Item 1.01Entry into a Material Definitive Agreements.
Third Amendment to Integrated License Agreement
In the course of the preparation of Bakhu's financial statements to be audited
for inclusion in Bakhu's Annual Report on Form 10-K for its fiscal year ended
July 30, 2021 (the "Form 10-K"), Bakhu determined that with the achievement of
efficacy on July 12, 2021, the amount of the offset against the $3.5 million
(the "One-Time Payment") needed to be determined to arrive at the net amount of
the One-time Payment Note payable by Bakhu to the Licensor. In undertaking to
review and ascertain the offset against the One-time Payment Note, Bakhu and
Cell Science were unable to agree on the nature and amount of the expense
advances to Cell Science representatives to the Science Team, as defined in the
Integrated License Agreement, to be offset against the principal amount of the
One-time Payment Note.
On January 31, 2022 Bakhu and Cell Science reached a mutual resolution and
entered into a Third Amendment to the Integrated License Agreement1 (the
"January 2022 Amendment").
In general, the January 2022 Amendment provided that:
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1 The Integrated License Agreement consists of that certain Patent and
Technology License Agreement, dated December 20, 2018, which on December 31,
2019, was restated in its entirety by the Amended and Restated Patent and
Technology License Agreement (the "Restated License"). The Restated License
Agreement was amended by that certain Amendment to the Amended and Restated
Patent and Technology License Agreement entered into as of September 22, 2020
(the "September 2020 Amendment"), further amended by that certain First
Amendment of the Amendment to the Amended and Restated Patent and Technology
License Agreement entered into as of February 8, 2021 (the "First Amendment"),
and further amended by that certain Second Amendment of the Amendment to the
Amended and Restated Patent and Technology License Agreement entered into as of
July 12, 2021 (the "Second Amendment").
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1.There shall be no reduction and offset against the One-time Payment.
Concurrently with the execution of January 2022 Amendment, Bakhu executed and
delivered to Cell Science, the One-time Payment Note in the principal amount of
$3,500,000 (the "One-Time Payment Note") with simple interest accruing thereon
at the applicable federal short-term annual rate of 0.44% under IRC Section
1274(d), from the date of execution. All unpaid principal and accrued and
unpaid interest will be due and payable on or before the first anniversary date
of the One-Time Payment Note. A copy of the One-Time Payment Note is attached as
Exhibit 1 to the January 2022 Amendment.
2.In lieu of any offset and reduction against the One-Time Payment Note,
Concurrently with the execution of January 2022 Amendment, Cell Science and OZ
Corporation, parties to that certain Research and Development Agreement dated
March 8, 2019, as amended March 12, 2020, (the "VO Leasing R&D Agreement") for
the lease the premises (the "Facility") used as the laboratory at which research
and development of the intellectual property and licensed science, entered into
the Landlord Consent to Assignment and Assumption of Lease and Release of
Assignor (the "Lease Assignment") whereby Cell Science and OZ Corporation
assigned of all right, title and interest under the VO Leasing R&D Agreement, to
Bakhu. A copy of the Lease Assignment is attached as Exhibit 2 to the January
2022 Amendment.
3.Further in lieu of any offset and reduction against the One-Time Payment Note
to Cell Science and in consideration of Bakhu's repayment of the amounts owing
to OZ Corporation pursuant to the Promissory Note dated August 1, 2019 (the "OZ
Note"), evidencing amounts paid or incurred by OZ Corporation respecting
activities at the facility and related to the acquisition or use of equipment,
supplies, consumables, compensation, and other costs and expenses, concurrently
with the execution of January 2022 Amendment, Cell Science and OZ Corporation,
executed and delivered the Assignment, Bill of Sale and Assumption (the "Lab
Assignment"), whereby Cell Science and OZ Corporation assigned to Bakhu, all
right, title and interest in and to all tangible and intangible person property
(excluding the intellectual property and licensed science covered by the
Integrated License Agreement) contained in or appurtenant to the laboratory
located at the Facility. A copy of the Lab Assignment is attached as Exhibit 3
to the January 2022 Amendment.
4.Sections 2.5, 7.3 and 7.4 of Restated License Agreement (as subsequently
amended, by merging all amendments into the Integrated License Agreement) be
amended to correct the contradictory and inconsistent language of those
sections.
The foregoing summary descriptions of the terms of the January 2022 Amendment is
a summary only and does not purport to be complete, may not contain all
information that is of interest to the reader and is qualified in its entirety
by reference to the full text the January 2022 Amendment, attached hereto as
Exhibit 10.01 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits. The following exhibits are either filed as a part hereof or
are incorporated by reference. Exhibit numbers correspond to the numbering
system in Item 601 of Regulation S-K.
Exhibit
Number Description of Exhibit
10.1 January 2022 Amendment (i.e., the Third Amendment to Integrated
License Agreement dated January 31, 2022 (1)
(1) Filed herewith
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