*Upon a recapitalization and a reorganization of the Company from Oregon to Delaware effective August 9, 2021, the Preferred stock was eliminated with the Series A Convertible Preferred stock having prior converted to shares of common stock.
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
*Upon a recapitalization and a reorganization of the Company from Oregon to Delaware effective August 9, 2021, the Preferred stock was eliminated with the Series A Convertible Preferred stock having prior converted to
shares of common stock.
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Notes to Unaudited Condensed Consolidated Financial Statements
For The Three and Nine Months Ended September 30, 2021
NOTE 1 - NATURE OF OPERATIONS
Historical Information:
The Company was incorporated in the State of Oregon on February 8, 1989, as Metro One Direct Information Services Inc. On December 12, 1995, we changed our name to Metro One Telecommunications Inc. The Company
was formerly in the business of providing directory assistance service to subscribers through carrier contracts starting with its first contract in 1991. Previously the Company was contracted with a number of wireless carriers, voice over
internet protocol providers, cable companies and various other carriers both free and prepaid providing live operator directory assistance services to the carriers’ subscribers and users. Revenues were historically derived principally through fees
charged to telecommunications carriers.
Starting in 2005, the Company went through a number of restructures of its business in an attempt to retain market share in a rapidly evolving technology and telecommunications industry.
In March 2008, the Company decided to exit the wholesale directory assistance business, but to continue to pursue growth in the Company’s small data services business which it had concurrently developed.
As of September 2008, the Company had closed all of its call centers and approximately 700 employees were terminated.
In conjunction with the closures, the Company sold a majority of its patent and trademarks to raise funds to continue operations.
Further, during 2008, the Company voluntarily deregistered its common stock under the Securities Exchange Act of 1934. With that action the Company moved from the OTC Markets Bulletin Board to the OTC Markets Pink
Sheets.
The Company was unsuccessful in pursuing its then current business and ceased filing any current information reports with OTC Markets in fiscal 2009.
Current Information:
Certain of the officers and directors of the Company maintained the Company’s registration as an Oregon corporation while seeking other business opportunities for the Company and its stockholders between fiscal 2009
and current date.
On March 30, 2021, the Company announced that its newly-formed, wholly owned Israeli subsidiary, Stratford Ltd. had received notification of approval from the Lod District Court in Israel for its winning bid to
acquire assets of Royal App Ltd. out of insolvency proceedings for approximately $2.4 million USD in cash, the assumption of $200,000 in repayable government grants, as well as 8% equity in the Company on a diluted basis, post conversion of the
Company’s preferred common stock and certain other proposed sales of common stock in order to raise the required funds to complete the acquisition, the “Recapitalization”.
Royal App is the developer of Shelfy, a white label, headless mobile commerce software platform that helps retailers and fast moving consumer goods companies become growth companies. Shelfy incorporates
sophisticated artificial intelligence and machine learning in its algorithms to markedly improve online shopping metrics through mobile phones for large consumer retailers such as supermarket chains, food and other clients. Prior to its recent
insolvency filing, more than $20 million had been invested in Royal App.
Metro One Telecommunications, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
For The Three and Nine Months Ended September 30, 2021
NOTE 1 - NATURE OF OPERATIONS
Description of Business:
Current Information (continued)
If the Recapitalization of the Company is not approved by the shareholders and the 8% of the Company Capitalization is not issued to the bankruptcy trustee within 120 days from the date of the closing of the
Acquisition, or April 26, 2021, the trustee, who holds a pledge over the assets of Royal App purchased by Stratford, may foreclose on such assets. Any foreclosure will result in the transfer of the ownership of Royal App assets purchased by
Stratford, from Stratford to the trustee for the creditors of Royal App. The transactions as contemplated above were successfully completed during the quarter ended September 30, 2021, and the Trustee has released its pledge over the assets.
To finance the acquisition as well as general working capital, the Company proposed to raise up to $3.5 million commencing March 2021 in the form of puttable Simple Agreements for Future Equity (“SAFES”) from
institutional investors and family offices. The terms of the SAFES require that they automatically convert into common stock of the Company following the conversion of all outstanding convertible preferred stock into common stock. The Company’s
intent was to undertake the conversion of preferred stock in the quarter ended September 30, 2021, following shareholder approval of certain proposed corporate restructure plans.
