NOTES TO THE FINANCIAL STATEMENTS
June 30, 2013 and 2012
(Unaudited)
Note 1. Basis of Presentation
The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at June 30, 2013, and for all periods presented herein, have been made.
Note 2. Significant Accounting Policies
Going Concern
The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred cumulative net losses of $13,361,267 from the period of July 3, 2006 (Inception) through June 30, 2013 and has used significant cash in support of its operating activities raising substantial doubt about the Company’s ability to continue as a going concern. The Company in 2012 has raised additional capital and will seek additional sources of capital through the issuance of debt or equity financing, but there can be no assurance the Company will be successful in accomplishing its objectives.
The ability of the Company to continue as a going concern is dependent on additional sources of capital and the success of the Company’s plan. The financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Use of estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company is subject to uncertainty of future events, economic, environmental and political factors and changes in the Company's business environment; therefore, actual results could differ from these estimates. Accordingly, accounting estimates used in the preparation of the Company's financial statements will change as new events occur; more experience is acquired, as additional information is obtained and as the Company's operating environment changes. Changes are made in estimates as circumstances warrant. Such changes in estimates and refinement of estimation methodologies are reflected in the financial statements.
F-5
WEBSAFETY, INC.
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2013 and 2012
(Unaudited)
Earnings per Share
Basic earnings per common share is computed by dividing net earnings by the weighted average number of common shares outstanding during each period presented. Diluted earnings per common share give the effect to the assumed exercise of stock options when dilutive. In a loss year, the calculation for basic and diluted earnings per share is considered to be the same, as the impact of potential common shares is anti-dilutive. At June 30, 2013, there were 1,990,000 stock options.
Beneficial Conversion Feature
Costs incurred with parties who are providing financing, which include the intrinsic value of beneficial conversion features associated with the underlying debt, are reflected as a debt discount. These discounts are generally amortized over the life of the related debt. In certain circumstances, the intrinsic value of the beneficial conversion feature may be greater than the proceeds associated to the convertible instrument. In such situations, the amount of the discount assigned to the beneficial conversion feature is limited to the amount of the proceeds allocated to the convertible instrument.
Fair value of financial instruments
The Company follows paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments and paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
|
|
| |
|
Level 1
|
|
Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
|
|
|
|
|
|
Level 2
|
|
Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
|
|
|
|
|
|
Level 3
|
|
Pricing inputs that are generally unobservable inputs and not corroborated by market data.
|
Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.
F-6
WEBSAFETY, INC.
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2013 and 2012
(Unaudited)
The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.
The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts payable, accrued expenses and loans payable approximate their fair values because of the short maturity of these instruments. Loans payable are recorded at their issue value.
Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.
It is not, however, practical to determine the fair value of advances from stockholders, if any, due to their related party nature.
Stock Based Compensation
We account for employee share-based awards in accordance with FASB ASC 718. FASB ASC 718 requires recognition in the financial statements of the cost of employee services received in exchange for an award of equity instruments over the period the employee is required to perform the services in exchange for the award (presumptively the vesting period). FASB ASC 718 also requires measurement of the cost of employee services received in exchange for an equity award based upon the grant-date fair value of the award.
The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of ASC 505-50. Accordingly, the measurement date for the fair value of the equity instruments issued is determined at earliest of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments, issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.
In accordance with ASC 505-50, each transaction involving the issuance of stock in exchange for goods or services is analyzed to determine whether the value of the stock given as consideration on the value of the goods on services received are the more representation of the value of the underlying transactions.
Comprehensive Income
The Company has no components of income that would require classification as other comprehensive income.
F-7
WEBSAFETY, INC.
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2013 and 2012
(Unaudited)
Property and Equipment
Fixed assets are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation of fixed assets is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful life. Upon sale or retirement of the asset, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the statements of operations.
|
| |
|
Asset
|
Useful Life
(in years)
|
|
Equipment
|
5 years
|
|
Furniture & Fixtures
|
7 years
|
Reclassification
Certain accounts in the prior-year financial statements have been reclassified for comparative purposes to conform to the presentation in the current-year financial statements.
