Exhibit 2.1
AN OFFERING STATEMENT PURSUANT TO REGULATION A RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. INFORMATION CONTAINED IN THIS PRELIMINARY OFFERING CIRCULAR IS SUBJECT TO COMPLETION OR AMENDMENT. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED BEFORE THE OFFERING STATEMENT FILED WITH THE COMMISSION IS QUALIFIED. THIS PRELIMINARY OFFERING CIRCULAR SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR MAY THERE BE ANY SALES OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL BEFORE REGISTRATION OR QUALIFICATION UNDER THE LAWS OF SUCH STATE. THE COMPANY MAY ELECT TO SATISFY ITS OBLIGATION TO DELIVER A FINAL OFFERING CIRCULAR BY SENDING YOU A NOTICE WITHIN TWO BUSINESS DAYS AFTER THE COMPLETION OF THE COMPANY’S SALE TO YOU THAT CONTAINS THE URL WHERE THE FINAL OFFERING CIRCULAR OR THE OFFERING STATEMENT IN WHICH SUCH FINAL OFFERING CIRCULAR WAS FILED MAY BE OBTAINED.
PRELIMINARY OFFERING CIRCULAR - DATED JANUARY 23, 2025
SUBJECT TO COMPLETION
ENDLESS CORPORATION
Registrant’s principal address: 10026 S. Mingo Rd #232 Tulsa, OK 74133
Registrant’s telephone number, including area code: (916) 786-0200
Registrant’s website: Endlessbiotech.com
Endless Corporation (herein referred to as “we,” “us,” “our,” and the “Company”) is offering up to 75,000,000 shares of our Series A preferred stock (the “Shares”) at $1.00 per share, for gross proceeds of up to $75,000,000.00. For more information on the securities offered hereby, please see the item titled “Securities Being Offered” on page 38. The minimum investment established for each investor is $650.00. The sale of Shares will commence within two days from this Offering Circular, as amended from time-to-time, being qualified by the Securities and Exchange Commission (“SEC”). For more information on the securities offered hereby, please see the item titled “Securities Being Offered” on page 38.
| Price of common stock | Price to Public [1] | Underwriting Discount and Commissions [2] | Proceeds to Issuer [3] | |||||||||
| Per Share | $ | 1.00 | $ | 0.01 | $ | 0.99 | ||||||
| Total Maximum | $ | 75,000,000.00 | $ | 750,000 | $ | 74,250,000 | ||||||
| (1) | All amounts in this chart and circular are in U.S. dollars unless otherwise indicated. There is no minimum offering amount and no provision to escrow or return investor funds if any minimum number of Shares is not sold. All investor funds will be held in a segregated Company account until the investor’s subscription is accepted by the Company, at which time such funds will become available for the Company’s use. We will conduct separate closings, which closings may be conducted on a rolling basis. Closings will be conducted promptly after receiving investor funds. |
| (2) | Dalmore Group, LLC, a Delaware limited liability company, referred to herein as the “Broker,” is engaged for administrative and compliance related services in connection with this Offering, but not for underwriting or placement agent services. The fee table includes the 1% commission payable to Broker but it does not include the one-time expense allowance of $5,000, or consulting fees of $20,000 payable to Broker. Please see “Plan of Distribution” for additional information. |
| (3) | We expect to incur expenses relating to this offering in addition to the fees due to the Broker, including, but not limited to, legal, accounting, marketing, travel, and other miscellaneous expenses, which are not included in the foregoing table. See “Use of Proceeds” for more detail. |
Generally, no sale may be made to you in this offering if the aggregate purchase price you pay is more than 10% of the greater of your annual income or net worth. Different rules apply to accredited investors and non-natural persons. Before making any representation that your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(C) of Regulation A. For general information on investing, we encourage you to refer to www.investor.gov.
Our preferred stock is not now listed on any national securities exchange, quotation system or the Nasdaq stock market and there is no market for our securities. There is no guarantee, and it is unlikely, that an active trading market will develop in our securities. Investors should be prepared to hold our Shares indefinitely.
This offering is being made pursuant to Tier 2 of Regulation A, following the Form 1-A Offering Circular disclosure format.
This offering is highly speculative and these securities involve a high degree of risk and should be considered only by persons who can afford the loss of their entire investment. See “Risk Factors” on Page 4.
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION.
TABLE OF CONTENTS
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This summary highlights some of the information in this circular. It is not complete and may not contain all of the information that you may want to consider. To understand this offering fully, you should carefully read the entire circular, including the section entitled “Risk Factors” and the exhibits, before making a decision to invest in our securities. Unless otherwise noted or unless the context otherwise requires, the terms “we,” “us,” “our,” “TA,” and the “Company” refer to Endless Corporation together with its wholly owned subsidiaries. In instances where we refer emphatically to “Endless Corporation” or where we refer to a specific subsidiary of ours by name, we are referring only to that specific legal entity. The term “Offering Circular” refers to this Offering Circular which comprises Part 2 of the Offering Statement (“Offering Statement”) filed with the SEC on Form 1-A of which this Offering Circular is a part.
The Company
Endless Corporation was founded in 2021 and is a domestic corporation organized under the laws of the Oklahoma. Our executive offices are located at 3810 South Elwood Ave Tulsa, OK 74107, our principal mailing address is 10026 S. Mingo Rd #232 Tulsa, OK 74133, and our telephone number is (916) 786-0200.
The Company’s securities are not traded on any national exchange or quoted on any trading platform and there is no market for the Units offered hereby or the securities underlying such Units. There is currently no specific intent to register our securities under the U.S. Exchange Act of 1934 (“Exchange Act”) or become an alternative reporting company.
Business Overview
The Company is a startup, development stage, biotechnology company focused on specializing in pharmaceutical-grade tissue cultures, clone genetics, genetic preservation, disease cleanup, and virus testing for cannabis plants. Thus far, we have generated revenue with limited commercial operations and have been selling our products primarily in Oklahoma. We hope to fundamentally change the way agriculture is cultivated with disease and pest-free genetics and our data collection and technologies will make cultivating agriculture more effective and profitable for our end user agricultural farmers.
The Company is also engaged in pheno-hunting, a process of selecting the best phenotype of each strain for mass production. Phenotypes expressed include smell, color, potency, resin production, height, etc. Phenotypes must be grown, harvested, dried and cured to determine quality. Once the best phenotype is selected, we clone them to get exact copies of the phenotype. These clones can then be mass produced for sale. We are also researching crop steering methods for our genetic clones. We continually collect data throughout the cultivation process to increase yield, quality, scale, and profitability.
All these efforts are meticulously researched to help our end users (agricultural farmers) to succeed with our immature plants in their cultivation process. The data we collect will help high-performance; science driven cultivators grow better agriculture ultimately for the end user. All our data and research will be made available to our agricultural farmers to cultivate the next generation of disease and pathogen free plants. Cultivators using our proprietary data can dramatically improve their cultivation methods.
Capitalization
The Company is authorized to issue 5,000,000,000 shares of stock with 3,470,000,000 shares of common stock at $0.0001 par value and 1,530,000,000 shares of preferred stock at $0.0001 par value authorized. As of the date of this offering circular the Company had 901,000,000 shares of common stock outstanding and 66,423,818 shares of preferred stock outstanding. Following this offering, assuming all offered Shares are sold and no other securities of the Company are issued other than the conversion of $3,970,000 in convertible notes with a qualification date of December 31, 2024, the Company will have 901,000,000 shares of common stock outstanding and 156,300,879 shares of preferred stock outstanding. If the qualification date is after December 31, 2024, the amount of preferred stock outstanding shall increase due to an increase in the amount of preferred stock issuable upon conversion of the convertible notes.
Note: the above amounts include a stock award to Numbers Matter Capital Inc. for marketing and investor relations services which consists of six million shares of series A preferred stock and twenty million shares of common stock. The stock award will be issued pursuant to the vesting schedule in the services contract attached hereto as Exhibit 6.6.
Use of Proceeds
In general, the Company will use net proceeds from the offering for marketing, research and development, staffing, and property, plant, and equipment. See “Use of Proceeds” on page 24 for more detail.
The Offering
This Offering Circular relates to the sale of up to 75,000,000 Shares of our series A preferred stock at a price of $1.00 per Share, for gross proceeds of up to $75,000,000.00, assuming all Shares are sold. There is no minimum offering amount and no provision to escrow or return investor funds if any minimum number of shares is not sold. The minimum investment amount established for each investor is $650.00. All funds raised by the Company from this offering will be immediately available for the Company’s use upon acceptance of an investor’s subscription.
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Shares are being offered on a “best efforts” basis. We have engaged Dalmore Group, LLC to act as the Broker of record in connection with this Offering, but not for underwriting or placement agent services. We have also engaged affiliates of the Broker to provide technology, marketing, and transfer agent services.
In order to subscribe to purchase the Shares, a prospective investor must complete a subscription agreement and send payment by wire transfer, ACH, or credit card through our subscription portal at Invest.endlessbiotech.com. We have engaged Industry FinTech Inc, an affiliate of Broker, to maintain our deal portal. Investors must answer certain questions to determine compliance with the investment limitation set forth in Regulation A Rule 251(d)(2)(i) under the Securities Act, which states that in offerings such as this one, where the securities will not be listed on a registered national securities exchange upon qualification, the aggregate purchase price to be paid by an investor who is a natural person for the securities cannot exceed 10% of the greater of the investor’s annual income or net worth, unless the purchaser is an accredited investor. In the case of an investor who is not a natural person, revenues or net assets for the investors’ most recently completed fiscal year are used instead.
This offering will terminate at the earlier to occur of: (i) all Shares offered hereby are sold, (ii) three years from the date this Offering Circular, as amended, is qualified with the SEC, or (iii) such earlier date as determined by the Company.
ABOUT THIS CIRCULAR
We have prepared this Offering Circular to be filed with the SEC for our offering of securities. The Offering Circular includes exhibits that provide more detailed descriptions of the matters discussed in this Offering Circular.
You should rely only on the information contained in this Offering Circular and its exhibits. We have not authorized any person to provide you with any information different from that contained in this Offering Circular. The information contained in this Offering Circular is complete and accurate only as of the date of this Offering Circular, regardless of the time of delivery of this Offering Circular or sale of our shares. This Offering Circular contains summaries of certain other documents, but reference is hereby made to the full text of the actual documents for complete information concerning the rights and obligations of the parties thereto. All documents relating to this offering and related documents and agreements, if readily available to us, will be made available to a prospective investor or its representatives upon request.
INDUSTRY AND MARKET DATA
The industry and market data used throughout this Offering Circular have been obtained from our own research, surveys or studies conducted by third parties and industry or general publications. Industry publications and surveys generally state that they have obtained information from sources believed to be reliable, but do not guarantee the accuracy and completeness of such information. We believe that each of these studies and publications is reliable. We have not engaged any person or entity to provide us with industry or market data.
TAX CONSIDERATIONS
No information contained herein, nor in any prior, contemporaneous or subsequent communication should be construed by a prospective investor as legal or tax advice. We are not providing any tax advice as to the acquisition, holding or disposition of the securities offered herein. In making an investment decision, investors are strongly encouraged to consult their own tax advisor to determine the U.S. Federal, state and any applicable foreign tax consequences relating to their investment in our securities. This written communication is not intended to be “written advice,” as defined in Circular 230 published by the U.S. Treasury Department
Any investment in our common stock involves a high degree of risk. Investors should carefully consider the risks described below and all of the information contained in this Offering Circular before deciding whether to purchase our common stock. Our business, financial condition or results of operations could be materially adversely affected by these risks if any of them actually occur. Some of these factors have affected our financial condition and operating results in the past or are currently affecting us. This Offering Circular also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks described below and elsewhere in this Offering Circular. In addition to the other information provided in this Offering Circular, you should carefully consider the following risk factors in evaluating our business before purchasing any of our common stock. Material risks identified by the Company are discussed in this section; however, discussion may not include all risks applicable to an investment in Shares to the extent such risks have not been contemplated by the Company.
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Risks Related to this Offering and our Common Stock
There is no current market for any shares of the Company’s stock.
You should be prepared to hold this investment indefinitely. More importantly, there is no established market for these securities and there may never be one. As a result, if you decide to sell these securities in the future, you may not be able to find a buyer. Investors should assume that they may not be able to liquidate their investment or be able to pledge their shares as collateral.
Investors will not have any voting rights in the Company.
The preferred stock is not entitled to vote on Company matters, and investors will not be entitled to influence company decisions. Accordingly, individual investors should anticipate no ability to direct the Company’s operations.
Using a credit card to purchase shares may impact the return on your investment as well as subject you to other risks inherent in this form of payment.
Investors in this offering may at some point have the option of paying for their investment with a credit card, which is not usual in the traditional investment markets. Transaction fees charged by your credit card company and interest charged on unpaid card balances (which can reach almost 30% in some states) add to the effective purchase price of the shares you buy. See “Plan of Distribution and Selling Shareholders.” The cost of using a credit card may also increase if you do not make the minimum monthly card payments and incur late fees. Using a credit card is a relatively new form of payment for securities and will subject you to other risks inherent in this form of payment, including that, if you fail to make credit card payments (e.g. minimum monthly payments), you risk damaging your credit score and payment by credit card may be more susceptible to abuse than other forms of payment. Moreover, where a third-party payment processor is used, your recovery options in the case of disputes may be limited. The increased costs due to transaction fees and interest may reduce the return on your investment.
The SEC’s Office of Investor Education and Advocacy issued an Investor Alert dated February 14, 2018, entitled Credit Cards and Investments – A Risky Combination, which explains these and other risks you may want to consider before using a credit card to pay for your investment.
The subscription agreement has a forum selection provision that requires disputes be resolved in state or federal courts in the state of Oklahoma, regardless of convenience or cost to you, the investor.
As part of this investment, each investor will be required to agree to the terms of the subscription agreement included as Exhibit 4.1 to the Offering Statement of which this Offering Circular is part. In the agreement, investors agree to resolve disputes arising under the subscription agreement in state or federal courts located in the state of Oklahoma, for the purpose of any suit, action or other proceeding arising out of or based upon the agreement. Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. The Company believes that the exclusive forum provision applies to claims arising under the Securities Act, but there is uncertainty as to whether a court would enforce such a provision in this context. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. You will not be deemed to have waived the Company’s compliance with the federal securities laws and the rules and regulations thereunder. This forum selection provision may limit your ability to obtain a favorable judicial forum for disputes with us. Although we believe the provision benefits us by providing increased consistency in the application of Oklahoma law in the types of lawsuits to which it applies and in limiting our litigation costs, to the extent it is enforceable, the forum selection provision may limit investors’ ability to bring claims in judicial forums that they find favorable to such disputes, may increase investors’ costs of bringing suit and may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the provision inapplicable to, or unenforceable in an action, the Company may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect its business, financial condition or results of operations.
We do not anticipate paying any cash dividends.
We presently do not anticipate that we will pay any dividends on any of our preferred stock in the foreseeable future. The payment of dividends, if any, would be contingent upon our revenues and earnings, if any, capital requirements, and general financial condition. The payment of any dividends will be within the discretion of our Board of Directors (the “Board”). We presently intend to retain all earnings to implement our business plan; accordingly, we do not anticipate the declaration of any dividends in the foreseeable future.
We may need additional capital, and the sale of additional Shares or other equity securities could result in additional dilution to our stockholders.
We may require additional capital for the development and commercialization of our products and may require additional cash resources due to changed business conditions or other future developments, including any investments or acquisitions we may decide to pursue. If our resources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity securities could result in additional dilution to our stockholders. The incurrence of additional indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.
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Because our management will have broad discretion and flexibility in how the net proceeds from this offering are used, we may use the net proceeds in ways in which you disagree.
The intended use of proceeds from this offering is more particularly described in the Section titled “Use of Proceeds,” however, such description is not binding and the actual use of proceeds may differ from the description contained therein. Accordingly, our management will have significant discretion and flexibility in applying the net proceeds of this offering. You will be relying on the judgment of our management with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the net proceeds are being used appropriately. It is possible that the net proceeds will be invested in a way that does not yield a favorable, or any, return for us. The failure of our management to use such funds effectively could have a material adverse effect on our business, financial condition, operating results and cash flow.
The offering price of our Shares from the Company has been arbitrarily determined.
Our management has determined the Shares offered by the Company. The price of the Shares we are offering was arbitrarily determined based upon the illiquidity of our preferred stock, our current financial condition and the prospects for our future cash flows and earnings, and market and economic conditions at the time of the offering. The offering price for the preferred stock sold in this offering may be more or less than the fair market value for our preferred stock.
The best-efforts structure of this offering may yield insufficient gross proceeds to fully execute our business plan.
Shares are being offered on a best-efforts basis. We are not required to sell any specific number or dollar amount of preferred stock but will use our best efforts to sell the Shares offered by us. As a “best efforts” offering, there can be no assurance that the offering contemplated by this Offering Circular will result in any proceeds being made available to us.
We may not register or qualify our securities with any state agency pursuant to blue sky regulations.
The holders of our shares of preferred stock and persons who desire to purchase them in the future should be aware that there may be significant state law restrictions upon the ability of investors to resell our shares. We currently do not intend to and may not be able to qualify securities for resale in states which require shares to be qualified before they can be resold by our shareholders.
We could face significant penalties for our failure to comply with the terms of our outstanding convertible promissory notes.
Our outstanding promissory notes contain positive and negative covenants and customary events of default. In the event events of defaults occur under the notes, we could face significant penalties and/or liquidated damages, all of which could have a material adverse effect on our results of operations and financial condition or cause any investment in the Company to decline in value or become worthless.
Compliance with Regulation A and reporting to the SEC could be costly.
Compliance with Regulation A could be costly and requires legal and accounting expertise. After qualifying this Form 1-A, we will be required to file an annual report on Form 1-K, a semi-annual report on Form 1-SA, and current reports on Form 1-U.
Our legal and financial staff may need to be increased in order to comply with Regulation A. Compliance with Regulation A will also require greater expenditures on outside counsel, outside auditors, and financial printers in order to remain in compliance. Failure to remain in compliance with Regulation A may subject us to sanctions, penalties, and reputational damage and would adversely affect our results of operations.
We will be required to publicly report on an ongoing basis under the reporting rules set forth in Regulation A for Tier 2 issuers. Therefore, we will be subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not “emerging growth companies,” and our investors could receive less information than they might expect to receive from exchange traded public companies.
We will be required to publicly report on an ongoing basis under the reporting rules set forth in Regulation A for Tier 2 issuers. The ongoing reporting requirements under Regulation A are more relaxed than for “emerging growth companies” under the Exchange Act. The differences include, but are not limited to, being required to file only annual and semi-annual reports, rather than annual and quarterly reports. Annual reports are due within 120 calendar days after the end of the issuer’s fiscal year, and semi-annual reports are due within 90 calendar days after the end of the first six months of the issuer’s fiscal year. Therefore, our investors could receive less information than they might expect to receive from exchange traded public companies.
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Shares are being offered under an offering exemption under Regulation A and, if it were later determined that such exemption was not available, purchasers would be entitled to rescind their purchase agreements.
Shares are being offered to prospective investors pursuant to Tier 2 of Regulation A under the Securities Act. Unless the sale of Shares should qualify for such exemption the investors might have the right to rescind their purchase of Shares. Since compliance with these exemptions is highly technical, it is possible that if an investor were to seek rescission, such investor would succeed. A similar situation prevails under state law in those states where Shares may be offered without registration. If a number of investors were to be successful in seeking rescission, the Company would face severe financial demands that could adversely affect the Company and, thus, the non-rescinding investors. Inasmuch as the basis for relying on exemptions is factual, depending on the Company’s conduct and the conduct of persons contacting prospective investors and making the offering, the Company will not receive a legal opinion to the effect that this offering is exempt from registration under any federal or state law. Instead, the Company will rely on the operative facts as documented as the Company’s basis for such exemptions.
Investors in this offering may not be entitled to a jury trial with respect to claims arising under the Subscription Agreement, which could result in less favorable outcomes to the plaintiff(s) in any action under these Agreements.
Investors in this offering will be bound by the Subscription Agreement, which includes a provision under which investors waive the right to a jury trial of any claim, other than claims arising under federal securities laws, that they may have against the Company arising out of or relating to these agreements. By signing the Subscription Agreement, the investor warrants that the investor has reviewed this waiver with his or her legal counsel, and knowingly and voluntarily waives the investor’s jury trial rights following consultation with the investor’s legal counsel.
If you bring a claim against the Company in connection with matters arising under the Subscription Agreement, other than claims under the federal securities laws, you may not be entitled to a jury trial with respect to those claims, which may have the effect of limiting and discouraging lawsuits against the Company. If a lawsuit is brought against the Company, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different outcomes than a trial by jury would have had, including results that could be less favorable to the plaintiff(s) in such an action.
The securities acquired in this Offering may be significantly diluted as a consequence of subsequent equity financings and conversion of warrants, options and convertible debt.
The Company’s equity securities will be subject to dilution. The Company may issue additional equity to employees and third-party financing sources in amounts that are uncertain at this time, and as a consequence, holders of the Securities offered herein will be subject to dilution in an unpredictable amount. Such dilution may reduce the Investor’s control and economic interests in the Company.
The amount of additional financing needed by the Company will depend upon several contingencies not foreseen at the time of this Offering. Generally, additional financing (whether in the form of loans or the issuance of other securities) will be intended to provide the Company with enough capital to reach the next major corporate milestone. If the funds received in any additional financing are not sufficient to meet the Company’s needs, the Company may have to raise additional capital at a price unfavorable to their existing investors, including the holders of the Shares. The availability of capital is at least partially a function of capital market conditions that are beyond the control of the Company. There can be no assurance that the Company will be able to accurately predict the future capital requirements necessary for success or that additional funds will be available from any source. Failure to obtain financing on favorable terms could dilute or otherwise severely impair the value of the Securities.
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Anti-takeover provisions in Oklahoma law could discourage, delay, or prevent a change in control of the Company and may affect the trading price of our Shares.
We are an Oklahoma corporation, and the anti-takeover provisions of the Oklahoma General Corporation Act may discourage, delay, or prevent a change in control in certain situations.
Because we have not paid dividends in the past and do not expect to pay dividends in the near future, any return on investment may be limited to the value of our shares.
We have never paid cash dividends on our stock and do not anticipate paying cash dividends in the foreseeable future. The payment of dividends on our stock will depend on earnings, financial condition and other business and economic factors affecting it at such a time that management may consider relevant. If we do not pay dividends, our stock may be less valuable because a return on your investment will only occur if its stock price appreciates.
We may need additional capital, and the sale of additional shares or other equity securities will result in additional dilution to our stockholders.
We may require additional capital for our operations and may require additional cash resources due to changed business conditions or other future developments. If our resources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity securities will result in additional dilution to our stockholders. The incurrence of additional indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.
There is no market for our Shares.
Our Shares are not currently listed on any exchange or otherwise publicly traded. There is no assurance that an Investor will realize a return on their investment or that they will not lose their entire investment.
If we are required to register any Shares under the Exchange Act, it would result in significant expense and reporting requirements that would place a burden on the Company.
Subject to certain exceptions, Section 12(g) of the Exchange Act requires an issuer with more than $10 million in total assets to register a class of its equity securities with the Commission under the Exchange Act if the securities of such class are held of record at the end of its fiscal year by more than 2,000 persons or 500 persons who are not “accredited investors.” To the extent the Section 12(g) assets and holders limits are exceeded, we intend to rely upon a conditional exemption from registration under Section 12(g) of the Exchange Act contained in Rule 12g5-1(a)(7) under the Exchange Act (the “Reg. A+ Exemption”), which exemption generally requires that the issuer (i) be current in its Form 1-K, 1-SA and 1-U filings as of its most recently completed fiscal year end; (ii) engage a transfer agent that is registered under Section 17A(c) of the Exchange Act to perform transfer agent functions; and (iii) have a public float of less than $75 million as of the last business day of its most recently completed semi-annual period or, in the event the result of such public float calculation is zero, have annual revenues of less than $50 million as of its most recently completed fiscal year. If the number of record holders of any Series of Interests exceeds either of the limits set forth in Section 12(g) of the Exchange Act and we fail to qualify for the Reg. A+ Exemption, we would be required to register such Series with the Commission under the Exchange Act. If we are required to register any Series of Interests under the Exchange Act, it would result in significant expense and reporting requirements that would place a financial burden on the Company and a time burden on our management.
Risks Related to our Business
We may face potential difficulties in obtaining capital.
We may have difficulty raising needed capital in the future as a result of many factors, including the inherent business risks associated with our Company and present and future market conditions. We will require additional funds to execute our business strategy and conduct our operations. If adequate funds are unavailable, it may materially harm our business, financial condition, and results of operations.
If we are unable to raise capital when needed or on attractive terms, we could be forced to delay future expansion and/or additional research and development. Any of these events could significantly harm our business, financial condition and prospects.
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Our business could be negatively impacted by cyber security threats, attacks, and other disruptions.
We may face advanced and persistent attacks on our information infrastructure where we manage and store various proprietary information and sensitive/confidential data relating to our operations. These attacks may include sophisticated malware (viruses, worms, and other malicious software programs) and phishing emails that attack our systems or products or otherwise exploit any security vulnerabilities. These intrusions sometimes may be zero-day malware that are difficult to identify because they are not included in the signature set of commercially available antivirus scanning programs. Experienced computer programmers and hackers may be able to penetrate our network security and misappropriate or compromise our confidential information, create system disruptions, or cause shutdowns. Additionally, sophisticated software and applications that we produce or procure from third-parties may contain defects in design or manufacture, including “bugs” and other problems that could unexpectedly interfere with the operation of our products. A disruption, infiltration, or failure of our information infrastructure systems as a result of software or hardware malfunctions, computer viruses, cyber-attacks, employee theft or misuse, power disruptions, natural disasters, or accidents could cause breaches of data security, loss of critical data, and performance delays, which in turn could adversely affect our business.
The markets for our products may develop more slowly than we expect or may be negatively impacted by market conditions.
The markets for our products are large. However, our success will depend on continued growth of these markets. In particular, we do not know how successful the adoption of our products will be. In part, this may depend on how well we compete with our competitors who enter this space who may have more resources and time in the industry than we do. We will incur substantial operating costs, particularly in sales and marketing and research and development, in attempting to develop market share. If the market for our products does not develop as we anticipate, or does not continue to grow, or grows more slowly than we expect, our operating results will be harmed.
Additionally, concerns about the systemic impact of a potential widespread recession (in the U.S. or internationally) or geopolitical issues could lead to increased market volatility and diminished growth expectations, which in turn could result in reductions in spending by our existing and prospective customers. Prolonged economic slowdowns may result in lower sales of our products. As a result, broadening or protracted extension of an economic downturn could harm our business, revenue, results of operations, and cash flows.
Protection of electronically stored data and other cybersecurity is costly, and if our data or systems are materially compromised in spite of this protection, we may incur additional costs, lost opportunities, damage to our reputation, disruption of service or theft of our assets.
We maintain information necessary to conduct our business, including confidential and proprietary information as well as personal information regarding our customers and employees, in digital form. We also use computer systems to develop our products and services and operate our businesses. Data maintained in digital form is subject to the risk of unauthorized access, modification, exfiltration, destruction or denial of access and our computer systems are subject to cyberattacks that may result in disruptions in service. We use many third-party systems and software, which are also subject to supply chain and other cyberattacks. Identifying and mitigating cyber risks is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated. Accordingly, despite our efforts, the risk of unauthorized access, modification, exfiltration, destruction, or denial of access with respect to data or systems and other cybersecurity attacks cannot be eliminated entirely, and the risks associated with a potentially material incident remain. In addition, we provide some confidential, proprietary, and personal information to third parties in certain cases when it is necessary to pursue business objectives. While we obtain assurances that these third parties will protect this information and, where we believe appropriate, monitor the protections employed by these third parties, there is a risk the confidentiality of data held by third parties may be compromised.
If our information or cyber security systems or data are compromised in a material way, our ability to conduct our business may be impaired, we may lose profitable opportunities or the value of those opportunities may be diminished and as described above, we may lose revenue. If personal information of our customers or employees is misappropriated, our reputation with our customers and employees may be damaged resulting in loss of business or morale, and we may incur costs to remediate possible harm to our customers and employees or damages arising from litigation and/or to pay fines or take other action with respect to judicial or regulatory actions arising out of the incident. Insurance we obtain may not cover losses or damages associated with such attacks or events. Our systems and the systems of third parties with whom we engage are continually attacked.
The Company’s business and reputation are impacted by information technology system failures and network disruptions.
The Company is exposed to information technology system failures or network disruptions caused by natural disasters, accidents, power disruptions, telecommunications failures, acts of terrorism or war, computer viruses, physical or electronic break-ins, ransomware or other cybersecurity incidents, or other events or disruptions. System redundancy and other continuity measures may be ineffective or inadequate, and the Company’s or its vendors business continuity and disaster recovery planning may not be sufficient for all eventualities. Such failures or disruptions can adversely impact the Company’s business by, among other things, preventing access to the Company’s online services, interfering with customer transactions or impeding the manufacturing and shipping of the Company’s products. These events could materially adversely affect the Company’s business, reputation, results of operations and financial condition.
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Reliance on third-party service providers creates risks for the Company.
Some of the Company’s operations may rely on the Company’s third-party service providers to host and deliver parts, services, and data. Any interruptions, delays, or disruptions in and to the delivery of such services, security, or data, including without limitation any privacy breaches or failures in data collection, could expose the Company to liability and harm the Company’s business and reputation.
The Company is not subject to Sarbanes-Oxley regulations and has identified material weaknesses in our internal control over financial reporting.
The Company does not have the internal control infrastructure that would meet the standards of a public company, including the requirements of the Sarbanes Oxley Act of 2002. As a privately-held (non-public) Company, the Company is currently not subject to the Sarbanes Oxley Act of 2002, and its financial and disclosure controls and procedures reflect its status as a development stage, non-public company.
In connection with the preparation of our financial statements for the year ended December 31, 2023, material weaknesses were identified in the design and operating effectiveness of our internal control over financial reporting, including insufficient information technology controls, entity-level controls, controls over the completeness and accuracy of information produced by the Company, and management review controls, including those over complex accounting and disclosure matters. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. If we fail to remediate these material weaknesses, or if we experience additional material weaknesses in the future or otherwise fail to maintain effective internal control over financial reporting in the future, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in us and, as a result, the value of our common stock.
Additionally, if it were necessary to implement an internal control infrastructure that would meet the standards of the Sarbanes Oxley Act of 2002, the cost to the Company of such compliance could be substantial and could have a material adverse effect on the Company’s results of operations.
There may be deficiencies with our internal controls that require improvements, and if we are unable to adequately evaluate internal controls, we may be subject to sanctions.
As a Regulation A issuer, we will not need to provide a report on the effectiveness of our internal controls over financial reporting, and we will be exempt from the auditor attestation requirements concerning any such report. We do not know whether our internal control procedures are effective and therefore there is a greater likelihood of undiscovered errors in our internal controls or reported financial statements as compared to issuers that have conducted such evaluations.
The Company’s Board of Directors and executives have significant flexibility with regard to the Company’s operations and investments.
The Company’s agreements and arrangements with its management have been established by the Board of Directors and may not be on an arm’s-length basis. The Board of Directors and our executives have considerable discretion with respect to all decisions relating to the terms and timing of transactions.
The liability of the management is limited.
As a result of certain exculpation and indemnification provisions in the Certificate of Incorporation and Bylaws, the Company’s Board of Directors and officers may not be liable to the Company or its investors for errors of judgment or other acts or omissions not constituting fraud, intentional misconduct, criminal act, or gross negligence. A successful claim for such indemnification would deplete the assets of the Company by the amount paid.
The borrowing of funds increases the risks of adverse effects on the Company’s financial condition.
The Company may seek other capital sources if needed in the future to execute its business plan. The Company may incur certain indebtedness with debt financing to raise that capital. Payments of principal and interest will reduce cash available for distribution and/or reserve funds set aside for contingencies. If variable rate debt is incurred, increases in interest rates would increase interest costs, which would reduce the Company’s returns. If the Company is unable to obtain such financing, that failure to do so may have a material and adverse effect on the Company’s operations. In such an event, investors could lose some or all of their investments.
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Economic conditions in the current period of disruption and instability could adversely affect our ability to access the capital markets, in both the near and long term, and thus adversely affect our business and liquidity.
The current economic conditions related to inflation and rising interest rates have had, and likely will continue to have for the foreseeable future, a negative impact on the capital markets. Even if we can raise capital, it may not be at a price or on terms that are favorable to us. We cannot predict the occurrence of future disruptions or how long the current conditions may continue.
Current uncertainty in global economic conditions, including volatility and inflation could adversely affect our revenue and business.
Global inflation increased during 2022 and 2023. Geopolitical tensions, as well as the related international response, have exacerbated inflationary pressures, including causing increases in the price for goods and services and exacerbated global supply chain disruptions, which have resulted in, and may continue to result in, shortages in materials and services and related uncertainties. Such shortages have resulted in, and may continue to result in, cost increases for labor, fuel, materials and services, and could continue to cause costs to increase, and also result in the scarcity of certain materials. We cannot predict any future trends in the rate of inflation or volatility spill-over effects between international financial markets, or other negative economic factors or associated increases in our operating costs and how that may impact our business. To the extent we are unable to recover higher operating costs resulting from inflation or otherwise mitigate the impact of such costs on our business, our revenues and gross profit could decrease, and our financial condition and results of operations could be adversely affected. Supply chain disruptions could represent a challenge for the company which may have a material adverse effect in the Company’s operations. In order to mitigate the possible effects of supply chain disruptions, management is continuously monitoring global economic conditions and has taken actions to prevent or minimize the impact resulting from these supply chain disruptions, such as the use of multiple vendors that supply the identical parts, making minor engineering modifications to our products for ease and speed of changing components and increasing our inventory to shorten delivery times to our customers. Our efforts are intended to have no impact on our product quality, reliability or regulatory approvals.
Failure to effectively manage our expected growth could place strains on our managerial, operational and financial resources and could adversely affect our business and operating results.
Our expected growth could place a strain on our managerial, operational and financial resources. Any further growth by us, or any increase in the number of our strategic relationships, will increase the strain on our managerial, operational and financial resources. This strain may inhibit our ability to achieve the rapid execution necessary to implement our business plan and could have a material adverse effect on our financial condition, business prospects and operations and the value of an investment in our company.
Changes in employment laws or regulation could harm our performance.
Various federal and state labor laws govern the Company’s relationship with our employees and affect operating costs. These laws may include minimum wage requirements, overtime pay, healthcare reform and the implementation of various federal and state healthcare laws, unemployment tax rates, workers’ compensation rates, citizenship requirements, union membership and sales taxes. A number of factors could adversely affect our operating results, including additional government-imposed increases in minimum wages, overtime pay, paid leaves of absence and mandated health benefits, mandated training for employees, changing regulations from the National Labor Relations Board and increased employee litigation including claims relating to the Fair Labor Standards Act.
Our business plan is speculative.
Our present business and planned business are speculative and subject to numerous risks and uncertainties. There is no assurance that the Company will generate significant revenues or profits.
Our expenses could increase without a corresponding increase in revenues.
Our operating and other expenses could increase without a corresponding increase in revenues, which could have a material adverse effect on our financial results and on your investment. Factors which could increase operating and other expenses include but are not limited to (1) increases in the rate of inflation, (2) increases in taxes and other statutory charges, (3) changes in laws, regulations or government policies which increase the costs of compliance with such laws, regulations or policies, (4) significant increases in insurance premiums, and (5) increases in borrowing costs.
Our bank accounts will not be fully insured.
The Company’s regular bank accounts and the escrow account for this offering each have federal insurance that is limited to a certain amount of coverage. It is anticipated that the account balances in each account may exceed those limits at times. In the event that any of the Company’s banks should fail, we may not be able to recover all amounts deposited in these bank accounts.
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Our operating plan relies in large part upon assumptions and analyses developed by the Company. If these assumptions or analyses prove to be incorrect, the Company’s actual operating results may be materially different from our forecasted results.
Whether actual operating results and business developments will be consistent with the Company’s expectations and assumptions as reflected in its forecast depends on a number of factors, many of which are outside the Company’s control, including, but not limited to:
| ● | whether the Company can obtain sufficient capital to sustain and grow its business; | |
| ● | our ability to manage the Company’s growth; | |
| ● | whether the Company can manage relationships with key vendors and advertisers; | |
| ● | demand for the Company’s products and services; | |
| ● | the timing and costs of new and existing marketing and promotional efforts and/or competition; | |
| ● | the Company’s ability to retain existing key management, to integrate recent hires and to attract, retain and motivate qualified personnel; | |
| ● | the overall strength and stability of domestic and international economies | |
| ● | consumer spending habits. |
Unfavorable changes in any of these or other factors, most of which are beyond the Company’s control, could materially and adversely affect its business, results of operations and financial condition.
Our operations may not be profitable.
The Company may not be able to generate significant revenues in the future. In addition, we expect to incur substantial operating expenses in order to fund the expansion of our business. As a result, we may experience substantial negative cash flow for at least the foreseeable future and cannot predict when, or even if, the Company might become profitable.
Our business model is evolving.
Our business model is likely to continue to evolve. Accordingly, our initial business model may not be successful and may need to be changed. Our ability to generate significant revenues will depend, in large part, on our ability to successfully market our products to potential users who may not be convinced of the need for our products and services or who may be reluctant to rely upon third parties to develop and provide these products. We intend to continue to develop our business model as the Company’s market continues to evolve.
Our employees may engage in misconduct or improper activities.
The Company, like any business, is exposed to the risk of employee fraud or other misconduct. Misconduct by employees could include intentional failures to comply with laws or regulations, provide accurate information to regulators, comply with applicable standards, report financial information or data accurately or disclose unauthorized activities to the Company. In particular, sales, marketing and business arrangements are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Employee misconduct could also involve improper or illegal activities which could result in regulatory sanctions and serious harm to our reputation.
Because we are a “start-up”, we face a material risk of business failure.
We were formed in 2021. We are therefore an “early stage” business. Our efforts to date have consisted mostly of formulating our business plan (a process which is still ongoing), conducting research and development, and developing our products. We have generated relatively limited revenue and incurred net losses. As such, we face a material risk of business failure.
The likelihood of our ability to meet our business goals must be considered in light of the significant expenses, complications and delays frequently encountered in connection with the establishment and expansion of new businesses and the nascent, rapidly evolving and highly competitive environment in which we operate. There is a material risk that future revenue from sales of our products or our other planned business activities may not occur or may not be significant enough for us to generate positive cash flows or profit at all. Future revenue, positive cash flows or profits, if any, will depend on many factors, including initial (and continued) market acceptance of our product offerings and the successful implementation of our business strategies.
Moreover, if we are unable to develop and implement other business strategies that generate revenue, our ability to achieve near and long-term growth would be significantly impaired, and our business might fail. There can be no assurance that our future results of operations will generate positive cash flows or be profitable or that our strategies, even if implemented, will increase the value of the Company.
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We depend heavily on key personnel, and turnover of key senior management could harm our business.
Our future business and results of operations depend in significant part upon the continued contributions of our senior management personnel. If we lose their services or if they fail to perform in their current positions, or if we are not able to attract and retain skilled personnel as needed, our business could suffer. Significant turnover in our senior management could significantly deplete our institutional knowledge held by our existing senior management team. We depend on the skills and abilities of these key personnel in managing the product acquisition, marketing and sales aspects of our business, any part of which could be harmed by turnover in the future. We do not have key-man insurance.
Since we have a limited operating history in our industry, it is difficult for potential investors to evaluate our business.
Our short operating history in the cannabis industry may hinder our ability to successfully meet our objectives and makes it difficult for potential investors to evaluate our business or prospective operations. As an early-stage company, we are subject to all the risks inherent in the financing, expenditures, operations, complications and delays inherent in a new business. Accordingly, our business and success face risks from uncertainties faced by developing companies in a competitive environment. There can be no assurance that our efforts will be successful or that we will ultimately be able to attain profitability.
As our products and company are in a highly regulated industry, enforcement of current regulations, our failure to abide by regulations or significant and unforeseen changes in regulations or policy may have material impacts on our business.
At the U.S. federal level, cannabis is still illegal. Should the federal government begin enforcement actions against the Company or its subsidiaries, it would materially impact our business. Conversely, should cannabis become federally legal, it is likely that the market would become flooded with competitors, many of which would likely be large conglomerates that would drive smaller operators such as our Company out of the market.
In Oklahoma, medical marijuana is regulated by the Oklahoma Medical Marijuana Authority (“OMMA”). The OMMA has its own independent set of regulations. Should we or our partners fail to comply with applicable state regulations, we could be subject to sanctions and it could result in the suspension or revocation of our partners’ licenses. It is also possible that the OMMA could elect not to renew any of the licenses because of failure to meet a new or existing regulation, change in our structure that causes it not to meet license requirements or our failure to pay license fees timely. In addition to regulation at the state level, our partners may be subject to local regulation. Failure of our partners to comply with local regulations could also materially negatively impact our business and affect our ability to operate in such cities. Our ability to comply with applicable regulations is costly and our inability to meet such costs could materially negatively impact our business.
The use of cannabis products in the United States may impact our business.
As with most products, it is very difficult to gauge accurately market acceptance of our products. While we are taking and will take significant efforts in selecting products that we believe represent the best opportunities for market adoption, such as unsatisfied needs, competitive environment, partnering potential, therapeutic potential, and target product profile potential, the ultimate market acceptance of a product is very difficult to predict.
We may expend our limited resources to pursue a particular product and may fail to capitalize on products that may be more profitable or for which there is a greater likelihood of success.
Because we have limited financial and managerial resources, we must focus our efforts on particular research programs and products. As a result, we may forego or delay pursuit of opportunities with other products that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. If we do not accurately evaluate the commercial potential or target market for a particular product, we may relinquish valuable rights to that product through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product. Any such failure to improperly assess potential products could result in missed opportunities and/or our focus on products with low market potential, which would harm our business and financial condition.
We engage in transactions with related parties and such transactions present possible conflicts of interest that could have an adverse effect on us.
We have entered, and may continue to enter, into transactions with related parties for financing, corporate, leases, business development and operational services, as detailed herein. Such transactions may not have been entered into on an arm’s-length basis, and we may have achieved more or less favorable terms because such transactions were entered into with our related parties. We rely, and will continue to rely, on our related parties to maintain these services. If the pricing for these services changes, or if our related parties cease to provide these services, including by terminating agreements with us, we may be unable to obtain replacements for these services on the same terms without disruption to our business. This could have a material effect on our business, results of operations and financial condition. The details of certain of these transactions are set forth in “Transactions with Related Persons, Promoters and Certain Control Persons.” Related person transactions create the possibility of conflicts of interest with regard to our management, including that:
| ● | we may enter into contracts between us, on the one hand, and related parties, on the other, that are not the result of arm’s-length transactions; |
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| ● | our executive officers and directors that hold positions of responsibility with related parties may be aware of certain business opportunities that are appropriate for presentation to us as well as to such other related parties and may present such business opportunities to such other parties; and | |
| ● | our executive officers and directors that hold positions of responsibility with related parties may have significant duties with, and spend significant time serving, other entities and may have conflicts of interest in allocating time. |
Such conflicts could cause an individual in our management to seek to advance his or her economic interests or the economic interests of certain related parties above ours. Further, the appearance of conflicts of interest created by related person transactions could impair the confidence of our investors. It is possible that a conflict of interest could have a material adverse effect on our liquidity, results of operations and financial condition.
