UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
___________________
FORM 8-K
___________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (date of earliest event reported): November 21, 2016
OWC
PHARMACEUTICAL RESEARCH CORP.
(Exact Name of
Registrant as Specified in its Charter)
Commission File No.: 0-54856
| Delaware | 98-0573566 |
| (State of Incorporation) | (I.R.S. Employer Identification No.) |
| 22 Shacham Street. P.O.B. 8324 Petach Tikva, Israel | 4918103 |
| (Address of Principal Executive Offices) | (ZIP Code) |
Registrant's Telephone Number, including area code: 972 (0) 3-758-2657
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry Into A Material Definitive Agreement. On November 22, 2016, OWC Pharmaceutical Research Corp. (the
"Registrant") filed a Form 8-K reporting that it had entered into a Reg S
Unit Subscription Agreement with Michepro Holding Ltd ("Michepro"),
organized under the laws of Cyprus (the "Investor"), pursuant to which the
Investor subscribed for and purchased the Registrant's securities for cash
consideration of $300,000. In connection with the Reg S Subscription Agreement with Michepro, the
Registrant also entered into a Corporate Management Services Agreement, a
copy of which is attached as Exhibit 10.19 hereto ("OWC Europe Agreement"),
with Sorelenco Limited, organized under the laws of Cyprus ("Consultant"),
and an affiliate of Michepro, pursuant to which the Consultant agreed to
provide management services to a new entity being organized by the
Registrant, OWC Europe Marketing Corporation ("OWC Europe"). The Consultant
shall provide OWC Europe with services involving the day to day operations
of OWC Europe including, but not limited to management, business
development, sales and marketing of the products of the Registrant's
wholly-owned Israeli subsidiary, One World Cannabis Ltd and the hiring and
training of staff, among other services. In consideration for services, the Registrant agreed to issue to the
Consultant: (i) 1,442,308 restricted shares of the common stock, par value
$0.0001 (the "Shares"); (ii) Class M Warrants exercisable for a period of
twelve (12) months to purchase 1,250,000 Shares at an exercise price $0.08;
(iii) Class G Warrants exercisable for a period of twenty-four (24) months
to purchase 448,462 Shares at an exercise price $0.25; and (iv) Class H
Warrants exercisable for a period of thirty-six (36) months to purchase
448,462 Shares at an exercise price $0.40. This initial term of the OWC Europe Agreement shall be for thirty-six
(36) months subject to the extension upon the mutual written agreement of
the Parties prior to the expiration of the Term. On December 16, 2016, the Registrant entered into a Consulting Agreement
with Jeff Smurlick, a resident of the State of Florida, pursuant to which
the Consultant shall provide the Registrant with services in the areas of
investor relations and business development with the objective of generating
interest in the business of the Registrant and its subsidiary, including
assisting the Registrant in establishing relationships with the financial
and medical communities specializing in the field of medical cannabis as
well as with the general media which includes an investor relations (IR)
program for the Company. A copy of the Consulting Agreement is attached as
Exhibit 10.20 hereto. In consideration for the services, the Registrant
issued to the Consultant 200,000 Class G Warrants and 200,000 Class H
Warrants identical to the Class G and Class H Warrants described above. Item 3.02. Unregistered Sales of Equity Securities. The issuance of the Shares and Warrants was made in reliance upon the
exemptions provided in Section 4(2) of the Securities Act of 1933, as
amended (the "Act") and Regulation S, with respect to Sorelenco and
Regulation D with respect to Mr. Smurlick, both promulgated by the United
States Securities and Exchange Commission (the "SEC") under the Act. Item 9.01 Financial Statements and Exhibits. (a) The following documents are filed as exhibits to
this report on Form 8-K or incorporated by reference herein. Any document incorporated by
reference is identified by a parenthetical reference to the SEC filing that included such
document. Exhibit
No. Date: December 21, 2016
Name
of Issuee
Date of Issuance
Bases for Issuance
Warrants Issued
Shares Issued
Sorelenco Limited
12/11/2016
For Services - OWC Europe Agreement
1,250,000 Class M
Warrants; 448,462 Class G Warrants; and 448,462 Class H Warrants
,442,308
Jeff Smurlick
12/16/2016
Services
- Consulting Agreement
200,000 Class
G Warrants and 200,000 Class H Warrants
-
Description
10.19
OWC Europe
Agreement dated November 21, 2016, between the Registrant and Sorelenco
Limited, filed herewith.
