The accompanying notes are an integral part of these condensed consolidated financial statements
The accompanying notes are an integral part of these condensed consolidated financial statements
The accompanying notes are an integral part of these condensed consolidated financial statements
Note: All share and per share information has been restated for all periods presented giving retroactive effect of the October 9, 2018 twenty-five for one reverse stock split and the October 10, 2018 increase of the authorized shares to 300,000,000 (see Note 10).
The accompanying notes are an integral part of these condensed consolidated financial statements
The accompanying notes are an integral part of these condensed consolidated financial statements
Notes to Condensed Consolidated Financial Statements (Unaudited)
As of December 31, 2018
1.
Condensed financial statements
The accompanying unaudited condensed consolidated financial statements are presented in United States dollars and are prepared using the accrual method of accounting which conforms to generally accepted accounting principles in the United States of America (“US GAAP”) for interim financial reporting and the instructions for Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all information and footnote disclosures necessary for a complete presentation of the financial position, results of operations, cash flows, and stockholders equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.
The unaudited condensed consolidated balance sheet of the Company as of December 31, 2018, and the related consolidated balance sheet of the Company as of March 31, 2018, which is derived from the Company’s audited financial statements, the unaudited condensed consolidated statement of operations for the three and nine months ended December 31, 2018 and 2017 and cash flows for the nine months ended December 31, 2018 and 2017 and the condensed consolidated statement of stockholders equity for the period of March 31, 2017 to December 31, 2018 are included in this document. These unaudited condensed consolidated financial statements should be read in conjunction with the March 31, 2018 audited financial statements and related notes included in the Company’s most recent Form 10-K as filed with the Securities and Exchange Commission on August 28, 2018.
Operating results for the nine months ended December 31, 2018 are not necessarily indicative of the results that can be expected for the year ending March 31, 2019.
2. Nature of operations
Viabuilt Ventures Inc. (“Company”) was incorporated as Madison Ventures Inc. in the State of Nevada as a for-profit company on September 14, 2009 and established a fiscal year end of March 31. The Company initially was engaged in the acquisition, exploration and development of natural resource properties. On February 27, 2015, the Company terminated the acquisition of the mineral claim and entered into a letter of intent with Ocure Ltd. (“Ocure”), pursuant to which the Company agreed to exclusively license certain technology from Ocure related to the development of products and devices for the treatment of anal fissures and on August 5, 2015, entered into an exclusive license agreement to Ocure’s semi-occlusive wound dressing for ambulatory treatment of acute and chronic anal fissures (the “Ocure License”). On July 9, 2015, the Company established the wholly-owned subsidiary Madison-IL Ltd., incorporated under the laws of the country of Israel to address the Company’s requirement for an Israeli company to operate and hold the assets associated with Ocure License. The Company elected January 4, 2017 to terminate the Ocure License and write off the remaining investment. On April 1, 2017, by consent action of a majority of the Company’s shareholders, Viabuilt sold Madison-IL, the wholly owned subsidiary, to a shareholder of the Company (see Note 4). On October 9, 2018, the Company changed its name from “Madison Ventures Inc.” to “Viabuilt Ventures Inc.” following regulatory approval. This was approved by consent action of a majority of the Company’s shareholders on July 5, 2018. The Company has no revenues, a limited operating history, and no current line of business.
The success of the Company is dependent upon the identification of products or services, the ability of the Company to obtain the necessary financing to develop such products or services, and upon future profitable operations.
