As filed with the
Securities and Exchange Commission on May 29, 2015
Registration No. 333-_______
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
ZONZIA MEDIA, INC.
(Exact name of registrant in its charter)
Nevada |
|
2741 |
|
84-0871427 |
(State or other Jurisdiction of |
|
(Primary Standard Industrial |
|
(I.R.S. Employer |
Incorporation or Organization) |
|
Classification Code Number) |
|
Identification No.) |
ZONZIA MEDIA, INC.
74 N. Pecos Road, Suite D
Henderson, NV 89074
(702) 463-8528
(Address and telephone number of principal executive
offices and principal place of business)
Stanley L. Teeple
74 N. Pecos Road, Suite D
Henderson, NV 89074
(702) 463-8528
(Name, address and telephone number of agent
for service)
With a copy to
Wilson & Oskam, LLP
Attention: Chris A. Wilson, Esq.
9110 Irvine Center Drive, Irvine, CA 92618
Approximate date of proposed sale to the public: From time to time
after this Registration Statement becomes effective.
If any
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: x
If this
Form is filed to register additional securities for an offering pursuant to Rule 462(b) 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.
o
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. o
If this
Form is a post-effective amendment filed pursuant to Rule 462(d) 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. o
If delivery
of the prospectus is expected to be made pursuant to Rule 434, please check the following box. o
Indicate by a check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated
filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check
One)
Large Accelerated Filer o |
Accelerated Filer o |
Non-accelerated Filer o |
Smaller Reporting Company x |
CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities
To Be Registered |
|
Amount To Be Registered |
|
|
Proposed Maximum Offering Price Per Share |
|
|
Proposed Maximum
Aggregate Offering Price |
|
|
Amount Of Registration Fee (4) |
|
Common Stock, $0.001 par value per share(1) for sale by Selling Stockholders |
|
|
43,302,185 |
|
|
$ |
0.32 |
(2) |
|
$ |
13,856,699 |
|
|
$ |
1,610.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock, $0.001 par value per share(1) for sale by our Company |
|
|
46,875,000 |
|
|
$ |
0.32 |
(3) |
|
$ |
15,000,000 |
|
|
$ |
1,743 |
|
TOTAL |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,353.15 |
|
_______________
(1) |
Pursuant to Rule 416 of the Securities Act, this registration statement also registers such additional shares of common stock as may become issuable to prevent dilution as a result of stock splits, stock dividends or similar transactions. |
(2) |
This represents the price at which the securities are initially being offered by the selling shareholders. This also represents a price that is calculated in accordance with Rule 457(c) of the Securities Act of 1933 solely for the purpose of computing the amount of the registration fee. Our common stock is not traded on a national exchange, but is traded as of the date of this prospectus on the OTC Pink Current Information market. The offering price is based on the average of the bid and ask price of our common stock on that market on May 22, 2015. |
(3) |
The price at which securities are being offered by the Company. |
(4) |
Calculated in accordance with Rule 457(o) under the Securities Act of 1933, as amended. |
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 Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
SUBJECT TO COMPLETION, DATED __________
The information in this prospectus is not
complete and may be changed. The selling stockholders may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and is
not soliciting an offer to buy these securities in any state where the sale is not permitted.
PROSPECTUS
ZONZIA MEDIA, INC.
This prospectus relates to the resale of up to 43,302,185 shares
of our common stock by selling stockholders referenced herein. These shares may be offered for sale from time to time by the selling
stockholders acting as principal for their own accounts or in brokerage transactions at the fixed offering price of $0.32 until
such time that the Company’s common stock is quoted on the OTC Bulletin Board, OTCQB, NASDAQ or any other established trading
market, and thereafter, at prevailing market prices or privately negotiated prices. The selling stockholders reserve the right
to accept or reject, in whole or in part, any proposed purchase of shares. Accordingly, the amount of any applicable underwriting
discounts and commissions will be determined at the time of such sale by the selling stockholders. See “Selling Stockholders”
and “Plan of Distribution” in this prospectus. We will pay all of the expenses incident to the registration of the
shares offered under this prospectus, except for sales commissions and other expenses of selling stockholders applicable to the
sales of their shares.
This prospectus also relates to the direct offering of up to 46,875,000
shares of our common stock, to be sold at the price of $0.32 per share, which was determined by the Company’s Board of Directors
based upon recent trading activity and reflects the size of offering the Company expects to sell within two years from the initial
effective date of registration. The offering does not require that we sell a minimum number of shares; therefore not all of the
shares may be sold. The proceeds from the sale of these shares will be available for use by the company. However, the amount raised
may be minimal and there is no assurance that we will be able to raise sufficient amount to fund ongoing operations.
Our executive officers, as authorized by the Board of Directors,
may offer and sell the direct offering shares registered herein, with no commission or other remuneration payable to such executive
officers for any shares they may sell. In offering the securities on our behalf, our Board of Directors and officers will rely
on the safe harbor from broker-dealer registration set forth in Rule 3a4-1 under the Securities Exchange Act of 1934.
There is no established public trading market for our common stock.
The quotation of bid and ask prices of our common stock on the OTC Pink Current Information market under the symbol “ZONX”
does not constitute an established public trading market. At May 27, 2015, the closing bid price for one share of our common stock
was $0.33.
The offering will terminate on the earlier of (i) the date when
the selling stockholders have sold all of the 43,302,185 shares of common stock offered by them and the company has sold all of
the 46,875,000 shares of common stock offered by it; or (ii) when the Board of Directors decides it is in the best interest of
the Company to terminate the offering prior to the completion of the sale of all such shares.
An investment in our common stock is speculative and involves
a high degree of risk. Investors should carefully consider the risk factors and other uncertainties described in this prospectus
before purchasing our common stock. See “Risk Factors” beginning on page 4.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL, ACCURATE, OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is ____ __,
2015
TABLE OF CONTENTS
Page No.
Note Regarding Forward-Looking Statements |
1 |
Prospectus Summary |
2 |
Risk Factors |
4 |
Market and Other Data |
11 |
Use of Proceeds |
11 |
Determination of Offering Price |
12 |
Market For Our Common Stock and Other Related Stockholder Matters |
12 |
Our Business |
14 |
Description of Properties |
19 |
Legal Proceedings |
19 |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
19 |
Directors and Executive Officers |
27 |
Executive Compensation |
31 |
Certain Relationships and Related Transactions, and Director Independence |
37 |
Security Ownership of Certain Beneficial Owners and Management |
39 |
Selling Stockholders |
40 |
Dilution |
42 |
Plan of Distribution |
44 |
Description of Securities |
45 |
Shares Eligible For Future Sale |
47 |
Legal Matters |
48 |
Experts |
48 |
Where You Can Find More Information |
48 |
Index to Financial Statements |
F-1 |
AVAILABLE INFORMATION
This prospectus constitutes a part of a registration
statement on Form S-1 (together with all amendments and exhibits thereto, the “Registration Statement”) filed by us
with the SEC under the Securities Act of 1933, as amended (the “Securities Act”). As permitted by the rules and regulations
of the SEC, this prospectus omits certain information contained in the Registration Statement, and reference is made to the Registration
Statement and related exhibits for further information with respect to Zonzia Media, Inc. and the securities offered hereby. With
regard to any statements contained herein concerning the provisions of any document filed as an exhibit to the Registration Statement
or otherwise filed with the SEC, in each instance reference is made to the copy of such document so filed. Each such statement
is qualified in its entirety by such reference.
Unless otherwise specified, the information
in this prospectus is set forth as of _____ __, 2015, and we anticipate that changes in our affairs will occur after such date.
We have not authorized any person to give any information or to make any representations, other than as contained in this prospectus,
in connection with the offer contained in this prospectus. If any person gives you any information or makes representations in
connection with this offer, do not rely on it as information we have authorized. This prospectus is not an offer to sell our common
stock in any state or other jurisdiction to any person to whom it is unlawful to make such offer.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
All statements other than statements of historical facts included
or incorporated by reference in this report, including, without limitation, statements regarding our future financial position
and capital needs, business strategy, projected product development, budgets, projected revenues, projected costs and plans and
objectives of management for future operations, are forward-looking statements. Forward-looking statements generally can be identified
by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,”
“project,” “estimate,” “anticipate,” or “believe” or the negative thereof or any
variation thereon or similar terminology.
Such forward-looking statements are made based on management's beliefs,
as well as assumptions made by, and information currently available to, management. Although we believe that the expectations reflected
in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct.
Such statements are not guarantees of future performance or events and are subject to known and unknown risks and uncertainties
that could cause the Company's actual results, events or financial positions to differ materially from those included within the
forward-looking statements. Important factors that could cause actual results to differ materially from our expectations include,
but are not limited to:
|
· |
future financial and operating results, including projections of sales, revenue, income, expenditures, liquidity, and other financial items; |
|
· |
our ability to develop relationships with new customers and maintain or improve existing customer relationships; |
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· |
development of new products, brands and marketing strategies; |
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· |
current or future revenue and revenue projections; |
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· |
management’s goals and plans for future operations; |
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· |
our ability to improve operational efficiencies, manage costs and business risks and improve or maintain profitability; |
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· |
growth, expansion, diversification and acquisition strategies, the success of such strategies, and the benefits we believe can be derived from such strategies; |
|
· |
personnel; |
|
· |
the outcome of regulatory, tax and litigation matters; |
|
· |
overall industry and market performance; |
|
· |
effects of competition; and |
|
· |
other assumptions described in this report or underlying or relating to any forward looking statements. |
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date made. All subsequent written and oral forward-looking statements attributable to us,
or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements. Except as required by
law, we undertake no obligation to disclose any revision to these forward-looking statements to reflect events or circumstances
after the date made, changes in internal estimates or expectations, or the occurrence of unanticipated events.
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this
prospectus. Because this is only a summary, it does not contain all of the information that may be important to you. You should
read this entire prospectus and should consider, among other things, the matters set forth under “Risk Factors,” “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related
notes thereto appearing elsewhere in this prospectus before making your investment decision.
Unless the context otherwise requires, any reference to “the
Company,” “we,” “us,” or, “our” refers to Zonzia Media, Inc., a Nevada corporation.
ZONZIA MEDIA, INC.
Our Business
Zonzia Media, Inc. is a multi-platform entertainment company focused
on delivering compelling innovative content. We plan to distribute through a linear channel, a video-on-demand channel and an over-the-top
channel. Our viewer immersion technology will allow instant access to our available content. Upon the full launch of our delivery
platforms, we plan to deliver all kinds of innovative entertainment including:
| · | Original Programming – featuring documentaries, short films,
mini-series, and television shows of all genres produced and directed by well-known individuals within the entertainment industry
as well as up and comers. |
| · | Feature Films – full-length films from major studio productions
and independent film makers. |
| · | Television Shows – shows from all the major networks as well
as originally developed shows exclusively available on delivery platforms. |
| · | Sports, Concerts, and Live Events – streaming sports, music,
and other live entertainment events from around the world. |
Corporate History
We were originally incorporated in 1981
in the State of Nevada. Our principal executive offices are located at 74 N. Pecos Road, Suite D, Henderson, Nevada 89074,
and our telephone number at that location is (702) 463-8528. Our website address is www.zonziamedia.com. The information on our
website is not part of this prospectus.
Management
The management of Zonzia Media, Inc. includes:
Name |
|
Age |
|
Office |
Naresh Malik |
|
49 |
|
Chief Executive Officer |
Myles A. Pressey III |
|
58 |
|
Chairman of the Board and Chief Business Development Officer |
Lynwood A. Bibbens |
|
43 |
|
Chief Strategy Officer |
Johnathan F. Adair |
|
50 |
|
Chief Operating Officer |
Stanley L. Teeple |
|
63 |
|
Chief Compliance Officer |
Steven L. Sanders |
|
55 |
|
Director |
Frank McEnulty |
|
58 |
|
Chief Financial Officer |
James C. Walter Sr. |
|
70 |
|
Director |
Our Growth Strategy
We are committed to seeking cash flows through focusing on the following
keys to meeting our objectives:
|
· |
A strong ad operation setup internally to sell across all of our content delivery platforms. |
|
· |
A strong internet/external content strategy. |
|
· |
Strong original digital television content. |
|
· |
Attracting popular licensed television content. |
|
· |
A strong marketing strategy to promote our content on social media and top consumer websites. |
The Offering
This prospectus covers: (i) up to 43,302,185 shares of our common
stock that may be offered for resale by the persons named in this prospectus under the heading “Selling Stockholders”;
and (ii) the direct offering of up to 46,875,000 shares of our common stock to be issued and sold by us at a price of $0.32.
The 43,302,185 shares being offered for resale include: (i) shares
that were sold in private placements of our common stock; and (ii) shares to compensate our executives and our consultants, and
(iii) as consideration to extinguish debts and contractual payment obligations of the Company. We agreed to file a registration
statement with the U.S Securities and Exchange Commission providing for the resale of the shares sold to accredited third party
investors that are covered hereby.
In addition, this prospectus covers up to 46,875,000 shares of common
stock to be sold by the company at an offering price of $0.32 per share in a direct public offering.
We note for potential investors
that, pursuant to this Registration Statement, some of the Company’s executive officers may sell shares they own
personally, and will also be seeking to sell shares of stock offered by the Company. This presents a conflict of interest in
that each such executive officer could be presented an opportunity to sell shares either personally or on behalf of the
Company, to a given potential investor. The Company’s management has considered this conflict and has resolved upon the
following practices in effort to minimize the practical effects of this conflict. In general, executive officers will make
sales of shares they hold personally through their individual brokers, and not as principal acting for their own accounts,
and accordingly, will not directly solicit potential investors with offers to sell stock they hold personally. In addition,
the executive officers will prioritize any potential offers of sales of significant amounts of stock, in amounts of $30,000
or higher, to be made on behalf of the Company and will not personally attempt, in any event, to sell their own shares
representing greater amounts to potential investors.
Offering Summary
Common Stock Offered by Zonzia Media, Inc. |
Up to 46,875,000 shares, to be sold by the Company on a best-efforts basis with no minimum subscription requirement, at a purchase price of $0.32 per share. |
|
|
Common Stock Offered by Selling Stockholders |
Up to 43,302,185 shares of our common stock, all of which are being
offered for resale by selling stockholders, including third party investors and shares issued to our officers, employees and consultants.
|
Common Stock Outstanding
|
As of the date of this prospectus, there are 226,822,131 shares
issued and outstanding. If the direct offering is fully subscribed, there would be 273,697,131 shares issued and outstanding.
|
Offering Price |
The price of the shares being offered by us is $0.32 per share.
The shares being offered by selling stockholders may be offered
and sold from time to time at prevailing market prices or privately negotiated prices.
|
Termination of the Offering |
The offering will conclude when the selling shareholders have sold
all 43,302,185 shares of common stock offered by them and the company has sold all of the 46,875,000 shares of common stock offered
by it. The company may, in its sole discretion, decide to terminate the registration of the shares offered by the company.
|
Use of Proceeds |
We intend to use the net proceeds from the sale of shares by us
to repay certain indebtedness and for working capital and other general corporate purposes to fund our growth strategy. We may
also use a portion of the net proceeds to acquire other businesses or technologies. We will not receive any proceeds from shares
sold by the selling stockholders. See “Use of Proceeds.”
|
Risk Factors |
An investment in our common stock is highly speculative and involves a high degree of risk. Investors should carefully consider the risk factors and other uncertainties described in this prospectus before purchasing our common stock. See “Risk Factors” beginning on page 4. |
|
|
Fees and Expenses |
We will pay all expenses incident to the registration of such shares, except for sales commissions and other expenses of selling stockholders. |
|
|
RISK FACTORS
An investment in our common stock involves a high degree of risk.
You should carefully consider the following risk factors in addition to other information in this prospectus, including the financial
statements and the related notes thereto, and in our other filings with the SEC before purchasing our common stock. The risks and
uncertainties described below are those that are currently deemed to be material and specific to our Company and industry. If any
of these risks actually occur, our business may be adversely affected, and you may lose all or part of your investment.
Risks Related to Our Business and Industry
Our sole operation has experienced a
net loss since its inception in May 2014, and because it has a limited operating history, our ability to fully and successfully
develop our business is unknown.
We do not have a significant operating history
with which investors can evaluate its business. We have only generated de minimis click-through revenue and have not fully
launched our content delivery platforms while incurring expenses.
Our ability to successfully develop our content
and attract customers on favorable terms necessary to realize consistent, meaningful revenues and profit has not been established
and cannot be assured. For us to achieve success, our services must receive broad market acceptance by consumers. Without this
market acceptance, we will not be able to generate sufficient revenue to continue our business operation, and our business may
fail.
Our ability to achieve and maintain profitability
and positive cash flow is dependent upon our ability to generate revenues, manage development costs and expenses and compete successfully
with our direct and indirect competitors.
Based on current plans, we expect to incur
operating losses in future periods. This will happen because there are expenses associated with the development, marketing and
provision of our services. As a result, we may not generate significant net income from operations in the future. Failure to generate
significant net income from operations in the near future may cause us to reduce or cease activities.
Our company’s independent auditors
have expressed substantial doubt about our ability to continue as a going concern.
We have incurred losses and during our short
history we have been in a development phase without material revenues or operational cash flows. Additionally, we currently have
limited viable funding sources to pay our on-going obligations. Next, we do not currently have, and do not expect to have, recurring
revenue generating sources until we fully launch our advertising business while continuing to incur operating expenses. These factors,
along with having no substantial firm funding commitments, result in substantial doubt about our ability to continue as a going
concern. As such, our independent auditors included an explanatory paragraph regarding the substantial doubt about the ability
to continue as a going concern. The financial statements contain additional note disclosures describing the circumstances that
led to the inclusion of the explanatory paragraph.
We expect to generate a significant portion
of our near-term revenues from advertising, and a reduction in spending by or loss of advertisers could seriously harm our business.
In the near term (the next 12 to 18 months),
we expect nearly all of our revenue will be generated from advertisers. Our advertisers can generally terminate their contracts
with us at any time. Advertisers will not continue to do business with us if their investment in advertising with us does not generate
sales leads, and ultimately customers, or if we do not deliver their advertisements in an appropriate and effective manner. If
we are unable to remain competitive and provide value to our advertisers, they may stop placing ads with us, which would adversely
affect our revenues and business.
In addition, expenditures by advertisers tend
to be cyclical, reflecting overall economic conditions and budgeting and buying patterns. Adverse macroeconomic conditions can
also have a material negative impact on the demand for advertising and cause our advertisers to reduce the amounts they spend on
advertising, which could adversely affect our revenues and business.
We face intense competition. If we do
not continue to innovate and provide content and products that are useful to users, we may not remain competitive, and our revenues
and operating results could be adversely affected.
Our business is rapidly evolving and intensely
competitive, and is subject to changing technologies, shifting user needs, and frequent introductions of new products and services.
Our ability to compete successfully depends heavily on providing products and services that provide enjoyable experiences and entertain
users. The competitive pressure to innovate encompasses providing a wider range of products and services and relevant and entertaining
content that may not have been a part of previous core business plans.
We have many competitors in different industries,
most of which have stronger band recognition, longer operating histories, and significantly more financial resources. Our competitors
can use their experience and resources in ways that could affect our competitive position, including by making acquisitions, investing
aggressively in research and development, aggressively initiating intellectual property claims (whether or not meritorious) and
competing aggressively for advertisers and consumers.
Our competitors are constantly developing innovations
content delivery, online advertising, and web-based products and services. The development of new, technologically advanced products
is also a complex and uncertain process requiring high levels of innovation and investment, as well as the accurate anticipation
of technology, market trends and consumer needs. As a result, we may not be able to compete on a timely basis, particularly with
competitors with greater financial resources and longer operating histories. If we are unable to provide quality products and services,
then acceptance rates for our products and services could decline and affect consumer and advertiser perceptions of our brand.
In addition, these new products and services may present new and difficult technological and legal challenges, and we may be subject
to claims if users of these offerings experience service disruptions or failures or other issues. Our operating results would also
suffer if our innovations are not responsive to the needs of our users, advertisers, are not appropriately timed with market opportunities,
or are not effectively brought to market. If our competitors are more successful than we are in developing compelling products
or in attracting and retaining users, advertisers, and content providers, our revenues and operating results could be adversely
affected.
Our business depends on a strong brand,
and failing to maintain and enhance our brand would hurt our ability to expand our base of users, advertisers, and other partners.
We are in the early stages of building a strong
brand identity that will be critical to the success of our business. We believe that the importance of brand recognition remains
crucial due to the relatively low barriers to entry in the internet market. Our brand may be negatively impacted by a number of
factors, including data protection and security issues, service outages, and product malfunctions. Failure to increase, maintain,
and continually enhance our brand, which likely will require us to incur significant, and potentially excessive, expenses will
adversely affect our business in a material manner.
If we fail to users to our viewer and
consumer base our revenue, financial results, and business may be significantly harmed.
Our user base size and our users’ level
of engagement are critical to our success. Our financial performance will be significantly determined by our success in adding,
retaining and engaging active users. If we are unable to attract and publish engaging content, then our active user rate will decline,
and we will be unable to attract advertising and ecommerce customers. If individual consumers across our target audience do not
perceive our products to be useful, reliable and trustworthy, then we may not be able to attract or retain users or otherwise maintain
or increase the frequency and duration of their engagement. We may not be able to expand our active user base to levels to generate
positive cash flows from operations. Consumer engagement patterns are constantly evolving and difficult to measure, and if we cannot
provide timely evolution of our brands, then our financial results will severely harmed. Any number of factors could potentially
negatively affect user retention, growth and engagement, including if:
|
· |
users increasingly engage with other products or activities; |
|
· |
we fail to introduce content and other video products that users find engaging; |
|
· |
consumer experience is diminished as a result of the decisions we make with respect to the frequency, prominence and size of ads that we display or the quality of the ads displayed; |
|
· |
we are unable to manage and prioritize information to ensure users are presented with content that is interesting, useful and relevant to them; |
|
· |
there are adverse changes in our products that are mandated by legislation, regulatory authorities or litigation, including settlements or consent decrees; or |
|
· |
technical or other problems prevent us from delivering our products in a rapid and reliable manner or otherwise affect the user experience, such as any failure to prevent spam or similar content. |
Our new products and changes to existing
products could fail to attract or retain users or generate revenue.
Our ability to retain, increase and engage
our user base and to increase our revenue depends heavily on our ability to provide successful new product offerings, such as original
television or other videos, both independently and in conjunction with developers or other third parties. Our product reviews and
introductions may include new and unproven products, including with which we have little or no prior experience. If new or enhanced
products fail to engage users, developers or marketers, then we may fail to attract or retain users or to generate sufficient revenue
or operating margin, and our business may be adversely affected.
We prioritize user growth and engagement
and the user experience over short-term financial results.
We frequently make product decisions that may
reduce our short-term revenue or profitability if we believe that the decisions are consistent with our mission and benefit the
aggregate user experience and will thereby improve our financial performance over the long term. For example, from time to time
we may change the size, frequency or relative prominence of ads in order to improve ad quality and overall user experience. Similarly,
from time to time we adjust our websites to deliver the most relevant content to our users, which may adversely affect the distribution
of content of developers and advertising customers and could reduce their incentive to invest in their marketing efforts on websites
and those of our brand partners. We also may introduce changes to existing content mixes to attract new targeted demographics that
direct previous users away from our sites. These decisions may not produce the long-term benefits that we expect, in which case
our user growth and engagement, our relationships with developers and advertising customers and our business and results of operations
could be harmed.
Our dependence on sole vendors subjects
us to commercial risk.
Currently, all of our advertising sales, support,
revenue generation and tracking and collections efforts are provided by one third party vendor. If our relationship with either
of these service providers erodes or is harmed, that would likely result in the interruption of our business plan and likely will
result in adverse impacts on our financial results and future performance; however, we have backup relationships that we believe
would limit and mitigate our exposure to some degree.
A variety of new and existing U.S. and
foreign laws could subject us to claims or otherwise harm our business.
We are subject to numerous U.S. and foreign
laws and regulations covering a wide variety of subject matters. New laws and regulations (or new interpretations of existing laws
and regulations) also may impact our business. The costs of compliance with these laws and regulations are high and are likely
to increase in the future. Any failure on our part to comply with these laws and regulations can result in negative publicity and
diversion of management time and effort and may subject us to significant liabilities and other penalties.
Furthermore, many of these laws were adopted
before the advent of the internet and related technologies and, as a result, do not contemplate or address the unique issues of
the internet and related technologies. The laws that do reference the internet are being interpreted by the courts, but their applicability
and scope remain uncertain. For example, the laws relating to the liability of providers of online services are currently unsettled
both within the U.S. and abroad. Claims may be filed against us under both U.S. and foreign laws for defamation, invasion of privacy
and other tort claims, unlawful activity, patent, copyright and trademark infringement or other theories based on the nature and
content of the materials searched and the ads posted by our users, our products and services or content generated by our users.
In addition, the Digital Millennium Copyright
Act has provisions that limit, but do not necessarily eliminate, our liability for listing or linking to third-party websites that
include materials that infringe copyrights or other rights, so long as we comply with the statutory requirements of this act. Any
future legislation impacting these safe harbors may adversely impact us. Various U.S. and international laws restrict the distribution
of materials considered harmful to children and impose additional restrictions on the ability of online services to collect information
from minors. In the area of data protection, many states have passed laws requiring notification to users when there is a security
breach for personal data, such as California’s Information Practices Act. We face similar risks and costs as our products
and services are offered in international markets and may be subject to additional regulations.
We may be subject to legal liability
associated with providing online services or content.
We will provide a wide variety of products
that enable users to exchange information and product and service providers to advertise and engage in various online activities
both domestically and internationally. The law relating to the liability of providers of these online services and products for
activities of their users is still somewhat unsettled both within the U.S. and internationally. Claims may be threatened or brought
against us for defamation, negligence, breaches of contract, copyright or trademark infringement, unfair competition, unlawful
activity, tort, including personal injury, fraud or other theories based on the nature and content of information that we publish
or to which we provide links or that may be posted online or generated by us or by third parties, including our users. In addition,
we may be subject to domestic or international actions alleging that certain content we have generated or third-party content that
we have made available within our services violates U.S. and non-U.S. law.
Interruption or failure of our information
technology and communications systems could hurt our ability to effectively provide our products and services, which could damage
our reputation and harm our operating results.
The availability of our products and services
depends on the continuing operation of our information technology and communications systems. Our systems are vulnerable to damage
or interruption from earthquakes, terrorist attacks, floods, fires, power loss, telecommunications failures, computer viruses,
computer denial of service attacks or other attempts to harm our systems.
The occurrence of a natural disaster could
result in lengthy interruptions in our service. In addition, our products and services are highly technical and complex and may
contain errors or vulnerabilities. Any errors or vulnerabilities in our products and services, or damage to or failure of our systems,
could result in interruptions in our services, which could reduce our revenues and profits and damage our brand.
Our operating results may fluctuate,
which makes our results difficult to predict and could cause our results to fall short of expectations.
