AUXO Auxilio, Inc. (delisted)

Item 1.01 Entry into a Material Definitive Agreement  

Reincorporation

On September 7, 2017 (the “ Effective Date ”), Auxilio, Inc., a Nevada corporation (“ Auxilio ”), changed its name and state of incorporation from the State of Nevada to the State of Delaware by merging (the “ Reincorporation ”) with and into its wholly owned subsidiary, CynergisTek, Inc., a Delaware corporation (the “ Company ” or “ CynergisTek ”), which was established for this purpose, pursuant to the terms of an Agreement and Plan of Merger, dated September 7, 2017, between Auxilio and the Company (“ Merger Agreement ”). A majority of the votes cast at Auxilio’s 2017 Annual Meeting of Stockholders held on June 8, 2017 voted to approve the Reincorporation.  Auxilio, as the sole stockholder of the Company, approved the Merger Agreement by written consent on September 7, 2017.  As a result of the Reincorporation, Auxilio has ceased to exist as a separate entity. As used herein, references to the “Registrant” means Auxilio prior to the Reincorporation, and the Company after the Reincorporation.

In accordance with Rule 12g-3 under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), the shares of common stock of the Company were deemed to be registered under Section 12(b) of the Exchange Act as a successor to Auxilio.

As of the Effective Date, the rights of the Registrant’s stockholders began to be governed by the General Corporation Law of the State of Delaware, the Company’s Certificate of Incorporation (the “ Delaware COI ”) and the By-Laws of the Company (the “ Delaware By-Laws ”).

The Reincorporation changed the name and legal domicile of the Registrant, but did not result in any change in the principal offices, business, management, capitalization, assets or liabilities of the Registrant. By operation of law, the Company succeeded to all of the assets and assumed all of the liabilities of Auxilio.  The officers and directors of Auxilio are the officers and directors of the Company.  In addition, the Registrant’s common stock, par value $0.001 per share (the “ Common Stock ”), will continue to trade on the NYSE American exchange.  Effective as of September 8, 2017, the Company’s trading symbol changed to “CTEK.”  

On the Effective Date, each outstanding certificate representing shares of Auxilio’s common stock was deemed, without any action by the stockholders, to represent the same number of shares of the Company’s Common Stock. Auxilio stockholders may, but are not required to, exchange their stock certificates as a result of the Reincorporation.  The Company assumed and will continue any and all stock option, stock incentive and other equity-based award plans adopted by Auxilio (individually, an “ Equity Plan ” and, collectively, the “ Equity Plans ”), and reserved for issuance under each Equity Plan a number of shares of the Company’s Common Stock equal to the number of shares of common stock so reserved by Auxilio immediately prior to the effective time of the Reincorporation. Each unexercised option or other right to purchase Auxilio common stock granted under any such Equity Plan which was outstanding immediately prior to the Effective Date, upon the effective time of the Reincorporation, became an option or right to purchase the Company’s Common Stock on a one-to-one basis, and otherwise on the same terms and conditions and at the same exercise price per share applicable to any such option or stock purchase right of Auxilio. Each other equity-based award relating to Auxilio common stock granted or awarded under any of the Equity Plans which was outstanding immediately prior to the Effective Date, upon the effective time of the Reincorporation, became an award relating to the Company’s Common Stock on a one-to-one basis and otherwise on the same terms and conditions applicable to such award immediately prior to the effective time of the Reincorporation.

Additional information about the Reincorporation can be found in Auxilio’s Definitive Proxy Statement for the 2017 Annual Meeting of Stockholders, filed with the Securities and Exchange Commission on April 27, 2017 (the “ Proxy Statement ”).  The foregoing descriptions of the Delaware COI and the Delaware By-Laws are qualified in their entirety by the full text of Delaware COI and the Delaware By-Laws, which are filed as Exhibits 3.1 and 3.2 hereto, respectively, and incorporated herein by reference. 

Amended and Restated Credit Agreement

AvidBank, a California banking corporation (“ AvidBank ”), in its capacity as contractual representative for itself and ZB, N.A., DBA California Bank and Trust (“ CBT ”; together with AvidBank, the “ Lenders ”), consented to the Reincorporation.  In addition, on September 7, 2017, the Company entered into a Joinder Agreement (the “ Joinder ”) and a Supplement No. 1 to Security Agreement (“ Security Agreement Supplement ”) with the Lenders, whereby the Company became party to the Amended and Restated Credit Agreement dated as of January 13, 2017 (the “ Credit Agreement ”) and the Security Agreement dated as of January 13, 2017 (the “ Security Agreement ”), respectively, which were originally entered into between Lenders, Auxilio and certain subsidiaries of Auxilio.  Copies of the Credit Agreement and Security Agreement were attached as Exhibits 99.7 and 99.8, respectively, to the Company’s current report on Form 8-K filed with the SEC on January 17, 2017.  

The foregoing description of the Merger Agreement, Joinder and Security Agreement Supplement does not purport to be complete and is qualified in its entirety by the entirety of the contents of such agreements, copies of which are filed as Exhibits 2.1, 10.1 and 10.2 hereto, respectively, and incorporated herein by reference.