Plan of Reorganization and Agreement of Securities Exchange
On April 23, 2018, the Company entered into a Plan of Reorganization and Agreement of Securities Exchange (the “Agreement”) with Firetainment Inc. (“Firetainment”), a Florida Corporation. The Agreement will result in the merger of Firetainment into Viabuilt with the corporation to survive as Firetainment Inc. Pursuant to the Agreement the Company agreed to issue Firetainment eight million (8,000,000) common shares, two-hundred million (200,000,000) prior to the October 9, 2018 twenty-five for one reverse stock split, in exchange for all of the shares of Firetainment. This issuance will result in a change in control of the Company. Under the Agreement, upon execution, Firetainment received the immediate right to the appointment of the directors and officers of the Company by the resignation of the existing sole director and officer of the Company and the simultaneous appointment of its own designee being the newly appointed sole director and officer. The closing of the Agreement will take place upon the delivery and completion of Firetainment audited statements for the period ending March 31, 2018, unless another time or date, or both, are agreed to in writing by the parties.
VIABUILT VENTURES INC.
Notes to Condensed Consolidated Financial Statements (Unaudited)
As of December 31, 2018
2. Nature of operations (continued)
Plan of Reorganization and Agreement of Securities Exchange (continued)
Also on April 23, 2018, the Board of Directors appointed William Shawn Clark as our Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer as well as our Sole Director. Concurrent with Mr. Clarks’ appointment, Eugenio Gregorio resigned as Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer as well as our Sole Director. Mr. Clark, the sole shareholder of Firetainment effective November 1, 2018, is now our sole officer and director.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods presented. The Company is required to make judgments and estimates about the effect of matters that are inherently uncertain. The Company regularly evaluates estimates and assumptions related to the useful life and recoverability of long-lived assets, deferred income tax asset valuations and loss contingences. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. Although, we believe our judgments and estimates are appropriate, actual future results may be different; if different assumptions or conditions were to prevail, the results could be materially different from our reported results.
Fair Value Estimates
Pursuant to the Accounting Standards Codification (“Codification”) topic 820, “
Disclosures About Fair Value of Financial Instruments
”, the Company records its financial assets and liabilities at fair value. The codification provides a framework for measuring fair value, clarifies the definition of fair value and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The codification establishes a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
|
Level 1 –
|
Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
|
|
|
|
|
Level 2 –
|
Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the asset/liability’s anticipated life.
|
|
|
|
|
Level 3 –
|
Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.
|
VIABUILT VENTURES INC.
Notes to Condensed Consolidated Financial Statements (Unaudited)
As of December 31, 2018
2. Nature of operations (continued)
Fair Value Estimates (continued)
The carrying values for accounts payable and due to related parties approximate their fair value due to their short maturities. The Company uses Level 2 inputs for its valuation methodology for the derivative liabilities.
Derivative Instruments
Our convertible debt or equity instrument contains an embedded derivative instrument, such as conversion option, which in certain circumstances may be required to be bifurcated from the associated host instrument and accounted for separately as a derivative instrument liability.
Our derivative instrument liabilities are re-valued at the end of each reporting period, with changes in the fair value of the derivative liability recorded as charges or credits to income, in the period in which the change occurs. For bifurcated conversion options that are accounted for as derivative instrument liabilities, we determine the fair value of these instruments using the Black-Scholes option pricing model. This model requires assumptions related to the remaining term of the instrument and risk-free rates of return, our current Common Stock price and expected dividend yield, and the expected volatility of our Common Stock price over the life of the option.
Share-based Compensation
Codification topic 718 “Stock Compensation” requires that the cost resulting from all share-based transactions be recorded in the financial statements and establishes fair value as the measurement objective for share-based payment transactions with employees and acquired goods or services from non-employees. The codification also provides guidance on valuing and expensing these awards, as well as disclosure requirements of these equity arrangements. The Company adopted the codification upon creation of the company and will expense share based costs in the period incurred. The Company has not adopted a stock option plan or completed a share-based transaction; accordingly no stock-based compensation has been recorded to date.
Recent Accounting Pronouncements
The Company’s management has evaluated all the recently issued, but not yet effective, accounting standards that have been issued or proposed by the FASB or other standards-setting bodies through the filing date of these financial statements and does not believe the future adoption of any such pronouncements will have a material effect on the Company’s financial position and results of operations.