Our operating results may fluctuate as a result
of a number of factors, many outside of our control, and we have a short operating history. As a result, comparing our operating
results on a period-to-period basis will take time as we build our history and may not be meaningful in any period. As a result,
you should not rely on our past results as an indication of our future performance. Our quarterly, year-to-date and annual revenues
and expenses may differ significantly from our projected rates. Any of these events could cause our stock price to fall. Each of
the risk factors listed in this section in addition to the following factors may affect our operating results:
|
· |
our ability to continue to attract users to our websites and satisfy existing users on our websites; |
|
· |
our ability to monetize traffic on our websites; |
|
· |
revenue fluctuations caused by changes in property mix, platform mix and geographical mix; |
|
· |
the amount and timing of operating costs and expenses and capital expenditures related to the maintenance and expansion of our businesses, operations and infrastructure; |
|
· |
our focus on long-term goals over short-term results; |
|
· |
our ability to keep our websites operational at a reasonable cost and without service interruptions; and |
|
· |
because our business is changing and evolving, and because of our lack of historical operating results, predicting our future operating results is not reliable. In addition, advertising spending has historically been cyclical in nature, reflecting overall economic conditions, as well as budgeting and buying patterns. |
We rely on highly skilled personnel,
and if we are unable to retain or motivate key personnel, hire qualified personnel or maintain our corporate culture, then we may
not be able to grow effectively.
Our performance largely depends on the talents
and efforts of highly skilled individuals. Our future success depends on our continuing ability to identify, hire, develop, motivate
and retain highly skilled personnel for all areas of our organization. Competition in our industry for qualified employees is intense.
In addition, our compensation arrangements, such as our equity award programs, may not always be successful in attracting new employees
and retaining and motivating our existing employees. Our continued ability to compete effectively depends on our ability to attract
new employees and to retain and motivate our existing employees.
Claims that current or future technologies
used in our products and services infringe or misappropriate the proprietary rights of others could adversely affect our ability
to use those technologies and cause us to incur additional costs.
We could be subject to third party infringement
claims if third parties challenge our use of a particular technology or proprietary information in our sites. Any litigation, regardless
of its outcome, would likely result in the expenditure of significant financial resources and the diversion of management’s
time and resources. In addition, litigation in which we are accused of infringement may cause negative publicity, adversely impact
prospective customers and require us to develop non-infringing technology, make substantial payments to third parties or enter
into royalty or license agreements, which may not be available on acceptable terms or at all.
We may acquire technologies or companies
in the future, and such acquisitions could disrupt our business and dilute our stockholders’ interests.
We may acquire additional technologies or other
companies in the future, and we cannot provide assurances that we will be able to successfully integrate their operations or that
the cost savings we anticipate will be fully realized. Entering into an acquisition or investment entails many risks, any of which
could materially harm our business, including:
|
· |
the diversion of management’s attention from other business concerns; |
|
· |
the failure to effectively assimilate the acquired technology, employees or other assets of the acquired company into our business; |
|
· |
the loss of key employees from either our current business or the acquired business; and |
|
· |
the assumption of significant liabilities of the acquired company. |
If we complete acquisitions, we may dilute
the ownership of current stockholders. In addition, achieving the expected returns and cost savings from our past and future acquisitions
will depend in part on our ability to integrate the products and services, technologies, research and development programs, operations,
sales and marketing functions, finance, accounting and administrative functions and other personnel of these businesses into our
business in an efficient and effective manner. Any businesses that we acquire may not perform at anticipated levels. If we are
unable to successfully integrate acquired businesses, then our anticipated revenues may be lower, and our operational costs may
be higher.
Our strategy for growth may include joint
ventures, strategic alliances and mergers and acquisitions, which could be difficult to manage.
The successful execution of our growth strategy
will depend on many factors, including identifying suitable companies, negotiating acceptable terms, successfully consummating
the corporate relationships and obtaining the required financing on acceptable terms. We may be exposed to risks that we may incorrectly
assess new businesses and technologies. We could face difficulties and unexpected costs during and after the establishment of corporate
relationships.
Acquisitions could be foreign acquisitions,
which would add additional risks, including political, regulatory and economic risks, related to specific countries as well as
currency risks.
Our insurance may not be sufficient.
We will carry insurance that we consider adequate
having regard to the nature of the risks of doing business and costs of coverage. We may not, however, be able to obtain insurance
against certain risks or for certain products or other resources located from time to time in certain areas of the world to the
extent that we may be forced to rely on outside providers. Currently, we are not fully insured against all possible risks, nor
are all such risks insurable. Our insurance coverage may not be adequate.
Some of our proprietary intellectual
property is not protected by any patent or patent application, and, despite our precautions, it may be possible for third parties
to obtain and use such intellectual property without authorization.
The steps we have taken and may take in the
future may not prevent misappropriation of our solutions or technologies, particularly in respect of officers and employees who
are no longer employed by us or in foreign countries where laws or law enforcement practices may not protect our proprietary rights
as fully as in the United States.
We may seek to protect our proprietary
intellectual property through contracts, including, when possible, confidentiality agreements and inventors’ rights agreements
with our customers and employees.
We intend to seek to protect proprietary intellectual
property in part by confidentiality agreements and, if applicable, inventors’ rights agreements with strategic partners and
employees, although such agreements have not been and may not be put in place in every instance. These agreements may not adequately
protect our trade secrets and other intellectual property or proprietary rights. There is also a risk that the parties that enter
into such agreements with us may breach them, that we will not have adequate remedies for any breach or that such persons or institutions
will assert rights to intellectual property arising out of these relationships.
Our failure to obtain or maintain the
right to use certain intellectual property may negatively affect our business.
Our future success and competitive position
depends in part on our ability to obtain or maintain certain proprietary intellectual property used in our solutions. This may
be achieved, in part, by prosecuting claims against others who we believe are infringing our rights and by defending claims of
intellectual property infringement brought by others. While we are not currently engaged in any intellectual property litigation,
in the future we may commence lawsuits against others if we believe that they have infringed our rights, or we may become subject
to lawsuits alleging that we have infringed the intellectual property rights of others. For example, to the extent that we have
previously incorporated third party technology and/or know-how into certain systems for which we do not have sufficient license
rights, we could incur substantial litigation costs, be forced to pay substantial damages or royalties or even be forced to cease
operations in the event that any owner of such technology or know-how were to challenge our subsequent installation of such system
(and any progeny thereof). In addition, to the extent that we discover or have discovered third party patents that may be applicable
to machines or systems in development, we may need to take steps to avoid claims of possible infringement, including obtaining
non-infringement or invalidity opinions and, when necessary, re-designing or re-engineering machines and/or systems. However, we
cannot assure you that these precautions will allow us to successfully avoid infringement claims. Our involvement in intellectual
property litigation could result in significant expense to us, adversely affect the development of our waste remediation intellectual
property and divert the efforts of our technical and management personnel, whether or not such litigation is resolved in our favor.
In the event of an adverse outcome in any such litigation, we may, among other things, be required to:
|
· |
pay substantial damages; |
|
· |
cease the development, manufacture, use, sale or importation of machines or systems or components thereof that infringe on other patented intellectual property; |
|
· |
expend significant resources to develop or acquire non-infringing intellectual property; |
|
· |
discontinue processes or systems incorporating infringing technology; or |
|
· |
obtain licenses to the infringing intellectual property. |
Any such development, acquisition or license
could require the expenditure of substantial time and other resources and could have a material adverse effect on our business,
results of operations and financial condition.
Risks Related to our Common Stock
Our executive officers and directors
collectively have the power to control our management and operations, and have a significant majority in voting power on all matters
submitted to the stockholders of the company.
Management and affiliates of our management
currently beneficially own a majority of our outstanding common stock. Consequently, management has the ability to influence control
of the operations of the Company and, acting together, will have the ability to influence or control substantially all matters
submitted to stockholders for approval, including:
|
· |
Election of our board of directors; |
|
· |
Removal of directors; |
|
· |
Amendment to the Company’s Articles of Incorporation or Bylaws; and |
|
· |
Adoption of measures that could delay or prevent a change in control or impede a merger, takeover or other business combination. |
These stockholders have complete control over
our affairs. Accordingly, this concentration of ownership by itself may have the effect of impeding a merger, consolidation, takeover
or other business consolidation, or discouraging a potential acquirer from making a tender offer for the Common Stock.
Our executive officers face a conflict
since they will be seeking to sell shares offered hereunder on behalf of the Company, and may also sell shares that they hold personally
that are registered hereby.
This Registration Statement covers both the
offering of shares of our common stock to the public and the sale of shares held by selling stockholders, including some of the
Company’s executive officers. Thus, the Company’s executive officers may sell shares they own personally, and will
also be seeking to sell shares of stock offered by the Company. This presents a conflict of interest in that each such executive
officer could be presented an opportunity to sell shares either personally or on behalf of the Company, to a given potential investor.
If an executive officer prioritized the sale of his or her own shares, this could harm the Company.
Our common stock has not been widely
traded, and the price of our common stock may fluctuate substantially.
To date, there has been a limited public market
for shares of our common stock, with limited trading. An active public trading market may not develop or, if developed, may not
be sustained. The current market price of our common stock and any possible subsequent listing on the NASDAQ Market or other securities
exchange, if and when we are successful in doing so, will be affected by a number of factors, including those discussed above.
Future sales of our common stock by existing
stockholders could cause our stock price to decline.
If our existing stockholders sell substantial
amounts of our common stock in the public market, then the market price of our common stock could decrease significantly. The perception
in the public market that our stockholders might sell shares of common stock also could depress the market price of our common
stock. There are approximately 226 million shares of our common stock outstanding, of which approximately 2,055,833 shares are
currently freely tradable. The balance of our shares currently contains certain restrictions on resale. We may in the future issue
and register additional shares of our common stock that might be freely transferable at the time of such transaction.
A decline in the price of shares of our common
stock might impede our ability to raise capital through the issuance of additional shares of our common stock or other equity securities.
We do not expect to pay dividends in
the foreseeable future, and any return on investment may be limited to the value of our common stock.
We do not anticipate paying dividends on our
common stock in the foreseeable future. The payment of dividends on our common stock will depend on our earnings, financial condition,
opportunities to invest in the growth of our business and other business and economic factors affecting us at such time as our
Board of Directors may consider relevant. If we do not pay dividends, then our common stock may be less valuable because a return
on investment will occur only if our stock price increases.
Our charter documents may discourage
or prevent a change in control, even if an acquisition would be beneficial to our stockholders, which could adversely affect our
stock price and prevent attempts by our stockholders to replace or remove our current management.
Our current articles of incorporation and bylaws,
which will remain in effect after the effective date of this Report, contain provisions that could delay or prevent a change in
control of our company or changes in our Board of Directors that our stockholders might consider favorable and limit the price
that certain investors might be willing to pay in the future for our securities. Among other things, these provisions:
|
· |
Authorize the issuance of preferred stock that can be designated and issued by our Board of Directors without prior stockholder approval and with rights senior to those of our common stock. |
|
· |
Require advance written notice of stockholder proposals and director nominations to be considered at stockholders’ meetings. |
These and other provisions in our articles
of incorporation and bylaws could make it more difficult for stockholders or potential acquirers to obtain control of our Board
of Directors or to initiate actions that are opposed by our then current Board of Directors, including a merger, tender offer or
proxy contest involving our company. Any delay or prevention of a change in control transaction or changes in our Board of Directors
could cause the market price of our common stock to decline.
We are authorized to issue preferred
stock, which could adversely affect the value of shares of our common stock.
Our articles of incorporation authorize us
to issue up to 2,000,000,000 shares of common stock and 200,000,000 shares of preferred stock, approximately 100,000,000 shares
of which preferred shares are available for future issuance as of the date of this Report. Our Board of Directors could designate
and issue preferred stock, in one or more series, the terms of which may be determined at the time of issuance by our Board of
Directors, without further action by stockholders. Terms of preferred stock could include voting rights, including the right to
vote as a series on particular matters, preferences as to dividends and liquidation, conversion rights, redemption rights and sinking
fund provisions. The designation of preferred stock could have a material adverse effect on the rights of holders of our common
stock and therefore could reduce the value of shares of our common stock. In addition, specific rights granted to future holders
of preferred stock could be used to restrict our ability to merge with, or sell our assets to, a third party. The ability of our
Board of Directors to issue preferred stock could have the effect of rendering more difficult, delaying, discouraging, preventing
or rendering more costly an acquisition of our company or a change in control of our company, thereby preserving control of our
company by current management.
Our common stock is deemed to be a “penny stock,”
which may make it more difficult for investors to sell their shares due to suitability requirements.
Our common stock is deemed to be a “penny
stock” as that term is defined in Rule 3a51-1 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). This classification reduces the potential market for our common stock by reducing the number of potential investors.
This would be detrimental to the development of active trading in our common stock and make it more difficult for investors in
our common stock to sell shares to third parties or to otherwise dispose of them. This also could cause our stock price to decline
or impede any increase in price. Penny stocks are stocks:
|
· |
with a price of less than $4.00 per share; |
|
· |
that are not traded on a “recognized” national exchange; or |
|
· |
in issuers with net tangible assets less than $2 million (if the issuer has been in continuous operation for at least three years) or $10 million (if the issuer has been in continuous operation for less than three years), or with average revenues of less than $6 million for the last three years. |
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 broker-dealers will
not offer penny stocks to their clients. Moreover, many investors are disinclined to purchase penny stocks.
If we raise additional funds through the issuance of equity
or convertible debt securities, your ownership will be diluted.
If we raise additional funds through the issuance
of equity or convertible debt securities, the percentage ownership held by existing stockholders will be reduced, and new securities
may contain certain rights, preferences or privileges that are senior to those of our common stock. Furthermore, any additional
equity financing may be dilutive to stockholders, and debt financing, if available, may involve restrictive covenants, which may
limit our operating flexibility with respect to certain business matters.
Grants of stock options and other rights to our employees
may dilute your stock ownership.
We plan to attract and retain employees in
part by offering stock options and other purchase rights for a significant number of shares of our common stock. We intend to grant
stock options to certain officers and directors of our company. The issuance of shares of common stock pursuant to such stock options,
and stock options issued in the future, will have the effect of reducing the percentage of ownership in our company of our then
existing stockholders.
FINRA sales practice requirements also
may limit a stockholder’s ability to buy and sell our stock.
In addition to the “penny stock”
rules described above, the Financial Industry Regulatory Authority (known as “FINRA”) has adopted rules that
require 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. Before recommending speculative 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 believes that there is a high probability that speculative low
priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers
to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse
effect on the market for our shares.
MARKET AND OTHER DATA
The industry and market data contained in this prospectus are based
on independent industry publications, reports by market research firms or other published independent sources and, in each case,
are believed by us to be reliable and accurate. However, industry and market data is subject to change and cannot always be verified
with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering
process and other limitations and uncertainties inherent in any statistical survey. In addition, consumption patterns and customer
preferences can and do change. The industry and market data sources upon which we relied are publicly available and were not prepared
for our benefit or paid for by us.
USE OF PROCEEDS
With respect to shares of our common stock that
may be offered and sold from time to time by the selling stockholders, we will receive no proceeds from the sale of those shares
of common stock in this offering.
With respect to up to 46,875,000 shares of common
stock to be sold by us, unless we provide otherwise in a supplement to this prospectus, we intend to use the net proceeds from
the sale of our securities for one or more of the following:
|
· |
to execute on our Plan of Operations described below under “Management’s
Discussion and Analysis – Plan of Operations,” including:
·
the development of high quality content for our digital publications,
·
advertising and marketing expenses; and
·
attracting and retaining highly talented professionals; |
|
· |
working capital and other general corporate purposes. |
|
· |
We may also use a portion of the net proceeds to acquire other businesses, technologies or intellectual properties valuable to our business. |
The charts below set forth our anticipated net
proceeds assuming various percentages of the public offering are completed, as well as how we anticipate that the net proceeds
from the public offering of our common stock would be used:
|
25% Offering Proceeds |
50% Offering Proceeds |
75% Offering Proceeds |
100% Offering Proceeds |
Gross Proceeds |
$3,750,000 |
$7,500,000 |
$11,250,000 |
$15,000,000 |
Offering Expenses |
50,000 |
50,000 |
50,000 |
50,000 |
Net Proceeds |
$3,700,000 |
$7,450,000 |
$11,200,000 |
$14,950,000 |
|
25% Offering Proceeds |
50% Offering Proceeds |
75% Offering Proceeds |
100% Offering Proceeds |
Development and Acquisition of Content for our Digital Publications |
$1,000,000 |
$3,00,000 |
$4,500,000 |
$6,00,000 |
Build out of software and hardware infrastructure |
$500,000 |
$750,000 |
$750,000 |
$1,000,000 |
Advertising and Marketing expenses |
$500,000 |
$1,000,000 |
$1,000,000 |
$1,500,000 |
Repayment of Debt |
$250,000 |
$250,000 |
$500,000 |
$500,000 |
General Corporate (including past due salary and professional fees) |
$1,450,000 |
$2,450,000 |
$3,450,000 |
$3,950,000 |
Acquisitions of other businesses or technologies |
$0 |
$0 |
$1,000,000 |
$2,000,000 |
TOTAL
|
$3,700,000 |
$7,450,000 |
$11,200,000 |
$14,950,000 |
DETERMINATION OF OFFERING PRICE
The offering price of the shares of common stock in the direct offering
is related to the price at which shares have recently traded in the over the counter market, as follows: the offering price reflects
a small premium of approximately 3% to the trailing 10-trading day average closing bid and ask prices of our common stock as of
May 27, 2015. The price does not necessarily bear any relationship to our book value, assets, past operating results, financial
condition or any other established criteria of value.
MARKET PRICE OF AND DIVIDENDS OF THE COMMON
EQUITY
AND RELATED STOCKHOLDER MATTERS
(a) Market Information.
Our shares of common stock are not traded on a national exchange;
rather, they are traded on the OTC Pink Current Information under the symbol “ZONX”. At May 27, 2015, the closing bid
price for one share of our common stock was $0.33. The following table sets forth, for the periods indicated, the high and low
trade prices for our common stock as reported on the on the OTC Pink Current Information. During 2012 and 2013, our common stock
did not trade above $0.01.
On November 21, 2014, we completed a 1 for
44 reverse split of our common stock. The following reverse split adjusted table reflects the high and low quarterly quotations
or traded prices. (source: www.otcmarkets.com).
Quarterly Period | |
High | | |
Low | |
2015 | |
| | | |
| | |
Second Quarter (through May 27, 2015) | |
$ | 0.34 | | |
$ | 0.20 | |
First Quarter | |
$ | 0.44 | | |
$ | 0.05 | |
| |
| | | |
| | |
2014 | |
| | | |
| | |
Fourth Quarter | |
$ | 0.93 | | |
$ | 0.07 | |
Third Quarter | |
$ | 0.44 | | |
$ | 0.03 | |
Second Quarter | |
$ | 0.66 | | |
$ | 0.05 | |
First Quarter | |
$ | 0.18 | | |
$ | 0.02 | |
Trading in stocks quoted on the OTC Pink Current Information
is often thin and is characterized by wide fluctuations in trading prices due to many factors that may have little to do with a
company’s operations or business prospects. We cannot assure you that there will be a market for our common stock in the
future.
Our transfer agent is Continental Stock Transfer & Trust Company
with an office at 17 Battery Place, 8th Floor, New York, New York 10004.
(b) Holders.
At May 27, 2015, there were 971 stockholders of record of our company’s
common stock. Company stockholders who hold their shares in electronic format in U.S. brokerage accounts are not deemed to be separate
stockholders, as such shares are held of record by CEDE and Co., which is counted by our company’s transfer agent as a single
stockholder of record. As of May 27, 2015, there were 226,822,131 shares of our company’s common stock issued and outstanding
and no shares of our preferred stock issued and outstanding.
(c) Dividends.
During the most recent fiscal year, we did not declare or pay cash
dividends. Our company does not intend to pay cash dividends on its common stock in the foreseeable future. We anticipate retaining
earnings (if any) for investing in our business and increasing our working capital. We are not subject to restrictions respecting
the payment of dividends, except that they may not be paid to render us insolvent.
(d) Securities Authorized for Issuance under Equity Compensation
Plans.
We have one equity compensation plan, our company’s 2007 Stock
Option Plan. See “Executive Compensation—2007 Stock Option Plan.” Set forth in the table below are (a) the number
of shares of our common stock to be issued upon the exercise of outstanding options, (b) the weighted-average exercise price of
the outstanding options and (c) other than shares of our common stock to be issued upon the exercise of the outstanding options,
the number of shares of our common stock remaining available for future issuance under our company’s 2007 Stock Option Plan
as of May 27, 2015.
The following table summarizes certain information regarding our
2007 Stock Option Plan as of May 27, 2015:
Equity Compensation Plan Information |
|
|
|
Number of securities |
|
|
|
remaining available for |
|
|
|
future issuance under |
|
Number of securities to |
Weighted-average |
equity compensation |
|
be issued upon exercise |
exercise price of |
plans (excluding |
|
of outstanding options, |
outstanding options, |
securities reflected in |
Plan category |
warrants and rights |
warrants and rights |
column (a)) |
|
(a) |
(b) |
(c) |
Equity compensation plans approved by security holders |
568,182 |
$6.60 |
340,909 |
Equity compensation plans not approved by security holders |
871,591 |
$0.88 |
N/A |
Total |
1,439,773 |
|
340,909 |
The above table has been adjusted to reflect retrospective
application of our 1-for-44 reverse stock split, effective November 12, 2014.
2007 Stock Option Plan
Before December 31, 2011, we issued options to both employees and
non-employees under our 2007 Stock Option Plan, which reserved 909,091 shares of common stock pursuant to the issuance of stock
options under the Plan. As of May 27, 2015, we had 568,182 shares of common stock subject to outstanding common stock options with
a weighted average exercise price of $6.60. As of May 27, 2015, 340,909 shares of common stock were available for future award
grants under the 2007 Stock Option Plan.
In addition, we issued warrants to employees and non-employees not
reserved under a formal Plan. As of May 27, 2015, we had 871,591 warrants outstanding with a weighted average exercise price of
$0.88. All numbers relating to the 2007 Stock Option Plan have been adjusted to reflect the retrospective application of our 1-for-44
reverse stock split effective November 12, 2014.
BUSINESS
Overview
Zonzia Media, Inc. (formerly Indigo-Energy,
Inc. and HDIMAX Media, Inc.; our “company” or “we” or “us”) currently conducts business through
its website, www.zonzia.com, and a soon to be launched video on demand channel, streaming video
on demand, and mobile video application (collectively “content delivery platforms”). Our on demand offerings, both
streaming and video will be available on an over-the-top basis meaning users will have access via any connection to the internet.
When referring to our company and using phrases such as “we” and “us,” our intent is to refer to Zonzia
Media, Inc. (formerly Indigo-Energy, Inc. and HDIMAX Media, Inc.).
We were originally incorporated in 1981 in
the State of Nevada. Our principal executive offices are located at 74 N. Pecos Road, Suite D, Henderson, Nevada 89074,
and our telephone number at that location is (702) 463-8528. Our website address is www.zonziamedia.com. The information on our
website is not part of this prospectus.
Zonzia Media
We are a new multi-platform entertainment distribution
channel with the goal of being a unique hybrid of a linear channel, a video-on-demand channel and an over-the-top channel. Our
viewer immersion technology will allow instant access to our available content. Upon the full launch of our delivery platforms
we will deliver all kinds of innovative entertainment including:
|
· |
Original Programming – featuring documentaries, short films, mini-series, and television shows of all genres produced and directed by well-known individuals within the entertainment industry as well as up and comers. |
|
· |
Feature Films – full-length films from major studio productions and independent film makers. |
|
· |
Television Shows – shows from all the major networks as well as originally developed shows exclusively available on delivery platforms. |
|
· |
Sports, Concerts, and Live Events – streaming sports, music, and other live entertainment events from around the world. |
Through our multi-platform distribution channels,
including our soon to be released Zonzia mobile application (“app”), we intend to provide our consumers an enhanced
interactive viewing experience. Our viewers will have instant access to social media pages, exclusive bonus coverage, behind the
scenes access, games, and much more. We will also be providing our viewers with the opportunity to receive instant coupons from
our participating advertisers. Our core delivery platforms include the following:
Zonzia.com
Our content will be readily available on computers
and mobile devices both in the United States and internationally. All of our content is posted on www.zonzia.com and is available
globally.
Video on Demand (VOD)
We have entered into strategic arrangements
with well-known cable and wireless providers to deliver all of our content on mobile devices and cable television. We anticipate
that our video on demand offerings (VOD) will include exclusively produced full length feature movies, live events and general
programming readily available on other websites, for which our competitors generally charge an access fee. We are cross-soliciting
film and live event promoters, offering direct access to our targeted demographics in exchange for an up-front production fee.
By matching video and live event producers and promoters with our advertising customers, advertisers will have the ability to produce
and embed user-targeted commercials in our streaming VOD offerings. We believe that, by providing entertaining and exclusively
available content to our expanding individual customer base, our brand awareness will increase significantly, enabling us to develop
strong relationships and retention rates with our advertisers, ecommerce and other brand partners.
Zonzia (Over-The-Top) Channel
Our Zonzia channel, soon to be available in
hotel rooms throughout the United States, delivers up to four hours of our content on a continuous loop free of charge. We are
intending to refresh the looped content on a twice a month basis.
In addition to being able to deliver innovative
and entertaining content across all of our delivery platforms, our overall success is heavily dependent on our ability to develop
worldwide brand recognition which is intended to result in a significant viewer and ultimately consumer base. Our brand recognition
and viewer base are expected to drive rapid expansion of individual consumer impressions that are essential in the development
and effectiveness of our advertising program offerings. In this regard, we have entered into multiple strategic agreements with
well-known digital content developers and distributors with significant and long established viewer and consumer bases. By fostering
these agreements, enhancing consumer engagement, and attracting new users, we believe we can provide our advertising customers
and content development partners strategic opportunities specifically designed for our targeted demographics. Since we generate
advertising revenue from the number of user impressions we achieve, our content and other product offerings must be attractive
to our individual users.
Viewer Subscriptions
As we launch our delivery platforms, particularly
our website mobile applications, our content and accompanying intereactive services will be available for free for limited periods
in order to aggressively increase our brand awareness and consumer base. As we continue to integrate the interactive services available
through our technology partners, including a built-in e-wallet enabling direct e-commerce which allows our viewers to make instant
purchases regardless of where or when they view our content. Through our technology application, viewers will be able to
make donations and receive valuable targeted coupons from participating advertisers. Additionally, content developers, directors,
and producers will be able to deliver entertaining interactive matter and allow users to view other related material through additional
platforms, greatly enhancing our viewer’s experience with synchronized multi-media. Our technology applications will
also provide viewers content related social media pages, exclusive bonus content, games, polls, and more.
As our brand awareness and consumer base gains
momentum, we will begin a targeted subscription drive expected to be fully ramped by the beginning of the fourth quarter of 2015.
