As filed with the Securities and Exchange Commission
on June 11, 2021
Registration No.
333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
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INTEGRATED VENTURES, INC.
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(Exact name of
registrant as specified in its charter)
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Nevada
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82-1725385
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(State or other
jurisdiction of
incorporation or
organization)
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(I.R.S. Employer
Identification
Number)
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73 Buck Road, Suite 2, Huntingdon Valley, PA
(215) 613-1111
(Address, including zip code, and telephone number, including area
code, of registrant’s principal executive offices)
Steve Rubakh
Chief Executive Officer
73 Buck Road, Suite 2,
Huntingdon Valley, PA
Telephone: (215) 613-1111
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
Copies to:
Joseph M. Lucosky, Esq.
Scott E. Linsky, Esq.
Lucosky Brookman LLP
101 Wood Avenue South, 5th Floor
Woodbridge, NJ 08830
(732) 395-4400
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE
PUBLIC: From time to time after the effective date of this
registration statement.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please
check the following box: ☐
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box: ☒
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier
effective registration statement for the same offering. ☐
If this Form is a registration statement pursuant to General
Instruction I.D. or a post-effective amendment thereto that shall
become effective on filing with the Commission pursuant to Rule
462(e) under the Securities Act, check the following box. ☐
If this Form is a post-effective amendment to a registration
statement filed pursuant to General Instruction I.D. filed to
register additional securities or additional classes of securities
pursuant to Rule 413(b) under the Securities Act, check the
following box. ☐
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company, or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule
12b-2 of the Exchange Act.
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Large accelerated filer
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☐
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Accelerated filer
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☐
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Non-accelerated filer
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☒
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Smaller reporting company
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☒
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Emerging growth company
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☐
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CALCULATION OF REGISTRATION FEE
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Title of Each Class of Securities to
be Registered
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Amount
of
Shares
to
be
Registered (1)
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Proposed
Maximum
Offering
Price per
Share (2)
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Proposed
Maximum
Aggregate
Offering
Price
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Amount
of
Registration
Fee
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Common Stock, par value $0.001 per share,
issuable upon conversion of the Series C Convertible Preferred
Stock
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20,518,374
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(3)
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$
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0.17
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$
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3,488,123
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$
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380
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Common Stock, par value $0.001 per share,
issuable upon conversion of the Series D Convertible Preferred
Stock
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12,402,217
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(4)
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$
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0.17
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$
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2,108,376
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$
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230
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Common Stock, $0.001 par value per share,
issuable upon exercise of the Warrants
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11,000,000
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(5)
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$
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0.30
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$
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3,300,000
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$
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360
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Common Stock, $0.001 par value per share
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3,000,000
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(6)
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$
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0.17
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$
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510,000
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$
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55
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Total
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46,920,591
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-
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$
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9,406,499
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$
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1,027
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(7)
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(1)
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Pursuant to Rule 416
under the Securities Act of 1933, as amended, the shares of Common
Stock (as defined below) being registered hereunder include such
indeterminate number of shares of Common Stock as may be issuable
with respect to the shares of Common Stock being registered
hereunder as a result of stock splits, stock dividends or similar
transactions.
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(2)
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Estimated solely for
the purpose of calculating the registration fee pursuant to Rule
457(c) and Rule 457(g) under the Securities Act of 1933, as
amended, using (i) the average $0.175 (high) and $0.165 (low)
prices of the common stock quoted on the OTCQB on June 1, 2021 and
(ii) the exercise price of the Warrants.
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(3)
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Represents the maximum
number of shares of Common Stock that the Registrant expects could
be issuable upon conversion of the Series C Convertible Preferred
Stock (as defined below), all of which were acquired by the Selling
Stockholders (as defined below).
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(4)
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Represents the maximum
number of shares of Common Stock that the Registrant expects could
be issuable upon conversion of the Series D Convertible Preferred
Stock (as defined below), all of which were acquired by the Selling
Stockholders (as defined below).
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(5)
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Represents the maximum
number of shares of common stock that the Registrant expects could
be issuable upon the exercise of the Warrants (as defined below),
all of which were acquired by the Selling Stockholders.
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(6)
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Represents 3,000,000
equity incentive shares issued to BHP Capital NY, Inc.
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(7)
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A fee of $1,027 is
being paid with the filing of this registration statement.
Calculated by multiplying the estimated aggregate offering price of
securities to be registered by 0.0001091.
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The registrant hereby amends this registration statement on
such date or dates as may be necessary to delay its effective date
until the registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall
become effective on such date as the Commission, acting pursuant to
said Section 8(a), may determine.
The information in this prospectus
is not complete and may be changed. These securities may not be
sold until the registration statement filed with the Securities and
Exchange Commission is effective. This preliminary
prospectus is not an offer to sell nor does it seek an offer to buy
these securities in any jurisdiction where the offer or sale is not
permitted.
Subject to Completion,
dated June 11,
2021.
PROSPECTUS
INTEGRATED VENTURES, INC.
46,920,591 Shares of Common
Stock
This prospectus relates to the resale, from time to time, of up to
46,920,591 shares (the “Shares”) of our common stock, par value
$0.001 per share (“Common Stock”), by the selling stockholder
identified in this prospectus under “Selling Stockholder” (the
“Offering”) pursuant to the January 2021 Financing and February
2021 Financing (as defined within). We are not selling any shares
of our Common Stock under this prospectus and will not receive any
proceeds from the sale of the Shares. We will, however, receive
proceeds from any warrants that are exercised through the payment
of the exercise price in cash. The Selling Stockholder will bear
all commissions and discounts, if any, attributable to the sale of
the Shares. We will bear all costs, expenses and fees in connection
with the registration of the Shares.
The Selling Stockholders may sell the Shares from time to time on
terms to be determined at the time of sale through ordinary
brokerage transactions or through any other means described in this
prospectus. The prices at which the selling stockholders may sell
the shares will be determined by the prevailing market price for
the shares or in negotiated transactions. No securities may be sold
without delivery of this prospectus and the applicable prospectus
supplement describing the method and terms of the offering of such
securities.
INVESTING IN OUR SECURITIES INVOLVES RISKS. SEE THE
“RISK FACTORS” ON PAGE 5
OF THIS PROSPECTUS AND ANY SIMILAR SECTION CONTAINED IN THE
APPLICABLE PROSPECTUS SUPPLEMENT CONCERNING FACTORS YOU SHOULD
CONSIDER BEFORE INVESTING IN OUR SECURITIES.
Our Common Stock is currently quoted on the OTCQB Marketplace
operated by OTC Markets Group Inc. (the “OTCQB”) under the trading
symbol “INTV”. On June 9, 2021, the last reported sale price of our
Common Stock on the OTCQB Market was $0.17 per share.
Investing in our securities involves a high degree of risk.
See “Risk Factors” beginning on page 5
in this prospectus for a discussion of information that
should be considered in connection with an investment in our
securities.
Neither the Securities and Exchange Commission nor any
state securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
The date of this prospectus is June
11, 2021.
TABLE OF
CONTENTS
ABOUT THIS
PROSPECTUS
This prospectus is part of a registration statement on Form S-3
that we filed with the U.S. Securities and Exchange Commission (the
“SEC”). You should read this prospectus and the information and
documents incorporated by reference carefully. Such documents
contain important information you should consider when making your
investment decision. See “Where You Can Find More Information” and
“Incorporation of Certain Information by Reference” in this
prospectus.
This prospectus may be supplemented from time to time to add, to
update or change information in this prospectus. Any statement
contained in this prospectus will be deemed to be modified or
superseded for purposes of this prospectus to the extent that a
statement contained in a prospectus supplement modifies or
supersedes such statement. Any statement so modified will be deemed
to constitute a part of this prospectus only as so modified, and
any statement so superseded will be deemed not to constitute a part
of this prospectus. You may only rely on the information contained
in this prospectus or that we have referred you to. We have not
authorized anyone to provide you with different information. This
prospectus does not constitute an offer to sell or a solicitation
of an offer to buy any securities other than the securities offered
by this prospectus. This prospectus and any future prospectus
supplement do not constitute an offer to sell or a solicitation of
an offer to buy any securities in any circumstances in which such
offer or solicitation is unlawful. Neither the delivery of this
prospectus or any prospectus supplement nor any sale made hereunder
shall, under any circumstances, create any implication that there
has been no change in our affairs since the date of this prospectus
or such prospectus supplement or that the information contained by
reference to this prospectus or any prospectus supplement is
correct as of any time after its date.
This prospectus contains summaries of certain provisions contained
in some of the documents described herein, but reference is made to
the actual documents for complete information. All of the summaries
are qualified in their entirety by the actual documents. Copies of
some of the documents referred to herein have been filed, will be
filed or will be incorporated by reference as exhibits to the
registration statement of which this prospectus is a part, and you
may obtain copies of those documents as described below under
“Where You Can Find More Information.”
The Selling Stockholders are offering the Shares only in
jurisdictions where such offer is permitted. The distribution of
this prospectus and the sale of the Shares in certain jurisdictions
may be restricted by law. Persons outside the United States who
come into possession of this prospectus must inform themselves
about, and observe any restrictions relating to, the distribution
of this prospectus and the sale of the Shares outside the United
States. This prospectus does not constitute, and may not be used in
connection with, an offer to sell, or a solicitation of an offer to
buy, the Shares by any person in any jurisdiction in which it is
unlawful for such person to make such an offer or solicitation. If
there is any inconsistency between the information in this
prospectus and the applicable prospectus supplement, you should
rely on the prospectus supplement. Before purchasing any
securities, you should carefully read both this prospectus and the
applicable prospectus supplement, together with the additional
information described under the heading “Where You Can Find More
Information; Incorporation by Reference.”
We have not authorized any other person to provide you with
different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We will not
make an offer to sell these securities in any jurisdiction where
the offer or sale is not permitted. You should assume that the
information appearing in this prospectus and the applicable
prospectus supplement to this prospectus is accurate as of the date
on its respective cover, and that any information incorporated by
reference is accurate only as of the date of the document
incorporated by reference, unless we indicate otherwise. Our
business, financial condition, results of operations and prospects
may have changed since those dates.
When we refer to “Integrated Ventures,” “INTV,” “we,” “our,” “us”
and the “Company” in this prospectus, we mean Integrated Ventures,
Inc., unless otherwise specified. When we refer to “you,” we mean
the holders of the applicable series of securities.
SPECIAL NOTICE REGARDING
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. These
forward-looking statements contain information about our
expectations, beliefs or intentions regarding our product
development and commercialization efforts, business, financial
condition, results of operations, strategies or prospects, and
other similar matters. These forward-looking statements are based
on management’s current expectations and assumptions about future
events, which are inherently subject to uncertainties, risks and
changes in circumstances that are difficult to predict. These
statements may be identified by words such as “expects,” “plans,”
“projects,” “will,” “may,” “anticipates,” “believes,” “should,”
“intends,” “estimates,” and other words of similar meaning.
