UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13
or 15(d) of
the Securities Exchange
Act of 1934
Date of Report (Date
of earliest event reported): June 26, 2015
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Synergy
Strips Corp. |
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(Exact
name of registrant as specified in its charter) |
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Nevada |
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000-55098 |
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99-0379440 |
(State
or other jurisdiction
of incorporation) |
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(Commission
File Number) |
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(IRS
Employer
ID Number) |
3434
Ocean Park #107-447, Santa Monica, CA |
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90405 |
(Address
of principal executive offices) |
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(Zip
Code) |
Registrant’s telephone
number, including area code (615) 939-9004
Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following
provisions:
[ ] Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
Asset Purchase Agreement
On June 26, 2015 (the “Closing Date”),
Neuragen Corp., a Delaware corporation (“Neuragen”) and our wholly owned subsidiary, entered into an Asset Purchase
Agreement (the “Purchase Agreement”) with Knight Therapeutics Inc., a Canadian corporation (“Knight”).
Pursuant to the Purchase Agreement, Neuragen purchased the U.S. rights related to an innovative OTC product that helps relieve
pain caused by diabetic nerve damage (the “Purchased Assets”) for an aggregate purchase price of $1.2 million, with
(i) $250,000 paid on the Closing Date, (ii) $250,000 to be paid on or before June 30, 2016, (iii) $700,000 to be paid in quarterly
installments (beginning with the quarter ending September 30, 2015) equal to the greater of $12,500 or 5% of U.S. net sales, and
(iv) 2% of U.S. net sales of Neuragen for 60 months thereafter. The payment of such amounts is secured by a security interest
in certain assets, undertakings and property (“Collateral”) pursuant to the Security Agreement, which will be released
upon receipt of total payments of $1.3 million (collectively, “Total Consideration”).
The Purchase Agreement contains customary
representations and warranties and covenants by each party. The Purchase Agreement contains customary indemnification provisions
in favor of Neuragen and its affiliates, including, subject to certain limitations, whereby Knight agrees to indemnify Neuragen
and its affiliates for any losses arising out of any breach of their representations or warranties and any breach or failure to
perform of their covenants under the Purchase Agreement, among others.
The foregoing description of the Purchase
Agreement is included to provide you with information regarding its terms and does not purport to be complete and is qualified
in its entirety by reference to the Purchase Agreement, which is filed as Exhibit 2.4 to this Current Report on Form 8-K, and
is incorporated into this report by reference.
Security Agreement
On the Closing Date, Neuragen entered into
a Security Agreement with Knight, pursuant to which Neuragen granted a lien and security interest to Knight in Collateral in connection
with the Purchase Agreement.
The Security Agreement was made to secure
the payment of all indebtedness, obligations and liabilities of Neuragen of the Purchase Agreement, including all expenses and
charges, legal or otherwise, suffered or incurred by Knight in collecting or enforcing such indebtedness of the Purchase Agreement.
The Security Agreement includes customary
covenants, agreements, representations and warranties, including covenants to not: waste or destroy the Collateral; or sell, assign,
mortgage, lease or otherwise dispose of the Collateral or any interest therin without the prior written consent of Knight. The
Security Agreement also includes customary events of default, including but not limited to: payment defaults; Neuragen becoming
insolvent or entering into bankruptcy; or if any contemplated security ceases to be a valid and perfected first-priority security
interest that is not remedied within fifteen business days by Neuragen. Upon the occurrence of an event of default and during
the continuation thereof, the principal amount of the outstanding Total Consideration will bear a default interest rate of an
additional 10% per annum.
Item 2.01. Completion of Acquisition or Disposition of Assets.
The information under the caption “Asset
Purchase Agreement” in Item 1.01 of this Report is incorporated herein by reference.
Item 8.01. Other Events.
On July 1, 2015, we issued a press release
announcing the acquisition of assets from Knight and the Security Agreement. A copy of the press release is attached hereto as
Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(d) |
Exhibits |
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Exhibit
No. |
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Description |
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2.4 |
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Asset
Purchase Agreement, dated June 26, 2015, by and between Neuragen Corp. and Knight Therapeutics Inc. |
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99.1 |
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Press
release dated July 1, 2015. |
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
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SYNERGY
STRIPS CORP. |
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Date:
July 2, 2015 |
/s/
Jack Ross |
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Jack Ross |
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President and
Chief Executive Officer |
ASSET
PURCHASE AGREEMENT
THIS
AGREEMENT is made and dated as of June 26, 2015.
