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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM 8-K
___________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (date of earliest event reported): November 21, 2016
OWC PHARMACEUTICAL RESEARCH CORP.
(Exact Name of Registrant as Specified in its Charter)
Commission File No.: 0-54856
Delaware
98-0573566
(State of Incorporation)
(I.R.S. Employer Identification No.)
22 Shacham Street. P.O.B. 8324 Petach Tikva, Israel
4918103
(Address of Principal Executive Offices)
(ZIP Code)
Registrant's Telephone Number, including area code: 972 (0) 3-758-2657
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of
the following provisions (see General Instruction A.2. below):
 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry Into A Material Definitive Agreement.
On November 22, 2016, OWC Pharmaceutical Research Corp. (the "Registrant") filed a Form 8-K reporting that it had entered into a Reg S
Unit Subscription Agreement with Michepro Holding Ltd ("Michepro"), organized under the laws of Cyprus (the "Investor"), pursuant to
which the Investor subscribed for and purchased the Registrant's securities for cash consideration of $300,000.
In connection with the Reg S Subscription Agreement with Michepro, the Registrant also entered into a Corporate Management Services
Agreement, a copy of which is attached as Exhibit 10.19 hereto ("OWC Europe Agreement"), with Sorelenco Limited, organized under the
laws of Cyprus ("Consultant"), and an affiliate of Michepro, pursuant to which the Consultant agreed to provide management services to a new
entity being organized by the Registrant, OWC Europe Marketing Corporation ("OWC Europe"). The Consultant shall provide OWC Europe
with services involving the day to day operations of OWC Europe including, but not limited to management, business development, sales and
marketing of the products of the Registrant's wholly-owned Israeli subsidiary, One World Cannabis Ltd and the hiring and training of staff,
among other services.
In consideration for services, the Registrant agreed to issue to the Consultant: (i) 1,442,308 restricted shares of the common stock, par value
$0.0001 (the "Shares"); (ii) Class M Warrants exercisable for a period of twelve (12) months to purchase 1,250,000 Shares at an exercise price
$0.08; (iii) Class G Warrants exercisable for a period of twenty-four (24) months to purchase 448,462 Shares at an exercise price $0.25; and
(iv) Class H Warrants exercisable for a period of thirty-six (36) months to purchase 448,462 Shares at an exercise price $0.40.
This initial term of the OWC Europe Agreement shall be for thirty-six (36) months subject to the extension upon the mutual written agreement
of the Parties prior to the expiration of the Term.
On December 16, 2016, the Registrant entered into a Consulting Agreement with Jeff Smurlick, a resident of the State of Florida, pursuant to
which the Consultant shall provide the Registrant with services in the areas of investor relations and business development with the objective of
generating interest in the business of the Registrant and its subsidiary, including assisting the Registrant in establishing relationships with the
financial and medical communities specializing in the field of medical cannabis as well as with the general media which includes an investor
relations (IR) program for the Company. A copy of the Consulting Agreement is attached as Exhibit 10.20 hereto. In consideration for the
services, the Registrant issued to the Consultant 200,000 Class G Warrants and 200,000 Class H Warrants identical to the Class G and Class H
Warrants described above.
Item 3.02. Unregistered Sales of Equity Securities.
Name of Issuee Date of Issuance
Sorelenco
12/11/2016
Limited
12/16/2016
Jeff Smurlick
Bases for Issuance
For Services - OWC
Europe Agreement
Services - Consulting
Agreement
Warrants Issued
1,250,000 Class M Warrants; 448,462 Class G
Warrants; and 448,462 Class H Warrants
200,000 Class G Warrants and 200,000 Class H
Warrants
Shares Issued
,442,308
-
The issuance of the Shares and Warrants was made in reliance upon the exemptions provided in Section 4(2) of the Securities Act of 1933, as
amended (the "Act") and Regulation S, with respect to Sorelenco and Regulation D with respect to Mr. Smurlick, both promulgated by the
United States Securities and Exchange Commission (the "SEC") under the Act.
Item 9.01 Financial Statements and Exhibits.