Subsequent to the initial launch and trial period we begin charging subscribers a monthly fee based on an industry average generally
between $5 and $10 per month. Subscribers will have access to exclusive content, exclusive events, live streaming, and behind the
scenes access.
Advertising
We provide our clients and customers advertising
opportunities through engaging consumers on our primary website, www.zonzia.com, mobile applications, and VOD and other channel
offerings.
Our advertising program, which provides our
customers many different options, is designed to maximize relevance to search queries or web content. Our advertising options specifically
co-designed by our sales and marketing staff will allow our customers to create targeted ads to appear beside related search results
or web content on our websites and include:
|
· |
Display Advertising – This includes banner ads and consists of text and graphics based ads that appear next to content relevant to the various product offerings. We will offer these banner ads in several sizes, allowing for each to contain logos, pictures, other graphics and video. |
|
· |
Display Advertorials – Display advertorials are advertisements in the form of editorial content and designed to provide consumers additional insights to our customers’ products or services. Advertorials are generally limited to 500 words and may be created by our content development staff or may be provided directly by the customer or the customer’s representative. Advertorials are believed to be the most cost-effective digital advertising, based on their high search engine optimization. |
|
· |
Native Advertising – Native advertising programs are designed to specifically match content and advertising directed at smaller, targeted groups of users based on specific interests. |
|
· |
Video Advertising – Similar to television commercials widely seen on network TV, video advertisements will run throughout some of our streaming video offerings. |
Most of our customers, regardless of the above
option(s) selected, pay us on a cost-per-impression (“CPM”) basis, which means that an advertiser pays us based on
the number of times such advertiser’s ads appear on our websites and other delivery platforms. As part of our on-going growth
and brand awareness building, we have and continue to invest significant resources in improving our advertising offerings and content
in order to attract more customers. We believe attracting and retaining advertising customers is dependent on our ability to develop
relevant, well-targeted, social and well-integrated content in order to enhance the user experience. We further believe enhancing
user experience is critical to the monetization of our demographic reach.
In order to continue improving and assist our
advertising clients effectively reach their targets, we engage independent third parties to provide us specific user analytics,
metrics and measurement tools. By understanding these data, we believe will be able to effectively monetize our user experience
while increasing return on ad spend for our advertising customers.
We are intending to use a third party to manage
all facets of our advertising operations. As of the date of this report, we have not formally engaged a service provider.
Sales and Support
Our sales support, billing systems, customer
tracking and revenue collection efforts are provided by a third party vendor who is also our website and infrastructure provider.
We are developing and growing our sales and
support infrastructure. When we are in a position to perform these functions internally, we expect to initially operate from leased
offices in Los Angeles and New York City. The Los Angeles facility will also encompass a production facility where we will produce
our own original content.
Marketing
Our initial marketing efforts will be focus
on building our viewer and consumer bases. We believe that through our strategic agreements with well-known cable and wireless
providers we will have access to tens of millions of viewers initially based in the United States. Our television channel offerings
in hotel rooms are also expected to provide access to a more diverse and global viewer.
Additionally, our marketing efforts during
fiscal 2015 will be focused on attracting and developing relationships with advertising customer and content producers and promoters.
As we develop these relationships we will extend our marketing campaigns to aggressively develop our subscribers, expected to occur
in the second half of 2015.
We are going to hire a public relations agency
to be responsible for our significant planned marketing campaigns. We will also bring in additional support to cover special events,
subscription campaigns, user and brand awareness campaigns, and other major initiatives.
In line with our overall business plan, we
are focusing on the continued growth and recognition of our brands through providing meaningful content and high-quality products
and consumer experience. Our marketing, promotional and public relations activities are designed to promote our brand image and
differentiate it from competitors. In doing so, we believe our viewer, and ultimately consumer; base will grow rapidly and provide
our customers with increasing impressions, allowing for maximization of advertising efforts.
Information Technology and Intellectual
Property
We have engaged an information technology consulting
firm to build the infrastructure to support our content delivery platforms. We have, and expect to continue to invest heavily in
this infrastructure on an on-going basis.
We regard the protection and enforcement of
intellectual property rights in our technology platforms to be important to the future success of our Company. As a result, we
consider the acquisition and maintenance of certain protectable and enforceable rights in patent, trademark, copyright, trade dress,
trade secret and know how in those technology platforms to be important to the future growth of our Company, and in that regard
we intend to continue to maintain and to formalize on a going forward basis rights in our service marks, our trademarks, our
copyrighted materials and content, our website and mobile applications, our domain names and our patentable business methods, as
needed. With respect to our trade secrets and know how in our technology platforms, we have and will continue to maintain a regime
of entering into protective confidentiality and intellectual property license agreements with our employees, our customers, our
partners and other third parties to protect our confidential technology and business information.
As of the date of this report, we do not have
any patents or registered trademarks.
Content Strategy
We have expended significant financial and
other Company resources in developing our content strategy and expect to do on an on-going basis. Our overall strategy is to provide
a generous mix of a established video libraries consisting of well-known movies, television shows, historical sporting events,
and documentaries and docu-movies; as well as original and exclusive productions and co-productions.
The competition for well-known, critically
acclaimed, and highly-rated programming across all genres is intense, and most of competitors consist of large companies with well
established brands and significantly greater resources.
Our business model and content strategy is
based around our ability to sell advertising, taking advantage of the careful monitoring and analyzing of our consumer demographics.
We believe our model provides our advertisers the ability to achieve significant value in their marketing strategy, through knowing
their audience in advance. If we effectively monetize our user demographics and experience satisfaction, we believe this would
serve as a competitive strength as we seek to enter into favorable licensing and revenue sharing arrangements with our content
developers and licensing partners. We anticipate that such arrangements would allow for global individual consumers to access live
streaming events, movies, television shows and other product offerings.
Video
We believe the growing demand for streaming
entertainment, increasingly available on mobile devices and tablets, is evident from the increasing development activity from major
cable networks, film and production studios, and sports leagues to name a few. Companies like NetFlix, one of the first and most
well-known brands streaming digital content, have experienced extreme success in rapidly building their brands and market share
while monetizing that success by requiring users to pay fees. We believe that our business model and content strategy allows us
to provide users a unique and entertaining streaming digital experience for certain of our products.
Our streaming platforms are designed to allow
aspiring film, short film and television directors/producers to showcase their accomplishments in addition to showings of other
first run movies and live streaming concerts and sporting events. We anticipate that our movies, short films and television shows
will include various genres, such as documentaries, docu-series, biopics and children’s programming. Our strategy and safety
policies strictly prohibit the streaming of adult entertainment and any form of pornography.
We also are seeking commercial arrangements
with concert and sporting event promoters in which we would charge them a production fee to reach the targeted demographics that
our website, mobile applications, and other distribution channels provide. Additionally, our officers have relationships with a
significant number of freelance video contributors.
Competition
The digital broadcasting industry is intensely
competitive and many of our competitors are well established internet companies, ecommerce and search engine companies, and television
network and conglomerates. Many of these competitors have significantly greater financial resources and may prove to be more attractive
to our content providers and developers.
Our business is characterized by rapid change
and converging, as well as new and disruptive, technologies. We face formidable competition in every aspect of our business, particularly
from companies that seek to connect people with information on the web and provide them with relevant advertising. Our advertising
business faces competition from:
|
· |
Various types of search engines, ecommerce websites, news-based content providers and other media and entertainment based sites. Many of these sites have more established brands and possess significant financial resources causing significant barriers to entry. |
|
· |
Other forms of advertising, such as television, radio, newspapers, magazines, billboards and yellow pages, for ad dollars. Our advertisers typically advertise in multiple media, both online and offline. |
|
· |
Providers of online products and services. Our online products and services compete directly with new and established companies, which offer communication, information and entertainment services integrated into their products or media properties. |
Our intended ecommerce business is rapidly
evolving and intensely competitive. Many of our current and potential competitors have greater resources, longer histories, more
customers and greater brand recognition. They may secure better terms from suppliers, adopt more aggressive pricing and devote
more resources to technology, infrastructure, fulfillment and marketing. Other companies also may enter into business combinations
or alliances that strengthen their competitive positions. Our ecommerce business faces competition from:
|
· |
Physical-world retailers, publishers, vendors, distributors, manufacturers and producers of our products. |
|
· |
Other online ecommerce and mobile ecommerce sites, including sites that sell or distribute digital content. |
|
· |
Media companies, web portals, comparison shopping websites and web search engines, either directly or in collaboration with other retailers. |
|
· |
Companies that provide ecommerce services, including website development, fulfillment, customer service and payment processing. |
|
· |
Companies that provide information storage or computing services or products, including infrastructure and other web services. |
|
· |
Companies that design, manufacture, market or sell consumer electronics, telecommunication and electronic devices. |
We compete to attract and retain users, for
whom other products and services are literally one click away, primarily on the basis of the relevance and usefulness of our content,
features, availability and ease of use of our products and services.
Employees
We presently have four full-time corporate
officers.
Our operations are overseen directly by our
corporate officers. Our officers oversee all responsibilities in the areas of corporate administration, business development and
research.
We intend to expand our current sales and marketing
teams; administrative teams; and content and business development teams. Competition for qualified personnel in our industry is
intense.
Seasonality
We do not expect seasonality to have a material
impact on our business. As we expand our ecommerce business, we may experience seasonality in our sales volumes.
Research and Development
We do not expect to incur material research
and development costs for the next 12 months.
Government Regulation
We are subject to numerous domestic and foreign
laws and regulations covering a wide variety of subject matter. New laws and regulations (or new interpretations of existing laws
and regulations) also may impact our business. The costs of compliance with these laws and regulations are high and are likely
to increase in the future. Any failure on our part to comply with these laws may subject us to significant liabilities and other
penalties.
Corporate History
Zonzia Media, Inc. was originally incorporated
in 1981 in the State of Nevada. In December 2005, following a recapitalization that resulted in a change of control, Indigo was
an independent energy company that engaged primarily in the exploration of natural gas and oil in the Appalachian Basin in Pennsylvania,
West Virginia, Illinois, and Kentucky through December 2010. These activities were carried out on leased properties,
some of which were proven, primarily through the entry into joint venture and other operating agreements.
In December 2010, the Company’s management
was notified by a representative of the New Jersey Attorney General’s Office (“NJAG”) that they were pursuing
a civil action against Everett Charles Ford Miller (“Everett Miller”) and related entities alleging violations of securities
laws amongst others. At the time of the civil action, Everett Miller was a Board Member of the Company, a significant shareholder,
and a significant note holder. On December 17, 2010, the Company was named as a nominal defendant in the civil complaint as a result
of Carr Miller Capital’s significant investment in the Company. At the time, and through the date of this filing,
there have been no allegations of wrongdoing on the Company’s part but the complaint does state that the Company was unjustly
enriched by the actions of Carr Miller Capital. The Company had no knowledge of any wrongdoing alleged to have been
committed by Everett Miller and a release from the NJAG was ultimately obtained on July 29, 2013.
On July 29, 2013, a group of large equity and
debt holders formed a new entity, New Hope Partners, LLC, and entered into a settlement agreement with the receiver to effectively
purchase a majority interest in the Company. The closing of the transaction between the receiver and New Hope Partners resulted
in a change of control of the Company (for more detail, including the settlement agreement, see Current Report on Form 8-K filed
August 5, 2013).
Subsequent to New Hope Partners obtaining a
controlling interest in the second half of 2013, the Company’s primary focus was on organizational efforts, settling previously
outstanding obligations on the best terms possible, and re-establishing its regulatory compliance. On May 12, 2014 the Company
filed its annual report on Form 10-K for the fiscal year ended December 31, 2013 and believes it has subsequently been current
with its periodic filing requirements under the Exchange Act of 1934. Additionally and as further discussed below, the Company
settled over $12 million of previously accrued liabilities primarily through the issuance of shares of restricted common stock
during the first half of 2014.
Since entering into a plan of merger on May
25, 2014, as amended on September 2, 2014 and November 20, 2014, the Company has been engaged in the digital publishing and broadcasting
business. In this regard, the Company completed a merger with HDIMAX, Inc., a private operating company, on November 21, 2014 and
changed its name to HDIMAX Media, Inc.
On January 22, 2015, the Company entered into
a Settlement Agreement with the former owner of HDIMAX, Inc. effectively and substantively cancelling the merger. For additional
details, including a copy of the Settlement Agreement, please see our Current Report on Form 8-K filed on January 29, 2015.
On March 9, 2015 the Company changed its name
to Zonzia Media, Inc. and its ticker symbol changed to “ZONX”. The Company is aggressively developing its digital content
and multi-platform entertainment distribution channels.
Where You Can Find More Information
We file annual, quarterly and other requisite filings with the U.S.
Securities and Exchange Commission (the “SEC”). Members of the public may read and copy materials that we file with
the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Members of the public
may obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC
also maintains an internet site that contains reports, proxy and information statements and other information regarding issuers
that file electronically with the SEC. That site is located at http://www.sec.gov.
You also may request a copy of our filings, at no cost, by writing
or telephoning us at:
Zonzia Media, Inc.
74 N. Pecos Road, Suite D
Henderson, Nevada 89074
Telephone: (702) 463-8528
Attention: Investor Relations
Consequence of Delays
The timing and successful execution of our overall business strategy
is dependent upon our current ability to raise additional capital at terms favorable to us. If outside funds are not obtained through
the sale of securities or other financing arrangements, the Company’s revenues will be limited.
DESCRIPTION OF PROPERTY
As of May 29, 2015, the Company did not have
any owned or leased property.
LEGAL PROCEEDINGS
Congoo, LLC v. HDIMAX Max Media, Inc. Civ.
Action No. 3:15-cv-01423
The Plaintiff’s in the case provide online
advertising opportunities for a fee. The Plaintiff alleged the Company owes them in excess of $422,000 based on an agreement, dated
prior to our merger, with an entity controlled by our former Chairman and Chief Executive Officer. The plaintiff alleges that the
entity with the prior agreement merged into our Company and changed the name. We are contesting the claim and have filed an initial
response on March 23, 2015.
On April 24, 2015 the Plaintiff’s attorney
notified the district court judge requesting our adjournment from participation in the complaint and that we may be entitled to
a dismissal. We believe that we will ultimately be granted this dismissal when the initial conference currently scheduled for June
10, 2015 takes place.
From time to time, we are involved in lawsuits,
claims, investigations and proceedings that arise in the ordinary course of business. There are no matters pending that we expect
to have a material adverse impact on our business, results of operations, financial condition or cash flows.
MANAGEMENT’S DISCUSSION AND ANALYSIS
The following discussion of our financial condition and results
of operations should be read in conjunction with (i) our audited financial statements for the period from May 24, 2014 (inception)
through December 31, 2014 and (ii) the unaudited financial statements for the period ended March 31, 2015 that appear elsewhere
in this registration statement.
This registration statement contains certain forward-looking
statements and our future operating results could differ materially from those discussed herein. Certain statements contained in
this discussion, including, without limitation, statements containing the words “believes”, “anticipates,”
“expects” and the like, constitute “forward-looking statements” within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). However,
as we will issue “penny stock,” as such term is defined in Rule 3a51-1 promulgated under the Exchange Act, we are ineligible
to rely on these safe harbor provisions. Such forward-looking statements involve known and unknown risks, uncertainties and other
factors which may cause our actual results, performance or achievements to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to
place undue reliance on such forward-looking statements. We disclaim any obligation to update any such factors or to announce publicly
the results of any revisions of the forward-looking statements contained herein to reflect future events or developments. For
information regarding risk factors that could have a material adverse effect on our business, refer to the Risk Factors section
of this prospectus beginning on page 4.
Overview
We are a new multi-platform entertainment distribution
channel with the goal of being a unique hybrid of a linear channel, a video-on-demand channel and an over-the-top channel. Our
viewer immersion technology will allow instant access to our available content. Upon the full launch of our delivery platforms
we will deliver all kinds of innovative entertainment including:
|
· |
Original Programming – featuring documentaries, short films, mini-series, and television shows of all genres produced and directed by well-known individuals within the entertainment industry as well as up and comers. |
|
· |
Feature Films – full-length films from major studio productions and independent film makers. |
|
· |
Television Shows – shows from all the major networks as well as originally developed shows exclusively available on delivery platforms. |
|
· |
Sports, Concerts, and Live Events – streaming sports, music, and other live entertainment events from around the world. |
Through our multi-platform distribution channels,
including our soon to be released Zonzia mobile application (“app”), we intend to provide our consumers an enhanced
interactive viewing experience. Our viewers will have instant access to social media pages, exclusive bonus coverage, behind the
scenes access, games, and much more. We will also be providing our viewers with the opportunity to receive instant coupons from
our participating advertisers. Our core delivery platforms include the following:
Zonzia.com
Our content will be readily available on computers
and mobile devices both in the United States and internationally. All of our content is posted on www.zonzia.com and is available
globally.
Video on Demand (VOD)
We have entered into strategic arrangements
with well-known cable and wireless providers to deliver all of our content on mobile devices and cable television. We anticipate
that our video on demand offerings (VOD) will include exclusively produced full length feature movies, live events and general
programming readily available on other websites, for which our competitors generally charge an access fee. We are cross-soliciting
film and live event promoters, offering direct access to our targeted demographics in exchange for an up-front production fee.
By matching video and live event producers and promoters with our advertising customers, advertisers will have the ability to produce
and embed user-targeted commercials in our streaming VOD offerings. We believe that, by providing entertaining and exclusively
available content to our expanding individual customer base, our brand awareness will increase significantly, enabling us to develop
strong relationships and retention rates with our advertisers, ecommerce and other brand partners.
Zonzia (Over-The-Top) Channel
Our Zonzia channel, soon to be available in
hotel rooms throughout the United States, delivers up to four hours of our content on a continuous loop free of charge. We are
intending to refresh the looped content on a twice a month basis.
In addition to being able to deliver innovative
and entertaining content across all of our delivery platforms, our overall success is heavily dependent on our ability to develop
worldwide brand recognition which is intended to result in a significant viewer and ultimately consumer base. Our brand recognition
and viewer base are expected to drive rapid expansion of individual consumer impressions that are essential in the development
and effectiveness of our advertising program offerings. In this regard, we have entered into multiple strategic agreements with
well-known digital content developers and distributors with significant and long established viewer and consumer bases. By fostering
these agreements, enhancing consumer engagement, and attracting new users, we believe we can provide our advertising customers
and content development partners strategic opportunities specifically designed for our targeted demographics. Since we generate
advertising revenue from the number of user impressions we achieve, our content and other product offerings must be attractive
to our individual users.
Viewer Subscriptions
As we launch our delivery platforms, particularly
our website mobile applications, our content and accompanying interactive services will be available for free for limited periods
in order to aggressively increase our brand awareness and consumer base. As we continue to integrate the interactive services available
through our technology partners, including a built-in e-wallet enabling direct e-commerce which allows our viewers to make instant
purchases regardless of where or when they view our content. Through our technology application, viewers will be able to
make donations and receive valuable targeted coupons from participating advertisers. Additionally, content developers, directors,
and producers will be able to deliver entertaining interactive matter and allow users to view other related material through additional
platforms, greatly enhancing our viewer’s experience with synchronized multi-media. Our technology applications will
also provide viewers content related social media pages, exclusive bonus content, games, polls, and more.
As our brand awareness and consumer base gains
momentum, we will begin a targeted subscription drive expected to be fully ramped by the beginning of the fourth quarter of 2015.
Subsequent to the initial launch and trial period we begin charging subscribers a monthly fee based on an industry average generally
between $5 and $10 per month. Subscribers will have access to exclusive content, exclusive events, live streaming, and behind the
scenes access.
Results of Operations
For the period from May 24, 2014 (inception) through December
31, 2014:
The financial statements and dollar amounts
included herein are stated in United States dollars and are prepared in accordance with United States generally accepted accounting
principles.
Since HDIMAX, Inc. was considered the accounting
acquirer and surviving entity upon completion of the merger transaction on November 21, 2014 and subsequently cancelled in January
2015, the following management’s discussion and analysis provides information and analysis associated with our advertising
and content development operations. Additionally, since the inception date of HDIMAX was contained in 2014; accordingly, no 2013
comparative operational results exist and are correspondingly omitted. The results of operations are not expected to be indicative
of our future operations due to the Settlement Agreement with an effective date of January 22, 2015.
Revenue
During the period ended December 31, 2014 we
generated net revenue of $439. The amount recognized was based on a lower than market net cost per impression as dictated by our
third party service provider arrangement. Through the remainder of 2015, we expect to launch our subscription services and begin
our advertising campaigns and other goods and services offerings.
Sales and Marketing
We incurred total sales and marketing expenses
of $1,006,012 during the period ended December 31, 2014. The majority of these expenses consisted of payments to third party content
developers, lead and internet impression generators, and other brand marketing expenses primarily paid on behalf on our former
website brand partners.
Officer Compensation
Officer compensation for period ended December
31, 2014 of $23,295,167 is primarily the result of accruing compensation due under employment agreements that became effective
upon the completion of the reverse acquisition of HDIMAX, Inc. Of the amount incurred for the period, $22,800,000 relates to the
obligation to issue 60,000,000 shares of common stock to former officers and directors. Upon entry into the settlement agreement
with HDIMAX, Inc. and related entities on January 22, 2015, the compensation obligations were forgiven and no shares of common
stock will be issued under the former agreements. In addition, approximately $130,000 of incurred and accrued cash based compensation
recognized during the period ended December 31, 2014 has been forgiven.
Professional Fees
The Company incurred $729,411 of professional
fees during the period ended December 31, 2014. The majority of these fees were incurred for the preparation and completion of
our reverse acquisition of HDIMAX, Inc. During the on-going ramp up of our principal business operations, through at least the
first half of 2015, we expect to continue to incur significant legal, accounting, and other consulting fees associated with entering
into material definitive contracts.
General & Administrative
Our general and administrative expenses totaling
$53,565 for the period ended December 31, 2014 were primarily associated with our on-going capital raising efforts and administrative
costs associated with the completion of the HDIMAX, Inc. acquisition. Our general and administrative costs are expected to significantly
fluctuate until we fully commence our planned principle business operations expected to occur in the second half of 2015.
For the three months ended March 31, 2015:
Given the inception date in May 2014, the following
analysis of our results will not be based on comparisons to the comparable period during 2014, but rather with regard to such other
periods within our history as deemed applicable.
The financial statements and dollar amounts
included herein are stated in United States dollars and are prepared in accordance with United States generally accepted accounting
principles. The results of operations may not be indicative of our future operations as we continue to develop our content delivery
platforms.
The following discussion of the financial condition
and results of operations should be read together with our condensed financial statements for the three month period ended March
31, 2015.
Revenue
We did not generate any revenue during the
three months ended March 31, 2015. Through the remainder of 2015 we expect to launch our video on demand offerings which are expected
to result in the generation of advertising revenues. Additionally, if we are successful in our funding and brand awareness campaigns
we may be able to launch our subscription service near the end of the year or in early 2016.
Sales and Marketing
For the three months ended March 31, 2015 we
incurred expenses totaling approximately $163,000 for the construction and development of our content delivery platforms. Offsetting
these expenses during the first quarter of 2015 was a non-recurring reversal of a previously accrued obligation totaling $422,448.
As we continue to build our brand awareness and video and other content libraries, along with our infrastructure, we expect our
sales and marketing expenses to increase throughout the next twelve months and beyond.
Officer and Director Compensation
Officer compensation for the three months ended
March 31, 2015 of $65,675,677 is primarily the result of non-recurring stock awards to our officers and directors. Included in
officer and director compensation during the period was the recognition, totaling $9,975,000, of unrecognized compensation cost
associated with the cancellation of an unvested restricted stock award issued to a former officer.
We believe a significant portion of the stock
awards granted during the first quarter of 2015 were necessary to attract and retain individuals to serve in officer, director,
and other consulting roles. In this regard, we issued a total of 145,200,000 shares of fully vested, restricted and unregistered
shares of common stock to these individuals.
Professional Fees
The Company incurred $819,599 of professional
fees during the period ended March 31, 2015. The majority of these fees were incurred on a non-cash basis via the issuance of 3,750,000
shares of restricted and unregistered common stock granted to various consultants for business development and contract review
and generation. We expect our professional fees to steadily decline as we approach the launch date of our principal business activities.
General & Administrative
Our general and administrative expenses totaling
$322,441 for the period ended March 31, 2015 were primarily associated with our on-going capital raising efforts and other administrative
costs. Additionally, we incurred one-time charges totaling approximately $298,000 associated with the Settlement Agreement with
our former Officers and Directors. Our general and administrative costs are expected to significantly fluctuate until we fully
commence our planned principal business operations expected to occur in the second half of 2015.
Liquidity and Capital Resources
Working Capital
At December 31, 2014, we had a working capital
deficit of approximately $2,236,000, primarily due to professional service providers, officers and directors, and other related
parties.
At March 31, 2015, we had a working capital
deficit of approximately $1,250,000, primarily due to professional service providers, officers and directors, and other related
parties. Our working capital is not sufficient to meet our operations, inclusive of plans for rapid growth. Additionally, our ability
to execute our content strategy and meet our day to day liquidity needs through the remainder of the year requires us to raise
additional capital.
Accordingly, our plans presented in this Report,
particularly under “Plan of Operations” below, are dependent upon our ability to raise significant capital in the near
term. If we are unsuccessful in generating sufficient cash through operations or raising additional capital through means such
as debt issuances, equity offerings or short-term advances from related parties, we will be required to significantly reduce our
operational efforts and curtail our rapid growth strategy. Further, as of the date of this Report we do not have any firm funding
commitment.
Cash Flow
Cash Used in Operating Activities
For the period ended December 31, 2014, our
cash used in operations totaling approximately $560,000 primarily consisted of payments to service providers to prepare for, and
assist in the completion of, the merger transaction and to maintain relationships with image providers and content developers.
For the near term, and under informal agreements, many of our services providers and related parties have agreed to defer payment
until we increase our liquidity, which resulted in off-sets to our net loss and cash used in operations totaling approximately
$1,230,000. Additionally, we recognized approximately $23.6 million in stock based compensation, a non-cash premium for the assumption
of the net liabilities of HDIMAX, Inc., and debt discount amortization. As noted above, we will require additional capital in order
to monetize our content strategy and overall plan of operations.
For the three months ended March 31, 2015,
our cash used in operations totaling approximately $92,000 primarily consisted of payments to service providers to prepare and
execute our Settlement Agreement with our former officers and directors. Our operational cash used significantly declined from
the quarter ended December 31, 2014 as a result of significant, non-recurring, stock based compensation of nearly $67,000,000.
For the near term, and under informal agreements, many of our services providers and related parties have agreed to defer payment
until we increase our liquidity, which resulted in off-sets to our net loss and cash used in operations totaling approximately
$405,000. Additionally, we recognized non-cash gains of approximately $917,000 related to the reversal of previously accrued compensation
due to our former officers and an internet marketing service provider that we were released from during the period, partially off-set
by the approximately $108,000 expense for our Settlement Agreement. As noted above, we will require additional capital in order
to monetize our content strategy and overall plan of operations.