Any inability to protect our intellectual property rights could reduce the value of our technologies and brand, which could adversely affect our financial condition, results of operations and business.
Our business is dependent upon our proprietary methods, know-how, genetics, trademarks, trade secrets, copyrights and other intellectual property rights. Effective intellectual property rights protection, however, may not be available under federal law and certain states in which we may operate. There is a risk of certain valuable trade secrets being exposed to potential infringers. There is a risk that other companies may employ the technology without authorization and without recompensing us.
The efforts we have taken to protect our proprietary rights may not be sufficient or effective. Any significant impairment of our intellectual property rights could harm our business or our ability to compete. In addition, protecting our intellectual property rights is costly and time consuming. There is a risk that we may have insufficient resources to counter adequately such infringements through negotiation or the use of legal remedies. It may not be practicable or cost effective for us to fully protect our intellectual property rights in some countries or jurisdictions. If we are unable to successfully identify and stop unauthorized use of our intellectual property, we could lose potential revenue and experience increased operational and enforcement costs, which could adversely affect our financial condition, results of operations and business.
Our potential for rapid growth and our entry into new markets make it difficult for us to evaluate our current and future business prospects, and we may be unable to effectively manage any growth associated with these new markets, which may increase the risk of your investment and could harm our business, financial condition, results of operations and cash flow.
Our entry into the rapidly growing cannabis market may place a significant strain on our resources and increase demands on our executive management, personnel and systems, and our operational, administrative and financial resources may be inadequate. We may also not be able to effectively manage any expanded operations or achieve planned growth on a timely or profitable basis, particularly if the number of customers using our products significantly increases or their demands and needs change as our business expands. If we are unable to manage expanded operations effectively, we may experience operating inefficiencies, the quality of our products and services could deteriorate, and our business and results of operations could be materially adversely affected.
If we are unable to develop and maintain our brand and reputation for our product offerings, our business and prospects could be materially harmed.
Our business and prospects depend, in part, on developing and then maintaining and strengthening our brand and reputation in the markets we serve. If problems with our products arise, our brand and reputation could be diminished. If we fail to develop, promote and maintain our brand and reputation successfully, our business and prospects could be materially harmed.
We could be subject to costly product liability claims related to our products.
We face the risk that the use of our products may result in adverse side effects to people. We face even greater risks upon further commercialization of our products. An individual may bring a product liability claim against us alleging that one of our products causes, or is claimed to have caused, an injury or is found to be unsuitable for consumer use. Any product liability claim brought against us, with or without merit, could result in: the inability to commercialize our products; decreased demand for our products; the inability to commercialize our products; regulatory investigations that could require costly recalls or product modifications; loss of revenue; substantial costs of litigation; liabilities that substantially exceed our product liability insurance, which we would then be required to pay ourselves; an increase in our product liability insurance rates or the inability to maintain insurance coverage in the future on acceptable terms, if at all; the diversion of management’s attention from our business; and damage to our reputation and the reputation of our products. Product liability claims may subject us to the foregoing and other risks, which could have a material adverse effect on our business, results of operations, financial condition, and prospects.
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Our employees, independent contractors, consultants and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.
We are exposed to the risk that our employees, independent contractors, consultants and vendors may engage in fraudulent or other illegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities to us that violates state or local regulations. It is not always possible to identify and deter misconduct by our employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, contractual damages, reputational harm, diminished profits and future earnings, loss of our Licenses or other entitlements and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
Cannabis remains illegal under federal law in the U.S. where we operate, and any change in the enforcement priorities of the U.S. federal government could render our current and planned future operations unprofitable or even prohibit such operations.
We operate in the cannabis industry in the U.S., which is dependent on state laws and regulations pertaining to such industry; however, under federal law, cannabis remains illegal.
The United States federal government regulates drugs through the Controlled Substances Act (the “CSA”), which places controlled substances, including cannabis, on one of five schedules. Cannabis is currently classified as a Schedule I controlled substance, which is viewed as having a high potential for abuse and having no currently accepted medical use in treatment in the United States.
Currently, 38 U.S. states, the District of Columbia and the U.S. territories of Guam and Puerto Rico allow the use of cannabis in some form. Such state and territorial laws are in conflict with the federal CSA, which makes cannabis use and possession illegal at the federal level. The United States Supreme Court has confirmed that the federal government has the right to regulate and criminalize cannabis, including for medical purposes, and that federal law criminalizing the use of cannabis preempts state laws that legalize its use.
A significant change in the federal government’s enforcement policy with respect to current federal laws applicable to cannabis could cause significant financial damage to us.
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We may not be able to maintain our banking accounts.
Many banks and credit unions will not accept deposits from legal marijuana businesses on a state or federal level because businesses that participate in cannabis-related activities are still deemed illegal under federal law. In addition, banks or other financial institutions may not make loans or other traditional banking services available. Although the Department of the Treasury issued guidelines (e.g., FinCEN) indicating that banks are permitted to provide services to cannabis-related companies in states that have legal cannabis as long as certain protocol are followed, many banks and credit unions are reluctant to accept deposits or will immediately close bank accounts of cannabis-related companies. In addition, the federal authorities may, at any time, change their policies and begin or continue penalizing banks or credit unions for providing services to cannabis-related companies in states that have legal cannabis. Additionally, even if banks or other financial institutions open accounts or provide financial services for the target companies, accounts may still be subject to financial or other disciplinary action by authorities. Any one of these or other related challenges could cause substantial losses and materially adversely impact the Company.
A lack of access to customary business banking relationships may cause the Company to carry large amounts of investments or revenues in cash that will likely be placed in large safes. These investments or business revenues may be subject to theft or subject the Company to other risks.
Any potential growth in the cannabis industry continues to be subject to new and changing state and local laws and regulations.
Changes in applicable state and local laws or regulations could restrict the products and services we offer or impose additional compliance costs on us. Violations of applicable laws, or allegations of such violations, could disrupt our business and result in a material adverse effect on our operations. We cannot predict the nature of any future laws, regulations, interpretations or applications, and it is possible that regulations may be enacted in the future that will be materially adverse to our business.
The cannabis industry faces significant opposition, and any negative trends could adversely affect our business operations.
We are substantially dependent on the continued market acceptance, and the proliferation of consumers, of medical and recreational cannabis. We cannot predict the future growth rate or future market potential, and any negative outlook on the cannabis industry may adversely affect our business operations.
We are subject to risks inherent in an agricultural business, including the risk of crop failure.
The cultivation of cannabis is an agricultural process. As such, our business is subject to the risks inherent in the agricultural business, including risks of crop failure presented by weather, insects, fire, plant diseases and similar agricultural risks. Although we currently grow our products indoors under climate-controlled conditions, there can be no assurance that natural elements, such as insects and plant diseases, will not entirely interrupt our production activities or have an adverse effect on our business. In addition, cannabis plants can be vulnerable to various pathogens including bacteria, fungi, viruses and other miscellaneous pathogens. Such instances often lead to reduced crop quality, stunted growth or death of the plant. Moreover, cannabis is “phytoremediative”, meaning that it may extract toxins or other undesirable chemicals or compounds from the ground in which it is planted. Various regulatory agencies have established maximum limits for pathogens, toxins, chemicals and other compounds that may be present in agricultural materials. If our cannabis plants are found to have levels of pathogens, toxins, chemicals or other undesirable compounds that exceed established limits, our product may not be suitable for commercialization and we may have to destroy the applicable portions of our crops.
We may not be able to store or transport our cannabis products to customers in a safe, timely and cost-efficient manner, and we may experience breaches of security at our facilities or loss as a result of theft of our products.
Because of the nature of our products and the limited legal channels for distribution, as well as the potential concentration of inventory in our facilities, we are subject to a heightened risk of theft of our product and other security breaches. The security of our products during transportation to and from our facilities is of the utmost concern. A breach of security at our one of our facilities, or during transport or delivery, could result in the significant loss of product as well as customers and may expose us to additional liability, including regulatory fines, litigation or increased expenses relating to the resolution and future prevention of similar events. Any failure to take steps necessary to ensure the safekeeping of our cannabis could also have an impact on our ability to continue operating under our existing licenses, to renew or receive amendments to our existing licenses or to receive required new licenses.
There has been limited study on the health effects of cannabis and cannabis products, and future clinical research studies may lead to conclusions that dispute or conflict with our understanding and belief regarding the benefits, viability, safety, efficacy, dosing and social acceptance of such products.
Research regarding the benefits, viability, safety, efficacy and dosing of cannabis or isolated cannabinoids, such as CBD and THC, remains in relatively early stages. Few clinical trials on the benefits and risks of cannabis or isolated cannabinoids have been conducted.
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Future research and clinical trials may draw opposing conclusions to statements contained in the articles, reports and studies currently favored or could reach different or negative conclusions regarding the benefits, viability, safety, efficacy, dosing or other facts and perceptions related to medical or adult-use cannabis, which could adversely affect social acceptance of cannabis and the demand for our cannabis products.
The cannabis market may experience supply and demand fluctuations.
If our inventory levels in the future become greater than consumer demand, we may have to engage in sale of excess inventory at discounted prices, which could significantly impair our brand image. Conversely, if we underestimate demand for our products, we may experience inventory shortages, which might delay shipments to customers, reduce revenue, negatively impact customer relationships and diminish brand loyalty. In addition, demand for cannabis and cannabis products is dependent on a number of social, political and economic factors that are beyond our control, including the novelty of legalization, which may wear off. A material decline in the economic conditions affecting consumers can cause a reduction in disposable income for the average consumer, change consumption patterns and result in a reduction in spending on cannabis products or a switch to other products obtained through illicit channels. There can be no assurance that market demand for cannabis will continue to be sufficient to support our current or future production levels or that we will be able to generate sufficient revenue to be profitable.
We will not be able to deduct many normal business expenses.
Under Section 280E of the U.S. Internal Revenue Code (“Section 280E”), many normal business expenses incurred in the cultivation and distribution of marijuana and its derivatives are not deductible in calculating our federal income tax liability. A result of Section 280E is that an otherwise profitable business may in fact operate at a loss, after taking into account its income tax expenses. The application of Section 280E likely will have a material adverse effect on us.
Our ability to expand our business to other jurisdictions is highly uncertain.
The Company intends to continue expanding its operations to other jurisdictions. We will need to obtain licenses, permits, and other authorizations to operate a marijuana business in these jurisdictions, and we can provide no assurance that we will be able to successfully do so, or if we can obtain such authorizations, the amount of time and resources that will be required to do so. We cannot provide any assurances that we will be able to successfully expand our business to these and other jurisdictions.
We may not be able to register any federal trademarks for our marijuana products or seek protection under federal bankruptcy laws.
Because producing, manufacturing, processing, possessing, distributing, selling, and using marijuana is a crime under the Federal CSA, the United States Patent and Trademark Office will not permit the registration of any trademark that identifies marijuana products. As a result, we may be unable to protect our marijuana product trademarks, which could have a material adverse effect on our business. Similarly, cannabis companies have been denied protection under U.S. federal bankruptcy laws.
Laws will continue to change rapidly for the foreseeable future.
Local, state and federal laws and enforcement policies concerning marijuana-related conduct are changing rapidly and will continue to do so for the foreseeable future. Changes in applicable law are unpredictable and could have a material adverse effect on our business.
Significant interruptions in our access to certain key inputs such as labor, raw materials, electricity, water and other utilities may impair our cannabis growing operations.
Our business is dependent on several key inputs and their related costs, including raw materials, supplies and equipment related to our operations, as well as electricity, water and other utilities. Any significant interruption, price increase or negative change in the availability or economics of the supply chain for key inputs and, in particular, loss of any energy subsidies, rising or volatile energy costs could curtail or preclude our ability to continue production and may have a material adverse impact on our business and results of operations. In addition, our operations could be significantly affected by a prolonged power outage. Furthermore, our cultivation operations require a significant amount of electricity as a result it may be difficult for us to locate areas to construct additional cultivation operations as we grow. Our ability to compete and grow cannabis is dependent on us having access, at a reasonable cost and in a timely manner, to skilled labor, equipment, parts and components. No assurances can be given that we will be successful in maintaining our required supply of labor, equipment, parts and components.
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Failure in our quality control systems may adversely impact our sales volume, market share and profitability.
The quality and safety of our products are critical to the success of our business and operations. As such, it is imperative that our quality control systems operate effectively and successfully. Quality control systems can be negatively impacted by the design of the quality control systems, the quality training program, and adherence by employees to quality control guidelines. If, as a result of a failure in our quality control systems, contamination of, or damage to, our inventory or packaged products occurs, we may incur significant costs in replacing the inventory and recalling products. We may be unable to meet customer demand and may lose customers who must purchase alternative brands or products. In addition, consumers may lose confidence in the affected products. A loss of sales volume from a contamination event may occur, and such a loss may affect our ability to supply our current customers and to recapture their business in the event they are forced to switch products or brands, even if on a temporary basis. We may also be subject to legal action as a result of a contamination, which could result in negative publicity and affect our sales. During this time, our competitors may benefit from an increased market share that could be difficult and costly to regain.
Our cannabis products may be subject to recalls for a variety of reasons, which could require us to expend significant management and capital resources.
Cultivators and distributors of consumer goods products are sometimes subject to the recall or return of their products for a variety of reasons, including public health and public safety risks, product defects, adulteration, unintended harmful side effects or interactions with other substances, packaging safety and inadequate or inaccurate labelling disclosure. Although we have detailed procedures in place for testing our finished cannabis products, there can be no assurance that any quality, potency or contamination problems will be detected in time to avoid unforeseen product recalls, regulatory action or lawsuits, whether frivolous or otherwise. As a result of any such recall, we may lose a significant number of sales and may not be able to replace those sales at an acceptable margin or at all. In addition, a product recall may require significant management attention or damage our reputation and goodwill or that of our products or brands.
Additionally, product recalls may lead to increased scrutiny of our operations by regulatory agencies, requiring further management attention, increased compliance costs and potential legal fees, fines, penalties and other expenses. Any product recall affecting the cannabis industry more broadly, whether or not involving us, could also lead consumers to lose confidence in the safety and security of such products, including products sold by us.
We will rely on third-party distributors to distribute our products, and those distributors may not perform their obligations.
We will rely on third-party distributors to distribute and sell our products to consumers. If these distributors do not successfully carry out their contractual duties, if there is a delay or interruption in the distribution of our products or if these third parties damage our products, it could negatively impact our revenue from product sales. Furthermore, any damage to our products, such as product spoilage, could expose us to potential product liability, damage our reputation and the reputation of our brands or otherwise harm our business and results of operations.
We may not be able to obtain adequate insurance coverage in respect of the risks we and our business face, the premiums for such insurance may not continue to be commercially justifiable or there may be coverage limitations and other exclusions which may result in such insurance not being sufficient to cover potential liabilities that we face.
Our insurance coverage is subject to coverage limits and exclusions and may not be available for the risks and hazards to which we are exposed. In addition, no assurance can be given that such insurance will be adequate to cover our liabilities, including potential product liability claims, or will be generally available in the future or, if available, that premiums will be commercially justifiable. If we were to incur substantial liability and such damages were not covered by insurance or were in excess of policy limits, we may be exposed to material uninsured liabilities that could impede our liquidity, profitability or solvency.
If we are not able to comply with all safety, health and environmental regulations applicable to our operations and industry, we may be held liable for any breaches of those regulations.
Safety, health and environmental laws and regulations affect nearly all aspects of our operations, including product development, working conditions, waste disposal, emission controls, the maintenance of air and water quality standards and, with respect to environmental laws and regulations, impose limitations on the generation, transportation, storage and disposal of solid and hazardous waste. Compliance with safety, health and environmental laws and regulations can require significant expenditures. There can be no assurance that we will always be in compliance with all safety, health and environmental laws and regulations notwithstanding our attempts to comply with such laws and regulations.
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We may become subject to litigation, regulatory or agency proceedings, investigations and audits.
We may become subject to litigation, regulatory or agency proceedings, investigations and audits from time to time in the ordinary course of business, some of which may adversely affect our business. Should any litigation, regulatory or agency proceeding, investigation or audit in which we become involved be determined against us, such a decision could adversely affect our ability to continue operating, the value or market price for the common shares and could require the use of significant resources. Even if we are involved in litigation, regulatory or agency proceedings investigations and audits and are ultimately successful, they can require the redirection of significant resources and may also create a negative perception of our brand. The outcome of any litigation, regulatory or agency proceedings, investigations and audits is inherently uncertain. Unfavorable rulings, judgments or settlement terms could have a material adverse impact on our business and results of operations.
SPECIAL INFORMATION REGARDING FORWARD LOOKING STATEMENTS
Some of the statements in this Offering Circular are “forward-looking statements.” These forward-looking statements involve certain known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, among others, the factors set forth above under “Risk Factors.” The words “believe,” “expect,” “anticipate,” “intend,” “plan,” and similar expressions identify forward-looking statements. We caution you not to place undue reliance on these forward-looking statements.
We undertake no obligation to update and revise any forward-looking statements or to publicly announce the result of any revisions to any of the forward-looking statements in this document to reflect any future or developments. However, the Private Securities Litigation Reform Act of 1995 is not available to us as a non-reporting issuer. Further, Section 27A(b)(2)(D) of the Securities Act and Section 21E(b)(2)(D) of the Exchange Act expressly state that the safe harbor for forward looking statements does not apply to statements made in connection with an initial public offering.
In the last twelve months, the Company has issued to officers and directors preferred shares totalling 32,161,916 and common shares totalling 850,000,000 at par value of $0.0001, as compared to the $1.00 per Share being offered to investors in this offering. In addition, the Company has issued convertible promissory notes to investors, totalling approximately $3,970,000 plus accrued interest. Upon qualification of this offering, these notes shall convert into preferred shares at a discounted price range of $0.17 to $0.50 per share. Furthermore, the Company has granted a stock award to Numbers Matter Capital Inc. for services which consists of six million shares of series A preferred stock and twenty million shares of common stock. As a result of the issuances to our officers and directors, issuances for services, and issuances upon conversion of our convertible notes at a discount to the price being offered to investors, investors will experience immediate economic dilution as a result of buying Shares. Future Share issuances could further dilute investors’ interests in the Company.
We are offering up to 75,000,000 shares of preferred stock in the Company at a price per share of $1.00 for maximum offering proceeds of up to $75,000,000.00 if all offered Shares are sold. There is no minimum offering amount and no provision to return investor funds if a minimum number of Shares is not sold. All accepted subscription funds will be immediately available for the Company’s use. We intend to conduct multiple separate closings, which closings may be conducted on a rolling basis. Closings will occur promptly after receiving investor funds, but in each case at least every 30 days. The minimum investment established for each investor is $650.00.
The sale of Shares will commence within two days from this Offering Circular, as amended, being qualified by the SEC. This offering shall be terminated upon (i) the date which is three years from the date this Offering Circular or an amendment thereof, as applicable, is qualified by the SEC, (ii) the sale of the maximum offering amount of Shares for the offering, or (iii) such earlier date as determined by the Company.
Agreement with Dalmore Group, LLC
We have engaged Dalmore Group, LLC, a Delaware limited liability company as our Broker of record to assist in our self-driven capital raise on a best-efforts basis of our interests in those states where Broker is registered to undertake such activities. The Broker will not solicit potential investors and is under no obligation to purchase any securities or arrange for the sale of any specific number or dollar amount of securities.
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The Company has also engaged affiliates of the Broker, including Industry FinTech Inc, and its affiliates (“IFT”) to create and maintain the online subscription processing platform for the offering.
Broker and its affiliates provide separate services to the Company to help facilitate the offering, from establishment of the platform to be used for subscription processing, through back-office operations/compliance. Although orchestrated through the Broker, each affiliate has separate compensation, and agreements embedded into the Broker’s services agreement. Once the offering is qualified, Investors will subscribe via the Company’s website and investor funds will be processed via IFT’s integrated payment solutions.
Fees and Commissions
The Company has engaged Dalmore Group, LLC a broker-dealer registered with the SEC and a member of FINRA, to perform the following administrative and compliance related functions in connection with this offering, but not for underwriting or placement agent services:
| ● | Review investor information, including KYC (“Know Your Customer”) data, perform AML (“Anti Money Laundering”) and other compliance background checks, and provide a recommendation to the Company whether or not to accept an investor as a customer; | |
| ● | We will be entering into an agreement with North Capital Private Securities Corporation (“North Capital”), a Delaware Corporation and a registered Broker-Dealer, member FINRA and SIPC to provide KYC and AML compliance services for the Company. North Capital dashboard is configured to provide access to our Broker-Dealer who reviews the investor information including KYC, performs AML and other compliance background checks and provides a recommendation to the Company whether or not to accept a Subscriber. See Exhibit 6.7 for tentative agreement with North Capital to be executed closer to the qualification date. |
Specifically, the following US databases are checked by North Capital during the KYC check:
| ● | Businesses | |
| ● | Bankruptcy | |
| ● | Driver’s License | |
| ● | Directory Assistance | |
| ● | Reverse Look Up & Mobile | |
| ● | Civil Court | |
| ● | Motor Vehicles and Boat | |
| ● | Hunting/Fishing License | |
| ● | Merchant Vessel | |
| ● | Geolocation | |
| ● | OFAC | |
| ● | PEP (Politically Exposed Persons) | |
| ● | Non SDN Consolidated Sanctions (PLC, FSE, ISA, SSI) | |
| ● | Defense Trade Controls (DTC) Debarred Parties | |
| ● | Commodity Futures Trading Commission Sanctions List of Regulatory and Self-Regulatory | |
| ● | Authorities | |
| ● | Bank of England Sanctions List (BOL) | |
| ● | World Bank Ineligible Firms | |
| ● | Official Records | |
| ● | Person Search | |
| ● | Professional Licenses | |
| ● | Property Assessment | |
| ● | Credit Headers | |
| ● | Property Deed | |
| ● | Voter Registration | |
| ● | Corporations | |
| ● | UCC Filings | |
| ● | Internet Domain Name | |
| ● | Delaware Corporations | |
| ● | Criminal Conviction | |
| ● | Concealed weapons Permit |
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| ● | DEA Controlled Substances Licenses | |
| ● | FAA Aircraft | |
| ● | FAA Pilot | |
| ● | Federal Firearms and Explosives License |
AML is used to cross check an individual’s name against a number of global watch lists to verify that the person isn’t a wanted person. This check will work for both U.S. persons and non-U.S. persons. If an individual fails this check, this means that this person’s name was at least a 90% match with a name on a watch list and a government issued photo ID needs to be collected to verify as pass or fail.
The following lists are checked are checked by North Capital for AML:
| ● | OFAC | |
| ● | PEP (Politically Exposed Persons) | |
| ● | Non SDN Consolidated Sanctions (PLC, FSE, ISA, SSI) | |
| ● | Defense Trade Controls (DTC) Debarred Parties | |
| ● | Commodity Futures Trading Commission Sanctions List of Regulatory and Self-Regulatory | |
| ● | Authorities | |
| ● | Bank of England Sanctions List (BOL) | |
| ● | World Bank Ineligible Firms | |
| ● | FBI Fugitives 10 Most Wanted, Most Wanted | |
| ● | Terrorists and Monthly Most Wanted | |
| ● | Financial Crimes Enforcement Network | |
| ● | Foreign Agent Registrations | |
| ● | International Police Most Wanted | |
| ● | OFAC - Enhanced Sanctioned Countries | |
| ● | Office of Controller of Currency of Unauthorized Banks | |
| ● | Office of the Superintendent of Financial Institutions (OSFI) - Canada | |
| ● | State Department Terrorist Exclusions | |
| ● | Terrorists Inside of European Union | |
| ● | Terrorists Outside of European Union | |
| ● | United Nations Named Terrorists | |
| ● | US Bureau of Industry and Security - Unverified Entity List | |
| ● | US Bureau of Industry and Security - Unverified Entity List | |
| ● | US Bureau of Industry and Security – Denied Person List |
| ● | Review each investor’s subscription agreement to confirm such investor’s participation in the offering and provide a determination to the Company whether or not to accept the use of the subscription agreement for the investor’s participation; | |
| ● | Contact and/or notify the Company, if needed, to gather additional information or clarification on an investor; | |
| ● | Not provide any investment advice nor any investment recommendations to any investor; | |
| ● | Keep investor details and data confidential and not disclose to any third-party except as required by regulators or in its performance pursuant to the terms of the agreement (e.g., as needed for AML and background checks); and | |
| ● | Coordinate with third party providers to ensure adequate review and compliance. |
As compensation for the services listed above, the Company has agreed to pay Broker a commission equal to 1% of the amount raised in the offering to support the offering on all newly invested funds after the issuance of a No Objection Letter by FINRA. In addition, our Company has paid Broker a $5,000 one-time advance expense allowance to cover reasonable out-of-pocket accountable expenses actually anticipated to be incurred by Broker in connection with this offering. Broker will refund any amount related to this expense allowance to the extent it is not used, incurred, or provided to our Company. Our Company has also agreed to pay Broker a one-time consulting fee of $20,000 to provide ongoing general consulting services relating to this offering such as coordination with third party vendors and general guidance with respect to the offering, which will be due and payable within 30 days after this offering is qualified by the SEC and the receipt of a No Objection Letter from FINRA. Assuming the offering as currently anticipated is fully-subscribed, the Company estimates that total fees payable to Broker, including the one-time advance expense allowance fee of $5,000 and consulting fee of $20,000, would be $775,000.00.
Broker has not investigated the desirability or advisability of investment in the Shares, nor approved, endorsed or passed upon the merits of purchasing the Shares. Broker is not participating as an underwriter and under no circumstance will it recommend the Company’s securities or provide investment advice to any prospective investor or make any securities recommendations to investors. Broker is not distributing any offering circulars or making any oral representations concerning this Offering Circular or this offering. Based upon Broker’s anticipated limited role in this offering, it has not and will not conduct extensive due diligence of this offering and no investor should rely on the involvement of Broker in this offering as any basis for a belief that it has done extensive due diligence. Broker does not expressly or impliedly affirm the completeness or accuracy of the Offering Statement and/or Offering Circular presented to investors by the Company. All inquiries regarding this offering should be made directly to the Company.
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The Shares are only offered in jurisdictions where it is not unlawful to offer and sell these securities. The Shares will not be offered or sold in states where the Broker is not registered as a broker-dealer pursuant to the applicable state law or in any jurisdictions where it is not lawful to offer and sell the Shares.
Investor Suitability Standards
Our Shares are being offered and sold only to “qualified purchasers” (as defined in Regulation A under the Securities Act). “Qualified purchasers” include: (i) “accredited investors” under Rule 501(a) of Regulation D and (ii) all other investors so long as their investment in any of the interests of our Company does not represent more than 10% of the greater of their annual income or net worth (for natural persons), or 10% of the greater of annual revenue or net assets at fiscal year-end (for non-natural persons). We reserve the right to reject any investor’s subscription in whole or in part for any reason, including if we determine in our sole and absolute discretion that such investor is not a “qualified purchaser” for purposes of Regulation A.
For an individual potential investor to be an “accredited investor” for purposes of satisfying one of the tests in the “qualified purchaser” definition, the investor must be a natural person who has:
1. an individual net worth, or joint net worth with the person’s spouse, that exceeds $1,000,000 at the time of the purchase, excluding the value of the primary residence of such person and the mortgage on that primary residence (to the extent not negative equity), but including the amount of debt that exceeds the value of that residence and including any increase in debt on that residence within the prior 60 days, other than as a result of the acquisition of that primary residence; or
2. earned income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year.
If the investor is not a natural person, different standards apply. See Rule 501 of Regulation D for more details. For purposes of determining whether a potential investor is a “qualified purchaser,” annual income and net worth should be calculated as provided in the “accredited investor” definition under Rule 501 of Regulation D.
In addition to the foregoing, each prospective investor must represent in writing that they meet, among other things, all of the following requirements:
| ● | The prospective investor has received this Offering Circular and its exhibits; | |
| ● | The prospective investor understands that an investment in interests involves substantial risks; | |
| ● | The prospective investor’s overall commitment to non-liquid investments is, and after their investment in interests will be, reasonable in relation to their net worth and current needs; | |
| ● | The prospective investor has adequate means of providing for their financial requirements, both current and anticipated, and has no need for liquidity in this investment; | |
| ● | The prospective investor can bear the economic risk of losing their entire investment in interests; | |
| ● | The prospective investor has such knowledge and experience in business and financial matters as to be capable of evaluating the merits and risks of an investment in interests; and | |
| ● | Except as set forth in the subscription agreement, no representations or warranties have been made to the prospective investor by our Company or any partner, agent, employee, or affiliate thereof, and in entering into this transaction the prospective investor is not relying upon any information, other than that contained in the offering statement of which this offering circular is a part, including its exhibits. |
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If you live outside the United States, it is your responsibility to fully observe the laws of any relevant territory or jurisdiction outside the United States in connection with any purchase, including obtaining required governmental or other consent and observing any other required legal or other formalities.
We will be permitted to make a determination that the subscribers of interests in this offering are qualified purchasers in reliance on the information and representations provided by the subscriber regarding the subscriber’s financial situation. Before making any representation that your investment does not exceed applicable federal thresholds, we encourage you to review Rule 251(d)(2)(i)(C) of Regulation A. For general information on investing, we encourage you to refer to http://www.investor.gov. We may accept or reject any subscription, in whole or in part, for any reason or no reason at all.
An investment in our interests may involve significant risks. Only investors who can bear the economic risk of the investment for an indefinite period of time and the loss of their entire investment should invest in our interests.
How to Subscribe
After the Commission has qualified the offering statement, the offering will be conducted using the online subscription processing platform of Industry Fintech Inc (“Technology Provider”), an affiliate of the Broker, through our website at Invest.endlessbiotech.com whereby investors in the offering will receive, review, execute, and deliver subscription agreements electronically. Payment of the purchase price for the interests will be made through a third-party processor by ACH debit transfer or wire transfer or credit card to an account designated by us. We estimate total fees payable by our Company directly to the Technology Provider will be approximately $3,250 per month with a $500 onboarding and set-up fee.
The Technology Provider is not participating as an underwriter or placement agent of this offering and will not solicit any investments, recommend our securities, provide investment advice to any prospective investor, or distribute this offering circular or other offering materials to potential investors. All inquiries regarding this offering should be made directly to us.
The Company may close on investments on a “rolling” basis (so not all investors will receive their interests on the same date). Investors may subscribe by tendering funds via wire, credit or debit card, or ACH only, and checks will not be accepted. Investors will subscribe via the Company’s website and investor funds will be processed via IFT. Funds will be held in the Company’s payment processor account until the Broker has reviewed the proposed subscription, and the Company has accepted the subscription. Funds released to the Company’s bank account will be net funds (investment less payment for processing fees).
The Company will be responsible for payment processing fees. Upon each closing, funds tendered by investors will be made available to the Company for its use.
In order to invest, you will be required to subscribe to the offering via the Company’s offering website and agree to the terms of the offering, subscription agreement, and any other relevant exhibit attached thereto.
Investors will be required to complete a subscription agreement in order to invest. The subscription agreement includes a representation by the investor to the effect that, if the investor is not an “accredited investor” as defined under securities law, the investor is investing an amount that does not exceed the greater of ten percent (10%) of his or her annual income or ten percent (10%) of their net worth (excluding the investor’s principal residence).
Any potential investor will have ample time to review the subscription agreement, along with their counsel, prior to making any final investment decision. Broker will review all subscription agreements completed by the investor. After Broker has completed its review of a subscription agreement for an investment in the Company, and the Company has elected to accept the investor into the offering, the funds may be released to the Company.
The Company maintains the right to accept or reject subscriptions in whole or in part, for any reason or for no reason, including, but not limited to, in the event that an investor fails to provide all necessary information, even after further requests from the Company, in the event an investor fails to provide requested follow up information to complete background checks or fails background checks, and in the event the Company receives oversubscriptions in excess of the maximum offering amount. Investors will be required to agree to indemnify our Company for misrepresentations of the investor within the subscription agreement or supplemental disclosures. Nonetheless, we may not require, and are not requiring, investors to waive any claims or remedies they may have against our Company under the Securities Act or Exchange Act. Once an investor’s interests have been issued, the investor will become a member of our Company.
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Jury Trial Waiver
The subscription agreement that investors will execute in connection with the offering provides that subscribers waive the right to a jury trial of any claim they may have against us arising out of or relating to the Agreement, excluding any claim under federal securities laws. If the Company opposed a jury trial demand based on the waiver, a court would determine whether the waiver was enforceable given the facts and circumstances of that case in accordance with applicable case law.
Additional Information Regarding this Offering Circular
We have not authorized anyone to provide you with information other than as set forth in this offering circular. Except as otherwise indicated, all information contained in this offering circular is given as of the date of this offering circular. Neither the delivery of this offering circular nor any sale made hereunder shall under any circumstances create any implication that there has been no change in our affairs since the date hereof.
From time to time, we may provide an “offering circular supplement” that may add, update or change information contained in this offering circular. We will also amend our offering statement annually while this offering is open to include updated financial statements. Any statement that we make in this offering circular will be modified or superseded by any inconsistent statement made by us in a subsequent offering circular supplement or amendment. The offering statement we filed with the SEC includes exhibits that provide more detailed descriptions of the matters discussed in this offering circular. You should read this offering circular and the related exhibits filed with the SEC and any offering circular supplement together with additional information contained in our annual reports, semiannual reports and other reports and information statements that we will file periodically with the SEC.
The offering statement and all amendments, supplements and reports that we have filed or will file in the future can be read on the SEC website at www.sec.gov.
The following table illustrates the amount of net proceeds to be received by the Company on the sale of the Shares offered hereby. It is possible that we may not raise the entire $75,000,000.00 in Shares being offered through this Offering Circular. In such case, we will reallocate the use of proceeds as the board of directors deems them to be in the best interests of the Company in order to effectuate its business plan. The intended use of proceeds are as follows:
Capital Sources and Uses
| 100% | 75% | 50% | 25% | |||||||||||||
| Gross Offering Proceeds | $ | 75,000,000 | $ | 56,250,000 | $ | 37,500,000 | $ | 18,750,000 | ||||||||
| Offering Costs (including broker dealer, and similar offering costs)(1) | $ | 3,010,500 | $ | 2,279,250 | $ | 1,548,000 | $ | 816,750 | ||||||||
| Use of Net Proceeds: | $ | 71,989,500 | $ | 53,970,750 | $ | 35,952,000 | $ | 17,933,250 | ||||||||
| Marketing | $ | 10,000,000 | $ | 7,500,000 | $ | 5,000,000 | $ | 2,500,000 | ||||||||
| Property, Plant, Equipment | $ | 45,000,000 | $ | 31,000,000 | $ | 18,750,000 | $ | 5,000,000 | ||||||||
| Research and Development | $ | 2,500,000 | $ | 1,875,000 | $ | 1,250,000 | $ | 625,000 | ||||||||
| Staffing, General, and Administrative (2) | $ | 14,489,500 | $ | 13,595,750 | $ | 10,952,000 | $ | 9,808,250 | ||||||||
*The figures in the table above are rounded to the nearest whole dollar.
Notes:
| (1) | Dalmore Group, LLC, referred to herein as the Broker, is engaged for administrative and compliance related services in connection with this Offering, but not for underwriting or placement agent services. Once the Commission has qualified the Offering Statement and this Offering commences, the Broker will receive a cash commission equal to one percent (1%) of the amount raised in the Offering. Additionally, the Broker and its affiliates will receive certain other fees, which fees are described in “Plan of Distribution” above. Our Company also expects to incur other expenses relating to this offering, including, but not limited to, legal, accounting, compliance, travel, marketing, technology, printing and other miscellaneous fees. The amounts listed above include reimbursement of such expenses to our Company. Any monies budgeted for but not spent on offering expenses will be reallocated pro rata among the other categories in the above table. |
| (2) | This amount includes the payment of $2,755,000 in cash in exchange for the termination of royalty payment agreements entered into by the Company. |
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The allocation of the use of proceeds among the categories of anticipated expenditures represents management’s best estimates based on the current status of the Company’s proposed operations, plans, investment objectives, capital requirements, and financial conditions. Future events, including changes in economic or competitive conditions of our business plan or the completion of less than the total offering, may cause the Company to modify the above-described allocation of proceeds. The Company’s use of proceeds may vary significantly in the event any of the Company’s assumptions prove inaccurate. We reserve the right to change the allocation of net proceeds from the offering as unanticipated events or opportunities arise.
Organization
Endless Corporation was founded in early 2021 and is a domestic corporation organized under the laws of the Oklahoma. The Company is a startup, development stage, biotechnology company focused on specializing in pharmaceutical-grade tissue cultures, clone genetics, genetic preservation, disease cleanup, and virus testing, including for cannibis.
The Business
With a focus and mission to provide disease and pest-free agriculture plants globally, we combine our pioneering science-driven and cutting-edge technology to provide cultivation operations with immature plants and crop steering knowledge. The Company’s team includes world-renowned scientists and researchers dedicated to advancing the agriculture industry. Thus far, we have generated revenue with limited commercial cannabis operations and have been selling our cannabis products primarily in Oklahoma. While our current operations are focused on cannabis products, we hope to expand our focus to other agricultural products. We hope to fundamentally change the way agriculture is cultivated with disease and pest-free genetics and our data collection and technologies will make cultivating agriculture more effective and profitable for our end user agricultural farmers.
In early 2023, Travis Dahm, the Company’s Co-Founder, CEO, and President organized Endless Grow, LLC which is a licensed regulated cannabis cultivator using the Company’s facilities to cultivate. Travis Dahm is the sole beneficial owner of Endless Grow, LLC, and under the current laws of Oklahoma a resident is required to maintain 75% ownership in this type of a regulated licensed cultivation. As soon as is feasibly possible the Company intends to transfer 25% ownership to Endless Corporation with the remaining 75% to be split evenly between Travis Dahm and Gary Holland, the Company’s Co-Founder & Chief Innovation Officer. Endless Corporation is contracted by Endless Grow, LLC to operate the cultivation license. The Company pays for all costs to operate the cultivation license and manages and collects all sales proceeds and applies them against the costs. Thus far, the costs for Endless Grow, LLC to operate have exceeded sales and any costs exceeding sales are charged to research and development costs as they are incurred.
In early 2024, Endless Corporation set up a subsidiary Endless Biotech, LLC to later hold the Company’s agricultural assets to be effective in or around early 2025. As of the end of the year 2023, there was no financial activity in this subsidiary; however, the Company expects activities.
The Company has capital needs of approximately $78 million over the next 12-24 months for the following phases of operations:
Phase 1: Expansion of Building One, Staffing, Equipment, Fulfillment Expansion, Fleet Delivery Services, Robotics Development, and Research & Development.
Phase 2: Tissue Culture Lab Expansion, Staffing, Land Development, Equipment, Fulfillment Expansion, Fleet Delivery Services, Robotics Development, and Research & Development.
Phase 3: Vegetation Center Development, Building Two Development, Fleet Delivery Services, and Research & Development.
The Company’s plans are contingent upon the amount of proceeds raised through this offering.
Research and Development
The Company is engaged in pheno-hunting, a process of selecting the best phenotype of each strain for mass production. Phenotypes expressed include smell, color, potency, resin production, height, etc. Phenotypes must be grown, harvested, dried and cured to determine quality. Once the best phenotype is selected, we clone them to get exact copies of the phenotype. These clones can then be mass produced for sale. We are also researching crop steering methods for our genetic clones. We continually collect data throughout the cultivation process to increase yield, quality, scale, and profitability.
All these efforts are meticulously researched to help our end users (agricultural farmers) to succeed with our immature plants in their cultivation process. The data we collect will help high-performance; science driven cultivators grow better agriculture ultimately for the end user. All our data and research will be made available to our agricultural farmers to cultivate the next generation of disease and pathogen free plants. Cultivators using our proprietary data can dramatically improve their cultivation methods.
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We consider our research and development as technological development and advancement in respect of our technologies, where specifically, these costs include, among others, such as labor costs for the collection of research data, testing, and documentation of crop steering data, laboratory costs, rent and equipment and growing supplies, specialty growing supply purchases used in development work and other various research items supporting testing and deployment efforts.
We intend to engage in research and development to deploy robotics in our tissue culture lab to help reduce our costs, maintain consistency, and make efficient scalability of tissue culture propagation. Our research and development will not only help us succeed, but our research and development can be utilized in deploying robotics across the glove in other tissue culture labs.
Market Opportunity
Industry Overview
Market Growth: The cannabis industry has been growing rapidly due to increasing legalization and acceptance for both medicinal and recreational use. The demand for high-quality cannabis plants has led to a parallel growth in the market for clones and tissue culture. 71 countries have adopted cannabis legalization, and cannabis consumers globally spent $415 billion on high-THC cannabis in 2020, with an annual spending projected to climb to $496 billion by 2025.
Technology Integration: Advances in biotechnology and plant sciences are driving innovation in cloning and tissue culture methods, improving yield and consistency of cannabis plants.
Competitive Landscape
Key Players: There are several established companies in the cannabis cloning and tissue culture space, along with numerous startups. Key players include companies that specialize in cannabis genetics, large-scale growers, and biotechnology firms that provide tissue culture solutions.
Tissue Culture Companies Specializing in Cannabis:
| ○ | Phylos Bioscience: Specializes in plant genetics and tissue culture, offering services that include DNA testing and strain identification, which help breeders and growers maintain consistency and quality. | |
| ○ | Segra International: Focuses on tissue culture propagation and plant micropropagation services for the cannabis industry, ensuring disease-free and high-quality plants. | |
| ○ | Conception Nurseries: A leader in tissue culture propagation, providing high-quality cannabis clones with a focus on scalability and genetic integrity. | |
| ○ | Tissue Culture Co.: Offers tissue culture and micropropagation services specifically tailored to cannabis, emphasizing genetic stability and disease-free plant production. |
Cannabis Genetic Companies:
| ○ | DNA Genetics: Known for their high-quality cannabis genetics, DNA Genetics provides seeds and clones to growers, ensuring consistency and quality across their product lines. | |
| ○ | Canopy Growth Corporation: A major player in the cannabis industry, Canopy Growth has invested in tissue culture technology to maintain genetic consistency across its large-scale operations. | |
| ○ | Aurora Cannabis: Another large cannabis producer, Aurora has developed in-house capabilities for tissue culture and cloning to support its extensive cultivation operations. |
Breeding and Cultivation Companies:
| ○ | Humboldt Seed Organization: Specializes in developing high-quality cannabis strains and providing seeds and clones to growers. | |
| ○ | Green House Seed Co.: A well-known name in cannabis breeding, offering a wide variety of strains and clones to the global market. | |
| ○ | Cannarado Genetics: Focuses on breeding and supplying unique cannabis strains, catering to both commercial growers and boutique producers. |
Research and Development Entities:
| ○ | Front Range Biosciences: An agricultural biotech company that combines plant breeding and genetics with tissue culture technology to produce high-quality cannabis and hemp plants. | |
| ○ | Cultivaris Hemp Foundation: Works on developing and distributing hemp clones through tissue culture, aiming to provide reliable, consistent plant materials to the market. |
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Nurseries with Tissue Culture Facilities:
| ○ | Dark Heart Nursery: Specializes in providing cannabis clones and has integrated tissue culture into their propagation methods to ensure clean, healthy plant starts. | |
| ○ | FloraCo: A company focused on delivering high-quality clones and tissue-cultured plants to the cannabis industry, emphasizing genetic consistency and health. |
Barriers to Entry: The industry has moderate barriers to entry, including the need for specialized knowledge in plant genetics and tissue culture techniques, regulatory compliance, and initial capital investment.