3. Going concern
These financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of approximately $691,000 as of December 31, 2018 and further losses are anticipated in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. The Company’s operating expenditure plan for the next fiscal year ending March 31, 2019 will require cash. Management intends to finance operating costs over the next twelve months with the issuance of common shares and/or related party borrowings.
VIABUILT VENTURES INC.
Notes to Condensed Consolidated Financial Statements (Unaudited)
As of December 31, 2018
4. Investment in technology license
On January 4, 2017, the Company elected to terminate the Ocure License (as defined below) and write off the remaining investment in the license agreement. In a further step to exit this line of business on April 1, 2017, by consent action of a majority of the Company’s shareholders, Viabuilt sold Madison-IL, Ltd., the wholly owned subsidiary the Company incorporated in Israel on July 9, 2015 pursuant to the license agreement (the “Subsidiary”), to Pompeii Finance, a shareholder of the Company (see Note 5). Pompeii assumed the remaining assets and liabilities of Madison-IL which on March 31, 2017 aggregated 23,844 NIL and 250,996 NIL or approximately $6,566 and $69,115, respectively. On April 1, 2017, the Company recognized a net gain from the sale of Madison-IL of $48,911 ($62,549 of net liabilities eliminated, offset by $13,738 of other comprehensive losses from prior period foreign translation adjustments and $100 of proceeds received).
On February 27, 2015, we entered into a letter of intent (the “Letter of Intent”) with Ocure Ltd. (“Ocure”), an Israeli corporation, pursuant to which the Company would be obligated to exclusively license certain technology from Ocure under terms of a license agreement to be negotiated between the Company and Ocure. On August 5, 2015, as amended February 26, 2016, the company entered into an exclusive license agreement (the “License Agreement”) with Ocure and the Subsidiary. Pursuant to the License Agreement, Ocure granted to the Subsidiary an exclusive, sub-licensable, worldwide, license (the “License”) to Ocure’s semi-occlusive wound dressing for ambulatory treatment of acute and chronic anal fissure, pursuant to Ocure’s patents and patent applications (the “Licensed Technology”) and to its production, use, import, offer for sale, sell, lease, distribute, or otherwise commercialize the Licensed Technology for uses classified as medical devices, or those otherwise approved ultimately as an OTC (over-the-counter) remedy.
Under the License Agreement, the Company was obligated as consideration for the Licensed Technology to provide the Subsidiary $250,000 for the commercialization of the Licensed Technology, payable as four defined amounts over a fourteen month period ending on or before April 8, 2016 (collectively, the “First $250,000 Tranche”).
The Effective Date of the License Agreement occurred upon satisfaction of the Condition Precedent, as defined, and approval of the Agreement by the Chief Scientist of the Israeli Ministry of the Economy. The License Agreement Effective Date was November 11, 2015; the date approval of the Chief Scientist of the Israeli Ministry of the Economy was received. Upon the 6-month anniversary of the Effective Date, if the Company had paid the First $250,000 Tranche, then Ocure would have transferred certain assets, as defined, to the Subsidiary, and the Company would be obligated to provide the Subsidiary a second $250,000 tranche, payable as three defined amounts over a two month period.
The Company was in default of the First $250,000 Tranche aggregate payment due on April 8, 2016. Upon the six month anniversary of the Effective Date (May 11, 2016) no assets were transferred by Ocure to the Company’s subsidiary. As of March 31, 2017, the Company had advanced funds aggregating $221,850 to the Subsidiary and paid Ocure $10,000 under the License Agreement. As such, the Company was in breach of its obligations under the License Agreement, but had not received notice of termination from Ocure. Madison-IL had not achieved the projected development milestones and the Company elected January 4, 2017 to terminate the Ocure License.
