Item 1.01.
Entry into a Material Event.
On February 8, 2017, Momentous Entertainment Group, Inc., a Nevada company (the "Company" or MEG), executed Share Exchange Agreement with the shareholders of VZ Network Holdings, Inc., a Delaware company (the Selling Company or VZ), purchasing all the issued and outstanding shares of VZ for newly-issued preferred stock of MEG, with VZ becoming a wholly-owned subsidiary of MEG. VZ owns 100% of the equity of Poolworks (Germany) Ltd, a German company with offices in Berlin. Poolworks owns and operates the social-media networking platforms studiVZ and meinVZ directed and offered primarily to individuals located in the Republic of Germany
Share Exchange with VZ Network Holdings, Inc.,
In exchange for the VZN Common Stock, the Company issued to the VNZ Majority Shareholders an aggregate of 10,000 shares of non-redeemable, convertible shares of Series C preferred stock of the Company (the Company Series C Preferred Stock).
The Company amended its articles of incorporation to authorize an aggregate of 10,000 shares of Company Series C Preferred Stock. The Companys Series C Preferred Stock:
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does not pay a dividend;
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has a stated or liquidation value of $1,000.00 per share, or an aggregate of $10,000,000, as to all shares of Company Series C Preferred Stock;
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upon liquidation or a sale of control of the Company is senior to the Company Common Stock;
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provides that upon the occurrence of a conversion event (defined as the listing of shares of Company Common Stock on a qualified stock exchange (as defined)), the Company Series C Preferred Stock shall automatically convert into 66,783,870 shares of Company Common Stock, or such other number of shares of Company Common Stock as shall represent 20% of the Companys fully-diluted Common Stock (as defined) on the date of conversion; and
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votes with the companys outstanding Common Stock on an as converted basis;
A qualified stock exchange is defined as any one of the New York Stock Exchange, the Nasdaq Stock Exchange (including the Nasdaq Capital Markets) or the NYSE: Market Amex Exchange.
The closing of the transactions contemplated by the Exchange Agreement was consummated on February 7, 2017.
The foregoing summary of certain terms of the Exchange Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Exchange Agreement, a copy of which is attached hereto as Exhibit 10.9 and is hereby incorporated into this Current Report on Form 8-K (Form 8-K) by reference.