Cash Provided by Financing Activities
All of our cash for the period ended December
31, 2014 was provided by short-term notes payable, some of which were convertible and converted during the period ended December
31, 2014. The proceeds from the notes payable, including those convertible totaled $560,000.
All of our cash for the three months ended
March 31, 2015 was provided by the issuance of 585,748 shares of restricted and unregistered shares of common stock totaling $95,850.
Our ability to continue as a going concern
for at least the next 12 months will depend on our ability to raise the money we require through equity or debt financing. Through
the end of April 2015 we raised an additional $70,000 through the issuance of short-term notes payable due to related parties,
the proceeds of which were primarily used to prepare and file our annual report on Form 10-K for the period ended December 31,
2014. Further, during May 2015 we raised an additional $160,000 through the sale of our common stock in private placements to third
party investors. There is no assurance that we will be able to obtain further funds required for our continued operations or that
additional financing will be available to us when needed or, if available, that it can be obtained on reasonable terms. If we are
not able to obtain the additional financing on a timely basis, we will not be able to meet our other obligations as they become
due, and we will be forced to scale down or perhaps even cease our operations. As of the date of this Report we do not have any
firm funding commitment.
Plan of Operations
While our officers have extensive experience
in digital publishing and broadcasting, our company is in the early stages of pursuing our mission to entertain a global audience
through content that we license or produce in fashion & beauty, sports, movies, TV shows, comedy, music, food and health and
fitness. We believe our business model and content strategy gives us a significant opportunity to deliver value to users, developers
and marketers while realizing our monetization objectives. Keys to meeting our objectives include, but are not limited to:
|
· |
A strong ad operation setup internally to sell across all of our content delivery platforms. |
|
· |
A strong internet/external content strategy. |
|
· |
Strong original digital television content. |
|
· |
Attracting popular licensed television content. |
|
· |
A strong marketing strategy to promote our content on social media and top consumer websites. |
Capital Raising Efforts
The timing and successful execution of our
overall business strategy is dependent upon our current ability to raise additional capital at terms favorable to us. Our officers
and directors have spent significant time and effort cultivating relationships with individuals and entities that may be interested
in investing in our Company.
Since late in 2014 through the date of this
report, our Officers, Directors and other consultants and Advisory Board Members have devoted significant time and effort to raising
the capital necessary to fully implement our principal business plans including securing content and building the required content
delivery infrastructure. While we have received positive feedback from these efforts and much preliminary interest from potential
debt and/or equity investors, we do not have any firm funding commitments as of the date of this report sufficient to fully implement
our business strategies in the near term.
Launch Strategy
Our content and platform launch strategy is
to produce and acquire compelling content that creates a connection with our targeted audience across desired platforms. If we
are successful in our capital raising efforts, we intend to be fully operating all of our delivery platforms and subscription services
in the fourth quarter of 2015.
The overall objective is to drive significant
viewers to engage in the offerings of our video on demand and over the top Channel. We intend to engage in an aggressive business
to business public relations drive to rapidly evolve a marketplace for our viewers, clients, and consumers. We have also begun
forming relationship and partnerships with several large television and wireless providers that will provide us basic access to
several million households nationwide.
Develop High Quality and Entertaining
Content to Increase User Engagement
We expect to begin spending approximately $5,000,000
dollars on the production of a series of originally created and exclusively available half-hour long comedy, dramatic and romance
television shows by the end of the fourth quarter of 2015. Additionally, some of our potential licensing partners require non-refundable
prepaid royalty payments in order to present their content on our distribution platforms. The majority of the costs incurred with
this type of third party content development are paid through revenue sharing arrangements in which the vendors receive a percentage
of the impression revenue from our advertising basis. We intend to prioritize product development investments that we believe will
drive user engagement. One of our critical, near-term uses of funds is to significantly improve and expand our content library
and unique offerings. Our expenditures likely will include, at least partially, up-front payments to movie and live event producers
and/or promoters. Key to increasing our content offerings is our ability to analyze and organize vast amounts of information in
real time to enable us to select the unique content that we believe will be most interesting to show to each user. We are focused
on providing entertaining content and other products to increase engagement, representing a core part of our strategy to maximize
our long-term business performance.
Marketing and Business Development
As at March 31, 2015, we had spent over $1,000,000
on sales and marketing expenses, reflecting our commitment to invest to improve our ad products in order to attract more customers
to work with us, to create more value for marketers and to enhance marketers’ ability to make their advertising more relevant
for users. Our advertising strategy centers on the belief that, with ad products that are relevant, well-targeted, social and well-integrated
with our content offerings, we can enhance the user experience while providing an attractive return for marketers. We expect to
continue to spend significantly in order to grow our brand awareness, develop relevant ecommerce partner relationships and increase
advertising value.
Attract and Retain Highly Talented Management and Professional
Consultants
The technology industry is highly competitive
and heavily dependent upon attracting and maintaining innovative and experienced individuals. We are heavily dependent on our officer
group, and loss of the services of these officers could have a material impact on our ability to implement our business plan.
Based on our value based approach, we seek
to engage legal, accounting and other management consulting professionals upon the completion of extensive due diligence processes
accounting for experience level, customer satisfaction and cost comparisons.
Build Infrastructure to Provide Robust and Reliable Product
Experience While Protecting Our Intellectual Property, Building and Maintaining User Trust, and Protect User Privacy
We are investing in software and hardware infrastructure
that enables us to provide a unique, personalized experience to each of our users around the world. We believe the speed and reliability
of our products are important competitive advantages.
Trust is a cornerstone of our business. We
dedicate significant resources to the goal of building user trust through developing and implementing programs designed to protect
user privacy, promote a safe environment and assure the security of user data. The resources we dedicate to this goal include engineers,
analysts, lawyers, policy experts and operations specialists, as well as hardware and software from leading vendors and solutions
we have designed and built.
We continue to build new procedural safeguards
as part of our comprehensive privacy program. These include a dedicated team of privacy professionals who are involved in new product
and feature development from design through launch; ongoing review and monitoring of the way data is handled by existing features
and applications; and rigorous data security practices. We regularly work with online privacy and safety experts and regulators
around the world to ensure compliance with the law and adherence to industry best practices.
We invest in technology, processes and people
as part of our commitment to safeguarding our users’ information. We use a variety of techniques to protect the data that
we are entrusted with, and we rely on multiple layers of network segregation using firewalls to protect against attacks or unauthorized
access. We also employ proprietary technologies to protect our users. For example, if we suspect that a user’s account may
have been compromised, we may use a process that we refer to as “social authentication” to validate that the person
accessing the account is the actual account holder. The process of social authentication may include asking the person accessing
the account to identify photos of the account holder’s friends. Our third party security consultants actively scan for security
vulnerabilities using commercial tools, penetration tests, code security reviews and internal and external audits.
We will invest extensively in advertising technology
capable of serving billions of ad impressions every day while maximizing the relevance of each impression to selected users based
on the information that users have chosen to share. Our system manages our entire set of ads, the selected audiences and the marketers’
bids to determine which ads to show each person and how to display them for every page on Facebook. We use an advanced user action
prediction system that weighs many real-time updated features using automated learning techniques. Our technology incorporates
the estimated user action rate with both the marketer’s bid and a user relevancy signal to select what we believe to be the
optimal ads to show.
Content Storage and Delivery
In November of 2014 we engaged a third party,
who has since been named to serve on our Advisory Board, to build the infrastructure to store our anticipated content library on
a cloud based server; provide necessary display setting conversions allowing the content to be viewed on multiple devices including
mobile phones, tablets, and televisions as well as in high definition; and allow for direct delivery to our strategic content delivery
interface partners who ultimately provide the material to our targeted viewers.
In April 2015 we began a test of this process
in which we provided our content interface partner with a small amount of programming that became available on-demand to a number
of cable subscribers in the Southeast Region of the United States. The purpose of the test was not intended to determine number
of users, advertising placement, or consumer interest in the actual content, rather the test was solely to determine our ability
to securely deliver and make the content available to its end user. While we have not extensively analyzed the results of the test,
it does appear that we have the ability to reach our end user in a Video On Demand format and we are encouraged by this test as
we prepare to launch content.
Since we appear to have demonstrated our ability
to digitally deliver content, we are focusing our near term efforts on building a Digital Rights Management (“DRM”)
system. Through an Advisory Board member, we have made contact with several parties to begin building the platforms that will allow
us to distribute our content securely in a variety manners including television on demand, mobile devices, and other devices with
internet capability. Funding permitted, we expect to devote a great deal of resources to the construction of our DRM to not only
ensure content delivery in the proper format to our end users, but to securely store the information safeguarding against piracy
and other forms of theft. We expect this to be one of primary focus areas for at least the next three to six months.
Content Development
The key to our success is providing entertaining
and engaging content to our end users allowing us to attract subscribers and advertising clients. Under the direct supervision
of our Officers we have made significant contacts within the industry and have had preliminary meetings with various entertainers,
producers, and other developers to provide a significant volume of video and other live streaming events. While we await the financial
ability to acquire our intended content library, we believe our relationships and preliminary discussions will allow to us to rapidly
increase our content offerings.
Brand Awareness
Through our officers and other relationships
within in the industry we have begun a social media brand awareness campaign designed to attract consumers to our content delivery
platforms.
Recent Activities
Subsequent to the Settlement Agreement with
our former CEO in January 2015, we have spent significant amounts of time and effort attracting and retaining highly experienced
individuals to form our management team, Board of Directors, and Advisory Board. We believe that we have successfully attracted
and retained these individuals. Once in place, our team began the process of rebranding the Company into Zonzia Media and assessing
the value of various content delivery platforms and developing the corresponding relationships with applicable service providers.
Off Balance Sheet Arrangements
We currently do not have any off-balance sheet arrangements.
Critical Accounting Policies and Estimates
The accompanying financial statements have been prepared on the
accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America and have
been presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal
course of business. These accounting principles require management to use estimates, judgments and assumptions that affect the
reported amounts of assets and liabilities as of the date of the financial statements and revenues and expenses during the reporting
period.
Our accounting policies that require significant management judgment
and estimates include:
Stock Based Compensation
We have on occasion issued equity and equity
linked instruments to employees and non-employees in lieu of cash for the receipt of goods and services and, in certain circumstances
the settlement of short-term loan arrangements. The applicable GAAP establishes that share-based payment transactions with non-employees
shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever
is more reliably measurable.
In these transactions, the Company issues unregistered
and restricted equity instruments.
While the Company believes that its shareholders
currently have 2,055,833 shares of freely-traded stock with a quoted market price (a Level 1input within the GAAP hierarchy), the
fair value of the unregistered and restricted shares issued in compensation transactions with non-employees as valued by the quoted
market price does not reflect the economic substance of the transactions and does not represent the Company’s principal market,
correspondingly, the quoted market price is not the most reliably measurable fair value. This determination was based upon the
liquidity restrictions placed upon our unregistered restricted equity instruments along with the quoted market not being the most
active or principal trading market.
When unregistered common shares are issued
for the settlement of short-term financing arrangements, the reacquisition price of the extinguished financing arrangement is determined
by the value of the debt which is more clearly evident, and no additional inducement expense is recognized.
In situations in which we issue unregistered
restricted common shares in exchange for goods and services, and the value of the goods and services are not the most reliably
measurable, we recognize the fair value of the unregistered restricted equity instruments based on the value of similar instruments
issued in private placements in exchange for cash in the most recent transactions (a Level 2 input within the GAAP hierarchy).
The Company has determined this methodology reflects the risk adjusted fair value of our unregistered restricted equity instruments
using a commercially reasonable valuation technique within the most active market.
Quantitative and Qualitative Disclosures About Market Risk
Under the scaled disclosure requirements applicable to smaller reporting
companies (as defined in Item 10(f)(1) of Regulation S-K), we are not required to report quantitative and qualitative disclosures
about market risk specified in Item 305 of Regulation S-K.
DIRECTORS AND EXECUTIVE OFFICERS
The following individuals serve as directors and executive officers
of our company as of the date of this report. All directors of our company hold office until the next annual meeting of our stockholders
or until their successors have been elected and qualified. The executive officers of our company are appointed by our board of
directors and hold office until their death, resignation or removal from office.
Name |
|
Age |
|
Office |
Naresh Malik |
|
49 |
|
Chief Executive Officer |
Myles A. Pressey III |
|
58 |
|
Chairman of the Board and Chief Business Development Officer |
Lynwood A. Bibbens |
|
43 |
|
Chief Strategy Officer |
Johnathan F. Adair |
|
50 |
|
Chief Operating Officer |
Stanley L. Teeple |
|
63 |
|
Chief Compliance Officer |
Steven L. Sanders |
|
55 |
|
Director |
Frank McEnulty |
|
58 |
|
Chief Financial Officer |
James C. Walter Sr. |
|
70 |
|
Director |
Naresh Malik
Beginning in January 2010 through the present,
Mr. Malik has served as President – Media and Creative Services, for Reliance MediaWorks. Reliance MediaWorks Limited is
a film and entertainment Services Company and a member of the Reliance Group. The Group has a comprehensive presence in Film and
Media Services, Productions, Sales & Distribution and Exhibition; Motion Picture Processing and DI; Film, Audio Restoration
and Image Enhancement; 3D; Digital Mastering: Studios and Equipment rentals; Visual Effects; Animation; Broadcast, Television Commercials
Post Production & Feature Film Promotion services with presence across India, USA and UK and offers end to end integrated services
across the entire film and media services value chain to production houses, studios and broadcasters, globally.
With over two decades of experience in management
and core skills within the Media & Entertainment business, Mr. Malik has been in the Executive Positions at Reliance, Prime
Focus, Pixion, Ideal System Asia Pacific amongst others.. Having led the function of Global Sales, Production and Transmission
for Film and Broadcast Industry has given him the unique and unparalleled expertise across this sector.
Myles A. Pressey III
Throughout his career, Mr. Pressey served in
many roles in investment and relationship management. Mr. Pressey has provided financial advisor services to high net worth individuals,
represented retired professional basketball players in sponsorship deals and negotiated and managed endorsement and television
appearance deals for athletes and entertainers. Since 2012, Mr. Pressey has owned and operated Regency Park Entertainment, an independent
film production and finance company. From 2010 to 2012, Mr. Pressey was the Managing Director of Film & Media at Sun Center
Studios, Pennsylvania’s only state-of-the-art sound stage facility and campus dedicated to servicing major film and television
production companies within the entertainment industry. Before joining Sun Center Studios in 2010, Mr. Pressey served as the Chief
Executive Officer of Pressey Padell Sports & Entertainment, which was founded in 2008 and focused on all facets of business
management for athletes and entertainers. Pressey Padell Sports & Entertainment handled not only endorsements and TV appearances
but also guided each athlete and entertainer and their families through all of their financial, marketing and endorsement matters.
Before establishing Pressey Padell Sports&
Entertainment, Mr. Pressey held various business and investment management roles. Mr. Pressey holds a Bachelor of Arts Degree in
Business from Antioch University.
Mr. Pressey’s experience with current
and retired professional athletes, entertainers, capital market and investment and business management is critical to our content,
marketing and business development strategy that is centered around our ability to establish and maintain long-term relationships
with content providers across all of our media offerings.
Lynwood A. Bibbons
Mr. Bibbens is a serial entrepreneur who's
founded and sold several technology and e-commerce companies including American Discount Warehouse, a company he founded in 1996
and sold in 3 years for over 10 times EBITDA. Lynnwood has the ability to foresee the needs of Distributors, Brands, and Consumers
as such he has formed long term relationships with corporations such as Samsung, Toshiba, Vizio, Amazon, CBS and Comcast. From
2007, Mr. Bibbens has focused on the Media and Entertainment industry by integrating multiple dynamic content platforms that use
proprietary technology which enable top Brands to better understand their clients. He has teamed up with Syndication partners Dailymotion,
Google, Roku, Opera, X Box, Dish, Comcast, Verizon, and Amazon. Mr. Bibbens also sits on the board of several companies; Adelman
Enterprises, New England Technology, Moblty, and The Invictus Firm.
Mr. Bibbens also co-founded and launched The
Invictus Firm, a Private Equity & Strategic Consulting Firm, based on his extensive background in Technology, Entertainment
Content, Distribution and Syndication. Mr. Bibbens’ investment focus is on existing and new Technology companies that are
dynamic and disruptive, specifically, companies that can capture and monetize content across multiple platforms while being able
to capture critical data in real time. Over his 20+ years of experience, Mr. Bibbens has been directly involved with structuring,
advising and distributing global private equity deals.
In connection with Mr. Bibbens’ appointment
as the Company’s President and Chief Strategy Officer, Mr. Bibbens entered into an employment agreement with the Company
on January 29, 2015. The employment agreement provides for an initial term of four years, with an automatic one-year renewal thereafter,
unless the employment agreement is terminated by advance written notice of either party. Under the terms of the employment agreement,
Mr. Bibbens receives a base salary in the amount of $250,000 per year. Subject to the discretion of the CEO and the Board of Directors,
Mr. Bibbens shall be eligible for an annual bonus of not less than fifteen percent (15%) and not more than thirty-five percent
(35%) of annual base salary. Mr. Bibbens shall receive an initial grant of 5,000,000 shares of the Company’s restricted common
stock within 30 days of signing the employment agreement, and will be granted 2,500,000 additional shares of the Company’s
common stock on each of the subsequent four anniversaries of the commencement of employment, should Mr. Bibbens continue to be
employed in good standings on such dates. The employment agreement further provides that Mr. Bibbens is entitled to 4 weeks of
paid vacation per year.
The Company may terminate the employment agreement
with Mr. Bibbens for cause, without cause, or by reason of his death or disability. Mr. Bibbens may terminate the employment agreement
for any reason by advance written notice. If the employment agreement is terminated by reason of death, disability, resignation
by Mr. Bibbens or termination by the Company without Cause (as defined in the employment agreement) then the Company will be required
to pay to Mr. Bibbens severance pay of four months base compensation and continue all other benefits under the agreement for a
period of four months. If the Company terminates the employment agreement for Cause, then Mr. Bibbens will only be entitled to
the base salary and benefits earned through and including the date of termination. Mr. Bibbens has agreed not to compete with us
during the term of his employment agreement and for a period of twelve months thereafter. We also agree to indemnify Mr. Bibbens
pursuant to the employment agreement.
Johnathan F. Adair
Johnathan Adair is a seasoned veteran and well
versed in all aspects of the entertainment industry with over 20 years of experience. Johnathan’s background includes post
at Sony Pictures Entertainment, Universal Pictures, The Walt Disney Company and the Los Angeles Philharmonic. At Sony Pictures,
Johnathan created and guided the marketing strategies for the company’s licensed consumer products division including the
blockbuster Spiderman 2, which broke both box office and licensed sales records. At Universal Pictures, Johnathan ran the worldwide
marketing operations for Universal Home Entertainment Productions representing over $120 million in revenue. While at the Walt
Disney Company, Johnathan directed the consumer products marketing and promotional strategies for the Winnie The Pooh and Mickey
Mouse brands and Disney’s television and live action film properties.
An accomplished and award winning violinist
and pianist, Johnathan headed the marketing and communications divisions of the Los Angeles Philharmonic Association. Johnathan
began his career at Sony Music where he served in the business affairs, marketing and A&R divisions. Johnathan is a graduate
with honors of Harvard University.
In connection with Mr. Adair’s appointment
as the Company’s Chief Operating Officer, Mr. Adair entered into an employment agreement with the Company on January 29,
2015. The employment agreement provides for an initial term of four years, with an automatic one-year renewal thereafter, unless
the employment agreement is terminated by advance written notice of either party. Under the terms of the employment agreement,
Mr. Adair receives a base salary in the amount of $250,000 per year. Subject to the discretion of the CEO and the Board of Directors,
Mr. Adair shall be eligible for an annual bonus of not less than fifteen percent (15%) and not more than thirty-five percent (35%)
of annual base salary. Mr. Adair shall receive an initial grant of 5,000,000 shares of the Company’s restricted common stock
within 30 days of signing the employment agreement, and will be granted 2,500,000 additional shares of the Company’s common
stock on each of the subsequent four anniversaries of the commencement of employment, should Mr. Adair continue to be employed
in good standings on such dates. The employment agreement further provides that Mr. Adair is entitled to 4 weeks of paid vacation
per year.
The Company may terminate the employment agreement
with Mr. Adair for cause, without cause, or by reason of his death or disability. Mr. Adair may terminate the employment agreement
for any reason by advance written notice. If the employment agreement is terminated by reason of death, disability, resignation
by Mr. Adair or termination by the Company without Cause (as defined in the employment agreement) then the Company will be required
to pay to Mr. Adair severance pay of four months base compensation and continue all other benefits under the agreement for a period
of four months. If the Company terminates the employment agreement for Cause, then Mr. Adair will only be entitled to the base
salary and benefits earned through and including the date of termination. Mr. Adair has agreed not to compete with us during the
term of his employment agreement and for a period of twelve months thereafter. We also agree to indemnify Mr. Adair pursuant to
the employment agreement.
Stanley L. Teeple
During the last five years, as President of
Stan Teeple, Inc. Mr. Teeple has provided services as Chief Financial Officer for Indigo-Energy, Inc. a publicly traded company
in the oil and gas exploration business from 2006 through 2012, as Interim Chief Financial Officer for Versant International, Inc.
an investment holding company during 2013, and as Chief Financial Officer for Element Renewal, a private water treatment company
during 2014. Over the last 30 years Stan has held numerous senior management positions in a number of public and private companies
across a broad spectrum of industries. Additionally he has operated and worked for various court appointed trustees and principals
as CEO, COO, and CFO in the entertainment, pharmaceuticals, food, travel, and tech industries. He presently operates his consulting
business on a project-to-project basis, and holds various other directorships. His businesses operational strengths include knowing
how to manage and maximize the resources and preserve the integrity of a company from start-up through to maturity.
Steven L. Sanders
As Chairman, CEO, and Chief Investment Strategist
(CIS) at StoneRidge Investment Partners, LLC, Steven Sanders is a leader in the money management industry. Mr. Sanders has led
multiple firms to growth and profitability over his extensive 30-year career. Most recently, in 2009, Mr. Sanders led the growth
of StoneRidge from $200 Million to $1.2 Billion in assets under management while driving enhancements to the firm's equity investment
process and helping launch and develop StoneRidge’s suite of custom designed fixed income products.
Possessing nearly 30 years of investment and
entrepreneurial experience, Mr. Sanders serves as Board Chairman of Beltraith Capital, LLC, a holding company formed by Mr. Sanders
to raise capital and acquire a controlling interest in StoneRidge in 2009.
Prior to joining StoneRidge, from 2006-2009,
Mr. Sanders served as Chief Investment Strategist at Creative Financial Group Asset Management, with $1.8 Billion in assets under
management. During that period, Mr. Sanders Co-founded and served as Chairman & CEO of First Genesis Financial Group, a subdivision
of Creative Financial Group. While there, Mr. Sanders developed and co-managed the firm’s absolute return, macro-economic
thematic investment strategy.
Mr. Sanders has provided economic and financial
market commentary to national and local television networks such as CNBC, Bloomberg, CNN, ABC World News, Fox TV, and CN8’s
Money Matters Today. His presentations on Macro Economics and Financial Markets are in demand at many investment conferences. Mr.
Sanders has served as a spokesperson for Citibank Master Card and Visa’s national financial education program and authored
a booklet about the virtues of saving and spending wisely, “Money Matters for Young Adults”. Since 2007, he has co-hosted
Financial Voices; a weekly financial and economic awareness program which airs on 900AM WURD Radio in Philadelphia and broadcast
internationally via the web. Mr. Sanders serves as Chairman of the Investment Committee for The Philadelphia Foundation, a member
of the Board of Trustees at the Pennsylvania Academy of Fine Arts, Advisory Board member of The Network for Teaching Entrepreneurship
Philadelphia and Board member for TOCFWH. Mr. Sanders holds a B.B.A. in Risk Management from Howard University.
Frank McEnulty
Mr. Frank McEnulty was appointed our Chief
Financial Officer effective February 19, 2015. Mr. McEnulty is an experienced financial executive with an extensive background
in finance and accounting, multiple location management, real estate development, financial analysis, workout and mediation, presentations
and public speaking, cash management, property management, business startup, development and operations. During his 19 years as
President and CFO of Meghan Matthews, Inc., a privately owned venture management company, Mr. McEnulty has overseen the start-up,
investment and growth of numerous new companies dealing with a wide variety of products. A partial list of these companies have
been a music magazine, a chain of brewpub restaurants, live music clubs in California and Tennessee, a record label, live-pay-per
view events, a new surfboard technology, consumer products and movie and video production in addition to managing the financial
activities of the owners of the company and their large real estate portfolio. Among his development projects have been major apartment
complexes, single-family homes, golf-course communities, shopping centers, and mid and low-rise condominium projects. Mr. McEnulty
has been responsible for the management of thousands of apartment units and over 2,000,000 square feet of retail space at one time.
Over time, Mr. McEnulty has been responsible for the acquisition, disposition, development and/or financing of over $750,000,000
in real estate projects. Mr. McEnulty also currently serves on the Board of Directors of Ojai Oil Company a diversified oil producer
and self-storage company and on the Board of Directors of Cell Medx, Corp a start-up pain management company in the field of diabetics.
Mr. McEnulty received his MBA in Venture Management from the University of Southern California in 1980 and has undergraduate degrees
in Accounting and Finance from California State University at Long Beach.
James C. Walter, Sr.
James C. Walter Sr., age 70, was appointed
by the sole remaining Director of Indigo-Energy, Inc. on October 18, 2013 to the offices of President, Chief Financial Officer,
Secretary, and sole Director, all of which to serve until replaced by the Board of Directors. Mr Walter resigned from our Board
on upon the completion of our merger on November 21,2014 and was re-appointed on January 22, 2015. Mr. Walter has had a 30 year
career as an independent insurance broker and is a shareholder of the Company. Walter Insurance Agency, Inc. was owned and operated
by Mr. Walter for 30 years before the company was sold in 2001. Since 2001, Mr. Walter has served as a business consultant. Additionally,
Mr. Walter is a member of New Hope Partners LLC, which owns a majority of our outstanding common stock. Mr. Walter has assumed
the duties as identified primarily in an interim capacity while the company went through its restructuring efforts.
Significant Employees
None.
Family Relationships
There are no family relationships among our directors or officers.
Conflicts Of Interest
Our directors and officers are subject to restrictions regarding
opportunities that may compete with our company’s business plan. New opportunities that are brought to the attention of our
directors and officers must be presented to our Board of Directors and made available to our company for consideration and review
under principles of state law corporate opportunity doctrines.
