Corporate Update November 1, 2022
Dear Valued CareClix Stakeholder,
CareClix is well positioned to complete what it started. Your patience and confidence is well placed. By now you should have heard that CareClix Holdings, Inc. decided to cancel the pending, proposed merger with Life On Earth Inc. (“LFER”). We are reaching out to you now to explain why we took this step, to let you know what this means for your investment as well as to give you an update on the health and future of the companies. In short, however, the future is positive, the CareClix business is growing, and we are all excited about the future.
Before the LFER acquisition, CareClix Holdings, Inc. formerly Solei Systems, Inc., was a publicly traded (OTC Markets (SOLI), SEC reporting holding company with four subsidiaries, CareClix, Inc., CareClix Services, Inc., CareClix RPM, Inc. and MyCareClix, Inc. CareClix, Inc. began operations in May 2019 with the acquisition of the CareClix Anywhere™ virtual health software system. For the first short year ended December 31, 2019, it generated $1,507,418 in total revenues, followed by $5,076,571 in 2020 and $2,814,636 in 2021, after transferring part of its then existing business to CareClix Services, Inc. CareClix Services, Inc. commenced operations in August 2021 and generated total revenues of $ 942,273 through the end of 2021. The remaining two subsidiaries commenced operations in 2022. The future looked promising; however, certain legacy issues with SOLI dating from before the acquisition of control of SOLI by the CareClix principals in 2017, as well as difficulties completing the annual audit for the year ended December 31, 2019, not completed until early 2021, convinced management that SOLI was not the right vehicle for growth as a public company. Accordingly, management searched for and identified a new public vehicle, LFER in late 2021.
The Detailed Story of Life on Earth, Inc. and CareClix Holdings, Inc.
CareClix Holdings, Inc. (SOLI) and Life on Earth, Inc. (LFER) entered into a Stock Purchase Agreement (the “SPA”) on December 17, 2021 under which LFER would acquire ownership of the four subsidiaries of SOLI in exchange for common stock of LFER to be distributed directly to the shareholders of SOLI on a 1 for 1 exchange basis, with closing scheduled for December 31, 2021. The intent was to transfer the four CareClix subsidiaries (the ”CareClix Companies”) to become wholly-owned subsidiaries of LFER and with the former SOLI shareholders acquiring 85+% ownership of LFER. Due to the inability of LFER to meet all closing conditions by December 31, 2021, the SPA was replaced by a Management Operating Agreement on December 31, 2021, providing for the same acquisition terms, and with LFER obtaining an effective registration statement for the LFER common shares to be issued to the SOLI shareholder. by no later than May 31, 2022. This agreement also provided for the interim transfer of the CareClix Companies to LFER but which would continue to be managed and operated exclusively by the CareClix management team pending the final closing on or before May 31, 2022.and with management control of LFER also transferring to CareClix management over the next 45 days. In the event that all of the remaining conditions to closing were not met by LFER by May 31, 2022. then, unless extended by mutual agreement of LFER and SOLI, the provisional closing reversed automatically, and the CareClix Companies returned to SOLI.
Immediately following the conditional closing on December 31`, 2021, and in conformity with SOLI’s undertaking to have no further involvement in the management or operations of the CareClix Companies, SOLI adopted a Plan of Complete Liquidation and Dissolution effective January 1, 2022, ceased all business activities, and began to gather its assets, primarily the right to distribute the LFER common stock to SOLI shareholders on the final closing, and liabilities, primarily the outstanding convertible notes, for its final liquidation and dissolution on or before May 31, 2022. Charles Scott remained as the sole director and CEO of SOLI effective January 1, 2022pending the final liquidation and dissolution.