(a) The following documents are filed as exhibits to this report on Form 8-K or incorporated by reference herein. Any document incorporated
by reference is identified by a parenthetical reference to the SEC filing that included such document.
Exhibit
No.
10.19
10.20
Description
OWC Europe Agreement dated November 21, 2016, between the Registrant and Sorelenco Limited, filed herewith.
Consulting Agreement dated December 16, 2016, between the Registrant and Jeffrey Smurlick, filed herewith.
OWC Pharmaceutical Research Corp.
By:
Name:
Title:
Date: December 21, 2016
/s/ Mordechai Bignitz
Mordechai Bignitz
Chief Executive Officer
Consulting Services Agreement
This Corporate Advisory Consulting Agreement (this "Agreement"), is made as of December 16, 2016, between OWC Pharmaceutical
Research Corp., a Delaware corporation, having its principal place of business located at 22 Shacham Street, P.O.B. 8324, Petach Tikva
4918103 Israel (the "Company") and Jeff Smurlick, having an address at 10861 Bal Harbor Drive, Boca Raton, FL 33498 (the "Consultant").
The Company and the Consultant are sometimes referred to individually, as a "Party" and collectively, as the "Parties."
RECITALS:
A. The Consultant has the professional business and financial expertise and experience in the areas of investor relations and business
development;
B. The Consultant is offering its services as a consultant to the Company and the Company desires to retain the Consultant as an independent
contractor; and
C. The Parties agree that this Agreement reflects the entire understanding and agreement between the Parties on the subject matter herein
contained.
NOW, THEREFORE, in consideration of the premises and promises, warranties and representations herein contained, it is agreed as follows:
1. Services: The Consultant shall provide the Company with services in the areas of investor relations and business development with the
objective of generating interest in the Company and its business from the business and financial community and investors.
(i) The investor relations services shall include assisting the Company in establishing relationships with the financial and medical communities
specializing in the field of medical cannabis as well as with the general media which includes an investor relations (IR) program for the
Company; and
(ii) The Consultant shall identify and advise the Company on appropriate financial events of potential interest for the Company’s participation.
The foregoing are collectively referred to as the "Services."
2. Compensation: In consideration for Services, the Company shall cause to be issued to the Consultant: (i) 200,000 Class G Warrants
exercisable on a "cashless" basis for a period of 24 months from the date first set forth above at an exercise price $0.25; and (ii) 200,000 Class
H Warrants exercisable on a "cashless" basis for a period of 36 months from the date first set forth above at an exercise price of $0.40. The
Class G and Class H Warrants are referred to collectively, as the "Warrants" and are evidenced by the respective Warrant Agreements in the
form attached hereto.
3. Term: This Agreement shall be for an initial term of twelve (12) months from the date first set forth above (the "Term"), subject to the
extension of the Term upon the mutual written agreement of the Parties prior to the expiration of the Term. Either Party may elect to terminate
this Agreement on 30 days advanced written notice to the other Party ("Termination Notice"), which shall become effective on the 30th day
("Termination Date"). In the event of Termination by either Party, any Warrants not exercised by the Consultant prior to the Termination Date
shall be deemed null and void.
4. Independent Contractor: The Consultant understands and acknowledges that since the Consultant is an independent contractor of but is not
an employee of the Company. As a result, the Company will not withhold income taxes or pay any employee taxes on its behalf, nor will the
Consultant receive any benefits of an employee. The Consultant shall not have any authority to assume or create any obligations, express or
implied, on behalf of the Company and shall have no authority to represent the Company as agent, employee or in any other capacity that as
herein provided.
5. Representations and Warranties: For purposes of this Agreement, the Consultant represents and warrants as follows:
(i) The Consultant has full power and authority to enter into this Agreement;
(ii) The Consultant does not have a preexisting personal or business relationship with the Company or any of its directors or executive officers;
(iii) The Consultant is aware that the Warrants and any shares issuable upon exercise of the Warrants (the "Warrant Shares") are not
transferable under this Agreement and applicable securities laws unless such securities are registered under the Securities Act of 1933, as
amended (the "Act") or pursuant to an available exemption under Rule 144 or other rule or regulation promulgated by the Securities and
Exchange Commission (the "SEC") under the Act;
(iv) All information that the Consultant has provided to the Company concerning the Consultant and the Consultant's knowledge of financial
and business matters, or, is correct and complete as of the date of this Agreement and may be relied upon by the Company;
(v) In rendering the Services hereunder, the Consultant agrees to comply with all applicable federal and state securities laws, the rules and
regulations of the SEC and of any exchange or quotation service on which the Company's securities are listed and/or subject to quotation and
the rules and regulations of the National Association of Securities Dealers, Inc.
