STOCKHOLDERS’ DEFICIT |
12 Months Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | ||||||||||||||||
| Equity [Abstract] | ||||||||||||||||
| STOCKHOLDERS’ DEFICIT | NOTE 15 - STOCKHOLDERS’ DEFICIT
As of December 31, 2021 and 2020, the Company’s Articles of Incorporation, as amended and restated, is authorized to issue shares of common stock at par value of $and shares of preferred stock at par value of $.
Reverse Stock Split and increased authorized common shares
On October 18, 2019, the Company completed a 100 for 1 reverse common stock split reducing the outstanding common shares to . The authorized common shares remain at billion authorized common stock. As a subsequent event, as of May 18, 2021 the authorized was increased to shares of common stock.
Preferred Stock
The Preferred Stock may be divided into such number and series as the Board of Directors may determine. The Board of Directors is authorized to determine and alter the rights, preferences, privileges, and restrictions granted to and imposed upon any wholly unissued series of Preferred Stock, and to fix the number of shares of any series of Preferred Stock and the designation of any such series of Preferred Stock. The Board of Directors may increase or decrease (but not below the number of shares such series then outstanding) the number of shares of any series subsequent to the issue of shares of that series.
The Series B Redeemable Convertible Preferred Stock is classified as temporary equity as it is mandatorily redeemable by the holder at a future date. The Series D-1 and D-2 Preferred Stock are classified as temporary equity as they are redeemable immediately. The Series D-3 Preferred Stock is also classified as temporary equity due to its put option, which providers the holders the right to put the shares to the Company for cash if they elect not to convert into shares of common stock.
Series A Preferred Stock
As of December 31, 2021 and 2020, there were designated shares of Series A Preferred Stock.
Liquidation
In the event of any liquidation, dissolution, or winding up of the Company, either voluntary or involuntary, the holders of the Series A Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Company to the holders of any junior stock by reason of their ownership of such stock an amount per share for each share of Series A Preferred Stock held by them equal to the sum of the liquidation preference. If upon the liquidation, dissolution, or winding up of the Company, the assets of the Company legally available for distribution to the holders of the Series A Preferred Stock are insufficient to permit the payment to such Holders of the full amounts specified in this Section then the entire remaining assets of the Company legally available for distribution shall be distributed with equal priority and pro rata among the holders of the Series A Preferred Stock in proportion to the full amounts they would otherwise be entitled to receive.
Redemption
The Series A Preferred Stock shall have no redemption rights.
Conversion
The “Conversion Ratio” per share of the Series A Preferred Stock in connection with any Conversion shall be at a ratio of 1:20, meaning every (1) one Preferred A share shall convert into 20 shares of Common Stock of the Company (the “Conversion”). Holders of Class A Preferred Shares shall have the right, exercisable at any time and from time to time to convert any or all their shares of the Class A Preferred Shares into Common Stock at the Conversion Ratio.
Voting
The Holder of each share of Series A Preferred Stock shall have such number of votes as is determined by multiplying (a) the number of shares of Series A Preferred Stock held by such holder; and, (b) by 20. The holders of Series A Preferred Stock shall vote together with all other classes and series of common and preferred stock of the Company as a single class on all actions to be taken by the common stock shareholders of the Company
2021 and 2020 Transactions
During the year ended December 31, 2021, the Company issued Series A Preferred Stock as follows:
- In March 2021, the company issued Series A shares for cash.
- In April 2021, the company issued Series A shares for cash.
- In April 2021, the company issued Series A shares for cash.
- During the fourth quarter 2021, the Company issued Series A shares as part of the employee stock plan. The Company also cancelled of shares related to the employee stock plan for employees that are no longer a part of the Company.
-During the year ended December 31, 2020, the Company issued Series A preferred Stock as follows: - In December 2020, the company issues shares of Series A preferred stock for cash. - During the third quarter of 2020 the company issued $ Series A shares in restricted shares to employees under the Employee Restricted Stock Plan.
As of December 31, 2021 and 2020, there was and shares of Series A Preferred Stock deemed issued and outstanding.
