Settlement Reached:
In January 2019, Melamed requested mediation, seeking settlement of the pending litigation with the Company, including that which was initiated against the Company by her son, Hootan Melamed (Shahla and Hootan, collectively, the “Melameds”). Through mediation, the Company and the Melameds reached agreeable settlement terms, and on February 19, 2020, the Company received a counter-signed Settlement and Release Agreement (the “Settlement”). Effective February 12, 2020 (the “Effective Date”), the Settlement is by and between Parallax Health Sciences, Inc., RoxSan Pharmacy, Inc., Michael Redmond, Edward Withrow III, Huntington Chase Financial Group, LLC, Calli Bucci and Dave Engert (collectively, “Parallax”), and Shahla Melamed and Hootan Melamed (collectively, the “Melameds”), and resolves all pending lawsuits between the parties in connection with the acquisition of RoxSan Pharmacy.
In consideration of the resolution of all existing and potential claims, including the cancellation of the Company’s contingent liability in the principal sum of $20,500,000, and accrued interest of approximately $4,500,000, and without further action or litigation and without admission of liability by either party, the Settlement terms include the following:
?A payment of $4,000,000 (the “Settlement Sum”) to the Melameds, to be paid as follows:
?$1,250,000 within 90 days of the Effective Date;
?$1,250,000 within one (1) year of the Effective Date;
?$1,500,000 within two (2) years of the Effective Date.
?The issuance of ten (10) million shares of the Company’s Common Stock to an entity owned by Shahla Melamed.
In addition, in the event forty percent (40%) or more of the Company and/or its subsidiaries (including by way of merger) is sold within two (2) years of the Effective Date, the Company shall pay the Melameds, within two (2) weeks of receipt of the proceeds from such sale (the “Sale Proceeds”), any outstanding unpaid Settlement Sum plus an additional 10% of the Sale Proceeds received, up to a total of an additional $3,000,000 over and above the Settlement Sum.
In the event the Company fails to cure a breach of timely payment of any portion of the Settlement Sum within thirty (30) days of a notice of default, a Stipulated Judgement may be filed by Melamed in the sum of $20,000,000, less any Settlement Sum amounts previously paid by the Company.
