Attached files
file | filename |
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EX-32.2 - VERUS INTERNATIONAL, INC. | ex32-2.htm |
EX-32.1 - VERUS INTERNATIONAL, INC. | ex32-1.htm |
EX-31.2 - VERUS INTERNATIONAL, INC. | ex31-2.htm |
EX-31.1 - VERUS INTERNATIONAL, INC. | ex31-1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
(Mark One)
[X] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended October 31, 2019 |
or
[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _______________________ to ___________________ |
Commission File Number 001-34106
VERUS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware | 11-3820796 | |
(State of incorporation) |
(I.R.S. Employer Identification No.) |
9841 Washingtonian Blvd #390 | ||
Gaithersburg, MD | 20878 | |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (301) 329-2700
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common stock, $0.000001 par value
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
[ ] Yes [X] No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
[ ] Yes [X] No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days.
[X] Yes [ ] No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
[X] Yes [ ] No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer [ ] | Accelerated filer [ ] |
Non-accelerated filer [X] | Smaller reporting company [X] |
Emerging growth company [ ] |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Act).
[ ] Yes [X] No
The aggregate market value of the voting stock and non-voting common equity held by non-affiliates of the registrant as of April 30, 2019, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $14 million.
As of May 1, 2020, 2,430,476,516 shares of common stock were issued and outstanding.
Documents Incorporated by Reference: None.
EXPLANATORY NOTE
Verus International, Inc. (the “Company,” “we,” “us,” “our” or “Verus”) is filing this Amendment No. 1 on Form 10-K/A (this “Amendment”) to amend its Annual Report on Form 10-K for the fiscal year ended October 31, 2019, originally filed with the U.S. Securities and Exchange Commission on April 13, 2020 (the “Original 10-K”). The purpose of this Amendment is to amend and restate Items 11 and 15 in their entirety. In addition, new certifications of our principal executive officer and principal financial officer are attached, each as of the filing date of this Amendment. This Amendment does not amend or otherwise update any other information in the Original 10-K. Accordingly, this Amendment should be read in conjunction with the Original 10-K.
PART III
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the compensation paid to our principal executive officer (“named executive officer”) during our fiscal year ended October 31, 2019 and 2018.
Summary Compensation Table | ||||||||||||||||
Name and Position | Year | Salary ($) | Stock Awards ($)(1) | Total ($) | ||||||||||||
Anshu Bhatnagar | 2019 | $ | 175,000 | $ | 2,515,794 | $ | 2,690,794 | |||||||||
Chief Executive Officer and Director | 2018 | $ | 175,000 | $ | 779,803 | $ | 954,803 |
(1) The amounts in this column represent the aggregate grant date fair value of awards computed in accordance with FASB ASC Topic 718. The annual expense for the 2019 and 2018 stock awards relates to warrants to purchase shares of the Company’s common stock that are granted under the provisions of the Chief Executive Officer’s employment agreement and are immediately vested upon being earned. For additional information regarding assumptions underlying the valuations of these stock awards and the calculation method, please refer to Note 10 to our consolidated financial statements, which are contained in our Annual Report on Form 10-K filed with the SEC on April 13, 2020.
Outstanding Equity Awards at Fiscal Year End
None.
Director Compensation
Our non-employee directors have elected to forego any cash compensation for participating in board of directors and committee meetings until such time as we become profitable over the course of an entire fiscal year, at which time the board of directors may reconsider the structure of its director compensation. In general, director compensation will be subject to review and adjustment from time to time at the discretion of our board of directors. Accordingly, our non-employee directors received no compensation during the fiscal year ended October 31, 2019.
Employment Agreements
Anshu Bhatnagar Employment Agreement
On April 29, 2020, the Company entered into an amended and restated employment agreement (the “Bhatnagar Employment Agreement”) with Anshu Bhatnagar pursuant to which Mr. Bhatnagar shall serve as Chief Executive Officer of the Company. The term of the Bhatnagar Employment Agreement will continue until December 31, 2020 unless extended or earlier terminated pursuant to the terms of the Bhatnagar Employment Agreement. Pursuant to the terms of the Bhatnagar Employment Agreement, Mr. Bhatnagar shall be entitled to receive five forms of compensation to include cash-based salary, stock-based salary, annual cash-based bonus, annual grants of restricted common stock and the opportunity to participate in the Company’s equity plans. Pursuant to the terms of the Bhatnagar Employment Agreement, Mr. Bhatnagar shall, among other things, (i) receive an annual base salary of $350,000 which may be increased at the sole discretion of the Company’s Board, (ii) an annual cash bonus at the sole discretion of the Board, (iii) a bonus in an amount equal to up to 100% of Mr. Bhatnagar’s then base salary at the sole discretion of the Board, and (iv) a stock-based bonus at the sole discretion of the Company. In addition, Mr. Bhatnagar received a warrant to purchase up to 471,883,795 shares of the Company’s Common Stock at an exercise price of $0.006 per share.