6. No Third Party Rights: The Parties warrant and represent that they are authorized to enter into this Agreement and that no third parties, other
than the Parties hereto, have any interest in any of the Services contemplated hereby.
7. Governing Law/Arbitration: This Agreement shall be governed by and construed in accordance with the laws of the State of New York. Any
dispute arising under or related to this Agreement or the construction or application of this Agreement, any claim arising out of this Agreement
or its breach, shall be submitted to arbitration in New York County, State of New York, before one arbitrator in accordance with the
Commercial Arbitration Rules of the American Arbitration Association, upon the written request of one Party after service of that request on
the other Party. The cost of arbitration shall be borne by the losing Party. The arbitrator is also authorized to award reasonable attorney's fees to
the prevailing Party.
8. Validity: If any paragraph, sentence, term or provision hereof shall be held to be invalid or unenforceable for any reason, such invalidity or
unenforceability shall not affect the validity enforceability of any other paragraph, sentence, term and provision hereof. To the extent required,
any paragraph, sentence, term or provision of this Agreement may be modified by the parties hereto by written amendment to preserve its
validity.
9. Entire Agreement: This Agreement contains the entire understanding of the Parties on the subject matter hereof and cannot be altered or
amended except by an amendment duly executed by all Parties hereto. This Agreement shall be binding upon and inure to the benefit of the
successors, assigns and personal representatives of the Parties.
IN WITFESS WHEREOF, the Parties hereto have executed this Agreement effective as of the date first written above.
OWC Pharmaceutical Research Corp. Jeff Smurlick (Consultant
/s/: Mordechai Bignitz /s/: Jeff Smurlick
Name: Mordechai Bignitz Name: Jeff Smurlick
Title: CEO
Corporate Management Consulting Agreement
This Corporate Management Consulting Agreement (this "Agreement"), is made as of November 21, 2016, between OWC Pharmaceutical
Research Corp., a Delaware corporation, having its principal place of business located at 22 Shacham Street, P.O.B. 8324, Petach Tikva
4918103 Israel (the "Company") and Sorelenco Limited a company organized under the laws of the Island of Cyprus (the "Consultant"). The
Company and the Consultant are sometimes referred to individually, as a "Party" and collectively, as the "Parties."
WHEREAS, the Consultant has the professional business and financial expertise and experience in the areas of business operations
management, business development, marketing with the objective of generating interest in the Company's products and services in Europe; and
WHEREAS, the Parties agree that the Consultant will render its services to OWC Europe Marketing Corporation, an entity being organized
("OWC Europe") following the execution and delivery of a separate investment/JV agreement between the Parties;
NOW, THEREFORE, in consideration of the premises and promises, warranties and representations herein contained, it is agreed as follows:
1. Services:
(i) The Consultant shall provide OWC Europe with services involving the day to day operations of OWC Europe including, but not limited to
management, business development, sales and marketing of the Company's products and services in Europe, and the hiring and training of staff
(the "Services");
(ii) In rendering the Services, the Consultant shall be responsible to the board of directors of OWC Europe and shall report on not less than a
monthly basis to the Company disclosing sales and expenses, among other financial information reasonably requested by the Company; and
(iii) The Consultant acknowledges and understands that the Company is a public, reporting company under the United States federal securities
laws and the rules and regulations of the United States Securities and Exchange Commission (the "SEC") and, as a result, the Company is
required to file reports with the SEC under the Securities Exchange Act of 1934 (the "Exchange Act"). As a result, the Consultant, in rendering
its Services to OWC Europe, will follow the guidelines of the Company’s chief executive officer and chief financial officer in keeping OWC
Europe’s books and records so that the Company can comply with the Exchange Act reporting requirements and the rules and regulations of the
SEC.