BETWEEN: |
Neuragen
Corp., a corporation formed under the laws of the State of Delaware; |
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(the
“Purchaser”) |
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AND: |
KNIGHT
THERAPEUTICS INC., a corporation formed under the laws of Canada; |
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(“Knight”) |
RECITALS
(A) |
WHEREAS
Knight was a secured creditor of Origin Biomed Inc. (“Origin”); |
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(B) |
WHEREAS
on April 7, 2015 by Order of the Supreme Court of Nova Scotia (the “Court”) and on the application of Knight,
Grant Thornton Limited (“GTL”) was appointed Receiver of Origin; |
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(C) |
WHEREAS
by Order dated June 4, 2015, the Court authorized GTL to convey the right, title and interest in certain of the property of
Origin to Knight (a copy of the said Order and any related receiver reports being attached hereto as Schedule A); |
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(D) |
WHEREAS
by agreement dated June 24, 2015, GTL conveyed such property, including the Purchased Assets, to Knight (a copy of the said
agreement being attached hereto as Schedule B); |
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(E) |
WHEREAS
the Purchaser desires to purchase and Knight desires to sell the Purchased Assets as herein defined; |
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(F) |
WHEREAS
the Parties wish to enter into this Agreement, all on the terms and conditions set out herein. |
NOW,
THEREFORE, in consideration of these premises and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties hereby covenant, contract and agree as follows:
1.1 |
For
the purposes of this Agreement, unless the context otherwise requires, the following terms shall have the respective meanings
set out below and grammatical variations of such terms shall have corresponding meanings: |
“Affiliate”
means any corporation or entity which is directly or indirectly controlled by, or controls or is under common control with, another
corporation or entity, provided that “control” shall mean ownership as to more than fifty percent (50%) of another
corporation or entity or the power to direct decisions of another corporation or entity, including, without limitation, the power
to direct management and policies of another corporation or entity, whether by reason of ownership, by contract or otherwise;
“Agreement”
means this Asset Purchase Agreement and all schedules, exhibits and instruments supplemental hereto or in amendment or confirmation
hereof.
“Confidential
Information” shall mean, with respect to a Party (the “Receiving Party”), all information, which
is disclosed by the other Party (the “Disclosing Party”) to the Receiving Party hereunder or to any of its
employees, consultants, Affiliates, licensees or sublicensees (“Representatives”), except to the extent that
such information, (i) as of the date of disclosure is demonstrably known to the Receiving Party or its Representatives, as shown
by written documentation, other than by virtue of a prior confidential disclosure to such Party or its Representatives by the
Disclosing Party; (ii) as of the date of disclosure is in, or subsequently enters, the public domain, through no fault or omission
of the Receiving Party; (iii) is obtained by the Receiving Party or its Representatives from a third Party having a lawful right
to make such disclosure free from any obligation of confidentiality to the Disclosing Party; or (iv) is independently developed
by or for the Receiving Party or its Representatives without reference to or reliance upon any Confidential Information of the
Disclosing Party as demonstrated by competent written records.
“Effective
Date” shall mean the date hereof.
“Know
How” means any and all technical information, trade secrets, formulas, prototypes, specifications, directions, instructions,
test protocols, procedures and results, studies, analyses, raw material sources, data, manufacturing data, formulation or production
technology, conceptions, ideas, innovations, discoveries, inventions, processes, methods, materials, machines, devices, formulae,
equipment, enhancements, modifications, technological developments, techniques, systems, tools, designs, drawings, plans, software,
documentation, data, programs and other knowledge, information, skills and materials controlled or owned by Knight as at the date
hereof and pertaining to the Products, and any modifications, variations, derivative works and improvements of or relating to
any of the foregoing owned and controlled by Knight as at the date hereof.
“IP
Agreement” means that certain agreement dated October 18, 2009 between Neuroquest and Origin, as amended, copies of
which are attached in Schedule I.
“Liens”
shall mean any security, interest, mortgage, pledge or other encumbrance.
“Losses”
means losses, damages, liabilities, deficiencies, actions, judgments, interest, awards, penalties, fines, costs or expenses
of whatever kind, including reasonable attorneys’ fees and the cost of enforcing any right to indemnification hereunder
and the cost of pursuing any insurance providers.
“LSU
Agreement” means that certain agreement dated March 26, 2004 between Origin and the Louisiana State University Agricultural
and Mechanical College, copy of which is attached in Schedule I.
“Net
Sales” means the gross amounts invoiced by or on behalf of the Purchaser and its Affiliates for sales of the Products
to third parties that are not Affiliates of the Purchaser in bona fide, arm’s-length transactions, less the following deductions
if and to the extent they are (i) determined in accordance with the Purchaser’s accounting standards which are in accordance
with IFRS, (ii) actually taken by the Purchaser or its Affiliates, and (iii) included in the gross invoiced sales price of the
Products or otherwise directly paid or incurred by the Purchaser or its Affiliates with respect to the sale of the Products:
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(a) |
cash
discounts; |
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(b) |
rebates; |
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(c) |
direct to customer
discounts and coupons; |
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(d) |
charge-backs; |
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(e) |
bad debt; |
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(f) |
amounts repaid
or credited by reasons of defects, rejections, recalls, returns; and |
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(g) |
tariffs, duties,
excise, sales, value-added and other similar taxes (other than taxes based on income). |
“Neuroquest”
means Neuroquest Inc.
“Parties”
means Knight and the Purchaser, collectively, and “Party” means either of them.
“Products”
means the products and formulas listed in Schedule C.