These statements relate to future events or our future operational
or financial performance, and involve known and unknown risks,
uncertainties and other factors that may cause our actual results,
performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by
these forward-looking statements. Factors that may cause actual
results to differ materially from current expectations include,
among other things, those listed under the section titled “Risk
Factors” and elsewhere in this prospectus, in any related
prospectus supplement and in any related free writing
prospectus.
Any forward-looking statement in this prospectus, in any related
prospectus supplement and in any related free writing prospectus
reflects our current view with respect to future events and is
subject to these and other risks, uncertainties and assumptions
relating to our business, results of operations, industry and
future growth. Given these uncertainties, you should not place
undue reliance on these forward-looking statements. No
forward-looking statement is a guarantee of future performance. You
should read this prospectus, any related prospectus supplement and
any related free writing prospectus and the documents that we
reference herein and therein and have filed as exhibits hereto and
thereto completely and with the understanding that our actual
future results may be materially different from any future results
expressed or implied by these forward-looking statements. Except as
required by law, we assume no obligation to update or revise these
forward-looking statements for any reason, even if new information
becomes available in the future.
This prospectus, any related prospectus supplement and any related
free writing prospectus also contain or may contain estimates,
projections and other information concerning our industry, our
business and the markets for our products, including data regarding
the estimated size of those markets and their projected growth
rates. Information that is based on estimates, forecasts,
projections or similar methodologies is inherently subject to
uncertainties and actual events or circumstances may differ
materially from events and circumstances reflected in this
information. Unless otherwise expressly stated, we obtained these
industry, business, market and other data from reports, research
surveys, studies and similar data prepared by third parties,
industry and general publications, government data and similar
sources. In some cases, we do not expressly refer to the sources
from which these data are derived.
PROSPECTUS SUMMARY
This summary highlights certain information about us, this
offering and information appearing elsewhere in this prospectus and
in the documents we incorporate by reference. This summary is not
complete and does not contain all of the information that you
should consider before investing in our securities. To fully
understand this offering and its consequences to you, you should
read this entire prospectus carefully, including the information
referred to under the heading “Risk Factors” in this prospectus
beginning on page 5, the financial statements and other information
incorporated by reference in this prospectus when making an
investment decision. This is only a summary and may not contain all
the information that is important to you. You should carefully read
this prospectus, including the information incorporated by
reference therein, and any other offering materials, together with
the additional information described under the heading “Where You
Can Find More Information.”
THE COMPANY
Our Business
On November 22, 2017, we successfully launched our cryptocurrency
operations, and revenues commenced from cryptocurrency mining
operations and from sales of cryptocurrency mining equipment. As of
March 31, 2021, the Company owned and operated approximately 761
miners that mine Bitcoin, Litecoin, ZCash and Ethereum. In
addition, the Company paid deposits of $2,528,392 for 300
additional miners to be placed into service subsequent to March 31,
2021.
The Company will continue to (1) raise capital to purchase new
mining equipment and (2) retire older and no longer profitable
models.
We have consolidated our cryptocurrency operations in one facility,
located in Carthage, New York. The power supply and purchase
agreement was entered into on May 10, 2019 for an initial term of
90 days, with an option to continue for a subsequent 36 months,
which option the Company has exercised. The Company’s sole
obligation under the Agreement is to pay the PetaWatt Properties,
LLC, a contractual rate per kilowatt hour of electricity, consumed
by the Company’s cryptocurrency mining operations.
Cryptocurrency Mining
Digital tokens are built on a distributed ledger infrastructure
often referred to as a “blockchain”. These tokens can provide
various rights, and cryptocurrency is a type of digital token,
designed as a medium of exchange. Other digital tokens provide
rights to use assets or services, or in some cases represent
ownership interests. Cryptocurrencies, for example Bitcoin, are
digital software that run on a blockchain platform, which is a
decentralized, immutable ledger of transactions, and essentially
function as a digital form of money. Cryptocurrencies such as
Bitcoin are not sponsored by any government or a single entity. A
bitcoin is one type of an intangible digital asset that is issued
by, and transmitted through, an open source, math-based protocol
platform using cryptographic security (the “Bitcoin Network”). The
Bitcoin Network, for example, is an online, peer-to-peer user
network that hosts the public transaction ledger, known as the
“Blockchain,” and the source code that comprises the basis for the
cryptography and math-based protocols governing the Bitcoin
Network. No single entity owns or operates the Bitcoin Network, the
infrastructure of which is collectively maintained by a
decentralized user base. Bitcoins can be used to pay for goods and
services or can be converted to fiat currencies, such as the US
Dollar, at rates determined on bitcoin exchanges or in individual
end-user-to-end-user transactions under a barter system.
Bitcoins are “stored” or reflected on the digital transaction
ledger known as the “blockchain,” which is a digital file stored in
a decentralized manner on the computers of each Bitcoin Network or
as applicable to other cryptocurrency users. A blockchain records
the transaction history of all bitcoins in existence and, through
the transparent reporting of transactions, allows the
cryptocurrency network to verify the association of each bitcoin
with the digital wallet that owns them. The network and software
programs can interpret the blockchain to determine the exact
balance, if any, of any digital wallet listed in the blockchain as
having taken part in a transaction on the cryptocurrency
network.
Mining is the process by which bitcoins, for example, are created
resulting in new blocks being added to the blockchain and new
bitcoins being issued to the miners. Miners engage in a set of
prescribed complex mathematical calculations in order to add a
block to the blockchain and thereby confirm cryptocurrency
transactions included in that block’s data. Miners that are
successful in adding a block to the blockchain are automatically
awarded a fixed number of bitcoins for their effort. To begin
mining, a user can download and run the network mining software,
which turns the user’s computer into a node on the network that
validates blocks.
All bitcoin transactions are recorded in blocks added to the
blockchain. Each block contains the details of some or all of the
most recent transactions that are not memorialized in prior blocks,
a reference to the most recent prior block, and a record of the
award of bitcoins to the miner who added the new block. Each unique
block can only be solved and added to the blockchain by one miner;
therefore, all individual miners and mining pools on the
cryptocurrency network are engaged in a competitive process and are
incentivized to increase their computing power to improve their
likelihood of solving for new blocks.
The method for creating new bitcoins is mathematically controlled
in a manner so that the supply of bitcoins grows at a limited rate
pursuant to a pre-set schedule. Mining economics have also been
much more pressured by the Difficulty Rate – a computation used by
miners to determine the amount of computing power required to mine
bitcoin. The Difficulty Rate is directly influenced by the total
size of the entire Bitcoin network. The Bitcoin network has grown
12-fold in the past year, resulting in a 12-fold increase in
difficulty. Today, the network requires the computing power of
approximately 500 Bitmain S17 miners to mine one Bitcoin per day,
using approximately 1.5 MegaWatt of power supply. Meanwhile, demand
from miners also drove up hardware and power prices, the largest
costs of production. This deliberately controlled rate of bitcoin
creation means that the number of bitcoins in existence will never
exceed 21 million and that bitcoins cannot be devalued through
excessive production unless the Bitcoin Network’s source code (and
the underlying protocol for bitcoin issuance) is altered.
Mining pools have developed in which multiple miners act cohesively
and combine their processing power to solve blocks. When a pool
solves a new block, the participating mining pool members split the
resulting reward based on the processing power they each
contributed to solve for such block. The mining pool operator
provides a service that coordinates the workers. Fees are paid to
the mining pool operator to cover the costs of maintaining the
pool. The pool uses software that coordinates the pool members’
hashing power, identifies new block rewards, records how much work
all the participants are doing, and assigns block rewards
in-proportion to the participants’ efforts. While we do not pay
pool fees directly, pool fees (approximately 2% to 5%) are deducted
from amounts we may otherwise earn. Participation in such pools is
essential for our mining business.
Our Cryptocurrency Operations
We utilize and rely on cryptocurrency pools to mine
cryptocurrencies and generate a mixed selection of digital
cryptocurrencies, including BTC, LTC and ETH.
Cryptocurrency payouts are paid to us by the pool operator, and the
digital currency produced is either stored in a wallet (Coinbase)
or sold in open market. Payout proceeds are automatically deposited
in our corporate bank accounts.
In our digital currency mining operations, various models of miners
are owned and deployed by the Company.
When funds are available and market conditions allow, we also
invest in certain denominations of cryptocurrencies to complement
our mining operations. We consider these investments similar to
marketable securities where we purchase and hold the
cryptocurrencies for sale. We report realized gains and losses on
the sales of cryptocurrencies and mark our portfolio of
cryptocurrencies to market at the end of each quarterly reporting
period, reporting unrealized gains or losses on the investments. We
held digital currencies with a total cost of $1,515,201 and $82,855
as of March 31, 2021 and June 30, 2020, respectively, comprised
primarily of Bitcoin (BTC), Ethereum (ETH), Chainlink (LINK) and
Bancor (BNT).
The Digital Currency Markets
The value of bitcoins is determined by the supply and demand of
bitcoins in the bitcoin exchange market (and in private
end-user-to-end-user transactions), as well as the number of
merchants that accept them. However, merchant adoption is very low
according to a Morgan Stanley note from the summer of 2018. As
bitcoin transactions can be broadcast to the Bitcoin Network by any
user’s bitcoin software and bitcoins can be transferred without the
involvement of intermediaries or third parties, there are little or
no transaction costs in direct peer-to-peer transactions on the
Bitcoin Network. Third party service providers such as crypto
currency exchanges and bitcoin third party payment processing
services may charge significant fees for processing transactions
and for converting, or facilitating the conversion of, bitcoins to
or from fiat currency.
Under the peer-to-peer framework of the Bitcoin Network,
transferors and recipients of bitcoins are able to determine the
value of the bitcoins transferred by mutual agreement, the most
common means of determining the value of a bitcoin being by
surveying one or more bitcoin exchanges where bitcoins are publicly
bought, sold and traded, i.e., the Bitcoin Exchange Market
(“Bitcoin Exchange”).
On each Bitcoin Exchange, bitcoins are traded with publicly
disclosed valuations for each transaction, measured by one or more
fiat currencies. Bitcoin Exchanges report publicly on their site
the valuation of each transaction and bid and ask prices for the
purchase or sale of bitcoins. Market participants can choose the
Bitcoin Exchange on which to buy or sell bitcoins. To date, the SEC
has rejected the proposals for bitcoin ETF’s, citing that lack of
enough transparency in the cryptocurrency markets to be sure that
prices are not being manipulated. The Wall Street Journal has
recently reported on how bots are manipulating the prices of
bitcoin on the crypto exchanges. However, on November 8, 2018, the
SEC announced in an order (the “Order”) that it had settled charges
against Zachary Coburn, the founder of the digital token exchange
EtherDelta, marking the first time that the SEC has brought an
enforcement action against an online digital token platform for
operating as an unregistered national securities exchange.
