ABCE ABCO Energy Inc (CE)

INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS

 

Other than as disclosed below, during the last two fiscal years, there have been no transactions, or proposed transactions, which have materially affected or will materially affect us in which any director, executive officer or beneficial holder of more than 5% of the outstanding common, or any of their respective relatives, spouses, associates or affiliates, has had or will have any direct or material indirect interest. We have no policy regarding entering into transactions with affiliated parties.

 

Any future material transactions and loans will be made or entered into on terms that are no less favorable to the Company that those that can be obtained from unaffiliated third parties.  Any forgiveness of loans must be approved by a majority of the Company’s independent directors who do not have an interest in the transactions and who have access, at the Company’s expense, to Company’s or independent counsel.  Until the Company has more than two directors, this policy will not be in effect.

 

Related party loans are demand notes totaling $179,100 and $177,347, respectively, as of June 30, 2017 and December 31, 2016.  These notes provide for interest at 12% per annum and are unsecured.  Other related party notes totaled $61,399 at June 30, 2017 for loans from a person who is neither an officer or director.

 

Related party notes payable as of June 30, 2017and December 31, 2016 consists of the following:

The first note in the amount of $60,000 provides for interest at 12% per annum and is unsecured.  This note has an accrued and unpaid interest charge of $23,472 and $19,876 at June 30, 2017 and December 31, 2016 respectively. 

The second note was increased by another loan in February 2017 in the amount of $4,200. The note is an unsecured demand note and bears interest at 12% per annum. This note has an accrued and unpaid interest charge of $9,143 and $5,812 at June 30, 2017 and December 31, 2016 respectively. 

The third note is from a related party and has a current balance of $61,399 as of June 30, 2017 which changes with credit card transactions during each period.  The note is an unsecured demand note and bears interest at 12% per annum. This note has an accrued and unpaid interest charge of $8,997 and $5,254 at June 30, 2017 and December 31, 2016 respectively. 

CERTAIN TRANSACTIONS

Until May, 8, 2017, the Company’s common stock was listed on the OTCQB Market under the symbol ABCO. Effective that date, the shares were delisted from the OTCQB because of the failure to cure a bid price deficiency whereby the shares did not close at or above $0.01 for 30 consecutive trading days over the last six [6] month period. The common stock now trades on the OTC Pink Tier under the symbol ABCE. The Company intends to re-apply for listing  on the OTCQB as soon as its shares close on the Pink Tier for $0.01 or more for 30 consecutive days. No assurance can be given that the shares will ever close at or above $0.01 requirement,  if the closing press comply to the requirements, that the application for re-listing will be approved.

 

During November, 2016, the Company issued an aggregate of 1,449,649 shares to financial consulting entities for services relating to fund raising activities. The total issuance was valued at $103,400 for fair market value as negotiated and that amount is charged to additional paid in capital. 

 

Effective December 31, 2016, the Company entered into a Consulting Agreement (“CA”) with Joshua Tyrell (“Tyrell”) which provides for Tyrell to assist in various business development activities on behalf of the Company, including but not limited to realizing new business opportunities.  In consideration for rendering such services, Tyrell was issued 1,500,000 free trading shares of Company common stock.  The CA has a six month term expiring on March 31, 2017.  On November 7, 2016 and on November 30, 2016, the CA was amended to provide for the payment of an additional 6,300,000 and an additional 5,000,000 free-trading shares, respectively to Tyrell for services rendered due to the huge trading volume of the derivative conversions and to extend the term of the CA to twelve (12) months ending November 7, 2017.  The consultant received a total of 14,300,000 (1,430,000 post reverse split) shares of free trading and restricted common stock valued at $91,600.

