Item 1.02 Termination of a Material Definitive Agreement.
On March 28, 2017, NewGen BioPharma Corp., a Nevada corporation (the “Company”), received notice from the President of NewGen BioPharma Corporation, a New Jersey corporation (“NewGen New Jersey”), of NewGen New Jersey’s intent to terminate the Agreement and Plan of Merger dated January 10, 2017 (the “Merger Agreement”), by and among the Company, NewGen New Jersey, and NewGen Merger Sub Inc., a New Jersey corporation and wholly-owned subsidiary of the Company formed for the purpose of the transaction. Pursuant to the terms of the Merger Agreement, the Company agreed to issue 40,000,000 shares of its common stock to the shareholders of NewGen New Jersey in exchange for the acquisition of all the issued and outstanding capital stock of NewGen New Jersey through a reverse triangular merger (the “Merger”). Upon the closing of the Merger, NewGen New Jersey was to become the wholly-owned subsidiary of the Company. The terms and conditions of the Merger Agreement were previously disclosed in further detail in our Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on January 11, 2017.
In furtherance of the Merger Agreement, Dr. Navdeep Jaikaria, the founder and President of NewGen New Jersey, was elected as a director of the Company on January 26, 2017. Also in furtherance of the Merger Agreement, and in consideration for Dr. Jaikaria’s willingness to serve as a director pending the closing of the Merger, the Company granted Dr. Jaikaria 11,000,000 restricted shares of the Company’s common stock on February 23, 2017, pursuant to the terms set forth in a Restricted Stock Award Agreement, as previously disclosed on our Current Report on Form 8-K filed with the SEC on February 27, 2017. The Restricted Stock Award Agreement provides that if the closing of the Merger does not occur, the restricted shares granted to Dr. Jaikaria will be forfeited in their entirety, and Dr. Jaikaria will have no ownership interest with respect thereto.
Pursuant to the terms of the Binding Letter of Intent dated October 27, 2016 (the “LOI”), by and between the Company and NewGen New Jersey, the Company changed its name from Greenwind NRG Inc. to NewGen BioPharma Corp. on November 18, 2016 in anticipation of a change in the Company’s business plan and direction in connection with the Merger Agreement. The LOI provides that if the closing of the Merger does not occur, the Company shall immediately change its name to one unrelated to NewGen. The Company is currently in the process of seeking the necessary approvals to file a Certificate of Amendment with the Nevada Secretary of State changing its name to an unrelated name, and will file a subsequent current report on Form 8-K when such amendment is made effective.
The Merger Agreement contains certain termination provisions for the parties, including, without limitation, (i) a provision stating that any party has the right to terminate the Merger Agreement if the closing of the Merger has not occurred on or before January 31, 2017 for any reason other than delay or nonperformance of the party seeking such termination, and (ii) provisions stating that either party may terminate the agreement if the other party fails to perform in any material respect its obligations under the Merger Agreement, or materially breaches any of its representations, warranties or covenants contained in the Merger Agreement.
On March 28, 2017, the trading of the Company’s common stock was temporarily suspended by the SEC until April 10, 2017. In light of these circumstances and the termination provisions contained in the Merger Agreement, NewGen New Jersey delivered notice to the Company on March 28, 2017 of its intent to terminate the Merger Agreement. Pursuant to the terms of the Merger Agreement, the termination of the Merger Agreement shall terminate all obligations of the parties thereunder, except for obligations relating to any liability for a party’s material breach of the Merger Agreement or its representations, warranties and covenants contained therein. The Company is not subject to any early termination penalties in connection with the termination of the Merger Agreement.