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Subsequent Events
12 Months Ended
Dec. 31, 2018
Subsequent Events [Abstract]  
Subsequent Events

NOTE 13 - SUBSEQUENT EVENTS

 

Authorized shares:

 

On February 20, 2019, the board of directors of the Company approved resolutions, and on February 21, 2019, certain stockholders representing a majority of our outstanding voting capital on such date approved by written consent the taking of all steps necessary to increase its authorized common stock from 500,000,000 shares to 1,500,000,000 shares (see Note 9). The Company’s 1,520,000,000 authorized shares consisted of 1,500,000,000 shares of common stock, par value $0.0001 per share, and 20,000,000 shares of preferred stock, par value $0.0001 per share. This increase in authorized shares is reflected retrospectively for all periods in the accompanying consolidated balance sheet.

 

Financing:

 

On January 18, 2019, the Company entered into a securities purchase agreement (the “Ninth Securities Purchase Agreement”) with an institutional investor for the sale of a convertible note in the aggregate principal amount of $146,875 (the “January 2019 Note I”). The January 2019 Note I contains an original issue discount (“OID”) of $12,500 such that the purchase price of the January 2019 Note I was $134,375. The closing occurred on January 22, 2019, and the Company received a net amount of $125,000 after the payment of legal fees. The January 2019 Note I has an interest rate of 5% per annum and matures on January 18, 2020. During the first six months the, January 2019 Note I may be converted, all or a portion, of the outstanding principal into shares of the Company’s common stock at a fixed conversion price of $0.02 per share. Starting on the six-month anniversary, the conversion price shall be equal to 60% of the lowest trading price of the common stock during the 20 prior trading days (including the day upon which a notice of conversion is received). The January 2019 Note I may not be converted to the extent that such conversion would result in beneficial ownership by the investor and its affiliates to exceed more than 9.9% of the Company’s issued and outstanding common stock. If the Company prepays the January 2019 Note I within 150 days of its issuance, the Company must pay the principal at a cash redemption premium of 115%, in addition to accrued interest; if such prepayment is made from the151st day to the 180th day after issuance, then such redemption premium is 120%, in addition to accrued interest. After the 180th day following the issuance of the January 2019 Note I, there shall be no further right of prepayment. 

 

On January 18, 2019, the Company entered into a securities purchase agreement (the “Tenth Securities Purchase Agreement”) with an institutional investor for the sale of a convertible note in the aggregate principal amount of $88,125 (the “January 2019 Note II”). The January 2019 Note II contains an original issue discount (“OID”) of $7,500 such that the purchase price of the January 2019 Note II was $80,625. The closing occurred on January 29, 2019, and the Company received a net amount of $75,000 after the payment of legal fees. The January 2019 Note II has an interest rate of 5% per annum and matures on January 18, 2020. During the first six months the January 2019 Note II is in effect, the investor may convert all or a portion of the outstanding principal of the January 2019 Note II into shares of the Company’s common stock at a fixed conversion price of $0.02 per share. Starting on the six-month anniversary, the conversion price shall be equal to 60% of the lowest trading price of the common stock during the 20 prior trading days (including the day upon which a notice of conversion is received). The investor may not convert the January 2019 Note II to the extent that such conversion would result in beneficial ownership by the investor and its affiliates of more than 9.9% of the Company’s issued and outstanding common stock. If the Company prepays the January 2019 Note II within 150 days of its issuance, the Company must pay the principal at a cash redemption premium of 115%, in addition to accrued interest; if such prepayment is made from the151st day to the 180th day after issuance, then such redemption premium is 120%, in addition to accrued interest. After the 180th day following the issuance of the January 2019 Note II, there shall be no further right of prepayment.

 

On March 25, 2019, the Company entered into a securities purchase agreement (the “Eleventh Purchase Agreement” and for the sale of the Company’s convertible notes and warrants. Pursuant to the Eleventh Purchase Agreement, the Company issued to the Eleventh Round Purchaser for an aggregate subscription amount of $50,000: (i) 10% Original Issue Discount and 5% Senior Convertible Notes in the aggregate principal amount of $55,556 (the “March 2019 Note”) and (ii) 5 year warrants (the “March 2019 Warrant”) to purchase an aggregate of 2,083,333 shares of the Company’s common stock at an exercise price of $0.04 per share (subject to adjustments under certain conditions as defined in the March 2019 Warrant). The Company received $50,000 in aggregate net proceeds from the sale, net of $5,556 original issue discount. The March 2019 Note bears an interest rate of 5% per year (which interest rate shall be increased to 18% per year upon the occurrence of an Event of Default (as defined in the March 2019 Note)), shall mature on November 25, 2019 and the principal and interest are convertible at any time at a conversion price equal to $0.02 per share (subject to adjustment as provided in the March 2019 Note); provided, however, that if an event of default has occurred, regardless of whether such Event of Default has been cured or remains ongoing, the Notes shall be convertible at 60% of the lowest closing price during the prior twenty trading days. The investor may not convert the March 2019 Note to the extent that such conversion would result in beneficial ownership by the investor and its affiliates of more than 9.9% of the Company’s issued and outstanding common stock. The March 2019 Note may be prepaid at anytime until the 180th following the original issue date at an amount equal to (i) 115% of outstanding principal balance of the March 2019 Note and accrued and unpaid interest during the period from the original issue date through the five months following the original issue date, and (ii) 120% of the outstanding principal balance of the March 2019 Note and accrued and unpaid interest during month six following the original issue date. In order to prepay the March 2019 Note, the Company shall provide twenty trading days prior written notice to the lender, during which time the investor may convert the March 2019 Note in whole or in part at the conversion price.

 

The initial exercise price of the March 2019 Warrant is $0.04 per share, subject to adjustment as described below, and the March 2019 Warrant are exercisable for five years after the issuance date. The March 2019 Warrant are exercisable for cash at any time and are exercisable on a cashless basis at any time there is no effective registration statement registering the shares of common stock underlying the warrants. The exercise price of the warrants is subject to adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock and also upon any distributions of assets, including cash, stock or other property to the Company’s stockholders. The exercise price of the warrants is also subject to full ratchet price adjustment if the Company issues common stock at a price per share lower than the then-current exercise price of the warrant.

 

Conversion of Convertible Debt:

 

Subsequent to the year ended December 31, 2018, The Company converted $152,996 and $49,772 of outstanding principal and interest into 37,864,284 shares of common stock.

 

Series B Preferred Redemption:

 

On February 20, 2019, pursuant to the Certificate of Designation, the Company exercised its right to redeem all of the 5,000,000 shares of the Series B Preferred outstanding held by to Banco Actinver, S.A., in its capacity as Trustee of the Trust Agreement for the benefit of Mr. Cosme and Mr. Alaman equal to the stated value. The total redemption price equaled $500, which was equal to $0.0001 per share of Series B Preferred (see Note 3 and Note 9). These shares Series B Preferred were cancelled upon redemption and considered unissued and not outstanding, effective on the date of cancellation.