ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.
The information provided in Items 1.01 and 2.01 of this Current Report on Form 8-K related to the aforementioned Share Exchange Agreement and Addendum are incorporated by reference into this Item 3.02.
Cancellation of 15,000,000 Shares of Common Stock / Issuance of Series B Preferred
On June 1, 2020, Joel Dulatre Cortez (“Cortez”) and Mark Christian Soo (“Soo”) agreed to cancel and return to authorized but unissued status an aggregate of 15,000,000 shares of the Company’s common stock, 10,000,000 shares of which were held by Cortez and 5,000,000 shares of which were held by Soo. In exchange therefore, Cortez will receive 1,000,000 shares of the Company’s Series B Preferred stock and Soo will receive 500,000 shares of the Company’s Series B Preferred stock. The Series B Preferred stock votes and converts to common stock at a ratio of 10 to 1.
Capitalization Table
The following table sets forth certain information regarding the Company's common stock beneficially owned on June 2, 2020, for (i) each shareholder the Company knows to be the beneficial owner of 5% or more of its outstanding common stock, (ii) each of the Company's executive officers and directors, and (iii) all executive officers and directors as a group. In general, a person is deemed to be a "beneficial owner" of a security if that person has or shares the power to vote or direct the voting of such security, or the power to dispose or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which the person has the right to acquire beneficial ownership within 60 days. To the best of the Company's knowledge, all persons named have sole voting and investment power with respect to such shares, except as otherwise noted. At June 2, 2020, 15,020,000 shares of the Company's common stock were outstanding.
Name of Person or Group
|
# of Shares
of Common
Stock
Owned
|
% of
Common
Stock
Ownership
|
# of
Preferred
A Stock
Owned
|
% of
Preferred
A Stock
Ownership
|
# of
Preferred
B Stock
Owned
|
% of
Preferred
B Stock
Ownership
|
# of
Preferred
C Stock
Owned
|
% of
Preferred
C Stock
Ownership
|
Total
Voting
Securities
|
% of
Ownership
of Voting
Securities
|
James E. Jenkins
|
20,000
|
0.00133%
|
NIL
|
0.00%
|
NIL
|
NIL
|
NIL
|
NIL
|
20,000
|
0.00015%
|
|
|
|
|
|
|
|
|
|
|
|
Scythian Mining Group
|
NIL
|
0.00%
|
1,000,000
|
100.00%
|
NIL
|
NIL
|
1,000,000
|
100.00%
|
100,000,000
|
74.6%
|
|
|
|
|
|
|
|
|
|
|
|
Abellant Trust
|
NIL
|
0.00%
|
NIL
|
0.00%
|
1,500,000
|
100%
|
NIL
|
NIL
|
15,000,000
|
11.2%
|
|
|
|
|
|
|
|
|
|
|
|
All executive officers and
directors as a group
(three persons)
|
20,000
|
0.00105%
|
1,000,000
|
100.00%
|
1,500,000
|
100%
|
1,000,000
|
100.00%
|
115,020,000
|
85.8%
|
(1)Unless otherwise noted, the security ownership disclosed in this table is of record and beneficial. The total voting securities as of June 2, 2020 is 134,020,000 shares and the percentage of ownership of voting securities above is based off of such number.
(2)The Series A Preferred Shares carry the following rights, preferences and privileges, each Series A Preferred Share has voting rights of 100-1, the equivalent of 100,000,000 voting shares prior to conversion, and each share of Series A Preferred Stock converts into shares of the Company’s common stock at a rate of one Series A Preferred Share for 15 shares of the Company’s common stock, for a total, on an as converted basis, of 15,000,000 common shares.
(3) The Series C Preferred Shares carry the following rights, preferences and privileges, each Series C Preferred Share has no voting rights (prior to conversion) and each share of Series C Preferred Stock converts into shares of the Company’s common stock at a rate of one Series A Preferred Share for 30 shares of the Company’s common stock, for a total on an as converted basis of 30,000,000 common shares.
(4)Barry Davis has voting and dispositive control over the Series A Preferred Shares and the Series C Preferred Shares as he is the Managing Director of Scythian Mining Group Limited.
(5)The Series B Preferred Shares carry the following rights, preferences and privileges, each Series B Preferred Share has voting rights (prior to conversion) of 10-1 and each share of Series B Preferred Stock converts into shares of the Company’s common stock at a rate of one Series B Preferred Share for 10 shares of the Company’s common stock, for a total, on an as converted basis, of 15,000,000 common shares.
(6)Victor Elias, trustee for the Abellant Trust, has voting and dispositive control over the Series B Preferred Shares.
(7)The security ownership in the above table reflects and accounts for all of the issuances and cancellations as described in this Form 8-K, some of which are still pending either issuance or cancellation.
Exemption from Registration. The shares of common stock and preferred stock referenced herein were issued in reliance upon an exemption from registration afforded under Section 4(2) of the Securities Act for transactions by an issuer not involving a public offering, or Regulation D promulgated thereunder, or Regulation S for offers and sales of securities outside the United States. The share issuances described herein are exempt transactions pursuant to Section 4(2) of the Securities Act as the acquisition was a private transaction by the Company and did not involve any public offering. Additionally, we relied upon the exemption afforded by Rule 506 of Regulation D of the Securities Act which is a safe harbor for the private offering exemption of Section 4(2) of the Securities Act whereby an issuer may sell its securities to an unlimited number of accredited investors, as that term is defined in Rule 501 of Regulation D. Further, we relied upon the safe harbor provision of Rule 903 of Regulation S of the Securities Act which permits offers or sales of securities by the Company outside of the United States that are not made to “U.S. Persons” or for the account or benefit of a “U.S. Person”, as that term is defined in Rule 902 of Regulation S.