10. Subsequent Events
|3 Months Ended|
Mar. 31, 2021
|Subsequent Events [Abstract]|
Effective April 9, 2021, Richard Munn and William Green each voluntarily resigned as a Director of the Company and all committees thereof.
Effective April 15, 2021, Jason Lane and Thomas Bundros each voluntarily resigned as a Director of the Company, and all committees thereof. Concurrently, effective that date, Mr. Lane also voluntarily resigned as Chairman of the Board of the Company.
Effective April 15, 2021, Michael McMullen voluntarily resigned as the Chief Financial Officer (“CFO”) of the Company. Notwithstanding, Mr. McMullen has agreed to continue to serve the Company on a consulting basis for a limited time to assist the Company in its transition to new management. Additionally, effective April 15, 2021, Don Dickson resigned as the interim Chief Executive Officer (“CEO”) of the Company.
The remaining Board members, namely, Don Dickson and Eric Bunting, appointed Cecil Bond Kyte to serve, effective April 15, 2021, as the Company’s Chief Executive Officer and Chief Financial Officer on such mutually acceptable terms and conditions to be determined at a later date, based on and subject to the Company’s financial condition and viability. Currently, Mr. Kyte will not receive any cash or stock consideration for his roles as CEO and CFO of the Company until approved by the Board. Currently, there is no agreement or arrangement regarding compensation for Mr. Kyte in his roles as CEO and CFO of the Company. Additionally, effective April 15, 2021, the remaining Board members appointed Mr. Kyte to serve on the Company’s Board of Directors as a Class I Director and to serve as the Company’s Chairman of the Board. The Board also approved a resolution suspending all Board compensation effective January 1, 2021, payable under the Company’s May 6, 2014, Board compensation policy as amended January 1, 2015.
From April 1, 2021, through August 18, 2021, the Company issued and sold to accredited US investors and non-U.S. investors an aggregate of $283,000 Convertible Promissory Notes (the “Notes”) and warrants to purchase an aggregate of 5,983,998 shares of common stock (the “Warrants”). The Company received proceeds from the closing of the private placement of $139,000, which funds were used, and are being used, for general corporate purposes and working capital.
The Notes are due twelve (12) months from their respective issuance dates (the “Maturity Date”). The Notes do not bear interest and were issued in the face amount equal to 110% of the purchasers’ commitments. The Notes are convertible into shares of the Company’s common stock at a rate of $0.02 to $0.03 per share. If the Notes are not paid in full by the Maturity Date, the balance remaining on the Maturity Date shall be increased by 10% and the Company shall be required to pay interest at a rate of 10% per annum thereon until all sums thereunder are paid in full.
The Warrants are exercisable into shares of the Company’s common stock for a term of one (1) year at an exercise price of $0.03 to $0.04 per share. The Warrants also contain provisions that protect the holders against dilution by adjustment of the conversion price in certain events involving a reduction or increase in the Company’s shares.
Additionally, from the April 1, 2021 through August 18, 2021, the Company sold 8,533,333 shares of common stock for aggregate consideration of $128,000, or $0.015 per share to Cecil Bond Kyte. During this same period, the Company issued and sold to Mr. Kyte a Convertible Note for $117,000, in the face amount of $128,700. The Note is unsecured, matures in twelve months from issuance and is convertible into 6,435,000 shares of common stock of the Company at $0.02 per share. As part of issuance of the Note, the Company granted Mr. Kyte a Warrant to purchase 3,217,500 shares of the Company’s common stock. The warrant is fully vested, exercisable at $0.03 per share and expires one year from the date of issuance.
The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef