuance of the shares of common stock upon the exercise of the Amended Warrants. Our obligations under the Exercise Offer are subject to the conditions described in Section 6 “Conditions of the Exercise Offer” above.
SECTION 19. MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain material U.S. federal income tax consequences that we believe will be applicable to Original Warrant holders who participate in the Exercise Offer. However, we have not requested a ruling from the Internal Revenue Service (“IRS”) or any opinion of counsel with regard to the treatment of Original Warrant holders who participate in the Exchange Offer and there can be no assurance, as discussed below, that the IRS will not take a position inconsistent with our expectations.
This discussion does not address all aspects of U.S. federal income taxation that may be relevant to you in light of your particular circumstances, or to those Original Warrant holders who are subject to special rules, such as financial institutions and mutual funds; banks; insurance companies; investment companies; retirement plans; tax-exempt organizations; dealers or traders in securities; any person that holds their Original Warrants as part of a straddle or hedge arrangement; partnerships or other pass-through entities; persons who are not citizens or residents of the United States or who are non-U.S. corporations, non-U.S. partnerships or non-U.S. estates or trusts for U.S. federal income tax purposes or whose functional currency is not the U.S. dollar; or persons who are subject to the alternative minimum tax provisions of the Internal Revenue Code of 1986, as amended (the “Code”). This discussion is based on current provisions of the Code, Treasury Regulations promulgated thereunder, judicial opinions, administrative rulings, and published positions of the IRS, all of which are subject to change (possibly with retroactive effect).
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This discussion assumes that Original Warrant holders hold the Original Warrants (and will hold their shares of our common stock received in connection with participating in the Exercise Offer) as capital assets (i.e., generally for investment) within the meaning of Code Section 1221. In addition, the following discussion does not address the tax consequences of the participation in the Exercise Offer under state, local or non-U.S. tax laws. You are urged to consult your tax advisors as to the U.S. federal income tax consequences of participating in the Exercise Offer and related reporting obligations, as well as the effects of state, local and non-U.S. tax laws and U.S. tax laws other than federal income tax laws including, without limitation, the U.S. federal net investment income tax.
If a partnership (including any entity or arrangement treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of an Original Warrant (or a beneficial owner of shares of our common stock received upon exercise of the Amended Warrants), the tax treatment of a partner in the partnership will depend upon the status of the partner and the activities of the partnership. Any such partnership, and any partner of any such partnership, should consult such partnership or partner’s own tax advisors about the U.S. federal income tax consequences of participating in the Exercise Offer.
Tax treatment of Exercise Offer.
Although not free from doubt, we intend to take the position that the amendment of your Original Warrants followed by an exercise of the Amended Warrants are treated as separate events for U.S. tax purposes, where an exchange of Original Warrants for Amended Warrants constitutes a recapitalization within the meaning of Code Section 368(a)(1)(E) for U.S. federal income tax purposes, followed by the subsequent exercise of the Amended Warrants. Under this treatment, (i) an Original Warrant holder who participates in the Exercise Offer would not recognize any gain or loss as a result of amending the Original Warrants, (ii) such holder’s tax basis in the shares of our common stock received upon exercise of the Amended Warrants would be equal to the holder’s tax basis in the Original Warrants, plus the amount of any cash paid to exercise the Amended Warrants, and (iii) such holder’s holding period of the common stock would begin on the day after the exercise of the Amended Warrants.
The IRS has not made a determination, nor have we received any opinion of counsel, on the U.S. federal income tax consequences of the Exercise Offer or of a holder’s participation in the Exercise Offer, and there is no published guidance directly on point. Because of the lack of authority dealing with transactions similar to the Exercise Offer, the U.S. federal income tax consequences of the Exercise Offer are unclear, and alternative characterizations are possible that could require you to immediately recognize income, gain or loss, or may impact your holding period. Therefore, we urge you to consult your tax advisors regarding the potential tax consequences of the Exercise Offer to you in your particular circumstances, including the consequences of possible alternative characterizations.