Although the cryptocurrency markets have been historically volatile
and have weathered several up and down cycles over the past few
years, recently these markets have been in a selloff phase for the
past several months, possibly reflecting doubts as to the
applicability of digital currencies in commercial applications and
other factors. In this selloff, prices of digital currencies other
than Bitcoin have experienced deeper percentage declines than
Bitcoin. On December 31, 2017, Bitcoin was trading in the range of
$18,000, and as of November 30, 2018, had declined to a $4,000
trading range. The trading range has recently increased to
approximately $50,000. Other cryptocurrencies have experienced more
substantial declines, than Bitcoin’s recent decline. Our revenues
are directly affected by the Bitcoin market price specifically,
which is the market leader for prices of all cryptocurrencies. In
recent weeks, regulatory crackdowns have also weighed on prices.
The SEC recently announced its first civil penalties against
cryptocurrency founders as part of a wide regulatory and legal
crackdown on fraud and abuses in the industry.
Competition
In cryptocurrency mining, companies, individuals and groups
generate units of cryptocurrency through mining. Miners can range
from individual enthusiasts to professional mining operations with
dedicated data centers, with all of which we compete. Miners may
organize themselves in mining pools, with which we would compete.
The Company currently participates in mining pools and may decide
to invest or initiate operations in mining pools. At present, the
information concerning the activities of these enterprises is not
readily available as the vast majority of the participants in this
sector do not publish information publicly or the information may
be unreliable.
Government Regulation
Government regulation of blockchain and cryptocurrency under review
with a number of government agencies, the SEC, the Commodity
Futures Trading Commission, the Federal Trade Commission and the
Financial Crimes Enforcement Network of the U.S. Department of the
Treasury, and in other countries. State government regulations also
may apply to certain activities such as cryptocurrency exchanges
(bitlicense, banking and money transmission regulations) and other
activities. Other bodies which may have an interest in regulating
or investigating companies engaged in the blockchain or
cryptocurrency business include the national securities exchanges
and the Financial Industry Regulatory Authority. As the regulatory
and legal environment evolves, the Company may in its mining
activities become subject to new laws, and further regulation by
the SEC and other agencies. On November 16, 2018, the SEC issued a
Statement on Digital Asset Securities Issuance and Trading, in
which it emphasized that market participants must still adhere to
the SEC’s well-established and well-functioning federal securities
law framework when dealing with technological innovations,
regardless of whether the securities are issued in certificated
form or using new technologies, such as blockchain.
Blockchain and cryptocurrency regulations are in a nascent state
with agencies investigating businesses and their practices,
gathering information, and generally trying to understand the risks
and uncertainties in order to protect investors in these businesses
and in cryptocurrencies generally. Various bills have also been
proposed in Congress for adoption related to our business which may
be adopted and have an impact on us. The offer and sale of digital
assets in initial coin offerings, which is not an activity we
expect to pursue, has been a central focus of recent regulatory
inquiries. On November 16, 2018, the SEC settled with two
cryptocurrency startups, and reportedly has more than 100
investigations into cryptocurrency related ventures, according to a
codirector of the SEC’s enforcement division (Wall Street
Journal, November 17-18, 2018). An annual report by the SEC
shows that digital currency scams are among the agency’s top
enforcement priorities. The SEC is focused in particular on Initial
Coin Offerings (ICOs), which involve the sale of digital
tokens related to blockchain projects. Many such projects have
failed to deliver on their promises or turned out to be outright
scams. In the past year, the enforcement division has opened
dozens of investigations involving ICOs and digital assets, many of
which were ongoing at the close of FY 2018,” the SEC states in a
section of the report titled “ICOs and Digital Assets.”
Financial
For the year ended June 30, 2020, we recognized revenues totaling
$454,170 from cryptocurrency operations (consisting of both mining
and equipment sales transactions). For the nine months ended March
31, 2021, we recognized revenues from cryptocurrency operations
totaling $885,931. In the current fiscal year, we have
significantly increased our investing efforts in digital currencies
when funds are available and held digital currencies with a total
cost of $1,515,201 and $82,855 as of March 31, 2021 and June 30,
2020, respectively.
At March 31, 2021, the Company owned and operated 761 mining rigs,
with a net book value of $1,324,660. This number is directly
related to the availability of the electric power for the mining
rigs, which is currently at maximum utilization capacity. For
financial accounting purposes, we record our mining rigs at the
lower of cost or estimated net realizable value.
During the nine months ended March 31, 2021, we purchased mining
machines and funded our operations primarily with proceeds provided
by convertible notes payable, the issuance of Series C and D
preferred stock, and cash generated from our digital currency
mining operations. During the year ended June 30, 2020, we received
net proceeds from convertible notes payable totaling $534,000.
Additional Capital Requirements
To continue to operate, complete and successfully operate our
digital currency mining facilities and to fund future operations,
we may need to raise additional capital for expansion or other
expenses of operations. The amount and timing of future funding
requirements will depend on many factors, including the timing and
results of our ongoing mining operations, and potential new
development and administrative support expenses. We anticipate that
we will seek to fund our operations through our cryptocurrency
mining operations, further liquidation of our marketable
securities, public or private equity or debt financings or other
sources, such as potential collaboration agreements. If additional
financing is required, we cannot be certain that it will be
available to us on favorable terms, or at all.
Employees and Employment Agreements
At present time, we have one full time employee, Steve Rubakh, our
sole officer and director, who devotes 100% of his time to our
operations. In addition, we rely on a group of subcontractors to
build, install, manage, monitor and service our mining equipment.
We presently do not have pension, health, annuity, insurance, stock
options, profit sharing or similar benefit plans; however, we may
adopt such plans in the future. There are presently no personal
benefits available to any officers, directors or employees;
however, we at times do reimburse Mr. Rubakh for certain health
insurance and medical costs.
Property
Our corporate offices are located at 73 Buck Road, Suite 2,
Huntingdon Valley, Pennsylvania 19006. Our telephone number is
(215) 613-1111. We occupy 450 sq ft facility, at no cost to the
Company. On May 8, 2019, the Company had consolidated all of its
mining operations in Carthage, New York, by signing a three-year
power supply and purchase agreement with PetaWatt Properties, LLC.
We believe that our offices and data center facility are suitable
and adequate and that we have sufficient capacity to meet our
current and future needs.
Recent Developments
On January 14, 2021, the Company entered into a Securities Purchase
Agreement the (the “Series C Agreement”) with BHP Capital NY, Inc.
(“BHP”), providing for the issuance and sale by the Company and the
purchase by BHP of newly designated shares of Series C Convertible
Preferred Stock issued by the Company. Under the January 2021
Financing, the purchase price per share of Series C Convertible
Preferred Stock was $1,000. The first closing under the January
2021 Financing was held on January 22, 2021, at which the Company
sold, and BHP purchased, 750 shares of Series C Preferred Stock for
$750,000. The Company received net proceeds of $740,000 after
payment of legal fees. The Company also on that date issued
2,000,000 shares of its common stock to BHP as equity incentive
shares. Pursuant to a second Securities Purchase Agreement
effective February 5, 2021, BHP purchased a second tranche
consisting of 375,000 shares of Series C Preferred Stock for
$375,000 (together with the Series C Agreement, the “January 2021
Financing”). As an equity incentive to this purchase of Series C
Preferred Stock, 1,000,000 shares of the Company’s common stock
were issued to BHP.
On February 18, 2021, we entered into a Securities Purchase
Agreement, (the “Series D Agreement”) with BHP Capital NY, Inc.,
providing for the issuance and sale by the Company and the purchase
by such purchaser of 3,000 shares of Series D Convertible Preferred
Stock (the “Series D Preferred Stock”) and a warrant to purchase
common stock for a purchase price of $3,000,000, with the ability
to purchase another 1,000 shares of Series D Preferred Stock on the
same terms exercisable at $0.60 per share (the “February 2021
Financing”).
Using the proceeds from the Series C Agreements and the Series D
Agreement, as well as amounts from operating cash flows, we
purchased an additional 697 mining rigs for an aggregate purchase
price of $2,910,964.
On March 8, 2021, we entered into a Master Agreement with Compute
North LLC (“Compute North”) pursuant to which Compute North will
provide collocation and hosting services in data centers located in
Nebraska and Texas, including rack space, electrical power,
utilities and physical security. Compute North will also provide
managed services for the mining equipment. The monthly fees and
term of the services will be determined based on the number of
mining rigs placed into service and total power consumed.
On March 30, 2021, we entered into securities purchase agreements
(the “Purchase Agreements”) with two institutional investors (the
“Purchasers”), for the offering (the “Offering”) of (i) 30,000,000
shares of common stock (“Shares”), par value $0.001 per share, of
the Company (“Common Stock”) and (ii) common stock purchase
warrants (“Warrants”) to purchase up to an aggregate of 30,000,000
shares of Common Stock, which are exercisable for a period of five
years after issuance at an initial exercise price of $0.30 per
share, subject to certain adjustments, as provided in the Warrants.
Each of the Purchasers will receive Warrants in the amount equal to
100% of the number of Shares purchased by such Purchaser. Each
Share and accompanying Warrant will be offered at a combined
offering price of $0.30. Pursuant to the Purchase Agreements, the
Purchasers are purchasing the Shares and accompanying Warrants for
an aggregate purchase price of $9,000,000. The number of shares of
common stock outstanding immediately after the Offering was
189,685,962 shares (excluding the exercise of the warrants offered
in the Offering). The Company expects to receive approximately
$8,145,000 in net proceeds from the Offering before exercise of the
Warrants and after deducting the discounts, commissions, and other
estimated offering expenses payable by the Company. The Company
expects to use the net proceeds from the Offering for working
capital and for general corporate purposes.
On April 12, 2021, we entered into non-fixed price sales and
purchase agreement (the “Agreement”) with Bitmain Technologies
Limited (“Bitmain”) to purchase from Bitmain cryptocurrency mining
hardware and other equipment in accordance with the terms and
conditions of the Agreement. Bitmain is scheduled to manufacture
and ship miners on monthly basis, in 12 equal batches of 400 units,
starting on August 2021 and through July 2022. The Agreement
remains in effect until the delivery of the last batch of products.
The total purchase price was approximately $34,047,600, subject to
price adjustments and related offsets. The total purchase price is
payable as follows: (i) 25% of the total purchase price is due upon
the execution of the Agreement or no later than April 19, 2021;
(ii) 35% of the total purchase price, is due by May 30, 2021; and
(iii) the remaining 40% of the total purchase price, is payable on
a monthly basis starting in June 2021.
Available Information
All reports of the Company filed with the SEC are available free of
charge through the SEC’s website at www.sec.gov. In addition, the
public may read and copy materials filed by the Company at the
SEC’s Public Reference Room located at 100 F Street, N.E.,
Washington, D.C. 20549. The public may also obtain additional
information on the operation of the Public Reference Room by
calling the Commission at 1-800-SEC-0330.
