Item
1.01 Entry into a Material Definitive Agreement.
Clearday,
Inc. (the “Company” or “Clearday”), through its subsidiary Clearday Management Ltd.,
on November 11, 2021 entered into a Strategic Alliance, Development and Distribution Terms Agreement (the “JV Agreement”)
with Invento Research Inc. (“Invento”). Under the terms of the JV Agreement, a company (the “JV”)
formed by Invento and Clearday will focus on the development and deployment of robotic services that combine content and uses (or robotic
applications) that empower, enhance and protect care workers providing services in the following (collectively, the “JV Core
Business Market”): (1) the home and residential health and non-acute care markets, (2) residential care facilities such
as assisted living, nursing home, skilled nursing and memory care facilities, (3) health care markets through hospitals, doctor offices,
ambulatory surgical care centers, urgent care centers, and medical clinics, and (4) laboratories (e.g., facilities that administer blood
testing services), occupational and physical therapy centers, and (5) telehealth applications. Each of Invento and Clearday will provide
sufficient time and attention to the business of the JV and shall use their respective commercially reasonable efforts to advance the
business of the JV.
Invento
and Clearday expect to initially develop and deploy robotic applications that are based on needs for Clearday’s residential care
and adult day care communities. Each of Invento and Clearday may add additional content and services to the robotic applications based
on, among other factors (1) Clearday’s knowledge and experience in treating residents & clients with cognitive issues, and
(2) Invento’s assessment of client requirement vis-à-vis the technological and financial feasibility of recommendations
and iterations, if any. The JV is expected to market and sell robots, robotic services and related content and services, initially to
the residential and home care markets, promptly after the deployment of the robots at Clearday facilities.
The
JV will be managed by a 4 person board. Each of Invento and Clearday will appoint 2 members of the board. The JV board will establish
the operating budget, including robot pricing, sales commissions and marketing expenses. Invento will sell its robots and related systems,
and Clearday will sell its Clearday at Home digital and Clearday at Home PRO services, at their respective wholesale prices
and each party has agreed to most favored nation pricing terms. Distributions will be made as determined from time to time
by the JV board on a pro rata basis to Invento and Clearday and any other member of the JV admitted by Invento and Clearday, subject
to priority distributions for cash investments to the JV.
Invento
will not sell its robots and related services to any person in the JV Core Business Market without the consent of Clearday or
an appropriate payment of a reasonable commission to Clearday as determined by the Board in its reasonable good faith discretion. No
robots will be sold to a person that competes with Clearday in its businesses that are in the JV Core Business Market, without
the consent of Clearday, which consent, shall be: (1) with respect to the digital service offerings of Clearday, in its sole and
absolute discretion of Clearday; and (2) with respect to all other businesses, not be unreasonably withheld, delayed or conditioned.
Clearday will provide its content that is customarily provided in its business to the JV and not to any other manufacturer of robotics
that have substantially similar functionality of the robots in the JV Core Business Market.
The
initial term of the JV is 5 years with successive 5 year terms subject to the JV achieving mutually agreed revenue
targets that (1) for the initial period ends June 30, 2023, (2) then for the period ending December 31, 2022, and
(3) for each annual period thereafter. If such revenue targets are not achieved, then either party may terminate the JV upon
60 days’ notice. In the event of such termination, the non-terminating party may initiate a buy / sell process to continue the
business of the JV by either continuing to buy Robots at the wholesale price or the acquisition of Clearday at Home at the wholesale
price.
The
foregoing description of the JV Agreement is a summary only, is not intended to be complete, and is qualified in its entirety by reference
to the full text of each such agreement that is filed as an exhibit to this Current Report on Form 8-K.