Series B Preferred Stock
As of December 31, 2021 and 2020, there were designated shares of Series B Preferred Stock.
Liquidation
Holders of Series B Preferred Stock shall have a liquidation preference junior to Series A holders.
Conversion
Each share of Series B Preferred Stock shall be convertible at the option of the holder at any time into shares of common stock at a conversion price equal to 65% multiplied by lowest average traded price during the ten (10) trading day period ending.
Voting
Series B Preferred Stock shall be non-voting on any matters requiring shareholder vote.
Dividends
Series B Preferred Stock will carry an annual cumulative dividend, compounded monthly, payable solely upon redemption, liquidation, or conversion.
Redemption
The Series B Preferred Stock is mandatorily redeemable by the holder 15 months after issuance, and therefore is classified as temporary equity in the consolidated balance sheet.
2021 and 2020 Transactions
During the year ended December 31, 2021, the Company issued Series B Preferred Stock as follows:
During the year ended December 31, 2020, the Company issued Series B Preferred Stock as follows:
Series C Preferred Stock
As of December 31, 2021 and 2020, there were designated shares of Series C Preferred Stock.
The Series C Preferred Shares have no equity value, no preference in liquidation, is not convertible into common shares and does not accrue dividends or have redemption rights. Each issued and outstanding share of Series C Preferred Stock authorizes the holder to vote eight billion (8,000,000,000) votes on any matter that shareholders are entitled to vote for under our Bylaws at a cost of $1.00 per share. Holders of shares of Series C Preferred Stock shall vote together with the holders of Common Shares as a single class.
On July 27, 2021, the Company issued additional preferred series C share to the CEO Angelo Ponzetta.
As of December 31, 2021 and 2020, there is shares and one share of S Series C Preferred Stock issued and outstanding.
Series D Preferred Stock
Series D Preferred Stock are “Blank Check” Preferred which allows the Board of Directors to subdivide and/or determine the rights, privileges, and other features of this stock.
The total number of shares of Series D Preferred Stock the Company is authorized to issue is ten million () shares.
Series D-1 Preferred Stock
On July 2, 2018, the Company entered into an Equity Line of Credit agreement with Oasis Capital, LLC (“Oasis Agreement”) and as a part of that Agreement the Company created a subset Series D-1 Preferred Stock from the authorized Series D Preferred Stock having special rights and privileges as follows:
As of December 31, 2021 and 2020, there were shares designated as Series D-1 Preferred Stock with a stated value of $2.00 per share (the “Stated Value”).
Liquidation
Holders of Series D-1 Preferred Stock shall have a liquidation preference junior to Series A, B and C holders. Upon any liquidation, dissolution or winding-down of the Company, the holders of the shares of Series D-1 Preferred Stock shall be paid in cash an amount for each share of Series D-1 Preferred Stock held by such holder equal to 140% of the Stated Value plus any dividends accrued but unpaid.
Conversion
Each share of Series D-1 Preferred Stock, together with accrued but unpaid dividends, shall be convertible at the option of the holder at any time into shares of common stock as is determined by dividing the Stated Value per share being converted plus accrued and unpaid dividends by the Series D-1 Conversion Price. The “Series D-1 Conversion Price” per share of Common Stock shall be the lowest traded price of the Common Stock during the thirty (30) trading day period ending, in Holder’s sole discretion on each conversion, on either (i) the last complete trading day prior to the Conversion Date or (ii) the Conversion Date.
Voting
Series D-1 Preferred Stock shall be non-voting except on certain major corporate actions or as required by law. In the event of such a right to vote, each holder of Series D-1 Preferred Stock shall have the right to the number of votes equal to the number of Conversion Shares then issuable upon conversion of the Series D-1 Preferred Stock held by such holder.
Dividends
Before any dividends shall be paid or set aside for payment on any junior security of the Company, each holder of the Series D-1 Preferred Stock shall be entitled to receive dividends, in the manner provided herein, payable on the Stated Value of the Series D-1 Preferred Stock at a rate of 8% per annum, which shall be cumulative and be due and payable in shares of common stock on the Conversion Date. Such dividends shall accrue from the date of issue of each share of Series D-1 Preferred Stock, whether or not declared.