10.20
Consulting
Agreement dated December 16, 2016, between the Registrant and Jeffrey
Smurlick, filed herewith.
OWC Pharmaceutical
Research Corp.
By:
/s/ Mordechai
Bignitz
Name:
Mordechai Bignitz
Title:
Chief Executive
Officer
Consulting Services Agreement
This Corporate Advisory Consulting Agreement (this "Agreement"), is made as of
December 16, 2016, between OWC Pharmaceutical Research Corp., a Delaware
corporation, having its principal place of business located at 22 Shacham
Street, P.O.B. 8324, Petach Tikva 4918103 Israel (the "Company") and Jeff
Smurlick, having an address at 10861 Bal Harbor Drive, Boca Raton, FL 33498 (the
"Consultant"). The Company and the Consultant are sometimes referred to
individually, as a "Party" and collectively, as the "Parties."
RECITALS:
A. The Consultant has the professional business and financial expertise and
experience in the areas of investor relations and business development;
B. The Consultant is offering its services as a consultant to the Company and
the Company desires to retain the Consultant as an independent contractor; and
C. The Parties agree that this Agreement reflects the entire understanding and
agreement between the Parties on the subject matter herein contained.
NOW, THEREFORE, in consideration of the premises and promises, warranties and
representations herein contained, it is agreed as follows:
1. Services: The Consultant shall provide the Company with services in the areas
of investor relations and business development with the objective of generating
interest in the Company and its business from the business and financial
community and investors.
(i) The investor relations services shall include assisting the Company in
establishing relationships with the financial and medical communities
specializing in the field of medical cannabis as well as with the general media
which includes an investor relations (IR) program for the Company; and
(ii) The Consultant shall identify and advise the Company on appropriate
financial events of potential interest for the Company’s participation.
The foregoing are collectively referred to as the "Services."
2. Compensation: In consideration for Services, the Company shall cause to be
issued to the Consultant: (i) 200,000 Class G Warrants exercisable on a
"cashless" basis for a period of 24 months from the date first set forth above
at an exercise price $0.25; and (ii) 200,000 Class H Warrants exercisable on a "cashless" basis for a period of 36 months from the date first set forth above
at an exercise price of $0.40. The Class G and Class H Warrants are referred to
collectively, as the "Warrants" and are evidenced by the respective Warrant
Agreements in the form attached hereto.
3. Term: This Agreement shall be for an initial term of twelve (12) months from
the date first set forth above (the "Term"), subject to the extension of the
Term upon the mutual written agreement of the Parties prior to the expiration of
the Term. Either Party may elect to terminate this Agreement on 30 days advanced
written notice to the other Party ("Termination Notice"), which shall become
effective on the 30th day ("Termination Date"). In the event of Termination by
either Party, any Warrants not exercised by the Consultant prior to the
Termination Date shall be deemed null and void.
4. Independent Contractor: The Consultant understands and acknowledges that
since the Consultant is an independent contractor of but is not an employee of
the Company. As a result, the Company will not withhold income taxes or pay any
employee taxes on its behalf, nor will the Consultant receive any benefits of an
employee. The Consultant shall not have any authority to assume or create any
obligations, express or implied, on behalf of the Company and shall have no
authority to represent the Company as agent, employee or in any other capacity
that as herein provided.
5. Representations and Warranties: For purposes of this Agreement, the
Consultant represents and warrants as follows:
(i) The Consultant has full power and authority to enter into this Agreement;
(ii) The Consultant does not have a preexisting personal or business
relationship with the Company or any of its directors or executive officers;
(iii) The Consultant is aware that the Warrants and any shares issuable upon
exercise of the Warrants (the "Warrant Shares") are not transferable under this
Agreement and applicable securities laws unless such securities are registered
under the Securities Act of 1933, as amended (the "Act") or pursuant to an
available exemption under Rule 144 or other rule or regulation promulgated by
the Securities and Exchange Commission (the "SEC") under the Act;
(iv) All information that the Consultant has provided to the Company concerning
the Consultant and the Consultant's knowledge of financial and business matters,
or, is correct and complete as of the date of this Agreement and may be relied
upon by the Company;
(v) In rendering the Services hereunder, the Consultant agrees to comply with
all applicable federal and state securities laws, the rules and regulations of
the SEC and of any exchange or quotation service on which the Company's
securities are listed and/or subject to quotation and the rules and regulations
of the National Association of Securities Dealers, Inc.