Company Positioning in the Industry
Expertise in Tissue Culture: Endless has expertise in tissue culture techniques and a data driven approach. Our team includes top researchers, biotechnologists, PHD biochemist and, a world-renowned plant scientist, and a nuclear engineer leading the operations team, and this can be a significant competitive advantage, as tissue culture can produce disease-free, genetically consistent plants at scale.
Partnerships and Collaborations: Endless has strategically partnered with leading industry innovators. Through collaborative efforts with our partners, Endless is actively engaged in targeting a global audience through strategic marketing initiatives. By aligning our marketing efforts with the expertise and reach of FoHSE, Athena, AROYA by Addium, Grodan, PIPP Horticulture, and Quest, we aim to amplify our brand visibility and engage with potential customers on a global scale. Leveraging the established books of business of our partners, we can effectively tap into new markets, introduce our innovative solutions to a wider audience, and foster strong relationships with clients worldwide. These partnerships with many key players in the industry can enhance our position by providing access to new technologies, strains, and distribution networks. This synchronized approach to marketing not only enhances our market reach but also strengthens our position as a key player in the industry. By combining our resources, knowledge, and networks, we can create impactful marketing campaigns that resonate with diverse audiences, drive brand awareness, and ultimately support our mutual goal of expanding our global footprint and driving collective revenue growth.
Innovation and R&D: We invest heavily in research and development to create proprietary cloning methods or unique cannabis strains to be better positioned to lead in the market. Our data collection also serves as a knowledge database for our customers (farmers) to help them with crop steering and more.
Regulatory Compliance: Compliance with local and federal regulations is crucial. We have demonstrated strong compliance records and are actively seeking a global compliance leader to help us gain a competitive edge on compliance, as regulatory compliance is a key concern in our industry.
Geographical Reach: Having a broad geographical reach, especially in key markets where cannabis is legalized, enhances our market position. We are committed to fulfilling the global demand for high quality, genetically consistent plants, disrupting traditional methods of propagation on a worldwide scale. We are building an advanced distribution network to ensure no matter where our customers are they can benefit from our quality plants.
Challenges and Opportunities
Regulatory Environment: The regulatory landscape for cannabis varies widely by region and can impact market entry and operations. Companies need to navigate complex regulations, which can be a barrier for new entrants.
Supply Chain and Quality Control: Ensuring a reliable supply chain and maintaining quality control are critical for success. Any disruptions can significantly impact business operations.
Market Demand: The increasing demand for cannabis for both medical and recreational use presents a significant growth opportunity. Companies positioned to scale their operations efficiently can capture larger market shares.
Intellectual Property
We do not hold any registered trademarks or patents, but do have intellectual property in our know-how and processes and under common law trademark laws.
Employees
At the time of filing, the Company, directly or through its subsidiaries, currently has approximately 31 employees, all of which are full-time employees.
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Reports to Security Holders
We are required to keep appropriate books of the business at our principal offices. The books will be maintained for both tax and financial reporting purposes on a basis that permits the preparation of financial statements in accordance with GAAP. For financial reporting purposes and tax purposes, the fiscal year and the tax year are the calendar year, unless otherwise determined by our board of directors in accordance with the Internal Revenue Code. We will file with the SEC periodic reports as required by applicable securities laws.
Under the Securities Act, we must update this Offering Circular upon the occurrence of certain material events. We will file updated Offering Circulars and Offering Circular supplements with the SEC. We are also subject to the informational reporting requirements of the Exchange Act that are applicable to Tier 2 companies whose securities are offered pursuant to Regulation A, and accordingly, we will file annual reports, semiannual reports and other information with the SEC. We will provide such documents and periodic updates electronically through the SEC’s EDGAR system at www.sec.gov. We will provide holders with copies via email or paper copies at any time upon request.
Government Regulation
The Company is subject to and affected by the laws and regulations of U.S. federal, state, and local governmental authorities, including those relating to data collection, privacy, and online sales. These laws and regulations are subject to change. Existing and future laws and regulations may impede the growth of the Internet, online services, and increase the cost of providing online services. These regulations and laws may cover sweepstakes, taxation, tariffs, user privacy, data protection, pricing, content, copyrights, distribution, electronic contracts and other communications, consumer protection, broadband residential Internet access and the characteristics and quality of services. It is not clear how existing laws governing issues such as property ownership, sales, use and other taxes, libel and personal privacy apply to the Internet and e-commerce. Unfavorable resolution of these issues may harm our business and results of operations.
We operate in the cannabis industry in the U.S., which is dependent on state laws and regulations pertaining to such industry; however, under federal law, cannabis remains illegal. The United States federal government regulates drugs through the Controlled Substances Act (the “CSA”), which places controlled substances, including cannabis, on one of five schedules. Cannabis is currently classified as a Schedule I controlled substance, which is viewed as having a high potential for abuse and having no currently accepted medical use in treatment in the United States. Currently, 38 U.S. states, the District of Columbia and the U.S. territories of Guam and Puerto Rico allow the use of cannabis in some form. Such state and territorial laws are in conflict with the federal CSA, which makes cannabis use and possession illegal at the federal level. The United States Supreme Court has confirmed that the federal government has the right to regulate and criminalize cannabis, including for medical purposes, and that federal law criminalizing the use of cannabis preempts state laws that legalize its use.
In Oklahoma, medical marijuana is regulated by the Oklahoma Medical Marijuana Authority. The OMMA has its own independent set of regulations. Should we or our partners fail to comply with applicable state regulations, we could be subject to sanctions and it could result in the suspension or revocation of our partners’ licenses. It is also possible that the OMMA could elect not to renew any of the licenses because of failure to meet a new or existing regulation, change in our structure that causes it not to meet license requirements or our failure to pay license fees timely. In addition to regulation at the state level, our partners may be subject to local regulation. Failure of our partners to comply with local regulations could also materially negatively impact our business and affect our ability to operate in such cities. Our ability to comply with applicable regulations is costly and our inability to meet such costs could materially negatively impact our business.
Transfer Agent
We have engaged United Transfer Agency, LLC doing business as Dalmore Transfer as our transfer agent.
Bankruptcy, Receivership, Etc.
Not applicable.
Legal Proceedings
We are not aware of any pending or threatened legal proceedings in which we are involved.
Reclassification, Merger, Consolidation, Etc.
Not applicable.
The Company entered into a lease agreement for office, cultivation, and lab space in Tulsa, Oklahoma on 5.7 acres of land. The Company entered into a 36-month non-cancelable agreement commencing on October 1, 2022. We believe that this space is suitable and adequate for our current operations.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of our operations, together with our financial statements and the notes thereto appearing elsewhere in this Offering Circular. This discussion contains forward-looking statements reflecting our current expectations, whose actual outcomes involve risks and uncertainties. Actual results and the timing of events may differ materially from those stated in or implied by these forward-looking statements due to a number of factors, including those discussed in the sections entitled “Risk Factors” starting on page 4, “Cautionary Statement Regarding Forward-Looking Statements” starting on page 19, and elsewhere in this Offering Circular. Please see the notes to our Financial Statements for information about our Significant Accounting Policies.
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Operating Results
Results of Operations for Years Ended 2023 and 2022, and Six Months Ended June 30, 2023, and 2024
Revenues
The Company is a startup, development stage, biotechnology company focused on specializing in pharmaceutical-grade tissue cultures, clone genetics, genetic preservation, disease cleanup, and virus testing. With a focus and mission to provide disease and pest-free agricultural plants globally. We combine our pioneering science-driven and cutting-edge technology to provide cultivation operations with immature plants and crop steering knowledge. The Company’s team includes a nuclear engineer, an engineer, and physicists, a world-renowned plant scientist, biologists, biotechnologists, and researchers dedicated to advancing the agricultural industry. Thus far, we have generated revenue with limited commercial operations up to this point and have been selling our products primarily in Oklahoma. The revenues we have generated to date are from small scale testing and proof of concept.
Salaries and Consulting
During 2022 and 2023 and the six months ended June 30, 2024, management continued to hire full time employees to execute the business plan, accelerate market development, assist our management team to develop and advance its technology development. The increase in salaries and consulting fees from $277,261 for the twelve months ended December 31, 2022 to $668,950 for the twelve months ended December 31, 2023, and from $208,961 for the six months to $548,001 for the six months ended June 30, 2024, and is reflective of our continued efforts to grow our business, advance the technology and establish more scalable deployment of our goods and services in the market.
Professional Services
The Company has hired several professional service organizations and individuals to assist and support its business operations. The Company spent $16,900 during the twelve months ended December 31, 2022, and $70,570 during the twelve months ended December 31, 2023, 31,630 for the six months ended June 30, 2023, and $103,152 for the six months ended June 30, 2024 on professional services fees, which is indicative of our rapid growth and our efforts to maintain and/or manage efficient research, development, customer relations, governance, etc.
Research and Development Expenses
Research and Development expenses consist primarily of expenses that exceed billable expenses exceeding sales of goods from our cultivation contracts with Best of Holloy, LLC and Endless Grow, LLC. These costs exceed our current sales as we are engaged in pheno-hunting, a process of selecting the best phenotype of each strain for mass production. Phenotypes expressed include smell, color, potency, resin production, height, etc. Phenotypes must be grown, harvested, dried and cured to determine quality. Once the best phenotype is selected, we clone them to get exact copies of the phenotype. These clones can then be mass produced for sale. We are also researching crop steering methods for our genetic clones. We continually collect data throughout the cultivation process to increase yield, quality, scale, and profitability. All these efforts are meticulously researched to help our end users (agricultural farmers) to succeed with our immature plants in their cultivation process. The data we collect will help high-performance; science driven cultivators grow better agriculture ultimately for the end user. All our data and research will be made available to our agricultural farmers to cultivate the next generation of disease and pathogen free plants. We consider all the costs related to pheno-hunting and collecting data as our Research and Development costs, which are charged to expenses as incurred. Cultivators using our proprietary data can dramatically improve their cultivation methods. We consider these costs to be related to technological development and advancement in respect of our technologies, where specifically, these costs include, among others, labor costs for the collection of research data, testing, and documentation of crop steering data, laboratory costs, rent and equipment and growing supplies, specialty growing supply purchases used in development work and other various research items supporting testing and deployment efforts.
As the Company started scaling capital expenditures for our headquarters and pilot facility, our research and development expenses were increased to $1,249,140 for the twelve months ended December 31, 2023 from $340,744 for the twelve months ended December 31, 2022. Our research and development expenses for the six months ended June 30, 2023 and June 30, 2024 were $0 and $588,454, respectively.
Interest Expense
In 2023 our interest expense decreased from $30,000 in 2022 to $1,352 in 2023 for a $500,0000 loan we received from a private lender with interest only payments beginning in November 2022 at an interest rate of 36% per annum that was converted to equity in February 2023, and a $250,000 loan we received from a private lender with interest only payments beginning in December 2023 at an interest rate of 12% per annum. For the six months ended June 30, 2023 and June 30, 2024 we spent $15,000 and $8,809, respectively in interest for the $250,000 loan.
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Other Income
Other income mostly relates to energy rebate incentives the Company received from Public Service Company of Oklahoma for installing energy efficient lights, and de minimis rebates we received from various vendors. Rebate income from Public Service Company of Oklahoma was $126,750 for the twelve months ended December 31, 2023.
Net Loss
Our net loss was $(1,386,847) for the twelve months ended December 31, 2023, compared to $(401,613) for the twelve months ended December 31,2022 and $(848,176) for the six months ended June 30, 2024 compared to $(75,112) for the six months ended June 30, 2023. This increase in net loss is reflective of the rapid growth of our Company, including increased employee count, technology development, construction and deployment of our headquarters and pilot facility and other related costs and expenses.
Liquidity and Capital Resources
Since our inception in 2021, we have devoted most of our cash resources to employees, capital expenditures, consultants, professional services and research and development activities to develop and grow our business. We have financed our operations to date primarily with the use of proceeds from the capital invested from investors from May 2022 to April 2024. In addition, in 2024, we offered a Series of Convertible Note offerings to fund our operating expenses and promotional efforts of this Offering.
To date, we have generated revenue from services, and no revenue form products, however, we do anticipate generating revenue from the sale of products under our biotech venture in the future. Thus far, we have incurred losses and generated negative cash flows from operations since inception. During the period from April 2021 (inception) through December 31, 2023, we have incurred cumulative net losses of approximately $1.78 million. For the six months ended June 30, 2023 and six months ended June 30, 2024 we have incurred net losses of approximately $472 thousand and $2.6 million, respectively. Our future expenditures and capital requirements will depend on numerous factors, including, among others, the progress of our research and development efforts, deployment of pilot plants with key customers, and our ability to scale up to commercial operations.
Through the date of this Offering Statement, we have raised capital by exempt offerings of common stock, preferred stock and convertible notes of approximately $8.9 million, net of offering costs and commissions.
From May 2022 to April 2024, the Company completed a Regulation D, Rule 504 exempt equity financing issuing 47,495 shares of Common Stock which were subsequently converted to Preferred stock in September 2024 for total proceeds of $4,900,000 before fees and commissions.
From March 2024 to December 2024, the company completed a Regulation D, Rule 504 exempt Convertible Note financings, convertible to Preferred Series A stock with discounts ranging from 50% - 83% upon the SEC qualification of the Company’s Regulation A Offering for total proceeds of $3,970,000 before fees and commissions. These funds were raised to pay for legal, accounting, and promotional costs related to this Offering, facility improvements, and operating cash flow.
Our capital raising efforts have provided us the ability to complete the buildout of our headquarters and pilot plant where we have deployed products through our service contracts with Best of Holloy, LLC and Endless Grow, LLC to our customers in Oklahoma, as well as advance our work on the educational, demonstration and commercial facilities. We continuously monitor our use of funds relative to executing on our business strategy with a focus on spending capital that will further our ability to recognize revenue in the future. We balance our use of funds based on our ability to raise additional capital resources through various exempt offerings as well as this Offering.
We believe that we currently have sufficient capital to finance our operations at least through the end of 2025. However, if our operating and development costs are higher than expected, we will need to obtain additional financing prior to that time. Further, we expect that, after such period, we will be required to raise additional capital to fund our operations and to further advance the commercialization of the US and internationally. There is no assurance that such financing will be available when needed, or that ultimately, we will achieve profitable operations and positive cash flow.
Credit Facilities
In 2024, as aforementioned, the Company issued approximately $4 million in convertible promissory notes to support its business operations and pay for the costs and promotion efforts of This Offering. These convertible note financings are converted to Series A Preferred Stock upon the qualification of This Offering by the SEC. The Company also has a $250,000 credit facility with a private lender which is partially owned 50% by our cofounder, CEO, and President Travis Dahm. The Company has not entered any active credit facility with a traditional bank or financial institution currently.
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Capital Expenditures
In October 2022, the Company leased a facility in Tulsa, Oklahoma, as part of its plan to build its headquarters and pilot plant. As part of occupying our facility, we started improving the facility and purchasing several technical equipment and testing instruments to continue research and development as well as begin production efforts along with pilot testing. The Company expects that it will continue acquiring capital equipment and improving the facility to expand its operations and development plans specifically, the Company has been in the process of making leasehold improvements and acquiring equipment for its cultivation, propagation, and tissue culture lab, with a total spend of approximately $1.75 million for the twelve months ended December 31, 2023. During the six months ended June 30, 2023 and the six months ended June 30, 2024 the Company spent $1.1 million and $561 thousand, respectively, for the same purposes.
Contractual Obligations, Commitments and Contingencies
From March 2023 to April 2024, as part of the Company’s financing rounds the Company entered into royalty agreements with investors and thus has incurred $4,806 in royalty payments in 2023. In the six months ended June 30, 2023, the Company incurred $0 and $55,676, respectively in royalty payments. As part of agreements with investors to either convert their royalty agreements to Preferred Stock or have them bought out with proceeds of this Offering, royalty agreements that would have obligated the company to pay $9,591,201 in future royalty payments have been terminated in exchange for 3,895,000 shares of Preferred Stock and $2,755,000 in cash payments from the proceeds of this Offering.
In October 2022, the Company entered a thirty-six-month non-cancelable building lease for our headquarters in Tulsa, Oklahoma. The headquarters includes a 23,196 square foot building and an unfinished building on 5.7 acres of land. Under the lease, the Company pays a base rent of $50,000 per month through August 2025. The Company made a $300,000 non-refundable deposit on the lease and has a purchase option of $5,500,000 for the building and land. If the Company exercises the purchase option, the $300,000 deposit will be applied to the purchase price. We are confident that we will not exercise the purchase option. The total future minimum lease payments over the remaining lease term as of December 31, 2023 are $1,050,000, and for the six months ended June 30 2023 and June 30, 2024 are $1,350,000$ and $750,000, respectively.
In October 2024, one of the Company’s investors, through a newly formed limited liability company with Endless Corporation as a member, acquired the property housing the Company’s leased headquarters, offices, cultivation areas, and culture lab facilities (collectively, the ‘Facilities’). As part of the transaction, the Company applied half of its building lease security deposit toward the purchase price and issued preferred stock to the sellers and their promissory note holders as partial consideration.
Following this acquisition, the Company and the investor are actively negotiating a new lease agreement with the newly formed limited liability company. In addition, discussions are progressing concerning the Company’s ownership stake in the limited liability company and the beneficial ownership structure of the Facilities.
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements during the periods presented, and do not have any currently.
Plan of Operations
As noted above, our current plan of operations requires us to raise significant additional capital. If we are successful in raising the maximum amount of $75,000,000 through the sale of Shares offered for sale in this Offering Circular, we believe that the Company will have sufficient cash resources to fund its plan of operations at least through the end of 2026. If we are unable to do so, we may have to delay and possibly cease some operations.
We continually evaluate our plan of operations to determine the way we can most effectively utilize our limited cash resources. The timing of completion of any aspect of our plan of operations is highly dependent upon the availability of cash to implement aspects of the plan and other factors beyond our control. There is no assurance that we will successfully obtain the required capital or revenues, or, if obtained, that the amounts will be sufficient to fund our ongoing operations.
Quantitative and Qualitative Disclosures about Market Risk
In the ordinary course of our business, we are not exposed to market risk of the sort that may arise from changes in interest rates or foreign currency exchange rates, or that may otherwise arise from transactions in derivatives.
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Contingencies
Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company’s management, in consultation with its legal counsel as appropriate, assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company, in consultation with legal counsel, evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates a potentially material loss contingency is not probable, but is reasonably possible, or is probable, but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. We are not aware of any matters which result in a loss contingency.
Relaxed Ongoing Reporting Requirements
Regulation A+ provides that a filer can take advantage of an extended transition period for complying with new or revised accounting standards. We have elected to avail ourselves of this exemption and, therefore, we will not be subject to the same adoption period for new or revised accounting standards as public companies.
Upon the completion of this Offering Statement, we may elect to become a public reporting company under the Securities Exchange Act of 1934, as amended (the Exchange Act). If we elect to do so, we will be required to publicly report on an ongoing basis as an “emerging growth company” (as defined in the JOBS Act) under the reporting rules set forth under the Exchange Act. As defined in the JOBS Act, an emerging growth company is defined as a company with less than $1 billion in revenue during its last fiscal year. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies.
For so long as we remain an “emerging growth company,” we may take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies that are not “emerging growth companies,” including but not limited to:
| ● | not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes- Oxley Act; | |
| ● | taking advantage of extensions of time to comply with certain new or revised financial accounting standards; | |
| ● | being permitted to comply with reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and | |
| ● | being exempt from the requirement to hold a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. |
If we are required to publicly report under the Exchange Act as an “emerging growth company”, we expect to take advantage of these reporting exemptions until we are no longer an emerging growth company. We would remain an “emerging growth company” for up to 5 years, though if the market value of our Common Stock that is held by non-affiliates exceeds $750 million, we would cease to be an “emerging growth company.”
We have commenced reporting under the Regulation A+ reporting requirements. If we elect not to become a public reporting company under the Exchange Act, we will be required to continue to publicly report on an ongoing basis under the reporting rules set forth in Regulation A+ for Tier 2 issuers. The ongoing reporting requirements under Regulation A+ are more relaxed than for “emerging growth companies” under the Exchange Act. The differences include, but are not limited to, being required to file only annual and semi-annual reports, rather than annual and quarterly reports. Annual reports are due within 120 calendar days after the end of the issuer’s fiscal year, and semi-annual reports are due within 90 calendar days after the end of the first six months of the issuer’s fiscal year.
Trend Information
Because we are still in the startup phase and have only recently commenced our research and product development, we are unable to identify any recent trends in revenue or expenses. Thus, except as set forth below, we are unable to identify any known trends, uncertainties, demands, commitments or events involving our business that are reasonably likely to have a material effect on our revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause the reported financial information in this Offering Circular to not necessarily be indicative of future operating results or financial condition.
Unpredictable events, such as the COVID-19 outbreak, and associated business disruptions including delayed piloting trials and laboratory resources could harm our financial condition, affect our operations, increase our costs and expenses, and impact our ability to raise capital. Our operations could be subject to unpredictable events, such as snowstorms, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics or pandemics such as the COVID-19 outbreak, and other natural or manmade disasters or business interruptions, for which we may not be insured. We do not carry insurance for all categories of risk that our business may encounter. The occurrence of any of these business disruptions could seriously harm our operations and financial condition. Additionally, COVID-19 has caused significant disruptions to the global financial markets, which could impact our ability to raise additional capital. The ultimate impact on us and any delays in our research and development is unknown, but our operations and financial condition could suffer in the event of any of these types of unpredictable events. Further, any significant uninsured liability may require us to pay substantial amounts, which would adversely affect our business, results of operations, financial condition and cash flows.
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DIRECTORS, EXECUTIVE OFFICERS, AND SIGNIFICANT EMPLOYEES
Our board of directors is elected annually by our shareholders. The board of directors elects our executive officers annually. Our directors and executive officers as of the date of this Offering Circular are as follows:
Officers and Significant Employees:
| Name | Position | Age | Term of Office | |||
| Travis Dahm | Co-Founder, CEO | 44 | July 2021 to present | |||
| Gary Holland | Co-Founder, CIO | 68 | July 2021 to present | |||
| Tim Lozott | CFO/COO | 53 | March 2024 to present | |||
| Barjesh Vaidya | Chief Scientist | 54 | October 2024 to present |
Directors:
| Name | Position | Age | Term of Office | |||
| Travis Dahm | Chairman | 44 | November 2024 to present | |||
| Gary Holland | Director | 68 | November 2024 to present | |||
| Tim Lozott | Vice Chairman | 53 | November 2024 to present |
Travis Dahm — Co-Founder, CEO, President, & Chairman
Mr. Travis Dahm is the Co-Founder, CEO and President of Endless Corporation and he serves as its Chairman of the Board of Directors. He is responsible for all aspects of building the company into a future world leader in micro propagation and propagation technologies. His focus is on commercializing these technologies and international finance. Travis is a 15-year veteran of the financial and fintech industry, where he has leveraged technology, entrepreneurial management expertise and a comprehensive understanding of the evolving needs of clients, to grow companies into successful global enterprises.
Mr. Dahm began his career in foreign exchange as the co-founder of Wiseman Capital Management, where he ran day-to-day operations and helped grow the fund to over $2 million in assets under management in the first 12 months of operations.
Travis left Wiseman Capital Management and co-founded CurrentDesk, a financial technology firm that has been in operation since 2012. As CEO of CurrentDesk, he led the firm to international growth. Travis has established white labels in Asia, Europe, North America, Central America, South America and Australia. In addition, Travis built multi-regional teams to help with the exponential growth processing over $1 billion in payment transactions annually, several trillion dollars in trade volume and hundreds of thousands of registered clients. CurrentDesk is still operational today with a headquarters in Tulsa, Oklahoma.
Most recently Mr. Dahm has entered the biotechnology and biogenetics industry by co-founding Endless Corporation, in Tulsa, Oklahoma. The company is unique in the fact that it focuses on propagation, genetics and tissue culture with a roadmap to expand into processing, education, health & beauty and ultimately technology.
Travis has a philosophy that a business is only as good as the team and product behind it. If you have a vision, can successfully build the team, and create a superior product; building the business becomes as simple as identifying strategic opportunities and forming key partnerships to create revenue for the company.
Gary Holland — Co-Founder, CIO & Director
Mr. Gary Holland is the Co-Founder and Chief Innovation Officer (CIO) of Endless Corporation and he serves as a Director of the Board of Directors. Gary’s focus is on leading the research and development and implementing innovation for the company. Gary Holland is an Nuclear Engineer, Electrical Engineer, Scientist, Astrophysicist, and AI Architect, who has not only helped Fortune 500 Corporations develop high quality software applications, but also helped cultivators identify and rectify mistakes to improve their bottom line. Gary understands the vast workings of a corporate business. This, coupled with his engineering background, gives him the ability to find the right solutions for any business.
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Early on in life, Gary joined the US Navy, becoming a Nuclear Engineer on Ballistic Missile Submarines. During his active-duty service, he developed a Nuclear Instrument Monitoring System for submarines used by the Navy.
Gary has designed and developed, with patent pending, an Al Knowledge Based System using Spatial Patterns and Dynamic Relationship Index Stores, that has a close structural representation of a human brain. He has also worked to design the Next Generation Shuttle Analysis Project used by NASA Langley researchers, scientists and engineers for analysis and engineering prototypes. Gary has built Artificial Intelligence based architectures, components, and programs used by federal and state agencies, and various fortune 500 corporations.
Gary Co-Founded Endless Corporation, after discovering the need for quality clones and genetics for cultivators. He has created and implemented standard operating procedures different from other competitors, giving Endless an edge by creating a superior product. Gary has also consulted several cultivators throughout Oklahoma, helping them with grow methodologies, propagation, and various crop steering techniques.
Gary’s extensive education includes Computer Science, AstroPhysics, Nuclear Engineering and Electrical Engineering.
Tim Lozott – CFO, COO, & Vice Chairman
Tim Lozott is the Chief Financial Officer and Chief Operating Officer of Endless Corporation and he serves as its Vice Chairman of the Board of Directors. He has served in these roles since March 2024, and November 2024, respectively. Mr. Lozott joins Endless with a wealth of experience and a proven track record in the agriculture industry, where he has served as a fully vertical operator with an $100 million exit. His strategic vision and financial acumen will play a pivotal role in positioning Endless as a global leader in pharmaceutical-grade tissue cultures and clone genetics for agriculture cultivators worldwide. Notably, Mr. Lozott’s career highlights include managing and co-managing REITs valued at over $2 billion, demonstrating his proficiency in asset management and strategic investment.
Prior to joining Endless, over the past five years Mr. Lozott served as CEO of Green Life Capital where he provided investment management and loan brokering for affiliated partners, and strategic advisory services to emerging growth companies. His focus for the companies he served is on driving value, turnaround and strategic advisory services, and identifying companies for full-stack capital investment opportunities. During his tenure at Green Life Capital, Mr. Lozott served as a strategic advisor, fractional and interim CFO for over a dozen companies including but not limited to; Now CFO, Hemper, Kingsbarn Realty Capital, Strategic Development Partners, Speedvegas, Paro, and interim CEO/CFO for Tree of Life Dispensaries, where he established two thriving dispensaries with over 30,000 customers in the span of less than 1 year from opening.
Mr. Lozott’s mandate includes implementing a “Scale, Grow or Die” strategy and preparing for an anticipated exit strategy
onto the Nasdaq Stock Exchange by the end of 2028. His expertise in strategic partnerships, mergers and acquisitions, along with land
and property acquisitions, will support Endless Biotech’s ambitious growth and expansion plans. Mr. Lozott will oversee all operations,
finance, and accounting functions for the company, spearheading efforts to drive financial growth and operational excellence.
Barjesh Vaidya – Chief Scientist
Brajesh Vaidya, our Chief Scientist, is a strategic addition to our leadership team. With over two decades of experience in cutting-edge tissue culture and plant biotechnology, Braz is a pioneering figure in plant biotechnology, distinguished by his expertise in advancing tissue culture and plant propagation techniques that drive sustainable growth and commercial scalability in agriculture. Braz has developed innovative protocols for creating disease-free plant stock, critical in producing consistent, high-quality clones for commercial cultivation. His work emphasizes meticulous lab management, including developing and implementing SOPs that meet stringent regulatory standards, while optimizing efficiency for large-scale production environments.
Throughout his career, Braz has led teams in R&D, where his disciplined approach has facilitated substantial breakthroughs in plant tissue culture, viroid testing, and disease management. Braz excels in cross-functional collaboration, coordinating with both internal teams and external stakeholders to meet project timelines and deliver actionable insights that inform broader production strategies. Known for his ability to bridge scientific research with commercial application, he has helped build frameworks that streamline operations from pilot to full-scale production, making significant impacts on both national and international biotech initiatives.
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Prior to joining Endless, most recently Braz worked with VidaCann as their director of Plant Biotech and Plant Tissue Culture Lab Manager. He was also a former research assistant at Fort Valley State University, where he maintained a biotech and plant tissue culture lab, and conducted research on plant tissue culture including molecular studies and genetic transformation.
Board Committees
We have not established an audit committee, compensation committee, or nominating committee.
Family Relationships
There is no family relationship between any director, executive officer, person nominated or chosen by the issuer to become a director or executive officer or any significant employee.
Director or Officer Involvement in Certain Legal Proceedings
Our current directors and executive officers have not at any time in the past five (5) years been convicted in a criminal proceeding (excluding traffic violations and other minor offenses) and no petition under the federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of any such officers or directors, or any partnership in which they were a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing.
Code of Ethics
We have not adopted any specific Code of Ethics.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The table below summarizes all compensation awarded to, earned by, or paid to our executive officers and directors for all services rendered in all capacities to us during the fiscal year ended as of December 31, 2023.
| Name | Capacity in which compensation was received | Cash Compensation | Other Compensation | Total Compensation | ||||||||||
| Travis Dahm (1) | Chairman, CEO | $ | 0 | $ | 0 | $ | 0 | |||||||
| Gary Holland (2) | Director, CIO | $ | 0 | $ | 0 | $ | 0 | |||||||
| Tim Lozott (3) | Vice Chairman, CFO/COO | $ | 0 | $ | 0 | $ | 0 | |||||||
| (1) | Mr. Dahm has not been compensated for his services. The Company reimburses Mr. Dahm for reasonable business travel and related expenses and out of pocket business expenses. The Company has an equity compensation plan with certain hurdles, which Mr. Dahm will vest shares of common stock and preferred stock in the Company. |
| (2) | Mr. Holland has not been compensated for his services. The Company reimburses Mr. Holland for reasonable business travel and related expenses and out of pocket business expenses. The company has an equity compensation plan with certain hurdles, which Mr. Holland will vest shares of common stock and preferred stock in the Company. |
| (3) | Mr. Lozott joined the Company in March of 2024, and his contract specifies his compensation as $10,000 in cash per month for his services and $10,000 per month in stock compensation for the first six months of his services, and after six months of services, Mr. Lozott’s cash compensation is $20,000 per month. The Company has an equity compensation plan with certain restrictions and hurdles, which Mr. Lozott will vest shares of common stock and preferred stock in the Company. The employment contract with Mr. Lozott is attached as Exhibit 6.5. |
No cash compensation was paid to the Company’s directors for their service as directors for the year ended December 31, 2023. We do not intend to pay such directors’ salary or cash compensation, but may issue them common stock, with such compensation to be determined by the board of directors in the future when applicable. We may also choose to compensate our officers in the future.
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Employment/Contractor Agreements
Mr. Lozott joined the Company in March of 2024, and he has an employment contract which specifies his compensation as $10,000 in cash per month for his services and $10,000 per month in stock compensation for the first six months of his services, and after six months of services Mr. Lozott’s cash compensation is $20,000 per month. The Company has an equity compensation plan with certain restrictions and hurdles, which Mr. Lozott will vest shares of common stock and preferred stock in the Company. In addition, the Company has an independent contractor agreement with Numbers Matter Capital for investor relations and other services. The agreement is attached as Exhibit 6.6. Part of the compensation to Numbers Matter Capital Inc. consists of six million shares of series A preferred stock and twenty million shares of common stock. The stock award will be issued after qualification of this offering by the SEC.
Equity Incentive Plan
Each of the executive officers and directors is eligible to receive equity compensation at the discretion of our Board. The Bylaws of the Company reserved 970,000,000 shares of common stock and 30,000,000 shares of preferred stock for an Equity Incentive Plan (the “Plan”) to be administered by the Board of Directors. The Company may at its discretion with the authorization of the Board of Directors increase the number of shares authorized to be issued under the Plan.
The Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock grants, performance share cash awards as well as other equity-based awards. Shares issued under the Equity Incentive Plan are shares of our common stock and preferred stock. Incentive stock options may be granted to our employees and employees of any parent or subsidiary corporation and in some cases to consultants serving in key roles. All other awards may be granted to our employees, directors or consultants and to employees, directors or consultants of any affiliated entity.
The Board of Directors, as administrators of the Plan, has the power to determine when awards will be granted, which employees, directors or consultants will receive awards, the terms of the awards, including the number of shares subject to each award and the vesting schedule of the awards, and to interpret the terms of the Plan and the award agreements. The Board of Directors, as administrator of the Plan, also has the authority to reduce the exercise price of outstanding stock options if the exercise price exceeds the fair market value of the underlying shares, and to cancel such options in exchange for new awards, in each case without stockholder approval. The Plan shall allow for:
(A) Stock Options. The Plan shall allow for the grant of incentive stock options to qualify under section 422 of the Code and non-qualified stock options.
(B) Stock Appreciation Rights. The Plan shall allow for the grant of stock appreciation rights. Stock appreciation rights grant the grantee the right to receive, upon exercise, an amount, payable in cash or shares of Common Stock, equal to the number of shares that is being exercised multiplied by the excess of
(1) the fair market value of a share of Common Stock on the date of exercise, over,
(2) the exercise price specified in the applicable award agreement. Stock appreciation rights may be granted on its own or in tandem with an option.
(C) Restricted Stock Awards. The Plan shall allow for the grant of restricted stock. Restricted stock awards are shares of Common Stock or hypothetical Common Stock units having a value equal to the fair market value of an identical number of shares of Common Stock, that vest in accordance with the terms and conditions established by the Board of Directors, as the administrator of the Plan. The administrator will determine the number of shares of restricted stock granted to any employee, director or consultant. The administrator may impose whatever conditions on vesting that it determines to be appropriate. For example, the administrator may set restrictions based on the achievement of specific performance goals or on the continuation of service or employment. Shares of restricted stock that do not vest are subject to repurchase or forfeiture.
(D) Performance Share Awards. The Plan shall allow for the grant of performance share awards. The Company shall have the discretion to determine:
(1) the number of shares of Common Stock or stock-denominated units subject to a performance share award granted;
(2) the performance period, during which time certain performance goals must be met in order for the grantee to obtain the right to exercise (the Company shall determine in its discretion whether a performance goal was met during the applicable performance period);
(3) the conditions that must be satisfied for the grantee to earn an award; and
(4) the other applicable terms, conditions and restrictions.
(E) Cash Awards and Other equity-based award Awards. The Plan shall allow for the grant of other cash awards and equity-based awards, subject to certain performance goals and vesting goals as the Company may determine in its sole discretion.
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(F) Term of Awards. The Board of Directors, as administrator of the Plan determines the provisions, terms and conditions of each award, including vesting schedules, forfeiture provisions, form of payment (cash, shares, or other consideration) upon settlement of the award, payment contingencies and satisfaction of any performance criteria.
(G) Performance Criteria. The Plan shall include the following performance criteria that may be considered, individually or in combination, by the Board of Directors, as administrator:
(1) increase in share price;
(2) earnings per share;
(3) total stockholder return,
(4) return on equity,
(5) return on assets,
(6) return on investment;
(7) net operating income,
(8) cash flow,
(9) revenue;
(10) economic value added,
(11) personal management objectives; or
(12) other measures of performance selected by the Board of Directors, as the Plan administrator
(H) Transferability of Awards. The Plan shall allow for the transfer of awards only
(1) by will,
(2) by the laws of descent and distribution and
(3) for awards other than incentive stock options, to the extent and in the manner authorized by the Board of Directors as the administrator of the Plan.
Only the recipient of an incentive stock may exercise such award during his or her lifetime.
(I) Certain Adjustments. In the event of changes in the capitalization, to prevent enlargement of the benefits or potential benefits available under the Plan, the Board of Directors, as the administrator, will make adjustments to one or more of the number of shares that are covered by outstanding awards, the exercise or purchase price of the outstanding awards, the numerical share limits contained in the Plan and any other terms the Board of Directors, as the administrator, determines require adjustment.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS
The following table sets forth the ownership, as of December 31, 2024, of our common stock by each person known by us to be the beneficial owner of more than 10% of any class of our outstanding voting stock, our directors, and our executive officers and directors as a group. To the best of our knowledge, the persons named have sole voting and investment power with respect to such shares, except as otherwise noted. There are not any pending or anticipated arrangements that may cause a change in control.
As of December 31, 2024, there were a total of 901,000,000 shares of common stock outstanding, for a total of 901,000,000 votes eligible to be cast in any Company vote.
The information presented below regarding beneficial ownership of our voting securities has been presented in accordance with the rules of the Securities and Exchange Commission and is not necessarily indicative of ownership for any other purpose. Under these rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security. A person is deemed to own beneficially any security as to which such person has the right to acquire sole or shared voting or investment power within 60 days through the conversion or exercise of any convertible security, warrant, option or other right. More than one person may be deemed to be a beneficial owner of the same securities.
Except as otherwise indicated and under applicable community property laws, we believe that the beneficial owners of our common stock listed below have sole voting and investment power with respect to the shares shown. Unless otherwise indicated, the business address of each person listed is c/o registered agent at 1209 S. Frankfort Ave, Ste 202, Tulsa, OK 74120.
| Title of Class | Name and
Address of Beneficial Ownership | Amount
and Nature of Beneficial Ownership(1) | Amount
and Nature of Beneficial Ownership Acquirable by Equity Compensation Plan Once Fully Vested | Percent of Class | ||||||||||
| Common Stock | Travis Dahm | 75,000,000 | 345,000,000 | 46.61 | % | |||||||||
| Common Stock | Gary Holland | 75,000,000 | 345,000,000 | 46.61 | % | |||||||||
| Common Stock | Tim Lozott | N/A | 10,000,000 | 1.11 | % | |||||||||
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INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
Except as described above and within the section entitled Executive Compensation of this Offering Circular, none of the following parties (each a “Related Party”) has, in our fiscal years ended 2022 and 2023, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us:
| ● | any of our directors or officers; |
| ● | any nominee for election as a director; |
| ● | any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our outstanding shares of common stock; or |
| ● | any member of the immediate family (including spouse, parents, children, siblings and in- laws) of any of the above persons. |
In May 2022, the Company entered into a credit facility agreement with Contra Enterprises, which is 50% beneficially owned by our co-founder, CEO, and President Travis Dahm, for a line of credit up to $250,000. From May of 2022 to October 2024 the Company has drawn against the line of credit. The balance due to Contra Enterprises was $57,000, $59,400, and $450 as of December 31, 2022, and December 31, 2023, and June 30, 2024, respectively. The credit facility agreement is attached as Exhibit 6.2.
In April of 2021 Endless Corporation contracted with Best of Holloy, LLC to provide management services, whereby, Endless Corporation provides operational oversight and management of Best of Holloy, LLC’s cultivation operation. The management service s agreement is attached as Exhibit 6.3. Endless Corporation invoices Best of Holloy, LLC for 100% of the cost to cultivate plus a management fee of $1,000 per month. In addition, Endless Corporation manages the sales process to customers of immature plants and cultivated agriculture and then collects sales receipts on behalf of Best of Holloy, LLC. Sales receipts are recorded as Due to Best of Holloy, LLC and offset by cultivation costs. Gary Holland is a 65% beneficial owner of Best of Holloy, LLC. The balance due to and from Best of Holloy, LLC was $0 as of December 31, 2022, and December 31, 2023, and June 30, 2024, respectively.
In April of 2023 Endless Corporation contracted with Endless Grow, LLC to provide management services, whereby Endless Corporation provides the operational oversight and management of Endless Grow, LLC’s cultivation operation. The Company’s management services agreement with Endless Grow, LLC is attached as Exhibit 6.4. Endless Corporation invoices Endless Grow, LLC for 100% of the cost to cultivate plus a management fee of $1,000 per month. In addition, Endless Corporation manages the sales process to customers of immature plants and cultivated agriculture and then collects sales receipts on behalf of Endless Grow, LLC. Sales receipts are recorded as Due to Endless Grow, LLC and offset by cultivation costs. Travis Dahm is the sole beneficial owner of Endless Grow, LLC. The balance due to and from Endless Grow, LLC was $0 as of December 31, 2022, and December 31, 2023, and June 30, 2024, respectively.
The following description is a summary of the material rights of shareholders; however, only preferred stock is being offered pursuant to this Offering Circular. Shareholder rights are dictated via the Company’s Certificate of Incorporation and Bylaws, each as amended from time to time. The foregoing documents have been filed as exhibits to this Offering Circular.
None of our securities are currently listed or quoted for trading on any national securities exchange or national quotation system.
The Company is authorized to issue 5,000,000,000 shares consisting of two classes of stock being “common stock” which are voting shares and “preferred stock”, which are non-voting shares. The Company is authorized to issue 3,470,000,000 shares of common stock, par value $0.0001, and 1,530,000,000 shares of preferred stock, par value $0.0001. As of the date of this offering circular the Company had 901,000,000 shares of common stock outstanding and 66,423,818 shares of preferred stock outstanding. Following this offering, assuming all offered Shares are sold and no other securities of the Company are issued other than the conversion of $3,970,000 in convertible notes with a qualification date of December 31, 2024, the Company will have 901,000,000 shares of common stock outstanding and 156,300,879 shares of preferred stock outstanding. If the qualification date is after December 31, 2024, the amount of preferred stock outstanding shall increase due to an increase in the amount of preferred stock issued upon conversion of the convertible notes. The number of authorized shares of common stock and preferred stock may be increased or decreased subject to the Company’s legal commitments at any time and from time to time to issue them, by the affirmative vote of the holders of a majority of the stock of the Company entitled to vote. We currently have approximately 65 stockholders.
Note: the above amounts include a stock award to Numbers Matter Capital Inc. for marketing and investor relations services, which consists of six million shares of series A preferred stock and twenty million shares of common stock. The stock award will be issued pursuant to the vesting schedule in the services contract attached hereto as Exhibit 6.6.