Distributions on Common Stock Received upon Exercise of Amended Warrants
Following exercise of the Amended Warrants, any distributions you receive in respect of our common stock received in connection with participating in the Exercise Offer generally will be treated as a dividend, subject to tax as ordinary income, to the extent payable out of our current or accumulated earnings and profits (as determined for U.S. federal income tax purposes), then as a tax-free return of capital to the extent of your tax basis in the shares of our common stock, and thereafter as gain from the sale or exchange of the stock. Dividends received by a non-corporate holder currently qualify for taxation at a reduced rate if the holder meets certain holding period and other applicable requirements. Dividends received by a corporate holder will be eligible for the dividends-received deduction if the holder meets certain holding period and other applicable requirements.
Sale or Other Taxable Disposition of Common Stock
You will generally recognize gain or loss upon the sale, exchange or other taxable disposition of shares of our common stock equal to the difference between (i) the amount of cash and the fair market value of any property received and (ii) your adjusted tax basis in the shares of our common stock. Any gain or loss you recognize generally will be treated as a capital gain or loss. The capital gain or loss will be long-term if your holding period in the common stock is more than one year at the time of sale, exchange or other taxable disposition and will be short-term if your holding period is one year or less. Long-term capital gains of individuals and other non-corporate taxpayers are generally eligible for reduced rates of taxation. The deductibility of capital losses is subject to certain limitations.
Information Reporting and Backup Withholding
Information reporting requirements generally will apply to certain holders with respect to dividends paid on, or, under certain circumstances, the proceeds of a sale, exchange or other disposition of, common stock. Under the Code and applicable Treasury Regulations, a holder of common stock may be subject to backup withholding (currently at a rate of 24%) with respect to dividends paid on common stock, or the proceeds of a sale, exchange or disposition of common stock, unless such holder (a) is a corporation or comes within certain other exempt categories and, when required, demonstrates this fact in the manner required, or (b) within a reasonable period of time, provides a correct taxpayer identification number, certifies that it is not subject to backup withholding (e.g., on an IRS Form W-9 or similar form) and otherwise complies with applicable requirements of the backup withholding rules. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will generally be allowed as a credit against a holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided the required information is timely furnished to the IRS. You should consult your tax advisors regarding the application of information reporting and backup withholding rules to your particular situation, the availability of an exemption therefrom, and the procedure for obtaining such an exemption, if applicable.
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THE FOREGOING DISCUSSION IS NOT A COMPLETE DISCUSSION OF ALL U.S. TAX CONSIDERATIONS THAT MAY BE RELEVANT TO YOU. YOU ARE URGED TO CONSULT WITH YOUR OWN TAX ADVISORS REGARDING YOUR PARTICULAR SITUATION AS IT RELATES TO THE TAX CONSEQUENCES OF PARTICIPATING IN THE EXERCISE OFFER AND THE OWNERSHIP AND DISPOSITION OF OUR COMMON STOCK.
[Not applicable.]
A holder may transfer the Original Warrants to a third party only if the transfer qualifies for an exemption from the registration requirements of the Securities Act, and in accordance with other transfer restrictions set forth in the Original Warrants. Any holder of an Original Warrant who desires to transfer an Original Warrant should contact us prior to such transfer to ensure that the planned transfer satisfies the transfer restrictions set forth in the Original Warrants.
The shares of common stock issuable upon exercise thereof will be “restricted securities” which may not be sold by the holder absent registration, or an exemption from the registration requirements, under the Securities Act and the applicable securities laws of any other state or jurisdiction. See Section 11: “Resales of Warrant Shares” above.
The Amended Warrants will contain a lock-up provision that provides that neither the holder nor any of its Affiliates will sell dispose or otherwise transfer, directly or indirectly (including, without limitation, any sales, short sales, swaps or any derivative transactions that would be equivalent to any sales or short positions) any of the shares of common stock issuable upon exercise of the Amended Warrants without the prior written consent of the Company for a period of three months after the Expiration Date. In addition, the Company may impose stop-transfer restrictions to enforce these restrictions and place a legend on any certificate representing the shares issued upon exercise of the Amended Warrants.
