Item 1.01.Entry into a Material Definitive Agreement.
Effective November 15, 2019, Holly Brothers Pictures, Inc. (the "Company") and Texas MDI, Inc. (“TMDI”), a Texas corporation, entered into a sublicense agreement (the "Agreement") granting the Company access to certain technology regarding the RxoidTM metered dose inhaler that TMDI has licensed from EM3 Methodologies, LLC (“EM3”) under the EM3 Exclusive License Agreement (the “EM3 Exclusive License Agreement”). The term of the Agreement is from November 15, 2019 until expiration of the EM3 Exclusive License Agreement. The expiration date of the EM3 Exclusive License Agreement is October 1, 2021, however, it is renewable for successive two year terms, subject to the payment of additional consideration by TMDI to EM3.
Pursuant to the EM3 Exclusive License Agreement, TMDI has obtained an exclusive license from EM3 to research, develop, make, have made, use, offer to sell, contract fill, export and/or import and commercialize the Licensed Products (as defined) using EM3’s proprietary Desirick Procedure which enables the production of a so-called metered dose inhaler (“MDI”) using hemp cannabinoid derivatives under the RxoidTM brand or on a white label basis. The MDI is a proven medical technology which is a complete replacement for vape cartridges and e-cigarettes without the typical dangers to cannabinoid (“CBD”) users. An MDI which is properly developed and manufactured delivers medication directly to a user’s blood stream through the pulmonary tract. They are generally sterile, stable, will not oxidize and have they a long shelf life not affected by light or temperature. MDI’s are efficient devices to deliver medication to humans. RxoidTM uses only FDA listed consumables and equipment in compliance with current good manufacturing processes (“cGMP”) to produce their products.
Per the terms of the Agreement, the Company has obtained a sublicense from TMDI to pursue certain commercial applications based on use of the Licensed Products in the States of Texas, California, Florida and Nevada exclusive of any other client of EM3. RxoidTM has made substantial material improvements to the Desirick Procedure prior to the execution of the EM3 Exclusive License which will remain the property of TMDI if any license is not renewed.
During the term of the Agreement, the Company shall be required to reimburse TMDI to the extent that TMDI is required to make any payments to EM3, pursuant to the EM3 Exclusive License Agreement, as a result of the Agreement. The Company’s obligation to make such reimbursements to TMDI is conditioned upon TMDI providing the Company with an advance notice requesting such payments, along with an accounting showing the calculations for such payments.
The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the Agreement, a copy of which is attached hereto as Exhibit 10.1, and is incorporated herein by reference.
With execution of the Agreement, the Company has adopted a new business strategy focused on developing potential commercial opportunities which will involve the rapid application of therapeutics using the RxoidTM MDI technology that is being sublicensed from TMDI with prospective healthcare providers, pharmacies and other parties in the States of Texas, California, Florida and Nevada. Although the license with EM3 is exclusive to these four (4) states, RxoidTM may be marketed and produced world-wide on a non-exclusive basis. Simultaneously, the Company will be exiting from its previous operations in the bitcoin mining business, which has been suspended since the middle of 2018.