Commitments and Contingencies

3 Months Ended

Feb. 28, 2023

Commitments and Contingencies Disclosure [Abstract]

Note 7. Commitments and Contingencies

Commitments

On April 6, 2022, the Company entered into an agreement (the “Sanctum Agreement”) with Sanctum Studios (“Sanctum”) relating to The Athena Project. Pursuant to the terms of the Sanctum Agreement, Sanctum agreed to conceptualize, create and produce a collection of 20,000 digital art assets based on the Greek Goddess Athena, in exchange for payment by the Company of $121,000 and certain variable rate payments depending on the number of vaults sold by the Company. The $121,000 is payable by the Company in three equal installments of $40,333.33 due on April 4, 2022, May 19, 2022 and July 1, 2022. The Company paid all installments due through August 31, 2022. The Sanctum deliverables are due by July 1, 2022 or earlier, as set forth in the Sanctum Agreement. The Company announced this material definitive agreement and associated Press Release, incorporated by reference, on a Current Report on Form 8-K which was filed with the SEC on April 7, 2022.

PIP North America ILO and Multi-Agreement

On June 26, 2022 , the Company entered into an ILO and Multi-Agreement (the “PIP Agreement”) with PIP North America Inc. (“PIP”). Pursuant to the terms of the PIP Agreement, the parties agreed as follows:

1. The Company agreed to provide PIP the exclusivity to list the first initial license offering (“ILO”) for a minimum of 90 days. PIP can mutually agree to allow the Company to list another ILO during this period and PIP will receive 50% of gross revenues.

2. PIP will not pay any listing fee for its first three ILOs, and the Company will provide free consulting services to help structure the ILOs.

3. The Company agreed to provide services necessary from Super How for the customization of the HyFi technology for the first three PIP ILOs, including smart contracts for each listing.

4. The Company agreed to provide, at the Company’s cost, Prime Trust for anti-money laundering (AML) and know your customer (KYC) services, including processing of the payments, conversion of tokens to fiat currency for the use by the ILO issuer and all other services necessary for any ILOs, projects or bridge loans that PIP agrees to list on HyFi marketplaces to raise capital.

5. The Company agreed to provide PIP with Exclusive License options for one-year $1 million an option for an additional year for $10 million for the agriculture category on the HyFi DeFi marketplaces. Whoever brings the issuer will receive 75% of the gross revenues and whoever does not bring the issuer will receive 25% of the gross revenues. The option for the one-year exclusive must be exercised while the first PIP ILO is listed on the HyFi ILO marketplace and, once exercised, will last for one year. Within 90 days of the expiration of the one-year exclusive license, PIP must exercise the license for the second year.

6. PIP agreed to pay the Company 5% of gross sales of PIP vaults plus usual and customary percentages charged by third party vendors for the vault program.

7. PIP agreed to purchase, and the Company agreed to sell 500,000 shares of restricted common stock at a purchase price of $0.25 per share. As of November 30, 2022 the shares have not been issued by the transfer agent.

8. PIP agreed to purchase, and the Company agreed to sell 3,125,000 HyFi tokens at a purchase price of $0.04 per token for $125,000. The HyFi tokens can be used as utility tokens in conjunction with HyFi DeFi marketplace fees and services, HyFi vaults, HyFi memberships and any other HyFi fees and services. As of November 30, 2022 the HyFi tokens have not been delivered.

9. The Company agreed to grant PIP an option to purchase up to 50 HyFi vaults for $1,000. The option will expire on August 30, 2022.

10. The Company agreed to provide a license for the HyFi Vault Program, a blockchain promotional and marketing program, and services necessary from third party vendors, including Super How and Sanctum Studios.

11. In exchange for the above, PIP agreed to pay to the Company $500,000. The Company agreed to use this payment as part of the payments to retire the China Energy Note, as amended.