SECTION 22. ADDITIONAL INFORMATION
We have filed with the SEC a Tender Offer Statement on Schedule TO of which this Exercise Offer is a part. This Exercise Offer does not contain all of the information contained in the Schedule TO and the exhibits to the Schedule TO. We recommend that holders of the Original Warrants review the Schedule TO, including the exhibits, as well as the following materials that we have filed with the SEC and are incorporating herein by reference, before making a decision on whether to participate in the Exercise Offer and to exercise the Amended Warrants:
| ● | our Annual Report on Form 10-K, as amended, for the fiscal year ended March 31, 2021, filed with the SEC on August 10, 2022 as amended on August 12, 2022; | |
| ● | our Quarterly Report on Form 10-Q for the fiscal period ended December 31, 2021 filed with the SEC on February 22, 2022; and | |
| ● | our Definitive Proxy Statement on Schedule 14A filed with the SEC on June 17, 2019; and | |
| ● | our Current Reports on Form 8-K filed with the SEC on February 9, 2022. |
You may read and copy any of these filings and other information about us at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for information on the operation of the Public Reference Room. The SEC also maintains an Internet website that contains reports, proxy statements and other information regarding issuers, including us, who file electronically with the SEC. The address of that site is www.sec.gov.
We will provide without charge to each person to whom a copy of this Exercise Offer is delivered, upon the written or oral request of any such person, a copy of any or all of the documents to which we have referred, other than exhibits to such documents (unless such exhibits are specifically incorporated by reference into such documents). Requests should be directed to our Chief Financial Officer, Simon Westbrook, by telephone at 650-204-7896, by e-mail at legal@kytotech.com, or by mail or personal delivery service at our corporate address indicated below.
As you read the documents referred to in this section, you may find some inconsistencies in information from one document to another later dated document. Should you find inconsistencies between the documents, or between a document and this Offering Memorandum, you should rely on the statements made in the most recent document. The information contained in this Offering Memorandum should be read together with the information contained in the documents to which we have referred you.
| -15- |
Our Board of Directors recognizes that the decision to participate in the Exercise Offer and to exercise the Amended Warrants is an individual one that should be based on a variety of factors. The holders of the Original Warrants should consult with their respective professional advisors if they have questions about their financial or tax situation. The information about this Exercise Offer from us is limited to the Offering Materials.
SECTION 23. INFORMATION REQUESTS
Please direct questions or requests for assistance regarding this Exercise Offer, Election Form, and Notice of Withdrawal or other materials, in writing, to us at our corporate address:
Kyto Technology and Life Science, Inc.
13050 La Paloma Road
Los Altos Hills, CA 94022
Telephone: 650-204-7896
Email: legal@kytotech.com
| -16- |
Exhibit (a)(1)(C)
INSTRUCTIONS FOR ELECTION TO PARTICIPATE
Your right to participate in the Offer to Amend and Exercise (the “Exercise Offer”) of Kyto Technology and Life Science, Inc. (the “Company”) will automatically expire if you do not properly elect to participate on or before the Expiration Date of May 2, 2022, as may be extended by the Company in its sole discretion. By execution of this Election to Participate and Exercise Warrant, you waive any right to receive any notice of the acceptance of the Amended Warrants, except as provided in the Exercise Offer. To effect your acceptance of the Exercise Offer you must:
| (1) | Complete, sign and return the Election to Participate (attached hereto). |
| (2) | Complete, sign and return the Acknowledgements and Representations and Warranties (attached hereto). |
| (3) | Complete, sign and return the Accredited Investor Questionnaire (attached hereto). |
If the shares issuable upon exercise of your Amended Warrant will be issued in the name of someone other than the record holder of the Original Warrants, the Accredited Investor Questionnaire must also be completed by that recipient.
| (4) | Pay the aggregate exercise price applicable to your Amended Warrant ($0.40 multiplied by the number of shares to be exercised) by check or by wire transfer pursuant to the wire transfer instructions set forth below. |
| (5) | The Election to Participate, Acknowledgements and Representations and Warranties and Accredited Investor Questionnaire, along with the aggregate exercise price, must be received by the Company at the address below on or before the Expiration Date of 5:00 pm (Pacific time) on May 2, 2022, as may be extended by the Company in its sole discretion. |
| ADDRESS: | Kyto Technology and Life Science, Inc. |
| 13050 La Paloma Road | |
| Los Altos Hills, CA 94022 | |
| Telephone: 650-204-7896 | |
| Email: legal@kytotech.com |
| WIRE TRANSFER INSTRUCTIONS | Bank Name: | Wells Fargo |
| Bank Address: | 100 Kings Village Rd, Scotts Valley, CA 95066 | |
| ABA Number: | 121042882 | |
| A/C Name: | Kyto Technology and Life Science Inc | |
| A/C Number: | 8023371332 |
| Swift code: | WFBIUS6S | |
| FBO: | Warrant exercise |
Delivery to an address other than as set forth above will not constitute a valid delivery.
