| Subsequent Events |
Note
12 – Subsequent Events
The
Company evaluated all events and transactions that occurred after June 30, 2019 and through the date of this filing in accordance
with FASB ASC 855, “Subsequent Events.” The Company determined that it does have a material subsequent events to disclose
as follows:
The
Company obtained additional working capital from the following sources:
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The
Company filed a definitive 14 C Information Statement on August 16, 2019 approved by majority shareholder vote
and the board of directors to 1) reverse split the outstanding common shares of stock by a ratio of one-for-one hundred (1:100)
and 2) and increase the authorized common shares in an amount up to 20 billion common shares. The reverse split will be executed
in the current fiscal quarter. The increase in authorized common shares may occur at a time prior to July 18, 2020,
at management’s discretion. |
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The
Company has decided to decrease costs in 12 Japan as well. By cutting all fixed costs and having the one employee in
12 Japan work directly for 12 Hong Kong, Ltd, as a contractor, the Company will now generate an operating profit from the
licensing and maintenance revenue generated from 12 Japan. This will show be reflected in the financial results of 12 Hong
Kong, LTD beginning in the third quarter. |
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On
July 25, 2019 the Company was served with a lawsuit from Auctus Fund, LLC (“Auctus”)
alleging a default under their convertible promissory note with an original amount due
of $100,000 and claiming to now be owned $ 482,509 including principal, Interest, damages,
defaults and other costs. Management believes that this is a frivolous lawsuit directly
related to the fact that Auctus ran out of reserve shares because of their failure to
act in a timely fashion to increase their reserve shares through the Company’s
transfer agent. Management believes that this will be easily resolved as soon as more
reserve shares are available. This is part of the reason the Company recently filed its
Pre-14C to change the capital structure of the Company’s common stock. The
Company currently owes approximately $40,000 in principal to Auctus and management
believes that this matter should settle for not much more than that amount. In the event
that Auctus takes an unreasonable position, the Company fully intends to aggressively
defend this lawsuit which has not yet been answered as the answer is not yet due. Many
of the other convertible notes that the Company holds maintain cross default clauses
that could cause significant increases in the amount that the Company would owe to each
of the other note holders due to the Auctus Lawsuit. Management has contacted the other
note holders who have assured management that they are not exercising those rights at
this time.
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On
August 1, 2019 the Company entered into a back end promissory note agreement with Adar Alef, LLC (“Adar”) for
loans totaling $52,500. The consideration to the Company was $50,000 with $2,500 of legal fees. |
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On
August 1, 2019 the Company entered into a promissory note agreement with LG Capital Funding, LLC (“LG”) for loans
totaling 55,600. The consideration to the Company is $50,000 with $2,500 legal fees and a $3,100 OID. |
Subsequent
to June 30, 2019, the Company reduced its debt to its debt holders by $12,748 through conversion of its common stock pursuant
to its agreements with various debt holders as indicated below:
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Adar
Alef redeemed $12,748 of principal for the issuance of 212,466,667 common shares. |
Subsequent
to June 30, 2019, the Company reduced its debt by $20,000. A holder of Series D-2 Preferred stock shareholders by converted
for 10,000 Series D-2 Preferred shares into 200,000,000 common stock.
Subsequent
to June 30, on August 15, 2019, the Company line of credit with Bank of American Fork associated with the Red Wire Group was extended
an additional six months.
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