THE OFFERING
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Issuer
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Integrated Ventures, Inc.
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Shares of Common Stock offered by us
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None
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Shares of Common Stock offered by the Selling
Stockholders
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46,920,591 Shares (1)
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Shares of Common Stock outstanding before the
Offering
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194,487,662 shares (2)
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Shares of Common Stock
outstanding after completion of this offering, assuming the sale of
all shares offered hereby
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241,408,253 shares
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Use of proceeds
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We will not receive any
proceeds from the resale of the common stock by the selling
stockholders.
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Market for Common Stock
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Our common stock is
quoted on the OTCQB Market under the trading symbol “INTV”.
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Risk Factors
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Investing in our
securities involves a high degree of risk. See the “Risk Factors”
section of this prospectus on page 5 and in the documents we
incorporate by reference in this prospectus for a discussion of
factors you should consider carefully before deciding to invest in
our securities.
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(1)
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This amount consists of
(i) 20,518,374 shares of Common Stock underlying the Series C
Convertible Preferred Stock, (ii) 12,402,217 shares of Common Stock
underlying the Series D Convertible Preferred Stock, (iii)
11,000,000 shares of Common Stock underlying the Warrants, issued
to the Selling Stockholders in the February 2021 Financing, and
(iv) 3,000,000 equity incentive shares issued to BHP Capital NY,
Inc.
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(2)
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The number of shares of
Common Stock outstanding before and after the Offering is based on
194,487,662 shares outstanding as of June 3, 2021 and excludes the
following:
41,000,000 shares of
common stock issuable upon the exercise of outstanding warrants
having a weighted average exercise price of $0.30 per share.
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RISK FACTORS
Investment in any securities offered pursuant to this prospectus
and the applicable prospectus supplement involves risks. You should
carefully consider the risk factors incorporated by reference to
our most recent Annual Report on Form 10-K and any subsequent
Quarterly Reports on Form 10-Q or Current Reports on Form 8-K we
file after the date of this prospectus, and all other information
contained or incorporated by reference into this prospectus, as
updated by our subsequent filings under the Exchange Act, and the
risk factors and other information contained in the applicable
prospectus supplement before acquiring any of such securities. The
occurrence of any of these risks might cause you to lose all or
part of your investment in the offered securities.
Risks Concerning our Business
BECAUSE WE ARE AN EARLY-STAGE-COMPANY WITH MINIMAL REVENUE AND A
HISTORY OF LOSSES AND WE EXPECT TO CONTINUE TO INCUR SUBSTANTIAL
LOSSES FOR THE FORESEEABLE FUTURE, WE CANNOT ASSURE YOU THAT WE CAN
OR WILL BE ABLE TO OPERATE PROFITABLY.
We have incurred losses since our organization, and are subject to
the risks common to start-up, pre-revenue enterprises, including,
among other factors, undercapitalization, cash shortages,
limitations with respect to personnel, financial and other
resources and lack of revenues. We cannot assure you that we will
be able to operate profitably or generate positive cash flow. If we
cannot achieve profitability, we may be forced to cease operations
and you may suffer a total loss of your investment.
AN INVESTMENT IN THE COMPANY MUST BE CONSIDERED SPECULATIVE SINCE
OUR OPERATIONS ARE DEPENDENT ON THE MARKET VALUE OF
BITCOIN.
Our operations are dependent on the continued viable market
performance of cryptocurrencies that we market and, in particular,
the market value of Bitcoin. The decision to pursue blockchain and
digital currency businesses exposes the Company to risks associated
with a new and untested strategic direction. Under the current
accounting rules, cryptocurrency is not cash, currency or a
financial asset, but an indefinite-lived intangible asset; declines
in the market price of cryptocurrencies would be included in
earnings, whereas increases in value beyond the original cost or
recoveries of previous declines in value would not be captured. The
prices of digital currencies have varied wildly in recent periods
and reflects “bubble” type volatility, meaning that high prices may
have little or no merit, may be subject to rapidly changing
investor sentiment, and may be influenced by factors such as
technology, regulatory void or changes, fraudulent actors,
manipulation and media reporting.
WE DEPEND HEAVILY ON OUR CHIEF EXECUTIVE OFFICER, AND HIS DEPARTURE
COULD HARM OUR BUSINESS.
The expertise and efforts of Steve Rubakh, our Chief Executive
Officer, are critical to the success of our business. The loss of
Mr. Rubakh’s services could significantly undermine our management
expertise and our ability to operate our Company.
OUR AUDITORS’ REPORT INCLUDES A GOING CONCERN PARAGRAPH.
Our financial statements include a going-concern qualification from
our auditors, which expresses doubt about our ability to continue
as a going concern. We have operated at a loss since inception. Our
ability to operate profitably is dependent upon, among other
things, obtaining additional financing for our operations. These
factors, among others, raise substantial doubt about our ability to
continue as a going concern. The accompanying financial statements
do not include any adjustments that take into consideration the
uncertainty of our ability to continue operations.
Risks Relating Generally to Our Operations and
Technology
CURRENTLY, THERE IS RELATIVELY LIMITED USE OF BITCOIN IN THE RETAIL
AND COMMERCIAL MARKETPLACE IN COMPARISON TO RELATIVELY LARGE USE BY
SPECULATORS, THUS CONTRIBUTING TO PRICE VOLATILITY THAT COULD
ADVERSELY AFFECT OUR RESULTS OF OPERATIONS.
Bitcoin has only recently become accepted as a means of payment for
goods and services by certain major retail and commercial outlets
and use of Bitcoin by consumers to pay such retail and commercial
outlets remains limited. Conversely, a significant portion of
Bitcoin demand is generated by speculators and investors seeking to
profit from the short- or long-term holding of Bitcoin. Many
industry commentators believe that Bitcoin’s best use case is as a
store of wealth, rather than as a currency for transactions, and
that other cryptocurrencies having better scalability and faster
settlement times will better serve as currency. This could limit
Bitcoin’s acceptance as transactional currency. A lack of expansion
by Bitcoin into retail and commercial markets, or a contraction of
such use, may result in increased volatility or a reduction in the
Bitcoin Index Price, either of which could adversely affect our
results of operations.
WE ARE RELIANT ON POOLS OF USERS OR MINERS THAT ARE THE SOLE OUTLET
FOR SALES OF CRYPTOCURRENCIES THAT WE MINE.
We do not have the ability to sell our cryptocurrency production
directly on the exchanges or markets that are currently where
cryptocurrencies are purchased and traded. Pools are operated to
pool the production on a daily basis of companies mining
cryptocurrencies, and these pools are our sole means of selling our
production of cryptocurrencies. Absent access to such pools, we
would be forced to seek a different method of access to the
cryptocurrency markets. There is no assurance that we could arrange
any alternate access to dispose of our mining production.
WE MAY NOT BE ABLE TO RESPOND QUICKLY ENOUGH TO CHANGES IN
TECHNOLOGY AND TECHNOLOGICAL RISKS, AND TO DEVELOP OUR INTELLECTUAL
PROPERTY INTO COMMERCIALLY VIABLE PRODUCTS.
Changes in legislative, regulatory or industry requirements or in
competitive technologies may render certain of our planned products
obsolete or less attractive. Our mining equipment may become
obsolete, and our ability to anticipate changes in technology and
regulatory standards and to successfully develop and introduce new
and enhanced products on a timely basis will be a significant
factor in our ability to remain competitive. We cannot provide
assurance that we will be able to achieve the technological
advances that may be necessary for us to remain competitive or that
certain of our products will not become obsolete.
WE ARE INCREASINGLY DEPENDENT ON INFORMATION TECHNOLOGY SYSTEMS AND
INFRASTRUCTURE (CYBER SECURITY).
Our operations are potentially vulnerable to breakdown or other
interruption by fire, power loss, system malfunction, unauthorized
access and other events such as computer hackings, cyber-attacks,
computer viruses, worms or other destructive or disruptive
software. Likewise, data privacy breaches by persons with permitted
access to our systems may pose a risk that sensitive data may be
exposed to unauthorized persons or to the public. It is critical
that our systems provide a continued and uninterrupted performance
for our business to generate revenues. There can be no assurance
that our efforts will prevent significant breakdowns, breaches in
our systems or other cyber incidents that could have a material
adverse effect upon our business, operations or financial condition
of the Company.
IF WE ARE UNABLE TO ATTRACT, TRAIN AND RETAIN TECHNICAL AND
FINANCIAL PERSONNEL, OUR BUSINESS MAY BE MATERIALLY AND ADVERSELY
AFFECTED.
Our future success depends, to a significant extent, on our ability
to attract, train and retain key management, technical, regulatory
and financial personnel. Recruiting and retaining capable personnel
with experience in pharmaceutical products is vital to our success.
There is substantial competition for qualified personnel, and
competition is likely to increase. We cannot assure you we will be
able to attract or retain the technical and financial personnel we
require. If we are unable to attract and retain qualified
employees, our business may be materially and adversely
affected.
THE SEC IS CONTINUING ITS PROBES INTO PUBLIC COMPANIES THAT APPEAR
TO INCORPORATE AND SEEK TO CAPITALIZE ON THE BLOCKCHAIN TECHNOLOGY,
AND MAY INCREASE THOSE EFFORTS WITH NOVEL REGULATORY REGIMES AND
DETERMINE TO ISSUE ADDITIONAL REGULATIONS APPLICABLE TO THE CONDUCT
OF OUR BUSINESS OR BROADENING DISCLOSURES IN OUR FILINGS UNDER THE
SECURITIES EXCHANGE ACT OF 1934.
As the SEC stated previously, it is continuing to scrutinize and
commence enforcement actions against companies, advisors and
investors involved in the offering of cryptocurrencies and related
activities. At least one Federal Court has held that
cryptocurrencies are “securities” for certain purposes under the
Federal Securities Laws.
According to a recent report published by Lex Machina, securities
litigation in general and those that are related to blockchain,
cryptocurrency or bitcoin specifically, showed a marked increase
during the first two quarters of 2018 as compared to 2017. The
total number of securities cases that referenced “blockchain,”
“cryptocurrency” or “bitcoin” in the pleadings tripled in the first
half of 2018 alone compared to 2017. On the same day, the SEC
announced its first charge against unregistered broker-dealers for
selling digital tokens after the SEC issued The DAO Report in 2017.
The SEC charged TokenLot LLC (TokenLot), a self-described “ICO
Superstore”, and its owners, Lenny Kugel and Eli L. Lewitt, with
failing to register as broker-dealers. On November 16, 2018, the
SEC settled with two cryptocurrency startups, and reportedly has
more than 100 investigations into cryptocurrency related ventures,
according to a codirector of the SEC’s enforcement. As the
regulatory and legal environment evolves, the Company may in its
mining activities become subject to new laws, and further
regulation by the SEC and other federal and state agencies.