Redemption
Shares of the Series D-1 Preferred Stock shall be redeemable in cash, at any time after the issuance of the respective Series D-1 Preferred Stock at a price per share equal to 125% of the Stated Value plus the amount of accrued but unpaid dividends, provided, however, that 125% shall be replaced with 140% if the Company exercises its option to redeem the Series D-1 Preferred Stock after the initial 60 calendar day period. Therefore, the Series D-1 Preferred Stock is classified as temporary equity in the consolidated balance sheet.
As of December 31, 2021 and 2020, there are Preferred Series D-1 shares issued and outstanding, respectively.
Series D-2 Preferred Stock
The total number of shares of Series D-2 Preferred Stock the Company is authorized to issue shares, with a stated value of $2.00 per share.
Dividends
Before any dividends shall be paid or set-side for payment on any junior security, each holder of Series D-2 Preferred Stock shall be entitled to receive dividends payable on the stated value of the Series D-2 Preferred Stock at a rate of 8% per annum, or 18% per annum following the occurrence of an event of default, which shall be cumulative and be due and payable in shares of common stock on the conversion date or in cash on the redemption date. Such dividends shall accrue from the date of issue of each share of Series D-2 Preferred Stock.
Liquidation
Holders of Series D-2 Preferred Stock shall have a liquidation preference junior to Series A, B, C and D-1 holders.
Conversion
Each share of Series D-2 Preferred Stock, together with accrued but unpaid dividends, shall be convertible at the option of the holder at any time into shares of common stock as is determined by dividing the Stated Value per share being converted plus accrued and unpaid dividends by the Series D-2 Conversion Price. The “Series D-2 Conversion Price” per share of Common Stock shall be the lowest traded price of the Common Stock during the thirty (30) trading day period ending, in Holder’s sole discretion on each conversion, on either (i) the last complete trading day prior to the Conversion Date or (ii) the Conversion Date.
Redemption
The Series D-2 Preferred Stock is classified temporary equity due to the fact that the shares are redeemable immediately.
2021 transactions
During the second quarter, Oasis converted Oasis converted series D-2 preferred shares and $888,860 of principal and interest into common shares.
On May 6, 2021, the Company received $30,000 as an additional advance from Oasis Capital pursuant to previous agreements with Oasis and on May 13, 2021 received an additional $50,000 for a total of Series D-2 preferred shares. Lastly the Company received an additional $50,000 on June 14, 2021 for an additional Series D-2 preferred shares.
2020 transactions
In 2020, the Company converted an aggregate of shares of Series D-2 Preferred Stock with a fair value of $46,000 into shares of common stock.
During the three months ended March 31, 2020, Oasis Capital converted Series D-2 Preferred shares with a value of $10,897 into common shares.
During the remainder of 2020, the Company converted an aggregate of shares of Series D-2 Preferred Stock with a fair value of $35,103 into shares of common stock.
As of December 31, 2021 the Company had Series D-2 Preferred Shares with a redemption value of $2,218,653 and Series D-2 Preferred Shares with a redemption value of $2,607,162 as of December 31, 2020.
Series D-3 Preferred Shares
The total number of shares of Series D Preferred Stock the Company is authorized to issue is shares.
Conversion
The Holder may convert some, part of all of the Series D-3 shares into common shares of the Company based on the closing market price on the day before notice of conversion is presented to the Company.
Dividends
The Company will pay dividends on the Series D-3 Preferred Stock at the rate of 10% per annum and shall pre-pay the Holder the first 12 month’s dividends from proceeds. After 12 months the Company would pay the pro-rata interest on a monthly basis due the first of each month and late after the 10th of each month.