ELECTION TO PARTICIPATE PURSUANT TO
OFFER TO AMEND AND EXERCISE WARRANTS TO PURCHASE COMMON STOCK OF
KYTO TECHNOLOGY AND LIFE SCIENCE, INC.
DATED APRIL 1, 2022
To: Kyto Technology and Life Science, Inc.
13050 La Paloma Road
Los Altos Hills, CA 94022
Telephone: 650-204-7896
Email: legal@kytotech.com
You are receiving this election form pursuant to the Offer to Amend and Exercise (the “Exercise Offer”) Warrants to Purchase Common Stock of Kyto Technology and Life Science, Inc. (the “Company”) dated May 2, 2022, as may be amended or supplemented from time to time (the “Offer to Amend and Exercise”). Capitalized terms not otherwise defined in this Election to Participate shall have the meanings ascribed to them in the Exercise Offer.
You are listed in the books and records of the Company as being the record holder of Original Warrants (as defined in the Exercise Offer) indicated in Table 1 below.
TABLE 1:
ORIGINAL WARRANTS
Original Warrant | ||||||||||||||||||||
| Holder | Warrant Number | Underlying Shares | Issuance Date | Expiration Date | Exercise Price | |||||||||||||||
| [●] | [●] | [●] | [●] | [●] | [●] | |||||||||||||||
| [●] | [●] | [●] | [●] | [●] | [●] | |||||||||||||||
| [●] | [●] | [●] | [●] | [●] | [●] | |||||||||||||||
If you elect to participate in the Exercise Offer, please check the following box and indicate below (1) the number of shares for which you elect to amend and exercise each Original Warrant in column [(A)], (2) the aggregate exercise price in column [(A) x (B)] and (3) the totals for each in the bottom row:
☐ Pursuant to the terms and subject to the conditions of the Exercise Offer, I hereby agree and elect to amend and exercise Original Warrants (i) at an exercise price of $0.40 per share of common stock in cash for the number of shares of Company common stock issuable therefor and (ii) for an increased number of shares of Company common stock equal to a number that is determined by multiplying the number of shares of Company common stock issuable upon the exercise of the Original Warrant multiplied by 3, as indicated in Table 2 below. By doing so I agree to purchase the number of shares of Kyto Technology and Life Science, Inc. common stock issuable upon exercise of such warrants for the aggregate cash purchase price, in each case as indicated in the “Totals” line item in the below table.
TABLE 2:
AMENDED WARRANTS
[TO BE COMPLETED BY WARRANT HOLDER]
| (A) | (B) | (C) | (B) x (C) | |||||||||||||
| Warrant Number | Shares Available under Amended Warrant | Shares Purchased | Exercise Price | Aggregate Exercise Price | ||||||||||||
| $ | 0.40 | $ | ||||||||||||||
| $ | 0.40 | $ | ||||||||||||||
| $ | 0.40 | $ | ||||||||||||||
| Totals: (*) | ||||||||||||||||
STOCK CERTIFICATES
The undersigned requests that certificates for such shares be issued in the name of:
(Please print name, address and social security or federal employer identification number (if applicable)) *
| * | If the certificate for such shares will be issued in the name of someone other than the record holder of the Original Warrants indicated in Table 1 above, please return the Accredited Investor Questionnaire for the recipient named above. |
If any Amended Warrant is partially exercised and not issued for all of the holder’s Original Warrants, a new Original Warrant evidencing the rights of the remaining unexercised shares will be issued to the existing holder, The undersigned requests that a new Original Warrant evidencing the rights of the remaining unexercised shares be delivered to:
(Please print name, address and social security or federal employer identification number (if applicable)) *
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
If you execute the election above to amend and exercise your Original Warrants and return this signature page, your Original Warrants will be deemed amended and exercised in accordance with the terms and conditions of the applicable Amended Warrant.
