Verus International Inc (VRUS)

[GermanCol]

As a 3 year shareholder, after reviewing in detail the last company filings and announcements and tired of all the negative posts from our new "saviors", I would like to offer my analysis about stock based compensation.

First, as memory seems to be so short on OTC and some new posters that don’t know the company (and pretend having the revealed reality) have come here saying there is no DD, that the supporters only say everything is good because we are heavily invested in VRUS, etc., I would like to remind the following:

1. In January 2, 2017, when Anshu entered into an agreement with the company to replace the previous CEO and to spinoff from a defunct company, he came not only as a CEO, but as a PARTNER and a CEO. So his stock based compensation maybe should not be called that way (that originates all the false claims that he is receiving too much, not thinking in shareholders, blah, blah, blah) because what we are seeing in non-cash charges is a realization of the partnership initial agreement of him being an owner of a percentage of the company, not a salary. Also consider the following to reinforce what I’m saying:

a. Stock based compensations are normally awarded as shares that the employee receives without having to pay. In Anshu’s case, he is not receiving shares, he is receiving warrants at an exercise price of 0.006, which is very different. In order to receive all the shares he is entitled to receive, he would have to pay that amount per share, which is almost the same market price we have now.

b. With the spinoff from a dead company with zero value Anshu started from zero revenues and customers a 100% new business. If it wasn’t for him, we would not have anything of what we have now, just think about that for a second. Also every million he brings to the company that allows him receive 7.5 million shares until he completes 20% of ownership stays with the company after he doesn’t receive anymore shares.

c. It is normal to have capitalist partners that get together with working partners to start a new business. He is putting his work in exchange for participation in the company, but also paying to receive his participation, so I don’t see why that is too much for him, I actually see the opposite.

2. When Anshu first signed the mentioned agreement in January 2, 2017, he was entitled to receive up to 90% of the Outstanding shares of the company based on Revenue increase.

Pursuant to the Agreement, Mr. Bhatnagar received warrants on the Effective Date (the “ Warrants ”). The Warrants grant Mr. Bhatnagar the right to acquire 5% of the outstanding fully diluted common stock of the Company, this right being fully vested and exercisable as of the Effective Date. The Warrants also vest a right to acquire 7,500,000 shares of our common stock, at an exercise price equal to the market price as of December 8, 2016 ($0.006 per share), for each $1,000,000 of revenues that the Company earns during the 2017 calendar year. The right vests upon the filing of a Form 10-Q or Form 10-K that reports the revenues necessary for each right to vest. However, prior to December 31, 2017, the Warrants may only vest up to the number of shares that would bring Mr. Bhatnagar’s beneficial ownership of our common stock up to, but not to exceed fifty (50) percent. On January 1, 2018, the Warrants vest the right to acquire shares that would bring Mr. Bhatnagar’s beneficial ownership of our common stock up to ninety (90) percent of the outstanding shares of our common stock, regardless of our income.

https://www.otcmarkets.com/filing/html?id=11772773&guid=JmrHUFgG6XOG13h

And that was modified to only 20% as can be seen in the 8-K/A from January 31 2017. So whoever is saying that is surprised with Anshu’s warrants is wrong. This is not new and nobody should be surprised. Actually conditions have been changing to be more positive for shareholders and less positive for him.

Explanatory Note

RealBiz Media Group, Inc. (the “Company”) is filing this amendment to the Current Report on Form 8-K dated January 2, 2017 and filed January 6, 2017 (the “Original 8-K), to include the amended terms of Anshu Bhatnagar’s employment agreement and to include such agreement as Exhibit 10.1 to the Original 8-K. No other changes have been made to the Original 8-K.

Item 1.01 Entry into a Material Definitive Agreement.

On January 31, 2017, the Company entered into an employment agreement with Anshu Bhatnagar (the “Employment Agreement”), effective as of January 2, 2017. Pursuant to the terms of the Employment Agreement, Mr. Bhatnagar will serve as Chief Executive Officer of the Company and a member of the Company’s Board of Directors (the “Board”) for a term which shall expire on December 31, 2021; provided, however , that the Employment Agreement may be renewed thereafter upon written notice by the Company and Mr. Bhatnagar. Pursuant to the Employment Agreement, the Company shall pay Mr. Bhatnagar (i) an annual base salary of $175,000, (ii) an annual discretionary bonus, as determined by the Board and (iii) warrants (the “Warrants”) to purchase 37,500 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) at an exercise price equal to $1.20 per share (post reverse stock split of the Company’s issued and outstanding Common Stock on a 1-for-200 basis). Mr. Bhatnagar may exercise the Warrants until such time as he owns 20% of the Company’s then issued and outstanding shares of Common Stock. In addition to the foregoing, after January 1, 2018, Mr. Bhatnagar shall receive warrants to acquire up to 3% of the Company’s issued and outstanding Common Stock at the beginning of each calendar year thereafter.

https://www.otcmarkets.com/filing/html?id=11812317&guid=JmrHUFgG6XOG13h

4. Then Andrew Garnock came and invested with a note and warrant to purchase stock at 0.0025 conversion price and we call him our Angel investor. But who brought Andrew Garnock to our company? Anshu. Also, Anshu’s warrants are exercisable at 0.006 per share (more than two times the price for Andrew Garnock) and additional to that, works for us incessantly 24/7. Maybe it’s worth calling Anshu our other Angel investor and Angel CEO.

Also consider that all revenue has come thanks to Anshu, but he is receiving shares for that until he gets 20% of ownership and that doesn’t mean Revenue brought by him will not continue with the company year after year.

5. With the last changes he is again giving up part of his benefits as he puts a limit with the Outstanding shares now, so if in the future OS increases he will not obtain more and will end up having less than 20%. So guess what, he has the same type of shares as us and doesn’t want any type of dilution because his 20% will be affected

So the ones that keep on staining Anshu’s honor should consider stopping to do it even if legal consequences don’t scare them.