Ultimately, the acquisition of the CareClix Companies by LFER failed due to its inability to meet the closing conditions and its material breaches and defaults of the SPA and the Management Operating Agreement. Those defaults and breaches were numerous and included:
The then directors and officers of LFER voted on December 30, 2021, to issue LFER common and preferred shares to themselves in payment and discharge of “accrued compensation” of more than $2,500,000 and authorized the issue of 12,503,177 common shares and 1,528,166 Series C Preferred shares, both at par value, $0.001 per shares, with an additional 3,056,332 common shares issued as “consideration shares” for the preferred, issued for no consideration. This action resulted in the total issued shares of common stock to increase by 15,559,509 shares, an increase of approximately 33%, but was not disclosed to SOLI as required by the SPA before the Interim Closing the next day. This action also was not approved by disinterested directors or by LFER shareholders, as required by Delaware corporate law. At the time these shares were authorized by the four former directors to be issued to themselves, the closing market trading price for the common shares was $0.10 per share and the Series C Preferred shares were being offered and sold to the public at $1.00 per share. resulting in a market value for those shares in excess of $3,000,000 In March 2022 the same four former directors of LFER unilaterally issued the shares to themselves and filed a Current Report with the SEC on Form 8-K disclosing their conduct, This 8-K Report was the first disclosure of the action to the CareClix Companies, or to Charles Scott and John Korangy, although they had been appointed as members of the LFER Board of Directors effective January 1, 2022, as part of the Interim Closing. Immediately upon the release of this 8-K information, the market price of the LFER common stock on the OTC Markets dropped from $0.07 to $0.10 per share, to $0.017 to $0.02 per share, where it has remained or decreased.
Although the Form 8-K filed by the four former LFER directors makes explicit reference to an “agreement” “effective February 4, 2022” to issue the shares to themselves, the only documentation is a copy of minutes of a Board of Directors meeting approving the issuance on December 30, 2021. On February 4, 2022, the two CareClix appointees were already on the LFER Board of Directors and no such agreement or approval of a stock issue was submitted to the LFER Board of Directors at that time. This reference tin an SEC 8-K report to this “agreement” to issue the shares in February 2022 was not true.
As part of the Interim Closing on December 31, 2021, the same four officers and directors of LFER had contracted and agreed in writing to transfer half of the outstanding Series A Preferred stock, the control block of LFER voting shares, to Charles Scott within 45 days after the Interim Closing. This transfer was part of the transfer of LFER control that was the basis for the Interim Closing. They failed and refused to do so. The SPA and Management Operating Agreement also expressly provided that LFER would issue an additional 4,000,000 Series A Preferred shares to Mr. Scott, 2,500,00 at the Interim Closing, 600.000 shares in 45 days and 900,000 shares at 75 days after the Interim Closing. This issuance again was an integral part of the transfer of LFER control that was the basis for the Interim Closing. The 2,500,000 Series A Preferred were issued at the Interim Closing, The four LFER officers again failed and refused to issue the remaining two installments.
Although the Interim Closing of the acquisition of the CareClix Companies had specific conditions to be performed by LFER by no later than May 31, 2022, the four former directors of LFER who were also the sole or principal officers, failed and refused to undertake any steps to meet these conditions, including the audit of the CareClix Companies or the preparation and filing of the Form S-4 registration statement for the LFER common shares to be issued to the SOLI shareholders. Further, the same four former directors and officers of LFER failed and refused to undertake any steps to prepare and file a Quarterly Report on Form 10-Q with the SEC for the quarter ended February 28, 2022, due April 14, 2022, despite repeated questions from management of the CareClix Companies. Ultimately, that Form 10-Q had to be prepared and filed by management of the CareClix Companies with the assistance of an independent accounting group, and little input from the LFER officers. That Form 10-Q. which was signed and filed by the former directors, expressly reported the multiple defaults and breaches of the SPA and Management Operating Agreement, as well as the Interim Closing.
Two of the four former directors and officers represented to SOLI before the Interim Closing that they would be resigning as officers and directors of LFER to pursue other opportunities within 45 days after the Interim Closing, which was the basis for their agreement in transfer their Series A Preferred shares to Mr. Scott, as part of the transfer of control of LFER, At the 45 days, they refused to surrender their Series A Preferred as promised in writing, and also refused to resign, claiming their promised resignations were “not in writing”. The result of these broken promises and contract breaches was that majority vote on the Board of Directors of LFER remained with the four former directors, directly contrary to the intent, terms and spirit of the Interim Closing and related transfer of control of LFER.
