NOTE RECEIVABLE

12 Months Ended

Feb. 28, 2022

NOTE RECEIVABLE

NOTE 3. NOTE RECEIVABLE

NOTE 3. NOTE RECEIVABLE

On March 12, 2021, the Company, through its wholly owned subsidiary HBR Pointclear, LLC, a Delaware limited liability company (“HBRP”); and PointClear Solutions, Inc., an Alabama corporation (“PointClear”) entered into an Option Agreement to Purchase Business Assets (the “Option Agreement”). The term of the Option (the “Option Term”) commenced on March 12, 2021, and automatically expires on August 1, 2022 (the “Option Termination Date”), unless duly extended, exercised, or sooner terminated as provided in the Option Agreement.

PointClear is a health care focused information technology solutions company that provides its clients technology driven solutions based upon its three core competencies; (i) Strategic planning, (ii) Digitization and Design, and (iii) Production and Implementation (the “Business”). Pursuant to the Option Agreement, PointClear granted to HBRP an exclusive non-cancelable option (the “Option”) to require PointClear to enter into an Asset Purchase Agreement (the “Asset Purchase Agreement”) under which, HBRP may (i) purchase all of PointClear’s tangible and intangible assets used in, or useful to the Business (the “Business Assets”), and (ii) the assume certain defined liabilities and contracts related to the Business. The Option provides HBRP the right, but not the obligation, to (i) enter into the Asset Purchase Agreement at any time until August 1, 2022 (the “Option Term”), and (ii), require PointClear to sell the Business Assets and perform under the Asset Purchase Agreement. 

Pursuant to the Option, HBRP shall arrange for a unsecured loan of up to $750,000 to PointClear (the “Improvement Loan”) pursuant to the Improvement Loan Agreement (the “Improvement Loan Agreement”), as consideration for obtaining rights under the Option. The loan agreement matures on the earlier of August 1, 2022, or the closing of the purchase of the Asset Purchase Agreement. PointClear is required to use the proceeds under the Improvement Loan to improve the Business and offset operating costs. If HBRP elects to exercise the Option it shall be obligated to pay to PointClear the consideration set forth in the Asset Purchase Agreement and comply with such other terms and conditions that are set forth in the Asset Purchase Agreement. The repayment of any monies lent under the Improvement Loan Agreement to PointClear will be determined based on whether or not HBRP elects to exercise the Option and enter into the Asset Purchase Agreement with Pointclear. The Option Agreement contains customary representations, warranties and covenants of PointClear and HBRP.

On March 12, 2021, our Company, through our wholly owned subsidiary HBR Pointclear, LLC, a Delaware limited liability company (“HBRP”); and PointClear Solutions, Inc., an Alabama corporation (“PointClear”) entered into an Option Agreement To Purchase Business Assets (the “Option Agreement”). The Option Agreement provided HBRP the exclusive non-cancelable right to require PointClear to enter into an Asset Purchase Agreement (“Asset Purchase Agreement”) under which, HBRP would (i) purchase all of PointClear’s tangible and intangible assets used in, or useful to the PointClear business (the “Business Assets”), and (ii) the assume certain defined liabilities and contracts of PCS related to the Business. As partial consideration for receiving its rights to purchase the Business Assets under the Option Agreement, HBRP arranged for a loan of up to $750,000 to PointClear pursuant to the Improvement Loan Agreement (the “Improvement Loan Agreement”) evidenced by and repaid in accordance with the terms of a promissory note (the “Promissory Note”). On March 16, 2021, pursuant to the Option Agreement and Improvement Loan Agreement, PointClear made its first draw under the Improvement Loan Agreement for $200,000.

On September 29, 2021, all of the above parties entered into a Separation and Settlement Agreement (“Separation and Settlement Agreement”), effective October 1, 2021, and terminated their mutual obligations under the Option Agreement and Improvement Loan Agreement. Pursuant to the Separation and Settlement Agreement, with respect to the:

1.	Option Agreement, the Option Agreement was cancelled and neither of the parties have any current or future rights or obligations under the Option Agreement.
2.	Improvement Loan Agreement, the principal owed by PointClear under the Improvement Loan Agreement was reduced to $150,000. Within 30 days of October 1, 2021, PointClear shall pay to HBRP, or its designee, $25,000 which shall reduce the principal owed under the Improvement Loan Agreement to $125,000. PointClear shall pay to HBRP, or its designee, $25,000 upon receipt from CHC of the amount owed following “Final Acceptance” testing. Any balance remaining under the Improvement Loan Agreement is hereby converted to a 60-month term loan pursuant to Section 2.05 of the Improvement Loan Agreement, and its repayment shall remain subject to the Improvement Loan Agreement.
3.	Consulting and Registrant Stock Option Agreements, the Consulting Agreements by and between HBRP and related consultants were cancelled by mutual consent and no money or consideration is owed or payable to any party thereunder according to the terms of such Consulting Agreements. The related stock option agreements by and between the Company and related consultants were cancelled by mutual consent and all option shares, vested or unvested were terminated.

During the year ended February 28, 2022, the Company recorded a $50,000 note receivable impairment related to the separation and settlement agreement. As of February 28, 2022, the note receivable balance due from Pointclear is $139,553.