“Purchased
Assets” means and comprises, as of the Effective Date, all right, title and interest of Knight in, to and under the
following properties, assets and rights to the extent that such properties, assets and rights relate to the manufacturing (if
applicable), marketing, promotion, sale and distribution of the Products exclusively in the Territory:
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(a) |
rights
to the registered marks listed on Schedule D, and to the patents pending listed on Schedule D and all goodwill
appurtenant thereto, applications, renewals and registrations thereof and all common law rights relating to the Territory
therein; |
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(b) |
any
and all domain names and addresses and websites related exclusively to the Products in the Territory, including the domain
names listed on Schedule D; |
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(c) |
all
finished goods, raw materials, and packaging material inventory of the Products to be used exclusively for sale in the Territory; |
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(d) |
all
accounts receivable relating to the sales of the Products in the Territory, as listed on Schedule E; |
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(e) |
all
prepaid expenses or deposits that would be to the benefit of the Purchaser in respect of the sale of the Products in the Territory,
as listed on Schedule F; |
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(f) |
all
books and records (including customer lists) pertaining to the sale of the Products in the Territory in Knight’s possession
or control, provided that where such books and records are not exclusive to the Territory, copies shall be provided; |
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(g) |
the
rights to the clinical trials in respect of the Products described in Schedule G, it being acknowledged and agreed
by the Purchaser that Knight shall retain corresponding rights to such clinical trials for outside of the Territory; |
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(h) |
those
orders for the purchase of Products for the Territory that have been shipped but not yet invoiced, being those listed in Schedule
H; |
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(i) |
all
data and know-how (including relating to formulation of the Products) and other intellectual property rights in Knight’s
possession and control to the extent that these are exclusively related to the manufacture, use or sale of the Products in
the Territory; |
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(j) |
all
personnel files related to the individuals described in Section 3.4 to the extent in Knight’s possession or control
and to the extent such individuals are hired by the Purchaser; |
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(k) |
all
claims of Knight against third parties related to the Products in the Territory and the assets described in this definition,
whether known or unknown, choate or inchoate, contingent or non-contingent; and |
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(l) |
the
goodwill and going concern value with respect to the assets described in subsections (a) through (k) above. |
“Royalty
Payment” has the meaning ascribed thereto in Section 2.3.
“Share
Agreement” means that certain agreement dated December 21, 2011 between Origin, Neuroquest and Neurodyn Inc., as amended,
copies of which are attached in Schedule I.
“Territory”
means the United States, including all states contained therein and Puerto Rico and the U.S. Virgin Islands.
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Schedule
A |
Court
Order |
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Schedule
B |
Purchase
Agreement |
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Schedule
C |
Products |
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Schedule
D |
Patents
Pending |
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Schedule
E |
Accounts
Receivable |
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Schedule
F |
Prepaid
Expenses or Deposits |
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Schedule
G |
Clinical
Trials |
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Schedule
H |
Orders
of Products |
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Schedule
I |
License
Agreements |
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Schedule
J |
Current
Assets and Liabilities |
2.1 |
Purchased
Assets: Subject to the provisions of this Agreement, Knight hereby sells, assigns and transfers to the Purchaser and the
Purchaser hereby purchases from Knight, as of the Effective Date, the Purchased Assets. |
2.2 |
Consideration.
The consideration payable by the Purchaser for the Purchased Assets shall be: |
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2.2.1 |
the
amount of US$250,000 payable upon the execution of this Agreement; |
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2.2.2 |
the
amount of US$250,000 payable on or before June 30, 2016; |
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2.2.3 |
the
amount of US$700,000 payable in installments (i) in respect of the period ending September 30, 2015 and (ii) for each three
month period thereafter (December 31, March 31, June 30, September 30) equal to the greater of (x) five percent (5%) of Net
Sales for that period, and (y) US$12,500; and |
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2.2.4 |
commencing
from the payment in full of the amount of US$700,000 as set forth in Section 2.2.3 above, and for the sixty (60) months thereafter,
an amount equal to two percent (2%) of Net Sales for that sixty (60) month period. Payments under this Section 2.2.4 shall
accrue and be payable on a quarterly basis; |
(collectively,
the “Total Consideration”)
2.3 |
Royalty
Payment: The obligations set forth in Sections 2.2.3 and 2.2.4 (the “Royalty Payments”), together with
the reporting obligations set forth in Section 6 below, shall bind all sublicensees, assignees and other successors and assigns
of the Purchaser. |
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2.4 |
Rights
Reserved by Knight: Knight reserves to itself the right to market, sell, and distribute the Products outside the Territory.
Knight recognizes and agrees that it has no right, title or license to market, sell or distribute the Products in the Territory,
and that it will not grant any party the right, title or license to market, sell or distribute the Products in the Territory.
To the extent required, the Purchaser hereby acknowledges that Knight may have the Products manufactured in the Territory
for sale outside the Territory and Knight acknowledges that the Purchaser may have the Products manufactured outside the Territory
for sale in the Territory. |
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2.5 |
Allocation
of Purchase Price. Knight and the Purchaser shall cooperate in the preparation of a joint schedule allocating the purchase
price among the Purchased Assets. |
2.6 |
Closing.