Note 3. Property and Equipment
Property and equipment consist of the following at June 30, 2013 and December 31, 2012:
|
|
|
| |
|
|
2013
|
|
2012
|
|
Property and Equipment
|
|
|
|
|
Equipment
|
$ 16,689
|
|
$ 16,689
|
|
Software
|
167,670
|
|
167,670
|
|
Total property and equipment before accumulated depreciation
|
184,359
|
|
184,359
|
|
|
|
|
|
|
Less accumulated depreciation
|
(179,644)
|
|
(178,064)
|
|
Total property and equipment
|
$ 4,715
|
|
$6,295
|
Depreciation expense for the six months ended June 30, 2013 and 2012 totaled $1,580 and $29,374, respectively.
During the six months ended June 30, 2013, the Company had incurred website development costs as part of web site application and infrastructure development activities. Specifically, activities include coordination of design, engineering, initial integration and design modifications, script writing, web site designs and revisions, application side designs, pre-video production build/test flash prototype for oversize video browser scaling, eCommerce engine, etc. All of these development costs were expensed as incurred.
F-8
WEBSAFETY, INC.
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2013 and 2012
(Unaudited)
Note 4. Loan Payable
The components of notes as of June 30, 2013 are as follows:
·
On July 23, 2010, the Company entered into a promissory note in the amount of $11,228 including interest of 5% due to Texas Atlantic Capital Partners, LLC. on demand. As of June 30, 2013, this note is still outstanding.
·
$20,000 loan received February 24, 2012, due on demand. The convertible promissory note provides the holder the right to convert at any time, all or any unpaid principal and interest into shares of the Company
’
s common stock at a price equal to $.0075 per share. As of June 30, 2013, no portion of this note has been converted to common stock.
·
$13,000 loan received February 27, 2012, due on demand. The convertible promissory note provides the holder the right to convert at any time, all or any unpaid principal and interest into shares of the Company’s common stock at a price equal to $.0075 per share. As of June 30, 2013, no portion of this note has been converted to common stock.
·
$63,054 loan received April 9, 2012, due August 31, 2012. The convertible promissory note provides the holder the right to convert at any time, all or any unpaid principal and interest into shares of the Company
’
s common stock at a price equal to $.0075 per share. As of June 30, 2013, no portion of this note was converted to common stock.
·
$18,800 loan received June 6, 2012, due on demand. The convertible promissory note provides the holder the right to convert at any time, all or any unpaid principal and interest into shares of the Company
’
s common stock at a price equal to $.0075 per share. As of June 30, 2013, no portion of this note was converted to common stock.
·
$63,000 loan received July 5, 2012, due April 10, 2013, including interest at 8%. The convertible promissory note provides the holder the right to convert at any time, all or any unpaid principal and interest into shares of the Company’s common stock at a price equal to 61% of the market price. As of June 30, 2013, this note was converted to common stock.
·
$63,000 loan received September 19, 2012, due June 21, 2013, including interest at 8%. The convertible promissory note provides the holder the right to convert at any time, all or any unpaid principal and interest into shares of the Company
’
s common stock at a price equal to 58% of the market price. As of June 30, 2013, this note was converted to common stock.
F-9
WEBSAFETY, INC.
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2013 and 2012
(Unaudited)
·
$8,769 loan received October 1, 2012, due on April 1, 2013. The convertible promissory note provides the holder the right to convert at any time, all or any unpaid principal and interest into shares of the Company’s common stock at a price equal to $.002 per share. As of June 30, 2013, this note was converted to common stock.
Each loan above has a right to convert to common stock. During the six months ended June 30, 2013, a total of $134,769 of the above mentioned notes were converted into shares of common stock.
Based on the intrinsic value of the conversion feature, the Company determined that there was a beneficial conversion feature associated with some notes payable. As a result of the beneficial conversion feature exceeding the proceeds received from the promissory notes, management discounted the notes 100% and will amortize this discount over the life of the note. During the six months ended June 30, 2013 and 2012, amortization of the beneficial conversion feature was $55,691 and $420,940, respectively. As of June 30, 2013, there was no remaining unamortized discount on notes.
Note 5. Related Party Transactions
Consulting, Legal and Administrative Services-
These services consist of management oversight of the operations of the Company; review of financial operations, capital raising and meetings with investors, potential investors, preparation of the Company’s SEC reports and documents for the Company’s operations.