In April 2022, as a result of disagreements between management of the CareClix Companies and the four former directors of LFER: Mahmood Khan, John C. Romagosa, Robert Gunther and Fernando Leonzo and the multiple defaults by them in meeting the terms and conditions of the SPA and the Management Operating Agreement, SOLI formally offered the option to LFER, through the same four former officers to rescind and terminate the Interim Closing on multiple occasions. Former LFER Management refused these offers to rescind but also continued to refuse to cure their defaults.
To undertake to cure the continuing defaults by LFER and also to initiate the audits of the CareClix subsidiaries by LFER as required by the Management Operating Agreement, on April 26, 2022, acting as majority voting shareholder of LFER, Charles Scott voted to remove Fernando Leonzo and John C. Romagosa as directors and officers of LFER. On April 29, 2022, again acting as majority voting shareholder, Charles Scott voted to remove Mahmood Kahn and Robert Gunther as directors and officers of LFER. The removals were done in compliance with Section 141(k) of the Delaware General Corporation Law. These removals left Charles Scott and Dr. John Korangy as the remaining members of the LFER Board of Directors. On May 2, 2022, the Board of Directors of LFER approved an Amended Management Operating Agreement, removing all further conditions to the Final Closing except the obligation of LFER to register and issue the balance of the common share consideration, and removing the automatic termination provision in the event that certain conditions were not met by May 31, 2022. LFER, at their direction, then engaged an audit firm and completed the audits of the CareClix Companies and the year ending May 31, 2022 audit for LFER. required for its Annual Report on Form 10-K for LFER’s fiscal year ended May 31, 2022, and due to be filed with the SEC by August 29, 2022 (extended to September 13, 2022). LFER was on track to complete the closing of the CareClix Companies acquisition and to cause the LFER common shares issued as fully registered shares to the SOLI shareholders, and also complete the LFER audit and timely filing of the LFER 10-K report.
On September 9, 2022, former LFER management filed a purported shareholder derivative action against LFER and its purported Board of Directors, in the Court of Chancery of the State of Delaware, seeking: A declaration that their removal as directors and officers was not valid; Unspecified damages for “intentional mismanagement” by declaring the Interim Closing of the CareClix Companies’ acquisition as the Final Closing; and Rescission of the acquisition transaction.
This action has not yet been served on LFER or the CareClix parties, is defective on its face and in any event is moot. On learning of the action filed by the four former LFER directors, Charles Scott and Dr John Korangy as the sole members of the Board of Directors of LFER, immediately rescinded the Board action on May 2, 2022 approving the Amended Management Operating Agreement, resulting in a default of the Interim Closing of the of the CareClix Companies’ acquisition for failure of consideration, breach of contract and failure by LFER to register the common share consideration by May 31, 2022. Consequently, ownership of the CareClix companies reverted to SOLI effective May 31, 2022, Mr. Scott turned in for cancellation all of the Series A Preferred stock of LFER, and Mr. Scott and Dr. Korangy resigned as officers and directors of LFER. Life on Earth, Inc. and CareClix Holdings, Inc. have severed all remaining connection except for a promissory note issued by LFER in favor of CareClix for $128,432 in funds voluntarily advanced to or for LFER for payment of LFER operating expenses and debts from December 2021 through early September 2022. It is not clear why the old LFER management, which so enthusiastically supported LFER’s acquisition of the CareClix Companies at the signing of the SPA on December 17, 2021, including the transfer of control of LFER, turned so antagonistic to the transaction and to the transfer of control, commencing with their deliberately concealed action in awarding themselves over $3,000,000 in market value of LFER stock on December 29, 2021. SOLI made every effort to work with these four former LFER principals, was finally forced to terminate all four of them in order to try to save the deal (after SOLI’s offers to rescind the transaction were refused by them), and finally gave up on LFER as more hurdles were placed on closing the deal.