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Common Stock
The holders of the common stock are entitled to one vote for each share of common stock held at all meetings of stockholders (and written actions in lieu of meetings); provided, however, that, except as otherwise required by law, holders of common stock, as such, shall not be entitled to vote on any amendment to our Second Amended and Restated Certificate of Incorporation that relates solely to the terms of one or more outstanding series of preferred stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to our Second Amended and Restated Certificate of Incorporation or pursuant to the General Corporation Act. There shall be no cumulative voting. Shareholders may take action by written consent.
Payments to Holders of Common Stock
In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, after the payment in full of all Liquidation Amounts (defined below) required to be paid to the holders of shares of preferred stock, the remaining assets of the Company available for distribution to its stockholders or, in the case of a Deemed Liquidation Event (defined below), the consideration not payable to the holders of shares of preferred stock or the remaining Available Proceeds (defined below), as the case may be, shall be distributed among the holders of shares of common stock, pro rata based on the number of shares held by each such holder.
Preferred Stock
The holders of the preferred stock are not entitled to vote.
Preferential Payments to Holders of Preferred Stock
In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of shares of preferred stock then outstanding shall be entitled to be paid out of the assets of the Company available for distribution to its stockholders, and in the event of a change of control, such as; a merger, consolidation, or sale of stock of all or substantially all assets (otherwise known as a “Deemed Liquidation Event”); the holders of shares of preferred stock then outstanding shall be entitled to be paid out of the consideration payable to stockholders in such Deemed Liquidation Event or out of the Available Proceeds (as defined below), as applicable, in each case on a pari passu basis among each series of preferred stock, before any payment shall be made to the holders of common stock by reason of their ownership thereof, an amount per share equal to the greater of:
| i. | the applicable Original Issue Price, plus any dividends declared but unpaid thereon, or |
| ii. | such amount per share as would have been payable had all shares of Preferred Stock been converted into Common Stock immediately prior to such liquidation, dissolution, winding up or Deemed Liquidation Event (the amount payable pursuant to this sentence is hereinafter referred to as the “Liquidation Amount”). |
If upon any such liquidation, dissolution or winding up of the Company or Deemed Liquidation Event, the assets of the Company available for distribution to its stockholders shall be insufficient to pay the holders of shares of preferred stock the full amount to which they shall be entitled as described above, the holders of shares of preferred stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.
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Redemption Rights
In the event of a Deemed Liquidation Event referred to in Section 1.3.1(a)(ii) or 1.3.1(b) of Exhibit 2.1, if the Company does not effect a dissolution of the Company under the General Corporation Act within 90 days after such Deemed Liquidation Event, then (i) the Company shall send a written notice to each holder of preferred stock no later than the 90th day after the Deemed Liquidation Event advising such holders of their right (and the requirements to be met to secure such right) pursuant to the terms of the following clause (ii) to require the redemption of such shares of preferred stock, and (ii) if the holders of at least a majority of the outstanding shares of Preferred Stock (the “Requisite Holders”) so request in a written instrument delivered to the Company not later than 120 days after such Deemed Liquidation Event, the Company shall use the consideration received by the Company for such Deemed Liquidation Event (net of any retained liabilities associated with the assets sold or technology licensed, as determined in good faith by the Board of Directors of the Company), together with any other assets of the Company available for distribution to its stockholders, all to the extent permitted by Oklahoma law governing distributions to stockholders (the “Available Proceeds”), on the 150th day after such Deemed Liquidation Event, to redeem all outstanding shares of preferred stock at a price per share equal to the applicable Liquidation Amount. Notwithstanding the foregoing, in the event of a redemption pursuant to the preceding sentence, if the Available Proceeds are not sufficient to redeem all outstanding shares of preferred stock, the Company shall redeem a pro rata portion of each holder’s shares of preferred stock to the fullest extent of such Available Proceeds, based on the respective amounts which would otherwise be payable in respect of the shares to be redeemed if the Available Proceeds were sufficient to redeem all such shares, and shall redeem the remaining shares as soon as it may lawfully do so under Oklahoma law governing distributions to stockholders. Prior to the distribution or redemption, the Company shall not expend or dissipate the consideration received for such Deemed Liquidation Event, except to discharge expenses incurred in connection with such Deemed Liquidation Event.
Holders of our preferred stock have no pre-emptive rights or other subscription rights, conversion rights, or sinking fund provisions.
Dividend Policy
We plan to retain any earnings from future revenues for the foreseeable future for our operations. We have never paid any cash dividends on our common stock or preferred stock and do not anticipate paying any cash dividends in the foreseeable future. Any future determination to pay cash dividends will be at the sole discretion of our Board of Directors and will depend on our financial condition, operating results, capital requirements and such other factors as our Board of Directors deems relevant.
Oklahoma Anti-Takeover Statute
We could become subject to the provisions of 1090.3 of the Oklahoma General Corporation Act regulating corporate takeovers. In general, Section 1090.3 prohibits a publicly-held (will apply when we have 1,000+ shareholders of record) Oklahoma corporation from engaging under certain circumstances, in a business combination with an interested stockholder for a period of three years following the date the person became an interested stockholder unless:
| ● | Prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder. |
| ● | Upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding (1) shares owned by persons who are directors and also officers and (2) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer. | |
| ● | On or subsequent to the date of the transaction, the business combination is approved by the board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder. |
Generally, a business combination includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. An interested stockholder is a person who, together with affiliates and associates, owns or, within three years prior to the determination of interested stockholder status, did own 15% or more of a corporation’s outstanding voting securities. We expect the existence of this provision to have an anti-takeover effect with respect to transactions our board of directors does not approve in advance. We also anticipate that Section 203 may also discourage attempts that might result in a premium over the market price for the shares of common stock held by stockholders.
The provisions of Oklahoma law, our certificate of incorporation and our bylaws could have the effect of discouraging others from attempting hostile takeovers and, as a consequence, they may also inhibit temporary fluctuations in the market price of our common stock that often result from actual or rumored hostile takeover attempts. These provisions may also have the effect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.
Disclosure of commission position on indemnification for securities liabilities
The Company’s Bylaws and Certificate of Incorporation, subject to the provisions of Oklahoma Law, contain provisions which allow the corporation to indemnify its officers and directors against liabilities and other expenses incurred as the result of defending or administering any pending or anticipated legal issue in connection with service to the Company if it is determined that person acted in good faith and in a manner which he reasonably believed was in the best interest of the Company. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, may be unenforceable.
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ABSENCE OF PUBLIC MARKET
There is no public trading market for the common stock and preferred stock shares of the Company. The Company may, as an alternative reporting company, qualify its common stock and preferred stock shares for quotation on the NASDAQ or OTCBB (the Over the Counter Bulletin Board) or other secondary market for which the Company’s Common Stock and preferred stock may then qualify, in the discretion of the Company’s Board of Directors. As of the date of this Offering Circular, the Board of Directors has not taken any action to list the Company’s common stock and preferred stock on the NASDAQ, OTCBB or any other market or exchange. (See Risk Factors starting on page 4.)
Our financial statements for fiscal years ended December 31, 2022 and December 31, 2023 included in this offering circular, have been audited by Bush & Associates CPA, as stated in its report appearing herein. Such financial statements have been included in reliance upon the report of such firms given upon their authority as experts in accounting and auditing.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC an offering statement on Form 1-A under the Securities Act with respect to the Shares offered by this Offering Circular. This Offering Circular does not contain all of the information included in the Offering Statement, portions of which are omitted as permitted by the rules and regulations of the SEC. For further information pertaining to us and the Shares to be sold in this offering, you should refer to the offering statement and its exhibits. Whenever we make reference in this offering circular to any of our contracts, agreements or other documents, the references are not necessarily complete, and you should refer to the exhibits attached to the offering statement for copies of the actual contract, agreement or other document filed as an exhibit to the offering statement or such other document, each such statement being qualified in all respects by such reference. Upon the qualification of this offering, we will be subject to the informational requirements of Tier 2 of Regulation A and will be required to file annual reports, semi-annual reports, current reports and other information with the SEC. We anticipate making these documents publicly available, free of charge, on our website as soon as reasonably practicable after filing such documents with the SEC.
You can read the Offering Statement and our future filings with the SEC over the Internet at the SEC’s website at www.sec.gov. You may also read and copy any document we file with the SEC at its public reference facility at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities.
We will answer inquiries from potential investors concerning the Shares, the Company and other matters relating to the offer and sale of the Shares under this Offering Circular. We will afford the potential investors the opportunity to obtain any additional information to the extent we possess such information or can acquire such information without unreasonable effort or expense that is necessary to verify the information in this Offering Circular.
Requests and inquiries regarding this offering circular should be directed to:
Endless Corporation
10026 S. Mingo Rd #232
Tulsa, OK 741
Email: tlozott@endlessbiotech.com
Registrants telephone number, including area code: (916) 786-0200
Registrant’s website: Endlessbiotech.com
We will provide requested information to the extent that we possess such information or can acquire it without unreasonable effort or expense.
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INDEX OF FINANCIAL INFORMATION
| Audited Financial Statements for fiscal years ended 2022 and 2023 | |
| Independent Accountant’s Audit Report on Financial Statements | F-2 |
| Balance Sheets | F-3 |
| Statement of Operations | F-4 |
| Statements of Members’ Equity | F-5 |
| Statement of Cash Flows | F-6 |
| Notes to Financial Statements | F-7 |
| Interim Unaudited Financial Statements for six month periods ended June 30, 2024 and June 30, 2023 | |
| Balance Sheets | F-13 |
| Statement of Operations | F-14 |
| Statements of Members’ Equity | F-15 |
| Statement of Cash Flows | F-16 |
| F-1 |
AUDITED FINANCIAL STATEMENTS
As of and for the Years Ended December 31, 2023 and 2022, and Independent Auditors’ Report
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of
Endless Corporation
OPINION ON THE FINANCIAL STATEMENTS
We have audited the accompanying consolidated balance sheet of Endless Corporation (the “Company”) as of December 31, 2023, and 2022, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and 2022, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
BASIS FOR OPINION
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
CRITICAL AUDIT MATTERS
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgements. We determined that there are no critical audit matters.
/s/ Bush & Associates CPA LLC
We have served as the Company’s auditor since 2024.
Henderson, Nevada
November 6, 2024
PCAOB ID Number 6797
| F-2 |
BALANCE SHEET (AUDITED)
| AS OF DECEMBER 31, | ||||||||
| 2023 | 2022 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and equivalents | $ | 93,326 | $ | 88,514 | ||||
| Accounts receivable | 0 | 0 | ||||||
| Property, Plant and Equipment, net | 1,723,114 | 49,249 | ||||||
| Operating Lease Right of Use Asset | 432,435 | 478,472 | ||||||
| Prepaid Expenses, Deposits & Other Assets | 300,000 | 300,000 | ||||||
| Total Assets | $ | 2,548,875 | $ | 916,235 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts Payable & Credit Cards Payable | $ | 34,027 | $ | 16,874 | ||||
| Accrued and other liabilities | 154,592 | 8,720 | ||||||
| Total Current Liabilities | 188,619 | 25,594 | ||||||
| Lease Liabilities: | ||||||||
| Operating Lease Liability | 432,435 | 478,472 | ||||||
| Long-Term Liabilities: | ||||||||
| Loans Payable | 309,400 | 557,000 | ||||||
| Total Liabilities | $ | 930,454 | $ | 1,061,066 | ||||
| Stockholders’ Equity: | ||||||||
| Common Stock at $1.00 par value, 100,000 shares authorized; 100,000 shares issued and outstanding in 2023 and 100,000 shares issued and outstanding in 2022 | 31,750 | 6,000 | ||||||
| Additional paid-in capital | 3,368,250 | 244,000 | ||||||
| Accumulated Profit (Deficit) | (1,781,579 | ) | (394,831 | ) | ||||
| Total Stockholders’ Equity | $ | 1,618,421 | $ | (144,831 | ) | |||
| Total Liabilities and Stockholders’ Equity | $ | 2,548,875 | $ | 916,235 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-3 |
STATEMENT OF OPERATIONS (AUDITED)
| AS OF DECEMBER 31, | ||||||||
| 2023 | 2022 | |||||||
| REVENUE: | ||||||||
| Managed Services Income | $ | 1,627,424 | $ | 688,290 | ||||
| EXPENSES: | ||||||||
| Cost of Services Sold | 1,691,460 | 674,270 | ||||||
| Royalty | 986 | 0 | ||||||
| Gross Profit (Loss) | $ | (65,022 | ) | $ | 14,020 | |||
| Operating Expenses: | ||||||||
| Advertising, Marketing, Selling | $ | 41,926 | $ | 649 | ||||
| Professional and Legal | 70,600 | 16,900 | ||||||
| Travel & Entertainment | 27,192 | 12,804 | ||||||
| Research & Development | 1,249,140 | 340,744 | ||||||
| General Business Expenses | 43,266 | 14,990 | ||||||
| Interest Paid | 16,352 | 30,000 | ||||||
| Total Expenses | 1,448,476 | 416,087 | ||||||
| Other Income | 126,750 | 454 | ||||||
| Net Profit (Loss) | $ | (1,386,748 | ) | $ | (401,613 | ) | ||
The accompanying notes are an integral part of these consolidated financial statements.
| F-4 |
STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (AUDITED)
For the years ended December 31, 2022 and 2203
| Common Stock | Additional Paid-In Capital | Accumulated Net Income (Loss) | Total | |||||||||||||
| Balance – December 31, 2021 | 0 | 0 | 6,782 | 6,782 | ||||||||||||
| Issuance of Common Stock | 6,000 | 244,000 | 250,000 | |||||||||||||
| Net Income (Loss) | (401,613 | ) | (401,613 | ) | ||||||||||||
| Balance – December 31, 2022 | $ | 6,000 | $ | 244,000 | $ | (394,831 | ) | $ | (144,831 | ) | ||||||
| Issuance of Common Stock | 25,750 | 3,124,250 | 3,150,000 | |||||||||||||
| Net Income (Loss) | (1,386,748 | ) | (1,386,748 | ) | ||||||||||||
| Balance – December 31, 2023 | $ | 31,750 | $ | 3,368,250 | $ | (1,781,579 | ) | $ | 1,618,421 | |||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-5 |
STATEMENT OF CASH FLOWS (AUDITED)
For the years ended December 31, 2022 and 2023
| For the years ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| CASH FLOWS USED IN OPERATING ACTIVITIES: | ||||||||
| Net profit (Loss) | $ | (1,386,748 | ) | $ | (401,613 | ) | ||
| Adjustments to reconcile net loss to net cash flows in operating activities | ||||||||
| Changes in assets and liabilities that increase (decrease) cash: | ||||||||
| Prepaid expenses and other assets | 0 | 0 | ||||||
| Accounts payable & Credit cards payable | 17,153 | 16,874 | ||||||
| Accumulated depreciation | 77,936 | 0 | ||||||
| Accrued and other liabilities | 145,872 | (6,739 | ) | |||||
| Net cash in operating activities | $ | (1,145,787 | ) | $ | (391,478 | ) | ||
| CASH FLOWS USED IN INVESTING ACTIVITIES: | ||||||||
| Purchase of fixed assets and leasehold improvements | 1,751,902 | 49,249 | ||||||
| Additions of right to use | (46,037 | ) | 478,472 | |||||
| Security Deposit | 300,000 | |||||||
| Net cash used in investing activities | $ | 1,705,865 | $ | 827,721 | ||||
| CASH FLOWS USED IN FINANCING ACTIVITIES: | ||||||||
| Issuance of common stock | 25,750 | 6,000 | ||||||
| Additional contributed capital | 3,124,250 | 244,000 | ||||||
| Issuance of convertible notes | 0 | 0 | ||||||
| Debt and line of credit borrowing (paydowns) | (247,600 | ) | 557,000 | |||||
| Financing right to use | (46,037 | ) | 478,427 | |||||
| Net cash provided by financing activities | $ | 2,856,363 | $ | 1,285,472 | ||||
| Net increase (decrease) in cash | $ | 4,812 | 66,273 | |||||
| CASH – beginning of year | 88,514 | 22,241 | ||||||
| CASH – end of year | $ | 93,326 | $ | 88,514 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-6 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (AUDITED)
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
1. NATURE OF BUSINESS
Endless Corporation (the “Company” or “Endless”) was founded in early 2021 and is a domestic corporation organized under the laws of the Oklahoma. The Company is a startup, development stage, biotechnology company focused on specializing in pharmaceutical-grade tissue cultures, clone genetics, genetic preservation, disease cleanup, and virus testing. With a focus and mission to provide disease and pest-free agriculture plants globally. We combine our pioneering science-driven and cutting-edge technology to provide cultivation operations with immature plants and crop steering knowledge. The Company’s team includes world-renowned scientists and researchers dedicated to advancing the agriculture industry. Thus far, we have generated revenue with limited commercial operations up to this point and have been selling our products primarily in Oklahoma. We hope to fundamentally change the way agriculture is cultivated with disease and pest-free genetics and our data collection and technologies will make cultivating agriculture more effective and profitable for our end user agricultural farmers.
In early 2023, Travis Dahm, the Company’s Co-Founder, CEO, and President organized Endless Grow, LLC which is a licensed regulated cultivator using the Company’s facilities to cultivate. Travis Dahm is the sole beneficial owner of Endless Grow, LLC, and under the current laws of Oklahoma a resident is required to maintain 75% ownership this type of a regulated licensed cultivation. As soon as is feasibly possible the Company intends to transfer 25% ownership to Endless Corporation with the remaining 75% to be split evenly between Travis Dahm and Gary Holland, the Company’s Co-Founder & Chief Innovation Officer. Endless Corporation is contracted by Endless Grow, LLC to operate the cultivation license. The Company pays for all costs to operate the cultivation license and manages and collects all sales proceeds and applies them against the costs. Thus far, the costs for Endless Grow, LLC to operate have exceeded sales and any costs exceeding sales are charged to research and development costs as they are incurred.
In early 2024, Endless Corporation set up a subsidiary Endless Biotech, LLC to later hold the Company’s agricultural assets to be effective during calendar year 2025. As of the end of the year 2023, there was no financial activity in this subsidiary; however, the Company expects activities in 2025.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting and reporting policies of the Company conform with accounting principles generally accepted in the United States of America, and, as such, include amounts based on judgments, estimates and assumptions made by management that affect the reported amounts of assets and liabilities and contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Following is a description of the more significant accounting policies followed by the Company:
Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. There was $93,826 and $88,514 in cash equivalents as of December 31, 2023 and 2022, respectively.
Prepaid Expenses
Expenditures made to secure the use of assets or the receipts of services at a future date are charged to the prepaid account and are amortized based on the term and usage of the related asset or service. The Company had no prepaid expenses as of December 31, 2023, and 2022, respectively.
Property, Plant, and Equipment
Property, plant, and equipment is recorded at cost. Expenditures for construction activities, and improvements are capitalized, while expenditures for operations and maintenance and general and administrative activities are charged to expense as incurred.
The Company depreciates property, plant, and equipment using the straight-line depreciation method (see Note 8 —Property, Plant, and Equipment for further details). Upon retirement or other disposition of property, plant and equipment, the cost and related accumulated depreciation are removed from the balance sheet, and any resulting gains or losses are recorded in the consolidated statements of operations.
| F-7 |
Commitments and Contingencies
Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. The Company had no liabilities or expenses related to claims, assessments, litigation, fines and penalties or other sources as of December 31, 2023, and 2022, respectively.
Leases
The Company follows ASU 2016-02, Leases (Topic 842) to determine if an arrangement is a lease at inception. Lease right-of-use (ROU) assets represent the Company’s right to an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet in accordance with the short-term lease exception included within Topic 842. When the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The lease ROU asset also includes any base lease payments made in advance and excludes non- lease components. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately.
Accounts Payable and Accrued and Other Liabilities
Accounts payable balance represents all invoices the Company has received, while accrued and other current liabilities consist of payroll related accruals, short-term lease obligations, deferred revenue, and estimated accruals when work has been performed, but an invoice has not been issued.
Expense and Other Income Recognition
Expenses are recognized when incurred. Other income is recognized when earned.
Research and Development
Research and Development expense is due to costs that exceed our current sales as we are engaged in pheno-hunting, a process of selecting the best phenotype of each strain for mass production. Phenotypes expressed include smell, color, potency, resin production, height, etc. Phenotypes must be grown, harvested, dried and cured to determine quality. Once the best phenotype is selected, we clone them to get exact copies of the phenotype. These clones can then be mass produced for sale. We are also researching crop steering methods for our clones. We continually collect data throughout the cultivation process to increase yield, quality, scale, and profitability. All these efforts are meticulously researched to help our end users (cultivators) to succeed with our immature plants. The data we collect will help high-performance; science driven cultivators grow better products for the end user. All our data and research will be made available to our customers to cultivate the next generation of disease and pathogen free agricultural plants. We consider all the costs related to pheno-hunting and collecting data as our Research and Development costs, which are charged to expenses as incurred. Cultivators using our proprietary data can dramatically improve their cultivation methods.
Income Taxes
Income taxes are accounted for using an asset-liability method. Deferred income taxes and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing asset and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of the change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established for deferred tax assets that, based on management’s evaluation, are not expected to be realized.
Tax benefits of uncertain tax positions are recorded only where the position is “more likely than not” to be sustained based on their technical merits. The amount recognized is the amount that represents the largest amount of tax benefit that is greater than 50% likely of being ultimately realized. A liability is recognized for any benefit claimed or expected to be claimed, in a tax return more than the benefit recorded in the financial statements, along with any interest and penalty (if applicable) in such excess. The Company has no uncertain tax position as of December 31, 2023 and 2022.
| F-8 |
Advertising
The Company expenses the cost of all advertising campaigns and tradeshows, including those for its Regulation A+ investment offering, and promotions as they are incurred. During the years ended December 31, 2023 and 2022, advertising expense amounted to $40,049 and $312 respectively, and is included as part of the advertising, marketing, selling expenses in the statements of operations.
Fair Value Measurements
The carrying amounts of the Company’s financial instruments including Cash and Cash Equivalents approximate fair value due to the short-term nature of those instruments. The Company determines the fair value based upon the exit price that would be received to sell an asset or paid to transfer as liability in an orderly transaction between market participants, as determined by either the principal market or most advantageous market. Inputs used in the valuation techniques to derive fair value are classified based on a three-level hierarchy. These levels are:
Level 1—Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
Level 2—Observable prices that are based on inputs not quoted on active markets but corroborated by market data.
Level 3—Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.
As of December 31, 2023, and 2022, the carrying amount of the Company’s financial instruments were determined using Level 1 inputs.
Stock-Based Compensation
The Company follows the provisions of ASC 718-20, Stock Compensation, Awards Classified as Equity, requiring that compensation cost relating to share-based payment transactions be recognized in the financial statements. Compensation expense for options granted to employees, directors and certain service providers (“grantees”) is determined based on estimated fair value of the options at the time of grant using the Black- Scholes option pricing model, which considers, as of the grant date, the estimated fair market value of the underlying shares, expected volatility, expected dividend yield and the risk-free interest rate over the expected life of the option. The grant date fair value of Restricted Share Awards (RSAs) is based on the estimated value of the restricted share on the date of grant. The compensation cost for all share-based awards is recognized as an expense over the grantee’s requisite service period (generally the vesting period of the equity award), except for costs related to persons directly involved in the development and/or construction of the projects which are capitalized into Construction in progress during the capitalization period. Shares are issued from authorized shares in settlement of options exercised. RSAs are included in common shares issued and outstanding from the date of issuance. Forfeitures are accounted for as they occur.
3. PREPAID EXPENSES, DEPOSITS AND OTHER ASSETS
In 2023 the Company did not have any prepaid expenses or other assets. The total of deposits is $300,000 for 2022 and 2023, respectively. The deposits are detailed in the below table.
Deposits at December 31, 2023 and 2022, consisted of the following:
| 2023 | 2022 | |||||||
| Building Lease Security Deposit | $ | 300,000 | $ | 300,000 | ||||
4. STOCKHOLDERS’ EQUITY
On September 8, 2021, the Company’s Board of Directors approved the First Amended and Restated Certificate of Incorporation. In accordance with the Company’s First Amended and Restated Certificate of Incorporation, the Company is authorized to issue 100,000 shares, consisting of one classes of stock to be designated “Common Stock” with a $1.00 par value per share. The founders were issued 52,505 Common Stock shares at $1.00 par value per share. Payment for these shares was rendered for services in-kind.
The holders of the Common Stock are entitled to one vote for each share of Common Stock held at all meetings of stockholders (and written actions in lieu of meetings). For the purpose of determining those stockholders entitled to a vote at any meeting of the stockholders, except as otherwise provided by law, only persons in whose names shares stand on the stock records of the corporation on the record date, as provided in the Bylaws, shall be entitled to a vote at any meeting of stockholders. Every person entitled to a vote or execute consents shall have the right to do so either in person, by remote communication, if applicable, or by agent or agents authorized by a proxy granted in accordance with Oklahoma law. An agent so appointed need not be a stockholder. No proxy shall be voted after three (3) years from the date of creation unless the proxy provides for a longer period.
| F-9 |
Prior to this Offering the Company amended its Bylaws and Certificate of Incorporation, and subsequently converted the Common Stock shares of the Founders to Common Stock voting shares and the Common Stock of investors to Preferred Stock non-voting shares. Per the Second Amended Bylaws and Certificate of Incorporation the company is authorized to issue 5,000,000,000 shares consisting of two classes of stock being “Common Stock” which are voting and “Preferred Stock”, which are non-voting, both with a par value of $.0001. As of the date of this Offering the total number of shares of Common Stock the Company is authorized to issue is 3,470,000,000, and the total number of Preferred Stock the Company is authorized to issue is 1,530,000,000. As of the date of this Offering the Company had 901,000,000 shares of Common Stock outstanding and 66,423,818 shares of Preferred Stock outstanding.
Per the Bylaws, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of shares of Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders, and in the event of a deemed liquidation event, the holders of shares of Preferred Stock then outstanding shall be entitled to be paid out of the consideration payable to stockholders in such deemed liquidation event or out of the Available Proceeds, as applicable, before any payment shall be made to the holders of Common Stock.
5. INCOME TAXES
For the fiscal year ended December 31, 2022, and December 31, 2023 respectively, the Company did not generate any taxable income and, as a result, no provision for federal or state income taxes has been recorded. The Company has incurred a net operating loss, which may be available to offset future taxable income, subject to applicable tax regulations and limitations. Deferred tax assets related to this net operating loss have not been recognized due to uncertainty surrounding the Company’s ability to utilize these assets in the future.
6. RISK CONCENTRATION
Financial instruments that potentially expose the Company to certain concentrations of credit risk include cash in bank accounts. The Company maintains accounts at high quality financial institutions, including First Enterprise Bank, and Equity Bank. While the Company attempts to limit any financial exposure its deposits balances may, at time, exceed the amount insured by the Federal Deposit Insurance Corporation (“FDIC”). All deposit accounts are insured up to $250,000 per depositor, per insured bank. The Company has not experienced any losses on such accounts.
Our business, results of operations and financial condition may be adversely affected if a public health epidemic interferes with the ability of us, our employees, workers, contractors, suppliers, customers and other business partners to perform our and their respective responsibilities and obligations relative to the conduct of our business.
The Company’s success depends upon the continued services of our executive officers and other key personnel who have critical industry experience and relationships. Significant competition for talented individuals could affect both Company’s ability to retain key personnel and hire new ones. The loss of the services of any officers or key personnel could hinder or delay the implementation of the business model, research and development efforts, or ability to sell products and services.
7. PROPERTY, PLANT AND EQUIPMENT
Assets are depreciated using the straight-line depreciation method applied to groups of assets with varying useful lives.
Property, plant and equipment as of December 31, 2023 and 2022, consisted of the following:
Estimated Useful Life (Years) | 2023 | 2022 | ||||||||
| Assets under construction or not in service | $ | 478,831 | $ | 49,249 | ||||||
| Production equipment | 5 | 194,009 | 0 | |||||||
| Production furniture, fixtures, and other equipment | 5 | 174,467 | 0 | |||||||
| Production lights | 5 | 286,788 | 0 | |||||||
| Leasehold improvements | 10 | 660,251 | 0 | |||||||
| Computers and tablets | 5 | 6,704 | 0 | |||||||
| Software and app licenses and development | 5 | 0 | 0 | |||||||
| Total property, plant and equipment | 1,801,050 | 0 | ||||||||
| Less accumulated depreciation | 77,936 | 0 | ||||||||
| Property, plant and equipment, net | $ | 1,723,114 | $ | 49,249 | ||||||
| F-10 |
8. LEASES
On October 1, 2022, the Company entered into a lease agreement for office, cultivation and lab space in Tulsa, Oklahoma. The monetary obligations remaining on the lease described in this paragraph was $1,650,000 and $1,050,000 as of December 31, 2022 and December 31, 2023, respectively.
The leased facilities span approximately 23,196 square feet and is currently being used for the Company’s headquarters, office, cultivation and tissue culture lab, as well as being remodeled by the Company.
As of December 31, 2022, the company has spent approximately $5 thousand dollars of remodeling costs. As of December 31, 2023 the company has spent approximately $906 thousand dollars of remodeling costs and received approximately $126 thousand dollars in rebates.
The Company accounts for its U.S. leases in accordance with ASC 842. The Company determines if an arrangement is a lease at contract inception. A lease exists when a contract conveys to the Company the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The definition of a lease embodies two conditions: (1) there is an identified asset in the contract that is land or a depreciable asset (i.e., property, plant, and equipment), and (2) the Company has the right to control the use of the identified asset and to obtain substantially all of the economic benefits from using the underlying asset.
Right-of-use assets represent the Company’s right to control the use of an explicitly or implicitly identified fixed asset for a period of time and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The lease liabilities are measured at the present value of the unpaid lease payments at the lease commencement date. Key estimates and judgments include how the Company determined the incremental borrowing rate (“IBR”) it uses to present value the unpaid lease payments, the lease term and lease payments.
ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its IBR. In some instances, the Company’s leases do not provide an implicit rate; therefore, management uses its IBR based on the information available at commencement date in determining the present value of lease payments.
The lease term for the Company’s lease includes the noncancelable period of the lease plus the renewal options the Company is certain to exercise. Lease payments included in the measurement of the lease asset or liabilities comprised of fixed payments. The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date less any lease incentives received. For operating leases, the ROU asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received.
Lease expense for lease payments is recognized on a straight-line basis over the lease term. The following is a maturity analysis of the annual undiscounted cash flows of the operating and finance lease liabilities as of December 31, 2023:
| Years ending December 31, | Operating Minimum Lease Payment | |||
| 2024 | $ | 600,000 | ||
| 2025 | 450,000 | |||
| Total undiscounted cash flows | 1,050,000 | |||
| Less imputed interest | (617,565 | ) | ||
| Net present value of lease liability | $ | 432,435 | ||
Supplemental balance sheet information at December 31, 2023 and 2022 related to the leases are as follows:
Operating lease:
| 2023 | 2022 | |||||||
| Assets – operating lease right of use asset | $ | 432,435 | $ | 478,472 | ||||
| Liabilities: | ||||||||
| Current – operating lease liability | ||||||||
| Noncurrent – operating lease liability | 432,435 | 478,472 | ||||||
| Total Lease Liability | $ | 432,435 | $ | 478,472 | ||||
| F-11 |
Supplemental lease term and discount rate information related to the leases at December 31, 2023 are as follows:
| 2023 | 2022 | |||||||
| Operating Lease remaining lease term in years | 1.75 | 2.75 | ||||||
| Discount Rate | 10 | % | 10 | % | ||||
9. ADOPTION OF NEW ACCOUNTING PRONOUCEMENTS
During the period ended December 31, 2022, and 2023 the Company has reviewed recently issued accounting pronouncements as required under generally accepted accounting principles (GAAP). The Company determined that no new accounting standards, issued by the Financial Accounting Standards Board (FASB) or other authoritative bodies, were adopted during the reporting period. Management has evaluated the potential impact of recently issued accounting standards that are not yet effective and determined that these will not have a material impact on the Company’s financial position, results of operations, or cash flows upon adoption..
10. REVENUE RECOGNITION
The Company recognizes revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers. The following summarizes significant information about the Company’s revenue recognition policies:
Management Services Income:
Management Services Income primarily consists of revenues generated from operating contracts with Best of Holloy, LLC and Endless Grow, LLC. Revenue recognition for these services is performed in accordance with ASC 606.
The Company recognizes revenue when earned. The amount of revenue recognized reflects the contractual agreement in place for the customer.
The Company does not have any material contract assets or liabilities related to Management Services Income.
11. SUBSEQUENT EVENTS
For purposes of these financial statements, subsequent events have been evaluated through November 6, 2024, which is the date that the financial statements were available to be issued. There are no material subsequent events that would require further disclosures in the Company’s consolidated financial statements aside from the one disclosed below.
Amendment to Bylaws, Certificate of Incorporation, Equity Restructuring, and Royalty Buy-Outs
In September 2024, the Company amended its bylaws and certificate of incorporation to facilitate equity restructuring initiatives. As part of this restructuring, the Company entered into agreements with existing investor common stockholders to exchange their outstanding common stock shares for preferred stock shares to align with the Company’s revised equity framework.
Additionally in September 2024, the Company reached agreements with certain investors to address its outstanding future earnings royalty obligations. As of December 31, 2023, these future obligations totaled $6.87 million in future earnings royalties. The Company successfully negotiated exchanges or buy-outs of these future earnings obligations by issuing 3,120,000 shares of preferred stock and agreeing to utilize $1.78 million in cash from the proceeds of this Offering for royalty buy-out obligations.
These transactions were executed to streamline the Company’s capital structure and reduce ongoing royalty liabilities, strengthening its financial position and supporting future growth initiatives.
Transaction Involving Company Facilities and Lease Negotiations
In October 2024, one of the Company’s investors, through a newly formed LLC in which Endless Corporation is a member, closed a purchase and sale agreement with the owners of the Company’s leased facilities and land, which include its headquarters, offices, cultivation, and culture lab facilities (collectively, the “Facilities”). The Company participated in this transaction by receiving credit for half of its building lease security deposit towards the purchase, along with the issuance of preferred stock to sellers and to the promissory note holders of the sellers.
Following this transaction, the Company and the investor are actively negotiating a new lease arrangement with the newly formed LLC. Additionally, discussions are underway regarding the Company’s ownership interest in the LLC and the beneficial ownership structure of the Facilities. This agreement is expected to provide strategic flexibility for the Company’s operations and financial planning.
| F-12 |
INTERIM UNAUDITED FINANCIAL STATEMENTS
FOR
SIX MONTH PERIODS ENDED JUNE 30, 2024 AND JUNE 30, 2023
ENDLESS CORPORATION
FINANCIAL STATEMENTS (UNAUDITED)
For the Period Six Months Ended June 30, 2024, and June 30, 2023
BALANCE SHEET (UNAUDITED)
| June 30, 2024 | June 30, 2023 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and equivalents | $ | 329,266 | $ | 116,855 | ||||
| Accounts receivable | 0 | 757,843 | ||||||
| Inventory | 16,985 | 16,343 | ||||||
| Property, Plant and Equipment, net | 2,191,523 | 1,157,164 | ||||||
| Operating Lease Right of Use Asset | 380,304 | 478,472 | ||||||
| Prepaid Expenses, Deposits & Other Assets | 900,000 | 300,000 | ||||||
| Total Assets | $ | 3,818,078 | $ | 2,826,677 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts Payable & Credit Cards Payable | $ | 30,755 | $ | 17,656 | ||||
| Accrued and other liabilities | 7,948 | 302,343 | ||||||
| Total Current Liabilities | 38,703 | 319,999 | ||||||
| Lease Liabilities: | ||||||||
| Operating Lease Liability | 380,304 | 478,471 | ||||||
| Long-Term Liabilities: | ||||||||
| Loans Payable | 250,450 | 0 | ||||||
| Convertible Notes Payable | 900,000 | 0 | ||||||
| Total Liabilities | $ | 1,569,457 | $ | 798,470 | ||||
| Stockholders’ Equity: | ||||||||
| Common Stock at $1.00 par value, 100,000 shares authorized; 100,000 shares issued and outstanding at June 30, 2024 and 100,000 shares issued and outstanding at December 31, 2023 | 47,495 | 27,250 | ||||||
| Additional paid-in capital | 4,830,881 | 2,472,750 | ||||||
| Accumulated Profit (Deficit) | (2,629,755 | ) | (474,793 | ) | ||||
| Total Stockholders’ Equity | $ | 2,248,621 | $ | 2,028,207 | ||||
| Total Liabilities and Stockholders’ Equity | $ | 3,818,078 | $ | 2,826,677 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-13 |
STATEMENT OF OPERATIONS (UNAUDITED)
For the Period Six Months Ended June 30, 2024, and June 30, 2023
Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | |||||||
| REVENUE: | ||||||||
| Managed Services Income | $ | 1,170,321 | $ | 736,842 | ||||
| EXPENSES: | ||||||||
| Cost of Services Sold | 1,272,599 | 734,210 | ||||||
| Royalty | 55,676 | 0 | ||||||
| Gross Profit (Loss) | $ | (157,954 | ) | $ | 2,632 | |||
| Operating Expenses: | ||||||||
| Advertising, Marketing, Selling | $ | 17,697 | $ | 8,585 | ||||
| Professional and Legal | 103,452 | 31,630 | ||||||
| Travel & Entertainment | 11,812 | 6,479 | ||||||
| Research & Development | 588,454 | 0 | ||||||
| General Business Expenses | 26,191 | 16,050 | ||||||
| Interest Paid | 8,809 | 15,000 | ||||||
| Total Expenses | 765,415 | 77,744 | ||||||
| Other Income | 66,193 | 0 | ||||||
| Net Profit (Loss) | $ | (88,176 | ) | $ | (75,112 | ) | ||
The accompanying notes are an integral part of these consolidated financial statements.
| F-14 |
STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)
For the Period Six Months Ended June 30, 2024, and Six Months Ended June 30, 2023
| Common Stock | Additional Paid-In Capital | Accumulated Net Income (Loss) | Total | |||||||||||||
| Balance – December 31, 2022 | $ | 6,000 | $ | 244,000 | $ | (394,831 | ) | $ | (144,831 | ) | ||||||
| Issuance of Common Stock | 21,250 | 2,288,750 | 2,250,000 | |||||||||||||
| Net Income (Loss) | (75,112 | ) | (75,112 | ) | ||||||||||||
| Balance – June 30, 2023 | 27,250 | 2,472,750 | (469,943 | ) | 2,030,057 | |||||||||||
| Issuance of Common Stock | 4,500 | 895,500 | 900,000 | |||||||||||||
| Net Income (Loss) | (1,311,636 | ) | (1,311,636 | |||||||||||||
| Balance – December 31, 2023 | $ | 31,750 | $ | 3,368,250 | $ | (1,781,579 | ) | $ | 1,618,421 | |||||||
| Issuance of Common Stock | 15,745 | 1,462,631 | 1,478,376 | |||||||||||||
| Net Income (Loss) | (848,176 | ) | (848,176 | ) | ||||||||||||
| Balance – June 30, 2024 | $ | 47,495 | $ | 4,830,881 | $ | (2,629,755 | ) | $ | 2,248,621 | |||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-15 |
STATEMENT OF CASH FLOWS (UNAUDITED)
For the Period Six Months Ended June 30, 2024, and June 30, 2023
June 30, 2024 | June 30, 2023 | |||||||
| CASH FLOWS USED IN OPERATING ACTIVITIES: | ||||||||
| Net profit (Loss) | $ | (848,176 | ) | $ | (75,112 | ) | ||
| Adjustments to reconcile net loss to net cash flows in operating activities | ||||||||
| Changes in assets and liabilities that increase (decrease) cash: | ||||||||
| Prepaid expenses and other assets | 600,000 | 0 | ||||||
| Accounts payable & Credit cards payable | 3,272 | (757,060 | ) | |||||
| Accumulated depreciation | 107,171 | 5,368 | ||||||
| Accrued and other liabilities | (146,644 | ) | 193,624 | |||||
| Net cash in operating activities | $ | (1,490,921 | ) | $ | (633,180 | ) | ||
| CASH FLOWS USED IN INVESTING ACTIVITIES: | ||||||||
| Purchase of fixed assets and leasehold improvements | 561,078 | 1,098,884 | ||||||
| Inventory | 1,107 | |||||||
| Additions of right to use | (52,131 | ) | 0 | |||||
| Security Deposit | ||||||||
| Net cash used in investing activities | $ | 510,054 | $ | 1,098,884 | ||||
| CASH FLOWS USED IN FINANCING ACTIVITIES: | ||||||||
| Issuance of common stock | 15,745 | 21,250 | ||||||
| Additional contributed capital | 1,462,631 | 2,228,750 | ||||||
| Issuance of convertible notes | 900,000 | 0 | ||||||
| Debt and line of credit borrowing (paydowns) | (58,950 | ) | (457,000 | ) | ||||
| Financing right to use | (52,131 | ) | 0 | |||||
| Net cash provided by financing activities | $ | 2,267,295 | $ | 1,793,000 | ||||
| Net increase (decrease) in cash | $ | 253,940 | $ | 60,936 | ||||
| CASH – beginning of Period | 93,326 | 55,919 | ||||||
| CASH – end of Period | $ | 329,266 | $ | 116,855 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-16 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
AS OF AND FOR THE PERIOD ENDING SIX MONTHS JUNE 30, 2024,
AND SIX MONTHS ENDED JUNE 30, 2023
1. NATURE OF BUSINESS
Endless Corporation (the “Company” or “Endless”) was founded in early 2021 and is a domestic corporation organized under the laws of the Oklahoma. The Company is a startup, development stage, biotechnology company focused on specializing in pharmaceutical-grade tissue cultures, clone genetics, genetic preservation, disease cleanup, and virus testing. With a focus and mission to provide disease and pest-free agriculture plants globally. We combine our pioneering science-driven and cutting-edge technology to provide cultivation operations with immature plants and crop steering knowledge. The Company’s team includes world-renowned scientists and researchers dedicated to advancing the agriculture industry. Thus far, we have generated revenue with limited commercial operations up to this point and have been selling our products primarily in Oklahoma. We hope to fundamentally change the way agriculture is cultivated with disease and pest-free genetics and our data collection and technologies will make cultivating agriculture more effective and profitable for our end user agricultural farmers.
In early 2023, Travis Dahm, the Company’s Co-Founder, CEO, & President organized Endless Grow, LLC which is a licensed regulated cultivator using the Company’s facilities to cultivate. Travis Dahm is the sole beneficial owner of Endless Grow, LLC, and under the current laws of Oklahoma a resident is required to maintain 75% ownership this type of a regulated licensed cultivation. As soon as is feasibly possible the Company intends to transfer 25% ownership to Endless Corporation with the remaining 75% to be split evenly between Travis Dahm and Gary Holland, the Company’s Co-Founder & Chief Innovation Officer. Endless Corporation is contracted by Endless Grow, LLC to operate the cultivation license. The Company pays for all costs to operate the cultivation license and manages and collects all sales proceeds and applies them against the costs. Thus far, the costs for Endless Grow, LLC to operate have exceeded sales and any costs exceeding sales are charged to research and development costs as they are incurred.