In the aggregate, during the six months ended June 30, 2013, the Company owed to related parties $477,972 for consulting, legal and accrued interest as reflected below.
|
|
|
|
| |
|
|
Consulting,
legal and
administrative
|
Loan
|
Accrued Interest
|
Total
|
|
Rowland W. Day II
|
$138,692
|
$304,890
|
$4,390
|
$447,972
|
|
Bryan Fowler
|
|
$30,000
|
|
$30,000
|
|
|
$138,692
|
$334,890
|
$4,390
|
$477,972
|
Rowland W. Day II is our CEO, CFO and Chairman of the Board. Bryan Fowler was a technology consultant and shareholder.
The components of notes as of June 30, 2013 are as follows:
F-10
WEBSAFETY, INC.
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2013 and 2012
(Unaudited)
On October 4, 2011, the Company entered into a convertible promissory note in the amount of $516,134 including interest of 5% due to Rowland W. Day II on demand. The convertible promissory note provides the holder the right to convert at any time, all or any unpaid principal and interest into shares of the Company’s common stock at a price equal to $0.005 per share. As of June 30, 2013, $150,000 of this note has been converted to common stock during 2012 and the remaining balance of $366,134 of this note has been converted to preferred stock during 2013.
On October 4, 2011, the Company entered into a convertible promissory note in the amount of $229,401 including interest of 5% due to Rowland W. Day II on demand. The convertible promissory note provides the holder the right to convert at any time, all or any unpaid principal and interest into shares of the Company’s common stock at a price equal to $0.0075 per share. As of June 30, 2013, $181,153 of this note was converted to shares of preferred stock.
On December 31, 2011, the Company entered into a convertible promissory note in the amount of $15,952 including interest of 5% due to Rowland W. Day II on demand. The convertible promissory note provides the holder the right to convert at any time, all or any unpaid principal and interest into shares of the Company’s common stock at a price equal to $0.0075 per share. As of June 30, 2013, no portion of this note was converted to shares of common stock.
On December 31, 2011, the Company entered into a convertible promissory note in the amount of $7,250 including interest of 5% due to Rowland W. Day II on demand. The convertible promissory note provides the holder the right to convert at any time, all or any unpaid principal and interest into shares of the Company’s common stock at a price equal to $0.0075 per share. As of June 30, 2013, no portion of this note was converted to shares of common stock.
On March 31, 2012, the Company entered into a convertible promissory note in the amount of $12,467 including interest of 5% due to Rowland W. Day II on demand. The convertible promissory note provides the holder the right to convert at any time, all or any unpaid principal and interest into shares of the Company’s common stock at a price equal to $0.0075 per share. As of June 30, 2013, no portion of this note was converted to shares of common stock.
On March 31, 2012, the Company entered into a convertible promissory note in the amount of $62,250 including interest of 5% due to Rowland W. Day II on demand. The convertible promissory note provides the holder the right to convert at any time, all or any unpaid principal and interest into shares of the Company’s common stock at a price equal to $0.0075 per share. As of June 30, 2013, no portion of this note was converted to shares of common stock.
F-11
WEBSAFETY, INC.
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2013 and 2012
(Unaudited)
On April 1, 2012, the Company entered into a convertible promissory note in the amount of $30,000, due to Bryan Fowler due August 31, 2012. The convertible promissory note provides the holder the right to convert at any time, all or any unpaid principal and interest into shares of the Company’s common stock at a price equal to $0.0075 per share. As of June 30, 2013, no portion of this note was converted to shares of common stock.
On June 30, 2012, the Company entered into a convertible promissory note in the amount of $83,125 including interest of 5% due to Rowland W. Day II on demand. The convertible promissory note provides the holder the right to convert at any time, all or any unpaid principal and interest into shares of the Company’s common stock at a price equal to $0.0075 per share. As of June 30, 2013, no portion of this note was converted to shares of common stock.
On June 30, 2012, the Company entered into a convertible promissory note in the amount of $18,063 including interest of 5% due to Rowland W. Day II on demand. The convertible promissory note provides the holder the right to convert at any time, all or any unpaid principal and interest into shares of the Company’s common stock at a price equal to $0.0075 per share. As of June 30, 2013, no portion of this note was converted to shares of common stock.
On September 30, 2012, the Company entered into a convertible promissory note in the amount of $16,132 including interest of 5% due to Rowland W. Day II on demand. The convertible promissory note provides the holder the right to convert at any time, all or any unpaid principal and interest into shares of the Company’s common stock at a price equal to $0.0075 per share. As of June 30, 2013, no portion of this note was converted to shares of common stock.