2. Compensation: In consideration for Services, the Company shall cause to be issued to the Consultant:
(i) 1,442,308 restricted shares of the Company’s common stock, par value $0.0001 (the "Shares");
(ii) Class M Warrants exercisable for a period of twelve (12) months to purchase 1,250,000 Shares at an exercise price $0.08 in the form of
Class M Warrant Agreement attached hereto;
(iii) Class G Warrants exercisable for a period of twenty-four (24) months to purchase 448,462 Shares at an exercise price $0.25 in the form of
Class G Warrant Agreement attached hereto; and
(iv) Class H Warrants exercisable for a period of thirty-six (36) months to purchase 448,462 Shares at an exercise price $0.40 in the form of
Class H Warrant Agreement attached hereto.
3. Term: This Agreement shall be for an initial term of thirty-six (36) months from the date first set forth above (the "Term"), subject to the
extension of the Term upon the mutual written agreement of the Parties prior to the expiration of the Term. Either Party may elect to terminate
this Agreement on sixty (60) days advanced written notice to the other Party (the "Termination"). In the event of Termination by either Party
prior to the exercise of the Class G, Class H or Class M Warrants (collectively, the "Warrants"), all unexercised Warrants shall not be subject to
exercise and shall become null and void.
4. Representations and Warranties: For purposes of this Agreement, the Consultant represents and warrants as follows:
(i) The Consultant is duly organized and validly existing under the laws of it state of organization and has full power and authority to enter into
this Agreement;
(ii) The Consultant is aware that the Shares including the Shares underlying the exercise of the Warrants are not transferable under this
Agreement and applicable securities laws unless such shares are registered under the Securities Act of 1933, as amended (the "Act") or
pursuant to an available exemption under Rule 144 or other rule or regulation promulgated by the Securities and Exchange Commission (the
"SEC") under the Act;
(iii) All information that the Consultant has provided to the Company concerning the Consultant and the Consultant's knowledge of financial
and business matters, is correct and complete as of the date of this Agreement and may be relied upon by the Company;
(iv) In rendering the services hereunder and in connection with the Shares, the Consultant agrees to comply with all applicable federal and state
securities laws, the rules and regulations thereunder, the rules and regulations of the SEC and of any exchange or quotation service on which
the Company's securities are listed and/or subject to quotation and the rules and regulations of the National Association of Securities Dealers,
Inc.
5. No Third-Party Rights: The Parties warrant and represent that they are authorized to enter into this Agreement and that no third parties, other
than the Parties hereto, have any interest in any of the Services contemplated hereby.
6. Governing Law/Arbitration: This Agreement shall be governed by and construed in accordance with the laws of the State of New York. Any
dispute arising under or related to this Agreement or the construction or application of this Agreement, any claim arising out of this Agreement
or its breach, shall be submitted to arbitration in New York County, State of New York, before one arbitrator in accordance with the
Commercial Arbitration Rules of the American Arbitration Association, upon the written request of one Party after service of that request on
the other Party. The cost of arbitration shall be borne by the losing Party. The arbitrator is also authorized to award reasonable attorney's fees to
the prevailing Party.
7. Validity: If any paragraph, sentence, term or provision hereof shall be held to be invalid or unenforceable for any reason, such invalidity or
unenforceability shall not affect the validity enforceability of any other paragraph, sentence, term and provision hereof. To the extent required,
any paragraph, sentence, term or provision of this Agreement may be modified by the parties hereto by written amendment to preserve its
validity.
8. Entire Agreement: This Agreement contains the entire understanding of the Parties on the subject matter hereof and cannot be altered or
amended except by an amendment duly executed by all Parties hereto. This Agreement shall be binding upon and inure to the benefit of the
successors, assigns and personal representatives of the Parties.
IN WITFESS WHEREOF, the Parties hereto have executed this Agreement effective as of the date first written above.
OWC Pharmaceutical Research Corp. Sorelenco Limited
/s/: Mordechai Bignitz /s/: ___________________
Name: Mordechai Bignitz Name:
Title: CEO