Subsequent to the conversion of the preferred stock, and as part of the agreement for the acquisition of the assets of Royal App the Company also agreed to issue common stock for commission fees of 2% of the
Company’s common stock on a diluted basis, and to the employees of Stratford as to 8% of the Company on a diluted basis, under the terms of an Employee Stock Option Plan, once approved by Shareholders. Further, in order to undertake these
issuances, the Company was required to increase the authorized common stock of the Company.
On June 9, 2021, the Company announced a Stockholders’ meeting to be held on June 30, 2021 to approve the following actions:
The meeting was held on June 30, 2021, and the Company’s shareholders approved all of the actions detailed above, as well as the conversion of 1,000 outstanding shares of Company’s Series A convertible preferred
stock whereby each 1 share of Preferred stock held is convertible into 71,683.25 shares of common stock. As a result, during the period ended September 30, 2021, the holders of the Company’s Series A convertible preferred stock successfully
converted their holdings into 71,683,250 shares of Common Stock and the Board issued the remaining securities as agreed under the Acquisition Agreement including 22,647,751 shares to the Trustee as part of the asset acquisition costs and 5,661,938
shares to the agent as financing costs. Further a total of $3.25 million raised in the form of SAFES were converted into a total of 126,614,436 shares of common stock at $0.02567 per share. On August 9, 2021 the Company redomiciled and filed
articles of conversion moving its registration to the State of Delaware.
Metro One Telecommunications, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
For The Three and Nine Months Ended September 30, 2021
NOTE 1 - NATURE OF OPERATIONS
Description of Business:
Current Information (continued)
During the period ended September 30, 2021, the Company undertook a second financing by way of Private Investment in Public Equity ("PIPE") in the form of unregistered Units at $0.075, each Unit consisting of a
share of Common Stock and ½ share purchase warrant for exercise for a period of two years form the date of grant at $0.975 per share. The Company accepted subscriptions in the period for a total of $275,000 in gross proceeds with respect to the
sale of 3,666,666 Units. The Company expects to close this financing on or about October 31, 2021, and expects to raise up to $2M in gross proceeds. Certain of the PIPE investments have agent fees payable at a rate of 4.25%.
NOTE 2 – GOING CONCERN
The accompanying financial statements have been prepared assuming the continuation of the Company as a going concern. The Company has recently acquired operating assets, is generating modest revenues, and is in the
process of pursuing expansion of its new business venture. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and is dependent on debt and equity financing to fund its operations. The
accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability
of the Company to continue as a going concern. Management’s plans for the continuation of the Company as a going concern include financing the Company’s operations through issuance of its common stock, conducting revenue generating operations or
expanding the Company’s existing business operations to acquire projects which generate additional revenue. If the Company is unable to complete its financing requirements or achieve net profits as projected, it will then modify its expenditures
and plan of operations to coincide with the actual financing completed and actual operating revenues, if any. The Company is currently seeking a further equity financing of up to $15 million US Dollars to meet ongoing capital requirements.
There are no assurances the Company will succeed in implementing its plans. Unless otherwise indicated, amounts provided in these notes to the financial statements pertain to continuing operations.
COVID-19
The recent COVID-19 pandemic could have an adverse impact on the Company going forward. COVID-19 has caused significant disruptions to the global financial markets, which may severely impact the Company’s ability to
raise additional capital and to pursue certain contracts. The Company may be required to cease operations if it is unable to finance its’ operations. The full impact of the COVID-19 outbreak continues to evolve as of the date of this report and is
highly uncertain and subject to change. Management is actively monitoring the situation but given the daily evolution of the COVID-19 outbreak, the Company is not able to estimate the effects of the COVID-19 outbreak on its operations or financial
condition in the next 12 months. There are no assurances that the Company will be able to meet its obligations, raise funds or conclude the acquisition of identified businesses. Further upon acquisition of any target businesses there is no
guarantee these operations will be profitable.
NOTE 3 - USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities, and disclosure of contingent assets and liabilities, at the date of these financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Metro One Telecommunications, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
For The Three and Nine Months Ended September 30, 2021
NOTE 4 – SUMMARY OF ACCOUNTING POLICIES
Fiscal Year end
The Company has selected December 31 as its fiscal year end.
Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles (US GAAP). In the opinion of management, all adjustments considered necessary for a
fair presentation have been included. All such adjustments are of a normal recurring nature.