As a result of the failure of LFER to complete the acquisition of the CareClix Companies, ownership of the CareClix Companies reverted to SOLI; however, as SOLI has been in liquidation since January 1, 2022, SOLI immediately transferred all of its assets and remaining liabilities on September 28, 2022 to the SOLI Liquidating Trust, Charles O. Scott as Trustee, to hold for all of the SOLI shareholders, in proportion to their ownership interests in SOLI at January 1, 2022, and for the noteholders, pending identifying and closing on the acquisition of a to-be-identified public company, in lieu of the failed LFER transaction.
CareClix Group of Companies Update
Virtual Health Holdings, Inc is a new Florida holding company wholly owned by the Solei Liquidation Trust and in turn is the new holding company for the CareClix Companies. The Solei Liquidating Trust is made up of all of the shareholders in Solei Systems, Inc on a one-to-one share basis as of January 1, 2022. Virtual Health Holdings, Inc holds the CareClix Group of Companies, which include: CareClix, Inc, CareClix Services, Inc, MyCareClix, Inc, and CareClix RPM, Inc. and management of the CareClix Network, PA.
CARECLIX, INC.
CareClix Inc is a cloud-based enterprise telehealth software development company which develops and supports the CareClix® Anywhere Virtual Care Management Platform. CareClix Inc mission is to improve healthcare delivery through increased ease, interoperability, data management, and patient engagement. The CareClix® Anywhere Virtual Care Management Platform was first developed in 2012 by practicing physicians; and development continues to be overseen by active licensed physicians. This differentiates CareClix® from its competitors. Our doctor focused approach drives our success in creating a suite of tools that improve care access, coordination, cost and quality. The CareClix® platform seamlessly and modularly integrates popular EHRs, claims systems, e-prescription, diagnostic laboratories, payer eligibility, medical devices and patient education. Currently the CareClix® virtual care platform has been recognized worldwide as one of the most complete telehealth platforms for medical service providers. It has been ranked by KLAS and was selected as the premiere virtual care platform by the New York Medical Society, Dallas Medical Society, Northern Virginia Medical Society, San Bernadino Medical Society, and International Medical Society. CareClix, Inc provides the technical platform for the CareClix Group of companies and sells it as Software-as-Service globally.
CARECLIX SERVICES, INC.
CareClix Services, Inc is a virtual healthcare delivery company. CareClix Services Inc combines the CareClix software with our multinational, multispecialty medical network to offer virtual healthcare services to a wide variety of health care services such as insurers, employers, affinity groups, healthcare systems, provider groups and independent physicians. CareClix Services, Inc is a leader in custom multinational virtual medicine. Our customers mix-and-match from our portfolio of technologies, medical services, and integrations. CareClix® also matches the transparency to our customers or partner’s comfort level allowing them to seamlessly grow their practice, their brand, and their revenue. CareClix Services is trusted by some of the best names in healthcare with more than 20 million individuals in the U.S. and over 35 other countries having access to CareClix’ platform or services. Medical services are provided by our affiliate medical group CareClix Network PA.
MYCARECLIX, INC.
My CareClix, Inc operates as a direct-to-consumer virtual healthcare delivery and products company providing affordable care with concentration on compassion, patient safety and healthcare equity. MyCareClix launching under the brand MyGuardianDoc. Subscribers of MyGuardianDoc receive access to 24/7 on demand urgent care services, virtual primary care services, second opinion services, mental health, and medical guidance through our multispecialty group and world class software platform. Subscribers also receive access to prescription discounts and in-home laboratory diagnostic testing for everyone in their household at wholesale pricing. For a small monthly subscription fee consumers in the US can have access to these services. We believe MyGuardianDoc can help reduce the healthcare equity gap and improve patient safety by providing a medical chaperone in an affordable and convenient way. MyCareClix has formed a Patient Safety and Care Equity Counsel whose purpose is to help relieve the pains caused by the current healthcare system leading to improved healthcare outcomes. By providing our Subscriber Households access to a physician, they can receive guidance, oversight, and care from a provider who has been trained to be sensitive to the needs of societal and racial minorities.
CARECLIX RPM, INC.
