LIFESTYLE MEDICAL NETWORK INC. (OTCMKTS:LMNK) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive
Agreement.
As of June 19, 2017, the Company renewed three promissory notes
with the holder, Roy Meadows (the Holder), such that: (a) the
Note dated April 28, 2015 with a Maturity Date of April 28, 2017
(April 2015 Note), was renewed to April 28, 2018; (b) the Note
dated June 8, 2015 with a Maturity Date of April 28, 2017 (June
2015 Note), was renewed to June 8, 2018; and (c) the Note dated
June 13, 2016 with a Maturity Date of June 13, 2017 (June 2016
Note), was renewed to June 13, 2018 (The Renewals). The Renewal
Fees were 10% of the outstanding balance of each Note: $34,496
for the April 2015 Note, $34,442.23 for the June 2015 Note and
$27,978.16 for the June 2016 Note. In connection with the
Renewals, each Notes Renewal Fee was added to the outstanding
balance of the respective Note as of its Maturity Date.
In connection with the Renewals, a five-year common stock
purchase warrant to purchase 969,264 shares of common stock of
the Company, at an exercise price of $.025 per share, was issued
to the Holder of the Notes.
Item 3.02. Unregistered Sales of Equity
Securities.
The following table sets forth the sales of unregistered
securities since the Companys last report filed under this item.
| Date | Title and Amount (1) | Purchaser | Principal Underwriter | Total Offering Price/Underwriting Discounts |
| December 17, 2016 |
Five-year common stock purchase warrant to purchase 969,264 shares of common stock of the Company, at an exercise price of $.025 per share, issued in connection with the Amendment to extend the term of three Promissory Notes.. |
Roy Meadows | NA | $-0-/NA |
Item 5.02. Departure of Directors or
Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
Employment Agreement
On July 2, 2017, the Board of Directors of the Company approved,
an Employment Agreement (Agreement) with Christopher P. Smith,
our Chief Executive Officer. The Agreement was effective July 1,
2017, for an initial term of three years, and the term is
automatically extended for additional one year periods if neither
party gives notice of termination at least 90 days prior to the
end of the initial term or any current additional one year term.
The Agreement with Mr. Smith (referred to sometimes as the
Executive) provides for a base salary of $240,000 per year, and
provides for incentive payments as established by the Board of
Directors and for a performance bonus (Performance Bonus) based
on the sum of two components, the first of which is as follows:
| Net Operating Profit Before Income Taxes | Performance Bonus |
| On the First $10 Million | 4.0% of Net Operating Profit |
| On all Amounts Over $10 Million | 3.0% of Net Operating Profit |
The Agreement contains provisions for discharge for cause,
including breach of the Agreement or specified detrimental
conduct by Mr. Smith, in which case accrued compensation would
payable as provided in the Agreement. The Agreement also provide
for termination by the Executive for good reason, comprising
events such as breach of the Agreement by the Company, assignment
of duties inconsistent with the Executives position, transfer of
the Executives primary office by more than 25 miles from Lake
Mary, Florida, or in the event of a change in control of the
Company. In the event of a termination by the Company without
cause, or by the Executive for good reason, the Company is
required to pay to the Executive in a lump sum in cash within 30
days after the date of termination the aggregate of the following
amounts:
A. the sum of (1) the Executives annual minimum salary through
the date of termination to the extent not theretofore paid, (2)
any annual incentive payment earned by the Executive for a prior
period to the extent not theretofore paid and not theretofore
deferred, (3) any annual performance bonus payment earned by the
Executive for a prior period to the extent not theretofore paid
and not theretofore deferred,(4) any accrued and unused vacation
pay and (5) any business expenses incurred by the Executive that
are unreimbursed as of the date of termination;
B. The product of (1) the performance bonus payment and (2) a
fraction, the numerator of which is the number of days that have
elapsed in the fiscal year of the Company in which the date of
termination occurs as of the date of termination, and the
denominator of which is 365;
C. the amount equal to the sum of (1) the Executives annual
minimum salary; (2) one (1) times the performance bonus payment
and (3) one (1) times the incentive payment;
D. In the event Executive is not fully vested in any retirement
benefits with the Company from pension, profit sharing or any
other qualified or non-qualified retirement plan, the difference
between the amounts Executive would have been paid if he had been
vested on the date his employment was terminated and the amounts
paid or owed to the Executive to such retirement plans;
E. The product of (1) the incentive payment and (2) a fraction,
the numerator of which is the number of days that have elapsed in
the fiscal year of the Company in which the date of termination
occurs as of the date of termination, and the denominator of
which is 365; and
F. The present value of the amount equal to the sum of five (5)
years Performance Bonus pay with such amount being calculated
based on the Performance Bonus paid to the Employee the year
prior to the date of termination.
In addition, all stock options and warrants outstanding as of the
date of termination and held by the Executive shall vest in full
and become immediately exercisable for the remainder of their
full term; all restricted stock shall no longer be restricted to
the extent permitted by law, and the Company will use its best
efforts, at its sole cost to register such restricted stock as
expeditiously as possible.
Item 9.01 Financial Statements and Exhibits.
| 10.16 | Convertible Promissory Note Amendment, dated June 19, 2017. |
| 10.17 |
Employment Agreement, dated July 1, 2017, between the Company and Christopher P. Smith. |
LIFESTYLE MEDICAL NETWORK, INC. ExhibitEX-10.16 2 f8k061917ex10xvi_lifestyle.htm CONVERTIBLE PROMISSORY NOTE AMENDMENT,…To view the full exhibit click here
About LIFESTYLE MEDICAL NETWORK INC. (OTCMKTS:LMNK)
Lifestyle Medical Network Inc. focuses its efforts, through its consulting subsidiaries, on contracting to provide management and professional consulting services, and licensing medical and health technologies, to healthcare companies. It also intends to evaluate commencing operation of a management service organization (MSO), which would provide administrative services to physician practices, and to open, operate and acquire medical and health clinics, if financing is available and the profile of the clinic’s services is consistent with the types of medical businesses it views as favorable for acquisition. The approximately nine Houston, Texas, medical clinics that the Company advises on operations through management and professional medical consulting agreements are all walk-in family practice clinics. The medical clinics are also equipped to handle minor emergencies, such as fractures, cuts and back injuries and to provide physical therapy.