Basis of Consolidation
These consolidated financial statements include the accounts of the Company and its 100% controlled Israeli subsidiary, Stratford Ltd (“Stratford”) as of September 30, 2021. All significant intercompany accounting
transactions have been eliminated as a result of consolidation.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.
Foreign Currency Translation
The Company uses the U.S. Dollar as the reporting currency for its financial statements. Functional currency is the currency of the primary economic environment in which an entity operates. The functional currency of
the Company’s wholly owned subsidiary is the Israeli Shekel.
Assets and liabilities of the Company’s subsidiary are translated into U.S. Dollars at period-end foreign exchange rates, and revenues and expenses are translated at average rates prevailing throughout the period.
Translation adjustments are included in “Accumulated other comprehensive income” as a separate component of stockholders’ equity, and in the “Effect of exchange rate changes on cash and cash equivalents,” on the Company’s consolidated statements of
cash flows. Transaction gains and losses including intercompany transactions denominated in a currency other than the functional currency of the entity involved are included in “General and Administrative” on the Company’s consolidated statements
of operations.
Accumulated Other Comprehensive Income (Loss)
Accumulated other comprehensive income (loss) includes foreign currency translation adjustments related to the Company’s subsidiary in Israel and is excluded from the accompanying consolidated statements of
operations.
Goodwill
Goodwill represents the excess of the purchase price of the acquisition over the net fair value of identifiable assets acquired and liabilities assumed. Goodwill amounts are not amortized.
Metro One Telecommunications, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
For The Three and Nine Months Ended September 30, 2021
NOTE 4 – SUMMARY OF ACCOUNTING POLICIES (continued)
Intangible Assets
The Company generally recognizes assets for customer relationships, developed technology, and finite-lived trade names from an acquisition. Finite-lived intangible assets are carried at acquisition cost less
accumulated amortization. Such amortization is recorded on a straight-line basis over the estimated useful lives of the respective assets, generally from 3 to 8 years. Amortization for developed technology is recognized in cost of revenue.
Amortization for customer relationships and trade names is recognized in sales and marketing expenses.
In the nine month period ended September 30, 2021, the company recorded assets acquired in the cumulative amount of approximately $3.47 million (cash proceeds, share based consideration and the assumption of certain
repayable grants issued by the government of Israel which financed certain development activities related to the intellectual property) purchased through a liquidation proceeding from the trustee for Royal App Ltd., an Israeli corporation (ref:
Note 5), which we recorded as intangible assets. Intangible assets acquired included (1) goodwill; (2) intellectual property and trademarks, including rights in patents in so far as they exist and rights of claim (if and in so far as they exist and
are transferrable) for infringement of the aforementioned intellectual property; and (3) agreements (rights and obligations) with customers. We initially record acquired intangible assets at their estimated fair values and we review these assets
periodically for impairment.
Impairment
The valuation of goodwill at the reporting unit level is reviewed annually during the fourth fiscal quarter or more frequently if facts or changes in circumstances indicate the carrying amount of goodwill may not be
recoverable. The Company presently has one reporting unit; therefore, all of its goodwill is associated with the entire company. Management has the option to first perform a qualitative assessment to determine whether it is more likely than not
that the fair value of the Company is less than the carrying amount, including goodwill. If it is determined that it is more likely than not that the fair value of the Company is less than the carrying amount, a quantitative assessment is performed
by comparing the fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated
to that reporting unit. The Company also has the option to bypass the qualitative assessment and perform the quantitative assessment.
The Company reviews the valuation of long-lived assets, including property and equipment and finite-lived intangible assets, whenever events or changes in circumstances indicate that the carrying amount of the asset
may not be recoverable. The recoverability of long-lived assets or asset groups is calculated based on the estimated undiscounted future cash flows expected to result from the use and eventual disposition of the asset. Impairment testing is
performed at the asset group level.
Research and Development
Research and development expenses consist primarily of costs associated with the developer of Royal App system, compensation and other expenses for research and development, personnel, supplies and development
materials, costs for consultants and related contract research and facility costs. Expenditures relating to research and development are expensed as incurred. In the period ended September 30, 2021, the company recorded assets acquired in the
cumulative amount of approximately $3.47 million purchased through a liquidation proceeding from the trustee for Royal App Ltd., an Israeli corporation (ref: Note 5), which we recorded as intangible assets. During the nine months ended September
30, 2021 we expensed $266,342 as research and development costs in the accompanying Condensed Consolidated Statements of Operations.