On September 30, 2012, the Company entered into a convertible promissory note in the amount of $57,437 including interest of 5% due to Rowland W. Day II on demand. The convertible promissory note provides the holder the right to convert at any time, all or any unpaid principal and interest into shares of the Company’s common stock at a price equal to $0.0075 per share. As of June 30, 2013, $12,000 was repaid back in 2012, but no portion of this note was converted to shares of common stock.
On December 31, 2012, the Company entered into a convertible promissory note in the amount of $9,237 including interest of 5% due to Rowland W. Day II on demand. The convertible promissory note provides the holder the right to convert at any time, all or any unpaid principal and interest into shares of the Company’s common stock at a price equal to $0.0075 per share. As of June 30, 2013, no portion of this note was converted to shares of common stock.
On December 31, 2012, the Company entered into a convertible promissory note in the amount of $3,771 including interest of 5% due to Rowland W. Day II on demand. The convertible promissory note provides the holder the right to convert at any time, all or any unpaid principal and interest into shares of the Company’s common stock at a price equal to $0.0075 per share. As of June 30, 2013, no portion of this note was converted to shares of common stock.
F-12
WEBSAFETY, INC.
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2013 and 2012
(Unaudited)
On March 31, 2013, the Company entered into a convertible promissory note in the amount of $20,813 including interest of 5% due to Rowland W. Day II on demand. The convertible promissory note provides the holder the right to convert at any time, all or any unpaid principal and interest into shares of the Company’s common stock at a price equal to $0.0075 per share. As of June 30, 2013, no portion of this note was converted to shares of common stock.
On March 31, 2013, the Company entered into a convertible promissory note in the amount of $9,398 including interest of 5% due to Rowland W. Day II on demand. The convertible promissory note provides the holder the right to convert at any time, all or any unpaid principal and interest into shares of the Company’s common stock at a price equal to $0.0075 per share. As of June 30, 2013, no portion of this note was converted to shares of common stock.
On June 30, 2013, the Company entered into a convertible promissory note in the amount of $37,440 including interest of 5% due to Rowland W. Day II on demand. The convertible promissory note provides the holder the right to convert at any time, all or any unpaid principal and interest into shares of the Company’s common stock at a price equal to $0.0075 per share. As of June 30, 2013, no portion of this note was converted to shares of common stock.
On June 30, 2013, the Company entered into a convertible promissory note in the amount of $54,000 including interest of 5% due to Rowland W. Day II on demand. The convertible promissory note provides the holder the right to convert at any time, all or any unpaid principal and interest into shares of the Company’s common stock at a price equal to $0.0075 per share. As of June 30, 2013, no portion of this note was converted to shares of common stock.
Each loan above has a right to convert to common stock. During the six months ended June 30, 2013, $547,287 plus interest of above mentioned notes were converted into shares of preferred stock that are convertible into common stock.
Note 6. Facilities
The Company’s corporate headquarters have been moved to 1 Hampshire Court, Newport Beach, California 92660 which is the office of our CEO and Chairman of the Board Rowland W. Day II. We are not being charged any rent at this time.
Note 7. Recent Pronouncements
Management does not believe that any recently issued but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.
F-13
WEBSAFETY, INC.
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2013 and 2012
(Unaudited)
Note 8. Stock Based Compensation
In November 2009, the Board of Directors and Shareholders adopted the 2008 Stock Option Plan providing for the issuance of up to 10,000,000 shares to Company officers, directors, employees and to independent contractors who provide services to the Company.
Options granted under the 2008 Stock Option Plan vest as determined by the Board of Directors and terminate after the earliest of the following events: expiration of the option as provided in the option agreement, 90 days subsequent to the date of termination of the employee, or ten years from the date of grant (five years from the date of grant for incentive options granted to an employee who owns more than 10% of the total combined voting power of all classes stock at the date of grant). In some instances, granted stock options are immediately exercisable into restricted shares of common stock, which vest in accordance with the original terms of the related options. The Company recognizes compensation expense ratably over the requisite service period.