In early 2024, Endless Corporation set up a subsidiary Endless Biotech, LLC to later hold the Company’s agricultural assets to be effective during calendar year 2025. As of the six months ended June 30, 2023, and June 30, 2024, there was no financial activity in this subsidiary; however, the Company expects activities in 2025.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting and reporting policies of the Company conform with accounting principles generally accepted in the United States of America, and, as such, include amounts based on judgments, estimates and assumptions made by management that affect the reported amounts of assets and liabilities and contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Following is a description of the more significant accounting policies followed by the Company:
Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. There was $329,266 and $116,855 in cash equivalents as of June 30, 2024, and June 30, 2023, respectively.
Prepaid Expenses
Expenditures made to secure the use of assets or the receipts of services at a future date are charged to the prepaid account and are amortized based on the term and usage of the related asset or service. The Company had $600,000 prepaid expenses as of June 30, 2024, and no prepaid expenses as of June 30, 2023, respectively.
Property, Plant, and Equipment
Property, plant, and equipment is recorded at cost. Expenditures for construction activities, and improvements are capitalized, while expenditures for operations and maintenance and general and administrative activities are charged to expense as incurred.
The Company depreciates property, plant, and equipment using the straight-line depreciation method (see Note 8 —Property, Plant, and Equipment for further details). Upon retirement or other disposition of property, plant and equipment, the cost and related accumulated depreciation are removed from the balance sheet, and any resulting gains or losses are recorded in the consolidated statements of operations.
| F-17 |
Commitments and Contingencies
Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. The Company had no liabilities or expenses related to claims, assessments, litigation, fines and penalties or other sources as of June 30, 2024, and June 30, 2023, respectively.
Leases
The Company follows ASU 2016-02, Leases (Topic 842) to determine if an arrangement is a lease at inception. Lease right-of-use (ROU) assets represent the Company’s right to an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet in accordance with the short-term lease exception included within Topic 842. When the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The lease ROU asset also includes any base lease payments made in advance and excludes non- lease components. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately.
Accounts Payable and Accrued and Other Liabilities
Accounts payable balance represents all invoices the Company has received, while accrued and other current liabilities consist of payroll related accruals, short-term lease obligations, deferred revenue, and estimated accruals when work has been performed, but an invoice has not been issued.
Expense and Other Income Recognition
Expenses are recognized when incurred. Other income is recognized when earned.
Research and Development
Research and Development expense is due to costs that exceed our current sales as we are engaged in pheno-hunting, a process of selecting the best phenotype of each strain for mass production. Phenotypes expressed include smell, color, potency, resin production, height, etc. Phenotypes must be grown, harvested, dried and cured to determine quality. Once the best phenotype is selected, we clone them to get exact copies of the phenotype. These clones can then be mass produced for sale. We are also researching crop steering methods for our clones. We continually collect data throughout the cultivation process to increase yield, quality, scale, and profitability. All these efforts are meticulously researched to help our end users (cultivators) to succeed with our immature plants. The data we collect will help high-performance; science driven cultivators grow better products for the end user. All our data and research will be made available to our customers to cultivate the next generation of disease and pathogen free agricultural plants. We consider all the costs related to pheno-hunting and collecting data as our Research and Development costs, which are charged to expenses as incurred. Cultivators using our proprietary data can dramatically improve their cultivation methods.
Income Taxes
Income taxes are accounted for using an asset-liability method. Deferred income taxes and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing asset and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of the change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established for deferred tax assets that, based on management’s evaluation, are not expected to be realized.
Tax benefits of uncertain tax positions are recorded only where the position is “more likely than not” to be sustained based on their technical merits. The amount recognized is the amount that represents the largest amount of tax benefit that is greater than 50% likely of being ultimately realized. A liability is recognized for any benefit claimed or expected to be claimed, in a tax return more than the benefit recorded in the financial statements, along with any interest and penalty (if applicable) in such excess. The Company has no uncertain tax position as of June 30, 2024, and June 30, 2023.
| F-18 |
Advertising
The Company expenses the cost of all advertising campaigns and tradeshows, including those for its Regulation A+ investment offering, and promotions as they are incurred. During the six months ended June 30, 2024 and June 30, 2023, advertising expense amounted to $17,697 and $8,565 respectively, and is included as part of the advertising, marketing, selling expenses in the statements of operations.
Fair Value Measurements
The carrying amounts of the Company’s financial instruments including Cash and Cash Equivalents approximate fair value due to the short-term nature of those instruments. The Company determines the fair value based upon the exit price that would be received to sell an asset or paid to transfer as liability in an orderly transaction between market participants, as determined by either the principal market or most advantageous market. Inputs used in the valuation techniques to derive fair value are classified based on a three-level hierarchy. These levels are:
Level 1—Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
Level 2—Observable prices that are based on inputs not quoted on active markets but corroborated by market data.
Level 3—Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.
As of June 30, 2024, and June 30, 2023, the carrying amount of the Company’s financial instruments were determined using Level 1 inputs.
Stock-Based Compensation
The Company follows the provisions of ASC 718-20, Stock Compensation, Awards Classified as Equity, requiring that compensation cost relating to share-based payment transactions be recognized in the financial statements. Compensation expense for options granted to employees, directors and certain service providers (“grantees”) is determined based on estimated fair value of the options at the time of grant using the Black- Scholes option pricing model, which considers, as of the grant date, the estimated fair market value of the underlying shares, expected volatility, expected dividend yield and the risk-free interest rate over the expected life of the option. The grant date fair value of Restricted Share Awards (RSAs) is based on the estimated value of the restricted share on the date of grant. The compensation cost for all share-based awards is recognized as an expense over the grantee’s requisite service period (generally the vesting period of the equity award), except for costs related to persons directly involved in the development and/or construction of the projects which are capitalized into Construction in progress during the capitalization period. Shares are issued from authorized shares in settlement of options exercised. RSAs are included in common shares issued and outstanding from the date of issuance. Forfeitures are accounted for as they occur.
3. PREPAID EXPENSES, DEPOSITS AND OTHER ASSETS
In 2023 the Company did not have any prepaid expenses or other assets. The total of deposits is $300,000 for June 30, 2023 and June 30, 2024, respectively. The deposits are detailed in the below table. The Company did not have any prepaid Advertising & Marketing during the period six months ended June 30, 2023 and June 30, 2024, the Company had prepaid Advertising & Marketing as detailed in the table below.
Deposits and Prepaid Advertising & Marketing at June 30, 2023 and December 31, 2023, consisted of the following:
June 30, 2024 | June 30, 2023 | |||||||
| Building Lease Security Deposit | $ | 300,000 | $ | 300,000 | ||||
| Prepaid Advertising & Marketing | $ | 600,000 | $ | 0 | ||||
4. STOCKHOLDERS’ EQUITY
On September 8, 2021, the Company’s Board of Directors approved the First Amended and Restated Certificate of Incorporation. In accordance with the Company’s First Amended and Restated Certificate of Incorporation, the Company is authorized to issue 100,000 shares, consisting of one classes of stock to be designated “Common Stock” with a $1.00 par value per share.
| F-19 |
The holders of the Common Stock are entitled to one vote for each share of Common Stock held at all meetings of stockholders (and written actions in lieu of meetings). For the purpose of determining those stockholders entitled to a vote at any meeting of the stockholders, except as otherwise provided by law, only persons in whose names shares stand on the stock records of the corporation on the record date, as provided in the Bylaws, shall be entitled to a vote at any meeting of stockholders. Every person entitled to a vote or execute consents shall have the right to do so either in person, by remote communication, if applicable, or by agent or agents authorized by a proxy granted in accordance with Oklahoma law. An agent so appointed need not be a stockholder. No proxy shall be voted after three (3) years from the date of creation unless the proxy provides for a longer period.
Prior to this Offering the Company amended its Bylaws and Certificate of Incorporation, and subsequently converted the Common Stock shares of the Founders to Common Stock voting shares and the Common Stock of investors to Preferred Stock non-voting shares. Per the Second Amended Bylaws and Certificate of Incorporation the company is authorized to issue 5,000,000,000 shares consisting of two classes of stock being “Common Stock” which are voting and “Preferred Stock”, which are non-voting, both with a par value of $.0001. As of the date of this Offering the total number of shares of Common Stock the Company is authorized to issue is 3,470,000,000, and the total number of Preferred Stock the Company is authorized to issue is 1,530,000,000. As of the date of this Offering the Company had 901,000,000 shares of Common Stock outstanding and 66,423,818 shares of Preferred Stock outstanding.
Per the Bylaws, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of shares of Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders, and in the event of a deemed liquidation event, the holders of shares of Preferred Stock then outstanding shall be entitled to be paid out of the consideration payable to stockholders in such deemed liquidation event or out of the Available Proceeds, as applicable, before any payment shall be made to the holders of Common Stock.
5. INCOME TAXES
For the six months ended June 30, 2023 and June 30, 2024, the Company did not generate any taxable income and, as a result, no provision for federal or state income taxes has been recorded. The Company has incurred a net operating loss, which may be available to offset future taxable income, subject to applicable tax regulations and limitations. Deferred tax assets related to this net operating loss have not been recognized due to uncertainty surrounding the Company’s ability to utilize these assets in the future.
6. RISK CONCENTRATION
Financial instruments that potentially expose the Company to certain concentrations of credit risk include cash in bank accounts. The Company maintains accounts at high quality financial institutions, including First Enterprise Bank, and Equity Bank. While the Company attempts to limit any financial exposure its deposits balances may, at time, exceed the amount insured by the Federal Deposit Insurance Corporation (“FDIC”). All deposit accounts are insured up to $250,000 per depositor, per insured bank. The Company has not experienced any losses on such accounts.
Our business, results of operations and financial condition may be adversely affected if a public health epidemic interferes with the ability of us, our employees, workers, contractors, suppliers, customers and other business partners to perform our and their respective responsibilities and obligations relative to the conduct of our business.
The Company’s success depends upon the continued services of our executive officers and other key personnel who have critical industry experience and relationships. Significant competition for talented individuals could affect both Company’s ability to retain key personnel and hire new ones. The loss of the services of any officers or key personnel could hinder or delay the implementation of the business model, research and development efforts, or ability to sell products and services.
7. PROPERTY, PLANT AND EQUIPMENT
Assets are depreciated using the straight-line depreciation method applied to groups of assets with varying useful lives.
Property, plant and equipment as of June 30, 2024, and June 30, 2023, consisted of the following:
Estimated Useful Life (Years) | June 30, 2024 | June 30, 2023 | ||||||||
| Assets under construction or not in service | $ | 1,054,410 | $ | 930,142 | ||||||
| Production equipment | 5 | 194,009 | 46,409 | |||||||
| Production furniture, fixtures, and other equipment | 5 | 174,467 | 106,778 | |||||||
| Production lights | 5 | 286,788 | 72,500 | |||||||
| Leasehold improvements | 10 | 660,251 | 0 | |||||||
| Computers and tablets | 5 | 6,704 | 6,704 | |||||||
| Software and app licenses and development | 5 | 0 | 0 | |||||||
| Total property, plant and equipment | 2,376,629 | 1,162,533 | ||||||||
| Less accumulated depreciation | 185,107 | 5,368 | ||||||||
| Property, plant and equipment, net | $ | 2,191,522 | $ | 1,157,165 | ||||||
| F-20 |
8. LEASES
On October 1, 2022, the Company entered into a lease agreement for office, cultivation and lab space in Tulsa, Oklahoma. The monetary obligations remaining on the lease described in this paragraph was $1,350,000 and $750,000 as of June 30, 2023, and June 30, 2024, respectively.
The leased facilities span approximately 23,196 square feet and is currently being used for the Company’s headquarters, office, cultivation and tissue culture lab, as well as being remodeled by the Company.
As of June 30, 2023, the Company has spent approximately $414 thousand of remodeling costs and received approximately $0 thousand dollars in rebates. As of June 30, 2024, the Company has spent approximately $1.2 million dollars of remodeling costs and received approximate $66 thousand dollars in rebates.
The Company accounts for its U.S. leases in accordance with ASC 842. The Company determines if an arrangement is a lease at contract inception. A lease exists when a contract conveys to the Company the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The definition of a lease embodies two conditions: (1) there is an identified asset in the contract that is land or a depreciable asset (i.e., property, plant, and equipment), and (2) the Company has the right to control the use of the identified asset and to obtain substantially all of the economic benefits from using the underlying asset.
Right-of-use assets represent the Company’s right to control the use of an explicitly or implicitly identified fixed asset for a period of time and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The lease liabilities are measured at the present value of the unpaid lease payments at the lease commencement date. Key estimates and judgments include how the Company determined the incremental borrowing rate (“IBR”) it uses to present value the unpaid lease payments, the lease term and lease payments.
ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its IBR. In some instances, the Company’s leases do not provide an implicit rate; therefore, management uses its IBR based on the information available at commencement date in determining the present value of lease payments.
The lease term for the Company’s lease includes the noncancelable period of the lease plus the renewal options the Company is certain to exercise. Lease payments included in the measurement of the lease asset or liabilities comprised of fixed payments. The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date less any lease incentives received. For operating leases, the ROU asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received.
Lease expense for lease payments is recognized on a straight-line basis over the lease term. The following is a maturity analysis of the annual undiscounted cash flows of the operating and finance lease liabilities as of June 30, 2024:
| Six Months Ended June 30, 2024 | Operating Minimum Lease Payment | |||
| 2024 | $ | 300,000 | ||
| 2025 | 450,000 | |||
| Total undiscounted cash flows | 750,000 | |||
| Less imputed interest | (369,696 | ) | ||
| Net present value of lease liability | $ | 380,304 | ||
Supplemental balance sheet information at June 30, 2024 and June 30, 2023 related to the leases are as follows:
Operating lease:
| June 30, 2024 | June 30, 2023 | |||||||
| Assets – operating lease right of use asset | $ | 380,304 | $ | 478,472 | ||||
| Liabilities: | ||||||||
| Current – operating lease liability | ||||||||
| Noncurrent – operating lease liability | 380,304 | 478,472 | ||||||
| Total Lease Liability | $ | 380,304 | $ | 478,472 | ||||
| F-21 |
Supplemental lease term and discount rate information related to the leases at June 30, 2024 and June 30, 2023 are as follows:
| June 30, 2024 | June 30, 2023 | |||||||
| Operating Lease remaining lease term in years | 1.25 | 1.75 | ||||||
| Discount Rate | 10 | % | 10 | % | ||||
9. ADOPTION OF NEW ACCOUNTING PRONOUCEMENTS
During the period six months ended June 30, 2024, and June 30, 2023, the Company did not adopt any new accounting pronouncements.
10. REVENUE RECOGNITION
The Company recognizes revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers. The following summarizes significant information about the Company’s revenue recognition policies:
Management Services Income:
Management Services Income primarily consists of revenues generated from operating contracts with Endless Grow, LLC. Revenue recognition for these services is performed in accordance with ASC 606.
The Company recognizes revenue when earned. The amount of revenue recognized reflects the contractual agreement in place for the customer.
The Company does not have any material contract assets or liabilities related to Management Services Income.
11. SUBSEQUENT EVENTS
For purposes of these financial statements, subsequent events have been evaluated through November 15, 2024, which is the date that the financial statements were available to be issued. There are no material subsequent events that would require further disclosures in the Company’s consolidated financial statements aside from the one disclosed below.
Amendment to Bylaws, Certificate of Incorporation, Equity Restructuring, and Royalty Buy-Outs
In September 2024, the Company amended its bylaws and certificate of incorporation to facilitate equity restructuring initiatives. As part of this restructuring, the Company entered into agreements with existing investor common stockholders to exchange their outstanding common stock shares for preferred stock shares to align with the Company’s revised equity framework.
Additionally in September 2024, the Company reached agreements with certain investors to address its outstanding future earnings royalty obligations. As of June 30, 2024, these future obligations totaled $9.59 million in future earnings royalties. The Company successfully negotiated exchanges or buy-outs of these future earnings obligations by issuing 3,895,000 shares of preferred stock and agreeing to utilize $2.76 million in cash from the proceeds of this Offering for royalty buy-out obligations.
These transactions were executed to streamline the Company’s capital structure and reduce ongoing royalty liabilities, strengthening its financial position and supporting future growth initiatives.
Transaction Involving Company Facilities and Lease Negotiations
In October 2024, one of the Company’s investors, through a newly formed LLC in which Endless Corporation is a member, closed a purchase and sale agreement with the owners of the Company’s leased facilities and land, which include its headquarters, offices, cultivation, and culture lab facilities (collectively, the “Facilities”). The Company participated in this transaction by receiving credit for half of its building lease security deposit towards the purchase, along with the issuance of preferred stock to sellers and to the promissory note holders of the sellers.
Following this transaction, the Company and the investor are actively negotiating a new lease arrangement with the newly formed LLC. Additionally, discussions are underway regarding the Company’s ownership interest in the LLC and the beneficial ownership structure of the Facilities. This agreement is expected to provide strategic flexibility for the Company’s operations and financial planning.
| F-22 |
PART III
INDEX TO EXHIBITS
The documents listed in the Exhibit Index of this report are incorporated by reference or are filed with this report, in each case as indicated below.
| 42 |
SIGNATURES
Pursuant to the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this Offering Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the State of Oklahoma, on January 23, 2025.
| Endless Corporation | ||
| Date: January 23, 2025 | ||
| By: | /s/ Travis Dahm | |
| Name: | Travis Dahm | |
| Title: | Chief Executive Officer (Principal Executive Officer) |
| By: | /s/ Tim Lozott | |
| Name: | Tim Lozott | |
| Title: | Chief Financial Officer (Principal Accounting & Financial Officer) |
Pursuant to the requirements of the Securities Act of 1933, this offering circular has been signed by the following persons in the capacities and on the date indicated.
| Signature | Title | Date | ||
| /s/ Travis Dahm | Chief Executive Officer, President, and Director | January 23, 2025 | ||
| Travis Dahm | ||||
| /s/ Gary Holland | Chief Innovation Officer, Director | January 23, 2025 | ||
| Gary Holland | ||||
| /s/ Tim Lozott | Chief Financial Officer | January 23, 2025 | ||
| Tim Lozott |
| 43 |
Exhibit 2.1
Exhibit 2.2
SECOND AMENDED BYLAWS
OF
ENDLESS CORPORATION, INC.
ARTICLE I
OFFICES
Registered Office. The registered office of the corporation shall be located at 10026 S. Mingo Rd., #232 Tulsa, Oklahoma 74133, or in such other location as the Board of Directors of the corporation (the “Board of Directors”) and the name of the registered agent of the Company in the State of Oklahoma shall be Zachariah O. Lindsey at LINDSEYfirm, 1209 S. Frankfort Ave., Ste. 202, Tulsa, OK 74120.
1.1 Offices. The corporation will also have and maintain an office or principal place of business at such place as may be fixed by the Board of Directors, and may also have offices at such other places, both within and without the State of Oklahoma, as the Board of Directors may from time to time determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
2.1 Location. All meetings of the stockholders for any purpose may be held at such place as may be fixed from time to time by the Board of Directors, or at such other place either within or outside the State of Oklahoma as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting; provided, however, that the Board of Directors may, in its sole discretion, determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication as authorized by the Oklahoma General Corporations Law (the “Act”). The location shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof, or a waiver by electronic transmission by the person entitled to notice.
2.2 Timing. Annual meetings of stockholders, shall be held at such date and time as shall be designated from time to time by the Board of Directors and stated in the notice to the meeting, at which they shall elect by a plurality vote a Board of Directors, and transact such other business as may properly be brought before the meeting.
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2.3 Notice of the Meeting. Written notice of any stockholder meeting stating the place, if any, date and hour of the meeting, the means of remote communication, if any, by which stockholders and proxy-holders may be deemed to be present in person and vote at such meeting, shall be given to each stockholder entitled to vote at such meeting not fewer than ten (10) nor more than sixty (60) days before the date of the meeting.
2.4 Stockholders’ Records. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address (but not the electronic address or other electronic contact information) of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of at least 10 days prior to the meeting:
(A) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or
(B) during ordinary business hours, at the principal place of business of the corporation. In the event that the corporation determines to make the list available on an electronic network, the corporation may take reasonable steps to ensure that such information is available only to stockholders of the corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.
2.5 Special Meetings. Special meetings of stockholders, for any purpose or purposes, unless otherwise prescribed by the statute or by the certificate of incorporation, may be called by the President and shall be called by the President or Secretary at the request in writing of a majority of the Board of Directors, or at the request in writing of stockholders owning at least twenty-five (25%) in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote. Such requests shall state the purpose or purposes of the proposed meeting.
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2.6 Notice of Special Meetings. Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not fewer than ten (10) nor more than sixty (60) days before the date of the meeting, to each stockholder entitled to vote at such meeting. The means of remote communication, if any, by which stockholders and proxy-holders may be deemed to be present in person and vote at such meetings shall also be provided in the notice.
2.7 Business Transacted at Special Meetings. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.
2.8 Quorum; Meeting Adjournment; Presence by Remote Means.
(A) Quorum; Meeting Adjournment. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by a certificate of incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted that might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
(B) Presence by Remote Means. If authorized by the Board of Directors in its sole discretion, and subject to such guidelines and procedures as the Board of Directors may adopt, stockholders and proxy-holders not physically present at a meeting of stockholders may, by means of remote communication:
(1) participate in a meeting of stockholders; and
| Second Amended Bylaws of the Endless Corporation | 4 |
(2) be deemed present in person and vote at a meeting of stockholders whether such meeting is to be held at a designated place or solely by means of remote communication, provided that:
(a) the corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder,
(b) the corporation shall implement reasonable measures to provide such stockholders and proxy-holders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and
(c) if any stockholder or proxy-holder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the corporation.
2.9 Voting Thresholds. When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes, these Second Amended Bylaws or the certificate of incorporation, a different vote is required, in which case such express provision shall govern and control the decision of such question.
2.10 Number of Votes Per Share. Unless otherwise provided in the certificate of incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote by such stockholder or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after three years from its date, unless the proxy provides for a longer period.
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2.11 Action by Written Consent of Stockholders; Electronic Consent; Notice of Action.
(A) Action by Written Consent of Stockholders. Unless otherwise provided by the certificate of incorporation, any action required or permitted to be taken at any annual or special meeting of the stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing setting forth the action so taken, is signed in a manner permitted by law by the holders of outstanding stock having not less than the number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Written stockholder consents shall bear the date of signature of each stockholder who signs the consent in the manner permitted by law and shall be delivered to the corporation as provided in the subsection (B) below. No written consent shall be effective to take the action set forth therein unless, within sixty (60) days of the earliest dated consent delivered to the corporation in the manner provided above, written consents signed by a sufficient number of stockholders to take the action set forth therein are delivered to the corporation in the manner provided above.
(B) Electronic Consent. A telegram, cablegram or other electronic transmission consenting to an action to be taken and transmitted by a stockholder or proxy-holder, or a person or persons authorized to act for a stockholder or proxy-holder, shall be deemed to be written, signed and dated for the purposes of this section, provided that any such electronic transmission sets forth or is delivered with information from which the corporation can determine
(1) that the other electronic transmission was transmitted by the stockholder or proxy-holder or by a person or persons authorized to act for the stockholder or proxy-holder and
(2) the date on which such stockholder or proxy-holder or authorized person or persons transmitted such electronic transmission. The date on which such electronic transmission is transmitted shall be deemed to be the date on which such consent was signed. No consent given by electronic transmission shall be deemed to have been delivered until such consent is reproduced in paper form and until such paper form is delivered to the corporation by delivery to its registered office in the State of Oklahoma, its principal place of business or an officer or agent of the corporation having custody of the book in which proceedings of the meetings of stockholders are recorded. Delivery made to a corporation’s registered office shall be made by hand or by certified or registered mail, return receipt requested. Notwithstanding the foregoing limitations on delivery, consents given electronic transmission may be otherwise delivered to the principal place of business of the corporation or to an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded if, to the extent and in the manner provided by resolution of the Board of Directors of the corporation.
| Second Amended Bylaws of the Endless Corporation | 6 |
ARTICLE III
BOARD OF DIRECTORS
3.1 Authorized Directors. The number of directors that shall constitute the whole Board of Directors shall be determined by resolution of the Board of Directors at a meeting of the Board of Directors, except as provided in section 3.3 of this Article, and each director elected shall hold office until his successor is elected and qualified. Directors need not be stockholders.
3.2 Election of Additional Directors and Term. Additional members of the Board of Directors shall be determined by resolution of the Board of Directors and shall be recruited by the current members of the Board of Directors and presented to the stockholders for election. Except as provided in section 3.3 of this Article, each newly elected director shall hold office until his successor is elected and qualified.
3.3 Vacancies. Unless otherwise provided in the corporation certificate of incorporation, as it may be amended, vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in the office, though less than a quorum, or by a sole remaining director, and the Directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced. If there are no directors in office, then an election of directors may be held in the manner provided by statute. If, at the time of filling any vacancy or any newly created directorship, the Directors then in the office shall constitute less than a majority of the whole Board of Directors (as constituted immediately prior to any such increase), the Board as then constituted shall summarily fill the vacancies to serve until the next regularly scheduled meeting.
3.4 Board Authority. The business of the corporation shall be managed by or under the direction of its Board of Directors, which may exercise all such powers of the corporation and do all such lawful acts and things as are not by the statute or by the certificate of incorporation or by these Bylaws directed or required or done by the stockholders.
| Second Amended Bylaws of the Endless Corporation | 7 |
3.5 Location of Meetings. The Board of Directors of the corporation may hold meetings, both regular and special, either within or outside of the State of Oklahoma.
3.6 First Meeting. The first meeting of each newly elected Board of Directors shall be held at such time and place as shall be fixed by the vote of the Board of Directors at the annual meeting and no notice of such annual meeting shall be necessary to the newly elected directors in order to legally constitute the annual meeting, provided a quorum shall be present. In the event of the failure of the Board of Directors to fix the time or place of such first meeting of the newly elected Board of Directors, or in the event such meeting is not held at the time and place so fixed by the Board of Directors, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors, or as shall be specified in a written waiver signed by all of the directors.
3.7 Regular Meetings. Regular meetings of Board of Directors may be held without a notice to stockholders at such time and at such place as shall from time to time be determined by the Board of Directors.
3.8 Special Meetings. Special meetings of the Board of Directors may be called by the Chief Executive Officer, or President, upon notice to each director; special meetings shall be called by the Secretary in like manner and on like notice on the written request of two (2) directors unless the Board of Directors consists of only one director, in which case special meetings shall be called by the Chief Executive Officer, President or Secretary in like manner and on like notice on the written request of the sole director. Notice of any special meeting shall be given to each director at his business or residence in writing, or by telegram, facsimile transmission, telephone communication or electronic transmission (provided, with respect to electronic transmission, that the director has consented to receive the form of transmission at the address to which it is directed). If mailed, such notice shall be deemed adequately delivered when deposited in the United States mails so addressed, with postage thereon prepaid, at least five (5) days before such meeting. If by facsimile transmission or other electronic transmission, such notice shall be transmitted at least twenty-four (24) hours before such meeting. If by telephone, the notice shall be given at least twelve (12) hours prior to the time set for the meeting. Neither the business to be transacted at, nor the purpose of, any regular or special meetings of the Board of Directors need be specified in the notice of such meeting, except for amendments to these Bylaws as provided under Section 8.1 of Article VIII hereof. A meeting may be held at any time without notice if all the directors are present (except as otherwise provided by law) or if those not present waive notice of the meeting in writing, either before or after such meeting.
| Second Amended Bylaws of the Endless Corporation | 8 |
3.9 Quorum. At all meetings of the Board of Directors a majority of the directors shall constitute a quorum for the transaction of business and any act of a majority of the directors present at any meeting at which there is a quorum shall be an act of the Board of Directors, except as may be otherwise specially provided by the statute or by the certificate of incorporation. If a quorum is not present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.
3.10 Action Without a Meeting. Unless otherwise restricted by the certificate of incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all members of the Board of Directors or committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing, writings, electronic transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or committee.
3.11 Telephonic Meetings. Unless otherwise restricted by the certificate of incorporation or these Bylaws, members of the Board of Directors or any committee designated by the Board of Directors may participate in a meeting of the Board of Directors or any committee, by means of conference telephone or other means of communication by which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at the meeting.
| Second Amended Bylaws of the Endless Corporation | 9 |
3.12 Committees. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.
(A) In the absence of disqualification of a member of a committee, the member or members thereof present at any meetings and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.
(B) Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it, but no such committee shall have the power or authority in reference to the following matters:
(1) approving or adopting, or recommending to the stockholders, any action or matter expressly required by the Act to be submitted to stockholders for approval, or
(2) adopting, amending or repealing and provisions of these Bylaws.
3.13 Minutes of Meetings. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.
3.14 Compensation of Directors. Unless otherwise restricted by the certificate of incorporation or these Bylaws, the Board of Directors shall have authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the corporation at any other capacity and receiving the compensation therefor. Members of special standing committees may be allowed like compensation for attending committee meetings.
3.15 Removal of Directors. Unless otherwise provided by the current Certificate of Incorporation or these Bylaws, any Director or the entire Board of Directors may be removed, with or without cause, by the holders of a majority of shares entitled to vote at an election of Directors.
| Second Amended Bylaws of the Endless Corporation | 10 |
3.16 Supervotes and Authority of Chairman of the Board. In the event of a tie in the vote of any matter brought before the Board of Directors and/or the stockholders, the present Chairman of the Board shall have a “super vote” to resolve any tie vote, considering the best interest of the Company.
ARTICLE IV
NOTICES
4.1 Notice. Unless otherwise provided by these Bylaws, whenever, under the provisions of the statutes or of the certificate of incorporation or of these Bylaws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail.
4.2 Waiver of Notice. Whenever any notice is required to be given under the provisions of the statutes or of the certificate of incorporation or of these Second Amended Bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.
4.3 Electronic Notice.
(A) Electronic Transmission. Without limiting the manner by which notice otherwise may be given effectively to stockholders and directors, any notice to stockholders or directors given by the corporation under anyprovision of the Act, the certificate of incorporation or these Bylaws shall be effective if given by a form of electronic transmission consented to by the stockholder or director to whom the notice is given. Any such consent shall be revocable by the stockholder or director by written notice to the corporation. Any such consent shall be deemed revoked if both:
(1) the corporation is unable to deliver by electronic transmission two consecutive notices given by the corporation in accordance with such consent, and
| Second Amended Bylaws of the Endless Corporation | 11 |
(2) such inability becomes known to the Secretary or an assistant secretary of the corporation or to the transfer agent, or other person responsible for the giving of notice; provided, however, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.
(B) Effective Day of Notice. Notice given pursuant to subsection (A) of this section shall be deemed given:
(1) if by facsimile telecommunication, when directed to a number at which the stockholder or director has consented to receive notice;
(2) if by electronic mail, when directed to an electronic mail address at which the stockholder or director has consented to receive notice; (3) if by any other form of electronic transmission, when directed to the stockholder or director. An affidavit of the Secretary or an assistant Secretary or of the transfer agent or other agent of the corporation that the notice has been given by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
(C) Form of Electronic Transmission. For the purposes of these Bylaws, “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.
ARTICLE V
OFFICERS
5.1 Required and Permitted Officers. The officers of the corporation shall be chosen by the Board of Directors and shall be a President, Treasurer, Secretary, Chief Executive Officer, Chief Operating Officer, and Chief Financial Officer. The Board of Directors may elect from among its members a Chairman of the Board and a Vice-Chairman of the Board. The Board of Directors may also choose one or more vice presidents, assistant secretaries and assistant treasurers. Any number of offices may be held by the same person, unless the certificate of incorporation or these Bylaws otherwise provide.
| Second Amended Bylaws of the Endless Corporation | 12 |
5.2 Appointment of Required Officers. The Board of Directors at its next meeting and ratification of these Second Amended Bylaws shall choose a President, Treasurer, Secretary, Chief Executive Officer, Chief Operating Officer, and a Chief Financial Officer and may choose officers and vice-presidents at any time thereafter at its first meeting after each annual meeting of stockholders.
5.3 Appointment of Permitted Officers. The Board of Directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors.
5.4 Officer Compensation. The salaries of all officers and agents of the corporation shall be fixed by the Board of Directors.
5.5 Term of Office; Vacancies. The officers of the corporation shall hold office until their successors are chosen and qualify. Any officer elected or appointed by the Board of Directors may be removed at any time by the affirmative vote of a majority of the Board of Directors. Any vacancy occurring in any office of the corporation shall be filled by the Board of Directors.
THE CHAIRMAN OF THE BOARD
5.6 Chairman Presides. The Chairman of the Board, if any, shall preside at all the meetings of the Board of Directors and of the stockholders at which he shall be present. They shall have and may exercise such powers as are, from time to time, assigned to him by the Board of Directors and as may be provided by law.
5.7 Absence of Chairman. In the absence of the Chairman of the Board, the Vice- Chairman of the Board, if any, shall preside at all meetings of the Board of Directors and of the stockholders at which he shall be present. He shall have and may exercise such powers as are, from time to time, assigned to him by the Board of Directors and as may be provided by law.
| Second Amended Bylaws of the Endless Corporation | 13 |
THE POWERS AND AUTHORITIES OF THE OFFICERS
5.8 Powers of Chief Executive Officer. The Chief Executive Officer of the corporation; in the absence of the Chairman and Vice-Chairman of the Board shall preside at all meetings of the stockholders and the Board of Directors; they shall be responsible for leading the vision and long-term strategy of the corporation and ensure growth and sustainability of the corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect.
5.9 Chief Executive Officer’s Signature Authority. The Chief Executive Officer shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the corporation.
5.10 Absence of Chief Executive Officer. In the absence of the Chief Executive Officer or in the event of his inability or refusal to act, the President, Chief Financial Officer, or Vice- President, if any, (or in the event there be more than one vice-president, the vice-presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the Chief Executive Officer, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Chief Executive Officer. The Chief Executive Officer, President, Chief Financial Officer, or vice-presidents shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.
5.11 Powers of President. The President of the corporation; in the absence of the, Chief Executive Officer, Chairman and Vice-Chairman of the Board shall preside at all meetings of the stockholders and the Board of Directors; they shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect.
| Second Amended Bylaws of the Endless Corporation | 14 |
THE SECRETARY AND ASSISTANT SECRETARY
5.12 Duties of Secretary. The Secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record all the proceedings of the meetings of the corporation and of the Board of Directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors, Chief Executive Officer, or President, under whose supervision he shall be. He shall have custody of the corporate seal of the corporation and he, or an assistant secretary, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by his signature or by the signature of such assistant secretary. The Board of Directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature.
5.13 Duties of Assistant Secretary. The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election) shall, in the absence of the Secretary or in the event of their inability or refusal to act, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
5.14 Duties of Treasurer. The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositaries as may be designated by the Board of Directors.
5.15 Disbursements and Financial Reports. The Treasurer shall disburse the funds of the corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings or when the Board of Directors so requires, an account of all of their transactions as treasurer and of the financial condition of the corporation.
| Second Amended Bylaws of the Endless Corporation | 15 |
5.16 Treasurer’s Bond. If required by the Board of Directors, the Treasurer shall give the corporation a bond (which shall be renewed every six years) in such a sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties in their office and for the restoration to the corporation, in case of their death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in their possession or under their control belonging to the corporation.
5.17 Duties of Assistant Treasurer. The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election) shall, in the absence of the treasurer or in the event of their inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.
THE CHIEF OPERATING OFFICER AND CHIEF FINANCIAL OFFICER
5.18 Duties of Chief Operating Officer. The Chief Operating Officer shall oversee and manage the day-to-day operations and internal affairs of the corporation, and in the absence of the Chief Executive Officer, or in the event of their inability or refusal to act, perform the duties and exercise the powers of the Chief Executive Officer and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.
5.19 Duties of Chief Financial Officer. The Chief Financial Officer shall manage the corporation’s financial activities, including financial planning, forecasting, budgeting, and tracking cash flow. The Chief Financial Officer shall oversee the accounting and direct the preparation of the corporation’s financial statements and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.
| Second Amended Bylaws of the Endless Corporation | 16 |
ARTICLE VI
CERTIFICATES OF STOCK
6.1 Stock Certificates. Every holder of stock in the corporation shall be entitled to have a certificate, signed by or in the name of the corporation by, the Chairman or Vice- Chairman of the Board of Directors, Chief Executive Officer, or the President or a vice-president and the Treasurer or an assistant treasurer, or the Secretary or an Assistant Secretary of the corporation, certifying the number of shares owned by him / her in the corporation. Certificates may be issued for partly paid shares and in such case upon the face or back of the certificate issued to represent any such partly paid shares, the total amount of the consideration to be paid thereof, and the amount paid thereon shall be specified. There will be two classes of Stock. Each holder of Common Stock shall have voting powers. Each share of Common Stock shall have one vote per share of stock held by the individual and/or entity per share of Common Stock. Holders of Preferred Stock will not have voting rights on any matter.
6.2 Authorized Capital Stock. The Corporation is authorized to issue a total of 5,000,000,000 shares of capital stock, each with a par value of $0.0001 per share, consisting of (a) 3,470,000,000 shares of common stock (the “Common Stock”), and (b) 1,530,000,000 shares of preferred stock (the “Preferred Stock”). The number of authorized shares of Common Stock or Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of capital stock representing a majority of the voting power of all the then-outstanding shares of capital stock of the Corporation entitled to vote thereon irrespective of the provisions of law. Of the 3,470,000,000 shares of Common Stock, the Company shall reserve 970,000,000 shares of Common Stock and 30,000,000 shares of Preferred Stock for an Equity Incentive Plan (the “Plan”) to be administered by the Board of Directors. The Company may at its discretion with the authorization of the Board of Directors increase the number of shares authorized to be issued under the Plan.
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6.3 Preferred Stock. The Board is hereby expressly authorized to provide out of the unissued shares of the Preferred Stock for one or more series of Preferred Stock and to establish from time to time the number of shares to be included in each such series and to fix the voting rights, if any, designations, powers, preferences, and relative, participating, optional, special, and other rights, if any, of each such series and any qualifications, limitations, and restrictions thereof, as shall be stated in the resolution or resolutions adopted by the Board providing for the issuance of such series and included in a certificate of designation (a “Preferred Stock Designation”) filed pursuant to law, and the Board is hereby expressly vested with the authority to the fullest extent provided by the law, now or hereafter, to adopt any such resolution or resolutions.
6.4 Administration of Equity Incentive Plan. The Board of Directors, as administrators of the Plan, has the power to determine when awards will be granted, which employees, directors or consultants will receive awards, the terms of the awards, including the number of shares subject to each award and the vesting schedule of the awards, and to interpret the terms of the Plan and the award agreements. The Board of Directors, as administrator of the Plan, also has the authority to reduce the exercise price of outstanding stock options if the exercise price exceeds the fair market value of the underlying shares, and to cancel such options in exchange for new awards, in each case without stockholder approval. The Plan shall allow for;
(A) Stock Options. The Plan shall allow for the grant of incentive stock options to qualify under section 422 of the Code and non-qualified stock options.
(B) Stock Appreciation Rights. The Plan shall allow for the grant of stock appreciation rights. Stock appreciation rights grant the grantee the right to receive, upon exercise, an amount, payable in cash or shares of Common Stock, equal to the number of shares that is being exercised multiplied by the excess of
(1) the fair market value of a share of Common Stock on the date of exercise, over,
(2) the exercise price specified in the applicable award agreement. Stock appreciation rights may be granted on its own or in tandem with an option granted under the Plan. Stock apperception rights shall be subject to an exercise period of no longer than 10 years, calculated from the date of the grant.
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(C) Restricted Stock Awards. The Plan shall allow for the grant of restricted stock. Restricted stock awards are shares of Common Stock or hypothetical Common Stock units having a value equal to the fair market value of an identical number of shares of Common Stock, that vest in accordance with the terms and conditions established by the Board of Directors, as the administrator of the Plan. The administrator will determine the number of shares of restricted stock granted to any employee, director or consultant. The administrator may impose whatever conditions on vesting that it determines to be appropriate. For example, the administrator may set restrictions based on the achievement of specific performance goals or on the continuation of service or employment. Shares of restricted stock that do not vest are subject to repurchase or forfeiture.
(D) Performance Share Awards. The Plan shall allow for the grant of performance share awards. The Company shall have the discretion to determine:
(1) the number of shares of Common Stock or stock-denominated units subject to a performance share award granted;
(2) the performance period, during which time certain performance goals must be met in order for the grantee to obtain the right to exercise (the Company shall determine in its discretion whether a performance goal was met during the applicable performance period);
(3) the conditions that must be satisfied for the grantee to earn an award; and
(4) the other applicable terms, conditions and restrictions.
(E) Cash Awards and Other equity-based award Awards. The Plan shall allow for the grant of other cash awards and equity-based awards, subject to certain performance goals and vesting goals as the Company may determine in its sole discretion.
(F) Term of Awards. The Board of Directors, as administrator of the Plan determines the provisions, terms and conditions of each award, including vesting schedules, forfeiture provisions, form of payment (cash, shares, or other consideration) upon settlement of the award, payment contingencies and satisfaction of any performance criteria.
(G) Performance Criteria. The Plan shall include the following performance criteria that may be considered, individually or in combination, by the Board of Directors, as administrator:
(1) increase in share price;
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(2) earnings per share;
(3) total stockholder return,
(4) return on equity,
(5) return on assets,
(6) return on investment;
(7) net operating income,
(8) cash flow,
(9) revenue;
(10) economic value added,
(11) personal management objectives; or
(12) other measures of performance selected by the Board of Directors, as the Plan administrator.
(H) Transferability of Awards. The Plan shall allow for the transfer of awards only
(1) by will,
(2) by the laws of descent and distribution and
(3) for awards other than incentive stock options, to the extent and in the manner authorized by the Board of Directors as the administrator of the Plan. Only the recipient of an incentive stock may exercise such award during his or her lifetime.
(I) Certain Adjustments. In the event of changes in the capitalization, to prevent enlargement of the benefits or potential benefits available under the Plan, the Board of Directors, as the administrator, will make adjustments to one or more of the number of shares that are covered by outstanding awards, the exercise or purchase price of the outstanding awards, the numerical share limits contained in the Plan and any other terms the Board of Directors, as the administrator, determines require adjustment.
6.5 Voting Power.
(A) Except as otherwise required by any non-waivable provision of applicable law or this Second Amended and Restated Certificate (including any Preferred Stock Designation), the holders of the Common Stock shall exclusively possess all voting power with respect to the Corporation.
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(B) Nature of Voting Rights. Except as may be otherwise provided in this Second Amended and Restated Certificate (including any Preferred Stock Designation) or required by any non-waivable provision of applicable law, at all meetings of the stockholders and on all matters properly submitted to a vote of the stockholders, each holder of Common Stock, as such, shall;
(1) have the right to one vote per share of Common Stock held of record by such holder;
(2) be entitled to notice of any stockholders’ meeting in accordance with the Bylaws of the Corporation, as the same may be amended from time to time (the “Bylaws”); and
(3) be entitled to vote only upon such matters and in such manner as may be provided by this Second Amended and Restated Certificate or the Bylaws; provided, however, that, except as otherwise required by any non-waivable provision of applicable law, holders of shares of Common Stock shall not be entitled to vote on any amendment to this Second Amended and Restated Certificate (including any Preferred Stock Designation) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon pursuant to this Second Amended and Restated Certificate (including any Preferred Stock Designation). This Second Amended and Restated Certificate does not authorize cumulative voting.