As of March 31, 2017, the Subsidiary in furtherance of the commercialization of the Licensed Technology had incurred an aggregate of $266,722 of costs recorded as the investment in technology license. At March 31, 2017, the additional costs recorded as the investment in technology license represent vendor obligations payable by Madison-IL
Accordingly the investment in the technology license of $266,722, at January 4, 2017, was written off and recognized as an expense during the year ended March 31, 2017. As of December 31, and March 31, 2018, zero technology license costs are capitalized.
VIABUILT VENTURES INC.
Notes to Condensed Consolidated Financial Statements (Unaudited)
As of December 31, 2018
5. Due to related parties
Due to related parties at December 31 and March 31, 2018 consisted of the following:
|
|
December 31,
|
|
|
March 31,
|
|
|
|
2018
|
|
|
2018
|
|
|
|
|
|
|
|
|
Balance at beginning of period
|
|
$
|
272,381
|
|
|
$
|
236,942
|
|
Funds advanced
|
|
|
36,331
|
|
|
|
35,539
|
|
Funds repaid
|
|
|
-
|
|
|
|
(100
|
)
|
Debt transferred to long-term convertible note
|
|
|
(273,548
|
)
|
|
|
-
|
|
Balance at end of period
|
|
$
|
35,164
|
|
|
$
|
272,381
|
|
On July 3, July 8, July 10, August 12, November 12, November 13, 2014, January 23, February 27, March 5, May 16, June 17, June 30, July 6, August 13, November 17, 2015, February 13, February 20, March 7 and March 17, 2016, Ecogenics Limited, a shareholder of the Company, advanced the Company $2,000, $775, $1,460, $2,000, $2,000, $1,763, $2,000, $10,000, $3,525, $4,093, $2,755, $1,083, $5,000, $3,000, $2,041, $961, $5,000, $3,300, and $50,000, respectively, as a series of unsecured obligations for an aggregate total of $102,756. On December 24, 2018, Ecogenics transferred its debt of $102,756 to Thomas Wenz in a private transaction (see Note 7).
On August 11 and November 10, 2016, Pompeii Finance Corp., a shareholder of the Company, advanced the Company $6,500 and $5,250, respectively, as a series of unsecured obligations for an aggregate total of $11,750.
On April 1, 2017, by consent action of a majority of the Company’s shareholders, Viabuilt negotiated the sale of Madison-IL, following the termination of the Ocure License, to Pompeii Finance for $100 which was deducted from the funds owed to Pompeii for the above advances (see Note 8). On December 24, 2018, Pompeii transferred its debt of $11,650 to Thomas Wenz in a private transaction (see Note 7).
The net funds aggregating $114,406 were used to pay operating costs of the Company. The aggregate obligations did not bear any interest, had no fixed term, and was not evidenced by any written agreement. The shareholders were under no obligation to advance additional funds to the Company.
On December 3, December 24, 2015, January 4, January 6, January 15, November 10, 2016, February 7, March 30, September 7, 2017, February 7, and June 19, 2018 Morpheus Financial Corporation Limited, a shareholder of the Company, advanced the Company $37,473, $7,500, $7,326, $8,412, $49,975, $3,750, $5,000, $3,000, $15,000, $20,539 (advanced as 25,735 CND), and $1,167, respectively, as a series of unsecured obligations. The funds aggregating $159,142 were used to pay operating costs of the Company.
On January 8, 2016, the aggregate advances received and future advances from Morpheus were structured as a noninterest bearing unsecured non-recourse loan due January 31, 2017. The shareholder, if requested by the Company, agreed to advance additional funds to the Company up to a maximum of $250,000 subject to certain timing limitation as defined. The Company previously was negotiating an extension of the due date. On December 24, 2018, Morpheus transferred its debt of $159,142 to Thomas Wenz in a private transaction (see Note 7).