Metro One Telecommunications, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
For The Three and Nine Months Ended September 30, 2021
NOTE 4 – SUMMARY OF ACCOUNTING POLICIES (continued)
Fair Value of Financial Instruments
Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair
value for applicable assets and liabilities, we consider the principal or most advantageous market in which we would transact and we consider assumptions market participants would use when pricing the asset or liability, such as inherent risk,
transfer restrictions, and risk of nonperformance. This guidance also establishes a fair value hierarchy to prioritize inputs used in measuring fair value as follows:
The Company’s financial instruments include cash, accounts payable, related party loans and a demand promissory note. The carrying amounts of cash and accounts payable approximate their fair value, due to the
short-term nature of these items.
Revenue Recognition
The Company has adopted the requirement of Accounting Standards Update, or ASU No. 2014-09 “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”).
We derive our revenues from annual license fees, subscriptions, and customized professional services. We recognize revenues when a contract exists between the Company and a customer and upon transfer of control of
promised products or services to such customer in an amount that reflects the consideration we expect to receive in exchange for those products or services. We enter into contracts that can include various combinations of annual licenses,
subscriptions, customized service contracts and professional services, which may be capable of being distinct and accounted for as separate performance obligations, or in the case of offerings such as annual licenses, subscriptions, services and
support, accounted for as a single performance obligation. Revenues are recognized net of allowances and any taxes collected from customers, which are subsequently remitted to governmental authorities.
We determine revenue recognition through the following steps:
•Identification of the contract, or contracts, with a customer;
•Identification of the performance obligations in the contract;
•Determination of the transaction price;
•Allocation of the transaction price to the performance obligations in the contract; and
•Recognition of revenues when, or as, the Company satisfies a performance obligation
Annual License fees and Subscription Revenues
Annual license and subscription revenues primarily consist of fees for providing customers access to a combination of our software offerings including persona-based and per-feature pricing models, where distinct
packages are aligned to a specific type of customer persona based on its size, market segment and physical/online store presence. Each package is very different than the next with prices increasing as the functionality does.
Metro One Telecommunications, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
For The Three and Nine Months Ended September 30, 2021
NOTE 4 – SUMMARY OF ACCOUNTING POLICIES (continued)
Revenue Recognition (cont’d)
Annual License fees and Subscription Revenues (cont’d)
We also provide routine customer support and maintenance related to email and phone support, bug fixes, and unspecified software updates and upgrades released when and if available during the maintenance term.
Revenues are generally recognized on a ratable basis over the contract term beginning on the date that our service is made available to the customer, which we believe best reflects the manner in which our customers utilize our subscription
offerings. Arrangements with customers do not provide the customer with the right to take possession of the software supporting application service at any time and, as a result, are accounted for as a service contract. Our subscriptions and
licenses have varying terms of service which dictate the revenue recognition on a contract by contract basis.
Customized Service Revenues
Customized service contract revenues primarily consist of fees for deployment, configuration, and optimization services, and potentially, training. The majority of our professional services contracts are billed on
a fixed price basis, and revenues are recognized over time based on a proportional performance methodology which utilizes input methods. A portion of our customized service contracts may be billed on a time and materials basis and revenues are
recognized over time as the services are performed.
Contracts with Multiple Performance Obligations
Most of our contracts with customers contain multiple performance obligations. For these contracts, we account for individual performance obligations separately if they are distinct. The transaction price is
allocated to the separate performance obligations on a relative standalone selling price (“SSP”) basis. We determine SSP by considering its overall pricing objectives and market conditions. Significant pricing practices taken into consideration
include our discounting practices, the size and volume of our transactions, the scope of customer needs relative to custom services and available subscription services for existing packages, the customer demographic, price lists, our go-to-market
strategy, historical sales, and contract prices. As our go-to-market strategies evolve, we may modify pricing practices in the future, which could result in changes to SSP.
Given the variability of pricing, we use a range of SSP. We determine the SSP range using information that may include market conditions or other observable inputs. We typically have more than one SSP for
individual products and services due to the stratification of products and services by customer size.