You must complete and sign the following exactly as your name appears on your Original Warrants. If the signature is by a trustee, executor, administrator, guardian, attorney-in-fact or another person acting in a fiduciary or representative capacity, please set forth the signatory’s full title and include with this Election to Participate proper evidence of the authority of such person to act in such capacity.
| Date: | By: | |||
| (Signature) | ||||
| (Print name) | ||||
| (Title, if applicable) |
| Address: | ||
| Telephone: | ||
| Fax: | ||
| Tax ID/SSN: |
[Election to Participate]
ACKNOWLEDGMENTS AND
REPRESENTATIONS AND WARRANTIES
I understand and acknowledge that:
| (1) | I have received a copy of the memorandum entitled “Offer to Amend and Exercise Warrants to Purchase Common Stock” dated April 1, 2022 (the “Exercise Offer”), the Election to Participate (including the instructions and other forms attached thereto) and the Notice of Withdrawal (the “Exchange Offer Materials”) from the Company. I have read, and I understand and agree to be bound by, all of the terms and conditions of the Exercise Offer as described in the Exchange Offer Materials. |
| (2) | To accept the Exercise Offer I must comply with the “Instructions for Exercise of Eligible Warrants” (attached hereto). |
| (3) | To the extent that I elect to participate, I hereby agree and acknowledge that my Original Warrants described in Table 2 above shall be deemed automatically amended, as applicable, without any further action or signature required by me or the Company (as so amended, the “Amended Warrants”): |
| (i) | to reduce the exercise price to $0.40 per share of common stock in cash for one and one half times the number of shares of Company common stock issuable therefor; | |
| (ii) | to shorten the exercise period so that such Original Warrants expire concurrently with the expiration of the Exercise Offer at 5:00 p.m. (Pacific Time) on May 2, 2022, as the Company may extend in its sole discretion; | |
| (iii) | to increase the number of shares of Company common stock issuable upon the exercise of the Original Warrant to a number that is determined by multiplying the number of shares of Company common stock issuable upon the exercise of the Original Warrant by 3; | |
| (iv) | to include a lock-up provision that provides that neither the holder nor any affiliate of the holder which (x) had or has knowledge of the transactions contemplated by this Exercise Offer, (y) has or shares discretion relating to such holder’s investments or trading or information concerning such holder’s investments or (z) is subject to such holder’s review or input concerning such affiliate’s investments or trading will sell dispose or otherwise transfer, directly or indirectly (including, without limitation, any sales, short sales, swaps or any derivative transactions that would be equivalent to any sales or short positions) any of the shares of common stock issuable upon exercise of the Amended Warrants without the prior written consent of the Company for a period of ninety (90) days after expiration of the Exercise Offer on May 2, 2022; and | |
| (v) | to the extent such Original Warrants contain cashless exercise provisions, to remove such cashless exercise provisions and require the payment of the exercise price of such Original Warrants in cash. |
| (4) | To the extent that I elect to participate, I understand that I am automatically and contemporaneously exercising the Amended Warrants referred to in (3) above. |
| (5) | To the extent that I elect not to participate, my Original Warrants will not be amended, will remain unmodified and will expire in accordance with their original terms indicated in Table 1 above. |
| (6) | If I choose to execute and deliver this Election to Participate along with the aggregate exercise price applicable with respect to my Amended Warrants to the Company, the Company will place the aggregate exercise price funds into a separate non-interest bearing account until the Expiration Date of the Exercise Offer. |
| (7) | If I have decided to amend and exercise less than my total number of Original Warrants, the Company will send me a new Original Warrant for the amount of Original Warrants I excluded from this Election to Participate. |
| (8) | By amending and exercising the Original Warrants pursuant to the procedure described in the Exercise Offer and in the instructions to this Election to Participate, I accept the terms and conditions of the Exercise Offer. |
| (9) | The Company has advised me to consult with my own legal, tax and accounting advisors as to the consequences of participating or not participating in the Exercise Offer. |
| (10) | I, and any new holder to which I have requested delivery of stock certificates or Original Warrants, have accurately completed and executed the Accredited Investor Questionnaire. The Exercise Offer is not being offered to holders in any jurisdiction in which the offering or acceptance of participation in the Exercise Offer would not be in compliance with the laws of such jurisdiction. In addition, the Company will not accept any Election to Participate from or on behalf of, any Original Warrant holders if the Company determines that a valid securities exemption is not available for the Exercise Offer under the Securities Act of 1933, as amended (the “Securities Act”) or the applicable securities laws of any other state or jurisdiction. |