Redemption
At the option of the Holder the Company may be obligated to redeem any non-converted shares of Series D-3 Preferred Stock that are not deemed to be incentive shares and that are not deemed to be settlement shares through the issuance of a “PUT” to the Company. At the conclusion of the PUT Notice Period, the Holder may at any time request a redemption of some, part, or all of Holder’s non-converted shares of Series D-3 Preferred Stock by providing the Company with a PUT DEMAND. The Company would then be obligated to redeem any undisputed Securities within ten (10) business days of receipt of the PUT DEMAND. The Holder may at any time after issuing a PUT NOTICE rescind the PUT option, which could then only be reinstated through a future PUT NOTICE. The Series D-3 Preferred Stock is classified as temporary equity due to the existence of the PUT.
As of December 31, 2021 and 2020, there were Preferred Series D-3 shares outstanding at $5.00 par representing a total of $274,234. There were accrued dividends of $27,420 and $61,977 at December 31, 2021 and 2020, respectively.
Series D-4 Preferred Stock
In April 2020, the Company authorized one million () shares of Series D-4 Preferred stock with a face value of $. The shares have no dividends, are non-voting, and have a liquidation preference after Series D-3 Preferred Shares. These shares are convertible into the Company’s common shares at no discount.
Series D-5 Preferred Stock
The total number of shares of Series D-5 Preferred Stock the Company is authorized to issue shares, with a stated value of $4.00 per share.
Liquidation
The holders shall be paid in cash after the holders of the superior preferred shares (Series A, B, D-1, and D-2), but before any junior securities, including common shares and other shares have no liquidation preferences.
Conversion
The holder may convert some or all of its Series D-5 Preferred Shares into common shares of the Company based on the closing market price on the day of or the day before notice of conversion.
Dividends
Series D-5 Preferred Stock will carry an annual dividend of 6% which will be paid in arrears.
Voting
Holders of the shares of Series D-5 Preferred Stock shall not have the right to vote on any matter as to which shareholders are required or permitted to vote, except as otherwise required by law.
Transactions
On February 21, 2019, the Company issued shares for 25% interest in the Red Wire Group. On March 14, 2019, the Company issued shares of Series D-5 Preferred Stock for 92.5% interest in Rune. See Note 4. In addition, the Company issued 2,625 Series D-5 shares in exchange for professional Services.
As of December 31, 2021 and 2020, the Company had Series D-5 Preferred Shares outstanding with a face value of $513,976. The company recorded had accrued dividends of $54,294 and $47,400 at December 31, 2021 and 2020, respectively.
Series D-6 Preferred Stock
The total number of shares of Series D-6 Preferred Stock the Company is authorized to issue shares, with a stated value of $5.00 per share.
Liquidation
The holders shall be paid in cash after the holders of the superior preferred shares (Series A, B, D-1, and D-2), but before any junior securities, including common shares and other shares have no liquidation preferences.
Conversion
The holder may convert some or all its Series D-6 Preferred Shares of the Company based on the closing market price on the day of or the day before notice of conversion.
Dividends
Series D-6 Preferred Stock shall not declare or accrue any dividends.
Voting
Holders of the shares of Series D-6 Preferred Stock shall not have the right to vote on any matter as to which shareholders are required or permitted to vote, except as otherwise required by law
Transactions
- The Company issued shares for an additional 75% interest in the Red Wire Group. See Note 4. - The Company issued shares as compensation for a value of $. - The Company issued shares pursuant to the acquisition of Social Sunday. See Note 4.
There were no shares issued for 2020 or 2021.
As of December 31, 2021 and 2020, the Company had and Series D-6 Preferred Shares with a face value of $463,400 and $523,400.
Common Stock
2021 Transactions
During the year ended December 31, 2021, the Company converted principal and unpaid accrued interest totalling $120,300 into an aggregate of shares of common stock.
During the year ended December 31, 2021, the Company converted an aggregate of shares of Series D-2 Preferred Stock with a fair value of $46,000 into shares of common stock.
2020 Transactions
During the year ended December 31, 2020, the Company converted principal and unpaid accrued interest totalling $120,300 into an aggregate of shares of common stock.
During the year ended December 31, 2020, the Company converted an aggregate of shares of Series D-2 Preferred Stock with a fair value of $46,000 into shares of common stock.
As of December 31, 2020 and 2019, and shares of common stock were issued and outstanding, respectively.
|