AVANT DIAGNOSTICS, INC. (OTCMKTS:AVDX) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement
Series A Private Placement
On February 8, 2019, Avant Diagnostics, Inc. (the “Company”) entered into a securities purchase agreement (collectively, the “Series A Purchase Agreement”) with Infusion 51a, L.P., an entity controlled by Jeff Stephens and Scott VanderMeer, a director and interim chief financial officer of the Company, respectively (“Infusion”), to which the Company sold an aggregate of thirty-five thousand (35,000) shares of its series A convertible preferred stock (the “Series A Preferred Stock”) for aggregate gross proceeds of $35,000. The terms of the Series A Preferred Stock were included in Items 3.02, 3.03 and Item 5.03 of the Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on May 25, 2018 and are incorporated herein by reference.
For a period of one year from the date of final closing of the offering, Investors holding at least a majority of the Series A Preferred Stock outstanding from time to time, together with the holders of series C preferred stock, shall have the right to cause the Company to sell for cash to such Investors on a pro rata basis up to an aggregate of $1,000,000 of common stock in one or more transactions at a 10% discount to the average closing price of the common stock (as reported for consolidated transactions with respect to securities listed on the principal national securities exchange on which the Common Stock is listed or admitted to trading or, if the Common Stock is not listed or admitted to trading on any national securities exchange, then in the over-the-counter market, as reported on any tier maintained by the OTC Markets Group, Inc.) for the thirty (30) consecutive trading days immediately prior to (and including) the Friday preceding the date of such purchase or purchases.
At any time until the Company’s 2019 annual meeting of stockholders, the holders of the Series A Preferred Stock, jointly and severally, shall have the exclusive right, voting separately as a class, to elect up to six (6) directors (each director, an “Investor Director”). An Investor Director so elected shall serve for a term of one year and until his successor is elected and qualified. An Investor Director may, during his or her term of office, be removed at any time, with or without cause, by and only by the affirmative vote, at a special meeting of holders of Series A Preferred Stock called for such purpose. Any vacancy created by such removal may also be filled at such meeting or by such consent for the remainder of such initial one-year term. At any time until the Company’s 2019 annual meeting of stockholders, Infusion shall have the right to elect up to three (3) directors (each director, an “Infusion Director”). An Infusion Director so initially elected shall serve for a term of one-year and until his successor is elected and qualified. Any vacancy in the position of an Infusion Director may be filled only by the affirmative vote of Infusion. An Infusion Director may, during his or her term of office, be removed at any time, with or without cause. Any vacancy created by such removal may also be filled by Infusion for the remainder of such initial one-year term.
As soon as practicable after the final closing of the offering, the Company shall use commercially reasonable efforts to take all necessary actions and to obtain such approvals of the Company’s stockholders as may be required to, among other things, undertake a reverse stock split (the “Reverse Split”) before the exchange of the Series A Preferred Stock into shares of common stock (the “Stockholder Approval”). Until the consummation of the Reverse Split, the Investors appointed AVDX Investors Group LLC (the “Investor Representative”) as its attorney-in-fact for the purpose of carrying out the Stockholder Approval.
Until the consummation of the Reverse Split, upon any issuance by the Company of common stock or Common Stock Equivalents (as defined in the Series A Certificate of Designations) for cash consideration, indebtedness or a combination of units thereof (a “Subsequent Financing”), each Qualifying Purchaser (as defined below) shall have the right to participate in up to an amount of the Subsequent Financing equal to 50% of the Subsequent Financing on the same terms, conditions and price provided for in the Subsequent Financing. For purposes herein, “Qualifying Purchaser” means an Investor with a subscription amount of at least $150,000.
Beginning on the six month anniversary of the final closing of the offering, on or prior to the sixtieth (60th) calendar day after the date of receipt of written demand from Investors holding at least 51% of Registrable Securities (as defined in the Series A Purchase Agreement), the Company shall prepare and file with the SEC a registration statement covering the resale of all of the Registrable Securities that are not then registered on an effective registration statement.
The foregoing information is a summary of the agreements involved in the transaction described above, is not complete, and is qualified in its entirety by reference to the full text of such agreements, copies of which are attached hereto as Exhibit 3.1 and Exhibit 10.1 and incorporated herein by reference. Readers should review such agreements for a complete understanding of the terms and conditions associated with this transaction.
Series D Private Placement
On March 22, 2019, the Company entered into a securities purchase agreement (the “Series D Purchase Agreement”) with an accredited investor (the “Series D Investor”) to which the Company sold an aggregate of twenty-five thousand (25,000) shares of its series D convertible preferred stock (the “Series D Preferred Stock”) for aggregate gross proceeds of $25,000. The terms of the Series D Preferred Stock are set forth under Items 3.02, 3.03 and 5.03 below.
As soon as practicable after the final closing of the offering, the Company shall use commercially reasonable efforts to take all necessary actions and to obtain Stockholder Approval to, among other things, undertake the Reverse Split. Until the consummation of the Reverse Split, the Series D Investor appointed the Investor Representative as its attorney-in-fact for the purpose of carrying out the Stockholder Approval.
