ITEM
5.01 – Changes in Control of Registrant
Senior
Secured Credit Agreement.
On January 3, 2014, Oncologix Tech, Inc. (the “Company”), together with its subsidiaries
Dotolo Research Corporation and Amian Angels, Inc., entered into a Senior Secured Revolving Credit Facility Agreement with TCA
Global Credit Master Fund LP (“Lender”) for a revolving credit facility of up to Four Million Dollars ($4,000,000)
for working capital financing for any purposes permitted thereunder. The Company drew down $400,000 on the original credit facility
and issued 20,000 shares of its Series D Convertible Preferred Stock to secure the required $150,000 in Advisory Fees and Investment
Banking Fees.
Senior
Secured Credit Agreement Amendment.
On September 25, 2014, the Company drew down an additional loan amount of $1,200,000 used
for the acquisition of Esteemcare Inc. and Affordable Medical Equipment Solutions Inc. In connection with the draw-down of the
second tranche, the Company was required to incur additional Advisory Fees and Investment Banking fees of $450,000 due after twelve
(12) months. This second tranche is secured by an 18.0% convertible promissory note, due in twelve months, with an extension option
of an additional twelve (12) months. Repayments of interest and fees begin immediately. Principal repayments begin December 25,
2014. The Lender will hold back interest and fees of each deposit for the first three (3) months of the agreement and then an
additional on-going 12.5% of deposits for principal payments beginning December 25, 2014.
Default
and Legal Actions.
On January 8, 2015, the Company and TCA began discussion for the full payment of $450,000 in Investment
Banking fees. Those discussions continued for sixty (60) days in which both parties agreed for the Company to provide $225,000
with both cash and execution of an equity debt exchange. On March 27, 2015, TCA filed a notice of default against the Company.
On March 31, 2015, the Company signed documents agreeing to pay TCA the $225,000 as mutually agreed to resolve the default and
pay all interest and principal due. TCA refused to execute the legal documents and accept the funds. On April 6, 2015, the Company
paid TCA $78,000 to cure the notice of default and also pay TCA the $225,000 as mutually agreed. After the interest payment was
issued to TCA, the Company was again placed into default.
After
extensive contract and payment negotiations to include the payment of $78,000 and the agreed payment of the additional $225,000
which TCA refused, OCLG retained legal counsel and filed a legal Complaint as the Plaintiff in the State of Florida, 17
th
Circuit on May 14, 2015. The Complaint cited unfair business practices, breach of confidentiality, and evidence stating
that OCLG was never in default of the Credit Agreement with TCA Global Fund. This Complaint was evidenced by numerous emails and
written correspondence from TCA executive management. TCA counter sued OCLG for Default, on June 25, 2015 for the sixth time.
Senior
Secured Credit Agreement – Settlement 1.
After many months of on-going discussions, on February 5, 2016, the Company
entered into a final settlement agreement with TCA in conjunction with an additional credit facility advance of $200,000. The
Settlement Agreement calls for 18.0% interest on the outstanding principal balance. Further, the Settlement calls for weekly payments
of $5,000 from March 4, 2016 to May 27, 2016. The weekly payments increase to $10,000 from June 3, 2016 to July 1, 2016. Payments
after July 1, 2016 would be negotiated.
Senior
Secured Credit Agreement – Settlement 2.
On April 8, 2016, the Company entered into a second amendment to the Settlement
agreement originally dated February 5, 2016 in conjunction with an additional credit facility advance of $375,000. The second
amendment to the settlement agreement creates a twenty-four (24) month replacement Promissory Note in the amount of $2,385,115.53.
The note bears interest at eighteen (18%) percent with a default interest rate of twenty four (24%) percent. As a requirement
of the Settlement Agreement, the Company incurred additional Advisory Fees and Investment Banking fees of $300,000 which brings
the total Advisory Fees and Investment Banking Fees to $900,000 primarily due to TCA stated defaults. Both the Company and TCA
agreed to joint dismissal of their litigations against either party. The agreement requires monthly interest payments of $31,695.13
commencing on April 30, 2016 and May 31, 2016 with monthly increased principal and interest payments of $125,261.10 beginning
on June 30, 2016.
Financial
Controls of the Company
Additional requirements of the second amendment to the Settlement Agreement requires the Company to
execute an irrevocable, ACH Authorization Agreement with TCA from the Company’s primary bank accounts that allows TCA to
debit, without notice to company, the required monthly principle and interest payments. Further, the Company is required to provide
TCA with Administrative controls and electronic access to each of its bank accounts and the Company must notify and obtain prior
approvals from TCA for all company operational activities, provide prior notifications for all payments including wire transfers,
ACH’s, prior approval before issuance of employee payrolls, payroll taxes, and obtain prior approvals of payment to all
creditors. Company understands that this level of financial control may constitute a change of control and TCA may be considered
an affiliate pursuant to Rule 144 of the Securities Act of 1933.