| (11) | All authority herein conferred or agreed to be conferred shall not be affected by, and shall survive, my death or incapacity, and all of my obligations hereunder shall be binding upon my heirs, personal representatives, successors and assigns. Except as stated in the Exercise Offer, this amendment is irrevocable. |
| (12) | Upon request, I will execute and deliver any additional documents deemed by the Company to be necessary or desirable to complete the amendment and exercise of the Original Warrants pursuant to the Exercise Offer. |
I hereby represent and warrant that:
| (1) | I have the full power and authority to execute, deliver and perform any obligations hereunder and that, when and to the extent the Original Warrants are accepted for amendment and exercise by the Company, the Original Warrants will be free and clear of all security interests, liens, restrictions, charges, encumbrances, conditional sales agreements or other obligations relating to the sale or transfer thereof and the Original Warrants will not be subject to any adverse claims. |
| (2) | I (either alone or with my purchaser representative) have such knowledge and experience in financial and business matters that I am capable of evaluating the merits and risks of investment in the Amended Warrants and the shares of common stock issuable upon the exercise of the Amended Warrants. |
| (3) | I (either alone or with my purchaser representative) have had the opportunity to review the current business prospects, financial condition and operating history of the Company as set forth or incorporated by reference in the Exercise Offer. |
| (4) | I (either alone or with my purchaser representative) have had the opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the Exercise Offer and I have received all the information I consider necessary or appropriate for deciding whether to accept the Exercise Offer. |
| (5) | Any securities I may acquire will be for my own account for investment and not with any view to the distribution thereof, and I will not sell, assign, transfer or otherwise dispose of any of the securities, or any interest therein, in violation of the Securities Act, any applicable state securities law or the lock-up provisions of the Amended Warrants. |
| (6) | I understand that (i) any securities I may acquire may not be registered under the Securities Act or any applicable state securities law, and consequently may not be sold or otherwise disposed of unless it is registered or sold or otherwise disposed of in a transaction that is exempt from such registration and (ii) the certificates representing the Securities will bear appropriate legends restricting the transferability thereof. |
| (7) | I understand that the Company will rely upon the completeness and accuracy of these representations and warranties and my responses to the questions in the enclosed Accredited Investor Questionnaire in establishing that the contemplated transactions are exempt from the Securities Act and hereby affirm that all such responses are accurate and complete. I will notify the Company immediately of any changes in any of such information occurring prior to the acceptance of my subscription. |
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You must complete and sign the following exactly as your name appears on your Original Warrants. If the signature is by a trustee, executor, administrator, guardian, attorney-in-fact or another person acting in a fiduciary or representative capacity, please set forth the signatory’s full title and include with this Election to Participate proper evidence of the authority of such person to act in such capacity.
| Date: | By: | |||
| (Signature) | ||||
| (Print name) | ||||
| (Title, if applicable) |
| Address: | ||
| Telephone: | ||
| Fax: | ||
| Tax ID/SSN: |
[Acknowledgements and Representations and Warranties]
ACCREDITED INVESTOR QUESTIONNAIRE
The undersigned understands that the purpose of this Questionnaire is to permit Kyto Technology and Life Science, Inc. (“Kyto”) to determine whether the undersigned is an “accredited investor” as such term is defined in Rule 501(a) promulgated under the Securities Act of 1933, as amended (the “Act”). The undersigned represents to Kyto that (i) the information contained herein is complete and accurate and may be relied upon by Kyto and (ii) the undersigned will notify Kyto immediately of any change in any of such information.
All information furnished is for the sole use of Kyto and its counsel and will be held in confidence by Kyto and its counsel, except that this Questionnaire may be furnished to such parties as Kyto deems desirable to establish compliance with federal or state securities laws.
