SCRC....Excellant 8k just filed and someone please post this on SCRC [i-hub] forum for all to see : > ....
Item 1.01 Entry into a Material Definitive Agreement.
On November 8, 2013, the Registrant entered into a written agreement with Wholesale Rx, Inc. (“WholesaleRx”) (effective retroactively to November 1, 2013) pursuant to which, among other things, the Registrant agreed to make an equity investment in WholesaleRx in the amount of $400,000 for 12,000 shares, which represents a 20% interest in WholesaleRx. The Registrant will pay the subscription amount in three installments ($150,000 upon execution of the agreement, $125,000 on December 31, 2013 and $125,000 on February 15, 2014). A proportionate number of the shares of WholesaleRx will be released to the Registrant from an escrow agent upon each payment. However, the Registrant will have the full rights of a shareholder as to all 12,000 shares. The agreement also provides the Registrant with a right of first refusal for (i) any proposed transfer of shares by the current owners of WholesaleRx and (ii) any financing (debt or equity) by WholesaleRx.
In the agreement, the Registrant also agreed to provide purchase order financing to WholesaleRx through a related third party financing source with which the Registrant has a pre-existing relationship. Under this arrangement, when WholesaleRx needs to fund the purchase of product to fill an order, the Registrant would secure advances financing from the third party financing source and then turn around and lend the money directly to WholesaleRx, which must repay the advance from the Registrant within 24 calendar days (which is six days before the Registrant must repay the third party financing source). The loans from the Registrant to WholesaleRx are secured by certain assets of WholesaleRx (including any proceeds from such assets), and WholesaleRx has agreed to indemnify and hold the Registrant harmless for any claims, charges and demands resulting from or arising out of any purchase order financing with the third party financing source.
In consideration for providing financing for WholesaleRx’s purchase orders, and to cover the Registrant’s costs in administering the purchase order financing, WholesaleRx has agreed to pay the Registrant on or before the 15th calendar day of each month 20% of the gross profit for the prior calendar month (which gross profit would consist of (i) sales to all customers minus (ii) cost of goods sold, freight in (to WholesaleRx), credits and allowances). If WholesaleRx is late in paying such 20% fee, then the amount owed will accrue interest at the rate of 18% per annum until paid.
PART III
MISCELLANEOUS
10. (a) Upon execution of this Master Agreement, WholesaleRx shall deliver to ScripsAmerica true and correct copies of all state and federal licenses, authorizations and qualifications to engage in the drug sales and distribution business which is the basis for this Master Agreement and copies of Certificates of Insurance and coverage pages of all insurance policies then in force.
(b) Prior to the execution of this Master Agreement, WholesaleRx has provided ScripsAmerica with a schedule of all liabilities as of the date indicated, a copy of which is attached hereto and made a part hereof, as Exhibit A. WholesaleRx, Justin Rotenberry and Richie Gross represent and warrant that such schedule is true and correct and complete, and that there are no other liabilities except as listed thereon.
11. WholesaleRx, Justin Rotenberry and Richie Gross acknowledge awareness that ScripsAmerica is a publicly-trading company which files periodic reports with the US Securities and Exchange Commission, and that such reports include audited and/or reviewed financial statements. WholesaleRx, Justin Rotenberry and Richie Gross also acknowledge awareness that the requirements of GAAP may require that WholesaleRx’s financial statements be consolidated with those of ScripsAmerica due to the financial arrangements. Being aware of the time deadlines for the filing of ScripsAmerica’s periodic reports, WholesaleRx, Justin Rotenberry and Richie Gross agree that they will fully and promptly cooperate, in good faith, with requests from ScripsAmerica and/or its attorneys, accountants and auditors for access to all financial records and related files and documents and, if required, an audit and/or review of the annual and quarterly financial statements of WholesaleRx. All costs associated with such audit and/or review shall be paid by ScripsAmerica.