6. No Third Party Rights: The Parties warrant and represent that they are
authorized to enter into this Agreement and that no third parties, other than
the Parties hereto, have any interest in any of the Services contemplated
hereby.
7. Governing Law/Arbitration: This Agreement shall be governed by and construed
in accordance with the laws of the State of New York. Any dispute arising under
or related to this Agreement or the construction or application of this
Agreement, any claim arising out of this Agreement or its breach, shall be
submitted to arbitration in New York County, State of New York, before one
arbitrator in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, upon the written request of one Party after service of
that request on the other Party. The cost of arbitration shall be borne by the
losing Party. The arbitrator is also authorized to award reasonable attorney's
fees to the prevailing Party.
8. Validity: If any paragraph, sentence, term or provision hereof shall be held
to be invalid or unenforceable for any reason, such invalidity or
unenforceability shall not affect the validity enforceability of any other
paragraph, sentence, term and provision hereof. To the extent required, any
paragraph, sentence, term or provision of this Agreement may be modified by the
parties hereto by written amendment to preserve its validity.
9. Entire Agreement: This Agreement contains the entire understanding of the
Parties on the subject matter hereof and cannot be altered or amended except by
an amendment duly executed by all Parties hereto. This Agreement shall be
binding upon and inure to the benefit of the successors, assigns and personal
representatives of the Parties.
IN WITFESS WHEREOF, the Parties hereto have executed this Agreement effective as
of the date first written above.
OWC Pharmaceutical Research Corp. Jeff Smurlick (Consultant
/s/: Mordechai Bignitz /s/: Jeff Smurlick
Name: Mordechai Bignitz Name: Jeff Smurlick
Title: CEO
Corporate Management Consulting Agreement
This Corporate Management Consulting Agreement (this "Agreement"), is made as of
November 21, 2016, between OWC Pharmaceutical Research Corp., a Delaware
corporation, having its principal place of business located at 22 Shacham
Street, P.O.B. 8324, Petach Tikva 4918103 Israel (the "Company") and Sorelenco
Limited a company organized under the laws of the Island of Cyprus (the
"Consultant"). The Company and the Consultant are sometimes referred to
individually, as a "Party" and collectively, as the "Parties."
WHEREAS, the Consultant has the professional business and financial expertise
and experience in the areas of business operations management, business
development, marketing with the objective of generating interest in the
Company's products and services in Europe; and
WHEREAS, the Parties agree that the Consultant will render its services to OWC
Europe Marketing Corporation, an entity being organized ("OWC Europe") following
the execution and delivery of a separate investment/JV agreement between the
Parties;
NOW, THEREFORE, in consideration of the premises and promises, warranties and
representations herein contained, it is agreed as follows:
1. Services:
(i) The Consultant shall provide OWC Europe with services involving the day to
day operations of OWC Europe including, but not limited to management, business
development, sales and marketing of the Company's products and services in
Europe, and the hiring and training of staff (the "Services");
(ii) In rendering the Services, the Consultant shall be responsible to the board
of directors of OWC Europe and shall report on not less than a monthly basis to
the Company disclosing sales and expenses, among other financial information
reasonably requested by the Company; and
(iii) The Consultant acknowledges and understands that the Company is a public,
reporting company under the United States federal securities laws and the rules
and regulations of the United States Securities and Exchange Commission (the
"SEC") and, as a result, the Company is required to file reports with the SEC
under the Securities Exchange Act of 1934 (the "Exchange Act"). As a result, the
Consultant, in rendering its Services to OWC Europe, will follow the guidelines
of the Company’s chief executive officer and chief financial officer in keeping
OWC Europe’s books and records so that the Company can comply with the Exchange
Act reporting requirements and the rules and regulations of the SEC.