The option price of each share of common stock shall be determined by the Board of Directors or compensation committee (when one is established), provided that with respect to incentive stock options, the option price per share shall in all cases be equal to or greater than 100% of the fair value of a share of common stock on the date of the grant, except an incentive option granted under the 2008 Stock Option Plan to a shareholder that owns more than 10% of the total combined voting power of all classes of stock, shall have an exercise price of not less than 110% of the fair value of a share of common stock on the date of grant. No participant may be granted incentive stock options, which would result in shares with an aggregate fair value of more than $10,000,000 first becoming exercisable in one calendar year.
For the six months ended June 30, 2013 and 2012, the Company recorded compensation costs for options and shares granted under the plan amounting to $0 and $328,378, respectively. There are no unamortized stock compensation costs. A deduction is not allowed for income tax purposes until nonqualified options are exercised. The amount of this deduction will be the difference between the fair value of the Company’s common stock and the exercise price at the date of exercise. The tax effect of the income tax deduction in excess of the financial statement expense, if any, will be recorded as an increase to additional paid-in capital. No tax deduction is allowed for incentive stock options. Accordingly no deferred tax asset is recorded for GAAP expense related to these options.
Management has valued the options at their date of grant utilizing the Black Scholes Merton option pricing model. The fair value of the underlying shares was determined based on the closing price of the Company’s publicly-traded shares as of date of the grant. Further, the expected volatility was calculated using the historical volatility of the Company’s stock.
F-14
WEBSAFETY, INC.
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2013 and 2012
(Unaudited)
The risk-free interest rate is based on the implied yield available on U.S. Treasury issues with an equivalent term approximating the expected life of the options depending on the date of the grant and expected life of the options. The expected life of options used was based on the contractual life of the option granted. The Company determined the expected dividend rate based on the assumption and expectation that earnings generated from operations are not expected to be adequate to allow for the payment of dividends in the near future.
The following table summarizes the status of the Company aggregate stock options granted under the incentive stock option plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
|
of Shares
|
|
|
Average
|
|
|
Weighted
|
|
|
|
|
|
|
|
Remaining
|
|
|
Intrinsic
|
|
|
Average
|
|
|
Aggregate
|
|
|
Subject to Exercise
|
|
Options
|
|
|
Price
|
|
|
Life (Years)
|
|
|
Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding as of December 31, 2012
|
|
|
1,990,000
|
|
|
$
|
-
|
|
|
-
|
|
|
$
|
-
|
|
|
Granted - 2013
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Forfeited - 2013
|
|
|
-
|
|
|
$
|
.
|
|
|
|
|
|
|
|
-
|
|
|
Exercised - 2013
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Outstanding as of June 30, 2013
|
|
|
1,990,000
|
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
|
Exercisable as of June 30, 2013
|
|
|
1,990,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 9. Legal Proceedings
On August 28, 2012, Keith Miller a part time employee of the Company at the time of his departure sued the Company, its officers and directors for fraud. Mr. Miller was previously the Interim Chief Technology Officer of the Company.
The Company and Mr. Miller settled the lawsuit on July 22, 2013.
Note 10. Patents
On February 19, 2013, the Company received Patent No: US 8,380,176,B2. This Patent covers a method to inhibit the use of a multi-function portable communication device in a moving vehicle. The Company has not assigned any monetary value nor is it reflected on the Company's financial statements. The costs to file the patent were expensed as incurred.
F-15
WEBSAFETY, INC.
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2013 and 2012
(Unaudited)
Note 11. Commitments and Contingencies
Series B Preferred Stock
The principal terms of the Series B Preferred Stock were as follows:
Voting rights
- The Series B Preferred Stock has voting rights (five votes per share) equal to those of the Company’s common stock.
Dividend rights
- The Series B Preferred Stock shall not pay dividend.
Conversion rights
- The holders of the Series B Preferred Stock have the right to convert any or all of their Series B Preferred Stock, at the option of the holder, at any time, into common stock on a one for 909,090.909 basis.
Redemption rights -
The holders of the Series B Preferred Stock may at each holder’s option to cause the Company to redeem any of shares or all shares of Series B Preferred Stock at a price of six hundred dollars ($600) per share.
Liquidation entitlement
- In the event of any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the funds and assets of the Company that may be legally distributed to the Company’s shareholders shall be distributed to shareholders.
The Company has classified the Series B Preferred Stock as temporary equity because it is redeemable at the option of the holder.
F-16
WEBSAFETY, INC.
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2013 and 2012
(Unaudited)