On November 11, 2022, the Company entered into an agreement with Generation Power Group Limited. The Company agreed to act as a non-exclusive placement agent in connection with an offering to investors of up to an aggregate of $100,000,000 of securities. The Company will receive the following:

(a)

Company Onboarding & Due Diligence Fee. The Company will receive a non-refundable Onboarding fee of $125,000 upon execution of this Agreement.

(b)

Placement Fee. The Company will receive a cash placement fee equal to 4% of the aggregate gross proceeds received from Investors that the Company originated. The Company will receive placement fee equal to 2% of the aggregate gross proceeds received from Investors that Generation Power Group Limited originate.

(c)

Expenses. The Company will receive promptly reimburse upon request for reasonable out-of-pocket expenses incurred by the Company in connection with the services provided hereunder, including, without limitation, travel costs, Site maintenance, and other customary expenses for this type of engagement, including, without limitation, out-of-pocket legal or regulatory fees, costs and expenses (including without limitation, any Offering-related regulatory filing fees and reasonable out-of-pocket counsel or consultant fees, related to the review of Offering Materials for compliance with applicable SEC/FINRA rules).

(d)

All fees and expenses payable hereunder are net of all applicable withholding and similar taxes.

The term of this Agreement shall be from the date hereof until the earlier of: (i) 12 months from the date hereof; or (ii) the date of the closing of the Offering as agreed by HYFI and the Company. The engagement hereunder will commence upon the execution of this Agreement by both parties, and shall be terminable by either party, with or without cause, on 30 days’ prior written notice to the other.

As of November 30, 2022, the Company has recorded the Onboarding & Due Diligence Fee as deferred revenue.

On November 15, 2022, Robert Kohn resigned as Chief Financial Officer of the Company and as a member of the Company’s Board of Directors, effective immediately. Mr. Kohn’s resignation was not because of a disagreement with the Company on any matter relating to the Company’s operations, policies or practices. Effective November 15, 2022, the Board appointed Paul Christopher Walton to serve as the Company’s Chief Operating Officer, as well as the Company’s principal financial officer and principal accounting officer.

Mr.Walton, Since September 2022, Mr. Walton has served as Chief Operating Officer of HyFi, helping to review its security token and renewable green energy financing business. He is responsible for developing the regulated financial infrastructure which will enable HyFi to raise capital for its clients, as well as attending to key operational responsibilities.

For the past five years Mr. Walton advised several start-up fintech businesses to raise capital, arrange operations and develop business invest management and alternative investing markets. This work involved regulated blockchain and cryptocurrency businesses as well as style-based investment technology. At Optimal Asset Management, Mr. Walton grew assets and helped to develop a business which was eventually sold to BNY Mellon.

Prior to this, Mr. Walton advised on a substantial portion of new technology and new product development at the London Stock Exchange’s New York operation, FTSE Russell for two periods between 2009 and 2017. Mr. Walton also ran business development for renowned economist, Mr. Stephen Ross, at his Ross, Jeffrey and Antle hedge fund, for a four-year period, helping to grow assets substantially.

Mr. Walton worked for a number of leading investment banks in London over three decades from the 1980s to the early 2000’s. In this work, Mr. Walton was a highly rated financial analyst and investment strategist at the Warburg’s private bank, Schroders private bank, Goldman Sachs, Schroder Salomon Smith Barney, and Merrill Lynch.

Mr. Walton received a Master’s Degree in Economics from the University of London and Bachelor’s Degree in Economics from the Victoria University of Manchester. Mr. Walton studied advanced management principles at the UK-based Ashridge Business School. For most of his career, Mr. Walton held regulatory qualifications administered by the then UK supervisory body, Financial Services Authority.

Contingencies

From time to time, the Company may be involved in legal matters arising in the ordinary course of business. While the Company believes that such matters are currently not material, there can be no assurance that matters arising in the ordinary course of business for which the Company is, or could be, involved in litigation, will not have a material adverse effect on its business, financial condition or results of operations.

Biopower Operations Corp 10-Q