Shareholders' Equity

12 Months Ended

Dec. 31, 2015

Notes

Shareholders' Equity

5. Shareholders’ equity

The Company is authorized to issue 705,000,000 shares: 700,000,000 shares of $0.0001 par value common stock and 5,000,000 shares of $0.0001 par value preferred stock. As of December 31, 2015, the Company has 99,512,345 and 96,445,678 shares of common stock outstanding, respectively and 200 shares of Series A preferred stock outstanding.  During the year ended December 31, 2015 and 2014, the Company sold 3,066,667 and 10,000,000 shares of common stock, respectively.

The Company’s authorized Series A preferred stock consists of 200 shares and has relative rights, preferences, privileges and limitations as follows:

The Series A has a super voting right in that it votes together with the common stock and any other class of stock entitled to vote with the common stock all as a single class, with each 100 shares of Series A entitled to 40% of all votes to be cast on any matter;

The Series A is not convertible and is not entitled to any dividends or any distribution in liquidation of the Company;

The Series A is not transferable in any manner without the unanimous vote of the Company’s Board of Directors;

Without the unanimous consent of the holders of the Series A stock, there shall not be any change made to the Rights of the Series A or to create any stock with equal or superior voting right to the Series A stock or authorize any additional shares of Series A stock; and

Upon the occurrence of a Qualified IPO by the Company, the Series A stock shall be automatically cancelled and returned to the status of undersigned authorized but unissued preferred stock. “Qualified IPO” means the sale of common stock of the Company in an underwritten public offering or resale registration under the Securities Act of 1933 which results in the Company having a market capitalization in excess of $100,000,000, based on the average closing price of the Company’s common stock for 10 consecutive trading days.