On June 29, July 24, July 11, July 31, August 7, August 17, September 12, September 14, October 17, October 22, November 7, and December 27, 2018 Firetainment Inc. advanced the Company $10,000, $1,458, $73, $600, $12,000, $150, $2,200, $1,900, $81, $89, $5,815, and $798, respectively, as a series of unsecured obligations. The obligation bears no interest, has no fixed term and is not evidenced by any written agreement. Firetainment is under no obligation to advance additional funds to the Company. On, January 3, and February 5, 2019 Firetainment advanced the Company $5,024 and 6,078, to pay operating costs of the Company, respectively.
VIABUILT VENTURES INC.
Notes to Condensed Consolidated Financial Statements (Unaudited)
As of December 31, 2018
6.
Long-term debt due to related party
Long term debt due to related party at December 31 and March 31, 2018 consisted of the following:
|
|
December 31,
|
|
|
March 31,
|
|
|
|
2018
|
|
|
2018
|
|
|
|
|
|
|
|
|
Balance at beginning of period
|
|
$
|
110,065
|
|
|
$
|
110,000
|
|
Funds advanced
|
|
|
-
|
|
|
|
65
|
|
Debt transferred to long-term convertible note
|
|
|
(110,065
|
)
|
|
|
|
|
Balance at end of period
|
|
$
|
-
|
|
|
$
|
110,065
|
|
On April 18, 2016, the Company entered into a five year non-interest bearing loan agreement for $110,000 with Cronus Overseas Corporation, a shareholder of the Company. Proceeds were used to fund the Technology acquisition and operations. If the loan is not repaid on or before April 15, 2021 the loan amount will be subject to default interest on the amount then outstanding of ten percent (10%) per month during the first 30 days of delinquency, fifteen percent (15%) per month during the 31 to 60 days of delinquency, twenty percent (20%) per month during the 61 to 90 days of delinquency (the “Default Interest”). If the loan amount remains unpaid after 90 days the lender, at its option, will be entitled to a default payment of one hundred fifty-nine percent (159%) of the then outstanding loan amount inclusive of the Default Interest. On September 25, 2017, Cronus paid on behalf of the Company $65 for operating costs of the Company. On December 24, 2018, Cronus transferred its debt of $110,065 to Thomas Wenz in a private transaction (see Note 7).
7.
Long-term convertible debt due to related party
|
|
|
|
|
|
December 31, 2018
|
|
|
|
Issued date
|
|
Maturity
|
|
Amount
|
|
|
Debt discount
|
|
|
Accrued interest
|
|
|
Net amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible Note
|
|
Dec. 26, 2018
|
|
Dec. 26, 2021
|
|
$
|
383,613
|
|
|
$
|
(377,307
|
)
|
|
$
|
757
|
|
|
$
|
7,063
|
|
Long-term convertible note, net of zero current portion
|
|
|
|
|
|
$
|
383,613
|
|
|
$
|
(377,307
|
)
|
|
$
|
757
|
|
|
$
|
7,063
|
|
Convertible Note for $383,613 was issued on December 26, 2018 to Thomas Wenz (“Wenz”), who is the sole debt holder of and the former shareholder of Firetainment, Inc. in exchange for and the cancellation of four unsecured obligations shown above as due to related parties (3 of the 4 obligations, see Note 5) and long term debt due to related party (see Note 6). The loan evidenced by a convertible promissory note has not been registered under any state or Federal securities law and matures December 21, 2021 (the “Wenz Debenture”). The Wenz Debenture accrues interest in arrears quarterly at the rate of 12% per annum; interest is due and payable within 30 days of the quarter. The Company can prepay the note and accrued interest or any portion thereof (the “Called Amount”) upon thirty day notice during which period Wenz can elect to convert all or a portion of the Called Amount into Common Stock. Wenz, at his option, at any time prior to maturity can convert the note, in whole or in part (the “Conversion Amount”), into Common Stock at a 25% discount to the closing market price on the specified conversion date (the “Conversion Price”); representing a beneficial conversion feature. The Conversion Amount is limited such that the number of shares of Common Stock held by Wenz and/or any of his affiliates or assignees after such requested conversion cannot exceed 4.99% of the then resulting issued and outstanding shares of the Company’s Common Stock. Due to this 4.99% limitation the unconverted Conversion Amount will remain outstanding under the original terms of the Wenz Debenture. In addition, Wenz’s ability to convert any amount into Common Stock is prohibited, at the option of the Company, if such conversion requires registration under any state or Federal securities law. In the event of default, Wenz may declare the principal immediately due and payable. The Company has accrued interest of $757 at December 31, 2018. As of December 31, 2018 the unamortized debt discount was $377,307.