In the event Mr. Bhatnagar’s employment is terminated by the Company for Cause (as defined in the Bhatnagar Employment Agreement) or by Mr. Bhatnagar other than for Good Reason (as defined in the Bhatnagar Employment Agreement), the Company shall pay Mr. Bhatnagar the Accrued Benefits (as defined in the Bhatnagar Employment Agreement), and any outstanding stock option or other stock awards held by Mr. Bhatnagar as of the date of termination shall be subject to the terms and conditions set forth in the applicable award agreement. If the Company terminates Mr. Bhatnagar’s employment for death, disability or without Cause or Mr. Bhatnagar terminates his employment for Good Reason, the Company shall pay Mr. Bhatnagar (i) his then base salary, (ii) any pro-rata share of his annual cash bonus that would or could have been earned prior to the termination date and (iii) other Accrued Benefits. In addition, Mr. Bhatnagar shall be entitled to participate in the Plans (as defined in the Bhatnagar Employment Agreement) for 60 months following the date of his termination. Any outstanding stock option or other stock awards held by Mr. Bhatnagar as of the date of termination shall be subject to the terms and conditions set forth in the applicable award agreement. If the Company and Mr. Bhatnagar mutually terminate the Bhatnagar Employment Agreement pursuant to the terms thereof, Mr. Bhatnagar shall receive (i) 24 months of base salary and (ii) any bonus compensation due to him through the date of termination. In addition, if Mr. Bhatnagar signs the Release (as defined in the Bhatnagar Employment Agreement), Mr. Bhatnagar shall receive an additional 24 months of his then base salary and COBRA benefits for 12 months from the date of termination. If within one year after a Change in Control (as defined in the Bhatnagar Employment Agreement), Mr. Bhatnagar’s employment is terminated by the Company due to his death or disability or without Cause, or Mr. Bhatnagar terminates his employment for Good Reason, then subject to signing the Release, the Company shall pay Mr. Bhatnagar an amount equal to five years of his base salary. Furthermore, all stock options and other stock-based awards shall immediately accelerate and become fully exercisable as of the date of termination, and Mr. Bhatnagar shall be entitled to COBRA benefits for a period of 24 months from the date of termination.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Financial Statements
Description | Pages | |
Report of Independent Registered Public Accounting Firm | F-1 | |
Consolidated Balance Sheets | F-2 | |
Consolidated Statements of Operations and Comprehensive loss | F-3 | |
Consolidated Statement of Changes In Stockholders’ Deficit | F-4 | |
Consolidated Statements of Cash Flows | F-5 | |
Notes to Consolidated Financial Statements | F-7 |
+ Each of these Exhibits constitutes a management contract, compensatory plan, or arrangement.
** Previously filed.
* Filed herewith.
# The SEC has granted confidential treatment with respect to certain portions of this exhibit. Omitted portions have been filed separately with the SEC.
## Pursuant to Item 601(b)(10) of Regulation S-K, certain confidential portions of this exhibit were omitted by means of making such portions with an asterisk because the identified confidential portions (i) are not material and (ii) would be competitively harmful if publicly disclosed.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K/A to be signed on its behalf by the undersigned, thereunto duly authorized on this 6th day of May, 2020.
Verus International, Inc. | ||
By: | /s/ Anshu Bhatnagar | |
Anshu Bhatnagar | ||
Chief Executive Officer (Principal Executive Officer) |
By: | /s/ Christopher Cutchens | |
Christopher Cutchens | ||
Chief Financial Officer (Principal Financial and Accounting Officer) |
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K/A has been signed below by the following persons on behalf of the registrant and in the capacities indicated.
Name | Title | Date | ||
/s/ Anshu Bhatnagar | Chief Executive Officer and Chairman of the Board | May 6, 2020 | ||
Anshu Bhatnagar | (Principal Executive Officer) | |||
/s/ Christopher Cutchens | Chief Financial Officer (Principal Financial and Accounting Officer) | May 6, 2020 | ||
Christopher Cutchens | ||||
/s/ Michael O’Gorman | Director | May 6, 2020 | ||
Michael O’Gorman | ||||
/s/ Thomas Butler Fore | Director | May 6, 2020 | ||
Thomas Butler Fore |