CareClix RPM, Inc will develop and support technologies and services related to expanding the reach of medical services through Remote Patient Monitoring and Remote Therapeutic Monitoring. CareClix RPM will distribute and monitor FDA approved healthcare devices for remote patient monitoring, remote therapeutic monitoring, and chronic care management. Utilizing the CareClix platform to track and report monitored patient data, CareClix RPM, Inc will create turnkey solutions for providers seeking to start or expand their remote patient monitoring, data integration, remote therapeutic monitoring, or chronic care management programs. Anticipated to begin the first quarter of 2023, CareClix RPM will procure and distribute devices and offer a multi-lingual patient engagement team with qualified medical oversight and thorough reporting for billing and care plan administration.
CARECLIX NETWORK PA is a Florida professional medical association affiliated with CareClix, Inc., which has contracted with medical professionals nationwide and globally to provide virtual healthcare consultations to patients of the CareClix Companies.
CURRENT OPERATIONS
The CareClix Group of Companies have a proven success record within the global growth of virtual healthcare delivery. We are well positioned to deliver this service with the technological and operational infrastructure we have created over the last decade. Having endured the initial growing pains essential to the foundation of any telemedicine company, and the difficult, complex environment created by the COVID-19 pandemic, CareClix has demonstrated its ability to deliver quality virtual care. Over the past decade CareClix created roots throughout the healthcare industry necessary to produce the type of quality health care delivery within a continuum of services that patients require as they navigate their healthcare and wellness needs. CareClix is a full spectrum virtual healthcare product for individuals addressing their diverse healthcare needs and not a niche product that only addresses episodic issues which may ignore comorbidities and co- conditional needs. Since our inception we have planned and implemented an offering that is more comprehensive. As a result, CareClix has gained momentum internationally through its salesforce and strategic relationships. CareClix has a unique global sales force. CareClix utilizes internal sales team, independent sales team and distribution channels such as system integrators, healthcare providers, IT companies, and benefits administrators to reach a growing number of countries and all 50 US states. Adding to the growth of the platform, CareClix has undertaken a major reorganization which has produced significant internal cost efficiencies. CareClix has the internal staff and systems to meet the diverse needs of healthcare providers without the inefficiencies common in our competitors. Combined with our robust sales program, we intend to expand our domestic and international footprint and be operationally profitable by fiscal 2023-year end.
Company Highlights:
Patient Safety and Care Equity Counsel
CareClix Services, Inc is commissioning a Patient Safety and Care Equity Counsel composed of highly culturally and ethnically diverse individuals who have demonstrated compassion for people and a willingness to work to improve safety and equity in healthcare. The Patient Safety and Care Equity Counsel (PSACE) is composed of compassionate, competent medical professionals, community leaders, and select subscribers who work together to help CareClix patients and subscribers throughout their healthcare system encounters. The mission of the PSACE is to:
CareClix has chosen to place the critical issue of Patient Safety and Health Equity at the center of its direct-to-consumer offering under the brand MyGuardianDoc™.
Launch of MyGuardianDoc™ Master Affiliate Program
MyCareClix has created a unique, patent pending distribution system called MAP. The Master Affiliate Program (MAP) is a direct sales opportunity limited to 99 Master Affiliates. The MAP incorporates two well established and extraordinary successful business models to create what, we perceive, is one of the most exciting opportunities for the entrepreneurial minded individual available. In addition, MAP is uniquely positioned to leverage the following three huge worldwide movements.
As highlighted by a recent television show on My Oprah titled, “The Color of Care.” We believe something must be done. The MAP business model allows for the Company to sell its products into the direct-to-consumer space utilizing key relationships with influencers and trusted sales professionals with proven success selling directly to consumers.
Continued International Growth
The CareClix Companies continue to serve multinational Fortune 50 companies through our relationship with MAXIS Global Benefits Network (MAXIS GBN). MAXIS Global Benefits Network was co-founded by MetLife and AXA; and is a network of almost 140 insurance companies in over 120 markets. They work in partnership with over 250+ multinational clients to deliver healthcare solutions for their people. CareClix has been working with MAXIS GBN to provide virtual care to their customers around the globe since 2018 as their chosen telehealth provider. CareClix is currently serving groups of the international employees of their customer companies like: AMEXCO, PEPSICO, Workday, Pfizer, NewsCorp, and expects to add Chubb in the next 30 days.
