| Item
1.01 |
Entry
into a Material Definitive Agreement. |
MCA
Westover Hills Operating Company, LLC (“MCA”), a subsidiary of Clearday, Inc. (“Clearday” or the
“Company”), entered into two agreements with an institutional lender
(“Funder”) to provide an aggregate net amount of $199,500 of financing. We
used the net proceeds of this financing for our businesses including the deployment of robotic service and the development of
other products and services in our Clearday Labs.
Each agreement is
Revenue Purchase and Security Agreement and Guaranty of
Performance (a “Revenue Purchase Agreement”) with the Funder. One agreement is dated as of April 25, 2022 and the
other is dated as of April 27, 2022. Under each Revenue Purchase Agreement, MCA sold to Funder a specified percentage of its future
receipts (as defined by the Revenue Purchase Agreements), which include the future resident revenues in the Westover Hills residential
care facility owned by MCA. An aggregate purchased amount of such future receipts of $284,550 was sold for an aggregate
amount of $210,000, less origination and other fees, which resulted in a net aggregate amount of $199,500 that
received by MCA. Funder has specified customary collection
procedures for the collection and remittance of the weekly payable amount including direct payments from a specified authorized bank
account of approximately $8,463 per week. Each Revenue Purchase Agreement expressly provides that the sale of the future
receipts shall be construed and treated for all purposes as a true and complete sale of receivables at a discount, and not a loan. Each
Revenue Purchase Agreement provides that the title to the sold future receivables is transferred to Funder free and clear of all
liens. Each Revenue Purchase Agreement includes customary remedies that may be exercised by Funder upon a default, including payment
of attorney fees and costs of collection in the amount of 30% of the then outstanding purchased amount of future receipts and customary
provisions regarding, among other matters, representations, warranties and covenants, indemnification, arbitration, governing law and
venue and the exercise of remedies upon a breach or default. Each Revenue Purchase Agreement also provides for the grant by MCA
of a security interest in the future receivables and other related collateral under the Uniform Commercial Code in accounts and proceeds.
Each
Revenue Purchase Agreement includes a Guaranty of Performance
(“Guaranty”) which provides for irrevocable, absolute, and unconditional guaranty by James Walesa, the Company’s Chairman
and Chief Executive Officer, of all of the of the obligations of MCA under such Revenue
Purchase Agreement. Such Guaranty provides customary provisions, including representations, warranties and covenants.
The
foregoing descriptions of each Revenue
Purchase Agreement are not complete and are qualified in their entirety by reference to the full text of such agreement, which is
filed as Exhibit 10.1 and as Exhibit 10.2
to this Current Report on Form 8-K and is incorporated herein by reference.
Forward
Looking Statements
This
communication contains forward-looking statements (including within the meaning of Section 21E of the Securities Exchange Act of 1934,
as amended, and Section 27A of the Securities Act of 1933, as amended) concerning the Company. These statements may discuss goals, intentions
and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise, based on current beliefs
of the management of the Company, as well as assumptions made by, and information currently available to, management. Forward-looking
statements generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and include
words such as “may,” “will,” “should,” “would,” “expect,” “anticipate,”
“plan,” “likely,” “believe,” “estimate,” “project,” “intend,”
and other similar expressions. Statements that are not historical facts are forward-looking statements. Forward-looking statements are
based on current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Actual
results could differ materially from those contained in any forward-looking statement as a result of various factors, including, without
limitation: the risks regarding the Company and its business, generally; risks related to the Company’s ability to correctly estimate
and manage its operating expenses and develop its innovate non-acute care businesses and the acceptance of its proposed products and
services, including with respect to future financial and operating results; the ability of the Company to protect its intellectual property
rights; competitive responses to the Company’s businesses including its innovative non-acute care business; unexpected costs, charges
or expenses; regulatory requirements or developments; changes in capital resource requirements; and legislative, regulatory, political
and economic developments. The foregoing review of important factors that could cause actual events to differ from expectations should
not be construed as exhaustive and should be read in conjunction with statements that are included herein and elsewhere, including the
risk factors included in the Company’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K filed with the SEC and the registration statement regarding the Company’s previously announced merger, that was filed
and declared effective. The Company can give no assurance that the actual results will not be materially different than those based on
the forward looking statements. Except as required by applicable law, the Company undertakes no obligation to revise or update any forward-looking
statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.