A. For Individuals:
The undersigned individual is an “Accredited Investor” for one or more of the following reasons (check all that apply):
| ☐ | The undersigned is an individual (not a partnership, corporation, etc.) whose individual net worth, or joint net worth with his or her spouse, presently exceeds $1,000,000. For purposes of the foregoing, “net worth” shall be deemed to include all of your assets, liquid or illiquid (including such items as furnishings, automobile and restricted securities, but excluding the value of your primary residence) minus any liabilities (including such items as loans and other debts and liabilities, but excluding any mortgage on your primary residence to the extent that it does not exceed the fair market value of such residence). |
| ☐ | The undersigned is an individual (not a partnership, corporation, etc.) who had (i) an individual income in excess of $200,000 or (ii) joint income together with their spouse in excess of $300,000, in each of the two most recent years and reasonably expect to reach the same income level in the current year. For purposes of the foregoing, “income” is not limited to “adjusted gross income” as that term is defined for federal income tax purposes, but rather includes certain items of income which are deducted in computing “adjusted gross income”. For investors who are salaried employees, the gross salary of such investor, minus any significant expenses personally incurred by such investor in connection with earning the salary, plus any income from any other source including unearned income, is a fair measure of “income” for purposes of this question. For investors who are self-employed, “income” is generally construed to mean total revenues received during the calendar year minus significant expenses incurred in connection with earning such revenues. |
| ☐ | The undersigned is a director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer. |
| ☐ | The undersigned individual is not an “Accredited Investor” because none of the above apply. The undersigned acknowledges that in the event he or she chooses to engage a purchaser representative, the undersigned will be required to complete a “Purchaser Representative Questionnaire,” in the form to be provided by the Company, to participate in the Exercise Offer. The undersigned must notify the Company if he or she chooses to engage a purchaser representative. |
B. For Entities:
| ☐ | The undersigned is an “Accredited Investor” because the undersigned falls within at least one of the following categories (Check all appropriate lines): |
| ☐ | (i) a bank as defined in Section 3(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) or a savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity; | |
| ☐ | (ii) a broker-dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended; | |
| ☐ | (iii) an insurance company as defined in Section 2(a)(13) of the Act; | |
| ☐ | (iv) an investment company registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”) or a business development company as defined in Section 2(a)(48) of the Investment Act; | |
| ☐ | (v) a Small Business Investment Company licensed by the U.S. Small Business Investment Act of 1958, as amended; | |
| ☐ | (vi) a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, where such plan has total assets in excess of $5,000,000; | |
| ☐ | (vii) an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, as amended (the “Employee Act”), where the investment decision is made by a plan fiduciary, as defined in Section 3(21) of the Employee Act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or an employee benefit plan that has total assets in excess of $5,000,000 or a self-directed plan the investment decisions of which are made solely by persons that are accredited investors. |
| ☐ | (viii) a private business development company, as defined in Section 202(a)(22) of the Investment Advisers Act of 1940 as amended; | |
| ☐ | (ix) an organization described in Section 501(c)(3) of the Internal Revenue Code, a corporation, a Massachusetts or similar business trust, or a partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000; | |
| ☐ | (x) a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a “sophisticated” person, who has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment; | |
| ☐ | (xi) an entity in which all of the equity investors are persons or entities described above. |
| ☐ | The undersigned is an entity all the equity owners of which are “accredited investors” within one or more of the above categories. If relying upon this Category alone, each equity owner must complete a separate copy of this Questionnaire. (Describe the entity below.) |
| ☐ | The undersigned entity is not an “Accredited Investor” because none of the above applies. The undersigned acknowledges that in the event the undersigned chooses to engage a purchaser representative, the undersigned will be required to complete a “Purchaser Representative Questionnaire,” in the form to be provided by the Company, to participate in the Exercise Offer. The undersigned must notify the Company if such entity chooses to engage a purchaser representative. |
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The foregoing representations are true and accurate as of the date hereof.
| Date: | By: | |||
| (Signature) | ||||
| (Print name) | ||||
| (Title, if applicable) |
| Address: | ||
| Telephone: | ||
| Fax: | ||
| Tax ID/SSN: |
[Accredited Investor Questionnaire]
Exhibit (a)(1)(D)
NOTICE OF WITHDRAWAL
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT
5:00 P.M. (PDT), ON MAY 2, 2022, UNLESS EXTENDED
To: Kyto Technology and Life Science, Inc.
13050 La Paloma Road
Los Altos Hills, CA 94022
Telephone: 650-204-7896
Email: legal@kytotech.com
INSTRUCTIONS TO NOTICE OF WITHDRAWAL
If you have previously elected to accept the Offer to Amend and Exercise Warrants to Purchase Common Stock (the “Exercise Offer”) by Kyto Technology and Life Science, Inc., a Delaware corporation (the “Company”), subject to the terms and conditions set forth therein, and you would like to change your election and withdraw the tender of you Original Warrants, you must complete, sign and return this Notice of Withdrawal to the Company so that the Company receives it before 4:59 p.m., Pacific Time, on May 2, 2022 (or on a later date, if the Exercise Offer is extended by the Company in its sole discretion) (such expiration date, the “Expiration Date”). Any Notice of Withdrawal received after that time will not be accepted. Please read this entire Notice of Withdrawal carefully.