Beginning on the six month anniversary of the final closing of the offering, on or prior to the sixtieth (60th) calendar day after the date of receipt of written demand from holders of at least 51% of Registrable Securities (as defined in the Series D Purchase Agreement), the Company shall prepare and file with the SEC a registration statement covering the resale of all of the Registrable Securities that are not then registered on an effective registration statement.
The foregoing information is a summary of the agreements involved in the transaction described above, is not complete, and is qualified in its entirety by reference to the full text of such agreements, copies of which are attached hereto as Exhibit 3.2 and Exhibit 10.2 and incorporated herein by reference. Readers should review such agreements for a complete understanding of the terms and conditions associated with this transaction.
The Series A Preferred Stock and Series D Preferred Stock sold were not registered under the Securities Act or the securities laws of any state, and were offered and sold in reliance on the exemption from registration afforded by Section 4(a)(2) under the Securities Act and Regulation D promulgated thereunder and corresponding provisions of state securities laws, which exempt transactions by an issuer not involving any public offering. The investors in such securities are each an “accredited investor” as such term is defined in Regulation D promulgated under the Securities Act. This Current Report shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall such securities be offered or sold in the United States absent registration or an applicable exemption from the registration requirements and certificates evidencing such shares contain a legend stating the same.
Item 3.02 Unregistered Sales of Equity Securities
Item 3.03 Material Modification to Rights of Security Holders
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
On March 14, 2019, the Company filed a Certificate of Designation of Preferences, Rights and Limitations for the Series D Preferred Stock with the Secretary of State of the State of Nevada (the “Series D Certificate of Designation”). The following is only a summary of the Series D Certificate of Designation and is qualified in its entirety by reference to the full text of the Series D Certificate of Designation which is filed as Exhibit 3.2 to this Current Report on Form 8-K and is incorporated by reference herein.
Designation, Amount and Par Value. The number of shares of Series D Preferred Stock designated shall be up to 2,000,000. Each share of Series D Preferred Stock shall have a par value of $0.001 per share and a stated value equal to $1.00 (the “Stated Value”).
Dividends: The holders of Series D Preferred Stock shall not be entitled to dividends.
Liquidation Preference: In the event of a merger, sale (of substantially all stock or assets) or liquidation of the Company, unless waived by the holders of a majority of the Series D Preferred Stock, the holders of the Series D Preferred Stock shall receive in preference to the holders of Common Stock an amount per share equal to the Stated Value.
Voting Rights. Except as otherwise required by law, the Series D Preferred Stock shall have no voting rights. However, as long as any shares of Series D Preferred Stock are outstanding, the Corporation shall not, without the affirmative vote of the Holders of a majority of the then outstanding shares of the Series D Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Series D Preferred Stock or alter or amend the Series D Certificate of Designation, (b) amend its articles of incorporation or other charter documents in any manner that adversely affects any rights of the holder, (c) increase the number of authorized shares of Series D Preferred Stock, or (d) enter into any agreement with respect to any of the foregoing.
No Redemption; No Preemptive Rights. The shares of Series D Preferred Stock are not redeemable by the Company. The shares of Series D Preferred Stock are not entitled to any preemptive or subscription rights in respect of any securities of the Company.
Fundamental Transaction. If, at any time while the Series D Preferred Stock is outstanding, the Company enters into a Fundamental Transaction, then, the Company shall cause any Successor to assume in writing all of the obligations of the Company under the Series D Certificate of Designation to written agreements in form and substance reasonably satisfactory to the holder and approved by the holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the holder of the Series D Preferred Stock, deliver to the holder in exchange for the Series D Preferred Stock a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to the Series D Preferred Stock, and which is reasonably satisfactory in form and substance to the holder.
Exchange for Common Stock. Upon a consummation of a reverse split of the Company’s common stock, the holders shall take all necessary steps with the Company to exchange all outstanding shares of Series D Preferred Stock into shares of the Company’s common stock at a rate of to be agreed upon by the parties.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are filed with this report:
Avant Diagnostics, Inc Exhibit
EX-3.2 2 ex3-2.htm AVANT DIAGNOSTICS,…
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About AVANT DIAGNOSTICS, INC. (OTCMKTS:AVDX)
Avant Diagnostics, Inc., formerly American Liberty Petroleum Corp., is a medical diagnostic technology company. The Company focuses on the commercialization of a series of microarray-based diagnostic tests that provide early detection of cancers, neurodegenerative diseases, and other chronic and severe disease states. The Company specializes in large panel biomarker tests. The Company’s lead product is OvaDx, a non-invasive proteomics diagnostic screening test for the early detection of ovarian cancer. The Company’s primary activities are preparing sample specimens in order for OvaDx to obtain the United States Food and Drug Administration (FDA) approval. The Company’s product, OvaDx, is a microarray-based test that measures the activation of the immune system in blood samples in response to early-stage ovarian tumor cell development. It identifies stage I, II, III and IV disease markers in patient samples.