Remaining performance obligations (RPOs) represent contracted revenues that have not yet been recognized, including deferred revenue and unbilled amounts that we expect will be recognized as revenues in future
periods. Our reported RPO balance is influenced by several factors, including the timing of renewals, average contract terms, and foreign currency exchange rates (if applicable). Because we may enter into multi-year contracts and the timing of
renewal of these contracts varies by customer, our reported RPOs may fluctuate significantly from period to period, and we do not believe this measure is a useful gauge of our future performance. For these reasons, we do not use RPOs as a tool
for managing our business.
Income Taxes
Income taxes are recognized in accordance with ASC 740, “Income Taxes”, whereby deferred income tax liabilities or assets at the end of each period are determined using the tax rate expected to be in effect when the
taxes are actually paid or recovered. A valuation allowance is recognized on deferred tax assets when it is more likely than not that some or all of these deferred tax assets will not be realized.
Metro One Telecommunications, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
For The Three and Nine Months Ended September 30, 2021
NOTE 4 – SUMMARY OF ACCOUNTING POLICIES (continued)
Basic and Diluted Net Income (Loss) Per Share
In accordance with ASC Topic 260 – Earnings Per Share, the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common stock outstanding.
Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if the potential common stock had
been issued and if the additional shares of common stock were dilutive.
Potential common stock consists of the incremental common stock issuable upon convertible notes, stock options and warrants and classes of shares with conversion features. The computation of basic loss per share for
the periods ended September 30, 2021 and December 31, 2020 excludes potentially dilutive securities of underlying preferred shares, because their inclusion would be antidilutive. As a result, the computations of net loss per share for each period
presented is the same for both basic and fully diluted.
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been
issued that might have a material impact on its financial position or results of operations.
NOTE 5 – ACQUISITION OF ASSETS
During March 2021 the Company entered into an agreement, (the “Agreement”,) for the purchase of certain assets of Royal App Ltd., a corporation incorporated in Israel, through a liquidation proceeding approved by the
Lod District Court (Israel) within the framework of Insolvency Case 53873-01-21. On April 26, 2021, the Company completed a cash payment to the trustee for the acquisition of the identified assets, and the assets were effectively transferred to
the Company’s controlled subsidiary, Stratford Ltd.
Assets acquired included (1) goodwill; (2) intellectual property and trademarks, including rights in patents in so far as they exist and rights of claim (if and in so far as they exist and are transferrable) for
infringement of the aforementioned intellectual property; (3) agreements (rights and obligations) with customers and, (4) certain equipment and fixed assets. Liabilities acquired included certain repayable government grants.
In consideration for the assets acquired the Company paid $2,140,288 (net of VAT), assumed approximately $200,000 USD in repayable government grants, which grants are repayable at a rate of 3% of gross sales until
retired in full, and agreed to issue 8% of the Company’s issued and outstanding shares on a diluted basis, following the issuance of certain share capital in respect to the sale of common shares under SAFES, the conversion of 1,000 shares of Series
A preferred stock to common stock and an estimate of shares expected to be issued for certain warrants and employee stock options during fiscal 2021. The consideration shares are to be issued to the bankruptcy trustee within 120 days from the date
of the closing of the acquisition, April 26, 2021. The trustee, who holds a pledge over the assets of Royal App purchased by Stratford Ltd., may foreclose on such assets in the event the consideration shares are not issued as required under the
terms of the Agreement. Any foreclosure will result in the transfer of the ownership of Royal App assets purchased by Stratford, from Stratford to the trustee for the creditors of Royal App. The 22,647,751 consideration shares were issued to the
trustee in August 2021 and were valued at the fair market value on the date of issue or $967,853 (net of VAT), as part of the acquisition consideration.
The Company has recorded the acquired assets on the Company’s balance sheets as Intangible Assets as of the date of acquisition and is currently reviewing the assets for further classification. The Company intends to
complete impairment testing on all acquired assets no later than the close of fiscal 2021.
Metro One Telecommunications, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
For The Three and Nine Months Ended September 30, 2021
NOTE 5 – ACQUISITION OF ASSETS (continued)
The Company also paid a transaction fee of 2% of the diluted share capital by way of the issuance of 5,661,938 common shares to Everest Corporate Finance Ltd., a company of which our President is an officer, director
and shareholder. The shares were valued at fair market value or $283,096 which amount was expensed as a finance cost.