Involvement in Certain Legal Proceedings
None of our directors or executive officers have been involved in
any of the following events during the past ten years:
|
(a) |
any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years before that time; |
|
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|
|
(b) |
any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offences); |
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|
(c) |
being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; |
|
|
|
|
(d) |
being found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated; |
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|
|
|
(e) |
being the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: (i) any federal or state securities or commodities law or regulation; or (ii) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease- and-desist order, or removal or prohibition order; or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or |
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(f) |
being the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Securities Exchange Act of 1934), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
EXECUTIVE COMPENSATION
Summary Compensation Table
Executives and Directors Compensation
During the period ended December 31, 2014 we
entered into various employment arrangements with our previous and current executive officers. Some of these arrangements were
retroactively forgiven and cancelled as part of our Master Settlement Agreement entered into on January 22, 2015, as described
in the notes to the Summary Compensation Table. For a more detailed description of the Master Settlement Agreement, please see
Item 1 – Description of Business.
The following table provides certain summary
information concerning compensation of our named executive officers:
Summary Compensation Table
Name
($) |
Year
($) |
|
Salary
($) |
|
|
Bonus
($) |
|
|
Stock
Awards
($) |
|
|
Option
Awards
($) |
|
|
Non-
Equity
Incentive
Plan
Comp
($) |
|
|
Non-
qualified Deferred
Comp.
Earnings
($) |
|
|
All Other
Comp.
($) |
|
|
TOTAL
($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rajinder Brar, Former CEO and CFO (1) |
2014 |
|
|
$370,511 |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
$370,511 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aneliya Vasilieva, Former Chief Content Officer (2) |
2014 |
|
|
$83,333 |
|
|
|
– |
|
|
|
$9,975,000 |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
$10,058,333 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Myles A. Pressey III, Interim CEO and Chief Business Development Officer (3) |
2014 |
|
|
$93,833 |
|
|
|
– |
|
|
|
$13,725,000 |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
$13,818,833 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
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James Walter Sr., Former CEO and CFO (4) |
2014 |
|
|
- |
|
|
|
– |
|
|
|
$476,875 |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
$476,875 |
|
_______________
|
(1) |
Mr. Brar was appointed Chairman and Chief Executive Officer on November 21, 2014. Effective January 22, 2015 Mr. Brar resigned all previously appointed Officer and Board positions. |
|
(2) |
Ms. Vasilieva was appointed Chief Content Officer on November 21, 2014. Effective January 22, 2015 Ms. Vasilieva resigned as Chief Content Officer. The above compensation represents accrued amounts related to a December 2014 employment agreement that was retroactively cancelled with all previously accrued amounts being forfeited. Stock awards, representing 26,250,000 shares of restricted and unregistered common stock, scheduled to vest on January 1, 2015 were cancelled. |
|
(3) |
Mr. Pressey III was appointed Chief Business Development Officer and a Board Member on November 21, 2014. Effective January 22, 2015 Mr. Pressey III resigned as Chief Business Development Officer and Director. The above compensation represents accrued amounts related to a December 2014 employment agreement that was retroactively cancelled. Stock awards, representing 33,750,000 shares of restricted and unregistered common stock, scheduled to vest on January 1, 2015 were cancelled. Additionally, $900,000 of stock based compensation was earned on a pre-merger basis while in the employ of the public shell company and correspondingly eliminated from being presented in the accompanying statement of operations for the period ended December 31, 2014. Mr. Pressey was appointed as the Company’s Chief Business Development Officer and its Interim Chief Executive Officer and Interim Chief Financial Officer on January 29, 2015. |
|
(4) |
Mr. Walter Sr. resigned as the Sole Officer and Director of the Company on November 21, 2014. Additionally, $476,875 of stock based compensation was earned on a pre-merger basis while in the employ of the public shell company and correspondingly eliminated from being presented in the accompanying statement of operations for the period ended December 31, 2014. On January 22, 2015 Mr. Walter was appointed as the Sole Officer and Director and subsequently resigned all Officer positions on January 29, 2015. |
Compensation of Executive Officers
Other than Mr. James C. Walter Sr., none of
the named executive officers shown in the Summary Compensation Table served as executive officers of the non-surviving public company
shell.
Outstanding Equity Awards at Fiscal Year End
As of December 31, 2014 the Company’s
named executive officers collectively held restricted stock awards totaling 120,000,000 shares of common stock, half of which were
scheduled to vest as of January 1, 2015 with an additional 60,000,000 shares of restricted common stock scheduled to vest as of
July 15, 2015. In accordance with our Settlement Agreement dated January 22, 2015 all of these previously issued equity compensation
awards were retroactively cancelled in January 2015. Accordingly, they are not shown in the table below. The table below sets forth
all other options and stock awards received by the named executive officers of the Company with respect to fiscal year 2014:
|
|
Option Awards |
|
Stock Awards |
|
Name |
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable |
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable |
|
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#) |
|
|
Option
Exercise
Price
($) |
|
Option
Expiration
Date |
|
Number of
Shares or
Units of
Stock that
Have Not
Vested
(#) |
|
|
Market
Value of
Shares or
Units of
Stock that
Have Not
Vested
($) |
|
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights that
Have Not
Vested
(#) |
|
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights that
Have Not
Vested
(#) |
|
James C. Walter Sr. |
|
|
250,000 |
|
|
|
– |
|
|
|
– |
|
|
$ |
11.00 |
|
10/16/17 |
|
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– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
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Compensation of Directors
For the period ended December 31, 2014, each
of our Directors also served as an executive officer of the Company. No director received additional compensation in respect to
his service on the Board in 2014. Accordingly, the tabular disclosure called for by Item 402(r) of Regulation S-K is not applicable.
Employment Agreements
We have entered into employment agreements with the following
current executive officers, the terms of which are summarized below.
Naresh Malik, Chief Executive Officer
Mr. Malik entered into an employment agreement with the Company
effective April 21, 2015. The employment agreement provides for an initial term of four years, with an automatic one-year renewal
thereafter, unless the employment agreement is terminated by advance written notice of either party. Under the terms of the employment
agreement, Mr. Malik receives a base salary in the amount of $250,000 per year. Subject to the discretion of the Board of Directors,
Mr. Malik shall be eligible for an annual bonus of not less than fifteen percent (15%) and not more than thirty-five percent (35%)
of annual base salary. Mr. Bibbens shall receive an initial grant of 5,000,000 shares of the Company’s restricted common
stock within 30 days of signing the employment agreement, and will be granted 2,500,000 additional shares of the Company’s
common stock on each of the subsequent four anniversaries of the commencement of employment, should Mr. Malik continue to be employed
in good standings on such dates. The employment agreement further provides that Mr. Bibbens is entitled to 4 weeks of paid vacation
per year and other executive level benefits.
The Company may terminate the employment agreement with Mr. Malik
for cause, without cause, or by reason of his death or disability. Mr. Malik may terminate the employment agreement for any reason
by advance written notice. If the employment agreement is terminated by reason of death, disability, resignation by Mr. Malik or
termination by the Company without Cause (as defined in the employment agreement) then the Company will be required to pay to Mr.
Malik severance pay of four months base compensation and continue all other benefits under the agreement for a period of four months.
If the Company terminates the employment agreement for Cause, then Mr. Malik will only be entitled to the base salary and benefits
earned through and including the date of termination. Mr. Malik has agreed not to compete with us during the term of his employment
agreement and for a period of twelve months thereafter. We also agree to indemnify Mr. Malik pursuant to the employment agreement.
Myles A. Pressey III, Chairman and Chief Business Development
Officer
Mr. Pressey III entered into an employment agreement with the Company
on January 29, 2015. The employment agreement provides for an initial term of four years, with an automatic one-year renewal thereafter,
unless the employment agreement is terminated by advance written notice of either party. Under the terms of the employment agreement,
Mr. Pressey III receives a base salary in the amount of $250,000 per year. Subject to the discretion of the Board of Directors,
Mr. Pressey III shall be eligible for an annual bonus of not less than fifteen percent (15%) and not more than thirty-five percent
(35%) of annual base salary. Mr. Pressey III shall receive an initial grant of One Hundred Twenty-Five Million (125,000,000) shares
of the Company’s common stock within 30 days of signing the employment agreement. Upon reaching certain benchmarks, for example
achievement by the Company of twenty-five million dollars ($25,000,000) in revenue on a consolidated reporting basis for any calendar
year, Mr. Pressey III will be entitled to a stock issuance in the amount of sixty-two million five hundred thousand (62,500,000)
shares. The employment agreement further provides that Mr. Pressey III is entitled to 4 weeks of paid vacation per year and other
executive level benefits.
The Company may terminate the employment agreement with Mr. Pressey
III for cause, without cause, or by reason of his death or disability. Mr. Pressey III may terminate the employment agreement for
any reason by advance written notice. If the employment agreement is terminated by reason of death, disability, Mr. Pressey III’s
resignation or termination by the Company without Cause (as defined in the employment agreement) then the Company will be required
to pay to Mr. Pressey III severance pay of four months base compensation and continue all other benefits under the agreement for
a period of four months. If the Company terminates the employment agreement for Cause, then Mr. Pressey III will be entitled to
the base salary and benefits earned through and including the date of termination. Mr. Pressey III has agreed not to compete with
us during the term of his employment agreement and for a period of twelve months thereafter. The Company also agreed to indemnify
Mr. Pressey III pursuant to the employment agreement.
Stanley L. Teeple, Chief Compliance Officer
We entered into an employment agreement with Stanley Teeple, our
Chief Compliance Officer dated December 1, 2014. Mr. Teeple performs the duties and functions of his office under the supervisory
authority of our Board of Directors and Chief Executive Officer. The employment agreement provides for an initial term ending December
31, 2016, with an automatic one-year renewal thereafter, unless the employment agreement is terminated by advance written notice
of either party. Under the terms of the employment agreement, Mr. Teeple receives a base salary in the amount of $250,000 per year,
subject to review at least annually by the CEO or Board of Directors. For 2014, Mr. Teeple is eligible for a $100,000 bonus and
for 2015 and subsequent years, a bonus of not less than 5% and not more than thirty-five percent (35%) of prior year annual base
salary shall be awarded in the discretion of the CEO and Board of Directors or committee thereof. Mr. Teeple shall receive a one-time
grant of one million shares of the Company’s common stock, to be issued not later than June 30, 2015. Mr. Teeple is also
entitled to participate in and receive such other benefits and compensation that our company may furnish to other management personnel
or employees generally. The employment agreement further provides that Mr. Teeple is entitled to 3 weeks of paid vacation per year
commencing January 1 2015. He is also entitled to and other executive level benefits under the employment agreement.
We may terminate the employment agreement with Mr. Teeple for cause,
without cause, or by reason of his death or disability. Mr. Teeple may terminate the employment agreement for any reason by advance
written notice. If the employment agreement is terminated by reason of death, disability, or termination by the Company without
Cause (as defined in the employment agreement) then our company will be required to pay to Mr. Teeple severance pay of four months
base compensation and continue all other benefits under the agreement for a period of four months. If we terminate the employment
agreement for cause or if Mr. Teeple terminates the employment agreement, then Mr. Teeple will be entitled to the base salary and
benefits earned through and including the date of termination. Mr. Teeple has agreed not to compete with us during the term of
his employment agreement and for a period of twelve months thereafter. We also agree to indemnify Mr. Teeple pursuant to the employment
agreement.
Johnathan F. Adair, Chief Operating Officer
Mr. Adair entered into an employment agreement with the Company
on January 29, 2015. The employment agreement provides for an initial term of four years, with an automatic one-year renewal thereafter,
unless the employment agreement is terminated by advance written notice of either party. Under the terms of the employment agreement,
Mr. Adair receives a base salary in the amount of $250,000 per year. Subject to the discretion of the CEO and the Board of Directors,
Mr. Adair shall be eligible for an annual bonus of not less than fifteen percent (15%) and not more than thirty-five percent (35%)
of annual base salary. Mr. Adair shall receive an initial grant of 5,000,000 shares of the Company’s restricted common stock
within 30 days of signing the employment agreement, and will be granted 2,500,000 additional shares of the Company’s common
stock on each of the subsequent four anniversaries of the commencement of employment, should Mr. Adair continue to be employed
in good standings on such dates. The employment agreement further provides that Mr. Adair is entitled to 4 weeks of paid vacation
per year.
The Company may terminate the employment agreement with Mr. Adair
for cause, without cause, or by reason of his death or disability. Mr. Adair may terminate the employment agreement for any reason
by advance written notice. If the employment agreement is terminated by reason of death, disability, resignation by Mr. Adair or
termination by the Company without Cause (as defined in the employment agreement) then the Company will be required to pay to Mr.
Adair severance pay of four months base compensation and continue all other benefits under the agreement for a period of four months.
If the Company terminates the employment agreement for Cause, then Mr. Adair will only be entitled to the base salary and benefits
earned through and including the date of termination. Mr. Adair has agreed not to compete with us during the term of his employment
agreement and for a period of twelve months thereafter. We also agree to indemnify Mr. Adair pursuant to the employment agreement.
Frank McEnulty, Chief Financial Officer
Mr. McEnulty entered into an employment agreement with the Company
effective as of May 2, 2015 to serve as the Company’s Chief Financial Officer. The agreement provides for two different stages
of employment: Stage 1 commences on the effective date of the agreement and lasts until the earlier of the Board of Directors implementing
Stage 2 of the agreement or the first anniversary of the agreement, at which time the Board may either implement Stage 2 or terminate
the Agreement. During Stage 1, Mr. McEnulty receives a base salary in the amount of $182,500 per year, and is entitled to 1,000,000
shares of common stock within 30 days of the employment agreement. Salary and any additional potential stock awards associated
with Stage 2 would be determined by the Board of Directors upon implementation of Stage 2. During Stage 2, if applicable, Mr. McEnulty
would be eligible for an annual bonus of not less than fifteen percent (15%) and not more than thirty-five percent (35%) of annual
base salary.
The Company may terminate the employment agreement with Mr. McEnulty
for cause, without cause, or by reason of his death or disability. Mr. McEnulty may terminate the employment agreement for any
reason by advance written notice. If the employment agreement is terminated by reason of death, disability, resignation by Mr.
McEnulty or termination by the Company without Cause (as defined in the employment agreement) then the Company will be required
to pay to Mr. McEnulty severance pay of four months base compensation and continue all other benefits under the agreement for a
period of four months. If the Company terminates the employment agreement for Cause, then Mr. McEnulty will only be entitled to
the base salary and benefits earned through and including the date of termination. Mr. McEnulty has agreed not to compete with
us during the term of his employment agreement and for a period of twelve months thereafter. We also agree to indemnify Mr. McEnulty
pursuant to the employment agreement.
Lynwood Bibbens, Chief Strategy Officer
In connection with Mr. Bibbens’ appointment as the Company’s
Chief Strategy Officer, Mr. Bibbens entered into an employment agreement with the Company on January 29, 2015. The employment agreement
provides for an initial term of four years, with an automatic one-year renewal thereafter, unless the employment agreement is terminated
by advance written notice of either party. Under the terms of the employment agreement, Mr. Bibbens receives a base salary in the
amount of $250,000 per year. Subject to the discretion of the CEO and the Board of Directors, Mr. Bibbens shall be eligible for
an annual bonus of not less than fifteen percent (15%) and not more than thirty-five percent (35%) of annual base salary. Mr. Bibbens
shall receive an initial grant of 5,000,000 shares of the Company’s restricted common stock within 30 days of signing the
employment agreement, and will be granted 2,500,000 additional shares of the Company’s common stock on each of the subsequent
four anniversaries of the commencement of employment, should Mr. Bibbens continue to be employed in good standings on such dates.
The employment agreement further provides that Mr. Bibbens is entitled to 4 weeks of paid vacation per year.
The Company may terminate the employment agreement with Mr. Bibbens
for cause, without cause, or by reason of his death or disability. Mr. Bibbens may terminate the employment agreement for any reason
by advance written notice. If the employment agreement is terminated by reason of death, disability, resignation by Mr. Bibbens
or termination by the Company without Cause (as defined in the employment agreement) then the Company will be required to pay to
Mr. Bibbens severance pay of four months base compensation and continue all other benefits under the agreement for a period of
four months. If the Company terminates the employment agreement for Cause, then Mr. Bibbens will only be entitled to the base salary
and benefits earned through and including the date of termination. Mr. Bibbens has agreed not to compete with us during the term
of his employment agreement and for a period of twelve months thereafter. We also agree to indemnify Mr. Bibbens pursuant to the
employment agreement.
Pension Benefits
We do not maintain any pension plan or arrangement under which our
named executive officers are entitled to participate or receive post-retirement benefits.
NonQualified Deferred Compensation
We do not maintain any nonqualified deferred compensation plan or
arrangement under which our named executive officers are entitled to participate.
Employee Benefit Plans
2007 Stock Option Plan. Our Board of Directors adopted our
company’s 2007 Stock Option Plan (the “2007 Stock Option Plan”). The 2007 Stock Option Plan was approved by our
stockholders at a meeting of stockholders held on October 15, 2007. The description set forth below summarizes the principal terms
and conditions of the 2007 Stock Option Plan, does not purport to be complete and is qualified in its entirety by reference to
the 2007 Stock Option Plan, a copy of which has been filed with the Securities and Exchange Commission as an Exhibit to this Report.
General. The primary objectives of the 2007 Stock Option
Plan are to:
|
· |
attract and retain selected key employees, consultants and directors; |
|
· |
encourage their commitment; |
|
· |
motivate superior performance; |
|
· |
facilitate attainment of ownership interests in our company; |
|
· |
align personal interests with those of our stockholders; and |
|
· |
enable them to share in the long-term growth and success of our company. |
Shares Subject to 2007 Stock Option Plan. The number of shares
of common stock of our company reserved under the 2007 Stock Option Plan is 90,90911. The number of shares available
under both the 2007 Stock Option Plan and outstanding incentive awards are subject to adjustments to prevent enlargement or dilution
of rights resulting from stock dividends, stock splits, recapitalization or similar transactions, or resulting from a change in
applicable laws or other circumstances.
Administration. The Plan shall be administered by either
the Board of Directors of the Company (the “Board”) or by a committee (the “Committee”) to which administration
of the Plan, or of part of the Plan, may be delegated by the Board (in either case, the “Administrator”). The Board
shall appoint and remove members of such Committee, if any, in its discretion in accordance with applicable laws. If necessary
in order to comply with Rule 16b-3 under the Exchange Act and Section 162(m) of the Code, the Committee shall, in the Board’s
discretion, be comprised solely of “non-employee directors” within the meaning of said Rule 16b-3 and “outside
directors” within the meaning of Section 162(m) of the Code. The foregoing notwithstanding, the Administrator may delegate
nondiscretionary administrative duties to such employees of the Company as it deems proper and the Board, in its absolute discretion,
may at any time and from time to time exercise any and all rights and duties of the Administrator under the Plan.
_______________
1
This reflects the 1-for-44 reverse stock split, which became effective on November 12, 2014. Originally, 40,000,000 shares
of our common stock was reserved under the 2007 Stock Option Plan.
Eligibility. Every person who at the date of grant of an
Option is an employee of the Company or of any Affiliate (as defined below) of the Company is eligible to receive Non-qualified
stock options (“NQSOs”) or Incentive Stock Options (“ISOs”) under the Plan. Every person who at the date
of grant is a consultant to, or non-employee director of, the Company or any Affiliate (as defined below) of the Company is eligible
to receive NQSOs under the Plan. The term “Affiliate” as used in the Plan means a parent or subsidiary corporation
as defined in the applicable provisions (currently Sections 424(e) and (f), respectively) of the Code. The term “employee”
includes an officer or director who is an employee of the Company. The term “consultant” includes persons employed
by, or otherwise affiliated with, a consultant.
Terms and Conditions
All Options granted under the 2007 Stock Option Plan shall be subject
to the terms and conditions provided therein, including:
1. Time
of Option Exercise. Subject to the other relevant provisions of the Plan, Options granted under the Plan shall be exercisable (a)
immediately as of the effective date of the stock option agreement granting the Option, or (b) in accordance with a schedule as
may be set by the Administrator (each such date on such schedule, the “Vesting Base Date”) and specified in the written
stock option agreement relating to such Option. In any case, no Option shall be exercisable until a written stock option agreement
in form satisfactory to the Company is executed by the Company and the optionee.
2. Nontransferability
of Option Rights. Except with the express written approval of the Administrator which approval the Administrator is authorized
to give only with respect to NQSOs, no Option granted under the Plan shall be assignable or otherwise transferable by the optionee
except by will, by the laws of descent and distribution or pursuant to a qualified domestic relations order. During the life of
the optionee, an Option shall be exercisable only by the optionee.
3. Payment.
All options issued under the Plan are deemed to be cashless. Options may be exercised using the intrinsic value of the options.
4. Termination
of Employment. All options issued under the plan are to be vested immediately unless stipulated otherwise by the Administrator
at the time of issuance. The Employee shall have 90 days from termination to exercise the option or it shall expire.
5. Determination
of Value. For purposes of the Plan, the fair market value of Shares or other securities of the Company shall be determined as follows:
(a) Fair market value shall be the closing
price of such stock on the date before the date the value is to be determined on the principal recognized securities exchange or
recognized securities market on which such stock is reported, but if selling prices are not reported, its fair market value shall
be the mean between the high bid and low asked prices for such stock on the date before the date the value is to be determined
(or if there are no quoted prices for such date, then for the last preceding business day on which there were quoted prices).
(b) In the absence of an established market
for the stock, the fair market value thereof shall be determined in good faith by the Administrator, with reference to the Company’s
net worth, prospective earning power, dividend-paying capacity, and other relevant factors, including the goodwill of the Company,
the economic outlook in the Company’s industry, the Company’s position in the industry, the Company’s management,
and the values of stock of other corporations in the same or similar line of business.
Federal Income Tax Consequences
The holder of an ISO does not realize taxable income upon the grant
or upon the exercise of the option (although the option spread is an item of tax preference income potentially subject to the alternative
minimum tax). If the stock acquired upon exercise of the options sold or otherwise disposed of within two (2) years from the option
grant date or within one year from the exercise date then, in general, gain realized on the sale is treated as ordinary income
to the extent of the option spread at the exercise date, and the Company receives a corresponding deduction. Any remaining gain
is treated as capital gain. If the stock is held for at least two (2) years from the grant date and one year from the exercise
date, then gain or loss realized upon the sale will be capital gain or loss and the Company will not be entitled to a deduction.
A special basis adjustment applies to reduce the gain for alternative minimum tax purposes.
Section 409A of the Code generally provides that any deferred compensation
arrangement that does not satisfy specific written requirements regarding (i) timing and form of payouts, (ii) advance election
of deferrals and (iii) restrictions on acceleration of payouts results in immediate taxation of all amounts deferred to the extent
not subject to a substantial risk of forfeiture. In addition, tax on the amounts included in income also are subject to a 20% excise
tax and interest. In general, to avoid a violation of Section 409A of the Code, amounts deferred may be paid out only upon separation
from service, disability, death, a specified time, a change in control (as defined by the Treasury Department) or an unforeseen
emergency. Furthermore, the election to defer generally must be made in the calendar year before performance of services, and any
provision for accelerated payout other than for reasons specified by the Treasury may cause the amounts deferred to be subject
to early taxation and to the imposition of the excise tax. Section 409A of the Code is broadly applicable to any form of deferred
compensation other than tax-qualified retirement plans and bona fide vacation, sick leave, compensatory time, disability pay or
death benefits and may be applicable to certain awards under the 2007 Stock Option Plan. The Treasury Department has provided guidance
on transition issues and final regulations under new Section 409A of the Code. Incentive awards under the 2007 Stock Option Plan
that are subject to Section 409A of the Code are intended to satisfy the requirements of Section 409A of the Code, as specified
in an incentive agreement.
Generally, taxable compensation earned by “covered employees”
(as defined in Section 162(m) of the Code) for options or other applicable incentive awards is intended to constitute qualified
performance-based compensation. We should, therefore, be entitled to a tax deduction for compensation paid in the same amount as
the ordinary income recognized by the covered employees without any reduction under the limitations of Section 162(m) on deductible
compensation paid to such employees. However, the committee may determine, within its sole discretion, to grant incentive awards
to such covered employees that do not qualify as performance-based compensation. Under Section 162(m), our company is denied a
deduction for annual compensation paid to such employees in excess of $1,000,000.
THE FOREGOING IS A SUMMARY OF THE UNITED STATES FEDERAL INCOME
TAX CONSEQUENCES THAT GENERALLY WILL ARISE UNDER THE CODE WITH RESPECT TO INCENTIVE AWARDS GRANTED UNDER THE 2007 STOCK OPTION
PLAN AND DOES NOT PURPORT TO BE A COMPLETE STATEMENT OF ALL RELEVANT PROVISIONS OF THE CODE.
MOREOVER, THIS SUMMARY IS BASED ON CURRENT FEDERAL INCOME TAX
LAWS UNDER THE CODE, WHICH ARE SUBJECT TO CHANGE. THE TREATMENT OF FOREIGN, STATE, LOCAL OR ESTATE TAXES IS NOT ADDRESSED. THE
TAX CONSEQUENCES OF THE INCENTIVE AWARDS ARE COMPLEX AND DEPENDENT ON EACH INDIVIDUAL’S PERSONAL TAX SITUATION. ALL PARTICIPANTS
ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISERS RESPECTING INCENTIVE AWARDS.
Limitation of Liability and Indemnification Matters
Our articles of incorporation contain provisions that limit the
liability of our directors for monetary damages to the fullest extent permitted by Nevada law.
Our articles of incorporation and bylaws authorize our company to
provide indemnification to our directors and officers and persons who are or were serving at our request as a director, officer,
manager or trustee of another corporation or of a partnership, limited liability company, joint venture, trust or other enterprise
to the fullest extent permitted by Nevada law. Our articles of incorporation and bylaws also authorize our company, by action of
our Board of Directors, to provide indemnification to employees and agents of our company and persons who are serving or did serve
at our request as an employee or agent of another corporation or of a partnership, limited liability company, joint venture, trust
or other enterprise with the same scope and effect as provided to our directors and officers as described above.
Our company has not entered into any indemnification agreement with
any of its directors or officers.
We anticipate obtaining director and officer liability insurance
with respect to possible director and officer liabilities arising out of certain matters, including matters arising under the Securities
Act.
Option Exercises and Stock Vested
None of our named executive officers exercised stock options during
2014 and through the date of this Report.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE
Other than as disclosed below, none of the
following persons have, since our date of incorporation, had any material interest, direct or indirect, in any transaction with
us or in any presently proposed transaction that has or will materially affect us:
|
· |
Any person proposed as a nominee for election as a director; |
|
· |
Any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our outstanding shares of common stock; |
|
· |
Any relative or spouse of any of the foregoing persons who has the same house as such person. |
Related Transactions
On May 24, 2014 our prior Chairman and Chief
Executive Officer contributed the brands, rights, and ecommerce opportunities of HDIMAX.com and Frontlinewire.com to the Company
in exchange for 48,500,000 shares of common stock of the Company. Since we were under control of our founder on the date of the
transaction, our founder’s historical cost became the carrying cost of the contributed assets totaling $488. As of December
31, 2014the cost of registering the websites was fully amortized, however, we maintained the rights to the domain names.