Subject to the terms and conditions of this Agreement, the consummation of the transactions contemplated by this Agreement
(the “Closing”) shall take place at the offices of Wyrick Robbins Yates & Ponton LLP, Raleigh, NC,
at 10:00 a.m. EST, on June 26, 2015. At the Closing, Knight shall deliver to the Purchaser the following: |
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2.6.1 |
A
bill of sale in a form and substance satisfactory to the Purchaser, duly executed by Knight, transferred the tangible personal
property in the Purchased Assets to the Purchaser; and |
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2.6.2 |
Intellectual
property assignments in form and substance satisfactory to the Purchaser and duly executed by Knight, transferring all of
Knight’s right, title and interest in and to the intellectual property assets included in the Purchased Assets to the
Purchaser. |
3. |
LICENCE |
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3.1 |
Knight
hereby grants to the Purchaser an exclusive, transferable, irrevocable, royalty-free (excluding any Royalty Payments required
by this Agreement and the LSU Royalty), fully paid up perpetual right and licence or sublicense (as applicable) (with the
right to sublicense), limited in all respects to the Territory, for and in respect to (i) the assets and rights described
in paragraphs (a), (g) and (i) of the definition of Purchased Assets, (ii) the rights that Knight holds under the IP Agreement,
the Share Agreement and/or the LSU Agreement, and (iii) all Know How, necessary for the manufacture, marketing, import, export,
sale, distribution, and other exploitation of the Products in the Territory, including the distribution of the Products under
private or non-Neuragen labels. |
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3.2 |
The
Purchaser acknowledges that the Products are subject to the license obligations set forth in the agreements attached hereto
as Schedule I and, to the extent applicable, agrees to assume such obligations in connection with the marketing, sale
and distribution of the Products in the Territory, specifically excluding any royalty or payment obligations thereunder other
than with respect to the LSU Agreement (the “LSU Royalty”). The Purchaser agrees to assume the royalty
obligations (if any) payable to Louisiana State Agricultural and Mechanical College pursuant to the LSU Agreement. The LSU
Royalty will be remitted by the Purchaser to Knight for payment to LSU. |
4. |
Assumption
of Liabilities AND OTHER MATTERS |
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4.1 |
Upon
the terms and subject to the conditions set forth in this Agreement, with effect as of the Effective Date, the Purchaser hereby
assumes, and agrees to pay, perform and discharge when due, and shall indemnify Knight and/or its Affiliates, as the case
may be, from and against the following liabilities (the “Assumed Liabilities”): |
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4.1.1 |
the
accounts payable owing to C-Care in the amount of US$51,795; |
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4.1.2 |
the
liabilities described in Section 3.2 with respect to the contracts listed on Schedule I, to the extent applicable,
but only to the extent such liabilities thereunder are required to be performed after the Closing and do not arise from any
failure to perform, improper performance, warranty or other breach, default or violation by Knight on or prior to the Closing;
and |
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4.1.3 |
all
allowances for customer returns in respect of Products sold in the Territory prior to the Effective Date and credits and other
amounts owed to customers in respect of the sale of Products in the Territory prior to the Effective Date, not to exceed US$100,000. |
Notwithstanding
anything to the contrary in this Agreement, the Purchaser shall not assume and shall not be responsible to pay, perform, or discharge
any liabilities of Knight or its Affiliates of any kind or nature whatsoever other than the Assumed Liabilities (the “Excluded
Liabilities”), and Knight shall pay and satisfy in due course all Excluded Liabilities which they are obligated to pay
and satisfy. Excluded Liabilities include, without limitation, any royalties payable to Neuroquest Inc. (other than the LSU Royalty).
4.2 |
The
Parties agree that the aggregate book value of the assets described in paragraphs (c), (d) and (e) of the definition of “Purchased
Assets” shall exceed the liabilities assumed and paid by the Purchaser under Section 4.1 by not less than US$75,000
as set forth on Schedule J hereto. To the extent that the finished goods inventory included in the Purchased Assets
cannot be sold solely as a result of those finished goods being stale-dated, then Knight shall provide to the Purchaser raw
materials of the Products with an equivalent book value to the stale-dated goods but only to the extent necessary to meet
the said US$75,000 threshold. The Purchaser shall use reasonable commercial efforts to sell such inventory prior to selling
new inventory. If, as of the date two hundred seventy (270) days from the date hereof, the US$75,000 threshold has not been
met, then Knight shall pay the Purchaser the amount of the shortfall or at its option provide the Purchaser with raw materials
of the Products with an equivalent book value. |
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4.3 |
Origin
employed two (2) employees in the Territory, namely Mike Herb and Angela MacIntosh. The Purchaser shall indicate by notice
in writing to Knight to be sent by July 15, 2015 whether or not it wishes to hire one, both or neither of such employees.
For each such employee in respect of which the Purchaser declines to hire, Knight shall indemnify the Purchaser with respect
to any severance or other costs arising from the termination of such employees’ employment with Origin or Knight. Should
the Purchaser or its Affiliates rehire any such employee within one (1) year of the date hereof, it shall reimburse to Knight
any severance or other termination costs incurred by Knight. |
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5. |
security |
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5.1 |
As
security for the payment of the Total Consideration, the Purchaser shall, contemporaneously herewith, grant to Knight on terms
and conditions satisfactory to Knight, an enforceable security charge and interest over certain of its assets, undertakings
and property pursuant to a Security Agreement substantially in the form attached hereto as Exhibit A. |
6. |
PAYMENT
TERMS |
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6.1 |
Payment
of Royalties. The Purchaser shall make the Royalty Payments owed to Knight hereunder within forty-five (45) days from
the end of each quarterly period in which such payment accrues. For greater certainty, the Parties agree that Royalty Payments
shall accrue on the date of shipment of the Products by or on behalf of the Purchaser. Each Royalty Payment shall be accompanied
by a report setting forth the sales of the Products in the Territory in the quarter covered by such statement, specifying
the Net Sales, if any and the royalties payable with respect thereto. |
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6.2 |
Accounting.
