Note 11. Related Parties and Related Party Transactions
On September 13, 2017 the company entered into an agreement to provide social media and other advertising services to Render Payment, LLC. Michael Hawkins, the then Chief Financial Officer, is a non-controlling member with greater than 10% ownership in Render Payment, LLC. Under terms of the agreement, we received 5,000,000 RPM Tokens at $0.25 per token.
During 2016, the Company advanced to Omni Health, Inc., (“OMHE”) $86,012 for internet product sales, and inventory purchases bringing the total outstanding balance due to the Company to $186,276 on April 30, 2016, which was recorded as due from related party. During FY 2017 OMHE paid to the Company $23,153 towards the outstanding liability. On June 22, 2016, the Company entered into a Separation and Share Transfer Agreement with OMHE (See Note 13) bringing the outstanding balance to $95,000 at the time of closing. On October 31, 2016, we converted the note plus the interest earned (outstanding balance of $98,105) into 17,677,058, as per the conversion formula. The fair market value of the stock received was $152,023 at the time of conversion. The Company recognized a gain of $53,918.
On May 1, 2016 the Company entered into a Line of Credit Agreement for up to $100,000 with Paul Rosenberg, the Chairman and CEO. The Company will utilize the Line of Credit as needed for day-to-day operations. During this quarter the company utilized $200 under the Line of Credit Agreement and $2,000 was assigned to the Line of Credit from the assumed liability of the VitaCig acquisition to Paul Rosenberg (see Note 8).
On May 2, 2016 the Company sold to Paul Rosenberg the bad inventory from the past several years that was written off the previous years at cost. Mr. Rosenberg paid for the bad inventory in cash. The Company had stored $20,730 worth of bad product it needed to destroy, which was not accounted for on its books and records. The Company booked the transaction as revenue.
On June 3, 2016 the Company entered into a Convertible Promissory Note with VitaCig, Inc., (VTCQ) in the amount of $95,000 which was accounted for by the reduction of the balance Due from Related Party. The terms of the Convertible Promissory Note include 8% annual interest, and a 25% reduction to the lowest conversion price of the preceding five days before election to convert.
Between May 1, 2016 and June 22, 2016, the Company received $21,945 which was paid towards the balance Due from Related Party leaving a balance owed of $68,123 on June 22, 2016, the date of acquisition. The Company purchased the VTCQ business for $68,183 on June 22, 2016 by writing off the remaining balance (excluding the Convertible Promissory Note of $95,000).
During the three months ended July 31, 2016, Scalable Solutions, LLC (Scalable) contracted Zoha Development, LLC (Zoha) to provide services to the construction division and paid Zoha $5,655 and has an outstanding balance owed of $10,000 at the end of the fiscal period ending July 31, 2016. The president of Scalable is a managing member of Zoha.
On June 7, 2016 the Company issued 2,500,000 shares of common stock ($75,000 in fair market value) to Paul Rosenberg for the acquisition of the domain url www.cbd.biz. See Note 5.
On June 8, 2016 Paul Rosenberg,
the Company’s CEO and Chairman of the Board,
converted 600,000 shares of Series A Preferred into 6,000,000 shares of common stock.
On June 22, 2016 the Company acquired the business of VitaCig, Inc., (VTCQ). See Note 7.
On April 1, 2017, the Company entered into an employment agreement with Alex Mardikian, the Chief Marketing Officer. The term of the agreement was for a period of one year. The agreement calls for $84,000 per year base salary with various performance based incentives and bonuses. Either party may terminate the agreement upon 30 days written notice to the other party.
Note 12. Stockholders’ Equity
Common Stock
As of
October
3
1
, 2017, the Company was authorized to issue 560,000,000 common shares at a par value of $0.0001. As of
October 31
, 2017, the Company had issued and outstanding 402,810,809 common shares.
During the
three months
ended
October
3
1
, 2017 the Company issued
4,000,000 under its option plan
for services rendered
and 2,600,000 shares through a private placement of $650,000
.
Preferred Stock
The Company has authorized 50,000,000 shares of preferred stock, of which it has designated 23,000,000 as Series A Preferred, at $0.0001 par value. The Company has 12,850,000 issued and outstanding as of
October
31, 2017. There were a total of 12,850,000 issued and outstanding as of October 31, 2017. Each share of the Preferred Stock has 10 votes on all matters presented to be voted by the holders of the Company’s common stock.
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