During the period ended December 31, 2014 we
paid our founder, Chairman, and Chief Executive Officer and related entities $211,591 for the development of content and other
marketing related expenses. The amount is classified in sales and marketing in the accompanying statement of operations.
As of December 31, 2014 we owed a related party
$340,163 as result of the related party directly paying third party vendors on our behalf. In February 2015 we issued 7,500,000
shares of restricted and unregistered common stock in full settlement of these previously accrued obligations.
Section 16(a) Beneficial Ownership
Reporting Compliance
Section 16(a) of the Exchange Act requires that the directors, officers
and persons who beneficially own more than 10% of the equity securities of reporting companies, file reports of ownership and changes
in ownership with the Securities and Exchange Commission (the “SEC”). Directors, officers and greater than 10% stockholders
are required by SEC regulation to furnish our company with copies of all Section 16(a) forms that they file. Based solely on our
review of the copies of such forms we received, we believe that during the year ended December 31, 2014, and through the date of
this Report, all such filing requirements applicable to our company were complied with.
Code of Ethics
We have not adopted a corporate code of ethics that applies to our
Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer or controller, or persons performing similar
functions. Our decision not to adopt such a code of ethics results from our having only a limited number of officers and directors
operating as the management for our company. We believe that, as a result of the limited interaction that occurs, having such a
small management structure for our company eliminates the current need for such a code.
Committees of our Board of Directors
Audit Committee
We do not have a formal standing audit committee. Rather, audit
committee functions are performed by our entire Board of Directors. These functions include: (1) selection and oversight of our
independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting,
internal controls and auditing matters; (3) establishing procedures for the confidential, anonymous submission by our employees
of concerns regarding accounting and auditing matters; (4) engaging outside advisors; and (5) funding for the outside auditory
and outside advisors engagement by the audit committee.
Audit Committee Financial Expert
None of our directors or officers has the qualifications or experience
to be considered a financial expert. We believe that the cost related to retaining a financial expert at this time is prohibitive.
However, we do intend to appoint an audit committee financial expert in the foreseeable future.
Disclosure Committee
Disclosure committee functions are performed by our entire Board
of Directors.
Director Independence
Two of the members of our Board of Directors may be deemed to be
independent under the standards for independence contained in the Nasdaq Marketplaces Rules, Rule 4350(d) and Rule 4200(a)(15).
Compensation Committee
Compensation committee functions are performed by our entire Board
of Directors. Our Board of Directors does not have a charter or other formal policies regarding compensation.
Nominating and Corporate Governance Committee
Nominating and Corporate Governance committee functions are performed
by our entire Board of Directors. Our Board of Directors does not have a charter or other formal policies regarding director nominations
or corporate governance.
Stockholder Communications
Any stockholder may communicate directly to our Board of Directors
by sending a letter to our company’s address of record.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Principal Stockholders and Management
The following table provides certain information regarding the ownership
of our common stock as of May 27, 2015 by:
|
· |
each of our executive officers; |
|
· |
each of our directors; |
|
· |
each person known to us to own more than 5% of our outstanding common stock; and |
|
· |
all of our executive officers and directors and as a group. |
Name
and Address of Stockholders† |
|
Shares Beneficially Owned (1)(2) |
|
|
Percentage Ownership (1) |
|
Myles A. Pressey III (Chairman of the Board and Chief Business Development Officer) |
|
|
128,409,091 |
|
|
|
56.17% |
|
Stanley L. Teeple (3) |
|
|
5,813,841 |
(3) |
|
|
2.54% |
|
Lynwood A. Bibbens (4) |
|
|
5,000,000 |
|
|
|
2.18% |
|
Jonathan F. Adair (5) |
|
|
5,000,000 |
|
|
|
2.18% |
|
Frank McEnulty (6) |
|
|
1,000,000 |
|
|
|
* |
|
Steven L. Sanders (Director) |
|
|
150,000 |
|
|
|
* |
|
James C. Walter Sr. (Director) |
|
|
7,746,053 |
|
|
|
3.39% |
|
Naresh Malik (7) |
|
|
5,000,000 |
|
|
|
2.18% |
|
|
|
|
|
|
|
|
|
|
Officers and Directors as a group (8) persons |
|
|
158,118,985 |
|
|
|
69.18% |
|
_______________
† Each stockholder’s address is c/o Indigo
Energy, Inc. 74 N. Pecos Road, Suite D, Henderson, Nevada 89074
* Represents less than 1%.
|
(1) |
Based on an aggregate of 226,822,131 shares of common stock outstanding as of May 27, 2015, and outstanding options and warrants convertible into shares of common stock totaling 1,780,682 for a grand total of 228,602,813. |
|
|
|
|
(2) |
Unless otherwise indicated, shares are fully vested shares of the Company common stock.. |
|
|
|
|
(3) |
Includes 132,023 shares held by Stan Teeple, Inc., an entity which Mr. Teeple controls as its CEO. Mr. Teeple was appointed Chief Compliance Officer effective December 3, 2014. |
|
|
|
|
(4) |
Appointed Chief Strategy Officer effective January 29, 2015. |
|
|
|
|
(5) |
Appointed Chief Operating Officer effective January 29, 2015. |
|
|
|
|
(6) |
Appointed Chief Financial Officer
effective May 2, 2015. |
|
|
|
|
(7) |
Appointed Chief Executive Officer effective
April 21, 2015. |
Changes in Control
Not applicable.
SELLING STOCKHOLDERS
This prospectus covers the resale by the selling stockholders named
below from time to time of up to a total of 43,302,185 shares of our common stock that were issued to the selling stockholders
pursuant to transactions exempt from registration under the Securities Act. All of the common stock offered by the selling stockholders
is being offered for their own accounts.
Issuances of Securities being Offered
A description of each transaction in which common stock being offered
in this offering was sold to the selling stockholders is set forth below. Generally, the shares that are being offered for resale
by the selling stockholders can be categorized as follows: (i) shares that were sold in private placements of our common stock;
and (ii) shares to compensate our executives and our consultants, and (iii) as consideration to extinguish debts and contractual
payment obligations of the Company.
Private Placement Transactions
A majority of the shares included in the
selling stockholder table below are held by third party investors. Each of the investors in the foregoing private placements is a
U.S. person having sufficient knowledge in business and financial matters to be capable of evaluating the merits and risks
of the transaction. The transactions were exempt from registration under the Securities Act of 1933, based upon Section
4(2) for transactions by the issuer not involving any public offering and Rule 506 of Regulation D promulgated thereunder.
There was no underwriter, no underwriting discounts or commissions, no general solicitation, no advertisement, and
resale restrictions were imposed by placing restrictive legends on the certificates.
Issuance to Executives and Consultants
Shares held by affiliates represent approximately one third of the
shares included in the Selling Stockholders’ table. Mr. Pressey III beneficially owns a total of approximately 128 million
shares of restricted common stock, of which 8,000,000, or approximately 6.25%, are being registered hereby. Pursuant to our employment
agreements with each of the following executive officers, we have issued 5,000,000 shares of restricted common stock, of which
1,250,000 shares are being registered for each such officer: Naresh Malik, our Chief Executive Officer; Lynwood Bibbens, our Chief
Strategy Officer; and Johnathan Adair, our Chief Operating Officer. In addition, we are registering 2,250,000 shares held by our
Chief Compliance Officer, Stanley Teeple, 500,000 shares held by Director James C. Walter Sr. and 150,000 shares held by Director
Steven Sanders.
The remainder of the shares included in the table below, were issued
to consultants in exchange for services or were issued as consideration to extinguish historical debts and contractual payment
obligations of the Company.
Selling Stockholders
The following table sets forth certain information regarding the
selling stockholders and the shares offered by them in this prospectus.
Except as specifically set forth in the footnotes to the table,
none of the selling stockholders has held a position as an officer or director of the Company, nor has any selling stockholder
had any material relationship of any kind with us or any of our affiliates, other than as an employee, as set forth in the footnotes
to the table. All information with respect to share ownership has been furnished by the selling stockholders. The shares being
offered are being registered to permit public resale of the shares and each selling stockholder may offer all or part of the shares
owned for resale from time to time. In addition, none of the selling stockholders has any family relationships with our officers,
directors or controlling stockholders, except as indicated in the footnotes to the table.
For additional information regarding our capitalization, including
shares held by officers, directors and 5% holders, refer to “Security Ownership of Certain Beneficial Owners and Management”
above.
The term “selling stockholders” also includes any transferees,
pledges, donees, or other successors in interest to the selling stockholders named in the table below. To our knowledge, subject
to applicable community property laws, each person named in the table has sole voting and investment power with respect to the
shares of common stock set forth opposite such person’s name. We will file a supplement to this prospectus to name successors
to any named selling stockholders who are able to use this prospectus to resell the securities registered hereby.
We will receive no proceeds from the sale of the registered shares.
We have agreed to bear the expenses of registration of the shares, other than commissions and discounts of agents or broker-dealers
and transfer taxes, if any. We have no contractual obligations to provide any of our shareholders with registration of their shares.
Name of Selling Stockholder1 |
Number of Shares of Common Stock Beneficially Owned Prior to Offering2 |
Total
Number of
Shares to be
Offered for
Selling
Stockholders
Account |
Total Shares to be
Owned and Percent
of Total
Outstanding After
Completion of this
Offering2,3,4 |
Briana Pressey(6) |
227,273 |
227,273 |
0 |
0% |
David Stang |
90,909 |
90,909 |
0 |
0% |
Davis Martin Consulting, LLC |
3,181,818 |
3,181,818 |
0 |
0% |
Ingenium Accounting Associates |
108,182 |
108,182 |
0 |
0% |
International Private Capital Group LLC |
2,046,765 |
2,046,765 |
0 |
0% |
James C. Walter Jr. |
5,402,273 |
500,000 |
4,902,273 |
2.15% |
Jerry Bratz Jr. |
36,364 |
36,364 |
0 |
0% |
Jerry Bratz Sr. |
1,556,851 |
1,556,851 |
0 |
0% |
Jim Dunn III |
545,185 |
545,185 |
0 |
0% |
Jimmy Oliver |
227,273 |
227,273 |
0 |
0% |
Johnathan Adair(7) |
5,000,000 |
1,250,000 |
3,750,000 |
1.64% |
Karrey Anne Geddes |
17,045 |
17,045 |
0 |
0% |
Kirsten Braatz |
523,480 |
523,480 |
0 |
0% |
Lance A. McKinlay |
179,393 |
179,393 |
0 |
0% |
Leslie Greif |
490,332 |
490,332 |
0 |
0% |
Linda Pressey(6) |
227,273 |
227,273 |
0 |
0% |
Lynwood Bibbens(8) |
5,000,000 |
1,250,000 |
3,750,000 |
1.64% |
Margaret W. Morie |
130,360 |
130,360 |
0 |
0% |
Mark Spuler |
277,777 |
277,777 |
0 |
0% |
Michael J. Ducas |
6,568,182 |
3,068,182 |
3,500,000 |
1.5% |
Myles A. Pressey III(9) |
128,409,091 |
8,000,000 |
120,409,091 |
52.69% |
Myles A. Pressey IV(6) |
227,273 |
227,273 |
0 |
0% |
Naresh Malik(10) |
5,000,000 |
1,250,000 |
3,750,000 |
1.64% |
New Hope Partners LLC |
16,381,105 |
11,881,104 |
4,500,000 |
2.0% |
Raymond Gawronski |
18,12 |
18,102 |
0 |
0% |
Raynard A. Barnard |
57,971 |
57,971 |
0 |
0% |
Robert Rosania |
22,510 |
22,510 |
0 |
0% |
Sandra Delgozzo |
22,727 |
22,727 |
0 |
0% |
Scott Alan Stiner |
2,250,000 |
2,250,000 |
0 |
0% |
Stanley L. Teeple(11) |
5,813,841 |
2,382,023 |
3,431,818 |
1.50% |
Steven P. Durdin(13) |
1,307,024 |
760,227 |
546,797 |
* |
Steven Sanders |
150,000 |
150,000 |
0 |
0% |
Steve Mongiardo |
17,045 |
17,045 |
0 |
0% |
Weltman
Bernfield LLC |
52,627 |
52,627 |
0 |
0% |
William Michael Long |
25,445 |
25,445 |
0 |
0% |
Wilson & Oskam LLP |
80,000 |
80,000 |
0 |
0% |
Total |
|
43,302,185 |
|
|
1. |
Unless a relationship is specified in the notes below, each selling stockholder is a third party investor with no other relationship with the registrant. |
2. |
The number of shares listed in these columns include all shares beneficially owned and all options or warrants to purchase shares held, whether or not deemed to be beneficially owned, by the selling stockholder. The ownership percentages listed in these columns include only shares beneficially owned by the listed selling stockholder. Beneficial ownership is determined in accordance with the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included the shares the person has the right to acquire within 60 days of the date above, including through the exercise of any option, warrant or other right or conversion of any security. The shares that a stockholder has the right to acquire within 60 days, however, are not included in the computation of the percentage ownership of any other stockholder. The ownership percentages are calculated assuming that 228,506,664 shares, including outstanding options and warrants convertible into shares of common stock totaling 1,780,682 shares, were outstanding as of May 27, 2015. |
3. |
Shares have been adjusted for the 1 for 44 reverse stock split effective November 12, 2014 |
4. |
Under the rules adopted by the SEC, a person is deemed to be a beneficial owner of securities with respect to which the person has or shares: (a) voting power, which includes the power to vote or direct the vote of the security, or (b) investment power, which includes the power to dispose of or to direct the disposition of the security. Unless otherwise indicated below, the persons named in the table above have sole voting and investment power with respect to all shares beneficially owned. Assumes that all the securities listed hereunder have been sold. |
5. |
* denotes less than 1%. |
6. |
Linda Pressey, Briana Pressey, and
Myles A. Pressey IV are the children of Myles A. Pressey III, our director and Chief Business Development Officer who each own
stock in her or his own name, respectively, and has sole voting and investment power over the shares indicated. |
7. |
Johnathan F. Adair was appointed as
our Chief Operating Officer on January 29, 2015. |
8. |
Lynwood A. Bibbens was appointed as our Chief Strategy Officer on
January 29, 2015. |
9. |
Myles A. Pressey III was elected as
a director and our Chief Business Development Officer effective January 29, 2015. |
10. |
Naresh Malik was appointed as our Chief Executive Officer on April 21, 2015. |
11.
12. |
Mr. Teeple was appointed as our Chief Compliance Officer effective December 3, 2014. The shares being registered include 2,250,000 shares held by Mr. Teeple individual and 132,023 shares held by Stan Teeple, Inc., an entity controlled by Stanley L. Teeple. |
13.
|
Mr. Durdin is a former Director and our former President and Chief Executive Officer. He resigned as a Director and as the President and Chief Executive Officer effective December 10, 2012. Includes 2,273 shares held by Durdin Insurance, an entity controlled by Mr. Durdin. |
DILUTION
At March 31, 2015, our net tangible book
value was approximately $(1,252,404), or $(.00593) per share of common stock then outstanding. Net tangible book value per share
represents the amount of our total tangible assets less total liabilities, divided by the number of shares of common stock outstanding.
Pro forma net tangible book value dilution per share represents the difference between the amount per share paid by purchasers
of shares of common stock in this offering and the pro forma net tangible book value per share of common stock immediately
after completion of this offering on a pro forma as adjusted basis. After giving effect to the sale of 9,375,000 shares
of common stock by us at the offering price of $0.32 per share, a total of 220,872,162 shares of common stock would be outstanding,
with a pro forma net tangible book value of approximately $.00621 per share. This would represent an immediate increase
in net tangible book value of approximately $.01214 per share to existing stockholders and an immediate dilution of approximately
$.3138 per share to investors in this offering. Dilution is determined by subtracting net tangible book value per share after this
offering from the amount paid by investors in this offering per share of common stock (minus placement agent fees and expenses
and other estimated offering expenses). The following table illustrates the per share dilution:
PURCHASERS OF SHARES IN THE PUBLIC OFFERING IF 100% OF PUBLIC OFFERING SHARES SOLD | |
| | |
| |
Offering price per share | |
| | | |
$ | 0.32 | |
Net tangible book value per share before offering | |
$ | (.00593 | ) | |
| | |
Increase in pro forma net tangible book value per share attributable to this offering | |
$ | .05901 | | |
| | |
Pro forma net tangible book value per share after this offering | |
| | | |
$ | .05308 | |
Dilution per share to new investors | |
| | | |
$ | .26690 | |
PURCHASERS OF SHARES IN THE PUBLIC OFFERING IF 75% OF PUBLIC OFFERING SHARES SOLD | |
| | |
| |
Offering price per share | |
| | | |
$ | .32 | |
Net tangible book value per share before offering | |
$ | (.00593 | ) | |
| | |
Increase in pro forma net tangible book value per share attributable to this offering | |
$ | .04631 | | |
| | |
Pro forma net tangible book value per share after this offering | |
| | | |
$ | .04038 | |
Dilution per share to new investors | |
| | | |
$ | .27960 | |
PURCHASERS OF SHARES IN THE PUBLIC OFFERING IF 50% OF PUBLIC OFFERING SHARES SOLD | |
| | |
| |
Offering price per share | |
| | | |
$ | .32 | |
Net tangible book value per share before offering | |
$ | (.00593 | ) | |
| | |
Increase in pro forma net tangible book value per share attributable to this offering | |
$ | .03234 | | |
| | |
Pro forma net tangible book value per share after this offering | |
| | | |
$ | .02641 | |
Dilution per share to new investors | |
| | | |
$ | .29360 | |
PURCHASERS OF SHARES IN THE PUBLIC OFFERING IF 25% OF PUBLIC OFFERING SHARES SOLD | |
| | |
| |
Offering price per share | |
| | | |
$ | .32 | |
Net tangible book value per share before offering | |
$ | (.00593 | ) | |
| | |
Increase in pro forma net tangible book value per share attributable to this offering | |
$ | .01691 | | |
| | |
Pro forma net tangible book value per share after this offering | |
| | | |
$ | .01098 | |
Dilution per share to new investors | |
| | | |
$ | .3090 | |
PLAN OF DISTRIBUTION
By Selling Stockholders
The selling stockholders and any of its pledgees, donees, transferees,
assignees and successors-in-interest may, from time to time, sell any or all of its shares of common stock on any stock exchange,
market or trading facility on which the shares are traded or in private transactions. These sales will be at the fixed offering price of $0.32 until such time that the Company’s common stock is
traded on an established trading market, and thereafter, at prevailing market prices or negotiated
prices. The selling stockholder may use any one or more of the following methods when selling shares:
|
· |
ordinary brokerage transactions and transactions in which the broker-dealer solicits investors; |
|
· |
block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
|
· |
purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
|
· |
an exchange distribution in accordance with the rules of the applicable exchange; |
|
· |
privately negotiated transactions; |
|
· |
to cover short sales made after the date that this Registration Statement is declared effective by the Commission; |
|
· |
broker-dealers may agree with the selling stockholder to sell a specified number of such shares at a stipulated price per share; |
|
· |
a combination of any such methods of sale; and |
|
· |
any other method permitted pursuant to applicable law; provided, however, that selling stockholders who are executive officers or directors of the Company
have agreed to sell the shares they hold personally through their individual broker (not a broker that may be engaged on behalf
of the Company, if applicable) and not as principal acting for their own accounts. |
The selling stockholder may also sell shares under an exemption
from the registration requirements under the Securities Act, if available, rather than under this prospectus.
Broker-dealers engaged by the selling stockholders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling stockholder
(or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated.
The selling stockholders may from time to time pledge or grant a
security interest in some or all of the Shares owned by it and, if it defaults in the performance of their secured obligations,
the pledgees or secured parties may offer and sell shares of common stock from time to time under this prospectus, or under an
amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933 amending the list
of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus.
Upon the company being notified in writing by a selling stockholder
that any material arrangement has been entered into with a broker-dealer for the sale of common stock through a block trade, special
offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus
will be filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of each such selling stockholder
and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such the shares of common
stock were sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v)
that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in
this prospectus, and (vi) other facts material to the transaction. In addition, upon the company being notified in writing by a
selling stockholder that a donee or pledgee intends to sell more than 500 shares of common stock, a supplement to this prospectus
will be filed if then required in accordance with applicable securities law.
The selling stockholder also may transfer the shares of common stock
in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial
owners for purposes of this prospectus.
The selling stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be “underwriters” within the meaning of the Securities Act in connection
with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares
purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Because the selling stockholder
may be deemed to be an underwriter within the meaning of the Securities Act, they will be subject to the prospectus delivery requirements
of the Securities Act. Discounts, concessions, commissions and similar selling expenses, if any, that can be attributed to the
sale of Securities will be paid by the selling stockholder and/or the purchasers. The selling stockholder has represented and warranted
to the company that it acquired the securities subject to this registration statement in the ordinary course of the selling stockholder’s
business and, at the time of its purchase of such securities the selling stockholder had no agreements or understandings, directly
or indirectly, with any person to distribute any such securities.
The company has advised the selling stockholders that it may not
use shares registered on this Registration Statement to cover short sales of common stock made prior to the date on which this
Registration Statement shall have been declared effective by the Commission. If the selling stockholder uses this prospectus for
any sale of the common stock, it will be subject to the prospectus delivery requirements of the Securities Act. The selling stockholder
will be responsible to comply with the applicable provisions of the Securities Act and Exchange Act, and the rules and regulations
thereunder promulgated, including, without limitation, Regulation M, as applicable to such selling stockholder in connection with
resales of their respective shares under this Registration Statement.
The company is required to pay all fees and expenses incident to
the registration of the shares, but the company will not receive any proceeds from the sale of the common stock by selling stockholders.
The company has agreed to indemnify the selling stockholder against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.
By Our Company
We are offering up to 46,875,000 shares of Common Stock at a price
of $0.32 per share. We are offering the shares directly to the public until such shares are sold, however, we may terminate
the offering prior to that date. There is no minimum amount of shares that must be sold before we use the proceeds. Proceeds
will not be returned to investors if we sell less than all of the 46,875,000 shares being offered in this prospectus. The
proceeds from the sales of the shares will be paid directly to us promptly following each sale and will not be placed in an escrow
account.
The offering will be conducted by our executive officers, including
Naresh Malik, our CEO; Frank McEnulty, our CFO; and Myles A. Pressey III, our Chairman and Chief Business Development Officer. Under
Rule 3a 4-1 of the Securities Exchange Act an issuer may conduct a direct offering of its securities without registration as a
broker/dealer. Such offering may be conducted by officers who perform substantial duties for or on behalf of the issuer
otherwise than in connection with securities transactions and who were not brokers or dealers or associated persons of brokers
or dealers within the preceding 12 months and who have not participated in selling an offering of securities for any issuer more
than once every 12 months, with certain exceptions.
Furthermore, such persons may not be subject to a statutory disqualification
under Section 3(a) (39) of the Securities Exchange Act and may not be compensated in connection with securities offerings by payment
of commission or other remuneration based either directly or indirectly on transactions in securities and at the time of offering
our shares may not be associated persons of a broker or dealer. Messrs. Malik, McEnulty and Pressey III will meet these
requirements.
How to Invest :
Subscriptions for purchase of shares offered by this prospectus
can be made by completing, signing and delivering to us, the following:
1) an
executed copy of the Subscription Agreement, available from the company; and
2) a
check payable to the order of Zonzia Media, Inc. in the amount of $0.32 for each share you want to purchase.
DESCRIPTION OF REGISTRANT’S SECURITIES
Authorized Capital Stock
Our authorized capital stock consists of 2,200,000,000 shares, 2,000,000,000
shares of which are common stock, par value $.001 per share, and 200,000,000 shares of which are preferred stock, par value $.001
per share.
Common Stock
Dividends. Each share of our common stock is entitled to
receive an equal dividend, if one is declared, which is unlikely. We have never paid dividends on our common stock and do not intend
to do so in the foreseeable future. We intend to retain future earnings (if any) to finance our growth. See “Risk Factors.”
Liquidation. If our company is liquidated, then assets that
remain (if any) after the creditors are paid and the owners of preferred stock receive liquidation preferences (as applicable)
will be distributed to the owners of our common stock pro rata.
Voting Rights. Each share of our common stock entitles the
owner to one vote. There is no cumulative voting. A simple majority can elect all of the directors of our company at a given meeting,
and the minority would not be able to elect any director of our company at that meeting.
Preemptive Rights. Owners of our common stock have no preemptive
rights. We may sell shares of our common stock to third parties without first offering such shares to current stockholders.
Redemption Rights. We do not have the right to buy back shares
of our common stock except in extraordinary transactions, such as mergers and court approved bankruptcy reorganizations. Owners
of our common stock do not ordinarily have the right to require us to buy their common stock. We do not have a sinking fund to
provide assets for any buy back.
Conversion Rights. Shares of our common stock cannot be converted
into any other kind of stock except in extraordinary transactions, such as mergers and court approved bankruptcy reorganizations.
Nonassessability. All outstanding shares of our common stock
are fully paid and nonassessable.
Preferred Stock
Our articles of incorporation authorize our Board of Directors to
issue “blank check” preferred stock. Our Board of Directors may divide this preferred stock into series and establish
the rights, preferences and privileges thereof. Our Board of Directors may, without prior stockholder approval, issue any or all
of the shares of this preferred stock with dividend, liquidation, conversion, voting or other rights that could adversely affect
the relative voting power or other rights of our common stock. Preferred stock could be used as a method of discouraging, delaying
or preventing a takeover or other change in control of our company. Issuances of preferred stock in the future could have a dilutive
effect on our common stock. See “Risk Factors—Risks Related to our Common Stock.”
As of the date of this Report, there are no shares of our preferred
stock outstanding.
Nevada Anti-Takeover Statutes
Nevada law provides that an acquiring person who acquires a controlling
interest in a corporation may only exercise the voting rights of control shares if those voting rights are conferred by a majority
vote of the corporation’s disinterested stockholders at a special meeting held upon the request of the acquiring person.
If the acquiring person is accorded full voting rights and acquires control shares with at least a majority of all the voting power,
then stockholders who did not vote in favor of authorizing voting rights for those control shares are entitled to payment for the
fair value of such stockholders’ shares. A “controlling interest” is an interest that is sufficient to enable
the acquiring person to exercise at least one-fifth of the voting power of the corporation in the election of directors. “Control
shares” are outstanding voting shares that an acquiring person or associated persons acquire or offer to acquire in an acquisition
and those shares acquired during the 90-day period before the person involved became an acquiring person.
These provisions of Nevada law apply only to “issuing corporations”
as defined therein. An “issuing corporation” is a Nevada corporation that (a) has 200 or more stockholders, with at
least 100 of such stockholders being both stockholders of record and residents of Nevada, and (b) does business in Nevada directly
or through an affiliated corporation. As of the date of this Report, we do not have 100 stockholders of record that are residents
of Nevada. Therefore, these provisions of Nevada law do not apply to acquisitions of our shares and will not so apply until such
time as both of the foregoing conditions are satisfied. At such time as these provisions of Nevada law may apply to us, they may
discourage companies or persons interested in acquiring a significant interest in or control of our company, regardless of whether
such acquisition may be in the interest of our stockholders.