All payments hereunder shall be made in United States dollars. |
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6.3 |
Interest.
In the event that any payment due hereunder is not made when due, interest shall accrue at a rate per annum equal to the lesser
of one percent (1%) per month or the highest rate permitted by Law, calculated on the number of days such payments are paid
after the date such payments are due and compounded monthly. |
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6.4 |
Taxes.
All payments paid by the Purchaser to Knight under this Agreement are exclusive of, and the Purchaser shall pay any sales,
use, rental, custom, value added, consumption or other taxes, duties, levies, fees or charges that may be assessed in any
jurisdiction resulting from or arising under this Agreement, provided, however, that the Purchaser shall in no event be responsible
or liable for any income taxes attributable to Knight. All payments contemplated under this Section 6.4 shall be supported
by a valid receipt for any tax withholding from the appropriate taxing authorities, as well as any other documentation required
by the Canada Revenue Agency, the Internal Revenue Service, or any other taxing authority, for the purpose of obtaining an
income tax deduction and/or tax credit for Knight. The Parties shall cooperate with each other by providing information to
the other Party, as may be reasonably requested by the other Party, for use in connection with making any withholdings and/or
in obtaining any tax deduction and/or tax credits hereunder. Without limiting the generality of the foregoing, the Parties
agree to execute certain forms required by the States of Maryland and New Jersey to be presented at Closing. |
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6.5 |
Records
Retention; Review |
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6.5.1 |
Payments.
The Purchaser and its Affiliates shall keep for at least three (3) years from the end of the calendar year to which they pertain
complete and accurate records of sales by the Purchaser or its Affiliates, as the case may be, of the Products and in sufficient
detail to allow the accuracy of the payments hereunder to be confirmed. |
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6.5.2 |
Review.
At the request of Knight, upon at least ten (10) business days’ prior written notice from Knight, and at the expense
of Knight (except as otherwise provided herein), the Purchaser shall permit Knight or its representative to inspect (during
regular business hours) the relevant records required to be maintained by the Purchaser and its Affiliates under this Section
6.5. Knight shall be entitled to review the then-preceding four (4) years of records required to be maintained by the Purchaser
and its Affiliates under this Section 6.5 solely for purposes of verifying the Purchaser’s calculations. If any review
reveals a deficiency in the calculation of payments resulting in an underpayment by the Purchaser, the Purchaser shall promptly
pay Knight the amount remaining to be paid and, if such underpayment is by five percent (5%) or more for any one-year period,
the Purchaser shall pay the reasonable documented out-of-pocket expenses of the review. |
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6.5.3 |
Other
Parties. Each Party shall include in any agreement with its Affiliates or third parties, terms requiring such party to
assume the Royalty Payments and LSU Royalty and to retain records as required in this Section 6.5 and to permit the other
Party to inspect such records as required by this Section 6.5. |
7. |
MANUFACTURING
AND FORMULATION |
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7.1 |
The
Purchaser acknowledges that the Products are currently sourced through C-Care Company of Linthicum Heights, MD, as contract
manufacturer, and that there is no formal manufacturing or supply agreement in place with C-Care. Each of the Purchaser and
Knight agree to use reasonable commercial efforts to coordinate with one another in respect of sourcing the Products (through
C-Care or otherwise) with the intention of obtaining volume and other discounts and efficiencies (batch sizes, validation
charges, etc.), provided that neither Party is obliged to source Products together. |
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7.2 |
The
Parties agree that at Knight’s request the Products shall be reformulated in a manner that excludes the use of geraniol.
Knight shall initiate and lead such reformulation process in consultation with the Purchaser. Knight and the Purchaser shall
share all of the costs of such reformulation equally. For greater certainty, the Purchaser will be entitled to such reformulated
Products and the rights thereto solely in respect to the Territory and Knight will be so entitled everywhere outside the Territory.