6.6 Liquidation Preference. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of shares of Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Company available for distribution to its stockholders, and in the event of a change of control, such as; a merger, consolidation, or sale of stock of all or substantially all assets (otherwise known as a “Deemed Liquidation Event”); the holders of shares of Preferred Stock then outstanding shall be entitled to be paid out of the consideration payable to stockholders in such Deemed Liquidation Event or out of the Available Proceeds (as defined below), as applicable, in each case on a pari passu basis among each series of Preferred Stock, before any payment shall be made to the holders of Common Stock by reason of their ownership thereof,
(A) with respect to the Series A Preferred Stock, the greater of
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(1) an amount per share equal to the Series A Original Issue Price, plus the sum of
(a) any unpaid Accruing Dividend thereon, and
(b) any dividends (other than Accruing Dividends) declared but unpaid theron, or
(2) such amount per share as would have been payable had all shares of Series A Preferred Stock been converted into Common Stock immediately prior to such liquidation, dissolution, winding up Deemed Liquidation Event. If upon any such liquidation, dissolution or winding up of the Company or Deemed Liquidation Event, the assets of the Company available for distribution to its stockholders are insufficient to pay the holders of shares of Preferred Stock the full amount to which they are entitled, the holders of shares of Preferred Stock shall share ratably in any distribution of assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.
6.7 Redemption. In the event of a Deemed Liquidation Event if the Company does not effect a dissolution of the Company under the Bylaws within ninety (90) days after such Deemed Liquidation Event, then:
(A) the Company shall send a written notice to each holder of Preferred Stock no later than the ninetieth (90th) day after the Deemed Liquidation Event advising such holders of their right (and the requirements to be met to secure such right) pursuant to the terms of the following clause,
(B) to require the redemption of such shares of Preferred Stock, and
(C) if the Requisite Holders so request in a written instrument delivered to the Company not later than one hundred twenty (120) days after such Deemed Liquidation Event. (the “Redemption Request”), the Company shall use the consideration received by the Company for such Deemed Liquidation Event (net of any retained liabilities associated with the assets sold or technology licensed, as determined in good faith by the Board), together with any other assets of the Company available for distribution to its stockholders, all to the extent permitted by Oklahoma law governing distributions to stockholders (the “Available Proceeds”), on the one hundred fiftieth (150th) day after such Deemed Liquidation Event (the “Redemption Date”), to redeem all outstanding shares of Preferred Stock at a price per share equal to the Liquidation Amount (the “Redemption Price”). In the event of a redemption pursuant to the preceding sentence, if the Available Proceeds are not sufficient to redeem all outstanding shares of Preferred Stock, the Company shall redeem a pro rata portion of each holder’s shares of Preferred Stock to the fullest extent of such Available Proceeds, based on the respective amounts which would otherwise be payable in respect of the shares to be redeemed if the Available Proceeds were sufficient to redeem all such shares, and shall redeem the remaining shares as soon as it may lawfully do so under Puerto Rico law governing distributions to stockholders. In the event the Company timely receives a Redemption Request, the Company shall send written notice of the mandatory redemption (a “Redemption Notice”) to each holder of record of each series of Preferred Stock not less than forty (40) days prior to the date of Redemption Date.
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6.8 Contents of Stock Certificates. Under Section 18-1039 of the Act, shareholders are entitled to stock certificates that certify the shares of the Corporation’s stock held by the shareholder. Notwithstanding the shareholders’ rights to stock certificates, the Board may authorize the issuance of some or all shares of any class or series of stock without certificates, provided the Board shall provide to a shareholder a written statement that contains the information required to be on stock certificates, per Section 18-1039 of the Act.
As required by Section 18-1039 of the Act, each stock certificate must contain on its face: The Corporation name and that the Corporation is organized under the laws of this State;
i) The name of the shareholder (or person to whom the stock is issued);
ii) The number and class of shares and the designation of the series, if any, the certificate represents; and
iii) The signature of two officers designated in these Bylaws or by the Board.
For the avoidance of doubt, in the event that an individual serves multiple roles within the Corporation, that person cannot countersign any document which that person has already signed in their official or individual capacity. If an officer who has signed or whose facsimile signature appears on any stock certificate ceases to be an officer before the certificate is issued to the shareholder, it may be issued by the Corporation and is valid as if the person were an officer on the date of issuance. The certificate may be sealed with the Corporation’s seal.
Additionally, Shareholders are entitled to stock certificates that certify the shares of the Corporation’s stock held by the shareholder. Notwithstanding the shareholders’ rights to stock certificates, the Board may authorize the issuance of some or all shares of any class or series of stock without certificates, provided the Board shall provide to a shareholder a written statement that contains the information required to be on stock certificates, per Section 18-1039 of the Act.
6.9 Facsimile Signatures. Any or all of the signatures on the certificate may be facsimile. In the event that any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, the certificate may be issued by the corporation with the same effect as if such officer, transfer agent or registrar were still acting as such at the date of issue.
6.10 Lost Certificate. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed upon making an affidavit of that fact by the person claiming the certificate to be lost, stolen or destroyed. When authorizing such issuance of a new certificate or certificated, the Board of Directors may, in its discretion and as such condition precedent to the issuance, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and / or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.
6.11 Right of First Refusal. No Shareholder shall have the right, at any time, to sell or transfer any portion of his or her shares purchased hereunder unless:
(A) Offer to Company. The selling Shareholder shall deliver a written notice to the Company, stating the price, terms, and conditions of the proposed sale or transfer, the shares to be sold or transferred, and the identity of the proposed transferee (“Seller’s Notice”). Within thirty (30) days after receipt of the Seller’s Notice, the Company shall have the right to purchase all, or any portion of the shares so offered at the price and on the terms and conditions stated in the Seller’s Notice;; or
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(B) Offer to Other Shareholders. If the Company elects not to purchase all the Shares specified in the Seller’s Notice, and if the Company has not then made a public offering, or alternative trading platform where shares may be sold, the following procedure shall be followed regarding any sale or transfer of Shares.
(1) The Company shall, at the expiration of 30 days after receipt of the Seller’s Notice, notify each of the Shareholders of the total number of Shares not purchased by the Company, enclosing a copy of the Seller’s Notice (the “Company’s Notice”). Each of the Shareholders shall have 30 days after the mailing of the Company’s Notice to notify the selling Shareholder in writing of his or her intention to purchase all or any specified portion of the available Shares described in the Company’s Notice on the terms and conditions set forth in the Seller’s Notice. Each Shareholder shall deliver to the selling Shareholder by mail or otherwise a written offer or offers to purchase all or any specified portion of the selling Shareholder’s Shares remaining for sale (“Shares for Sale”) on the terms described in the Seller’s Notice. Each Shareholder shall be entitled to purchase the proportion of the Shares for Sale at the ratio that his or her Shares bear to the total Shares held by all Shareholders desiring to purchase Shares for Sale. If the total Shares specified in the offers received within such period by the selling Shareholder exceed the Shares for Sale, each Shareholder desiring to purchase a percentage of the Shares for Sale in excess of his or her proportionate share shall be entitled to purchase the proportion of the Shares for Sale that remains thus undisposed of, at the ratio that his or her Shares bear to the total Shares held by all of the Shareholders desiring to purchase shares in excess of those to which they are entitled under such prior apportionment. Such apportionment shall be made successively until all of the Shares for Sale shall have been allocated to purchasing Shareholders.
(C) Transfer to Other Persons. If none or only a part of the Shares for Sale is bid for purchase by the Company or other Shareholders, then the selling Shareholder may dispose of the remaining Shares for Sale to any person or persons but only within a period of 90 days from the date of the Seller’s Notice. However, the selling Shareholder shall not sell or transfer any of the Shares for Sale at a lower price or on terms more favorable to the purchaser or transferee than those specified in the Seller’s Notice. After the 90-day period, the procedure for first offering to the Company and other Shareholders shall again apply. If only part of the Shares for Sale are purchased by the other Shareholders and the other purchaser or transferee elects not to purchase the remaining shares, the selling Shareholder may elect not to sell any shares.
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(D) Purchase Upon Death, Disability, or Divorce Event. Upon the death, Disability or divorce of a shareholder, (hereafter referred to as “Decedent”), all of the shares of stock owned by the Decedent, to which his Personal Representative shall be entitled, may be sold and purchased as provided herein. If a divorce decree is entered, this Section shall govern the distribution of the Decedent’s shares. Personal Representative shall be defined as and include any trustee, executor, or administrator of the deceased’s shareholders estate.
6.12 Transfer of Stock. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.
6.13 Fixing a Record Date. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date which shall not be more than sixty (60) nor less than ten (10) days before the date of such meetings, nor more than sixty (60) days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting, provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
6.14 Registered Stockholders. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, to vote as such owner as set forth herein, to hold liable for calls and assessments a person registered on its books as the owner of shares and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Oklahoma.
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6.15 Liens of Shares. No shareholder shall cause or permit to be created a lien or security interest on the shares of stock, except in favor of a lender to the Company and only upon consent of the Board.
6.16 Shareholder’s Agreement Not to Encumber the Corporation. Each shareholder agrees not to transfer all or any part of their part of their shares, or take or omit any action, filing election, or other action which could result in a deemed transfer if such transfer (either considered alone or in the aggregate with prior transfers) that would result in the termination of the Company for federal income tax purposes. In order for the shareholder to identify transfers which could result in such a termination, each shareholder covenants and agrees to immediately inform the Company in writing of any transfers or deemed transfers for purpose of the Code.
ARTICLE VII
GENERAL PROVISIONS
7.1 Dividends. Dividends upon the capital stock of the corporation, if any, subject to the provisions of the certificate of incorporation, may be declared by the Board of Directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property or in shares of the capital stock, subject to the provisions of the certificate of incorporation.
7.2 Reserve for Dividends. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their sole discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purposes as the directors think conducive to the interests of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.
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7.3 Checks. All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time to designate.
7.4 Fiscal Year. The fiscal year of the corporation shall be a calendar year.
7.5. Corporate Seal. The Board of Directors may adopt a corporate seal having inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal, Oklahoma.” The seal may be used by causing it or a facsimile thereof to be impressed or affixed or otherwise reproduced.
7.6. Indemnification. The corporation shall, to the fullest extent authorized under the laws of the State of Oklahoma, as those laws may be amended and supplemented from time to time, indemnify any Officer and/or Director made, or threatened to be made, a party to an action or proceeding, whether criminal, civil, administrative or investigative, by reason of being a director of the corporation or a predecessor corporation or a director or officer of another corporation, if such person served in such position at the request of the corporation; provided, however, that the corporation shall indemnify any such director or officer in connection with a proceeding initiated by such director or officer only if such proceeding was authorized by the Board of Directors of the corporation. The indemnification provided for in this Section 7.6 shall:
(A) not be deemed exclusive of any other rights to which those indemnified may be entitled under these bylaws, agreement or vote of stockholders or disinterested directors or otherwise, both as to action in their official capacities and as to action in another capacity while holding such office,
(B) continue as to a person who has ceased to be a director, and
(C) inure to the benefit of the heirs, executors and administrators of a person who has ceased to be a director. The corporation’s obligations to provide indemnification under this Section 7.6 shall be offer to the extent of any other source of indemnification or any otherwise applicable insurance coverage under a policy maintained by the corporation or any other person.
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Expenses incurred by an Officer or Director of the corporation in defending a civil or criminal action, suit or proceeding by reason of the fact that they are or were an Officer and/or Director of the corporation (or was serving at the corporation’s request as a Director or officer of another corporation) shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such Director to repay such amount if it shall ultimately be determined that they are not entitled to be indemnified by the corporation as authorized by relevant sections of the Act.
Notwithstanding the foregoing, the corporation shall not be required to advance such expenses to an agent who is a party to an action, suit or proceeding brought by the corporation and approved by a majority of the Board of Directors of the corporation that alleges willful misappropriation of corporate assets by such agent, disclosure of confidential information in violation of such agent’s fiduciary or contractual obligations to the corporation or any other willful and deliberate breach in bad faith of such agent’s duty to the corporation or its stockholders. The foregoing provisions of this Section 7.6 shall be deemed to be a contract between the corporation and each Director who serves in such capacity at any time while this bylaw is in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any state of facts then or theretofore existing or any action, suit or proceeding theretofore or thereafter brought based in whole or in part upon any such state of facts. The Board of Directors in its sole discretion shall have power on behalf of the corporation to indemnify any person, other than a Director, made a party to any action, suit or proceeding by reason of the fact that their heir, or the personal representative of their estate, is or was an officer or employee of the corporation.
To assure indemnification under this Article for all Directors, officers and employees who are determined by the corporation or otherwise to be or to have been “Fiduciaries” of any employee benefit plan of the corporation that may exist from time to time, for the purposes of this section 7.6, be interpreted as follows: an “other enterprise” shall be deemed to include such an employee benefit plan, including without limitation, any plan of the corporation that is governed by the Act of Congress entitled “Employee Retirement Income Security Act of 1974”, as amended from time to time; the corporation shall be deemed to have requested a person to serve the corporation as administrator of an employee benefit plan where the performance by such person of his duties to the corporation also imposes duties on, or otherwise involves services by, such person to the plan or participants or beneficiaries of the plan; excise taxes assessed on a person with respect to an employee benefit plan pursuant to such Act of Congress shall be deemed “fines”.
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CERTIFICATE OF INCORPORATION GOVERNS
7.7 Conflicts with Certificate of Incorporation. In the event of any conflict between the provisions of the corporation’s certificate of incorporation and these Second Amended Bylaws, the provisions of the certificate of incorporation shall govern.
ARTICLE VIII
AMENDMENTS
8.1 Alteration. These Bylaws may be altered, amended or repealed, or new Bylaws may be adopted by the stockholders or by the Board of Directors, when such power is conferred upon the Board of Directors by the certificate of incorporation at any regular meeting of the stockholders or of the Board of Directors or at any special meeting of the stockholders or of the Board of Directors if notice of such alteration, amendment, repeal or adoption of new Bylaws be contained in the notice of such special meetings. If the power to adopt, amend or repeal Bylaws is conferred upon the Board of Directors by the certificate of incorporation, it shall not divest or limit the power of the stockholders to adopt, amend or repeal bylaws.
ARTICLE IX
LOANS TO OFFICERS
9.1 Loans to Officers. The corporation may lend money to, or guarantee any obligation of or otherwise assist any officer or other employee of the corporation or of its subsidiaries, including any officer or employee who is Director of the corporation or its subsidiaries, whenever, in the judgment of the Board of Directors, such loan, guarantee or assistance may reasonably be expected to benefit the corporation. The loan, guarantee or other assistance may be with or without interest and may be unsecured or secured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. Nothing in these Bylaws shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the corporation at common law or under any statute.
ARTICLE X
RATIFICATION OF FIRST AMENDED BYLAWS
10. 1 Ratification of First Amended Bylaws. By adopting the foregoing Second Amended Bylaws of Endless Corporation the Board of Directors ratify and those portions of the First Amended Bylaws with respect to the citations contained within those First Amendments that rely on or cite to portions of the Oklahoma General Corporation Act and the present and applicable laws of the State of Oklahoma.
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CERTIFICATE OF SECRETARY OF
ENDLESS CORPORATION, INC.
The undersigned, Travis Dahm, hereby certifies that they are the duly elected and acting Secretary of Endless Corporation, an Oklahoma Corporation (the “Corporation”), and that the Second Amended Bylaws attached hereto constitute the Second Amended Bylaws of said Corporation as duly adopted by Action of the Board of Directors of the Corporation on September 17, 2024.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed his name on September 17, 2024.
| /s/ Travis Dahm | |
| Travis Dahm, Secretary |
Exhibit 4.1
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES OR BLUE SKY LAWS AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND STATE SECURITIES OR BLUE SKY LAWS. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION (“SEC”), ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON THE MERITS OF THIS OFFERING OR THE ADEQUACY OR ACCURACY OF THE SUBSCRIPTION AGREEMENT OR ANY OTHER MATERIALS OR INFORMATION MADE AVAILABLE TO INVESTOR IN CONNECTION WITH THIS OFFERING OVER THE WEB-BASED PLATFORM MAINTAINED BY THE COMPANY. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. THIS INVESTMENT IS SUITABLE ONLY FOR PERSONS WHO CAN BEAR THE ECONOMIC RISK FOR AN INDEFINITE PERIOD OF TIME AND WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. FURTHERMORE, INVESTORS MUST UNDERSTAND THAT SUCH INVESTMENT IS ILLIQUID AND IS EXPECTED TO CONTINUE TO BE ILLIQUID FOR AN INDEFINITE PERIOD OF TIME. NO PUBLIC MARKET EXISTS FOR THE SECURITIES, AND NO PUBLIC MARKET IS EXPECTED TO DEVELOP FOLLOWING THIS OFFERING.
THE COMPANY MAY NOT BE OFFERING THE SECURITIES IN EVERY STATE. THE OFFERING MATERIALS DO NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY STATE OR JURISDICTION IN WHICH THE SECURITIES ARE NOT BEING OFFERED.
THE INFORMATION PRESENTED IN THE OFFERING MATERIALS WAS PREPARED BY THE COMPANY SOLELY FOR THE USE BY PROSPECTIVE INVESTORS IN CONNECTION WITH THIS OFFERING. NO REPRESENTATIONS OR WARRANTIES ARE MADE AS TO THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED IN ANY OFFERING MATERIALS, AND NOTHING CONTAINED IN THE OFFERING MATERIALS IS OR SHOULD BE RELIED UPON AS A PROMISE OR REPRESENTATION AS TO THE FUTURE PERFORMANCE OF THE COMPANY. NEITHER THE DELIVERY NOR THE PURCHASE OF THE SECURITIES SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE OF THE OFFERING MATERIALS.
SUBSCRIPTION AGREEMENT
| To: | Endless Corporation |
| 3810 South Elwood Ave | |
| Tulsa, OK 74107 | |
| Ladies and Gentlemen: |
The undersigned (“Investor”) hereby subscribes for the dollar amount (“Subscription Amount”) of Shares (defined below) of Endless Corporation, an Oklahoma corporation (the “Company”) as indicated on the signature page hereto.
WHEREAS, the Company is offering up to 75,000,000 shares of its Series A preferred stock (the “Shares”) at $1.00 per Share for proceeds up to $75,000,000.00, pursuant to its Form 1-A, as amended and/or supplemented from time to time (“Offering Statement”), filed with the Securities and Exchange Commission (“SEC”) under Tier II of Regulation A promulgated under the Securities Act of 1933, as amended (the “Securities Act”).
NOW, THEREFORE, it is agreed as follows:
1. The Shares will be held by the Investor as indicated on the Subscriber Information Page hereto (e.g., individual, corporation, custodial account, community property, etc.).
2. To induce the Company to accept this subscription, the Investor hereby agrees and represents that:
(a) Concurrent with the execution hereof, the Investor authorizes the Company to request the Subscription Amount from the Investor’s bank or other financial institution. The Investor has transferred funds equal to the Subscription Amount to the Company concurrently with submitting this Subscription Agreement, unless otherwise agreed by the Company.
(b) Within five (5) days after receipt of a written request from the Company, the Investor shall provide such information and execute and deliver such documents as the Company may reasonably request to comply with any and all laws and ordinances to which the Company may be subject, including the securities laws of the United States or any other applicable jurisdiction.
(c) The Company has entered into, and from time to time may enter into, separate subscription agreements with other investors for the sale of Shares to such other investors. The sale of Shares to such other investors and this sale of the Shares shall be separate sales and this Subscription Agreement and the other subscription agreements shall be separate agreements.
(d) The Company may elect at any time to close all or any portion of this offering, once it has raised the minimum offering amount, on various dates (each a “Closing Date”).
(e) The Investor understands the meaning and legal consequences of, and that the Company intends to rely upon, the representations and warranties contained in Sections 2, 3, 4 and 5 hereof, and the Investor hereby agrees to indemnify and hold harmless the Company and each and any manager, member, officer, employee, agent or affiliate thereof from and against any and all loss, damage or liability due to or arising out of a breach of any representation or warranty of the Investor. The representations, warranties and covenants made by Investor herein shall survive the closing or termination of this Subscription Agreement.
3. The Investor hereby represents and warrants that the Investor is a “qualified purchaser,” as defined in Regulation A under the Securities Act, meaning Investor is an “accredited investor” as defined in Rule 501 of Regulation D under the Securities Act and indicated on the U.S. Accredited Investor Certificate attached hereto, or the Subscription Amount does not represent more than 10% of the greater of Investor’s annual income or net worth (for natural persons), or 10% of the greater of annual revenue or net worth at fiscal year-end (for non-natural persons), with net worth calculated in the same manner as for accredited investors under Rule 501 of Regulation D under the Securities Act.
4. The Investor hereby further represents, warrants, acknowledges and agrees, which representations and warranties will be true and correct as of Investor’s Closing Date, that:
(a) The information provided by the Investor to the Company via this Subscription Agreement or otherwise in connection with the purchase of Shares is true and correct in all respects as of the date hereof and the Investor hereby agrees to promptly notify the Company and supply corrective information to the Company if, prior to the consummation of its investment in the Company, any of such information becomes inaccurate or incomplete.
(b) The Investor, if an individual, is over 18 years of age (or older if required by Investor’s state in order to purchase securities), and the address set forth above is the true residence and domicile of the Investor, and the Investor has no present intention of becoming a resident or domiciliary of any other state or jurisdiction. If a corporation, trust, partnership or other entity, the Investor has its principal place of business at the address set forth on the signature page.
(c) If Investor is not a United States person (as defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended), Investor hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Shares or any use of this Subscription Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Shares, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Shares. Investor’s subscription and payment for and continued beneficial ownership of the Shares will not violate any applicable securities or other laws of Investor’s jurisdiction.
(d) The Investor has had an opportunity to ask questions of and receive answers from the Company, or a person or persons acting on its behalf, concerning the Company and the terms and conditions of this investment, and all such questions have been answered to the full satisfaction of the Investor.
(e) Except as set forth in this Subscription Agreement, no representations or warranties have been made to the Investor by the Company or any partner, agent, employee or affiliate thereof.
(f) The Investor has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Company and making an informed investment decision with respect thereto. The Investor has consulted its own advisers with respect to its proposed investment in the Company.
(g) The Investor is not making this subscription in any manner as a representative of a charitable remainder unitrust or a charitable remainder trust.
(h) The Investor has the financial ability to bear the economic risk of the Investor’s investment, including a complete loss thereof, has adequate means for providing for its current needs and possible contingencies and has no need for liquidity in its investment.
(i) The Investor acknowledges and understands that:
| (i) | The Shares are a speculative investment and involve a substantial degree of risk; | |
| (ii) | The Shares are being offered pursuant to Regulation A under the Securities Act and have not been registered or qualified under any state blue sky or securities law; and | |
| (iii) | Any federal income tax treatment which may be currently available to the Investor may be lost through adoption of new laws or regulations, amendments to existing laws or regulations or changes in the interpretations of existing laws and regulations. |
(j) The Investor has carefully reviewed and understands the Company’s Offering Statement, as amended or supplemented, and exhibits included therewith, including the “Risk Factors” contained in the Offering Statement.
(k) The Investor represents and warrants that (i) the Shares are to be purchased with funds that are from legitimate sources in connection with its regular business activities and which do not constitute the proceeds of criminal conduct; (ii) the Shares are not being acquired, and will not be held, in violation of any applicable laws; (iii) the Investor is not listed on the list of Specially Designated Nationals and Blocked Persons maintained by the United States Office of Foreign Assets Control (“OFAC”); and (iv) the Investor is not a senior foreign political figure, or any immediate family member or close associate of a senior foreign political figure.
(l) If the Investor is an individual retirement account, qualified pension, profit sharing or other retirement plan, or governmental plans or units (all such entities are herein referred to as a “Retirement Trust”), the Investor represents that the investment in the Company by the Retirement Trust has been authorized by the appropriate person or persons and that the Retirement Trust has consulted its counsel with respect to such investment and the Investor represents that it has not relied on any advice of the Company or its affiliates in making its decision to invest in the Company.
(m) Neither the execution and delivery of this Agreement nor the fulfillment of or compliance with the terms and provisions hereof, will conflict with, or result in a breach or violation of any of the terms, conditions or provisions of, or constitute a default under, any contract, agreement, mortgage, indenture, lease, instrument, order, judgment, statute, law, rule or regulation to which Investor is subject.
(n) Investor has carefully reviewed all of the Company’s SEC filings filed by the Company since the Company’s Offering Statement was qualified by the SEC and understands the information contained therein. Investor acknowledges that the Company’s SEC filings, including but not limited to the Offering Statement, are available free of charge at the SEC’s web site at www.sec.gov.
(o) Investor has all requisite power and authority to (i) execute and deliver this Agreement, and (ii) to carry out and perform its obligations under the terms of this Agreement. This Agreement has been duly authorized, executed and delivered and constitutes the legal, valid and binding obligation of Investor, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or other laws relating to or affecting the enforcement of creditors’ rights generally in effect from time to time and by general principles of equity.
(p) Investor acknowledges and agrees that there is no ready public market for the Shares and that there is no guarantee that a market for their resale will ever exist. The Company has no obligation to list any of the Shares on any market or take any steps (including registration under the Securities Act or the Securities Exchange Act of 1934, as amended (the “Exchange Act”) with respect to facilitating trading or resale of the Shares. Investor must bear the economic risk of this investment indefinitely and Investor acknowledges that Investor is able to bear the economic risk of losing Investor’s entire investment in the Shares. Investor also understands that an investment in the Company involves significant risks and has taken full cognizance of and understands all of the risk factors relating to the purchase of Shares.
(q) Investor has accurately answered all questions on and completed the signature page hereto and each other schedule and exhibit attached hereto, which are made a part hereof by reference.
(r) It is understood that this subscription is irrevocable by Investor but is not binding on the Company until accepted by the Company by signature of its authorized representative on the acceptance page hereto. The Company may accept or reject this subscription in whole or in part. In the event of rejection of this subscription in its entirety, or in the event the sale of the Shares (or any portion thereof) to Investor is not consummated for any reason, this Subscription Agreement shall have no force or effect with respect to the rejected subscription (or portion thereof), except for Section 2(d) hereof, which shall remain in force and effect.
(s) The Company reserves the right to request such information as is necessary to verify the identity of the Investor. The Investor shall promptly on demand provide such information and execute and deliver such documents as the Company may request to verify the accuracy of the Investor’s representations and warranties herein or to comply with the USA PATRIOT Act of 2001, as amended (the “Patriot Act”), certain anti-money laundering laws or any other law or regulation to which the Company may be subject (the “Relevant Legislation”). In addition, by executing this Subscription Agreement the Investor authorizes the Company to provide the Company’s legal counsel and any other appropriate third party with information regarding the Investor’s account, until the authorization is revoked by the Investor in writing to the Company.
5. The Company represents and warrants to the Investor that:
(a) The Company is duly formed and validly existing in good standing as a public benefit corporation under the laws of the State of Oklahoma and has all requisite power and authority to carry on its business as now conducted.
(b) The execution, delivery and performance by the Company of this Subscription Agreement have been authorized by all necessary action on behalf of the Company, and this Subscription Agreement is a legal, valid and binding agreement of the Company, enforceable against the Company in accordance with its terms.
6. Notwithstanding anything contained in this Subscription Agreement, Investor is not being asked to waive and is not waiving any right to bring a claim against the Company under the Securities Act, Securities Exchange Act of 1934 or similar state law; however, the Company may rely on the representations contained in this Subscription Agreement in defense of such claims, if applicable.
7. Miscellaneous.
(a) All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or persons or entity or entities may require.
(b) This Subscription Agreement is not transferable or assignable by Investor without the prior written consent of the Company.
(c) The representations, warranties and agreements contained herein shall be deemed to be made by and be binding upon Investor and its heirs, executors, administrators and successors and shall inure to the benefit of the Company and its successors and assigns.
(d) None of the provisions of this Subscription Agreement may be waived, changed or terminated orally or otherwise, except as specifically set forth herein or except by a writing signed by the Company and Investor.
(e) The invalidity, illegality or unenforceability of one or more of the provisions of this Subscription Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Subscription Agreement in such jurisdiction or the validity, legality or enforceability of this Subscription Agreement, including any such provision, in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.
(f) This Subscription Agreement constitutes the entire agreement between the Investor and the Company with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings, if any, relating to the subject matter hereof.
(g) The terms and provisions of this Subscription Agreement are intended solely for the benefit of each party hereto and their respective successors and assigns, and it is not the intention of the parties to confer, and no provision hereof shall confer, third-party beneficiary rights upon any other person.
(h) This Subscription Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.
(i) No failure or delay by any party in exercising any right, power or privilege under this Subscription Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law
(j) Notice, requests, demands and other communications relating to this Subscription Agreement and the transactions contemplated herein shall be in writing and shall be deemed to have been duly given if and when (a) delivered personally, on the date of such delivery; or (b) mailed by registered or certified mail, postage prepaid, return receipt requested, on the third day after the posting thereof; or (c) emailed, telecopied or cabled, on the date of such delivery to the respective parties at the addresses set forth on the signature page hereto with respect to the Investor and above with respect to the Company. The Company will not accept notice by email or other electronic communication.
(k) THE COMPANY WILL NOT BE LIABLE TO INVESTOR FOR ANY LOST PROFITS OR SPECIAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES, EVEN IF INVESTOR TELLS THE COMPANY IT MIGHT INCUR THOSE DAMAGES.
(l) Investor agrees that the Company may deliver all notices, tax reports and other documents and information to Investor by email or another electronic delivery method chosen by the Company. Investor agrees to tell the Company right away if Investor changes its email address or home mailing address so the Company can send information to the new address.
(m) Each of the parties hereto agrees that the transaction consisting of this Agreement (and, to the extent permitted under applicable law, each related agreement) may be conducted by electronic means. Each party agrees, and acknowledges that it is such party’s intent, that if such party signs this Agreement (or, if applicable, related agreement) using an electronic signature, it is signing, adopting, and accepting this Agreement or such closing document and that signing this Agreement or such related agreement using an electronic signature is the legal equivalent of having placed its handwritten signature on this Agreement or such related agreement on paper. The use of electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent, communicated, received, or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act and any other applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act.
(n) IN ANY DISPUTE WITH THE COMPANY, INVESTOR AND THE COMPANY AGREE TO WAIVE THE RIGHT TO A TRIAL BY JURY. This means that any dispute will be heard by an arbitrator or a judge, not a jury. This provision will not apply to claims under the Securities Act or Exchange Act.
(o) The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Oklahoma as applied to contracts executed in and performed wholly within the State of Oklahoma, without reference to principles of conflict of laws. This provision will not apply to claims under the Securities Act or Exchange Act. Venue for any dispute arising under this Subscription Agreement shall be in the State of Oklahoma.
[SIGNATURE PAGE FOLLOWS]
ENDLESS CORPORATION
SUBSCRIPTION AGREEMENT SIGNATURE PAGE
The undersigned, desiring to purchase Shares from Endless Corporation, by executing this signature page, hereby executes, adopts and agrees to all terms, conditions and representations of the Subscription Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement on the date set forth below.
___________________
Date
$__________________
Subscription Amount
___________________
No. of Shares
| __________________________________ | ___________________________________ | |
| Name of Investor (Person or Entity) | Name of Joint Investor (if any) | |
| __________________________________ | ___________________________________ | |
| Signature | Additional Signature (if necessary) | |
| __________________________________ | ___________________________________ | |
| Title (if Investor not a natural person) | Title (if necessary) |
| ACCEPTANCE | ||
| The foregoing subscription is hereby accepted this _____ day of ______________, | ||
| 20_______. | ||
| The Subscription in Amount of $ _________________ is accepted for ___________ Shares | ||
| ___________________________________ | ______________________________ | |
| Name of Authorized Agent | Signature of Authorized Agent | |
ACCREDITED INVESTOR CERTIFICATE
The Investor hereby represents and warrants that that the Investor is an Accredited Investor, as defined by Rule 501 of Regulation D under the Securities Act of 1933, and Investor meets at least one (1) of the following criteria (initial all that apply) or that Investor is an unaccredited investor and meets none of the following criteria:
Please initial each applicable statement below
| 1. | ______ | The Investor is a natural person (individual) whose own net worth, taken together with the net worth of the investor’s spouse or spousal equivalent, exceeds $1,000,000. Net worth for this purpose means the difference between total assets and total liabilities, excluding positive equity in the investor’s principal residence, but reduced by (1) any additional indebtedness secured by the investor’s principal residence incurred within the 60 days prior to his/her purchase of Shares (other than debt incurred as a result of the acquisition of the primary residence) and (2) any negative equity in the investor’s principal residence. Assets need not be held jointly to be included in the calculation of net worth, nor do the securities need to be purchased jointly. | |
| 2. | ______ | The Investor is a natural person (individual) who had an individual income in excess of $200,000 (or joint income with the investor’s spouse or spousal equivalent in excess of $300,000) in each of the two previous years and who reasonably expects a gross income in excess of $200,000 (or joint income with the investor’s spouse in excess of $300,000) this year. | |
| 3. | ______ | The Investor is a director or executive officer, or manager of the Company. | |
| 4. | ______ | The Investor is an entity as to which all the equity owners are accredited investors. | |
| 5. | ______ | The Investor is a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring Shares, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D of the Securities Act. | |
| 6. | ______ | The Investor is an organization described in section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, or limited liability company, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000. | |
| 7. | ______ | The Investor is either (i) a bank or any savings and loan association or other institution acting in its individual or fiduciary capacity; (ii) a broker or dealer; (iii) a registered investment adviser or investment adviser relying on the exemption from registering under the Investment Advisers Act of 1940; (iv) an insurance company; (v) an investment company or a business development company under the 1940 Act or a private business development company under the 1940 Act; (vi) a Small Business Investment Company licensed by the U.S. Small Business Administration; (vii) a Rural Business Investment Company as defined in the Consolidated Farm and Rural Development Act; or (viii) an employee benefit plan whose investment decision is being made by a plan fiduciary, which is either a bank, savings and loan association, insurance company, registered investment adviser, or an employee benefit plan whose total assets are in excess of $5,000,000 or a self-directed employee benefit plan whose investment decisions are made solely by persons that are accredited investors. | |
| 8. | ______ | The Investor is an entity not formed for the specific purpose of acquiring the securities offered, owning investments in excess of $5,000,000. | |
| 9. | ______ | The Investor is a natural person holding in good standing a Series 7, 65, or 82 license or one or more professional certifications or designations or credentials from an accredited educational institution that the SEC has designated as qualifying an individual for accredited investor status. The professional certifications or designations or credentials currently recognized by the SEC as satisfying the above criteria will be posted on its website. | |
| 10. | ______ | The Investor is a “family office” as defined in the Investment Advisers Act of 1940 and (i) with assets under management in excess of $5,000,000, (ii) that is not formed for the specific purpose of acquiring the securities offered, and (iii) whose prospective investment is directed by a person who has such knowledge and experience in financial and business matters that such family office is capable of evaluating the merits and risks of the prospective investment; or a “family client” of such family office whose prospective investment is directed by such family office. |
INVESTOR INFORMATION QUESTIONNAIRE
The Investor warrants that the following information is true and correct, and the Company may rely on the following information in deciding whether to accept Investor’s subscription.
EITHER ☐ (i) The Investor is an accredited investor (as that term is defined in Regulation D under the Securities Act because the undersigned meets the criteria set forth above in the Accredited Investor Certificate attached hereto: OR ☐ (ii) The Subscription Amount on the Signature Page hereto (together with any previous investments in the Shares pursuant to this offering) does not exceed 10% of the greater of the Investor’s net worth or annual income for all investments in this offering.
In calculating your net worth: (i) your primary residence shall not be included as an asset; (ii) indebtedness that is secured by your primary residence, up to the estimated fair market value of the primary residence at the time of entering into this Subscription Agreement, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of entering into this Subscription Agreement exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability); and (iii) indebtedness that is secured by your primary residence in excess of the estimated fair market value of the primary residence at the time of entering into this Subscription Agreement shall be included as a liability.
Complete the following for each Investor (include joint-holder if applicable)
Name: ________________________________________________________________
Address: ______________________________________________________________
Phone Number:__________________________________________________________
Email: _________________________________________________________________
Taxpayer ID No.: ____________________________ Date of Birth: ________________
Driver’s License State: __________ DL No.: ________________________
If Investor is an entity, please complete the following:
Note: Representatives of entities who will be responsible for making the decision to purchase the securities must each complete the ABOVE INVESTOR INFORMATION.
Type of Entity: _____________________________ State of Formation: _________________
Date of Formation: ___________________________ Number of Equity Owners: ___________
If Investor is a trust or an estate, please complete the following:
Note: Each trustee or executor must complete THE ABOVE QUESTIONNAIRE.
Type of Entity: ☐ Trust ☐ Estate / ☐ Revocable ☐ Irrevocable
Date of Formation: _________________________ Number of Beneficiaries: __________________
Check this box if the securities will be held in a custodial account: ☐
Type of account: __________________________ Name of account provider: ________________________
Address of account provider: ______________________
Exhibit 6.1
Broker-Dealer Agreement
This agreement (together with exhibits and schedules, the “Agreement”) is entered into by and between Endless Corporation (“Client”) and Dalmore Group, LLC., a Delaware Limited Liability Company (“Dalmore”). Client and Dalmore agree to be bound by the terms of this Agreement, effective as of 09-13-2024 (the “EffectiveDate”):
WHEREAS, Dalmore is a registered broker-dealer providing services in the equity and debt securities market, including offerings conducted via exemptions from registration with the Securities Exchange Commission (“SEC”);
WHEREAS, Client is offering securities directly to the public in an offering exempt from registration under Regulation A (the “Offering”); and
WHEREAS, Client recognizes the benefit of having Dalmore as a broker dealer of record and service provider for investors who participate in the Offering (collectively, the “Investors”).
NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. Appointment, Term, and Termination.
a. Services. Client hereby engages Dalmore to perform the services listed on Exhibit A attached hereto and made apart hereof, in connection with the Offering (the “Services”). Unless otherwise agreed to in writing by the parties, the services to be performed by Dalmore are limited to those Services.
b. Term. The Agreement will commence on the Effective Date and will remain in effect for a period of twelve (12) months and will renew automatically for successive renewal terms of twelve (12) months each unless any party provides notice to the other party of non-renewal at least sixty (60) days prior to the expiration of the current term. If Client defaults in performing the obligations under this Agreement, the Agreement may be terminated (i) upon written notice if Client fails to perform or observe any material term, covenant or condition to be performed or observed by it under this Agreement and such failure continues to be unremedied, (ii) upon written notice, if any material representation or warranty made by Client proves to be incorrect at any time in any material respect, or (iii) upon written notice if Client or Dalmore commences a voluntary proceeding seeking liquidation, reorganization or other relief, or is adjudged bankrupt or insolvent or has entered against it a final and unappealable order for relief, under any bankruptcy, insolvency or other similar law, or either party executes and delivers a general assignment for the benefit of its creditors.
2. Compensation. As compensation for the Services, Client shall pay to Dalmore the following fees:
a. A fee equal to one percent (1%) on the aggregate amount raised by the Client (the “Offering Fee”). The Offering Fee shall only be payable after the Financial Industry Regulatory Authority (“FINRA”) department of Corporate Finance issues a no objection letter (the “No Objection Letter”) for the Offering. Client authorizes Dalmore to deduct the Offering Fee directly from the Client’s third-party escrow or payment account.
b. A one-time expense fee of five thousand ($5,000) for out-of-pocket expenses incurred by Dalmore (the “Expense Fee”). The Expense Fee is due and payable upon execution of this Agreement. The Expense Fee shall cover expenses anticipated to be incurred by the firm such as FINRA filings and any other expenses incurred by Dalmore in connection with the Offering. Notwithstanding the foregoing, Dalmore will refund to the Client any portion of the Expense Fee that remains unused.
c. A one-time consulting fee of twenty thousand ($20,000) (the “Consulting Fee”), due and payable within five (5) days of receipt of the No Objection Letter. In the event the Consulting Fee is not paid by the first closing, Client authorizes Dalmore to deduct the Consulting Fee directly from the Client’s third-party escrow or payment account upon the first closing. Consulting fees payable under this Agreement are not refundable for any reason.
3. Regulatory Compliance
a. Client and all its third-party providers shall at all times (i) maintain all required registrations and licenses, including foreign qualification, if necessary; and (iii) pay all related fees and expenses (including all fees associated with FINRA filings), in each case that are necessary or appropriate to perform their respective obligations under this Agreement.
FINRA Corporate Filing Fee for this $75,000,000, best efforts offering will be $11,750 and will be a pass-through fee payable to Dalmore, from the Client, who will then forward it to FINRA as payment for the filing.
b. Client and Dalmore will each be responsible for supervising the activities and training of their respective sales employees, as well as all of their other respective employees in the performance of functions specifically allocated to them pursuant to the terms of this Agreement.
c. Client and Dalmore agree to promptly notify the other concerning any material communications from or with any Governmental Authority or Self-Regulatory Organization with respect to this Agreement or the performance of its obligations unless such notification is expressly prohibited by the applicable Governmental Authority.
4. Role of Dalmore. Client acknowledges and agrees that Dalmore’s sole responsibilities in connection with an Offering are set forth on Exhibit A, and that Dalmore is strictly acting in an administrative and compliance capacity as the broker dealer of record, and is not being engaged by the Client to act as an underwriter or placement agent in connection with the Offering. Dalmore will use commercially reasonable efforts to perform the Services. Dalmore (i) makes no representations with respect to the quality of any investment opportunity; (ii) does not guarantee the performance of any Investor; (iii) is not soliciting or approaching investors in connection with the Offering, (iv) is not an investment adviser, does not provide investment advice and does not recommend securities transactions, (v) in performing the Services is not making any recommendations to the appropriateness, suitability, legality, validity or profitability of the Offering, and (vi) does not take any responsibility for any documentation created and used in connection with the Offering.
5. Indemnification. Client shall indemnify and hold Dalmore, its affiliates and their representatives and agents harmless from, any and all actual or direct losses, liabilities, judgments, arbitration awards, settlements, damages and costs (collectively, “Losses”), resulting from or arising out of any third party suits, actions, claims, demands or similar proceedings (collectively, “Proceedings”) to the extent they are based upon (i) a breach of this Agreement by Client, (ii) the wrongful acts or omissions of Client, or (iii) the Offering.