Nevada law also restricts the ability of a corporation to engage
in any combination with an interested stockholder for three years from when the interested stockholder acquires shares that cause
the stockholder to become an interested stockholder, unless the combination or purchase of shares by the interested stockholder
is approved by the board of directors before the stockholder became an interested stockholder. If the combination was not previously
approved, then the interested stockholder may only effect a combination after the three-year period if the stockholder receives
approval from a majority of the disinterested shares or the offer satisfies certain fair price criteria.
An “interested stockholder” is a person who is:
|
· |
the beneficial owner, directly or indirectly, of 10% or more of the voting power of the outstanding voting shares of the corporation; or |
|
· |
an affiliate or associate of the corporation and, at any time within three years immediately before the date in question, was the beneficial owner, directly or indirectly of 10% or more of the voting power of the then outstanding shares of the corporation. |
Our articles of incorporation and bylaws do not exclude us from
these restrictions.
These provisions are intended to enhance the likelihood of continuity
and stability in the composition of the board of directors and in the policies formulated by the board of directors and to discourage
some types of transactions that may involve the actual or threatened change of control of our company. These provisions are designed
to reduce our vulnerability to an unsolicited proposal for the potential restructuring or sale of all or a part of our company.
However, these provisions could discourage potential acquisition proposals and could delay or prevent a change in control of our
company. They also may have the effect of preventing changes in our management.
Periodic Securities and Exchange Commission Reports
We file reports with the SEC electronically. The reports we file
are Forms 10-K, 10-Q and 8-K. You may read copies of materials we file with the SEC at the SEC’s Public Reference Room at
450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling
the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site that will contain copies of the reports we file electronically.
The address for the Internet site is www.sec.gov.
Stock Transfer Agent
Our stock transfer agent for our securities is Continental Stock
Transfer & Trust Company.
SHARES ELIGIBLE FOR FUTURE SALE
Market Considerations
Currently, our common stock trades on the OTC Pink Current Information
market. This market is separate and distinct from the NASDAQ stock market and other stock exchanges. NASDAQ has no business relationship
with issuers of securities quoted on the OTC Pink Current Information market. The SEC’s order handling rules, which apply
to NASDAQ-listed securities, do not apply to securities quoted on the OTC.
Shares Covered by this Prospectus
As of May 27, 2015, we have 226,822,131 shares of our common stock
outstanding, of which approximately 2,055,833 shares are currently freely tradable prior to this offering. Of the outstanding shares,
all of the 43,302,185 shares being registered for resale in this offering may be sold without restriction or further registration
under the Securities Act, except for any shares purchased by our “affiliates,” as that term is defined in Rule 144
under the Securities Act, whose sales may be made only in compliance with the limitations of Rule 144 described below.
The remaining shares outstanding after this offering are deemed
“restricted securities” under Rule 144. Restricted securities may be sold in the public market only if registered or
if they qualify for an exemption under the Securities Act, such as Rule 144, which rule is summarized below.
Rule 144
Certain outstanding shares of our common stock which are not included
in this prospectus may be eligible for sale in the public market under Rule 144. In general, under Rule 144 as currently in effect,
a person who has beneficially owned restricted shares of our common stock for at least six months would be entitled to sell their
securities provided that (1) such person is not deemed to have been one of our affiliates at the time of, or at any time during
the three months preceding, a sale, (2) we are subject to the reporting requirements of the Exchange Act for at least 90 days before
the sale and (3) if the sale occurs prior to satisfaction of a one-year holding period, we provide current information at the time
of sale.
In the event that the registration statement of which this prospectus
is a part lapses for any reason (the Company is required to maintain its effectiveness for one year after the effective date),
all currently outstanding shares of common stock will be subject to resale pursuant to Rule 144, subject to the limitations described
herein. Common stock issued upon exercise of the options at any time while a registration statement covering such shares is not
effective will be subject to sale pursuant to Rule 144 upon the expiration of the holding period, which commences on the date the
Company receives payment of the exercise price under the option agreements.
Persons who have beneficially owned restricted shares of our common
stock for at least six months but who are our affiliates at the time of, or at any time during the three months preceding, a sale,
would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only
a number of securities that does not exceed the greater of:
|
· |
1% of the total number of securities of the same class then outstanding; or |
|
· |
the average weekly trading volume of such securities during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale. |
provided, that, in each case, that we are subject to the
periodic reporting requirements of the Exchange Act for at least three months before the sale.
However, since our common stock is traded over the counter, which
is not an “automated quotation system,” our stockholders will not be able to rely on the market-based volume limitation
described in the second bullet above. If, in the future, our securities are listed on an exchange or quoted on NASDAQ, then our
stockholders would be able to rely on the market-based volume limitation. Unless and until our stock is so listed or quoted, our
stockholders can only rely on the percentage based volume limitation described in the first bullet above.
Such sales by affiliates must also comply with the manner of sale,
current public information and notice provisions of Rule 144. The selling stockholders will not be governed by the foregoing restrictions
when selling their shares pursuant to this prospectus.
Restrictions on the Use of Rule 144 by Shell Companies or Former
Shell Companies
Rule 144 is not available for the resale of securities initially
issued by companies that are, or previously were, shell companies, like us, unless certain conditions are met. As a result, it
is likely that pursuant to Rule 144 our non-stockholders, who were issued shares of our common stock while we were a shell company,
will be able to sell the their shares of our common stock from and after November 26, 2015 (the one year anniversary of the Form
10 disclosure) without registration. However, we are registering for public resale certain shares of our outstanding common stock
which were issued prior to the acquisition of HDIMAX, as described elsewhere in this in the registration statement of which this
prospectus forms a part.
LEGAL MATTERS
The validity of the issuance of the common stock offered by the
selling stockholders under this prospectus will be passed upon for us by Wilson & Oskam, LLP. Wilson & Oskam, LLP’s
partners and affiliates own a total of 259,393 shares of our common stock.
EXPERTS
The financial statements for the period ended September 30, 2014
included in this prospectus and elsewhere in the registration statement, have been audited by Haynie & Company, an independent
registered public accounting firm, to the extent and for the periods indicated in their report appearing elsewhere herein, and
are included in reliance upon such report and upon the authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-1
under the Securities Act with respect to the common stock offered by this prospectus. This prospectus, which is part of the registration
statement, omits certain information, exhibits, schedules and undertakings set forth in the registration statement. For further
information pertaining to us and our common stock, reference is made to the registration statement and the exhibits and schedules
to the registration statement. Statements contained in this prospectus as to the contents or provisions of any documents referred
to in this prospectus are not necessarily complete, and in each instance where a copy of the document has been filed as an exhibit
to the registration statement, reference is made to the exhibit for a more complete description of the matters involved.
You may read and copy all or any portion of the registration statement
without charge at the public reference room of the SEC at 100 F Street, N. E., Washington, D. C. 20549. Copies of the registration
statement may be obtained from the SEC at prescribed rates from the public reference room of the SEC at such address. You may obtain
information regarding the operation of the public reference room by calling 1-800-SEC-0330. In addition, registration statements
and certain other filings made with the SEC electronically are publicly available through the SEC’s web site at http://www.sec.gov.
The registration statement, including all exhibits and amendments thereto, has been filed electronically with the SEC.
We are subject to the information and periodic reporting requirements
of the Exchange Act and, accordingly, we file annual reports containing financial statements audited by an independent registered
public accounting firm, quarterly reports containing unaudited financial data, current reports and other reports and information
with the SEC. You may inspect and copy each of our periodic reports, proxy statements and other information at the SEC’s
public reference room, and at the web site of the SEC referred to above.
INDEX TO FINANCIAL STATEMENTS
Financial Statements of Zonzia Media, Inc. |
|
Report of Independent Registered Public Accounting Firm, Haynie & Company, Certified Public Accountants |
|
|
F-2 |
|
Balance Sheets as at March 31, 2015 and December 31, 2014 |
|
|
F-3 |
|
Statement of Operations for the period from May 24, 2014 (inception)
through December 31, 2014 |
|
|
F-4 |
|
Statement of Stockholders’ Deficit for the period from May 24,
2014 (inception) through December 31, 2014 |
|
|
F-5 |
|
Statement of Cash Flows for the period from May 24, 2014 (inception)
through December 31, 2014 |
|
|
F-6 |
|
Notes to financial statements |
|
|
F-7 |
|
Unaudited Interim Financial Statements of Zonzia Media, Inc. for the three months ended March 31, 2015 |
|
|
|
|
Condensed Balance Sheet |
|
|
F-16 |
|
Condensed Statement of Operations |
|
|
F-17 |
|
Condensed Statement of Stockholders’ Deficit |
|
|
F-18 |
|
Condensed Statement of Cash Flows |
|
|
F-19 |
|
Notes to condensed financial statements |
|
|
F-20 |
|
All schedules have been omitted because the information required
to be presented in them is not applicable or is shown in the financial statements or related notes.
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors
Zonzia Media, Inc. (formerly HDIMAX Media, Inc. and Indigo-Energy,
Inc.)
Henderson, NV
We have audited the accompanying balance sheet
of Zonzia Media, Inc. (formerly HDIMAX Media, Inc. and Indigo- Energy, Inc.) as of December 31, 2014 and the related statement
of operations, stockholders’ deficit and cash flows for the period from May 24, 2014 to December 31, 2014. These consolidated
financial statements are the responsibility of Zonzia Media, Inc.’s management. Our responsibility is to express an opinion
on these financial statements based on our audit.
We conducted our audit in accordance with the
standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included
consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over
financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the financial statements referred
to above present fairly, in all material respects, the financial position of Zonzia Media, Inc. (formerly HDIMAX Media, Inc. and
Indigo-Energy, Inc.), as of December 31, 2014 and the results of their operations and their cash flows for the period from May
24, 2014 to December 31, 2014 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the
Company has no source of recurring revenue; negative working capital; and has suffered recurring losses from operations; which
raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are
also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Haynie & Company
Haynie & Company
Salt Lake City, Utah
Date: April 15, 2015
ZONZIA MEDIA, INC.
(formerly HDIMAX Media, Inc. and Indigo-Energy,
Inc.)
BALANCE SHEET
| |
December 31, 2014 | |
ASSETS | |
| |
| |
| |
Current Assets | |
| |
Cash | |
$ | 208 | |
| |
| | |
Total assets | |
$ | 208 | |
| |
| | |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | |
| | |
| |
| | |
Current Liabilities | |
| | |
Accounts payable | |
$ | 710,769 | |
Accrued expenses | |
| 690,247 | |
Related party accounts payable | |
| 340,163 | |
Accrued compensation | |
| 495,167 | |
| |
| | |
Total current liabilities | |
| 2,236,346 | |
| |
| | |
Stockholders' Equity (Deficit) | |
| | |
Preferred stock, $0.001 par value, 200,000,000 shares authorized and none issued and outstanding at December 31, 2014 | |
| | |
Common stock, $0.001 par value, 2,000,000,000 shares authorized and 758,065,119 shares issued and outstanding at December 31, 2014 | |
$ | 758,065 | |
Additional paid in capital | |
| 22,923,087 | |
Accumulated deficit | |
| (25,917,290 | ) |
| |
| | |
Total stockholders' equity (deficit) | |
| (2,236,138 | ) |
| |
| | |
Total liabilities and stockholders' equity (deficit) | |
$ | 208 | |
The accompanying notes are an integral part
of these financial statements
ZONZIA MEDIA, INC.
(formerly HDIMAX Media, Inc. and Indigo-Energy,
Inc.)
STATEMENT OF OPERATIONS
| |
For the Period from Inception on May 24, 2014 to December 31, 2014 | |
Revenue | |
| | |
Net revenue | |
$ | 439 | |
| |
| | |
Expenses | |
| | |
General and administrative | |
| 53,565 | |
Sales and marketing | |
| 1,006,102 | |
Officer compensation | |
| 23,295,167 | |
Professional fees | |
| 729,411 | |
| |
| | |
Total operating expenses | |
| 25,084,245 | |
| |
| | |
Gain (loss) from operations | |
| (25,083,806 | ) |
| |
| | |
Other income (expense) | |
| | |
Interest expense | |
| (13,462 | ) |
| |
| | |
Total other expenses | |
| (13,462 | ) |
| |
| | |
Net loss | |
$ | (25,097,268 | ) |
| |
| | |
Net loss per share - basic and diluted | |
$ | (0.14 | ) |
| |
| | |
Weighted average shares outstanding | |
| 185,663,218 | |
The accompanying notes are an integral part
of these financial statements
ZONZIA MEDIA, INC.
(formerly HDIMAX Media, Inc. and Indigo-Energy,
Inc.)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
|
|
Common Stock |
|
|
Paid in |
|
|
Accumulated |
|
|
Total Equity |
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
(deficit) |
|
Balance, Inception May 24, 2014 |
|
|
– |
|
|
$ |
– |
|
|
$ |
488 |
|
|
$ |
– |
|
|
$ |
488 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of founder's shares in May 2014 |
|
|
48,500,000 |
|
|
|
48 |
|
|
|
(48 |
) |
|
|
– |
|
|
|
– |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cancellation of founder's shares related to reverse capitalization in November 2014 |
|
|
(48,500,000 |
) |
|
|
(48 |
) |
|
|
47 |
|
|
|
– |
|
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reverse capitalization in November 2014 |
|
|
757,689,386 |
|
|
|
757,689 |
|
|
|
(488 |
) |
|
|
(820,022 |
) |
|
|
(62,821 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for debt settlement in December 2014 |
|
|
375,733 |
|
|
|
376 |
|
|
|
123,088 |
|
|
|
– |
|
|
|
123,464 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation |
|
|
– |
|
|
|
– |
|
|
|
22,800,000 |
|
|
|
– |
|
|
|
22,800,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
(25,097,268 |
) |
|
|
(25,097,268 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance December 31, 2014 |
|
|
758,065,119 |
|
|
$ |
758,065 |
|
|
$ |
22,923,087 |
|
|
$ |
(25,917,290 |
) |
|
$ |
(2,236,138 |
) |
The accompanying notes are an integral part
of these financial statements.
ZONZIA MEDIA, INC.
(formerly HDIMAX Media, Inc. and Indigo-Energy,
Inc.)
STATEMENT OF CASH FLOWS
| |
For the Period from Inception on May 24, 2014 to December 31, 2014 | |
Cash Flows from Operating Activities | |
| | |
Net loss | |
$ | (25,097,268 | ) |
| |
| | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |
| | |
Stock-based compensation | |
| 22,800,000 | |
Debt discount and deferred issuance cost amortization | |
| 12,560 | |
Change in accounts payable | |
| 460,530 | |
Change in accrued expenses | |
| 496,754 | |
Change in related party accounts payable | |
| 272,465 | |
Change in accrued payroll | |
| 495,167 | |
| |
| | |
Net cash used in operating activities | |
| (559,792 | ) |
| |
| | |
Cash Flows from Financing Activities | |
| | |
Proceeds from related party notes payable | |
| 560,000 | |
| |
| | |
Net cash provided by financing activities | |
| 560,000 | |
| |
| | |
Net increase in cash and cash equivalents | |
| 208 | |
| |
| | |
Cash and cash equivalents at beginning of the period | |
| – | |
| |
| | |
Cash and cash equivalents at end of the period | |
$ | 208 | |
| |
| | |
Supplementary Disclosures of Cash Flow Information | |
| | |
Cash paid for income taxes | |
$ | – | |
Cash paid for interest | |
$ | – | |
The accompanying notes are an integral part
of these financial statements
ZONZIA MEDIA, INC.
(formerly HDIMAX Media, Inc. and Indigo-Energy,
Inc.)
Notes to Financial Statements
NOTE 1 - DESCRIPTION OF BUSINESS
Zonzia Media, Inc, initially organized as HDIMAX
Media, Inc., and incorporated in the State of Delaware in May 2014, is a digital publishing and broadcast Company focused on content
development and multi-platform content distribution, advertising, and ecommerce.
Reverse Merger with Indigo-Energy, Inc.
On November 21, 2014, through a wholly-owned
subsidiary of a public shell Company then known as Indigo-Energy, Inc., HDIMAX Acquisition Corporation, a Nevada corporation, was
merged with and into HDIMAX, Inc., a Delaware corporation (“HDIMAX”) (such merger, the “Merger”) pursuant
to the Agreement and Plan of Merger, effective as of September 2, 2014, and as amended effective as of November 20, 2014, by and
among Indigo-Energy, Inc. (our “company” or “we” or “us”), HDIMAX and HDIMAX Acquisition Corporation
(the “Merger Agreement”). HDIMAX was the surviving corporation of the Merger and as such will continue as a wholly-owned
subsidiary of our Company. Upon closing the merger, we changed our name to HDIMAX Media, Inc.
As a result of the Merger, all of HDIMAX’s
common stock was converted into 712,121,205 shares of our Company’s common stock, which represents approximately 94% of the
outstanding shares of our company’s common stock after giving effect to the Merger. The common stock issuance, representing
94% of the outstanding shares of the consolidated Company was accounted for as a reverse capitalization in accordance with accounting
principles generally accepted in the United States (“US GAAP”) and the Rules and Regulations as promulgated by the
United States Securities and Exchanges Commission (“SEC”).
In accordance with US GAAP, and as previously
disclosed in our original Current Report on Form 8-K as filed on November 26, 2014, HDIMAX, Inc. (private operating company) was
deemed the accounting acquirer. Further, as of the date of the reverse capitalization transaction, the legal acquirer also deemed
the accounting acquiree, Zonzia Media, Inc. (formerly HDIMAX Media, Inc. and Indigo-Energy, Inc.) was considered a shell company
as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934. Further, the Staff of the Securities and Exchange
Commission considers a public shell reverse acquisition to be a capital transaction in substance, rather than a business combination.
That is, the transaction is a reverse recapitalization, equivalent to the issuance of stock by the private company (HDIMAX, Inc.)
for the net monetary assets of the shell corporation accompanied by a recapitalization. The accounting is similar to that resulting
from a reverse acquisition, except that no goodwill or other intangible assets should be recorded.
As of December 31, 2014, we provided clients
and customers advertising and ecommerce opportunities through engaging consumers on two websites, Frontlinewire.com and HDIMAX.com.
HDIMAX.com - Operates as an internet
television network. HDI Max is engaged in the internet delivery of television shows, movies and original content to its customers
directly on televisions, computers, and mobile devices in the United States and Internationally. The original content ranges from
news and comedy to travel and sports.
HDIMAX.com offers consumers live video streaming
that will be unique to internet television in that users are not charged based on usage and all consumers have unlimited access
to live streaming or other previously posted content such as movies and television.
Frontlinewire.com (FLW) - Frontlinewire.com
was launched to provide a premier news service that delivers the latest breaking news and information on the latest
top stories, weather, business, entertainment, politics, and more.
In addition to the above websites, we previously
had an agreement to provides ecommerce opportunities to other websites, all of which were controlled by our former, Chairman, and
Chief Executive Office, Rajinder Brar, including www.fashionstylemag.com, www.themanlife.com, www.thewomanlife.com, and www.southasianlife.com.
On January 22, 2015, we entered into a Settlement
Agreement in which we cancelled all of the 712,121,205 shares of restricted and unregistered common stock previously issued to
effectuate the merger with Rajinder Brar, the previous sole owner of HDIMAX, Inc. In consideration for the shares being cancelled,
we forfeited our rights to sell advertising and other products on websites previously controlled Mr. Brar and related entities,
with the exception of www.hdimax.com. An outline of the significant terms of the Settlement Agreement include, but are not limited
to, the following:
|
· |
The 712,121,205 million shares of HDIMAX Media, Inc. (formerly Indigo-Energy) common stock issued to Rajinder Brar, the owner of 100% of the previously outstanding stock of HDIMAX, Inc. immediately preceding the reverse acquisition transaction, were cancelled. |
|
· |
Rajinder Brar, Aneliya Vasileva, and Myles Pressey III, previously appointed as the Company’s officers and Board of Directors immediately following the completion of the reverse acquisition, resigned and forfeited future compensation terms associated with any and all previously agreed upon employment agreements, inclusive of the compensation accrued as of December 31, 2014. |
|
· |
Mr. James C. Walter Sr. was reappointed to serve as a Director charged with appointing new officers. Mr. Walter Sr. served as the Sole Officer and Director of the Company immediately preceding the completion of the reverse acquisition transaction. |
|
· |
The Company’s option agreement to acquire Fashion Style Magazine, Inc., an entity wholly owned by Rajinder Brar, was cancelled. |
|
· |
The Omnibus Agreement and License dated November 21, 2014, by and between the Company and Fashion Style Magazine, Inc. was terminated. The brands and assets wholly owned by Rajinder Brar through Fashion Style Magazine, Inc. were intended to be a core portion of the consolidated Company’s business operations subsequent to the completion of the reverse acquisition. |
|
· |
The Company forfeited all rights to Frontlinewire.com, a brand and website acquired in the reverse acquisition. |
|
· |
The Company maintained all rights to hdimax.com, a brand and website acquired in the reverse acquisition, but agreed to assign those assets back to their original owners by May 1, 2015. We do not intend to further develop or publish content at www.hdimax.com. |
For additional details, including
a copy of the Settlement Agreement, please see our Current Report on Form 8-K filed on January 29, 2015.
On March 9, 2015 we changed our name to Zonzia
Media, Inc. and we are developing a new multi-platform entertainment distribution channel with the goal of being a unique hybrid
of a linear channel, a video-on-demand channel and an over-the-top channel. Our viewer immersion technology will allow our views
instant access to our available content.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The accompanying financial statements have
been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States
of America (“US GAAP”) and have been presented on a going concern basis, which contemplates the realization of assets
and satisfaction of liabilities in the normal course of business.
Use of Estimates
The preparation of financial statements in
conformity with US 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 the financial statements and the reported amounts of revenues
and expenses during the reporting periods. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid instruments
with an original maturity of 90 days or less at the time of purchase to be cash equivalents. The Company did not have any cash
equivalents at December 31, 2014.
Revenue Recognition
We recognize revenues when the services or
products have been provided or delivered, the fees we charge are fixed or determinable, we and our advertisers or other customers
understand the specific nature and terms of the agreed upon transactions, and collectability is reasonably assured.
Most of our advertising customers pay on a
cost-per-impression basis that enables advertisers to pay us based on the number of times their ads display on our websites. For
the sale of certain third-party products and services, we recognize revenue on negotiated commission rate as a percentage of the
gross amount billed to the customers.
Fair Value Measurements
The fair value of a financial instrument is
the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer
prices. The fair value should be calculated based on assumptions that market participants would use in pricing the asset
or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration
of non-performance risk, including the party’s own credit risk.
Fair value measurements do not include transaction
costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair
values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair
value measurement. The fair value hierarchy is defined into the following three categories:
Level 1: Quoted market prices in
active markets for identical assets or liabilities.
Level 2: Observable
market-based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs that
are not corroborated by market data.
Stock Based Compensation
The Company has on occasion issued equity and
equity linked instruments to employees and non-employees in lieu of cash for the receipt of goods and services and, in certain
circumstances the settlement of short-term loan arrangements. The applicable GAAP establishes that share-based payment transactions
with non-employees shall be measured at the fair value of the consideration received or the fair value of the equity instruments
issued, whichever is more reliably measurable.
In these transactions, the Company issues unregistered
and restricted equity instruments.
While the Company currently has 2,055,832 shares
of freely-traded stock with a quoted market price (a Level 1input within the GAAP hierarchy), the fair value of the unregistered
and restricted shares issued in compensation transactions with non-employees as valued by the quoted market price does not always
reflect the economic substance of the transactions and does not always represent the Company’s principal market, correspondingly,
the quoted market price is not always the most reliably measurable indicator of the fair value. The determination of fair value
is based upon facts and circumstances including the liquidity restrictions placed upon our unregistered restricted equity instruments
along with the quoted market not being the most active or principal trading market.
When unregistered common shares are issued
for the settlement of short-term financing arrangements, the reacquisition price of the extinguished financing arrangement is determined
by the value of the debt which is more clearly evident, and no additional inducement expense is recognized.
In situations in which we issue unregistered
restricted common shares in exchange for goods and services, and the value of the goods and services are not the most reliably
measurable, we recognize the fair value of the unregistered restricted equity instruments based on the value of similar instruments
issued in private placements in exchange for cash in the most recent transactions (a Level 2 input within the GAAP hierarchy).
The Company has determined this methodology reflects the risk adjusted fair value of our unregistered restricted equity instruments
using a commercially reasonable valuation technique within the most active market.
Income Taxes
Income taxes are recorded in the period in
which the related transactions have been recognized in the financial statements. Deferred tax assets and liabilities are recorded
for expected future tax consequences of loss carryforwards and temporary differences. Temporary differences are the differences
between the reported amounts of assets and liabilities in the financial statements and their tax basis. Deferred tax assets are
reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of, or all of,
the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax
laws and rates on the date of enactment.
Loss Per Common Share
Basic net loss per common share is computed
by dividing net loss by the weighted average number of common shares outstanding. Dilutive loss per common share includes additional
dilution from common stock equivalents, such as stock options and warrants, and convertible instruments, if the impact is not antidilutive.
Recently Issued Accounting Pronouncements
In May 2014, the Financial Accounting Standards
Board (“FASB”) issued Accounting Standards (“ASU”) No. 2014-09, Revenue from Contracts with Customers.
The objective of this update is to 1) remove inconsistencies and weaknesses in revenue requirements, 2) provide a robust framework
for addressing revenue recognition issues, 3) improve comparability of revenue recognition practices across entities, industries,
jurisdictions, and capital markets 4) provide more useful information to users of financial statements through improved disclosure
requirements, and 5) simplify the preparation of financial statements. This update is effective in annual reporting periods beginning
after December 15, 2016 and the interim periods within that year. The Company will be evaluating the impact of this update
as it pertains to the Company’s financial statements and other required disclosures on an on-going basis, currently contingent
the commencement of principal revenue generating activities, until its eventual adoption and implementation.
In June 2014, the FASB issued ASU No. 2014-10,
Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable
Interest Entities Guidance in Topic 810, Consolidation, which removes all incremental financial reporting requirements from GAAP
for development stage entities, including the removal of Topic 915 from the FASB Accounting Standards Codification. The presentation
and disclosure requirements in Topic 915 will no longer be required for the first annual period beginning after December 15, 2014.
The revised consolidation standards are effective one year later, in annual periods beginning after December 15, 2015. Early adoption
is permitted. We adopted ASU No. 2014-10 effective on our inception date of May 24, 2014.
In June 2014, the FASB issued
ASU No. 2014-12, Stock Compensation. The amendments require that a performance target that affects vesting and that could be achieved
after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in
as it relates to awards with performance conditions that affect vesting to account for such awards. As such, the performance target
should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period
in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable
to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being
achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively
over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service
period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately
vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award
if the performance target is achieved. As indicated in the definition of vest, the stated vesting period (which includes the period
in which the performance target could be achieved) may differ from the requisite service period. The amendment is effective for
annual periods beginning after December 15, 2015 with early adoption permitted. The Company is currently evaluating the impacts
of this amendment on the stock-based compensation awards expected to be issued in future periods.