To withdraw your election with respect to all of your outstanding Original Warrants, check the box titled “I elect to withdraw all of my Original Warrants that I previously chose to exchange pursuant to the Exercise Offer” below. Any Notice of Withdrawal submitted without the box “I elect to withdraw all of my Original Warrants that I previously chose to exchange pursuant to the Offer” checked will be rejected. For this Notice of Withdrawal to be valid it must be signed and dated and the entire Notice of Withdrawal must be returned to the Company at the address listed above before the Expiration Date.
To withdraw your election with respect to a portion of your outstanding Original Warrants, check the box titled “I elect to withdraw all of my Original Warrants that I previously chose to exchange pursuant to the Exercise Offer” below. You must then request and complete, sign and return a new Election to Participate indicating the amount of Original Warrants you wish to exercise. A new Election to Participate can be requested from the Company at the address listed above. Please follow the instructions included in the Election to Participate to ensure acceptance of your Election to Participate. Your Election to Participate must be received by the Company prior to the Expiration Date.
DELIVERY OF THIS NOTICE OF WITHDRAWAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
I previously received a copy from the Company of its Exercise Offer, dated April 1, 2022, and any amendments thereto. I elected to participate in the Exercise Offer and delivered an executed Election to Participate.
| ☐ | I elect to withdraw all of my Original Warrants that I previously chose to exchange pursuant to the Exercise Offer. Therefore, I have completed and signed this Notice of Withdrawal. I do not accept the Exercise Offer to amend any of my Original Warrants. |
I understand that by rejecting the Exercise Offer, my Original Warrants will not be amended or exercised pursuant to the terms of the Exercise Offer. I waive any right to receive any notice of the acceptance of this Notice of Withdrawal.
All capitalized terms used but not defined herein shall have the meanings ascribed to them in the Exercise Offer.
| Date: | By: | |||
| (Signature) | ||||
| (Print name) | ||||
| (Title, if applicable) |
| Address: | ||
| Telephone: | ||
| Fax: | ||
| Tax ID/SSN: |
All questions as to the validity, form, eligibility (including time of receipt) and acceptance of any Notice of Withdrawal will be determined by the Company in its discretion, which determination shall be final and binding on all parties. The Company reserves the right to reject any or all Notices of Withdrawal that the Company determines not to be in proper form or the acceptance of which may, in the opinion of the Company’s counsel, be unlawful. The Company also reserves the right to waive any of the conditions of the Exercise Offer and any defect or irregularity in the Notice of Withdrawal. No Notice of Withdrawal will be deemed to be properly made until all defects and irregularities have been cured or waived. Unless waived, any defects or irregularities in connection with any Notice of Withdrawal must be cured within such time as the Company shall determine. Neither the Company nor any other person is or will be obligated to give notice of any defects or irregularities in any Notice of Withdrawal and no person will incur any liability for failure to give any such notice.
IMPORTANT: THIS NOTICE OF WITHDRAWAL MUST BE RECEIVED ON OR PRIOR TO THE TIME AND DATE OF EXPIRATION OF THE EXERCISE OFFER AT 5:00 P.M. (PACIFIC TIME) ON MAY 2, 2022, AS MAY BE EXTENDED BY THE COMPANY IN ITS SOLE DISCRETION.
Delivery to an address other than as set forth above will not constitute a valid delivery.
Exhibit 107
CALCULATION OF FILING FEE:
| Transaction valuation(1) | Amount of filing fee(1)(2) | |
| $9,580,002 | $888.07 |
| (1) | Estimated for purposes of calculating the amount of the filing fee only. An offer to amend and exercise warrants to purchase an aggregate of 4,790,001 shares of common stock (the “Exercise Offer”). The transaction value is calculated pursuant to Rule 0-11 using $2.00 per share of common stock, which represents the average of the high and low sales price of the common stock on March 30, 2022. |
| (2) | Calculated by multiplying the transaction value by .0000927 |
| ☐ | Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number or the Form or Schedule and the date of its filing. |
| Amount Previously Paid: N/A | Filing Party: N/A | |
| Form or Registration Number: N/A | Date Filed: N/A |