VIABUILT VENTURES INC.
Notes to Condensed Consolidated Financial Statements (Unaudited)
As of December 31, 2018
8. Derivative liability
Guidance under Codification topic 815 to determine whether an instrument (or embedded feature) is indexed to an entity’s own stock, instruments which do not have fixed settlement provisions are deemed to be derivative instruments. The Company has issued a convertible note whose conversion price is based on a future market price. However, since the number of shares to be issued is not explicitly limited, the Company is unable to conclude that enough authorized and unissued shares are available to share settle the conversion option.
As a result, the conversion option is classified as a liability and bifurcated from the debt host and accounted for as a derivative liability in accordance with Codification topic 815 and will be re-measured at the end of every reporting period with the change in value reported in the statement of operations.
During the period ended December 31, 2018, the Company recorded a derivative liability with a fair value of $511,484 using the Black Scholes pricing model with a risk free rate of 2.6%, volatility of 581.64%, three year term, and dividend yield of zero as of December 31, 2018. The risk-free interest rate was based on rates established by the Federal Reserve Bank. The Company uses the historical volatility of its common stock to estimate the future volatility for its common stock. The expected life of the conversion feature of the note was based on the remaining contractual term of the note. The expected dividend yield was based on the fact that the Company has not paid dividends to its common stockholders in the past and does not expect to pay dividends to its common stockholders in the future.
At December 31, 2018, the balance of the derivative liability was $511,484.
9. Related party transactions
Employment Agreements
On April 2, 2014, Mr. Gene Gregorio was appointed the Company’s President, Chief Executive Officer, Chief Financial Officer and sole Director. On April 20, 2014, the Company agreed to issue Mr. Gregorio 40,000 (1,000,000 presplit) restricted shares of the Company’s Common Stock, valued at $25,000, based on the market close, as compensation for his services for an initial term of one year (the “April 20
th
Agreement”). On March 31, 2015, the Company issued Mr. Gregorio the agreed 40,000 (1,000,000 presplit) restricted shares of the Company’s Common Stock.
In addition, if during the term of the April 20
th
Agreement Mr. Gregorio’s direct efforts result in a consummated financing for the Company he shall be paid a 5.0% fee on such financing received by the Company, at his option, as either cash or shares of Company’s Common Stock at the offering price. Additionally, the Company will grant Mr. Gregorio a 2 year stock option priced at the current market trading price equal to 5% of the aggregate shares issued to investors within the financing.
On April 14, 2015, the April 20
th
Agreement with Mr. Gene Gregorio was extended for a second year under the same terms and conditions. Mr. Gregorio will be issued 40,000 (1,000,000 presplit) restricted shares of the Company’s Common Stock, valued at $25,000, based on the market close, as compensation for his services for the second year the extended April 20
th
Agreement. On August 9, 2016, the Company issued Mr. Gregorio the agreed 40,000 (1,000,000 presplit) restricted shares of the Company’s Common Stock for services rendered during the period April 21, 2015 to April 20, 2016.
On April 23, 2018, Mr. Gregorio resigned as the Company’s President, Chief Executive Officer, Chief Financial Officer and as the sole Director.
VIABUILT VENTURES INC.