Upon any reformulation described in this Section 7.2, Knight and the Purchaser agree to enter into a separate agreement regarding
the details of such reformulation. The Parties further agree to consult with one another with respect to any additional reformulation
of the Products with the intention that they will cost share and have exclusive rights to the reformulated Product in their
respective territories as above. |
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7.3 |
Should
either Party at any time or from time to time wish to extend or add to the products sold under the “Neuragen”
trademark (such as a line extension) (a “New Product”) for their respective territories, they shall offer
the opportunity to the other to market and sell the New Product in its own territory, which offer shall include the proposed
details (including proposed cost sharing or other financial terms for the new offering). The Parties shall negotiate in good
faith for a period of not less than thirty (30) days after which the offering party may withdraw the offer. |
8. |
REPRESENTATIONS
AND WARRANTIES OF SYNERGY |
|
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8.1 |
The
Purchaser represents and warrants to Knight that, as of the Effective Date: |
|
8.1.1 |
The
Purchaser is duly organized, validly existing, and in good standing under the laws of the State of Delaware. |
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8.1.2 |
The
Purchaser has all necessary power, authority and capacity and is properly authorized to enter into this Agreement and to perform
its obligations hereunder. The execution and delivery of this Agreement and the performance of the transactions contemplated
hereby have been duly authorized by it and its directors and the Agreement is a legal and binding obligation of the Purchaser,
enforceable against the Purchaser by Knight in accordance with its terms except as enforcement may be limited by bankruptcy,
insolvency and other laws affecting the rights of creditors generally and except that equitable remedies may be granted only
in the discretion of a court of competent jurisdiction; |
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8.1.3 |
The
execution, delivery, and performance of this Agreement by the Purchaser does not, and the consummation of the transactions
contemplated herein will not, violate any provisions of the Purchaser’s organizational documents, any Law or regulation
applicable to the Purchaser, or any agreement, mortgage, lease, instrument, order, judgment, or decree to which the Purchaser
is a party or is bound. |
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8.1.4 |
No
consent or approval of, or filing with or notice to, any federal, state, provincial, or local regulatory authority, agency,
or department or any other person not a party to this Agreement to which the Purchaser is a party is required or necessary
to be obtained by the Purchaser or on its behalf in connection with the execution, delivery, and performance of this Agreement
or to consummate the transactions contemplated hereby or thereby. |
9. |
REPRESENTATIONS
AND WARRANTIES OF KNIGHT |
|
|
9.1 |
Knight
represents and warrants to the Purchaser that, as of the Effective Date: |
|
9.1.1 |
Knight
is duly organized, validly existing, and in good standing under the laws of Canada. |
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9.1.2 |
Knight
has all necessary corporate power, authority and capacity and is properly authorized to enter into this Agreement and to perform
its obligations hereunder. The execution and delivery of this Agreement and the performance of the transactions contemplated
hereby have been duly authorized by all necessary actions of it, its shareholders, and its directors and the Agreement is
a legal and binding obligation of Knight, enforceable against Knight by the Purchaser in accordance with its terms except
as enforcement may be limited by bankruptcy, insolvency and other laws affecting the rights of creditors generally and except
that equitable remedies may be granted only in the discretion of a court of competent jurisdiction; |
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9.1.3 |
The
execution, delivery, and performance of this Agreement by Knight, including the sale and assignment of the Purchased Assets
to the Purchaser, does not, and the consummation of the transactions contemplated herein will not (a) violate any provisions
of Knight’s organizational documents, bylaws, any Law or regulation applicable to Knight, or any agreement, mortgage,
lease, instrument, order, judgment, or decree to which Knight is a party or is bound; or (b) require the consent, notice or
other action by any person under, conflict with, result in a violation or breach of, constitute a default under or result
in the acceleration of any contract. |
|
9.1.4 |
To
the best of Knight’s knowledge, no consent or approval of, or filing with or notice to, any federal, state, provincial,
or local regulatory authority, agency, or department or any other person not a party to this Agreement is required or necessary
to be obtained by Knight or on its behalf in connection with the execution, delivery, and performance of this Agreement or
to consummate the transactions contemplated hereby or thereby. |
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9.1.5 |
Knight
is the owner of and has good, valid, and marketable legal title to the Purchased Assets free and clear of all Liens. The Purchaser
acknowledges that Knight’s title thereto is derived from and limited by the proceedings and agreements referred to in
the Recitals hereto. |
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9.1.6 |
Except
as described in the Recitals hereto, there are no claims, actions, suits, proceedings, complaints, or investigations pending,
or to the knowledge of Knight, threatened, before any federal, state, provincial or local court or government or regulatory
authority, or before any arbitrator of any nature, brought by or against Knight or any of its Affiliates involving, affecting,
or related to the Purchased Assets. |
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9.1.7 |
The
Purchased Assets, along with the licenses granted in Section 3.2, constitute all of the rights, property and assets in Knight’s
possession or control with respect to the manufacture and distribution of the Products in the Territory. |
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9.1.8 |
To
the best of Knight’s knowledge, no action, suit, proceeding, or audit is pending against or with respect to the any
of the Purchased Assets regarding taxes. |
10. |
DISCLAIMER
OF WARRANTIES. |
|
|
10.1 |
EXCEPT
AS EXPRESSLY PROVIDED IN THIS AGREEMENT, EACH OF the Purchaser AND Knight HEREBY DISCLAIMS ALL CONDITIONS, WARRANTIES AND
STATEMENTS IN RESPECT OF THE SUBJECT MATTER OF THIS AGREEMENT, WHETHER EXPRESS OR IMPLIED, BY STATUTE, CUSTOM OF THE TRADE
OR OTHERWISE (INCLUDING, WITHOUT LIMITATION, ANY SUCH CONDITION, WARRANTY OR STATEMENT RELATING TO THE DESCRIPTION OR QUALITY
OF ANY PURCHASED ASSETS, THE PRODUCTS, THEIR MERCHANTABILITY OR THEIR FITNESS FOR A PARTICULAR PURPOSE OR USE UNDER ANY CONDITIONS)
AND ANY SUCH CONDITION, WARRANTY OR STATEMENT IS HEREBY DISCLAIMED BY EACH OF SYNERGY AND KNIGHT AND EXCLUDED. |
11. |
INDEMNIFICATION.
