Re: Breach of Contract Case Against Phenom People

Hey Dave,

I am writing to provide you with a summary report on the breach of contract case we are planning to
pursue against Phenom People. This report aims to provide you with a comprehensive overview of the
situation and the key points relevant to our case.

1. Introduction
This case centers on a significant breach of contract by Phenom People, which has prompted our need
for legal intervention and resolution. The breach pertains to a contractual agreement between our
company, RedefineHR, and Phenom People, with implications for both parties and their respective
contractual obligations. Within this document, we aim to provide a concise overview of the breach,
setting the stage for a comprehensive exploration of the case.

2. Contract Details
Inclusion of Pruitt Health in Co-Seller Contract
Our records, including messages and attached PDFs, confirm our mutual agreement to include Pruitt
Health in the new co-seller contract. We firmly believe that this inclusion in the accelerator program,
coupled with our reliance on the data provided in the spreadsheet, would have enabled us to meet our
120% accelerator target. This achievement would result in a 5% bonus to RedefineHR (RHR),
approximating $68,452.

Reliance on Spreadsheet for ACV Calculation

The spreadsheet provided by the Phenom accounting team served as the basis for our request related to
the Annual Contract Value (ACV) for SaaS revenue. Chris Grimes, as our point of contact, advised us to
use the spreadsheet, attached, for calculating the invoice amount. We diligently followed this advice,
resulting in a specific figure of $50,072.40 (calculated as 834,540/3yr = 278,180 * 18% = $50,072.40).
Moreover, our instructions were to send invoices aligned with the ACV values outlined in the
spreadsheet. We have attached relevant screenshots, with particular emphasis on the line item
pertaining to Pruitt Health.

Additional Contract Payments still not received.

Additionally, our contractual obligations with Baylor Scott White included a contract renewal with a value
of $40,000, which has not been received, further compounding the financial impact of the breach.

It is critical to emphasize that Phenom People has demonstrably failed to fulfill these contractual
obligations, including the receipt of the $40,000 from Baylor Scott White. Phenom states that Baylor has
not paid them, however, the site is still live and active, further inferring that BSW has paid their bill. Also,
we have several internal resources that are stating that they have heard that BSW has continued the
contract with Phenom.
Chronology of Events
It is important to emphasize that we relied extensively on information received from Phenom People's
accounting and leadership teams, further underlining the significance of the provided data.

Co-sell Contract Date

The new Co-sell contract was officially executed on May 19, 2022, marking the commencement of the
agreement and the associated obligations.

Email Communication (May 17, 2022)

On May 17th, 2022, an email from Saumil clarified our understanding of the Co-sell agreement. This
communication explicitly stated that our existing clients, including United, BSW, Pruitt, and Vituity, were
to be included within the Co-sell agreement. This email serves as a crucial reference point in defining the
scope and terms of the agreement.

Pruitt Health Invoice Terms

The terms of the Pruitt Health invoice were based on our Co-sell agreement, specifically involving an 18%
calculation. This detail is significant in establishing the basis on which financial transactions were
executed.

Reliance on Provided Information

It is crucial to highlight that our reliance on the information received from Phenom People's accounting
and leadership teams was a central factor in our business decisions and financial calculations. This
underscores the importance of the accuracy and consistency of the data provided, which directly
impacts the financial aspects of the contractual relationship.

These pieces of information are fundamental to our case and offer clarity on the contractual obligations
and expectations that have been established. We kindly request your review of these critical dates and
documents as we proceed in addressing the breach of contract matter.

Breach of Contract

Long-standing Breach
The breach of contract by Phenom People has endured for an extended period, spanning nearly a year.
During this time, they have consistently maintained, both in written correspondence and phone
discussions, that they are not obligated to honor the accelerator payments specified in our agreement.
Furthermore, despite our efforts, invoices submitted to Phenom People in May 2023 remain
outstanding.
The outstanding amount on these invoices is a substantial $76,394, yet its reliability is cast into doubt by
the pervasive inconsistencies and misrepresentations evident in their accounting practices.

Exclusion of Pruitt Health

Chris Grimes, a representative from Phenom People, has repeatedly asserted that Pruitt Health is not
included in the accelerator program, a claim that directly contradicts our understanding of the contract
terms.