6. Confidentiality. For purposes of this Agreement, the term “Confidential Information” means all confidential and proprietary information of a party, including but not limited to (i) financial information, (ii) business and marketing plans, (iii) the names of employees and owners, (iv) the names and other personally-identifiable information of users of the third-party provided online fundraising platform, (v) security codes, and (vi) all documentation provided by Client or Investor, but shall not include (i) information already known or independently developed by the recipient without the use of any confidential and proprietary information, or (ii) information known to the public through no wrongful act of the recipient. During the term of this Agreement and at all times thereafter, neither party shall disclose Confidential Information of the other party or use such Confidential Information for any purpose without the prior written consent of such other party. Without limiting the preceding sentence, each party shall use at least the same degree of care in safeguarding the other party’s Confidential Information as it uses to safeguard its own Confidential Information. Notwithstanding the foregoing, a party may disclose Confidential Information (i) if required to do by order of a court of competent jurisdiction, provided that such party shall notify the other party in writing promptly upon receipt of knowledge of such order so that such other party may attempt to prevent such disclosure or seek a protective order; or (ii) to any applicable governmental authority as required by applicable law. Nothing contained herein shall be construed to prohibit the SEC, FINRA, or other government official or entities from obtaining, reviewing, and auditing any information, records, or data. Client acknowledges that regulatory record- keeping requirements, as well as securities industry best practices, require Dalmore to maintain copies of practically all data, including communications and materials, regardless of any termination of this Agreement.
7. Notices. Any notices required by this Agreement shall be in writing and shall be addressed, and delivered or mailed postage prepaid, or faxed or emailed to the other parties hereto at such addresses as such other parties may designate from time to time for the receipt of such notices. Until further notice, the address of each party to this Agreement for this purpose shall be the following:
If to the Client:
Endless Corporation
10026 S Mingo Rd #232
Tulsa, Oklahoma 74133
Attn: Tim Lozott
Tel: (310) 525-4201
Email: tlozott@endlessbiotech.com
If to Dalmore:
Dalmore Group, LLC
530 7th Avenue, Suite 902
New York, NY 10018
Attn: Etan Butler
Chairman
Tel: 917-319-3000
Email: etan@dalmorefg.com
8. Miscellaneous.
a. ANY DISPUTE OR CONTROVERSY BETWEEN THE CLIENT AND PROVIDER RELATING TO OR ARISING OUT OF THIS AGREEMENT WILL BE SETTLED BY ARBITRATION BEFORE AND UNDER THE RULES OF THE ARBITRATION COMMITTEE OF FINRA.
b. This Agreement is non-exclusive and shall not be construed to prevent either party from engaging in any other business activities.
c. This Agreement will be binding upon all successors, assigns or transferees of Client. No assignment of this Agreement by either party will be valid unless the other party consents to such an assignment in writing. Either party may freely assign this Agreement to any person or entity that acquires all or substantially all of its business or assets. Any assignment by the either party to any subsidiary that it may create or to a company affiliated with or controlled directly or indirectly by it will be deemed valid and enforceable in the absence of any consent from the other party.
d. Neither party will, without prior written approval of the other party, reference such other party in any advertisement, website, newspaper, publication, periodical or any other communication, and shall keep the contents of this Agreement confidential in accordance with the provisions set forth herein.
e. THE CONSTRUCTION AND EFFECT OF EVERY PROVISION OF THISAGREEMENT, THE RIGHTS OF THE PARTIES UNDER THIS AGREEMENT AND ANY QUESTIONS ARISING OUT OF THE AGREEMENT, WILL BE SUBJECT TO THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES TO THE EXTENT SUCH APPLICATION WOULD CAUSE THE LAWS OF A DIFFERENT STATE TO APPLY. The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any party
f. If any provision or condition of this Agreement is held to be invalid or unenforceable by any court, or regulatory or self-regulatory agency or body, the validity of the remaining provisions and conditions will not be affected and this Agreement will be carried out as if any such invalid or unenforceable provision or condition were not included in the Agreement.
g. This Agreement sets forth the entire agreement between the parties with respect to the subject matter hereof and supersedes any prior agreement relating to the subject matter herein. The Agreement may not be modified or amended except by written agreement.
h. This Agreement may be executed in multiple counterparts and by facsimile or electronic means, each of which shall be deemed an original but all of which together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
| Endless Corporation | ||
| By | /S/ Tim Lozott | |
| Name: | Tim Lozott | |
| Its: | Chief Financial Officer |
| Dalmore Group, LLC: | ||
| By | /S/ Ethan Butler | |
| Name: | Etan Butler | |
| Its: | Chairman |
Exhibit A
Services:
i. Review Investor information, including KYC (Know Your Customer) data, AML (Anti-Money Laundering), OFAC compliance background checks (it being understood that KYC and AML processes may be provided by a qualified third party);
ii. Review each Investor’s subscription agreement to confirm such Investor’s participation in the Offering, and provide confirmation of completion of such subscription documents to Client;
iii. Contact and/or notify the issuer, if needed, to gather additional information or clarification on an Investor;
iv. Keep Investor information and data confidential and not disclose to any third-party except as required by regulatory agencies or in our performance under this Agreement (e.g. as needed for AML and background checks);
v. Coordinate with third party providers to ensure adequate review and compliance;
vi. Provide, or coordinate the provision by a third party, of an “invest now” payment processing mechanism, including connection to a qualified escrow agent
Exhibit 6.2
LINE OF CREDIT AGREEMENT
This Line of Credit Agreement (the “Agreement”) is entered into on November 1, 2022 by and between:
Contra Enterprises, a Oklahoma corporation with its principal place of business at 10026 S Mingo Road Tulsa, OK 74133
and
Endless Corporation, a Oklahoma corporation with its principal place of business at 3810 S Elwood Ave Tulsa, OK 741073 (“Borrower”).
RECITALS
WHEREAS, the Lender agrees to provide the Borrower with a revolving line of credit on the terms and conditions set forth herein; and
WHEREAS, the Borrower agrees to utilize the line of credit provided by the Lender in accordance with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto agree as follows:
1. LINE OF CREDIT
1.1 Credit Limit: The Lender agrees to provide the Borrower with a revolving line of credit in an aggregate principal amount not to exceed $250,000 (the “Credit Limit”).
1.2 Purpose: The line of credit shall be used for [purpose, e.g., working capital, business expansion].
1.3 Term_: The line of credit shall be available for an initial term of 2 years, commencing on the date of this Agreement, and may be renewed upon mutual agreement of the parties.
1.4 Advances: The Borrower may request advances under the line of credit from time to time, provided that the total amount of all advances outstanding at any time shall not exceed the Credit Limit.
2. INTEREST AND FEES
2.1 Interest Rate: The outstanding principal amount of the line of credit shall bear interest at a rate of 18% per annum, calculated on the basis of a 360-day year and actual days elapsed.
3. REPAYMENT
3.1 Repayment of Principal:The Borrower shall repay the outstanding principal amount of each advance under the line of credit in accordance with the terms set forth in the advance request, but in any event, no later than the termination date of this Agreement.
3.2 Interest Payments:Interest shall be payable quarterly in arrears on the last day of each quarter.
3.3 Reborrowing: The Borrower may reborrow amounts repaid under the line of credit, subject to the terms and conditions of this Agreement.
4. CONDITIONS PRECEDENT
4.1 The obligation of the Lender to make any advances under the line of credit is subject to the fulfillment of the following conditions precedent:
| ● | Delivery of executed copies of this Agreement and any related documentation. | |
| ● | No default or event of default under this Agreement. | |
| ● | Receipt of all required approvals, consents, and authorizations from third parties and governmental authorities. |
5. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender that:
| ● | It is duly organized, validly existing, and ingood standing under the laws of its jurisdiction. | |
| ● | It has the power and authority to enter into and perform its obligations under this Agreement. | |
| ● | This Agreement constitutes a legal, valid, and binding obligation of the Borrower. |
6. COVENANTS
The Borrower covenants and agrees to:
| ● | Maintain its existence and comply with all applicable laws and regulations. | |
| ● | Use the proceeds of the line of credit for the specified purpose. | |
| ● | Provide the Lender with financial statements and other information as requested. |
7. EVENTS OF DEFAULT
7.1 An event of default shall occur if:
| ● | The Borrower fails to make any payment due under this Agreement. | |
| ● | The Borrower breaches any covenant or representation in this Agreement. | |
| ● | The Borrower becomes insolvent or files for bankruptcy. |
7.2 Upon the occurrence of an event of default, the Lender may:
| ● | Terminate the line of credit. | |
| ● | Declare all outstanding amounts under the line of credit immediately due and payable. |
8. TERMINATION AT WILL BY LENDER
8.1 Termination at Will: The Lender may terminate this Agreement and the line of credit at any time, with or without cause, upon providing 30 days’ prior written notice to the Borrower.
8.2 Upon termination, all outstanding amounts under the line of credit, including principal, interest, and any other fees or charges, shall become immediately due and payable.
9. MISCELLANEOUS
9.1 Amendments: This Agreement may not be amended except in writing signed by both parties.
9.2 Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the State of Oklahoma, without regard to its conflict of laws principles.
9.3 Notices: All notices under this Agreement shall be in writing and delivered to the addresses set forth above or such other address as either party may specify in writing.
9.4 Entire Agreement: This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings, and negotiations.
IN WITNESS WHEREOF, the parties have executed this Line of Credit Agreement as of the date first above written.
| ENDLESS CORPORATION | ||
| By: | /S/ Travis Dahm | |
| Name: | Travis Dahm | |
| Title: | Secretary | |
| CONTRA ENTERPRISES | ||
| By: | /S/ David Winters | |
| Name: | David Winters | |
| Title: | Managing Member | |
Exhibit 6.3
MANAGEMENT SERVICES AGREEMENT BY AND BETWEEN ENDLESS
CORPORATION AND BEST OF HOLLOY, LLC
This Management Service Agreement (“Agreement”) is entered into as of April 1, 2021 (the “Effective Date”) by and among Endless Corporation, a Oklahoma corporation with a business address of 10026 S. Mingo Road #232 Tulsa, Tulsa, OK 74133; and Best of Holloy, LLC, a Oklahoma Limited Liability Company with a business address of 6704 Frankoma Rd Tulsa Oklahoma 74131. Each of are referred to herein as a “Party” and collectively as the “Parties.”
RECITALS
Whereas, Endless Corporation is a corporation organized and operating in good standing under the laws of the State of Oklahoma, which seeks to expand its business management services and research and development within the legal and licensed cannabis market sector.
Whereas, Best of Holloy, LLC is a business entity organized and operating in good standing under the laws of the Oklahoma and holds a licensed legal cannabis cultivator’s license.
Whereas, Endless Corporation operates brands known as Endless Cultivation, Endless Clones, Endless Biotech, and Endless Grow (the “Endless Brand” or “Endless Brands”), and may not have its own licenses to cultivate legalized cannabis, but works with cannabis cultivators and possibly other licenses in order to conduct licensed and compliant delivery activity, including the non-store front wholesale delivery of cannabis products in Oklahoma.
Whereas, Best of Holloy, LLC has its own facility to cultivate cannabis legally in Oklahoma.
Whereas, Endless Corporation has demand for cultivated cannabis products from other cannabis cultivators and other licenses and seeks to conduct licensed and compliant delivery activity, including the non-store front wholesale delivery of cannabis products in Oklahoma.
Whereas, the Parties have determined it is in mutual interest to move forward with such an Agreement as outlined herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows.
MANAGEMENT SERVICES AGREEMENT BY AND BETWEEN ENDLESS CORPORATION AND BEST OF HOLLOY, LLC | 1 |
Section One – Organization
| 1.1. | Best of Holloy, LLC will maintain a facility in Tulsa, Oklahoma where its licensed cultivation operations will be located. |
| 1.2. | Endless Corporation and Best of Holloy, LLC will jointly provide required cultivation equipment, staffing and supplies; including, but not limited to hiring and maintaining operations staff, supplying racks, rolling benches, lighting, heating and air conditioning, environment and humidity control, electrical power, plumbing, water, nutrients, etc. to cultivate cannabis on behalf of the Endless Brandss. |
| 1.3. | Endless Corporation will provide Management Services for a period of five (5) years for the sales of the Endless Brands cultivated at the Best of Holloy, LLC facility unless otherwise terminated pursuant to the terms and conditions of this Agreement. |
| 1.4. | Endless Corporation will facilitate sales of cannabis products cultivated under the Endless Brand or Endless Brands at the Best of Holloy, LLC facility to licensed cultivators and ensure the transfer of product follows OMMA regulations. |
| 1.5. | Endless Corporation will facilitate collection of sales proceeds for sales of the Endless Brands outlined in section 1.4 on behalf of Endless Grow, LLC. |
| 1.6. | Relative to the licensed cultivation, Best of Holloy, LLC will ultimately be responsible for overall operations of the cultivation operations, including, but not limited to: 1) maintaining a license and paying legal and license fees associated with cultivation, and 3) tasks of governance related to Best of Holloy, LLC, and 4) complying with all laws regulating legal cannabis cultivation and supplying required information to OMMA. |
| 1.7. | The Parties acknowledge this Agreement does not outline all required management functions that may fall under a typical management agreement. The Parties agree to work in good faith to periodically workout specific functions that shall be encompassed with the Agreement for the Management Services. |
Section Two - Fees Paid For Management Services
2.1. Endless Corporation, as compensation for the Management Service, will earn a fee equal to reimbursement of costs of goods sold provided by Endless Corporation related to the cultivation of cannabis on behalf of the Endless Brands and the greater of a service fee of $1,000 per month or ninety percent (90%) of the Net Profit of the sale of Endless Brands cultivated at the Best of Holloy, LLC facility. In no event, shall the Management Service Fee exceed gross sales of the Endless Brands sold by Endless Corporation. The fees (the “Monthly Management Service Fees”) will be calculated once per month on a (Monthly) period basis beginning on the first day of each month and ending on the last day of each month. The Monthly Management Services Fee will be invoiced by the 15th of the month following the month end. Gross sales, costs of goods sold, and net profit will be defined as outlined by the relevant Generally Accepted Accounting Practices. (GAAP).
MANAGEMENT SERVICES AGREEMENT BY AND BETWEEN ENDLESS CORPORATION AND BEST OF HOLLOY, LLC | 2 |
2.2. Payment of the Management Service Fees shall be due and payable to Endless Corporation as of the last day of each of month in the month they are invoiced. These Fees shall be booked as revenue by Endless Corporation.
Section Three - Representations of the Parties
3.1. Organization. Each Party that is a corporation or limited liability company is duly organized and incorporated and in good standing in the jurisdiction of its incorporation, has full power and authority to enter into and perform its obligations under this Agreement and the Ancillary Agreements (to which it is a party), and has the requisite approval of its Board of Directors or Managers to enter into this Agreement and the Ancillary Agreements (to which it is a party) and to consummate the transactions contemplated.
3.2. Authority. This Agreement and the Ancillary Agreements are valid, binding, and enforceable obligations of the Parties which have executed such agreements, in accordance with their terms (except that the enforceability of such Party’s obligations thereunder is subject to general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law or in arbitration). All material consents, approvals, authorizations, and other requirements prescribed by any law, rule, or regulation that must be obtained or satisfied by such Party and are necessary for such Party’s execution and delivery of this Agreement and the Ancillary Agreements or the performance of the terms thereof have been obtained and satisfied.
3.3. Binding Agreement. The execution and delivery of this Agreement and the Ancillary Agreements by each Party which has executed such agreements, and the consummation of the transactions contemplated thereby will not result in a breach of any of the terms and provisions of, or constitute a default under, or conflict with, any material agreement, indenture, judgment, decree, order, or award of any court, governmental body, or arbitrator applicable to such Party, including any law, rule or regulation applicable to such Party, or their respective incorporation or organizational documents;
3.4. No Transfer. No transfer of any cannabis licenses are part of this Agreement.
3.5. No Interference. Endless Corporation is under no obligation to any third party that would interfere with its representations, warranties or obligations under this Agreement.
Section Four. Dissolution and Winding Up
4.1. Elective Dissolution – Cessation of Business. The Agreement may be terminated, at the unanimous election of the Endless Corporation Board of Directors as follows:
a) Upon the occurrence of any event, or the existence of any condition beyond the reasonable control of the Parties, which prevents the business operation outlined in this Agreement from functioning in a manner consistent with the purpose of the Agreement or to otherwise to make it possible to carry out its purpose, and such event or condition cannot be corrected within a reasonable time, at a reasonable expense.
MANAGEMENT SERVICES AGREEMENT BY AND BETWEEN ENDLESS CORPORATION AND BEST OF HOLLOY, LLC | 3 |
b) Default Dissolution. The non-defaulting Party may elect to terminate and dissolve the Management Agreement in the event of a default, as specified below, by the other Party. The occurrence of any of the following events shall constitute a default by a Party:
A Party or its Affiliate shall materially default in the observance or performance of
any material agreement, covenant, or condition contained in this Agreement or in any material agreement with or relating to the Management Agreement, and such default shall continue to exist for a period of 30 days after the other Party or the Management Agreement gives such defaulting Party or its Affiliate written notice of such default;
A representation or warranty made by the Party herein or in any Ancillary Agreement (or in any certificate or financial or other statement furnished by such Party to the other in connection therewith) or by the Party’s Affiliate in connection with this Agreement or any Ancillary Agreement shall prove to be false or misleading in any respect which would have a material adverse effect on the Management Agreement or the other Party, and remain uncured for a period of thirty (30) days after the other Party gives the Party or its Affiliate written notice of such default.
c) There is an entry of an order for relief or the institution of any proceedings of any nature under the laws of the United States or any state or any foreign country for relief of debtors wherein an Party is seeking relief as debtor; there is an appointment of a receiver, trustee, custodian or like officer for all or substantially all of the business or assets of such Party on the grounds of insolvency and either the Party has consented to such appointment or has failed to vacate or otherwise cause said appointment to be set aside within 60 days; or there is the institution against such Party of a proceeding under the Federal bankruptcy act or any law of the United States or other jurisdiction now in existence or hereinafter enacted having the same general purpose which proceeding is not dismissed or discharged within 60 days after the institution thereof.
4.2. Winding Up. If the Agreement is to be dissolved, then the Parties shall proceed jointly to wind up the affairs of the Agreement.
4.3. In the event that Best of Holloy, LLC would like to discontinue this Management Services Agreement, it may choose to appoint a third-party manager with 30 days prior notice to Endless Corporation and cease the cultivation operations and sale of Endless Brands.
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Section Five - Audit Rights
Best of Holloy, LLC shall have the right, upon not less than ten (10) business days written notice to Endless Corporation, to audit, examine and make copies of, or extracts from, the books of account and other financial and sales records of the business in order to confirm the calculation revenues, cost of goods sold and net profits. If an audit reveals a discrepancy in the amounts paid and/or reported in respect of the period covered, the Parties will reasonably cooperate to true-up the over- or underpayment within thirty (30) days of finally determining the correct amount of that should have been paid and/or reported.
Section Six - Dispute Resolution
6.1. Initial Procedure. The Management Service Agreement Parties agree to meet informally in an attempt to resolve the dispute amongst themselves acting in good faith. If the Management Service Agreement Parties cannot resolve the dispute, they shall then be required to endeavor to achieve a resolution of such claim, dispute, difference or controversy by non-binding mediation administered by the American Arbitration Association under its Commercial Mediation Procedures, before resorting to arbitration, litigation, or some other dispute resolution procedure.
The Party which elects to seek resolution of such claim, dispute, difference or controversy by mediation shall notify the other Party in writing of such election. Any such notice shall describe in reasonable detail the subject matter of such claim, dispute, difference or controversy, and include a statement of such party’s position and a summary of the arguments supporting that position and the relief sought and shall also identify the names of three (3) prospective, independent, neutral mediators and include a statement of their respective curricula vitae. Each of such prospective mediators shall be a Party of the American Arbitration Association National Roster of Arbitrators and Mediators and have experience in commercial matters, including, if practicable, Management Service Agreements.
Within ten (10) business days following its receipt of such notice, the recipient Party shall submit to the other Party a written response, which response shall include a reasonably detailed statement of the recipient Party’s position regarding the dispute identified by the notifying Party and a summary of the arguments supporting that position. Any such response shall also include the name, selected from the list of prospective mediators provided by the notifying party, of the individual who will act as the mediator in the dispute identified by the notifying party.
The Parties shall meet with the selected mediator in the City of Tulsa, Oklahoma, or such other location as the Management Service Agreement Parties may mutually agree within thirty (30) business days after the recipient Party has received notice of the dispute and shall proceed diligently and in good faith, using commercially reasonable efforts, to resolve the matters in dispute. The mediation shall not continue longer than one (1) hearing day without the written approval of both parties. Neither Party shall be bound by any recommendation of the mediator. One or more senior executives from each party shall personally participate in the mediation proceedings contemplated herein and shall endeavor to achieve a resolution of the dispute through mutual agreement.
MANAGEMENT SERVICES AGREEMENT BY AND BETWEEN ENDLESS CORPORATION AND BEST OF HOLLOY, LLC | 5 |
The senior executives, who shall have full authority to decide on behalf of and bind their respective entities, shall allocate at least one (1) full business day of their time for the mediation process on any such claim, dispute, difference or controversy submitted to mediation hereunder. Such senior executives may be represented by counsel in connection with any such mediation proceedings and, in addition, either party may, with permission of the mediator, bring such additional persons as are needed to respond to questions, contribute information or participate in the negotiations.
The fees and expenses of the mediator and the American Arbitration Association shall be shared equally by both parties. The mediator shall be disqualified as a witness, consultant, expert or counsel for any party with respect to any such claim, dispute, difference or controversy and any related matters. All offers, promises, conduct and statements, whether oral or written, made in the course of the mediation by any of the parties, their agents, employees, experts and attorneys, and by the mediator or any employees of the American Arbitration Association, are confidential, privileged and inadmissible for any purpose, including, but not limited to, impeachment, in any arbitration, litigation or other proceeding related to this Agreement, provided, however, that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the mediation.
At no time prior to or during the mediation shall either party initiate an arbitration or litigation related to this Agreement except to pursue a provisional remedy that is authorized by law or by agreement of the parties. If any such claim, dispute, difference or controversy is not resolved by such mediation, either party may pursue such rights and remedies as may be available to either of them under this Agreement or at law or in equity.
6.2. Injunctive Relief. Nothing in this Article shall preclude any Party, at any time, from taking or requesting any judicial or other authority in any country to order any provisional or conservatory measure, including pre-award attachment, injunction or similar remedy for the presentation of its rights and interests.
6.3. Attorney fees. In any Dispute for which a Party is permitted to bring a court or arbitration proceeding, the prevailing Party shall be entitled to recover its actual attorneys’ fees and court costs from the non-prevailing Party.
MANAGEMENT SERVICES AGREEMENT BY AND BETWEEN ENDLESS CORPORATION AND BEST OF HOLLOY, LLC | 6 |
Section Seven – Governing Law
Governing Law. This agreement shall be deemed to have been entered into in Oklahoma and shall be governed by and construed under the laws of Oklahoma without giving effect to the principles of conflicts of law. Any Dispute for which a Party is permitted to bring a court proceeding shall be instituted in the courts of Oklahoma, and each Party irrevocably submits to the jurisdiction of such courts in any such suit, action, or proceeding. Service of process, summons, notice, or other document by mail to such Party’s address set forth herein shall be effective service of process for any suit, action, or other proceeding brought in any such court.
Section Eight - Indemnification
8.1. Indemnification Obligations. Each Party shall indemnify, defend and hold harmless the other Party and its officers, directors, employees, agents, successors and assigns against all Losses arising out of or resulting from any third-party claim, suit, action or proceeding related to or arising out of or resulting business operations under this Agreement.
8.2. Indemnification Procedure. The indemnitee shall promptly notify the indemnitor in writing of any Action and cooperate with the indemnitee at the indemnitor’s sole cost and expense. The indemnitor shall immediately take control of the defense and investigation of the Action and shall employ counsel of its choice/reasonably acceptable to the indemnitee to handle and defend the Action, at the indemnitor’s sole cost and expense. The indemnitor shall not settle any Action in a manner that adversely affects the indemnitee’s rights without the indemnitee’s prior written consent, which shall not be unreasonably withheld or delayed. The indemnitee’s failure to perform any obligations under this Section shall not relieve the indemnitor of its obligation under this Section except to the extent that the indemnitor can demonstrate that it has been materially prejudiced as a result of the failure. The indemnitee may participate in and observe the proceedings at its own cost and expense with counsel of its own choosing.
Section Nine - Miscellaneous
9.1. Force Majeure. Neither Party shall be liable or responsible to the other Party, nor be deemed to have defaulted under or breached this Agreement, for any failure or delay in fulfilling or performing any term of this Agreement, when and to the extent such failure or delay is caused by:
| a. | acts of God; |
| b. | flood, fire or explosion; |
| c. | war, terrorism, invasion, riot or other civil unrest; |
| d. | embargoes or blockades in effect on or after the date of this Agreement; |
| e. | Regional, national or global emergency; including pandemics ie: COVID-19 |
MANAGEMENT SERVICES AGREEMENT BY AND BETWEEN ENDLESS CORPORATION AND BEST OF HOLLOY, LLC | 7 |
| f. | strikes, labor stoppages or slowdowns or other industrial disturbances; |
each of the foregoing, a “Force Majeure”), in each case, provided that (i) such event is outside the reasonable control of the affected Party; (ii) the affected Party provides prompt notice to the other Party, stating the period of time the occurrence is expected to continue; and (iii) the affected Party uses diligent efforts to end the failure or delay and minimize the effects of such Force Majeure event. A Party may terminate this Agreement if a Force Majeure event affecting the other Party continues substantially uninterrupted for a period of one hundred and twenty (120) Business Days or more. Unless the Party terminates this Agreement pursuant to the preceding sentence, all timelines in the Management Service Agreement Project Plan shall automatically be extended for a period up to the duration of the Force Majeure event.
9.2. Further Assurances. Each Party shall, upon reasonable request, and at the request of the other Party, promptly execute such documents and perform such acts as may be necessary to give full effect to the terms of this Agreement.
9.3. Counterparts. This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which shall constitute but one and the same instrument. Any party to this Agreement may deliver an executed copy hereof or of any of the Related Agreements by facsimile transmission or electronically in Portable Document Format (PDF) to another party hereto or thereto and any such delivery shall have the same force and effect as any other delivery of a manually signed copy of this Agreement or of any of the Related Agreements.
9.4. Publicity. Each Party agrees that press releases and other announcements to be made by the Management Service Agreement with respect to transactions contemplated hereby shall be subject to mutual agreement and prior consent.
9.5. Interpretation. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
9.6. Assignability. This Agreement, and all rights and obligations hereunder, are personal to the Parties and shall not be assigned by any of them voluntarily or by operation of law without the prior written consent thereto by the other Parties hereto. No assignment shall become effective until the prospective transferee has executed and delivered to the Management Service Agreement and undertaking satisfactory to counsel for the other parties in which the transferee agrees to be bound by the terms of this Agreement and all of the Related Agreements as may be appropriate.
9.7. No Waiver. A failure by any party to assert its rights under this Agreement shall not be deemed a waiver of such rights, nor shall any waiver be implied from any act or omission. No waiver by a party with respect to any right shall extend its effect to any subsequent breach of the terms hereof of like or different kind unless such waiver explicitly provides otherwise.
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9.8. Agreements. This Agreement may be altered, modified, or amended only by a written instrument duly executed by each of the Parties.
9.9. Complete Agreement. This Agreement amends and restates, in its entirety, the Management Service Agreement . This Agreement, together with the Disclosure Schedules hereto and the Ancillary Agreements, represent the entire agreement of the parties with respect to the transactions contemplated hereby and shall supersede and replace the existing Management Service Agreement and any and all previous contracts, arrangements, understandings, negotiations and commitments between the parties with respect to the transactions contemplated hereby (whether oral or written); provided, however, that it does not change or otherwise alter or affect any of the Ancillary Agreements except to the extent that the provisions of any such Ancillary Agreements are inconsistent with any of the provisions hereof, in which event the provisions of this Agreement will govern and control.
9.10. Responsibility for Breach by Affiliates. Each Party shall be responsible for and liable for any breach of the provisions of this Agreement or any agreement executed in connection herewith (including, but not limited to, the Related Agreements) by its Affiliates, and any such breach by a Party’s Affiliate shall be considered a breach of this Agreement by such Party.
9.11 Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given in accordance with this Section:
If to Endless Corporation:
Travis Dahm
10026A South Mingo Road #232 Tulsa, Tulsa, OK 74133
Email: tdahm@endlesscultivaiton.com
If to Best of Holloy, LLC:
Gary Holland
6704 Frankoma Rd Tulsa Oklahoma 74131
Email: gholland@bestofholloy.com
Notices sent in accordance with this Section shall be deemed effectively given: (a) when received, if delivered by hand (with written confirmation of receipt); (b) when received, if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail (in each case, with confirmation of transmission), if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the five (5) Business Day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid.
9.12. Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon a determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to affect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the Effective Date.
| For ENDLESS CORPORATION | ||
| X | /s/ Travis Dahm | |
| Travis Dahm | ||
| Secretary | ||
| For Best of Holloy, LLC | ||
| X | /s/ Gary Holland | |
| Managing Member | ||
MANAGEMENT SERVICES AGREEMENT BY AND BETWEEN ENDLESS CORPORATION AND BEST OF HOLLOY, LLC | 9 |
Exhibit 6.4
MANAGEMENT SERVICES AGREEMENT BY AND BETWEEN ENDLESS
CORPORATION AND ENDLESS GROW, LLC
This Management Service Agreement (“Agreement”) is entered into as of May 1, 2023 (the “Effective Date”) by and among Endless Corporation, a Oklahoma corporation with a business address of 10026 S. Mingo Road #232 Tulsa, Tulsa, OK 74133; and Endless Grow, LLC, a Oklahoma Limited Liability Company with a business address of 10026 S. Mingo Road #232 Tulsa, OK 74133. Each of are referred to herein as a “Party” and collectively as the “Parties.”
RECITALS
Whereas, Endless Corporation is a corporation organized and operating in good standing under the laws of the State of Oklahoma, which seeks to expand its business management services and research and development within the legal and licensed cannabis market sector.
Whereas, Endless Grow, LLC is a business entity organized and operating in good standing under the laws of the Oklahoma and holds a licensed legal cannabis cultivator’s license.
Whereas, Endless Corporation operates brands known as Endless Cultivation, Endless Clones, Endless Biotech, and Endless Grow, and may not have its own licenses to cultivate legalized cannabis, but works with cannabis cultivators and possibly other licenses in order to conduct licensed and compliant delivery activity, including the non-store front wholesale delivery of cannabis products in Oklahoma.
Whereas, Endless Grow, LLC does not have its own facility to cultivate cannabis and Endless Corporation has leased a facility where Endless Grow, LLC cultivation operations are located.
Whereas, the Parties have determined it is in mutual interest to move forward with such an Agreement as outlined herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows.
Section One – Organization
| 1.1. | Endless Corporation will maintain a facility in Tulsa, Oklahoma where Endless Grow, LLC licensed cultivation operations will be located. |
| 1.2. | Endless Corporation will provide all required cultivation equipment, staffing and supplies; including, but not limited to hiring and maintaining operations staff, supplying racks, rolling benches, lighting, heating and air conditioning, environment and humidity control, electrical power, plumbing, water, nutrients, etc. to cultivate cannabis on behalf of Endless Grow, LLC. |
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| 1.3. | Endless Corporation will provide Management Services for a period of ten (10) years to Endless Grow, LLC unless otherwise terminated pursuant to the terms and conditions of this Agreement. |
| 1.4. | Endless Corporation will facilitate sales of cannabis products cultivated at the Endless Corporation facility to licensed cultivators and ensure the transfer of product follows OMMA regulations. |
| 1.5. | Endless Corporation will facilitate collection of sales proceeds for sales outlined in section 1.4 on behalf of Endless Grow, LLC. |
| 1.6. | Relative to the licensed cultivation, Endless Grow, LLC will ultimately be responsible for overall operations of the cultivation operations, including, but not limited to: 1) maintaining a license and paying legal and license fees associated with cultivation, and 3) tasks of governance related to Endless Grow, LLC, and 4) complying with all laws regulating legal cannabis cultivation and supplying required information to OMMA. |
| 1.7. | The Parties acknowledge this Agreement does not outline all required management functions that may fall under a typical management agreement. The Parties agree to work in good faith to periodically workout specific functions that shall be encompassed with the Agreement for the Management Services. |
Section Two - Fees Paid For Management Services
2.1. Endless Corporation, as compensation for the Management Service, will earn a fee equal to reimbursement of costs of goods sold related to the cultivation of cannabis on behalf of Endless Grow, LLC and the greater of a service fee of $1,000 per month or ninety percent (90%) of the Net Profit of Endless Grow, LLC. In no event, shall the Management Service Fee exceed gross sales by Endless Corporation. The fees (the “Monthly Management Service Fees”) will be calculated once per month on a (Monthly) period basis beginning on the first day of each month and ending on the last day of each month. The Monthly Management Services Fee will be invoiced by the 15th of the month following the month end. Gross sales, costs of goods sold, and net profit will be defined as outlined by the relevant Generally Accepted Accounting Practices. (GAAP).
2.2. Payment of the Management Service Fees shall be due and payable to Endless Corporation as of the last day of each of month in the month they are invoiced. These Fees shall be booked as revenue by Endless Corporation.
Section Three - Representations of the Parties
3.1. Organization. Each Party that is a corporation or limited liability company is duly organized and incorporated and in good standing in the jurisdiction of its incorporation, has full power and authority to enter into and perform its obligations under this Agreement and the Ancillary Agreements (to which it is a party), and has the requisite approval of its Board of Directors or Managers to enter into this Agreement and the Ancillary Agreements (to which it is a party) and to consummate the transactions contemplated.
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3.2. Authority. This Agreement and the Ancillary Agreements are valid, binding, and enforceable obligations of the Parties which have executed such agreements, in accordance with their terms (except that the enforceability of such Party’s obligations thereunder is subject to general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law or in arbitration). All material consents, approvals, authorizations, and other requirements prescribed by any law, rule, or regulation that must be obtained or satisfied by such Party and are necessary for such Party’s execution and delivery of this Agreement and the Ancillary Agreements or the performance of the terms thereof have been obtained and satisfied.
3.3. Binding Agreement. The execution and delivery of this Agreement and the Ancillary Agreements by each Party which has executed such agreements, and the consummation of the transactions contemplated thereby will not result in a breach of any of the terms and provisions of, or constitute a default under, or conflict with, any material agreement, indenture, judgment, decree, order, or award of any court, governmental body, or arbitrator applicable to such Party, including any law, rule or regulation applicable to such Party, or their respective incorporation or organizational documents;
3.4. No Transfer. No transfer of any cannabis licenses are part of this Agreement.
3.5. No Interference. Endless Corporation is under no obligation to any third party that would interfere with its representations, warranties or obligations under this Agreement.
Section Four. Dissolution and Winding Up
4.1. Elective Dissolution – Cessation of Business. The Agreement may be terminated, at the unanimous election of the Endless Corporation Board of Directors as follows:
a) Upon the occurrence of any event, or the existence of any condition beyond the reasonable control of the Parties, which prevents the business operation outlined in this Agreement from functioning in a manner consistent with the purpose of the Agreement or to otherwise to make it possible to carry out its purpose, and such event or condition cannot be corrected within a reasonable time, at a reasonable expense.
b) Default Dissolution. The non-defaulting Party may elect to terminate and dissolve the Management Agreement in the event of a default, as specified below, by the other Party. The occurrence of any of the following events shall constitute a default by a Party:
A Party or its Affiliate shall materially default in the observance or performance of any material agreement, covenant, or condition contained in this Agreement or in any material agreement with or relating to the Management Agreement, and such default shall continue to exist for a period of 30 days after the other Party or the Management Agreement gives such defaulting Party or its Affiliate written notice of such default;
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A representation or warranty made by the Party herein or in any Ancillary Agreement (or in any certificate or financial or other statement furnished by such Party to the other in connection therewith) or by the Party’s Affiliate in connection with this Agreement or any Ancillary Agreement shall prove to be false or misleading in any respect which would have a material adverse effect on the Management Agreement or the other Party, and remain uncured for a period of thirty (30) days after the other Party gives the Party or its Affiliate written notice of such default.
c) There is an entry of an order for relief or the institution of any proceedings of any nature under the laws of the United States or any state or any foreign country for relief of debtors wherein an Party is seeking relief as debtor; there is an appointment of a receiver, trustee, custodian or like officer for all or substantially all of the business or assets of such Party on the grounds of insolvency and either the Party has consented to such appointment or has failed to vacate or otherwise cause said appointment to be set aside within 60 days; or there is the institution against such Party of a proceeding under the Federal bankruptcy act or any law of the United States or other jurisdiction now in existence or hereinafter enacted having the same general purpose which proceeding is not dismissed or discharged within 60 days after the institution thereof.
4.2. Winding Up. If the Agreement is to be dissolved, then the Parties shall proceed jointly to wind up the affairs of the Agreement.
4.3. In the event that Endless Grow, LLC would like to discontinue this Management Services Agreement, it may choose to appoint a third-party manager with 30 days prior notice to Endless Corporation and relocation of its license and cultivation operations.
Section Five - Audit Rights
Endless Grow, LLC shall have the right, upon not less than ten (10) business days written notice to Endless Corporation, to audit, examine and make copies of, or extracts from, the books of account and other financial and sales records of the business in order to confirm the calculation revenues, cost of goods sold and net profits. If an audit reveals a discrepancy in the amounts paid and/or reported in respect of the period covered, the Parties will reasonably cooperate to true-up the over- or underpayment within thirty (30) days of finally determining the correct amount of that should have been paid and/or reported.
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Section Six - Dispute Resolution
6.1. Initial Procedure. The Management Service Agreement Parties agree to meet informally in an attempt to resolve the dispute amongst themselves acting in good faith. If the Management Service Agreement Parties cannot resolve the dispute, they shall then be required to endeavor to achieve a resolution of such claim, dispute, difference or controversy by non-binding mediation administered by the American Arbitration Association under its Commercial Mediation Procedures, before resorting to arbitration, litigation, or some other dispute resolution procedure.
The Party which elects to seek resolution of such claim, dispute, difference or controversy by mediation shall notify the other Party in writing of such election. Any such notice shall describe in reasonable detail the subject matter of such claim, dispute, difference or controversy, and include a statement of such party’s position and a summary of the arguments supporting that position and the relief sought and shall also identify the names of three (3) prospective, independent, neutral mediators and include a statement of their respective curricula vitae. Each of such prospective mediators shall be a Party of the American Arbitration Association National Roster of Arbitrators and Mediators and have experience in commercial matters, including, if practicable, Management Service Agreements.
Within ten (10) business days following its receipt of such notice, the recipient Party shall submit to the other Party a written response, which response shall include a reasonably detailed statement of the recipient Party’s position regarding the dispute identified by the notifying Party and a summary of the arguments supporting that position. Any such response shall also include the name, selected from the list of prospective mediators provided by the notifying party, of the individual who will act as the mediator in the dispute identified by the notifying party.
The Parties shall meet with the selected mediator in the City of Tulsa, Oklahoma, or such other location as the Management Service Agreement Parties may mutually agree within thirty (30) business days after the recipient Party has received notice of the dispute and shall proceed diligently and in good faith, using commercially reasonable efforts, to resolve the matters in dispute. The mediation shall not continue longer than one (1) hearing day without the written approval of both parties. Neither Party shall be bound by any recommendation of the mediator. One or more senior executives from each party shall personally participate in the mediation proceedings contemplated herein and shall endeavor to achieve a resolution of the dispute through mutual agreement.
The senior executives, who shall have full authority to decide on behalf of and bind their respective entities, shall allocate at least one (1) full business day of their time for the mediation process on any such claim, dispute, difference or controversy submitted to mediation hereunder. Such senior executives may be represented by counsel in connection with any such mediation proceedings and, in addition, either party may, with permission of the mediator, bring such additional persons as are needed to respond to questions, contribute information or participate in the negotiations.
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The fees and expenses of the mediator and the American Arbitration Association shall be shared equally by both parties. The mediator shall be disqualified as a witness, consultant, expert or counsel for any party with respect to any such claim, dispute, difference or controversy and any related matters. All offers, promises, conduct and statements, whether oral or written, made in the course of the mediation by any of the parties, their agents, employees, experts and attorneys, and by the mediator or any employees of the American Arbitration Association, are confidential, privileged and inadmissible for any purpose, including, but not limited to, impeachment, in any arbitration, litigation or other proceeding related to this Agreement, provided, however, that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the mediation.
At no time prior to or during the mediation shall either party initiate an arbitration or litigation related to this Agreement except to pursue a provisional remedy that is authorized by law or by agreement of the parties. If any such claim, dispute, difference or controversy is not resolved by such mediation, either party may pursue such rights and remedies as may be available to either of them under this Agreement or at law or in equity.
6.2. Injunctive Relief. Nothing in this Article shall preclude any Party, at any time, from taking or requesting any judicial or other authority in any country to order any provisional or conservatory measure, including pre-award attachment, injunction or similar remedy for the presentation of its rights and interests.
6.3. Attorney fees. In any Dispute for which a Party is permitted to bring a court or arbitration proceeding, the prevailing Party shall be entitled to recover its actual attorneys’ fees and court costs from the non-prevailing Party.
Section Seven – Governing Law
Governing Law. This agreement shall be deemed to have been entered into in Oklahoma and shall be governed by and construed under the laws of Oklahoma without giving effect to the principles of conflicts of law. Any Dispute for which a Party is permitted to bring a court proceeding shall be instituted in the courts of Oklahoma, and each Party irrevocably submits to the jurisdiction of such courts in any such suit, action, or proceeding. Service of process, summons, notice, or other document by mail to such Party’s address set forth herein shall be effective service of process for any suit, action, or other proceeding brought in any such court.
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Section Eight - Indemnification
8.1. Indemnification Obligations. Each Party shall indemnify, defend and hold harmless the other Party and its officers, directors, employees, agents, successors and assigns against all Losses arising out of or resulting from any third-party claim, suit, action or proceeding related to or arising out of or resulting business operations under this Agreement.
8.2. Indemnification Procedure. The indemnitee shall promptly notify the indemnitor in writing of any Action and cooperate with the indemnitee at the indemnitor’s sole cost and expense. The indemnitor shall immediately take control of the defense and investigation of the Action and shall employ counsel of its choice/reasonably acceptable to the indemnitee to handle and defend the Action, at the indemnitor’s sole cost and expense. The indemnitor shall not settle any Action in a manner that adversely affects the indemnitee’s rights without the indemnitee’s prior written consent, which shall not be unreasonably withheld or delayed. The indemnitee’s failure to perform any obligations under this Section shall not relieve the indemnitor of its obligation under this Section except to the extent that the indemnitor can demonstrate that it has been materially prejudiced as a result of the failure. The indemnitee may participate in and observe the proceedings at its own cost and expense with counsel of its own choosing.