Recently, the SEC on February 11, 2020, filed charges against an
Ohio-based businessman who allegedly orchestrated a digital asset
scheme that defrauded approximately 150 investors, including many
physicians. The agency alleges that Michael W. Ackerman, along with
two business partners, raised at least $33 million by claiming to
investors that he had developed a proprietary algorithm that
allowed him to generate extraordinary profits while trading in
cryptocurrencies. The SEC’s complaint alleges that Ackerman misled
investors about the performance of his digital currency trading,
his use of investor funds, and the safety of investor funds in the
Q3 trading account. The complaint further alleges that Ackerman
doctored computer screenshots taken of Q3’s trading account to
create. In reality, as alleged, at no time did Q3’s trading account
hold more than $6 million and Ackerman was personally enriching
himself by using $7.5 million of investor funds to purchase and
renovate a house, purchase high end jewelry, multiple cars, and pay
for personal security services.
In another recent action filed on March 16, 2020, the SEC obtained
an asset freeze and other emergency relief to halt an ongoing
securities fraud perpetrated by a former state senator and two
others who bilked investors in and outside the U.S. and obtained an
asset freeze and other emergency relief to halt an ongoing
securities fraud perpetrated by a former state senator and two
others who bilked investors in and outside the U.S. The SEC’s
complaint alleges that Florida residents Robert Dunlap and Nicole
Bowdler worked with former Washington state senator David Schmidt
to market and sell a purported digital asset called the “Meta 1
Coin” in an unregistered securities offering, conducted through the
Meta 1 Coin Trust. The complaint alleges that the defendants made
numerous false and misleading statements to potential and actual
investors, including claims that the Meta 1 Coin was backed by a $1
billion art collection or $2 billion of gold, and that an
accounting firm was auditing the gold assets. The defendants also
allegedly told investors that the Meta 1 Coin was risk-free, would
never lose value and could return up to 224,923%. According to the
complaint, the defendants never distributed the Meta 1 Coins and
instead used investor funds to pay personal expenses and for other
personal purposes.
BANKS AND FINANCIAL INSTITUTIONS MAY NOT PROVIDE BANKING SERVICES,
OR MAY CUT OFF SERVICES, TO BUSINESSES THAT PROVIDE DIGITAL
CURRENCY-RELATED SERVICES OR THAT ACCEPT DIGITAL CURRENCIES AS
PAYMENT, INCLUDING FINANCIAL INSTITUTIONS OF INVESTORS IN OUR
SECURITIES.
A number of companies that provide bitcoin and/or other digital
currency-related services have been unable to find banks or
financial institutions that are willing to provide them with bank
accounts and other services. Similarly, a number of companies and
individuals or businesses associated with digital currencies may
have had and may continue to have their existing bank accounts
closed or services discontinued with financial institutions in
response to government action, particularly in China, where
regulatory response to digital currencies has been particularly
harsh. We also may be unable to obtain or maintain these services
for our business. The difficulty that many businesses that provide
bitcoin and/or derivatives on other digital currency-related
services have and may continue to have in finding banks and
financial institutions willing to provide them services may be
decreasing the usefulness of digital currencies as a payment system
and harming public perception of digital currencies, and could
decrease their usefulness and harm their public perception in the
future.
IT MAY BE ILLEGAL NOW, OR IN THE FUTURE, TO ACQUIRE, OWN, HOLD,
SELL OR USE BITCOIN, ETHEREUM, OR OTHER CRYPTOCURRENCIES,
PARTICIPATE IN THE BLOCKCHAIN OR UTILIZE SIMILAR DIGITAL ASSETS IN
ONE OR MORE COUNTRIES, THE RULING OF WHICH COULD ADVERSELY AFFECT
THE COMPANY.
Although currently Bitcoin, Ethereum, and other cryptocurrencies,
the Blockchain and digital assets generally are not regulated or
are lightly regulated in most countries, including the United
States, one or more countries such as China and Russia may take
regulatory actions in the future that could severely restrict the
right to acquire, own, hold, sell or use these digital assets or to
exchange for fiat currency. Such restrictions may adversely affect
the Company. Such circumstances could have a material adverse
effect on the ability of the Company to continue as a going concern
or to pursue this segment at all, which could have a material
adverse effect on the business, prospects or operations of the
Company and potentially the value of any cryptocurrencies the
Company holds or expects to acquire for its own account and harm
investors.
If regulatory changes or interpretations require the regulation of
Bitcoin or other digital assets under the securities laws of the
United States or elsewhere, including the Securities Act of 1933,
as amended (the “Securities Act”), the Securities Exchange Act of
1934, as amended (the “Exchange Act”) and the Investment Company
Act of 1940 or similar laws of other jurisdictions and
interpretations by the SEC, the Commodity Futures Trading
Commission (the “CFTC”), the Internal Revenue Service (“IRS”),
Department of Treasury or other agencies or authorities, the
Company may be required to register and comply with such
regulations, including at a state or local level. To the extent
that the Company decides to continue operations, the required
registrations and regulatory compliance steps may result in
extraordinary expense or burdens to the Company. The Company may
also decide to cease certain operations. Any disruption of the
Company’s operations in response to the changed regulatory
circumstances may be at a time that is disadvantageous to the
Company.
OUR DIGITAL CURRENCIES MAY BE SUBJECT TO LOSS, THEFT OR RESTRICTION
ON ACCESS.
There is a risk that some or all of our digital currencies could be
lost or stolen. Digital currencies are stored in digital currency
sites commonly referred to as “wallets” by holders of digital
currencies which may be accessed to exchange a holder’s digital
currency assets. Hackers or malicious actors may launch attacks to
steal, compromise or secure digital currencies, such as by
attacking the digital currency network source code, exchange
miners, third-party platforms, cold and hot storage locations or
software, or by other means. We may be in control and possession of
one of the more substantial holdings of digital currency. As we
increase in size, we may become a more appealing target of hackers,
malware, cyber-attacks or other security threats. Any of these
events may adversely affect our operations and, consequently, our
investments and profitability. The loss or destruction of a private
key required to access our digital wallets may be irreversible and
we may be denied access for all time to our digital currency
holdings or the holdings of others held in those compromised
wallets. Our loss of access to our private keys or our experience
of a data loss relating to our digital wallets could adversely
affect our investments and assets.
INCORRECT OR FRAUDULENT DIGITAL CURRENCY TRANSACTIONS MAY BE
IRREVERSIBLE.
Once a transaction has been verified and recorded in a block that
is added to a blockchain, an incorrect transfer of a digital
currency or a theft thereof generally will not be reversible and we
may not have sufficient recourse to recover our losses from any
such transfer or theft. It is possible that, through computer or
human error, or through theft or criminal action, our digital
currency rewards could be transferred in incorrect amounts or to
unauthorized third parties, or to uncontrolled accounts. Further,
at this time, there is no specifically enumerated U.S. or foreign
governmental, regulatory, investigative or prosecutorial authority
or mechanism through which to bring an action or complaint
regarding missing or stolen digital currency. To the extent that we
are unable to recover our losses from such action, error or theft,
such events could have a material adverse effect on our ability to
continue as a going concern or to pursue our new strategy at all,
which could have a material adverse effect on our business,
prospects or operations of and potentially the value of any bitcoin
or other digital currencies we mine or otherwise acquire or hold
for our own account.
WE ARE SUBJECT TO RISKS ASSOCIATED WITH OUR NEED FOR SIGNIFICANT
ELECTRICAL POWER. GOVERNMENT REGULATORS MAY POTENTIALLY RESTRICT
THE ABILITY OF ELECTRICITY SUPPLIERS TO PROVIDE ELECTRICITY TO
MINING OPERATIONS, SUCH AS OURS.
The operation of a bitcoin or other digital currency mine can
require massive amounts of electrical power. We are reliant on
PetaWatt Properties, LLC, located in Carthage, NY for the power
supply for our mining operations. Our mining operations can only be
successful and ultimately profitable if the costs, including
electrical power costs, associated with mining a bitcoin are lower
than the price of a bitcoin. As a result, any mine we establish can
only be successful if we can obtain sufficient electrical power for
that mine on a cost-effective basis with a reliable supplier, and
our establishment of new mines requires us to find locations where
that is the case. There may be significant competition for suitable
mine locations, and government regulators may potentially restrict
the ability of electricity suppliers to provide electricity to
mining operations in times of electricity shortage, or may
otherwise potentially restrict or prohibit the provision or
electricity to mining operations. If we are unable to receive
adequate power supply and are forced to reduce our operations due
to the availability or cost of electrical power, our business would
experience materially negative impacts.
WE HAVE INCREASED OUR INVESTMENTS IN CRYPTOCURRENCIES, THE MARKET
VALUE OF WHICH MAY BE SUBJECT TO SIGNIFICANT FLUCTUATIONS
When funds are available and market conditions allow, current
strategy is to invest in certain denominations of cryptocurrencies
to complement our mining operations. We consider these investments
similar to marketable securities where we purchase and hold the
cryptocurrencies for sale. We report realized gains and losses on
the sales of cryptocurrencies and mark our portfolio of
cryptocurrencies to market at the end of each quarterly reporting
period, reporting unrealized gains or losses on the investments.
The market value of these investments may fluctuate materially, and
we may be subject to investment losses on the change in market
value.
Risks related to the coronavirus
pandemic
THE FUTURE IMPACT OF THE CORONAVIRUS (COVID-19) PANDEMIC ON
COMPANIES IS EVOLVING AND WE ARE CURRENTLY UNABLE TO ASSESS WITH
CERTAINTY THE BROAD EFFECTS OF COVID-19 ON OUR
BUSINESS.
The future impact of the COVID-19 pandemic on companies is evolving
and we are currently unable to assess with certainty the broad
effects of COVID-19 on our business, particularly on the digital
currency markets. As of March 31, 2021, our investment in property
and equipment of $1,324,660 could be subject to impairment or
change in valuation due to COVID-19 if our cryptocurrency mining
revenues significantly decrease or we are not able to raise capital
sufficient to fund our operations. In addition, current travel
restrictions and social distancing requirements make it difficult
for our management to access and oversee our operations in the
State of New York.
The COVID-19 pandemic continues to have a material negative impact
on capital markets, including the market prices of digital
currencies. While we continue to incur operating losses, we are
currently dependent on debt or equity financing to fund our
operations and execute our business plan, including ongoing
requirements to replace old and nonprofitable mining machines. We
believe that the impact on capital markets of COVID-19 may make it
more costly and more difficult for us to access these sources of
funding.
Our business can potentially be impacted by the effects of the
COVID-19 as follows: (1) effect our financial condition, operating
results and reduce cash flows; (2) cause disruption to the
activities of equipment suppliers; (3) negatively effect the
Company’s mining activities due to imposition of related public
health measures and travel and business restrictions; (4) create
disruptions to our core operations in New York due to quarantines
and self-isolations; (5) restrict the Company’s ability and that of
its employees to access facilities and perform equipment
maintenance, repairs, and programming which will lead to inability
to monitor and service miners, resulting in reduced ability to mine
cryptocurrencies due to miners being offline.
