ELMCA
4 years ago
EXPLANATORY NOTE
On April 28, 2020 the Companyโs Board of Directorโs awarded 10,000,000 shares of the Companyโs Series A Preferred Stock to Custodian Ventures LLC, managed by David Lazar. Based upon the original Certificate of Designation these shares were convertible to common stock at a ratio of 20 to 1. The Companyโs Form 10-Qโs for the periods ended April 30, 2020, July 31, 2020 and October 31, 2020 each contained financial statements that included stock-based compensation based upon a 20 to 1 conversion rate. Each of these 10-Qโs was filed on November 18, 2020. On November 19, 2020 it was discovered that due to a scrivenerโs error, the conversion rate was intended to be 200 to 1 instead of 20 to 1. The impact of the increase in the conversion rate from 20 to 1 to 200 to 1, was an additional $5,400,000 in stock-based compensation expense included in โgeneral and administrative expense -related partyโ, on the Companyโs Restated Statement of Operations. This Amendment No. 1 on Form 10-Q/A (this Amendment) amends the financial statements and the related footnotes on the Companyโs Report on Form 10-Q for the quarter ended October 31, 2020, as amended. Also see Note 6. โRestatementโ. Except for the foregoing, no other information in the Original Filing is revised by this Amendment.