 

The Company has entered into Securities Purchase Agreement with Blackbridge Capital, LLC, a Delaware limited liability company [“SPA”], operating out of New York, New York (“Blackbridge”) whereby Blackbridge has agreed to purchase up to $5,000,000 worth of shares of the Company’s common stock.  The Company has agreed to file a Registration Statement to register such shares for sale to Blackbridge.  In addition, the Company has issued [i] a convertible promissory note to Blackbridge pursuant to the Securities Purchase Agreement equal to $150,000 as a commitment fee, that is currently charged to prepaid expenses until services are provided (the “Blackbridge Note”), [ii] and a $100,000 Convertible Note to cover the expenses to be incurred for the preparation and filing of the Registration Statement and related matters (“Expenses Note”).

 

On March 13, 2017, the Company and Blackbridge, entered into an Agreement, effective as of March 1, 2017, terminating the SPA.  The Registration Statement on Form S-1 filed by the Company pursuant to the SPA could not be processed because of technical issues raised by the SEC and was withdrawn on February 28, 2017.  In addition, the Blackbridge Note issued by the Company as a commitment fee remains, by its express terms, in full force and effect notwithstanding the termination of the SPA as does the Expenses Note.

During the six-month period ended June 30, 2017 the Company sold an aggregate of 33,143,250 shares of common stock and received or credited gross proceeds of $280,871. Of such shares, 26,362,000 were not issued because of the lack of a sufficient  number of authorized shares. The Company’s Articles of Incorporation were amended on August 17, 2017 to increase the authorized  shares  from 50,000,000 shares to 1,000,000,000 shares after the Company Shareholders  authorized such  Amendment  at a Special Meeting held on August 17, 2017. Expenses of this offering totaled $162,855.  The net proceeds of $118,016 were used for working capital, corporate expenses, legal fees and public company expenses. The unissued shares with equity valuation of $178,169 will be issued after the special meeting.

The Board of Directors of the Company has approved a reverse stock split of its common stock, at a ratio of 1-for-10 (the “Reverse Stock Split”).  The Reverse Stock Split became effective with FINRA (the Financial Industry Regulatory Authority) and in the marketplace on January 13, 2017 (the “Effective Date”), whereupon the shares of common stock began trading on a split adjusted basis.  On the Effective Date, the Company’s trading symbol was changed to “ABCED” for a period of 20 business days, after which the “D” will be removed from the Company’s trading symbol, which will revert to the original symbol of “ABCE”.  In connection with the Reverse Stock Split, the Company’s CUSIP number will change to 00287V204.  On the Effective Date, the total number of shares of the Company’s Common Stock held by each stockholder will be converted automatically into the number of whole shares of Common Stock equal to (i) the number of issued and outstanding shares of Common Stock held by such stockholder immediately prior to the Reverse Stock Split, divided by (ii) 10.  No fractional shares will be issued, and no cash or other consideration will be paid.  Instead, the Company will issue one whole share of the post-Reverse Stock Split Common Stock to any stockholder who otherwise would have received a fractional share because of the Reverse Stock Split.

As a result of the Reverse Stock Split the number of authorized shares of common stock was reduced to 50,000,000 from 500,000,000 shares.  The Company has called a Special meeting for June 22, 2017 to authorize an amendment to the Articles of Incorporation to increase the authorized capital to 1,000,000,000 common shares and 100,000,000 preferred shares.

 

On January 11, 2017, the Company issued a $45,000 one [1] year convertible Note to Crown Bridge Partners, LLC. After the OID and other issuance expenses, the Company netted $40,000. The Note is convertible into shares of common stock at a discount rate of 48% off of the lowest average closing price for the 20 trading day period prior to the date on the notice of conversion.

 

On February 25, 2017, the Company replaced its current auditors, Thayer-O’Neal Company, LLC (“Thayer”) with Fruci & Associates II, PLLC (“Fruci”).  There were no disagreements between the Company and Thayer regarding accounting principles or practices, disclosure requirements or auditing scope or procedures which resulted in this change of auditors.  Fruci conducted the audit of the Company’s financial statements for the fiscal year ended December 31, 2016 which appeared its Form 10-K has its fiscal year ended December 31, 2016.