In addition, our partners such as manufacturers, suppliers and
sub-contractors will be disrupted by absenteeism, quarantines and
travel restrictions resulting in their employees’ ability to work.
The Company’s supply chain, shipments of parts and purchases of new
products may be negatively affected. Such disruptions could have a
material adverse effect on our operations.
THE CORONAVIRUS PANDEMIC IS AN EMERGING SERIOUS THREAT TO HEALTH
AND ECONOMIC WELLBEING AFFECTING OUR EMPLOYEES, INVESTORS AND OUR
SOURCES OF SUPPLY.
The sweeping nature of the novel COVID-19 pandemic makes it
extremely difficult to predict how the Company’s business and
operations will be affected in the long run. However, the likely
overall economic impact of the pandemic is viewed as highly
negative to the general economy. To date, we have not been
classified as an essential business in the New York, and we may not
be allowed to access our mining facilities. The duration of such
impact cannot be predicted.
Risks Related to our Securities
OUR LACK OF INTERNAL CONTROLS OVER FINANCIAL REPORTING MAY AFFECT
THE MARKET FOR AND PRICE OF OUR COMMON STOCK.
Pursuant to Section 404 of the Sarbanes-Oxley Act, we are required
to file a report by our management on our internal control over
financial reporting. Our disclosure controls and our internal
controls over financial reporting are not effective. We do not have
the financial resources or personnel to develop or implement
systems that would provide us with the necessary information on a
timely basis so as to be able to implement financial controls. The
absence of internal controls over financial reporting may inhibit
investors from purchasing our stock and may make it more difficult
for us to raise capital or borrow money. Implementing any
appropriate changes to our internal controls may require specific
compliance training of our directors and employees, entail
substantial costs in order to modify our existing accounting
systems, take a significant period of time to complete and divert
management’s attention from other business concerns. These changes
may not, however, be effective in developing or maintaining
internal control.
OUR COMMON STOCK IS DEEMED TO BE “PENNY STOCK,” WHICH MAY MAKE IT
MORE DIFFICULT FOR INVESTORS TO SELL THEIR SHARES DUE TO DISCLOSURE
AND SUITABILITY REQUIREMENTS.
Our common stock is deemed to be “penny stock” as that term is
defined in Rule 3a51-1 promulgated under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”). These requirements
may reduce the potential market for our common stock by reducing
the number of potential investors. This may make it more difficult
for investors in our common stock to sell shares to third parties
or to otherwise dispose of them. This could cause our stock price
to decline. Penny stocks are stock:
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With a price of less
than $5.00 per share;
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That are not traded on
a “recognized” national exchange;
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Whose prices are not
quoted on the NASDAQ automated quotation system (NASDAQ listed
stock must still have a price of not less than $5.00 per share);
or
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In issuers with net
tangible assets less than $2.0 million (if the issuer has been in
continuous operation for at least three years) or $10.0 million (if
in continuous operation for less than three years), or with average
revenues of less than $6.0 million.
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Broker-dealers dealing in penny stocks are required to provide
potential investors with a document disclosing the risks of penny
stocks. Moreover, broker-dealers are required to determine whether
an investment in a penny stock is a suitable investment for a
prospective investor. Many brokers have decided not to trade “penny
stocks” because of the requirements of the penny stock rules and,
as a result, the number of broker-dealers willing to act as market
makers in such securities is limited. In the event that we remain
subject to the “penny stock rules” for any significant period,
there may develop an adverse impact on the market, if any, for our
securities.
FINRA SALES PRACTICE REQUIREMENTS MAY LIMIT A STOCKHOLDER’S ABILITY
TO BUY AND SELL OUR STOCK.
The Financial Industry Regulatory Authority (referred to as FINRA)
has adopted rules requiring that, in recommending an investment to
a customer, a broker-dealer must have reasonable grounds for
believing that the investment is suitable for that customer. Prior
to recommending speculative or low-priced securities to their
non-institutional customers, broker-dealers must make reasonable
efforts to obtain information about the customer’s financial
status, tax status, investment objectives and other information.
Under interpretations of these rules, FINRA has indicated its
belief that there is a high probability that speculative or
low-priced securities will not be suitable for at least some
customers. If these FINRA requirements are applicable to us or our
securities, they may make it more difficult for broker-dealers to
recommend that at least some of their customers buy our common
stock, which may limit the ability of our stockholders to buy and
sell our common stock and could have an adverse effect on the
market for and price of our common stock.
THE MARKET PRICE FOR OUR COMMON STOCK MAY BE VOLATILE AND YOUR
INVESTMENT IN OUR COMMON STOCK COULD SUFFER A DECLINE IN VALUE.
The trading volume in our stock is low, which may result in
volatility in our stock price. As a result, any reported prices may
not reflect the price at which you would be able to sell shares of
common stock if you want to sell any shares you own or buy if you
wish to buy shares. Further, stocks with a low trading volume may
be more subject to manipulation than a stock that has a significant
public float and is actively traded. The price of our stock may
fluctuate significantly in response to a number of factors, many of
which are beyond our control. These factors include, but are not
limited to, the following, in addition to the risks described above
and general market and economic conditions:
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the market’s reaction
to our financial condition and its perception of our ability to
raise necessary funding or enter into a joint venture, given the
economic environment resulting from the COVID-19 pandemic, as well
as its perception of the possible terms of any financing or joint
venture;
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the market’s perception
as to our ability to generate positive cash flow or earnings;
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changes in our or any
securities analysts’ estimate of our financial performance;
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the anticipated or
actual results of our operations;
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changes in market
valuations of digital currencies and other companies in our
industry;
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concern that our
internal controls are ineffective;
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actions by third
parties to either sell or purchase stock in quantities which would
have a significant effect on our stock price; and
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other factors not
within our control.
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RAISING FUNDS BY ISSUING EQUITY OR CONVERTIBLE DEBT SECURITIES
COULD DILUTE THE NET TANGIBLE BOOK VALUE OF THE COMMON STOCK AND
IMPOSE RESTRICTIONS ON OUR WORKING CAPITAL.
We anticipate that we will require funds in addition to the net
proceeds from this offering for our business.
We will need to raise additional capital, we may in the future
offer additional shares of our common stock or other securities
convertible into or exchangeable for our common stock at prices
that may not which is less than the market price and which may be
based on a discount from market at the time of issuance.
Stockholders will incur dilution upon exercise of any outstanding
stock options, warrants or upon the issuance of shares of common
stock under our present and future stock incentive programs. If we
were to raise capital by issuing equity securities, either alone or
in connection with a non-equity financing, the net tangible book
value of the then outstanding common stock could decline. If the
additional equity securities were issued at a per share price less
than the market price, which is customary in the private placement
of equity securities, the holders of the outstanding shares would
suffer dilution, which could be significant. Further, if we are
able to raise funds from the sale of debt securities, the lenders
may impose restrictions on our operations and may impair our
working capital as we service any such debt obligations. In
addition, the sale of shares and any future sales of a substantial
number of shares of our common stock in the public market, or the
perception that such sales may occur, could adversely affect the
price of our common stock. We cannot predict the effect, if any,
that market sales of those shares of common stock or the
availability of those shares of common stock for sale will have on
the market price of our common stock.
WE MAY ISSUE PREFERRED STOCK WHOSE TERMS COULD ADVERSELY AFFECT THE
VOTING POWER OR VALUE OF OUR COMMON STOCK.
Our articles of incorporation authorize us to issue, without the
approval of our stockholders, one or more classes or series of
preferred stock having such designations, preferences, limitations
and relative rights, including preferences over our common stock
respecting dividends and distributions, as our board of directors
may determine. We have outstanding shares of our Series A
super-voting preferred stock and Series B convertible preferred
stock, the terms of which adversely impact the voting power or
value of our common stock. Similarly, the repurchase or redemption
rights or liquidation preferences included in a series of preferred
stock issued in the future might provide to holders of preferred
stock rights that could affect the residual value of the common
stock.
BECAUSE CERTAIN EXISTING STOCKHOLDERS OWN A LARGE PERCENTAGE OF OUR
VOTING STOCK, OTHER STOCKHOLDERS’ VOTING POWER MAY BE LIMITED.
Steve Rubakh, our Chief Executive Officer, owns and/or controls a
majority of the voting power of our common stock. As a result, Mr.
Rubakh will have the ability to control all matters submitted to
our stockholders for approval, including the election and removal
of directors and the approval of any merger, consolidation or sale
of all or substantially all of our assets. This stockholder, who is
also our sole director, may make decisions that are averse to or in
conflict with your interests.
WE DO NOT HAVE A MAJORITY OF INDEPENDENT DIRECTORS ON OUR BOARD AND
THE COMPANY HAS NOT VOLUNTARILY IMPLEMENTED VARIOUS CORPORATE
GOVERNANCE MEASURES, IN THE ABSENCE OF WHICH STOCKHOLDERS MAY HAVE
MORE LIMITED PROTECTIONS AGAINST INTERESTED DIRECTOR TRANSACTIONS,
CONFLICTS OF INTEREST AND SIMILAR MATTERS.
Federal legislation, including the Sarbanes-Oxley Act of 2002, has
resulted in the adoption of various corporate governance measures
designed to promote the integrity of the corporate management and
the securities markets. Some of these measures have been adopted in
response to legal requirements. Others have been adopted by
companies in response to the requirements of national securities
exchanges, such as the NYSE or the NASDAQ Stock Market, on which
their securities are listed. Among the corporate governance
measures that are required under the rules of national securities
exchanges are those that address board of directors’ independence,
audit committee oversight, and the adoption of a code of ethics. We
have not yet adopted any of these other corporate governance
measures and since our securities are not yet listed on a national
securities exchange, we are not required to do so. If we expand our
board membership in future periods to include additional
independent directors, we may seek to establish an audit and other
committee of our board of directors. It is possible that if our
Board of Directors included a number of independent directors and
if we were to adopt some or all of these corporate governance
measures requiring expansion of our board of directors,
stockholders would benefit from somewhat greater assurance that
internal corporate decisions were being made by disinterested
directors. In evaluating our Company, our current lack of corporate
governance measures should be borne in mind.
OUR SHARE PRICE IS VOLATILE AND MAY BE INFLUENCED BY NUMEROUS
FACTORS THAT ARE BEYOND OUR CONTROL.
Market prices for shares of technology companies such as ours are
often volatile. The market price of our common stock may fluctuate
significantly in response to a number of factors, most of which we
cannot control, including:
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fluctuations in digital currency and stock
market prices and trading volumes of similar companies;
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general market conditions and overall
fluctuations in U.S. equity markets;
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sales of large blocks of our common stock,
including sales by our executive officers, directors and
significant stockholders;
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discussion of us or our stock price by the
press and by online investor communities; and
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other risks and uncertainties described in
these risk factors.
