UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM
CURRENT REPORT
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Item 1.01. Entry into a Material Definitive Agreement
Settlement Agreement to Compromise Debt
On June 3, 2022, the Company entered into a Settlement Agreement with James Owens, its Chairman and Chief Technology Officer to settle the $1,644,583.34 debt owed to Mr. Owens (comprised of $756, 450 Due to Shareholder and $874, 833.34 accrued salary and related expense on the Company’s Balance Sheet) in exchange for a Convertible Promissory Note in the amount of $1,101,000.00. Additionally, Mr. Owens agreed to forgive the balance owed to him of $543, 583.34 and reduce the salary on his employment contract, effective immediately, to $1.00 per year.
On June 3,2022, the Company issued Mr. Owens a Convertible Promissory Note in the amount of $1,101,000 in accordance with the Settlement Agreement. The maturity date of the note is twenty-four months from the date of issue. The conversion provision states that the note may be converted into Common Stock of the Company at any time beginning three days after issuance of the note and ending on the maturity date, at a conversion rate of $0.01 per share. The note bears interest at the rate of 8 percent per annum.
Item 5.02. Compensatory Arrangements of Certain Officers
Amended Executive Employment Agreement
On June 3, 2022, the Company amended the Executive Employment Agreement of James Owens dated January 2020, changing Mr. Owens’ salary from $350,000 to $1.00 per year.
Cancelation of Stock Option Grant
On June 3, 2022, the Company’s Board of Directors canceled the Stock Option Grant granted to the Company’s CFO on December 9, 2022.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
| 10.1* | Settlement Agreement to Compromise Debt |
| 10.2* | Convertible Promissory Note |
| 10.3*+ | Amended Executive Employment Agreement |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
*Filed herewith
+Includes management contacts and compensation plans and arrangements
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| Dated: June 8, 2022 | By: | /s/ Harold E. Hutchins |
| Harold E. Hutchins | ||
| Chief Financial Officer | ||
| (principal financial and accounting officer) |