Section Nine - Miscellaneous
9.1. Force Majeure. Neither Party shall be liable or responsible to the other Party, nor be deemed to have defaulted under or breached this Agreement, for any failure or delay in fulfilling or performing any term of this Agreement, when and to the extent such failure or delay is caused by:
| a. | acts of God; |
| b. | flood, fire or explosion; |
| c. | war, terrorism, invasion, riot or other civil unrest; |
| d. | embargoes or blockades in effect on or after the date of this Agreement; |
| e. | Regional, national or global emergency; including pandemics ie: COVID-19 |
| f. | strikes, labor stoppages or slowdowns or other industrial disturbances; |
each of the foregoing, a “Force Majeure”), in each case, provided that (i) such event is outside the reasonable control of the affected Party; (ii) the affected Party provides prompt notice to the other Party, stating the period of time the occurrence is expected to continue; and (iii) the affected Party uses diligent efforts to end the failure or delay and minimize the effects of such Force Majeure event. A Party may terminate this Agreement if a Force Majeure event affecting the other Party continues substantially uninterrupted for a period of one hundred and twenty (120) Business Days or more. Unless the Party terminates this Agreement pursuant to the preceding sentence, all timelines in the Management Service Agreement Project Plan shall automatically be extended for a period up to the duration of the Force Majeure event.
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9.2. Further Assurances. Each Party shall, upon reasonable request, and at the request of the other Party, promptly execute such documents and perform such acts as may be necessary to give full effect to the terms of this Agreement.
9.3. Counterparts. This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which shall constitute but one and the same instrument. Any party to this Agreement may deliver an executed copy hereof or of any of the Related Agreements by facsimile transmission or electronically in Portable Document Format (PDF) to another party hereto or thereto and any such delivery shall have the same force and effect as any other delivery of a manually signed copy of this Agreement or of any of the Related Agreements.
9.4. Publicity. Each Party agrees that press releases and other announcements to be made by the Management Service Agreement with respect to transactions contemplated hereby shall be subject to mutual agreement and prior consent.
9.5. Interpretation. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
9.6. Assignability. This Agreement, and all rights and obligations hereunder, are personal to the Parties and shall not be assigned by any of them voluntarily or by operation of law without the prior written consent thereto by the other Parties hereto. No assignment shall become effective until the prospective transferee has executed and delivered to the Management Service Agreement and undertaking satisfactory to counsel for the other parties in which the transferee agrees to be bound by the terms of this Agreement and all of the Related Agreements as may be appropriate.
9.7. No Waiver. A failure by any party to assert its rights under this Agreement shall not be deemed a waiver of such rights, nor shall any waiver be implied from any act or omission. No waiver by a party with respect to any right shall extend its effect to any subsequent breach of the terms hereof of like or different kind unless such waiver explicitly provides otherwise.
9.8. Agreements. This Agreement may be altered, modified, or amended only by a written instrument duly executed by each of the Parties.
9.9. Complete Agreement. This Agreement amends and restates, in its entirety, the Management Service Agreement . This Agreement, together with the Disclosure Schedules hereto and the Ancillary Agreements, represent the entire agreement of the parties with respect to the transactions contemplated hereby and shall supersede and replace the existing Management Service Agreement and any and all previous contracts, arrangements, understandings, negotiations and commitments between the parties with respect to the transactions contemplated hereby (whether oral or written); provided, however, that it does not change or otherwise alter or affect any of the Ancillary Agreements except to the extent that the provisions of any such Ancillary Agreements are inconsistent with any of the provisions hereof, in which event the provisions of this Agreement will govern and control.
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9.10. Responsibility for Breach by Affiliates. Each Party shall be responsible for and liable for any breach of the provisions of this Agreement or any agreement executed in connection herewith (including, but not limited to, the Related Agreements) by its Affiliates, and any such breach by a Party’s Affiliate shall be considered a breach of this Agreement by such Party.
9.11 Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given in accordance with this Section:
If
to Endless Corporation:
Travis Dahm
10026A South Mingo Road #232 Tulsa, Tulsa, OK 74133
Email: tdahm@endlesscultivaiton.com
If to Endless Grow, LLC:
Travis Dahm
10026A South Mingo Road #232 Tulsa, Tulsa, OK 74133
Email: tdahm@endlesscultivaiton.com
Notices sent in accordance with this Section shall be deemed effectively given: (a) when received, if delivered by hand (with written confirmation of receipt); (b) when received, if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail (in each case, with confirmation of transmission), if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the five (5) Business Day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid.
9.12. Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon a determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to affect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the Effective Date.
| For ENDLESS CORPORATION | ||
| X | /s/ Travis Dahm | |
| Travis Dahm | ||
| Secretary | ||
| For Endless Grow, LLC | ||
| X | /s/ Travis Dahm | |
| Travis Dahm | ||
| Managing Member | ||
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Exhibit 6.5
EXECUTIVE CONSULTING AGREEMENT
THIS AGREEMENT is dated March 06, 2024.
BETWEEN:
Endless Corporation, an Oklahoma Corporation with an office in Tulsa, Oklahoma
(hereinafter referred to as the “Company”)
AND:
Green Life Consultants, LLC (“GLC”), a Nevada Limited Liability Company with an office in Las Vegas, Nevada
(hereinafter referred to as the “Consultant”)
WHEREAS:
| A. | The Company wishes to engage the Consultant to provide certain management services pursuant to the terms of this Agreement and the Consultant wishes to provide the services referred to herein. |
NOW THEREFORE in consideration of the premises, the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the parties hereby covenant and agree as follows:
| 1. | DEFINITIONS |
For the purposes of this Agreement, the following terms shall have the following meanings:
| 1.1 | “Board” means Board of Directors of the Company. |
| 1.2 | “Cause” includes: |
| (a) | the failure of the Consultant to properly carry out the Services; |
| (b) | the failure of the Consultant to adhere to the policies of the Company after notice by the Company of the failure to do so and an opportunity for the Consultant to correct the failure within 30 days from the date of receipt of such notice; |
| EXECUTIVE CONSULTING AGREEMENT ENDLESS CORPORATION AND GREEN LIFE CONSULTANTS |
| (c) | the Consultant’s dishonesty, misappropriation, willful misconduct, theft, fraud or gross negligence in the carrying out of the Consultant’s duties, or involving the property, business, reputation or affairs of the Company; |
| (d) | the Consultant’s conviction of a criminal or other statutory offence; |
| (e) | the Consultant’s breach of a fiduciary duty owed to the Company; |
| (f) | the Consultant’s refusal to follow the lawful written direction of the board of directors of the Company; or, |
| (g) | any material breach by the Consultant of the obligations, representations, warranties, and covenants contained in this Agreement or the Confidentiality Agreement. |
| 1.3 | “CFO” means Chief Financial Officer. |
| 1.4 | “ Payment and Compensation Clause” means the payments set out in Schedule “A” to this Agreement and forming part of this Agreement. |
| 1.5 | “Consulting Termination Date” means the date of termination of this Agreement pursuant to Section 4. |
| 1.6 | “Disability” means the mental or physical state of the Consultant such that the Consultant has been unable as a result of illness, disease, mental or physical disability or similar cause to fulfil the Consultant’s obligations under this Agreement either for any consecutive six-month period or for any period of 12 months (whether or not consecutive) in any consecutive 24-month period. |
| 1.7 | “Services” has the meaning ascribed to it in Section 2 |
| 2. | SERVICES TO BE PROVIDED |
| 2.1 | The Company hereby engages the Consultant to provide consulting services (the “Services”), to be provided exclusively by the Consultant to the Company and such subsidiaries as the Company has and may have, as follows. |
| (a) | The Consultant will provide Mr. Tim Lozott’s services as CFO of the Company who shall have such authority and power, and responsibilities, as are customary for the position of CFO in corporations of similar size as the Company. |
| (b) | Mr. Lozott shall be responsible for the accounting and finances of the Company and its subsidiaries. |
| PAGE 2 OF 12 |
| EXECUTIVE CONSULTING AGREEMENT ENDLESS CORPORATION AND GREEN LIFE CONSULTANTS |
| (c) | In connection with the Company’s Initial Regulation A Offering, these Services shall include, but are not limited to initiation, negotiation, review, execution, and approval of contracts related to the Regulation A Offering and required services in order to effect such an offering. These contracts may be with other consultants and third parties, with the Consultant having all related authority to initiate, review, negotiate, and execute said contracts on behalf of the Company, and the right and ability on behalf of the Company to terminate and enter into contracts for legal, accounting, marketing, and for any and all other service contracts for services related to the Regulation A Offering. |
| (d) | The Consultant’s duties will be otherwise as determined by the Board from time to time consistent with the foregoing. |
| (e) | The Consultant may seek and obtain advice and recommendation to agreements as necessary for the financial betterment of the Company from the CEO but shall operate at the direction of the Board. |
| (f) | The Consultant may assist the Company with capital raise(s), but continued services under this Agreement shall not in any way be contingent on Consultant’s ability to raise Capital for the Company. However, fees and renumeration related to capital raise services shall not be included in the Consulting Fees of this agreement and will be contracted under a separate consulting services agreement. |
| 2.2 | The Company will provide the Consultant with the appropriate level of resources and information to perform such duties, and the Consultant shall be reimbursed for fees and expenses approved by the Board. |
| 2.3 | The Consultant will report directly to the Board and will keep the Board informed of all matters concerning the Services as requested by the Board from time to time. |
| 2.4 | The Consultant acknowledges that he may be required to travel to provide the Services. |
| 2.7 | The Consultant recognizes and understands that, in performing the duties and responsibilities of CFO as provided in this Agreement, he will occupy a position of fiduciary trust and confidence, pursuant to which he will develop and acquire experience and knowledge with respect to all aspects of the way the Company’s business is conducted. Without limiting the generality of the foregoing, Mr. Lozott must observe appropriate standards of loyalty, good faith, and avoidance of conflicts of duty and self-interest. It is the intent and agreement of the parties that such knowledge and experience will be used solely and exclusively in furtherance of the business interests of the Company and not in any manner that would be detrimental to it. |
| PAGE 3 OF 12 |
| EXECUTIVE CONSULTING AGREEMENT ENDLESS CORPORATION AND GREEN LIFE CONSULTANTS |
| 3. | REMUNERATION, EXPENSES AND VACATION |
| 3.1 | Until the termination of this Agreement, the Company will pay the Consultant the Consulting Fees for services rendered. |
| 3.2 | The Consultant will be responsible for all costs associated with the performance of the Services, except as provided in Section 3.3. |
| 3.3 | The Consultant must maintain detailed expense records and will be reimbursed by the Company for the following: |
| (a) | All reasonable travel expenses incurred by the Consultant in providing the Services; and, |
| (b) | Reasonable out of pocket documented costs incurred by the Consultant actually, necessarily, and properly while providing the Services. |
| 3.4 | The Consultant will be eligible to participate in any stock option plan and periodic bonuses granting options to purchase common shares of the Company as determined by the Board. |
| 3.5 | The Consultant and Mr. Lozott shall not be entitled to an annual paid vacation or employee benefits. |
| 4. | TERM AND TERMINATION |
| 4.1 | The effectiveness of this Agreement and the commencement of its term are subject to and conditional upon approval of his Agreement by the Company’s Board of Directors. |
| 4.2 | The term of this Agreement is indeterminate. |
| 4.3 | The Company and the Consultant acknowledge and agree that this Agreement may be terminated in the following ways: |
| (a) | Until the end of the first twelve months following the Date of this Agreement: |
| (i) | by the Consultant on one (1) month prior notice to the Company; |
| (ii) | by the Company on one (1) month prior notice to the Consultant; |
| PAGE 4 OF 12 |
| EXECUTIVE CONSULTING AGREEMENT ENDLESS CORPORATION AND GREEN LIFE CONSULTANTS |
| (c) | Following the end of the first twelve months following the Date of this Agreement: |
| (i) | by the Consultant on three (3) months prior notice to the Company; |
| (ii) | by the Company on three (3) months prior notice to the Consultant, or payment in lieu thereof at mutual agreement of the parties; |
| (iii) | by the Company for the reason of the death or Disability of Mr. Lozott without prior notice and without further obligation to the Consultant. |
| 4.4 | Upon termination of this Agreement for any reason, the Consultant must, upon receipt of any portion of the Consulting Fees then due and owing together with all expenses allowed under Section 3.3, promptly deliver as soon as reasonably possible the following in accordance with the direction of the Company: |
| (a) | A final accounting, reflecting the balance of expenses allowed under Section 3.3 but not invoiced by the Consultant while providing the Services as of the date of termination; |
| (b) | All documents in the custody of the Consultant that are the property of the Company, including but not limited to all books of account, correspondence and contracts; and, |
| (c) | All equipment and any other property in the custody of the Consultant that are the property of the Company. |
| 5. | INDEPENDENT CONTRACTOR RELATIONSHIP |
| 5.1 | It is expressly agreed that the Consultant is acting as an independent contractor in performing the Services under this Agreement and that the Consultant is not an employee of the Company. |
| 5.2 | The Consultant need only devote such portion of the Consultant’s time to provision of the Services as is necessary to complete the Services. Consultant may from time to time take reasonable personal time off for sickness, family leave, jury duty, holidays, vacation and the like. |
| 5.3 | The Consultant is not precluded from acting in any other capacity for any other person, firm or company provided that such other work does not, in the reasonable opinion of the Board, conflict with the Consultant’s duties to the Company. |
| PAGE 5 OF 12 |
| EXECUTIVE CONSULTING AGREEMENT ENDLESS CORPORATION AND GREEN LIFE CONSULTANTS |
| 5.4 | The Consultant represents and warrants that: |
| (a) | It has the right to perform the Services without violation of its obligations to others; |
| (b) | It is not bound by any agreement or obligation to any other party that will conflict with its obligations as a consultant of the Company; and |
| (c) | All advice, information, and documents provided by the Consultant to the Company while providing the Services may be used fully and freely by the Company. |
| 5.5 | Subject to section 3, The Consulting Fees will be the whole of the Consultant’s compensation for providing the Services. For clarity: unless required by law, the Company will not pay any contribution to a pension plan, retirement plan, employment insurance or federal and state withholding taxes, or provide any other financial contributions or benefits with regard to the Consultant. |
| 5.6 | The Consultant is solely responsible for the Consultant’s payment of taxes and similar requirements under the federal or state laws, while it is providing the Services. |
| 5.7 | The Company shall indemnify the Consultant, to the maximum extent permitted by applicable law and the Company’s constating documents against all claims, losses, damages, liabilities, costs, charges and expenses, including legal fees, incurred or sustained by the Consultant in connection with any action, suit or proceeding to which he may be made a party by reason of being an officer, director, employee or consultant of the Company or of any subsidiary or affiliate of the Company or any other corporation for which the Consultant serves in good faith as an officer, director, or employee at the Company’s request. This Section will survive termination of this Agreement. |
| 6. | GENERAL PROVISIONS |
| 6.1 | Assignability |
| (a) | No party may assign this Agreement without the written agreement of the other party. |
| (b) | In the event that the Company completes a business combination with a successor company or changes its name, this Agreement will continue in full force and effect between the Consultant and the newly amalgamated or named company (the “New Company”). The Company must make it a condition of any such transaction that the New Company agrees to be bound by this Agreement. |
| PAGE 6 OF 12 |
| EXECUTIVE CONSULTING AGREEMENT ENDLESS CORPORATION AND GREEN LIFE CONSULTANTS |
| 6.2 | Authorization. The Company represents and warrants that it is fully authorized and empowered to enter into this Agreement and perform its obligations hereunder, and that performance of this Agreement will not violate any agreement between the Company and any other person, firm or organization nor breach any provisions of its constating documents or governing legislation. |
| 6.3 | Consultant’s Obligations |
| (a) | No Conflicting Obligations. The Consultant will not, in the performance of the Services: |
| (i) | improperly bring to the Company or use any trade secrets, confidential information, or other proprietary information of any other party; or |
| (ii) | knowingly infringe the property rights of any other party. |
| (b) | Non-Solicitation. The Consultant agrees that, for a one (1) year period following the Consulting Termination Date, he must not, without the consent of the Board by resolution, engage in any solicitation of: (i) clients or customers of the Company to purchase products or services provided by the Company; or (ii) the retainer of employees or independent contractors of the Company. |
| (c) | Confidential information. |
| (ii) | Use of Confidential Information by Consultant |
The use of Confidential Information by the Consultant and Company pursuant to this Agreement is governed by the Confidentiality Agreement.
| (iii) | Restriction on Advertising and Publicity by Consultant |
The Consultant agrees it shall not make reference to the Company, its subsidiaries or affiliates, or any registered trade names or trademarks of any of the Company, its subsidiaries or affiliates, in any advertising, publication, promotional material or publicity release without the prior consent of the Company.
| (d) | Consent to Enforcement. The Consultant confirms that all restrictions in this Section 6.3 and the Confidentiality Agreement are reasonable and valid, and any defenses to the strict enforcement thereof by the Company are waived by the Consultant. Without limiting the generality of the foregoing, the Consultant hereby consents to an injunction being granted by a court of competent jurisdiction in the event that the Consultant is in breach of any of the provisions stipulated in this Section 6.3 or the Confidentiality Agreement. |
| PAGE 7 OF 12 |
| EXECUTIVE CONSULTING AGREEMENT ENDLESS CORPORATION AND GREEN LIFE CONSULTANTS |
The Consultant hereby expressly acknowledges and agrees that injunctive relief is an appropriate and fair remedy in the event of a breach of any of the said provisions.
| (e) | The Consultant’s obligations contained in this Section 6.3 and the Confidentiality Agreement will remain in effect in accordance with their terms and continue in full force and effect despite any breach, repudiation, alleged breach or repudiation, or termination of this Agreement. |
| 6.4 | No other Agreement. This Agreement cancels and supersedes any existing agreement or other arrangement between the Company and the Consultant and contains the entire agreement and obligation between the parties with respect to their respective subject matter. |
| 6.5 | Amendment or Waiver. |
| (a) | This Agreement may not be amended unless such amendment is agreed to in writing and signed by the Consultant and an authorized officer of the Company. |
| (b) | No waiver by either party hereto of any breach by the other party hereto of any condition or provision contained in this Agreement to be performed by such other party will be deemed a waiver of any similar or dissimilar condition or provision. Any waiver must be in writing and signed by the Consultant or an authorized officer of the Company, as the case may be. |
| 6.6 | Compliance with Policies and Laws. The Consultant agrees to abide by all the Company’s policies and procedures, including without limitation, the Company’s code of conduct. The Consultant also agrees to abide by all laws applicable to the Company, in each jurisdiction that it does business, including without limitation securities and regulations governing publicly traded companies. |
| 6.7 | Governing Law. This Agreement will be construed and interpreted in accordance with the laws of the Oklahoma and the federal laws of the United States applicable therein and will be treated in all respects as an Oklahoma contract. The parties hereto irrevocably attorn to the courts of competent jurisdiction of Oklahoma. |
| PAGE 8 OF 12 |
| EXECUTIVE CONSULTING AGREEMENT ENDLESS CORPORATION AND GREEN LIFE CONSULTANTS |
| 6.8 | Notices. Any notice required or permitted to be given under this Agreement must be in writing and will be properly given if delivered to the following: |
| (a) | in the case of the Company: |
Endless Corporation
3810 South Elwood Ave Tulsa, OK 74107
| (b) | in the case of the Consultant: |
Green Life Consulting, LLC
309 Finsbury Ct Las Vegas, NV 89148
| (c) | in the case of Mr. Lozott: |
Tim Lozott
309 Finsbury Ct Las Vegas, NV 89148
Any notice so given will be conclusively deemed to have been given or made on the day of delivery, if delivered, or if faxed, upon the date shown on the delivery receipt recorded by the sending facsimile machine.
| 6.9 | Severability. If any provision contained herein is determined to be void or unenforceable for any reason, in whole or in part, it must not be deemed to affect or impair the validity of any other provision contained herein and the remaining provisions will remain in full force and effect to the fullest extent permissible by law. |
| 6.10 | Further Assurances. Each of the Consultant and the Company will do, execute and deliver, or will cause to be done, executed and delivered, all such further acts, documents and things as the Consultant or the Company may reasonably require for the purposes of giving effect to this Agreement. |
| 6.11 | Counterparts/Facsimile Execution. This Agreement may be executed in several counterparts and each counterpart will together constitute one original document. |
| 6.12 | References. All references to “Section” or “Schedule” in this Agreement refer to sections or schedules of this Agreement. |
| PAGE 9 OF 12 |
| EXECUTIVE CONSULTING AGREEMENT ENDLESS CORPORATION AND GREEN LIFE CONSULTANTS |
IN WITNESS WHEREOF the parties have executed this Agreement as of the date first above written.
Endless Corporation |
||
| Per: | /s/ Travis Dahm | |
| Travis Dahm, Secretary | ||
| Green Life Consulting, LLC | ||
| Per: | /s/ Tim Lozott | |
| Tim Lozott, Managing Member | ||
| PAGE 10 OF 12 |
| EXECUTIVE CONSULTING AGREEMENT ENDLESS CORPORATION AND GREEN LIFE CONSULTANTS |
Schedule “A”
| 1. | Payment and Compensation Clause |
| a. Monthly Compensation Company agrees to pay Consultant a total monthly fee of $20,000 (twenty thousand U.S. dollars) for 80 hours of work each month. |
| b. Bank Transfer Payment Company shall pay $10,000 (ten thousand U.S. dollars) of the monthly fee via bank transfer to Consultant’s designated account on or before the first day of each month. |
| c. Stock Payment The remaining $10,000 (ten thousand U.S. dollars) of the monthly fee shall be paid in the form of Restricted Stock, with each share priced at the company’s current valuation of $20,000,000 and share structure, which is equivalent to $200 (two hundred dollars) per share. Therefore, Consultant will receive up to 50 shares of such stock for each month of Services. These shares shall have a value of no less than $1,500,000 (one million five hundred thousand U.S.dollars) upon any conversion or exchange of shares required to reorganize and/or restructure the Company’s share structure in preparation for the Company’s initial Regulation A offering. These shares will be delivered to Consultant upon the Securities and Exchange Commission (SEC) review of the Company’s Form 1-A and Offering Statements are declared qualified by the SEC with a notice of qualification being issued. |
| d. Stock Payment Limitation and Compensation Adjustment The stock-based portion of the compensation described in subsection (c) is limited to a maximum of six months. After the sixth month, the entire monthly fee will be paid in cash via bank transfer or other mutually agreed-upon methods. Therefore, starting from the seventh month, the monthly cash compensation will increase to $20,000 (twenty thousand dollars) and be paid on or before the first day of each month. If this Agreement is extended or renewed beyond the six-month period, the compensation structure will continue with the adjusted cash-only payment. |
| 2. | Stock Bonus Clause |
a. Stock Bonus Award Consultant is eligible to earn Restricted Stock equivalent to $1,500,000.00 (one million five hundred thousand U.S.dollars) (“Restricted Bonus Stock Award”), with the stock price per share to be equal to the price per share determined in the Company’s initial Regulation A Offering, and subject to meeting the milestones outlined in this clause.
| PAGE 11 OF 12 |
| EXECUTIVE CONSULTING AGREEMENT ENDLESS CORPORATION AND GREEN LIFE CONSULTANTS |
b. Milestone Achievements and Bonus Shares Consultant will receive Restricted Bonus Stock Awards upon the Company achieving the following fundraising milestones from its initial Regulation A offering:
$18,750,000 Fundraising Milestone: Consultant will be awarded $375,000 (three hundred seventy-five thousand U.S. dollars) worth of Restricted Stock Shares, with a price per share equal to the price per share determined in the Company’s Initial Regulation A Offering.
$37,500,000 Fundraising Milestone: Consultant will be awarded $375,000 (three hundred seventy-five thousand U.S. dollars) worth of Restricted Stock Shares, with a price per share equal to the price per share determined in the Company’s Initial Regulation A Offering.
$56,250,000 Fundraising Milestone: Consultant will be awarded $375,000 (three hundred seventy-five thousand U.S. dollars) worth of Restricted Stock Shares, with a price per share equal to the price per share determined in the Company’s Initial Regulation A Offering.
$75,000,000 Fundraising Milestone: Consultant will be awarded $375,000 (three hundred seventy-five thousand U.S. dollars) worth of Restricted Stock Shares, with a price per share equal to the price per share determined in the Company’s Initial Regulation A Offering.
c. Timing of Restricted Bonus Stock Award and Restrictions Upon achievement of each fundraising milestone in the Company’s initial Regulation A Offering, the Restricted Bonus Stock Award will be issued to Consultant within 14 days. However, these Restricted Bonus Stock Award Shares cannot be sold, transferred, or otherwise liquidated for a period of 24 months from the date of issuance. After the 24-month restriction period, the shares become freely tradable, subject to any additional conditions outlined in the Company’s stock plan or as required by applicable laws and regulations.
Consultant agrees to comply with all applicable rules and regulations regarding the Restricted Bonus Shares, including but not limited to any requirements outlined in the Company’s stock plan or by regulatory authorities. If the Agreement is terminated for cause before the end of the 24-month restriction period, the Restricted Shares will vest to the Consultant pro-rata, based on the number of months of service performed during the restriction period, and consultant forfeits any rights to the unvested shares.
| PAGE 12 OF 12 |
Exhibit 6.6
CORPORATE ADVISORY, BRAND MARKETING & CONSULTING
ENGAGEMENT AGREEMENT
FEBRUARY 25, 2024
Travis Dahm
Endless Corporation
3810 Elwood Ave.
Tulsa Oklahoma
United States
Endless Corporation:
Numbers Matter Capital Inc. (“NMC”) is pleased to provide Corporate Advisory, Brand Marketing and Consulting Services, to Endless Corporation, an Oklahoma corporation (the “Company”) on the terms and conditions in this engagement agreement (the “Agreement”).
| 1. | Engagement; Nature of Services. |
NMC will act as the Company’s corporate advisor and consultant with respect to the matters listed below and may perform such services as it deems reasonably necessary.
| a) | Consultancy and Corporate Advisory Services. NMC shall provide the Company with general corporate advisory services in connection with consulting, Regulation A Tier 2 capital raises & marketing matters such as: |
| i) | Assisting the Company with the formation, structuring and completion of an SEC Qualified “Regulation A Tier 2” capital raise offering of up to $75 Million over a 12-month period to Accredited & Non-Accredited Investors and the listing process to a National Exchange in the United States (OTCPK, OTCQB, OTCQX, NYSE AMERICAN, NASDAQ or NYSE), if applicable; |
| ii) | Introduction to Investment Banking firms, Private Equity Firms, Family Offices and Investors focused on servicing emerging growth companies, if applicable; | |
| iii) | Rendering advice related to capital structures, capital market opportunities, asset allocation and exit strategies; | |
| iv) | Evaluate any potential capital raise transaction proposals on behalf of the Company and provide guidance with respect to cap structure and valuation; | |
| v) | Assisting in the preparation of a corporate presentation; | |
| vi) | Assisting in the preparation of a comprehensive due diligence package that can be used for potential M&A, Joint-Venture or Capital Raise transactions; | |
| vii) | Working with the Company to develop financial growth optimization strategies; | |
| viii) | Coordinate the engagement of corporate communications, branding and marketing services, Influencer(s), Celebrity Endorsement(s), Brand Ambassador(s) and investor relations professionals; if applicable | |
| ix) | Introduction to pertinent equity research professionals; if applicable | |
| x) | Assist in getting the Company to attend various investor conferences; | |
| xi) | Assist in drafting of press releases; and | |
| xii) | Make ourselves available for corporate and/or board meetings. |
NMC shall render such other Consulting services including Investor Relations Services, Brand Marketing Services and Corporate Advisory Services as may from time to time be agreed upon by NMC and the Company. The fees payable for any such other services shall be customary fees for Consulting Services, Investor Relations Services, Branding and Marketing Services and Corporate Advisory Service fees to be mutually agreed upon based upon the nature and type of services to be rendered.
NMC shall not be required to undertake duties not reasonably within the scope of the Consulting and Corporate Advisory Services contemplated by this Agreement or to spend any minimum amount of time in providing such services. NMC does not provide tax, accounting or legal advice.
| 2. | Term; Termination of Engagement: |
The term of this engagement shall be for (36) thirty-six months from the date of this Agreement or until the Company is qualified for (3) three Regulation A Tier 2 capital raises the “Term”. Nevertheless, NMC engagement may be terminated by either the Company or NMC at any time upon 30 days’ written notice to that effect to the other party. If the company terminates this Agreement without Cause (as defined herein), NMC shall be paid its full Consulting services & Corporate Advisory services Fee under Section 4. “Cause” means a material breach of this Agreement by NMC; which breach shall not have been cured within a reasonable period following written notice of the breach to NMC by the Company.
The provisions of this Section 2 and of Sections 5, 6 and 7 of this Agreement shall survive termination.
| 3. | Information: |
The Company will furnish to NMC such information as NMC reasonably requests in connection with performing its services. In performing its services, NMC will use and rely upon the information provided by the Company as well as publicly available information regarding the Company. Accordingly, NMC shall be entitled to assume and rely upon the accuracy and completeness of all such information and is not required to independently verify any information, whether publicly available or otherwise furnished to it, including any financial information, forecasts or projections. For any financial forecasts and projections made available to NMC, NMC may assume that the forecasts and projections have been reasonably prepared on a basis reflecting the best currently available estimates and judgments of management of the Company. If, in NMC’s opinion after completing its due diligence process, the condition or prospects of the Company, financial or otherwise, are not substantially as represented or do not fulfill NMC’s expectations, NMC shall have the sole discretion to determine whether to continue to participate in a Corporate Advisory assignment.
| 4. | Fees: |
For the services to be rendered by NMC, the Company shall pay NMC a Corporate Advisory Consulting Fee, as set forth below.
| a) | NMC Corporate Advisory & Consulting Fee: Upon execution of this Agreement, the Company shall pay to NMC a fee (“Corporate Advisory & Consulting Fee”) of $200,000.00 (two hundred thousand dollars) base fee in (1) payment as defined below; |
| b.) | $200,000.00: Consultant Retainer – retainers for Consulting services, airfare, travel, hotels, car rentals and other undefined expenses. All Fee(s) to be sent by Bank Wire to NMC’s attorney IOTA Trust Account of record. | |
| c.) | Any additional associated costs associated with the preparation of the Reg A Tier 2 offering of the company including any additional attorney overage(s) charge(s) for “out of scope” work not yet defined, Broker Dealer sponsorship fee(s), Transfer Agent sponsorship fee(s), Edgar Agency sponsorship fees, Finra fees, BlueSky Filings and all additional associated costs in the Company’s’ REG A Tier 2 preparation are not to exceed USD $100,000.00 (One hundred thousand dollars) billed to the company. | |
| d.) | Additional Regulation A Tier 2 cost(s), including Credit Card Processing fee(s), Alternative Trading Platform fee(s) Broker Dealer commission & other undefined fees and any additional attorney fees beyond the scope of the REG A Tier 2 preparation are the sole responsibility of the company and are not included in this Corporate Advisory & Consulting engagement agreement |
| e.) | In addition, NMC will earn compensation of a Non-Restricted Stock Award of (6) six million “Regulation A Tier 2” Preferred Class shares and an additional (20) Twenty million “two-year restricted” Common Class shares of Endless Corporation (“Stock Award”) for services performed in connection with Consultancy, Corporate Advisory, Corporate Communications, Branding and Marketing Advisory Services for the Company’s initial Regulation A Tier 2 offering. The company is responsible for all the hard costs and expenses of branding and marketing services and other related services by third party vendors to be billed to the company. The Stock Award will be issued after the Securities and Exchange Commission (SEC) review of the Company’s Form 1-A and the Offering Statement are declared qualified by the SEC with a notice of qualification being issued. The Stock Award will be vested to NMC for the common shares shall be (10) ten million shares upon the first SEC qualification, and (5) five million shares upon the second SEC qualification, (5) five million shares upon the third SEC qualification. Any unvested Stock Award shares shall be returned to the Company. NMC may at its election sell some or all its vested shares in the Company’s initial Regulation A Offering, any future offerings, to other individuals or parties, or may sell shares back to the Company with a stock buy-back agreement. |
| 5. | Expenses: |
NMC’s associated cost(s) & fees for retained Securities Attorney(s) Deemed “Endless Corporation retained counsel are attorneys who will draft the Regulation A Tier2 Circular for submittal of “Qualified Status” for approval by the (SEC) Securities and Exchange Commission. GAAP qualified Accountant(s) & Financial Auditors also deemed “Endless Corporation accountants” will prepare the audited financials necessary for a Qualified approval status. Both attorney(s) and accountant(s) fees are included as part of the fee payment(s) excluding any overage charges and or fees described herein in section 4 of this agreement.
| a) | Additional Expenses: |
NMC will submit for pre-approval with the Company any expenses related to this engagement (including travel expenses, printing, branding and marketing services and other miscellaneous, etc.) incurred in connection with this Corporate Advisory assignment or otherwise arising out of this agreement. Once approved, the Company shall reimburse NMC for all expenses due to it within 10 business days of the written receipt.
| 6. | Scope of Responsibility: |
NMC shall not be liable to the Company, or to any other person claiming through the Company, for any claim, loss, damage, liability, or expense suffered by the Company or any such other person arising out of or related to NMC’s engagement except for any claim, loss, damage, liability or expense that arises out of, or is based upon, any action or failure to act by NMC that constitutes bad faith, willful misconduct or gross negligence.
| 7. | Indemnification; Contribution: |
| a) | The Company agrees to indemnify and hold harmless NMC and its officers, directors, shareholders, employees, affiliates, agents and each person who controls NMC (and any of its affiliates) within the meaning of Section 15 of the Securities Act of 1933, as amended or Section 20 of the Securities Exchange Act of 1934, as amended (each an “Indemnified Person”), to the fullest extent lawful, against all claims, losses, damages, liabilities, and expenses (Including all fees and disbursements of counsel and other expenses reasonably Incurred in connection with the investigation of, preparation for and defense of any pending or threatened claim, action, proceeding, inquiry, investigation or litigation, to which an Indemnified Person may become subject) (collectively, “Damages”) incurred that arise out of or are related to any actual or proposed Corporate Advisory assignment or NMC ‘s engagement under this Agreement. However, this indemnification shall not include any Damages that are found in a final judgment by a court of competent jurisdiction to have resulted from the bad faith, willful misconduct or gross negligence of NMC. | |
| b) | If the indemnity above is unavailable or insufficient to hold harmless an Indemnified Person, then the Company shall contribute to amounts paid or payable by an Indemnified Person for Damages in such proportion as appropriately reflects the relative benefits received by the Company on the one hand and NMC on the other. If applicable law does not permit allocation solely based on benefits, then such contribution shall be made in such proportion as appropriately reflects both the relative benefits and relative faults of the parties and other relevant equitable considerations. However, in no event shall NMC ‘s aggregate contributions for Damages exceed the amount of fees received by NMC under this Agreement. |
| c) | Promptly after receipt by NMC of notice of any claim or the commencement of any action for which an Indemnified Person may be Entitled to indemnity, NMC shall promptly notify the Company of such claim or the commencement of such against the Indemnified Person that would give rise to indemnification. However, any delay or failure to notify the Company will not relieve the Company of its indemnity obligation except to the extent it is materially prejudiced by such delay or failure. The Company may participate in the defense of the claim and shall assume the defense of the claim and shall pay as incurred the fees and disbursements of counsel for the proceeding. In any proceeding where the Company declines to assume the defense or the Company’s counsel is deemed to have a conflict of interest, the Indemnified Person shall have the right to retain its own counsel which shall be reasonably satisfactory to NMC. The Company shall pay the fees and expenses of such counsel as Incurred. However, the Company shall not be responsible for the fees and expenses of more than one counsel (other than counsel of record) for all Indemnified Persons. | |
| d) | The Company will not enter into any waiver, release or settlement for any threatened or pending claim, action, proceeding or investigation or settle any related litigation for which indemnification may be sought under this Agreement (whether or not Indemnified Persons are a formal party to the litigation), unless the waiver, release or settlement includes an unconditional release of each Indemnified Person from any and all liability arising out of the threatened or pending claim, action, proceeding, investigation or litigation. |
| 8. | Representations and Warranties; Covenants: |
The Company represents warrants and covenants as follows:
| a) | All information provided by the Company will be accurate and complete in all material respects and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading considering the circumstances under which such statements are made. | |
| b) | During the term of this Agreement, the Company will (a) promptly notify NMC of any material development in the operations, financial condition or prospects of the Company or its assets, whether or not in the ordinary course of business, (b) provide copies of its annual reports and other financial reports at the earliest time the Company makes them available to others, and (c) provide such other information concerning the business and financial condition of the Company and its assets as NMC may from time to time reasonably request. |
| c) | The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated in this Agreement have been duly authorized by all necessary corporate action and will not conflict with or constitute a breach of, or default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant to, any contract, indenture, mortgage, loan agreement, note lease or other instrument to which the Company is bound, or to which any property or assets of the Company are subject. |
| 9. | Reliance on Others: |
The Company confirms that it will rely on its own counsel and accountants for legal, tax and accounting advice. If applicable
| 10. | No Rights in Shareholders, etc: |
NMC has been engaged only by the Company, and this engagement is not deemed to be on behalf of and is not intended to confer rights upon any shareholder, partner or other owner of the Company or any other person not a party to this Agreement as against NMC. Unless otherwise expressly agreed, no one other than the Company is authorized to rely upon this engagement of NMC or to rely upon any statements, advice, opinions or conduct by NMC.
| 11. | Independent Contractor; No Fiduciary Duty; Non-Exclusive Services. |
NMC’s role is that of an independent contractor and nothing in this Agreement is intended to create or shall be construed as creating a fiduciary relationship between the Company and NMC. NMC and its affiliates provide financial consulting services, investment banking referral services, and consulting advice to others. Nothing in this Agreement shall limit or restrict NMC in providing services to others, except as such services may relate to matters concerning the Company’s business and properties.
| 12. | Use of Name: |
The Company shall not utilize the name Numbers Matter Capital Inc. (NMC) or any derivative thereof, in any publication, announcement or otherwise, without the prior written consent of NMC.
| 13. | Public Disclosure: |
After receiving cost estimates, the Company agrees to distribute at its expense any pre-approved press release via Businesswire National Circuit or a similar news service concerning the Company and its business, as NMC may reasonably request, so long as the press release is compliant with US, Canadian and International securities laws.
| 14. | Advertising: |
NMC may, at its option and expense:(a) place advertisements in financial and other newspapers and journals (including electronic versions) describing its services to the Company and (b) use the Company’s corporate logo in such advertising or related branding and marketing services materials (including electronic versions) concerning NMC’s services to the Company. If requested by NMC, the Company shall include a mutually acceptable reference to NMC in any press release or other public announcement made by the Company regarding a Corporate Advisory assignment.
| 15. | Governing Law; Jurisdiction: |
This Agreement shall be governed by and construed in all respects under the laws of the State of Texas, without reference to its conflict of law’s provisions. Any right to trial by jury for any claim, action, proceeding or litigation arising out of this Agreement or any of the matters contemplated in this Agreement is waived by the Company and the Placement Agent. The parties hereby irrevocably and unconditionally: submit to the jurisdiction of the federal and state courts located in the state of Texas, for any dispute related to this Agreement or any of the matters contemplated hereby; consent to service of process by registered or certified mail return receipt requested or by any other manner provided by applicable law; and waive any right to claim that any action, proceeding or litigation so commenced has been commenced in an inconvenient forum.
| 16. | Miscellaneous: |
Nothing in this Agreement is intended to obligate NMC to provide any services other than as set forth above. This Agreement may be executed in counterparts, in PDF and/or email, each of which shall be deemed an original, but which together shall be considered a single instrument. This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements and understandings (both written and oral) of the parties with respect to the subject matter of this Agreement. This Agreement cannot be amended or otherwise modified except in writing signed by the parties. The provisions of this Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company and NMC.
| 17. | Entire Agreement: |
This Agreement contains the entire agreement between the parties hereto with respect to the transactions contemplated herein. All other negotiations and agreements (written or oral) between the parties are superseded by this Agreement and there are no representations, warranties, or understandings or agreements other than those expressly set forth herein. The language of all parts of this Agreement will in all cases be construed as a whole in accordance with its fair meaning and not strictly for or against either party hereto.
Sincerely,
| COMPANY NAME. | NUMBERS MATTER LLC | |||
| By: | /s/ Travis Dahm | By: | /s/ John Howes | |
| Travis Dahm | John R. Howes ESQ | |||
| CEO | CONSULTANT & CORPORATE ADVISORY | |||
| Date: | March -27th- 2024 | Date: | March -27th- 2024 | |
Exhibit 11.1
To Whom It May Concern:
We consent to the incorporation by reference in the Registration Statement of Endless Corporation on Form 1-A of our report dated November 6, 2024, on our audits of the financial statements as of December 31, 2023, and 2022, and for each of the years then ended, which report is included in this Annual Report on Form 1-A to be filed on or about January 16, 2025.
We also consent to the references to us under the headings “Experts” in such Registration Statement.
Very truly yours,
/s/ Bush & Associates CPA LLC (PCAOB 6797)
Henderson, Nevada
January 16, 2025
179 N. Gibson Rd., Henderson, NV 89014 ● 702.703.5979 ● www.bushandassociatescpas.com
Exhibit 12.1
Endless Corporation
10026 S. Mingo Rd #232
Tulsa, OK 74133
January 16, 2025
Re: Form 1-A Offering Statement
Ladies and Gentlemen:
Dodson Robinette, PLLC dba Crowdfunding Lawyers has acted as counsel to Endless Corporation, an Oklahoma limited liability company (the “Company”), in connection with the preparation and filing with the Securities and Exchange Commission of a Regulation A Offering Statement on Form 1-A (the “Offering Statement”) relating to the sale by the Company of up to 75,000,000 shares of series A preferred stock (“Shares”) for total potential gross proceeds of $75,000,000. This opinion is being delivered in accordance with the requirements of Part III of Form 1-A.
In rendering this opinion, we have examined (i) the Offering Statement and the exhibits thereto, (ii) certain resolutions of the manager of the Company, relating to the issuance and sale of the Shares, and (iii) such other records, instruments and documents as we have deemed advisable in order to render this opinion. In such examination, we have assumed the genuineness of all signatures, the legal capacity of all natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified, conformed or photostatic copies and the authenticity of the originals of such latter documents. As to certain factual matters, we have relied upon resolutions and representations of the manager of the Company and have not sought independently to verify such matters.
Based on the foregoing, we are of the opinion that when sold and issued against payment therefor as described in the Offering Statement, the Shares will be validly authorized, legally issued, fully paid and non-assessable.
Our opinion herein is expressed solely with respect to the Oklahoma General Corporation Act, as currently in effect, and we express no opinion as to whether the laws of any jurisdiction are applicable to the subject matter hereof. No opinion is being rendered hereby with respect to the truth, accuracy or completeness of the Offering Statement or any portion thereof.
The information set forth herein is as of the date hereof. We assume no obligation to supplement this opinion letter if any applicable law changes after the date hereof or if we become aware of any fact that might change the opinion expressed herein after the date hereof. Our opinion is expressly limited to the matters set forth above, and we render no opinion, whether by implication or otherwise, as to any other matters relating to the Company, the Shares, the Offering Statement, or the circular included therein.
We hereby consent to the filing of this opinion as an exhibit to the Offering Statement. In giving such consent, we do not believe that we are “experts” within the meaning of such term as used in the Securities Act of 1933 or the rules and regulations of the Commission issued thereunder with respect to any part of the Offering Statement, including this opinion as an exhibit or otherwise.
| Sincerely, | |
| /s/ Dodson Robinette, PPLC | |
| DODSON ROBINETTE, PLLC |
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