Notes to Condensed Consolidated Financial Statements (Unaudited)
As of December 31, 2018
9. Related party transactions (continued)
Madison-IL
On March 31, 2017, the Company forgave the intercompany debt between Viabuilt Ventures, Inc. and Madison-IL Ltd which aggregated $231,850. The Company, established Madison-IL on July 9, 2015 as a wholly-owned subsidiary, incorporated under the laws of the country of Israel to address the Company’s requirement for an Israeli company to operate and hold the assets associated with Ocure License. Following the Company’s January 4, 2017 discussion to terminate the Ocure License and to dissolve or liquidate Madison-IL, by consent action of a majority of the Company’s shareholders, Viabuilt negotiated the sale of Madison-IL to Pompeii Finance, a shareholder of the Company, on April 1, 2017 for $100 which was deducted from the funds owed to Pompeii for related party advances (see Note 4). Pompeii assumed the remaining assets and liabilities of Madison-IL which on March 31, 2017 aggregated 23,844 NIL and 250,996 NIL or approximately $6,566 and $69,115, respectively. On April 1, 2017, the Company recognized a net gain from the sale of Madison-IL of $48,911 ($62,549 of net liabilities eliminated, offset by $13,738 of other comprehensive losses from prior period foreign translation adjustments and $100 of proceeds received).
Convertible debt
On December 26, 2018, the Company issued Convertible Note 1 for $383,613 to Thomas Wenz (“Wenz”), who is the sole debt holder of and the former shareholder of Firetainment, Inc. in exchange for four unsecured obligations shown above as due to related parties (3 of the 4 obligations, see Note 5) and long term debt due to related party (see Note 6). The loan evidenced by a convertible promissory note has not been registered under any state or Federal securities law and matures December 21, 2021 (the “Wenz Debenture”). The Wenz Debenture accrues interest in arrears quarterly at the rate of 12% per annum; interest is due and payable within 30 days of the quarter. The Company can prepay the note and accrued interest or any portion thereof (the “Called Amount”) upon thirty day notice during which period Wenz can elect to convert all or a portion of the Called Amount into Common Stock. Wenz, at his option, at any time prior to maturity can convert the note, in whole or in part (the “Conversion Amount”), into Common Stock at a 25% discount to the closing market price on the specified conversion date (the “Conversion Price”); representing a beneficial conversion feature. The Conversion Amount is restricted such that the number of shares of Common Stock held by Wenz and/or any of his affiliates or assignees after such requested conversion cannot exceed 4.99% of the then resulting issued and outstanding shares of the Company’s Common Stock. In addition, Wenz’s ability to convert any amount into Common Stock is prohibited, at the option of the Company, if such conversion requires registration under any state or Federal securities law. In the event of default, Wenz may declare the principal immediately due and payable.
10. Capital stock
The Company’s capitalization is 300,000,000 shares of Common Stock, with a par value of $0.001 per share, with 1,176,000 shares issued and outstanding at December 31 and March 31, 2018. On April 11, 2016, the Company effected a four for one forward stock split of our i) authorized and ii) issued and outstanding shares of Common Stock. Prior to the forward stock split the Company had 75,000,000 authorized shares of Common Stock, with a par value of $0.001 per share and 7,100,000 shares issued and outstanding at March 31, 2016. On October 9, 2018, the Company effected a twenty-five for one reserve stock split of our i) authorized and ii) issued and outstanding shares of Common Stock. Prior to the reverse stock split the Company had 300,000,000 authorized shares of Common Stock, with a par value of $0.001 per share and 29,400,000 shares issued and outstanding at September 30, 2018. Additional on October 10, 2018, the Company increased the number of authorized shares of Common Stock from 12,000,000 to 300,000,000.
As of December 31 and March 31, 2018, the Company has not granted any stock options or stock warrants.
11. Subsequent Events
On January 3, 2019, Firetainment Inc. advanced the Company $5,024 to pay operating costs.
On February 5, 2019, Firetainment Inc. advanced the Company $6,078 to pay operating costs.