Alternate ACV Calculation

Chris has gone to the extent of using a pocket calculator to derive alternative Annual Contract Value
(ACV) values during discussions. This calculated data has been presented to deter the accelerator bonus
payment.

Chris's Privileges
It is crucial to note that Chris is not an accountant, nor does he have the obligations to access the
underlying cash flow information within the company. His actions and calculations, therefore, raise
questions about their validity and alignment with the contract terms.

To further support our claims, we have provided an audio recording of a meeting, which can be accessed
at the following link: [Audio Recording Link](https://cdn.fireflies.ai/ptHA0oz24OTCsi6j/audio.mp3?
Expires=1698861353&Policy=eyJTdGF0ZW1lbnQiOlt7IlJlc291cmNlIjoiaHR0cHM6Ly9jZG4uZmlyZWZsaWV
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p8MwaNYFdkfiFo3wbtkfMRD8ymnydiq9ONGFs8Qsw__&Key-Pair-Id=K25ZJR0UZVF4CM

Damages Incurred
In light of the breach of contract by Phenom People and the corresponding impact on our business, we
firmly believe we are entitled to collect the following:

Accelerator Program Payments

We assert our right to collect approximately $$68,452 in outstanding payments related to the
accelerator program. This amount represents the agreed-upon bonus for achieving the 120% accelerator
target, which we achieved during 2022 calendar year.
 Baylor Scott White (BSW) Payments
We are entitled to recover $40,000 for the missing payments associated with Baylor Scott White's
contract renewal. The failure to receive these funds has had a direct financial impact on our operations.

Future Referrals
Beyond the immediate financial losses, we anticipate further damages in the form of lost revenue from
future referrals. We expect that existing referrals due for renewal during the 2024 calendar year, along
with additional renewal and add-on commission, will be adversely affected by the breach and if we
pursue legal action against the company.

These damages reflect both the financial shortfall we have already experienced and the potential future
losses stemming from the breach of contract. We are committed to pursuing these claims to ensure that
our contractual rights are upheld and that our financial interests are protected.

Inaccurate Spreadsheets and SKUs

Inaccurate Spreadsheets

Discrepancies are evident when comparing spreadsheets provided by Toni (phenomAccountant) with
those sent by non-accounting professionals, Meghan Luff and Brian Kelly. The inconsistency is notably
apparent in the omission of SKUs that should be eligible for payment. For a detailed reference, we invite
you to review the "Phenom X Redefine Client Data Request" spreadsheet against the "Phenom+ Redefine
Client Data Request_Current SKUs." This comparison reveals substantial discrepancies in the data
provided.
Disorganization and Communication Issues
These inaccuracies in the spreadsheets underscore the disorganized nature of Phenom People's Cosell
program and their inability to effectively communicate critical information. This has posed challenges in
our ability to account for our commissions accurately.

Given these concerns, we are considering the necessity of conducting a comprehensive audit of Phenom
People's internal financial records. This step is prompted by the belief that there may be a substantial
sum of money to which we are entitled but has not been paid out due to inaccuracies and
misrepresentations in their SKUs and accounting practices.

Evidence
We have attached all emails, spreadsheets, and communications with the Unphenomal team.

Furthermore, it's worth noting that throughout our interactions, we have encountered considerable
delays and non-responsiveness in their communication, primarily from individuals such as Brian Kelly
and Chris Grimes. This has compounded the challenges we've faced in trying to address the breach of
contract and resolve related issues; thus, we are now pursuing legal action.
This information provides context about the overall nature of our interactions with Phenom People and
can be considered when evaluating the entire case.

Desired Outcome
In response to the breach of contract by Phenom People and the associated damages incurred, we are
determined to pursue legal action to recoup all the payments due, including those related to the
accelerator program, missing SKU payments and Baylor Scott White payments. Additionally, we intend to
seek reimbursement for the legal fees incurred during the course of this legal process.

Our objective is to secure a just resolution to this matter and ensure that our contractual rights and
financial interests are upheld. We are committed to taking the necessary steps to achieve this outcome
and seek your expert legal guidance and support in this pursuit.

In addition to pursuing recovery for the immediate financial losses incurred, we also seek remedies to
address the potential future values of our renewals, add-ons, and referred clients, particularly in the case
of Starbucks and AutoZone. These future revenues, which may be adversely affected by the breach of
contract, are a critical component of our financial outlook.