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Subsequent Events
12 Months Ended
Dec. 31, 2017
Subsequent Events [Abstract]  
Subsequent Events

Note 11 - Subsequent Events

 

On January 17, 2018, Alex Bafer, the chief executive officer, chief financial officer and chairman of the board of Recall Studios, Inc. resigned from all of his positions with the Company effective immediately. Mr. Bafer’s resignation was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices, but rather, for personal reasons.

 

On January 17, 2018, Frank M. Esposito, the Company’s current Chief Legal Officer, member of the Company’s board of directors and secretary of the Company’s board of directors, agreed to serve as the Company’s Interim Chief Executive Officer. Mr. Esposito assumed his new role as Chief Executive Officer effective January 17, 2018, and is expected to serve until he completes a search and the Company appoints a new Chief Executive Officer.

 

Mr. Esposito, age 45, has served as the Company’s Chief Legal Officer since July of 2014 and as a member of the Company’s board of directors since February of 2017.

 

There are no family relationships between Mr. Esposito and any of our other officers and directors.

 

In connection with Mr. Esposito’s appointment as Interim Chief Executive Officer of the Company, on January 15, 2018, Esposito, PLLC and the Company entered into a letter agreement amending the letter agreement dated June 29, 2016 between the Company and Esposito Partners, pursuant to which the Company engaged Esposito Partners to provide legal services to the Company. The Letter Agreement also provided that Frank Esposito, who is the Managing Member of Esposito Partners, would serve as the Chief Legal Officer, a member of the Company’s board of directors and as secretary of the Company’s board of directors.

 

Pursuant to the Amendment, the parties memorialized their agreement regarding the continued engagement by the Company of Esposito Partners under the Letter Agreement. Further pursuant to the Amendment, it was agreed that Mr. Esposito would serve as the Interim Chief Executive Officer of the Company until such time as a suitable replacement is found for Mr. Bafer. Further, in the Letter Agreement it was agreed that Esposito Partners would be paid a non-refundable retainer for Mr. Esposito’s performance of services for the Company. To date, the Company has paid $25,000 of the Compensation due to Mr. Esposito under the Letter Agreement and still owes $65,000 under the Letter Agreement. Pursuant to the Amendment, in consideration of Mr. Esposito assuming the role of Interim Chief Executive Officer, Esposito Partners agreed not to seek any compensation beyond that already agreed to between the Company and Esposito Partners, and further Esposito Partners agreed to defer any collection of the Amount Owed provided that the Company remits a payment of $10,000 to Esposito Partners upon the execution of the Amendment as a reduction of amounts outstanding.

 

On February 1, 2018, Frank M. Esposito, the interim Chief Executive Officer, Chief Legal Officer and member of the board of directors of Recall Studios, Inc. resigned from his position as the Company’s interim Chief Executive Officer. Mr. Esposito will retain his positions as the Company’s Chief Legal Officer and a member of the Company’s board of directors.

 

Also on February 1, 2018, the Company’s board of directors appointed Alexander Bafer as the Company’s Chief Executive Officer and Chairman of the Board.

 

In connection with Mr. Bafer’s appointment as Chief Executive Officer of the Company, the Company and Mr. Bafer entered into an Executive Employment Agreement effective February 1, 2018. Pursuant to the terms of the Employment Agreement, the Company agreed to employ Mr. Bafer as Chief Executive Officer for a term of one year, which term will automatically renew for successive one-year periods unless either party provides 30 days’ prior written notice. In exchange for Mr. Bafer’s services as Chief Executive Officer, the Company will pay Mr. Bafer an annual salary of $250,000, subject to review and adjustment as provided in the Employment Agreement. Mr. Bafer will also be eligible to receive a performance-based bonus. The Company also granted Mr. Bafer an option to purchase 250,000 shares of the Company’s common stock pursuant to the Company’s 2014 Equity Incentive Stock Plan (the “Plan”).

 

Mr. Bafer and the Company also entered into an Agreement for Chairman of Board of Directors (the “COB Agreement”) in connection with Mr. Bafer’s appointment as Chairman of the Board. The COB Agreement has a term of one year, and will continue for as long as Mr. Bafer is elected as Chairman of the Board. Pursuant to the terms of the COB Agreement, the Company agreed to grant Mr. Bafer an option to purchase 250,000 shares of the Company’s common stock pursuant to the Plan.

 

In January 2018 the Company entered into a securities purchase agreement in connection with the issuance of a $53,000 convertible note. The note carries interest of 8% per year and is due and payable on October 30, 2018. The outstanding amounts under the note are convertible, at the option of the holder, into shares of common stock of the Company, at a conversion price calculated at 63% of the average three lowest sale price for the common stock during the 10 consecutive trading days immediately preceding the conversion date.

 

In January 2018 the Company issued an additional convertible promissory note to Crown Bridge Partners in the amount of $17,500. The new amount is subject to the same provisions as detailed in Note 3.

 

In February 2018 the Company entered into a securities purchase agreement in connection with the issuance of a $94,500 convertible note. The note carries interest of 8% per year and is due and payable on February 21, 2018. The outstanding amounts under the note are convertible, at the option of the holder, into shares of common stock of the Company, at a conversion price calculated at 50% of the lowest sale price for the common stock during the 20 consecutive trading days immediately preceding the conversion date.

 

In February 2018 the Company issued an additional convertible promissory note to Crown Bridge Partners in the amount of $35,000. The new amount is subject to the same provisions as detailed in Note 3.

 

In February 2018 pursuant the September 29, 2017 securities purchase agreement with Labrys Fund, LP, the Company canceled 107,843 that were issued to Labrys as a commitment fee as the Company fulfilled all obligations under the agreement pursuant to these returnable shares.