NOTE 6 – PRIVATE PLACEMENT
Simple Agreements for Future Equity
Investor deposits consist of $3,250,000 in gross proceeds received in the form of puttable Simple Agreements for Future Equity (“SAFES”) from institutional investors and family offices during the period ended June
30, 2021. The terms of the SAFES require that they automatically convert into restricted, unregistered shares of common stock of the Company following the conversion of all outstanding convertible preferred stock into common stock at such price
per share equal to the fully diluted capital post conversion of the preferred stock divided by $2,000,000, or $0.02567 per share. On August 20, 2021, 126,614,436 unregistered restricted shares of common stock in exchange for 3.25M in proceeds from
SAFES.
Private Investment in Public Equity (“PIPE”)
During the period ended September 30, 2021, the Company received gross proceeds of $275,000 from accredited investors in the form of PIPES and completed the sale of 3,666,666 units at a price of $0.075 per unit where
each unit consists of one share of common stock and one-half of one share purchase warrant. Each warrant is exercisable into one share of common stock at a price of $0.0975 expiring in two years. The Company intends to raise up to $2 million prior
to the close October 31, 2021, through PIPES.
NOTE 7 – CAPITAL STOCK AND ADDITIONAL PAID-IN CAPITAL
Common Stock and Preferred Stock
Up to August 9, 2021, Company had authorized 50,000,000 shares of Common stock, no par value and 10,000,000 shares of Preferred stock, no par value, of which 1,385 shares have been designated Series A convertible
preferred stock with a liquidation preference of $10,000 per share. Holders of convertible preferred stock, when voting with the holders of our common stock, are entitled to an approximate 0.856 vote for each share of common stock into which the
Series A convertible preferred stock registered in the shareholder’s name can be converted. Each share of Series A convertible preferred Stock is convertible into approximately 71,683.25 shares of common stock. In addition, the holders of the
convertible preferred stock were entitled to elect a majority of the members of our Board of Directors. On August 9, 2021 the Company filed articles of conversion moving its registration to the State of Delaware and amending the articles of the
Company to increase the authorized shares of the Company from 50,000,000 to 600,000,000, no par value, and eliminating the Preferred stock
.
During the three months ended September 30, 2021, the Company issued the following shares of common stock:
Metro One Telecommunications, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
For The Three and Nine Months Ended September 30, 2021
NOTE 7 – CAPITAL STOCK AND ADDITIONAL PAID-IN CAPITAL (continued)
Common Stock and Preferred Stock (cont’d)
On September 9 and September 27, 2021, the Company issued 2,666,666 and 1,000,000 units at $0.075 each for gross proceeds of $200,000 and $75,000, respectively in the form of
PIPES. Each unit consists of one common share and one-half of one share purchase warrant. Each warrant will entitle the holder to purchase one common share for $0.0975 expired in two years.
On September 30, 2021 and December 31, 2020 the Company had 236,507,367 and 6,233,326 shares of common stock issued and outstanding, respectively, and 0 and 1,000 shares of Series A Preferred stock issued and
outstanding, respectively.
Stock Purchase Warrants
The following warrants were outstanding as at September 30, 2021:
Warrant transactions are summarized as follows:
The following weighted average assumptions were used for the Black-Scholes pricing model valuation of warrants issued during the nine months period ended September 30 to
allocate the proceeds between common stock and additional paid-in capital:
Metro One Telecommunications, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
For The Three and Nine Months Ended September 30, 2021
NOTE 8 –RELATED PARTIES TRANSACTIONS
Key management compensation
Key management personnel are persons responsible for planning, directing and controlling the activities of the entity, and include all directors and officers.
At September 30, 2021, accounts payable and accrued liabilities included $41,062 of management fees with respect to key management compensation.
NOTE 9 – SUBSEQUENT EVENTS
Subsequent to September 30, 2021, the Company closed an additional $1,576,000 in PIPES by way of the sale of an additional 21,013,333 Units at $0.075 per Unit, each Unit consisting of one share of common stock and
one-half warrant for exercise at $0.0975 per share. The Company paid agent commissions on $1.376 M in proceeds at 4.25% for a total of $58,480 in financing costs.
Subsequent to September 30, 2021, the Company granted the following Stock options under its 2021 Employee Stock Incentive Plan:
Subsequent to September 30, 2021, the Company granted 7,791,658 Stock Purchase Warrants to one of its financing agents, exercisable for a period of two years from the date of grant at $0.02567 per share.
The Company has evaluated events for the period from September 30, 2021, through the date of the issuance of these financial statements and determined that there are no additional events requiring disclosure.