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WE HAVE NO CURRENT PLANS TO PAY DIVIDENDS ON OUR COMMON STOCK AND
INVESTORS MUST LOOK SOLELY TO STOCK APPRECIATION FOR A RETURN ON
THEIR INVESTMENT IN US.
We do not anticipate paying any further cash dividends on our
common stock in the foreseeable future. We currently intend to
retain all future earnings to fund the development and growth of
our business. Any payment of future dividends will be at the
discretion of our board of directors and will depend on, among
other things, our earnings, financial condition, capital
requirements, level of indebtedness, statutory and contractual
restrictions applying to the payment of dividends and other
considerations that the board of directors deems relevant.
Investors may need to rely on sales of their common stock after
price appreciation, which may never occur, as the only way to
realize a return on their investment. Investors seeking cash
dividends should not purchase our common stock.
USE OF PROCEEDS
All proceeds from the resale of the shares of our Common Stock
offered by this prospectus will belong to the Selling Stockholders.
We will not receive any proceeds from the resale of the shares of
our Common Stock by the Selling Stockholders.
We will receive proceeds from any cash exercise of the Warrants. If
all such Warrants are fully exercised on a cash basis, we will
receive gross cash proceeds of approximately $0.30 per Warrant
exercised. We expect to use the proceeds from the exercise of such
warrants, if any, for general corporate purposes. General corporate
purposes may include providing working capital, funding capital
expenditures, or paying for acquisitions. We currently do not have
any arrangements or agreements for any acquisitions. We cannot
precisely estimate the allocation of the net proceeds from any
exercise of the warrants for cash. Accordingly, in the event the
Warrants are exercised for cash, our management will have broad
discretion in the application of the net proceeds of such
exercises. There is no assurance that the Warrants will ever be
exercised for cash.
PRIVATE PLACEMENT SERIES
C PREFERRED STOCK
On February 14, 2021, we entered into a Securities Purchase
Agreement (the “Agreement”) with BHP Capital NY, Inc. (the
“Purchaser” or “Holder”), providing for the issuance and sale by us
and the purchase by the Purchaser of shares of Series C Convertible
Preferred Stock (the “Series C Preferred Stock”) issued by us.
Under the Agreement, the purchase price per share of Series C
Convertible Preferred Stock is $1,000. The first closing date under
the Agreement (“Closing”) was held on January 22, 2021, at which
the Company sold, and the Purchaser purchased 750 shares of Series
C Preferred Stock for $750,000. The Company also on that date
issued 3,000,000 shares of its common stock to the Purchaser, as
commitment shares.
We have agreed to indemnify and hold the Purchaser and its
respective directors, officers, shareholders, members, partners,
employees and agents, each Person who controls the Purchaser
(within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees harmless from any and all
losses, liabilities, obligations, claims, contingencies, damages,
costs and expenses, incurred by reason of or relating to (a) any
breach of any of the representations, warranties, covenants or
agreements made by the Company in the Agreement or in the other
Transaction Documents or (b) any action instituted against the
Purchaser Parties in any capacity, or any of them or their
respective Affiliates, by any stockholder of the Company who is not
an Affiliate of such Purchaser Party, with respect to any of the
transactions contemplated by the Transaction Documents (unless such
action is based upon a breach of such Purchaser Party’s
representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party
may have with any such stockholder or any violations by such
Purchaser Party of state or federal securities laws or any conduct
by such Purchaser Party which constitutes fraud, gross negligence,
willful misconduct or malfeasance).
We have also agreed to promptly secure and maintain the listing of
its common stock upon each national securities exchange or
automated quotation system, if any, upon which shares of common
stock are then listed (subject to official notice of issuance).
The Agreement provides that the Company shall file a Registration
Statement with the Securities and Exchange Commission (“SEC”) and
have the Registration Statement declared effective by the SEC
within 180 days of the first Closing.
PRIVATE PLACEMENT OF WARRANTS AND SERIES
D PREFERRED STOCK
On February 18, 2021, we entered into a Securities Purchase
Agreement, dated as of February 18, 2021 (the “Agreement”) with BHP
Capital NY, Inc. (the “Purchaser” or “Holder”), providing for the
issuance and sale by the Company and the purchase by the Purchaser
of shares of Series D Convertible Preferred Stock (the “Series D
Preferred Stock”) issued by us. Under the Agreement, the purchase
price per share of Series D Convertible Preferred Stock is $1,000.
The first closing date under the Agreement (“Closing”) was held on
February 19, 2021, at which the Company sold, and the Purchaser
purchased initially three thousand (3,000) shares of Preferred
Stock at price of $1,000 per share of Preferred Stock and the
Warrant for a purchase price of $3,000,000 (the “Purchase Price”),
with the ability to purchase another one thousand (1,000) shares
upon the terms herein shares of Series D Preferred Stock on the
same terms.
We have agreed to indemnify and hold the Purchaser and its
respective directors, officers, shareholders, members, partners,
employees and agents, each Person who controls the Purchaser
(within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees harmless from any and all
losses, liabilities, obligations, claims, contingencies, damages,
costs and expenses, incurred by reason of or relating to (a) any
breach of any of the representations, warranties, covenants or
agreements made by the Company in the Agreement or in the other
Transaction Documents or (b) any action instituted against the
Purchaser Parties in any capacity, or any of them or their
respective Affiliates, by any stockholder of the Company who is not
an Affiliate of such Purchaser Party, with respect to any of the
transactions contemplated by the Transaction Documents (unless such
action is based upon a breach of such Purchaser Party’s
representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party
may have with any such stockholder or any violations by such
Purchaser Party of state or federal securities laws or any conduct
by such Purchaser Party which constitutes fraud, gross negligence,
willful misconduct or malfeasance).
We have also agreed to promptly secure and maintain the listing of
its common stock upon each national securities exchange or
automated quotation system, if any, upon which shares of common
stock are then listed (subject to official notice of issuance).
The Agreement provides that the Company shall file a Registration
Statement with the Securities and Exchange Commission (“SEC”) and
have the Registration Statement declared effective by the SEC
within 180 days of the first Closing.
The Purchaser has, under the terms of the Warrant issued February
18, 2021, the right to purchase, at any time during the Warrant
Exercise Term, up to one hundred percent (100%) warrant coverage,
exercisable into shares of our Common Stock at a per share exercise
price of sixty cents $0.30 (as the same may be adjusted for
reclassifications or consolidations of the Common Stock, or merger
of the Company). This Warrant may be exercised by the Purchaser at
any time during the Warrant Exercise Term of five years from the
Closing.
SELLING
STOCKHOLDERS
The shares of our Common Stock being offered by the Selling
Stockholders are issuable upon the conversion of the Series C
Preferred Stock, Series D Preferred Stock, and exercising of the
Warrants. For additional information regarding the issuance of the
Series C Preferred Stock, Series D Preferred Stock, and Warrants,
see “January 2021 Financing” and “February 2021 Financing” above.
We are registering the shares of our Common Stock in order to
permit the Selling Stockholders to offer the shares for resale from
time to time. Except as otherwise described in the footnotes to the
table below and for the ownership of the Registered Shares issued
pursuant to the Series C Purchase Agreement and Series D Purchase
Agreement, the Selling Stockholders have not had any material
relationship with us within the past three years.
The table below lists the Selling Stockholders and other
information regarding the beneficial ownership (as determined under
Section 13(d) of the Securities Exchange Act of 1934, as amended
(and the rules and regulations thereunder) of the shares of our
Common Stock by each of the Selling Stockholders.
The second column lists the number of shares of our Common Stock
beneficially owned by each Selling Stockholder ownership before
this Offering (including shares which the Selling Stockholder has
the right to acquire within 60 days, including upon conversion of
any convertible securities).
The third column lists the shares of our Common Stock being offered
by this prospectus by the Selling Stockholders.
The fourth and fifth columns list the number of shares of Common
Stock beneficially owned by the Selling Stockholders and their
percentage ownership after the Offering shares of Common Stock
(including shares which the Selling Stockholder has the right to
acquire within 60 days, including upon conversion of any
convertible securities), assuming the sale of all of the shares
offered by the Selling Stockholders pursuant to this
prospectus.
The amounts and information set forth below are based upon
information provided to us by the Selling Stockholders as of June
3, 2021, except as otherwise noted below. The Selling Stockholders
may sell all or some of the shares of Common Stock it is offering,
and may sell, unless indicated otherwise in the footnotes below,
shares of our common stock otherwise than pursuant to this
prospectus. The tables below assume the Selling Stockholders sell
all of the shares offered by them in offerings pursuant to this
prospectus, and not acquire any additional shares. We are unable to
determine the exact number of shares that will actually be sold or
when or if these sales will occur.
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Selling Stockholder
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Number of Shares
Owned Before Offering (1)
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Shares
Offered
Hereby(2)(3)(4)
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Number of Shares
Owned
After
Offering(5)
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Percentage
of
Shares
Beneficially
Owned
After
Offering
(1)(5)
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BHP Capital NY, Inc.
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2,660,058
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46,920,591 |
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2,660,058 |
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* less than 1%
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(1)
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Percentages are
calculated based on an aggregate of 194,487,662 shares of Common
Stock outstanding as of June 3, 2021. As applicable, such
percentages have been further adjusted to account for outstanding
convertible securities of such Selling Stockholder.
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Under the terms of the
Series C Preferred Stock and Series D Preferred Stock, the number
of shares of our Common Stock that may be acquired by a Selling
Stockholder upon any conversion of a share of Series C Preferred
Stock and Series D Preferred Stock is generally limited to the
extent necessary to ensure that, following such conversion, such
selling stockholder would not, together with its affiliates and any
other persons or entities whose beneficial ownership of our common
stock would be aggregated with such selling stockholder for
purposes of Section 13(d) of the Exchange Act, beneficially own in
excess of 4.99% (the “Beneficial Ownership Limitation”) of the
total number of shares of our common stock issued and outstanding
immediately after giving effect to the issuance of shares of our
common stock issuable upon conversion of Series C Preferred Stock
and Series D Preferred Stock and/or Series C Preferred Stock and
Series D Preferred Stock voting together with the common stock on
an as-converted basis subject to the Beneficial Ownership
Limitations.
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(3)
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The number of shares
offered hereby, for each Selling Stockholder, consists solely of
the shares issuable to such selling stockholder upon conversion of
the Series C Preferred Stock and Series D Preferred Stock issued
pursuant to the securities purchase agreements and the shares
issuable upon exercise of the Warrants issued to such selling
stockholder. The shares issuable upon conversion of the Series C
Preferred Stock and Series D Preferred Stock, and the shares
issuable upon exercise of the Warrants will become eligible for
sale by the selling stockholders under this prospectus only as
Series C Preferred Stock and Series D Preferred Stock and/or the
Warrants are exercised. In addition, the number of shares offered
hereby shown under the column titled “Number of Shares Offered”
includes the maximum number of shares issuable upon the conversion
of the Series C Preferred Stock, Series D Preferred Stock, and the
exercise of the Warrants without regard to the Beneficial Ownership
Limitation described in footnote (2).