Medicare Credentialing
In August 2022, CareClix Network, PA completed the credentialing process with Medicare. This will allow CareClix Services, Inc to begin to provide better service to the millions of people who are currently in the Medicare System and the healthcare providers who serve them. CareClix Network, PA continues to expand its credentialing with commercial payers, but still relies primarily on cash payment for services.
Small Business Program
CareClix Services, Inc launched the Small Business program in 2022. The CareClix Small Business program provides virtual healthcare to small and medium sized businesses within the United States. The CareClix Small Business Program makes administration simple so businesses as small as 10 employees can experience what the largest businesses have benefited from for years.
Integration of At-Home Laboratory and Phlebotomy
CareClix adds at-home diagnostic lab testing through MyHomeLabs. CareClix Services, Inc acquired an exclusive relationship with MyHomeLabs. MyHomeLabs (dba of Burgmann Enterprises Inc.) is a mobile laboratory and phlebotomy services partnered with 4M Healthcare. MyHomeLabs can bring laboratory services and its associated phlebotomy services directly into the home or workplace. MyHomeLabs operates across the United States and provides a wide range of tests from comprehensive cancer, kidney, liver, sexual, thyroid, heart, allergy, hormone and full panel tests for both men and women. As telehealth expands across the scope of healthcare, CareClix is working to improve patient outcomes by implementing new capabilities which will now include at-home testing. Many individuals do not have access to testing facilities which can result in not obtaining necessary laboratory tests which may negatively impact their health. By providing a simple, professional, timely service to their home, we can improve their quality of life and help improve their medical outcome. MyHomeLabs integration allows CareClix doctors to send a mobile phlebotomist to the home of the patient to do testing as well. The tests are sent to 4M Healthcare laboratory, and the reports are integrated into the CareClix platform for the doctor to interpret and act upon. This improves our clinical teamwork which empowers the doctors using the CareClix Virtual Care Platform to gather more information about the patient, expand their service to the patient, and provide better healthcare outcomes.
Strategic Relationship in the Middle East: GlobeMed
In May 2022 CareClix was selected by GlobeMed Limited to integrate the CareClix Virtual Healthcare Platform inside their existing platform. This integration brings the CareClix Platform to the providers and clients they serve. GlobeMed is a leading Third-Party Administrator (TPA) in the Middle East North Africa region. For over 31 years they have employed an award-winning TPA franchisee model with 12 separate operations caring for over 23 million insured members through their TPA-franchisor and health insurance system vendor model. Currently processing nearly $2 billion worth of claims annually through the largest healthcare network in the region with over 20,250 directly contracted providers and more than 120,000 providers worldwide PA franchisor, and a health insurance systems vendor. This integration with CareClix is being launched into the following countries in stages: Kuwait, Qatar, Bahrain, Lebanon, Jordan, Iraq, Kingdom of Saudi Arabia, Egypt, and United Arab Emirates. The project “go-live” date is schedule for November 1, 2022.
CareClix RPM and Select Quote
CareClix RPM is currently in discussions with a Select Quote to aid in the growth and management of our Medicare and Medicare Advanced programs. In the terms of the agreement, Select Quote will facilitate Medicare and Medicare Advantage patients who are seeking additional care for their chronic disease management with CareClix RPM.
In Summary:
We want all of our note holders and stockholders to know that we are confident we can grow the CareClix Companies and we are currently doing everything in our power to make sure your investment is protected. It is taking us longer than we anticipated, but, as you see from the summary above, nearly a year was lost due to the LFER misconduct. A lot is happening at CareClix. We are viable and growing through this tough but exciting time. Your patience and confidence is well placed. We believe very soon the company will be in a whole new space. We are very close to operational break-even—which is uncommon for virtual health companies like ours. Our executive leadership still continues to work without compensation, and we have seen an incredible reaction to our direct-to-consumer offering called MyGuardianDoc. We believe this new offering can bring us to operational break-even very shortly. Thank you for your patience and confidence as we continue to work to grow the company, protect and grow your investment.
Sincerely,
Charles O. Scott
Trustee