2. Compensation: In consideration for Services, the Company shall cause to be
issued to the Consultant:
(i) 1,442,308 restricted shares of the Company’s common stock, par value $0.0001
(the "Shares");
(ii) Class M Warrants exercisable for a period of twelve (12) months to purchase
1,250,000 Shares at an exercise price $0.08 in the form of Class M Warrant
Agreement attached hereto;
(iii) Class G Warrants exercisable for a period of twenty-four (24) months to
purchase 448,462 Shares at an exercise price $0.25 in the form of Class G
Warrant Agreement attached hereto; and
(iv) Class H Warrants exercisable for a period of thirty-six (36) months to
purchase 448,462 Shares at an exercise price $0.40 in the form of Class H
Warrant Agreement attached hereto.
3. Term: This Agreement shall be for an initial term of thirty-six (36) months
from the date first set forth above (the "Term"), subject to the extension of
the Term upon the mutual written agreement of the Parties prior to the
expiration of the Term. Either Party may elect to terminate this Agreement on
sixty (60) days advanced written notice to the other Party (the "Termination").
In the event of Termination by either Party prior to the exercise of the Class
G, Class H or Class M Warrants (collectively, the "Warrants"), all unexercised
Warrants shall not be subject to exercise and shall become null and void.
4. Representations and Warranties: For purposes of this Agreement, the
Consultant represents and warrants as follows:
(i) The Consultant is duly organized and validly existing under the laws of it
state of organization and has full power and authority to enter into this
Agreement;
(ii) The Consultant is aware that the Shares including the Shares underlying the
exercise of the Warrants are not transferable under this Agreement and
applicable securities laws unless such shares are registered under the
Securities Act of 1933, as amended (the "Act") or pursuant to an available
exemption under Rule 144 or other rule or regulation promulgated by the
Securities and Exchange Commission (the "SEC") under the Act;
(iii) All information that the Consultant has provided to the Company concerning
the Consultant and the Consultant's knowledge of financial and business matters,
is correct and complete as of the date of this Agreement and may be relied upon
by the Company;
(iv) In rendering the services hereunder and in connection with the Shares, the
Consultant agrees to comply with all applicable federal and state securities
laws, the rules and regulations thereunder, the rules and regulations of the SEC
and of any exchange or quotation service on which the Company's securities are
listed and/or subject to quotation and the rules and regulations of the National
Association of Securities Dealers, Inc.
5. No Third-Party Rights: The Parties warrant and represent that they are
authorized to enter into this Agreement and that no third parties, other than
the Parties hereto, have any interest in any of the Services contemplated
hereby.
6. Governing Law/Arbitration: This Agreement shall be governed by and construed
in accordance with the laws of the State of New York. Any dispute arising under
or related to this Agreement or the construction or application of this
Agreement, any claim arising out of this Agreement or its breach, shall be
submitted to arbitration in New York County, State of New York, before one
arbitrator in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, upon the written request of one Party after service of
that request on the other Party. The cost of arbitration shall be borne by the
losing Party. The arbitrator is also authorized to award reasonable attorney's
fees to the prevailing Party.
7. Validity: If any paragraph, sentence, term or provision hereof shall be held
to be invalid or unenforceable for any reason, such invalidity or
unenforceability shall not affect the validity enforceability of any other
paragraph, sentence, term and provision hereof. To the extent required, any
paragraph, sentence, term or provision of this Agreement may be modified by the
parties hereto by written amendment to preserve its validity.
8. Entire Agreement: This Agreement contains the entire understanding of the
Parties on the subject matter hereof and cannot be altered or amended except by
an amendment duly executed by all Parties hereto. This Agreement shall be
binding upon and inure to the benefit of the successors, assigns and personal
representatives of the Parties.
IN WITFESS WHEREOF, the Parties hereto have executed this Agreement effective as
of the date first written above.
OWC Pharmaceutical Research Corp. Sorelenco Limited
/s/: Mordechai Bignitz /s/: ___________________
Name: Mordechai Bignitz Name:
Title: CEO