The representations and warranties contained herein shall survive the Closing and shall remain in full force and effect for
a period of twelve (12) months. Knight shall indemnify and defend each of the Purchaser and its Affiliates and their respective
representatives (collectively, the “Synergy Indemnitees”) against, and shall hold each of them harmless
from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon,
the Synergy Indemnitees based upon, arising out of, with respect to or by reason of: |
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(a) any
inaccuracy in or breach of any of the representations or warranties of Knight contained in this Agreement, the other
transaction documents related to this Agreement or in any certificate or instrument delivered by or on behalf of Knight
pursuant to this Agreement, as of the date such representation or warranty was made or as if such representation or
warranty was made on and as of the Closing (except for representations and warranties that expressly relate to a
specified date, the inaccuracy in or breach of which will be determined with reference to such specified
date); |
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(b) any
breach or non-fulfillment of any covenant, agreement or obligation to be performed by Knight pursuant to this Agreement, the
other transaction documents related to this Agreement or any certificate or instrument delivered by or on behalf of Knight
pursuant to this Agreement; |
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|
(c) The
Purchaser agrees that Knight’s liability for any breach of any condition, warranty or statement in respect of this
Agreement or at law shall not exceed the consideration actually received by it pursuant to Section 2.2 above. The
Purchaser shall be permitted any offset any Losses payable to it under this Section 11 against amounts otherwise payable
by the Purchaser to Knight hereunder. |
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12. |
GENERAL |
|
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12.1 |
Other
Expenses. Each of Knight and Purchaser will bear its own costs and expenses (including legal fees and expenses) incurred
in connection with this Agreement and the transactions contemplated hereby. |
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12.2 |
Entire
Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof
and supersedes all prior agreements, understandings, negotiations and discussions, whether written or oral. There are no conditions,
covenants, agreements, representations, warranties or other provisions, express or implied, collateral, statutory or otherwise,
relating to the subject matter hereof except as herein provided. |
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12.3 |
Governing
Law; Exclusive Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State
New York applicable to contracts made and to be performed wholly within the State of New York, without regard to the conflict
of laws principles thereof. The Parties expressly reject the application of the United Nations Convention on Contracts for
the International Sale of Goods and all implementing legislation thereunder. The Parties hereby consent to the exclusive jurisdiction
of the Federal and New York State courts located in Manhattan, New York and hereby waive any objection to venue or forum laid
therein. The Parties hereby agree that service of process by certified mail, return receipt requested, shall constitute personal
service for all purposes hereof. |
12.4 |
Counterparts;
Facsimile Signature. This Agreement may be executed in one or more counterparts, and all such counterparts shall be deemed
to be part of one and the same original. One or more counterparts of this Agreement may be delivered via electronic means,
with the intention that they shall have the same effect as an original counterpart hereof. |
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12.5 |
Confidentiality.
Knight and the Purchaser acknowledge that each Party will be exposed to certain Confidential Information of the other Party.
Knight and the Purchaser agree that Knight and its Affiliates, employees, agents and consultants, and the Purchaser and its
Affiliates, employees, agents and consultants, will not use and will not disclose any Confidential Information of the other
Party except in accordance with the provisions and for the purposes of this Agreement. In addition, neither Party will disclose
any Confidential Information of the other Party to any Affiliate, employee, agent or consultant who does not have a need to
know such Confidential Information. |
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12.6 |
Assignment.
Neither party shall assign this Agreement or any part thereof without the prior written consent of the other party (which
consent shall not be unreasonably withheld); provided, however, that the Purchaser and Knight, without such consent, may assign
this Agreement to an Affiliate or in connection with the transfer or sale of substantially all of its business or assets to
which this Agreement pertains, in the event of its merger or consolidation with another company. No such permitted assignment
or other permitted transfer shall relieve the assigning or transferring party from its obligations hereunder. A change in
ownership of either party shall not be construed as an assignment of this Agreement. |
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12.7 |
Successors
in Interest. This Agreement shall be binding upon and inure to the benefit of the Parties hereto, their subsidiaries,
affiliates, successors and permitted assigns. Assignment to an affiliate or subsidiary shall not release the party making
such assignment from responsibility for its obligations under this Agreement. |
(Signatures
on next page)
IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written.
|
Neuragen
Corp. |
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By: |
/s/
Jack Ross |
|
Name: |
Jack Ross |
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Title: |
President and Chief Executive Officer |
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Knight
therapeutics inc. |
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By: |
/s/
Jeffrey Kadanoff |
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Name: |
Jeffrey Kadanoff |
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Title: |
Chief Financial Officer |
Omitted
Exhibits and Schedules*
EXHIBITS
|
Exhibit
A |
Security
Agreement |
SCHEDULES
|
Schedule
A |
Court
Order |
|
Schedule
B |
Purchase
Agreement |
|
Schedule
C |
Products |
|
Schedule
D |
Patents
Pending |
|
Schedule
E |
Accounts
Receivable |
|
Schedule
F |
Prepaid
Expenses or Deposits |
|
Schedule
G |
Clinical
Trials |
|
Schedule
H |
Orders
of Products |
|
Schedule
I |
License
Agreements |
|
Schedule
J |
Current
Assets and Liabilities |
*
The listed exhibits and schedules have been omitted from this Exhibit 2.4 pursuant to Item 601(b)(2) of Regulation S-K. Synergy
Strips Corp. hereby undertakes to furnish supplementally copies of any of the omitted exhibits and schedules upon request by the
SEC.