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Represents an aggregate
of 46,920,591 shares of common stock issuable upon conversion of
3,000 shares of Series D Preferred Stock and 1,125 shares of Series
C Preferred Stock, 11,000,000 shares of common stock issuable upon
exercise of the Warrants, and 3,000,000 equity incentive shares
issued to BHP Capital NY, Inc. Bryan Pantofel is president of BHP
Capital NY, Inc. and has voting and investment power over the
securities listed in the table above.
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(5)
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Assumes that the
selling stockholder will set all of the shares of our Common Stock
listed in the table above and will not acquire nor dispose of any
other shares of our Common Stock before the completion of this
offering.
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Relationships with the Selling
Stockholders
Neither the selling stockholders nor any of the persons that
control them has had any material relationships with us or our
affiliates within the past three (3) years, except as described
herein or disclosed in our filings with the SEC.
LEGAL MATTERS
Lucosky Brookman LLP will pass upon certain legal matters relating
to the issuance and sale of the securities offered hereby on behalf
of Integrated Ventures, Inc.
EXPERTS
Our balance sheets as of June 30, 2020 and 2019, and the related
statements of operations, stockholders’ deficit, and cash flows for
each of the two year period ended June 30, 2020 and 2019, and the
related notes (collectively referred to as the financial
statements) have been audited by M&K CPAS, PLLC, an independent
registered public accounting firm, as set forth in its report
incorporated by reference and are included in reliance upon such
report given on the authority of such firm as experts in accounting
and auditing.
WHERE YOU CAN FIND MORE
INFORMATION
Available Information
We file reports, proxy statements and other information with the
SEC. Information filed with the SEC by us can be inspected and
copied at the Public Reference Room maintained by the SEC at 100 F
Street, N.E., Washington, D.C. 20549. You may also obtain copies of
this information by mail from the Public Reference Room of the SEC
at prescribed rates. Further information on the operation of the
SEC’s Public Reference Room in Washington, D.C. can be obtained by
calling the SEC at 1-800-SEC-0330. The SEC also maintains a web
site that contains reports, proxy and information statements and
other information about issuers, such as us, who file
electronically with the SEC. The address of that website is
http://www.sec.gov.
Our website address is https://www.integratedventuresinc.com. The
information on our website, however, is not, and should not be
deemed to be, a part of this prospectus.
This prospectus and any prospectus supplement are part of a
registration statement that we filed with the SEC and do not
contain all of the information in the registration statement. The
full registration statement may be obtained from the SEC or us, as
provided below. Forms of the documents establishing the terms of
the offered securities are or may be filed as exhibits to the
registration statement. Statements in this prospectus or any
prospectus supplement about these documents are summaries and each
statement is qualified in all respects by reference to the document
to which it refers. You should refer to the actual documents for a
more complete description of the relevant matters. You may inspect
a copy of the registration statement at the SEC’s Public Reference
Room in Washington, D.C. or through the SEC’s website, as provided
above.
INCORPORATION BY REFERENCE
The SEC’s rules allow us to “incorporate by reference” information
into this prospectus, which means that we can disclose important
information to you by referring you to another document filed
separately with the SEC. The information incorporated by reference
is deemed to be part of this prospectus, and subsequent information
that we file with the SEC will automatically update and supersede
that information. Any statement contained in a previously filed
document incorporated by reference will be deemed to be modified or
superseded for purposes of this prospectus to the extent that a
statement contained in this prospectus modifies or replaces that
statement.
We incorporate by reference our documents listed below and any
future filings made by us with the SEC under Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934, as amended,
which we refer to as the “Exchange Act” in this prospectus, between
the date of this prospectus and the termination of the offering of
the securities described in this prospectus. We are not, however,
incorporating by reference any documents or portions thereof,
whether specifically listed below or filed in the future, that are
not deemed “filed” with the SEC, including any information
furnished pursuant to Items 2.02 or 7.01 of Form 8-K or related
exhibits furnished pursuant to Item 9.01 of Form 8-K.
This prospectus and any accompanying prospectus supplement
incorporate by reference the documents set forth below that have
previously been filed with the SEC:
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Our Annual Report on
Form 10-K for the year ended June 30, 2020, filed with the SEC on
September 23, 2020.
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Our Quarterly Report on
Form 10-Q for the quarter ended September 30, 2020, filed with the
SEC on November 13, 2020.
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Our Quarterly Report on Form 10-Q for the
quarter ended December 31, 2020, filed with the SEC on February 12,
2021.
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Our Quarterly Report on Form 10-Q for the
quarter ended March 31, 2021, filed with the SEC on May 14,
2021.
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Our Current Reports on
Form 8-K filed with the SEC on August 10, 2020, November 18, 2020,
January 28, 2021, January 29, 2021, February 25, 2021, April 2,
2021, and April 15, 2021.
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The description of our
Common Stock contained in our Registration Statement on Form 8-A,
filed with the SEC on August 9, 2016, and any amendment or report
filed with the SEC for the purpose of updating the description.
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All reports and other documents we subsequently file pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
termination of this Offering, including all such documents we may
file with the SEC after the date of the initial registration
statement and prior to the effectiveness of the registration
statement, but excluding any information furnished to, rather than
filed with, the SEC, will also be incorporated by reference into
this prospectus and deemed to be part of this prospectus from the
date of the filing of such reports and documents.
You may request a free copy of any of the documents incorporated by
reference in this prospectus (other than exhibits, unless they are
specifically incorporated by reference in the documents) by writing
or telephoning us at the following address:
Integrated Ventures, Inc.
73 Buck Road, Suite 2
Huntingdon Valley, PA 19006
Telephone: (215) 613-1111
Exhibits to the filings will not be sent, however, unless those
exhibits have specifically been incorporated by reference in this
prospectus and any accompanying prospectus supplement.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and
Distribution.
The following is an estimate of the expenses (all of which are to
be paid by the registrant) that we may incur in connection with the
securities being registered hereby.
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SEC registration fee
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$ |
1,027 |
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Legal fees and expenses
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30,000 |
* |
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Accounting fees and expenses
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4,000 |
* |
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Total
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$ |
35,027 |
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Item 15. Indemnification of Directors and
Officers.
The Nevada Revised Statutes limits or eliminates the personal
liability of directors to corporations and their stockholders for
monetary damages for breaches of directors’ fiduciary duties as
directors. Our Amended and Restated Bylaws include provisions that
require the company to indemnify our directors or officers against
monetary damages for actions taken as a director or officer of our
Company. We are also expressly authorized to carry directors’ and
officers’ insurance to protect our directors, officers, employees
and agents for certain liabilities. Our Amended and Restated
Articles of Incorporation do not contain any limiting language
regarding director immunity from liability.
The limitation of liability and indemnification provisions under
the Nevada Revised Statutes and our Amended and Restated Bylaws may
discourage stockholders from bringing a lawsuit against directors
for breach of their fiduciary duties. These provisions may also
have the effect of reducing the likelihood of derivative litigation
against directors and officers, even though such an action, if
successful, might otherwise benefit us and our stockholders.
However, these provisions do not limit or eliminate our rights, or
those of any stockholder, to seek non-monetary relief such as
injunction or rescission in the event of a breach of a director’s
fiduciary duties. Moreover, the provisions do not alter the
liability of directors under the federal securities laws. In
addition, your investment may be adversely affected to the extent
that, in a class action or direct suit, we pay the costs of
settlement and damage awards against directors and officers
pursuant to these indemnification provisions.
Item 16. Exhibits.
(a) Exhibits
EXHIBIT INDEX
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
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(1)
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To file, during any
period in which offers or sales are being made, a post-effective
amendment to this registration statement:
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(i)
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To include any
prospectus required by Section 10(a)(3) of the Securities Act of
1933;
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(ii)
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To reflect in the
prospectus any facts or events arising after the effective date of
the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more
than a 20 percent change in the maximum aggregate offering price
set forth in the “Calculation of Registration Fee” table in the
effective registration statement; and
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(iii)
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To include any material
information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to
such information in the registration statement.
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(2)
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That for the purpose of
determining any liability under the Securities Act of 1933 each
such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
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(3)
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To remove from
registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination
of the offering.
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(4)
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That, for the purpose
of determining liability under the Securities Act of 1933 to any
purchaser, each prospectus filed pursuant to Rule 424(b) as part of
a registration statement relating to an offering, other than
registration statements relying on Rule 430B or other than
prospectuses filed in reliance on Rule 430A, shall be deemed to be
part of and included in the registration statement as of the date
it is first used after effectiveness. Provided, however, that no
statement made in a registration statement or prospectus that is
part of the registration statement or made in a document
incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of
contract of sale prior to such first use, supersede or modify any
statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such
document immediately prior to such date of first use.
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(5)
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That, for the purpose
of determining liability of the registrant under the Securities Act
of 1933 to any purchaser in the initial distribution of the
securities:
The undersigned
registrant undertakes that in a primary offering of securities of
the undersigned registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the securities
to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the
undersigned registrant will be a seller to the purchaser and will
be considered to offer or sell such securities to such
purchaser:
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(i)
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Any preliminary
prospectus or prospectus of the undersigned registrant relating to
the offering required to be filed pursuant to Rule 424;
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(ii)
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Any free writing
prospectus relating to the offering prepared by or on behalf of the
undersigned registrant or used or referred to by the undersigned
registrant;
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(iii)
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The portion of any
other free writing prospectus relating to the offering containing
material information about the undersigned registrant or its
securities provided by or on behalf of the undersigned registrant;
and
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(iv)
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Any other communication
that is an offer in the offering made by the undersigned registrant
to the purchaser.
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(6)
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The undersigned
Registrant hereby undertakes to provide to the underwriters at the
closing specified in the underwriting agreement certificates in
such denominations and registered in such names as required by the
underwriters to permit prompt delivery to each purchaser.
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(7)
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Insofar as
indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions described in Item 14
above, or otherwise, the Registrant has been advised that in the
opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of
the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act
and will be governed by the final adjudication of such issue.
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(8)
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The undersigned
Registrant hereby undertakes:
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(1)
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That for purposes of
determining any liability under the Securities Act, the information
omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4), or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the time it
was declared effective.
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(2)
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That for the purpose of
determining any liability under the Securities Act, each
post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the
securities offered therein, and this offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of Philadelphia, State of Pennsylvania, on June 11, 2021.
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Integrated Ventures,
Inc.
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By:
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/s/ Steve Rubakh
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Name:
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Steve Rubakh
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Title:
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President and Chief Executive Officer
(Principal Executive Officer,
Principal Financial Officer,
Principal Accounting Officer)
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Integrated Ventures (QB) (USOTC:INTV)
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