EMBARGOED FOR USE BEFORE |
Contact: |
After 5pm (Eastern) |
Jack Ross, Chairman
/ CEO |
July 1, 2015 |
Synergy Strips |
|
Jack@synergystrips.com |
|
615-939-9004 |
Synergy
Strips Corp Does another Acquisition with the Purchase of U.S Rights For Neuragen®
Westbrook, Maine,
July 1, 2015 – Synergy Strips Corp (OTCQB: SNYR) a consumer health care company, today announced through its wholly
owned subsidiary Neuragen Corp the purchase from Knight Therapeutics Inc. (TSX: GUD) (“Knight” or the “Company”),
a leading Canadian specialty pharmaceutical company, the U.S. rights related to Neuragen®, an innovative OTC product that
helps relieve pain caused by diabetic nerve damage. Knight retains Canadian rights and ex-U.S. global rights to Neuragen®.
Under the terms of
the agreement, Synergy will Pay Knight a minimum aggregate consideration of US$1,200,000 payable as follows: (i) US$250,000 upon
closing, (ii) US$250,000 by June 30 2016, (iii) US$700,000 payable in quarterly installments equal to the greater of US$12,500
or 5% of U.S. net sales, plus (iv) 2% of U.S. net sales of Neuragen® for 60 months thereafter.
“This sale
of the U.S. rights to Neuragen® allows us to not only recover the principal of our CDN$850,000 secured loan to Origin, but
also provides Knight with a healthy return. In addition, we are strengthening our relationship with Synergy, our U.S. OTC commercialization
partner, and focusing on the upcoming Canadian re-launch of Neuragen®, our first commercial product north of the border,”
said Jonathan Ross Goodman, President and CEO of Knight.
“We are pleased
to add another unique offering to our U.S. portfolio; it is consistent with the company’s strategy to grow by further acquisition.
We are deliberately seeking to generate shareholder value through the addition of products that help improve the lives of customers
while leveraging our existing distribution relationships. We will continue to be active on the acquisition trail” said Jack
Ross, President and CEO of Synergy.
About Neuragen®
Neuragen®
is a topical product that works directly at the site of the pain as opposed to oral products. Neuragen® reduces the spontaneous
firing of damaged peripheral nerves. By calming these firings at the source, Neuragen® is clinically shown to reduce shooting
and burning pains quickly and without the side effects of orally taken medications. This is in part due to the small lipophilic
molecules found in Neuragen® which rapidly carry the active ingredients through the rough outer layer of the skin to the site
of the pain. Neuragen is available over the counter in most local pharmacies either in the diabetic section or the analgesic (pain)
section. For more information, please visit www.neuragen.com.
About Knight Therapeutics
Inc.
Knight
Therapeutics Inc., headquartered in Montreal, Canada, is a specialty pharmaceutical company focused on acquiring or in-licensing
innovative pharmaceutical products for the Canadian and select international markets. Knight’s shares trade on TSX under
the symbol GUD. For more information about Knight Therapeutics Inc., please visit the Company’s web site at www.gud-knight.com
or www.sedar.com.
About Synergy Strips
Corp.
Synergy
Strips Corp. (OTCQB:SNYR) is a Consumer Health Care Company, that is in the process of building a portfolio of best-in- class
consumer product brands. Synergy’s strategy is to grow its portfolio both organically and by further acquisition.
About FOCUSfactor®
“Another Synergy Brand”
FOCUSfactor
is sold at America’s leading retailers such as Costco, Sam’s Club, Wal-Mart, Walgreens and The Vitamin Shoppe. FOCUSfactor,
America’s leading brain health supplement, is a nutritional supplement that includes a proprietary blend of brain supporting
vitamins, minerals, antioxidants and other nutrients. In December 2012, the United States Patent and Trademark Office issued US
Patent 8,329,227 covering FOCUSfactor’s proprietary formulation “for enhanced mental function.” The issuance
of the patent marked one of the few times a patent has been issued for a nationally branded nutritional supplement. FOCUSfactor
is clinically tested with results demonstrating improvements in focus, concentration and memory in healthy adults.
Forward-Looking
Statements
This
press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that
are subject to risks and uncertainties. All statements, other than statements of historical facts, regarding management’s
expectations, beliefs, goals, plans or Synergy’s prospects should be considered forward-looking. Readers are cautioned that
actual results may differ materially from projections or estimates due to a variety of important factors, including: Synergy’s
ability to integrate the Neuragen® product line into its current operations; Synergy’s dependence on third parties for
its research and development, manufacturing and distribution functions; Synergy’s’ dependence on its license relationships;
the risks and uncertainties associated with Synergy’s ability to manage its limited cash resources; obtaining additional
financing to support Synergy’s operations; protecting the intellectual property developed by or licensed to Synergy for
Neuragen®; and Synergy’s ability to build its operations to support its business strategy and promote its products.
These and other risks are described in greater detail in Synergy’s filings with the SEC, copies of which are available free
of charge at the SEC’s website (www.sec.gov) or upon request from Synergy. Synergy may not actually achieve the goals
or plans described in its forward-looking statements, and investors should not place undue reliance on these statements. Synergy
assumes no obligation and does not intend to update these forward-looking statements, except as required by law.
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