In August 2014, the FASB issued
ASU No. 2014-15 Presentation of Financial Statements – Going Concern. In connection with preparing financial statements for
each annual and interim reporting period, an entity's management should evaluate whether there are conditions or events, considered
in the aggregate, that raise substantial doubt about the entity's ability to continue as a going concern within one year after
the date that the financial statements are issued (or within one year after the date that the financial statements are
available to be issued when applicable).
Management's evaluation should
be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements
are issued (or at the date that the financial statements are available to be issued when applicable).
Substantial doubt about an
entity's ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate
that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that
the financial statements are issued (or available to be issued).
When management identifies
conditions or events that raise substantial doubt about an entity's ability to continue as a going concern, management should consider
whether its plans that are intended to mitigate those relevant conditions or events will alleviate the substantial doubt. The mitigating
effect of management's plans should be considered only to the extent that (1) it is probable that the plans will be effectively
implemented and, if so, (2) it is probable that the plans will mitigate the conditions or events that raise substantial doubt about
the entity's ability to continue as a going concern.
If conditions or events raise
substantial doubt about an entity's ability to continue as a going concern, but the substantial doubt is alleviated as a result
of consideration of management's plans, the entity should disclose information that enables users of the financial statements to
understand all of the following (or refer to similar information disclosed elsewhere in the footnotes):
a. Principal conditions
or events that raised substantial doubt about the entity's ability to continue as a going concern (before consideration of management's
plans)
b. Management's evaluation
of the significance of those conditions or events in relation to the entity's ability to meet its obligations
c. Management's plans
that alleviated substantial doubt about the entity's ability to continue as a going concern.
If conditions or events raise
substantial doubt about an entity's ability to continue as a going concern, and substantial doubt is not alleviated after consideration
of management's plans, an entity should include a statement in the footnotes indicating that there is substantial doubt about
the entity's ability to continue as a going concern within one year after the date that the financial statements are issued
(or available to be issued). Additionally, the entity should disclose information that enables users of the financial statements
to understand all of the following:
a. Principal conditions
or events that raise substantial doubt about the entity's ability to continue as a going concern
b. Management's evaluation
of the significance of those conditions or events in relation to the entity's ability to meet its obligations
c. Management's plans
that are intended to mitigate the conditions or events that raise substantial doubt about the entity's ability to continue as a
going concern.
We do not expect the effective implementation
of this ASU, beginning in fiscal 2017, to materially impact future disclosures.
In November 2014, the FASB issued ASU No. 2014-16
Derivatives and Hedging. For hybrid financial instruments issued in the form of a share, an entity (an issuer or an investor) should
determine the nature of the host contract by considering all stated and implied substantive terms and features of the hybrid financial
instrument, weighing each term and feature on the basis of relevant facts and circumstances. That is, an entity should determine
the nature of the host contract by considering the economic characteristics and risks of the entire hybrid financial instrument,
including the embedded derivative feature that is being evaluated for separate accounting from the host contract.
In evaluating the stated and implied substantive
terms and features, the existence or omission of any single term or feature does not necessarily determine the economic characteristics
and risks of the host contract. Although an individual term or feature may weigh more heavily in the evaluation on the basis of
facts and circumstances, an entity should use judgment based on an evaluation of all the relevant terms and features. For example,
the presence of a fixed-price, noncontingent redemption option held by the investor in a convertible preferred stock contract is
not, in and of itself, determinative in the evaluation of whether the nature of the host contract is more akin to a debt instrument
or more akin to an equity instrument. Rather, the nature of the host contract depends on the economic characteristics and risks
of the entire hybrid financial instrument. The amendment is effective for fiscal years beginning after December 15, 2015 and may
be retroactively applied for all periods. We are currently evaluating the potential impacts on our financial statements in the
event we enter into these types of arrangements in the future.
In February 2015 the FASB issued ASU No. 2015-02,
Consolidation. Under current GAAP we may be required to consolidate another legal entity in situations in which our contractual
rights do not give us the ability to act primarily on our own behalf, we do not hold a majority of the legal entity's voting rights,
or we are not exposed to a majority of the legal entity's economic benefits or obligations. The Standards Update amends the GAAP
to require that all legal entities are subject to reevaluation under the revised consolidation model.
Specifically, the amendments:
1. Modify the evaluation
of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities
2. Eliminate the
presumption that a general partner should consolidate a limited partnership
3. Affect the consolidation
analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships
4. Provide a scope
exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with
or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered
money market funds.
We do not believe this updated
consolidation guidance will have a material impact on our future financial position, results of operations, or cash flows.
In April 2015 the FASB issued
ASU No. 2015-03, Interest-Imputation of Interest. The Standards Update requires that debt issuance costs related to a recognized
debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent
with debt discounts. We do not believe this updated presentation requirement will have a material impact on our future financial
position, results of operations, or cash flows.
There have been no other recently issued accounting
pronouncements through the date of this report that the Company believes will have a material impact on the financial position,
results of operations, or cash flows.
NOTE 3 - GOING CONCERN
Since our inception on May 24, 2014, we have
generated immaterial revenues resulting in the incurrence of a net loss for the period ended December 31, 2014. This has further
led to negative working capital, all which results in substantial doubt about the Company’s ability to continue as a going
concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Our management, Board, and Advisory Board has
focused its efforts and our limited resources on raising additional capital through debt or equity offerings at terms not detrimental
to our planned future operations. As of the date of this report we do not have any firm funding commitments.
NOTE 4 - NOTES PAYABLE
In June and September we received proceeds
from short-term loans from Indigo-Energy, the pre-merger public shell Company used to effectuate our reverse capitalization, for
proceeds of $200,000 and $250,000, respectively. Indigo-Energy financed the loans to us on a pre-merger basis, totaling $450,000,
via the issuance of 2,272,727 (100,000,000 pre-merger) shares to investors. Upon completion of the merger with Indigo-Energy, considered
to be the accounting acquiree in accordance with US GAAP, the note payable was eliminated and the corresponding 2,272,727 shares
issued were including in our reverse capitalization adjustment.
In November 2014 we entered into two convertible
short-term notes payable with investors for proceeds totaling $110,000. The notes, at the option of the holder, were convertible
into shares of our restricted common stock at a 25% discount to the average closing quoted market price for the ten days immediately
prior to the conversion date. On December 17, 2014, the holders of the notes converted all of the principal and accrued interest
into 375,733 shares of restricted common stock. Since the notes were convertible into a predominantly fixed monetary value on
the dates of issuance in accordance with US GAAP, we determined the notes would be net settled via the issuance of restricted
common stock which resulted in the conversion feature being classified as a liability. During the period ended December 31, 2014
we recognized interest expense totaling $11,660 resulting from the accretion of interest through the date of conversion.
NOTE 5 - RELATED PARTY TRANSACTIONS
On May 24, 2014 our prior Chairman and Chief
Executive Officer contributed the brands, rights, and ecommerce opportunities of HDIMAX.com and Frontlinewire.com to the Company
in exchange for 48,500,000 shares of common stock of the Company. Since we were under control of our founder on the date of the
transaction, our founder’s historical cost became the carrying cost of the contributed assets totaling $488. As of December
31, 2014 the cost of registering the websites was fully amortized, however, we maintained the rights to the domain names.
During the period ended December 31, 2014 we
paid our founder, Chairman, and Chief Executive Officer and related entities $211,591 for the development of content and other
marketing related expenses. The amount is classified in sales and marketing in the accompanying statement of operations.
As of December 31, 2014 we owed a related party
$340,163 as result of the related party directly paying third party vendors on our behalf. We do not have any formalized arrangement
for the settlement of this obligation and the related party has informally agreed to defer payment until we have obtained the appropriate
level of capital resources and liquidity. Since the obligations are effectively due on demand they are classified as current in
the accompanying balance sheet.
NOTE 6 - ACCRUED EXPENSES
Subsequent to the completion of our reverse
merger and recapitalization and corresponding Settlement Agreement, as more fully discussed in Note 10 – Subsequent Events,
we have been named as debtors by certain creditors of entities controlled by our former Chairman, Chief Executive Officer, and
majority shareholder through which we previously held an option to acquire and had certain Omnibus and License Agreements. As of
December 31, 2014 we have accrued total obligations of $690,247 associated with our exposure to these liabilities. We have engaged
legal counsel to vigorously dispute our alleged obligations to settle these accrued expenses.
NOTE 7 - STOCKHOLDERS’ EQUITY
Common Stock
As of December 31, 2014 we had 758,065,119
shares of common stock issued and outstanding. Our common stock transactions through the date of this report are as follows:
On May 24, 2014 we issued 48,500,000 shares
of common stock to our prior Chairman and Chief Executive Officer in exchange for contributed assets with a total value of $488.
On November 21, 2014, upon completion of our
merger, we issued our prior Chairman and Chief Executive Officer 712,121,205 shares of restricted and unregistered common stock.
Since we were deemed the accounting acquirer in our reverse merger transaction with a public shell company we determined the substance
of the transaction was capital in nature, rather than a business combination. In accounting for the reverse recapitalization we
recognized the net issuance of 709,189,386 shares of common stock for the assumption of net liabilities resulting in a net equity
deduction of $62,821.
On November 21, 2014 we entered into employment
agreements with two of our former officers to grant an aggregate of 120,000,000 shares of common stock for compensation. The grants
were to vest in two tranches, the first of which was on January 1, 2015. For the period ended December 31, 2014 we recognized compensation
cost associated with these employment agreements of $22,800,000. In January 22, 2015, as part of our Settlement Agreement, we retroactively
cancelled these employment agreements and all previously accrued compensation and related burden was forgiven.
In December 2014 we issued a total of 375,733
shares of restricted and unregistered common stock in settlement of convertible notes payable with a principal balance of $110,000
and unamortized discounts of $13,088.
In January 2015 we issued 75,000 shares of
restricted and unregistered common stock for consulting services valued at $25,000.
In January 2015 we issued 57,971 shares restricted
and unregistered shares of common stock for cash totaling $10,000.
In January 2015 we issued a total of 145,000,000
shares of restricted and unregistered shares of common stock as compensation to our officers, directors, and other consultants
valued at $54,016,061.
In January 2015 we issued 5,000,000 shares
of restricted and unregistered shares of common stock to a former employee of HDIMAX, Inc. valued at $1,900,000.
In January 2015, in accordance with the terms
of our Settlement Agreement with our former Chairman and Chief Executive Officer, we cancelled 712,121,205 shares of unregisters
and restricted common stock.
In February 2015 we issued 142,500 shares of
restricted and unregistered common stock for accounting and legal services valued at $21,179.
In February 2015 we issued a total of 200,000
shares of restricted and unregistered shares of common stock as compensation directors valued at $38,348.
In February 2015 we issued 3,750,000 shares
of restricted and unregistered common stock for consulting services valued at $719,021.
In February 2015 we issued 177,777 restricted
and unregistered shares of common stock for cash totaling $32,800.
In February 2015 we issued 7,500,000 shares
of restricted and unregistered common stock in settlement of previously accrued related party liabilities totaling $340,163.
Stock Options
In accordance with the terms of our Merger
Agreement, the Company exchanged all of the previously outstanding options on a one for one basis. The options are fully vested
and all associated compensation expense was recognized in periods prior to that presented. The stock option grant date fair value
was estimated using a Black-Scholes pricing model.
As of December 31, 2014 the Company had 568,182
stock options outstanding. During the period presented there were no options granted, exercised, cancelled, or forfeited, correspondingly,
no additional compensation expense was recognized for the periods presented. All options outstanding are exercisable and do not
have any intrinsic value at December 31, 2014 and are set to expire in October of 2017. At December 31, 2014 the weighted average
exercise price of the outstanding options was $6.60 with a weighted average remaining term of 2.83 years.
Warrants
In accordance with the terms of our Merger
Agreement, the Company exchanged all of the previously outstanding warrants on a one for one basis. The warrants are fully vested
and all associated consideration was recognized in periods prior to that presented. The warrant grant date fair value was estimated
using a Black-Scholes pricing model.
As of the December 31, 2014, the Company had
outstanding warrants of 871,591. The weighted average exercise price of the outstanding warrants at December 31, 2014 was $0.88
with a weighted average remaining term of 2.83 years as of December 31, 2014. The warrants did not have any intrinsic value as
of December 31, 2014 and were fully vested. Of the outstanding warrants, 862,500 are contingently exercisable only in the event
that other equity-linked instruments are exercised.
NOTE 8 - INCOME TAXES
Income taxes from continued operations for the period ended December
31, 2014 consist of the following:
| |
2014 | |
Current: | |
| | |
Federal | |
$ | – | |
| |
| | |
Deferred: | |
| | |
NOL Carryforwards | |
$ | 887,000 | |
Valuation allowance | |
| (887,000 | ) |
Deferred tax assets, net | |
$ | – | |
At December 31, 2014 we had federal net operating
losses of approximately $2,609,000 which will begin to expire in 2034 and could be subject to certain limitations under section
382 of the Internal Revenue Code associated with changes in control we effectuated in the first quarter of 2015.
The Company has provided a full valuation allowance
for all periods for its net deferred tax assets as it cannot conclude it is more likely than not that they will be realized or
limited and / or forfeited under the applicable provisions of the Internal Revenue Code prior to expiration.
As of December 31, 2014, the Company did not
have any unrecognized tax benefits. The Company's policy is to recognize interest and penalties related to income tax matters
in income tax expense. The Company currently has no federal or state tax examinations in progress. The Company is subject to U.S.
federal and state income tax examination from inception in 2014.
NOTE 9 - REVERSE MERGER AND
RECAPITALIZATION
On November 21, 2014 we recapitalized the previously
outstanding 48,500,000 outstanding shares of HDIMAX, Inc. common stock via a reverse merger with a wholly-owned subsidiary of Indigo-Energy,
Inc., a public shell company. In order to complete the reverse merger, Indigo-Energy, Inc., defined as the legal acquirer, issued
712,121,205 shares of restricted and unregistered shares of common stock. The issuance of the shares of common stock resulted in
a change of control of Indigo-Eneregy, Inc. in which the previous shareholder of HDIMAX, Inc. obtained approximately 94% of the
consolidated Company immediately following the transaction.
Further, in accounting for the reverse merger,
HDIMAX is deemed to be the accounting acquirer. Since as of the date of the transaction, Indigo-Energy, Inc., the legal acquirer
also deemed the accounting acquiree, was considered a shell company as defined in Rule 12b-2 promulgated under the Securities Exchange
Act of 1934, we determined the transaction was capital in nature rather than a business combination. Correspondingly, in accordance
with the Rules and Regulations as promulgated by the Securities and Exchange Commission (“SEC”), we recognized the
issuance of the restricted and unregistered shares of common stock based on the assumption of net monetary liabilities, along with
a recapitalization. On the date of merger we assumed net liabilities of $107,901. Additionally, as a result of the par value of
the stock being excess of the net liabilities assumed and the pre-merger equity of the shell company, we recognized an adjustment
to our accumulated deficit of $820,022 associated with the completion of the transaction since the par value and assumed liabilities
exceeded our previous excess capital.
NOTE 10 - SUBSEQUENT EVENTS
See Note 7 – Stockholders’ Equity
for a description of the unregistered and restricted share issuances subsequent to December 31, 2014 and through the date of this
report.
On January 22, 2015 we entered into a Settlement
Agreement with Rajinder Brar, the previous sole owner of HDIMAX, Inc., in which we cancelled all of the 712,121,205 shares of common
stock previously issued to Mr. Brar. In consideration for the shares being cancelled, we forfeited our rights to sell advertising
and other products on websites previously controlled Mr. Brar and related entities, with the exception of www.hdimax.com. An outline
of the significant terms of the Settlement Agreement include, but are not limited to, the following:
|
· |
The 712,121,205 million shares of HDIMAX Media, Inc. (formerly Indigo-Energy) common stock issued to Rajinder Brar, the owner of 100% of the previously outstanding stock of HDIMAX, Inc. immediately preceding the reverse acquisition transaction, were cancelled. |
|
· |
Rajinder Brar, Aneliya Vasileva, and Myles Pressey III, previously appointed as the Company’s officers and Board of Directors immediately following the completion of the reverse acquisition, resigned and forfeited future compensation terms associated with any and all previously agreed upon employment agreements. |
|
· |
Mr. James C. Walter Sr. was reappointed to serve as a Director charged with appointing new officers. Mr. Walter Sr. served as the Sole Officer and Director of the Company immediately preceding the completion of the reverse acquisition transaction. |
|
· |
The Company’s option agreement to acquire Fashion Style Magazine, Inc., an entity wholly owned by Rajinder Brar, was cancelled. |
|
· |
The Omnibus Agreement and License dated November 21, 2014, by and between the Company and Fashion Style Magazine, Inc. was terminated. The brands and assets wholly owned by Rajinder Brar through Fashion Style Magazine, Inc. were intended to be a core portion of the consolidated Company’s business operations subsequent to the completion of the reverse acquisition. |
|
· |
The Company forfeited all rights to Frontlinewire.com, a brand and website acquired in the reverse acquisition. |
|
· |
The Company maintained all rights to hdimax.com, a brand and website acquired in the reverse acquisition, but agreed to assign those assets back to their original owners by May 1, 2015. |
We do not intend to further develop or publish
content at www.hdimax.com. For additional details, including a copy of the Settlement Agreement, please see our Current Report
on Form 8-K filed on January 29, 2015.
During the first quarter of 2015, associated
with the cancellation of our previously effective employment agreements with two former officers, we reversed previously accrued
compensation expense and related burden, inclusive of stock-based compensation, totaling $23,295,167.
ZONZIA MEDIA, INC.
(formerly HDIMAX Media, Inc. and Indigo-Energy,
Inc.)
CONDENSED BALANCE SHEETS
| |
March 31, 2015 | | |
December 31, 2014 | |
| |
(unaudited) | | |
| |
ASSETS | |
| | | |
| | |
| |
| | | |
| | |
Current Assets | |
| | | |
| | |
Cash | |
$ | 3,936 | | |
$ | 208 | |
Prepaid professional fees | |
| 2,420 | | |
| – | |
| |
| | | |
| | |
Total assets | |
$ | 6,356 | | |
$ | 208 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | |
| | | |
| | |
| |
| | | |
| | |
Current Liabilities | |
| | | |
| | |
Accounts payable | |
$ | 749,526 | | |
$ | 710,769 | |
Accrued expenses | |
| 267,799 | | |
| 690,247 | |
Related party accounts payable | |
| – | | |
| 340,163 | |
Accrued compensation | |
| 241,435 | | |
| 495,167 | |
| |
| | | |
| | |
Total current liabilities | |
$ | 1,258,760 | | |
$ | 2,236,346 | |
| |
| | | |
| | |
| |
| | | |
| | |
Stockholders' Equity (Deficit) | |
| | | |
| | |
| |
| | | |
| | |
Preferred stock, $0.001 par value, 200,000,000 shares authorized and none issued and outstanding at March 31, 2015 and December 31, 2014 | |
$ | – | | |
$ | – | |
Common stock, $0.001 par value, 2,000,000,000 shares authorized and 211,197,162 and 758,065,119 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively | |
| 211,197 | | |
| 758,065 | |
Additional paid in capital | |
| 90,153,456 | | |
| 22,923,087 | |
Accumulated deficit | |
| (91,617,057 | ) | |
| (25,917,290 | ) |
| |
| | | |
| | |
| |
| | | |
| | |
Total stockholders' equity (deficit) | |
$ | (1,252,404 | ) | |
$ | (2,236,138 | ) |
| |
| | | |
| | |
Total liabilities and stockholders' equity (deficit) | |
$ | 6,356 | | |
$ | 208 | |
The accompanying notes are an integral part
of these unaudited condensed financial statements.
ZONZIA MEDIA, INC.
(formerly HDIMAX Media, Inc. and Indigo-Energy,
Inc.)
CONDENSED STATEMENT OF OPERATIONS
| |
For the Three Months | |
| |
Ended | |
| |
March 31, | |
| |
2015 | |
| |
(unaudited) | |
Revenue | |
| | |
| |
| | |
Net revenue | |
$ | – | |
| |
| | |
Expenses | |
| | |
General and administrative | |
| 322,441 | |
Sales and marketing | |
| (297,928 | ) |
Officer and director compensation | |
| 65,675,677 | |
Professional fees | |
| 819,599 | |
| |
| | |
Total operating expenses | |
| 66,519,789 | |
| |
| | |
Loss from operations | |
| (66,519,789 | ) |
| |
| | |
| |
| | |
Net loss | |
$ | (66,519,789 | ) |
| |
| | |
Net loss per share - basic and diluted | |
$ | (0.20 | ) |
| |
| | |
Weighted average shares outstanding | |
| 326,733,511 | |
The accompanying notes are an integral part
of these unaudited condensed financial statements.
ZONZIA MEDIA, INC.
(formerly HDIMAX Media, Inc. and Indigo-Energy,
Inc.)
CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY
(DEFICIT)
(Unaudited)
|
|
Common Stock |
|
|
Paid in |
|
|
Accumulated |
|
|
Total Equity |
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
(deficit) |
|
Balance, Inception May 24, 2014 |
|
|
– |
|
|
$ |
– |
|
|
$ |
488 |
|
|
$ |
– |
|
|
$ |
488 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of founder's shares in May 2014 |
|
|
48,500,000 |
|
|
|
48 |
|
|
|
(48 |
) |
|
|
– |
|
|
|
– |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cancellation of founder's shares related to reverse capitalization in November 2014 |
|
|
(48,500,000 |
) |
|
|
(48 |
) |
|
|
47 |
|
|
|
– |
|
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reverse capitalization in November 2014 |
|
|
757,689,386 |
|
|
|
757,689 |
|
|
|
(488 |
) |
|
|
(820,022 |
) |
|
|
(62,821 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for debt settlement in December 2014 |
|
|
375,733 |
|
|
|
376 |
|
|
|
123,088 |
|
|
|
– |
|
|
|
123,464 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation |
|
|
– |
|
|
|
– |
|
|
|
22,800,000 |
|
|
|
– |
|
|
|
22,800,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
(25,097,268 |
) |
|
|
(25,097,268 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance December 31, 2014 |
|
|
758,065,119 |
|
|
$ |
758,065 |
|
|
$ |
22,923,087 |
|
|
$ |
(25,917,290 |
) |
|
$ |
(2,236,138 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Settlement agreement with former officers and directors in January 2015 |
|
|
(709,121,205 |
) |
|
$ |
(709,121 |
) |
|
$ |
162,000 |
|
|
$ |
820,022 |
|
|
$ |
272,901 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation in January 2015 |
|
|
145,000,000 |
|
|
|
145,000 |
|
|
|
63,846,061 |
|
|
|
– |
|
|
|
63,991,061 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for previously accrued consulting fees in January 2015 |
|
|
75,000 |
|
|
|
75 |
|
|
|
24,925 |
|
|
|
– |
|
|
|
25,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for cash in January 2015 |
|
|
307,971 |
|
|
|
308 |
|
|
|
34,692 |
|
|
|
– |
|
|
|
35,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for employment agreement termination in January 2015 |
|
|
5,000,000 |
|
|
|
5,000 |
|
|
|
1,895,000 |
|
|
|
– |
|
|
|
1,900,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Related party debt forgiveness |
|
|
– |
|
|
|
– |
|
|
|
100,000 |
|
|
|
– |
|
|
|
100,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for cash in February 2015 |
|
|
177,777 |
|
|
|
177 |
|
|
|
32,623 |
|
|
|
– |
|
|
|
32,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation in February 2015 |
|
|
4,092,500 |
|
|
|
4,093 |
|
|
|
774,455 |
|
|
|
– |
|
|
|
778,548 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for settlement of related party accounts payable in February 2015 |
|
|
7,500,000 |
|
|
|
7,500 |
|
|
|
332,663 |
|
|
|
– |
|
|
|
340,163 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for cash in February 2015 |
|
|
100,000 |
|
|
|
100 |
|
|
|
27,950 |
|
|
|
– |
|
|
|
28,050 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
(66,519,789 |
) |
|
|
(66,519,789 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance March 31, 2015 |
|
|
211,197,162 |
|
|
$ |
211,197 |
|
|
$ |
90,153,456 |
|
|
$ |
(91,617,057 |
) |
|
$ |
(1,252,404 |
) |
The accompanying notes are an integral part
of these unaudited condensed financial statements.
ZONZIA MEDIA, INC.
(formerly HDIMAX Media, Inc. and Indigo-Energy,
Inc.)
CONDENSED STATEMENT OF CASH FLOWS
| |
For the Three Months | |
| |
Ended | |
| |
March 31, | |
| |
2015 | |
| |
(unaudited) | |
Cash Flows from Operating Activities | |
| | |
| |
| | |
Net loss | |
$ | (66,519,789 | ) |
| |
| | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |
| | |
Stock-based compensation | |
| 66,834,609 | |
Gain on non-cash settlement of accrued expenses | |
| (809,714 | ) |
Change in prepaid professional fees | |
| (2,420 | ) |
Change in accounts payable | |
| 163,757 | |
Change in accrued expenses | |
| – | |
Change in related party accounts payable | |
| – | |
Change in accrued payroll | |
| 241,435 | |
| |
| | |
Net cash used in operating activities | |
| (92,122 | ) |
| |
| | |
Cash Flows from Financing Activities | |
| | |
Proceeds from issuance of common stock | |
| 95,850 | |
| |
| | |
Net cash provided by financing activities | |
| 95,850 | |
| |
| | |
Net increase in cash | |
| 3,728 | |
| |
| | |
Cash at beginning of the period | |
| 208 | |
| |
| | |
Cash at end of the period | |
$ | 3,936 | |
| |
| | |
Supplementary Disclosures of Cash Flow Information | |
| | |
| |
| | |
Cash paid for income taxes | |
$ | – | |
Cash paid for interest | |
$ | – | |
| |
| | |
The accompanying notes are an integral part
of these unaudited condensed financial statements.
ZONZIA MEDIA, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2015
(UNAUDITED)
1. Interim Financial Statements
The accompanying interim unaudited condensed
financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three month period ended March 31, 2015, are not necessarily indicative of the results
that may be expected for the year ending December 31, 2015. For further information, refer to the financial statements and footnotes
thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014. Further, the accompanying condensed
statement of operations and cash flows do not contain the comparative period ended March 31, 2014 due to our inception date being
May 24, 2014.
The accompanying condensed financial statements
have been prepared in conformity with accounting principles generally accepted in the United States of America which contemplate
continuation of the Company as a going concern.
Description of Business
Zonzia Media, Inc, initially organized as HDIMAX
Media, Inc., and incorporated in the State of Delaware in May 2014, is a digital publishing and broadcast Company focused on content
development and multi-platform content distribution, advertising, and ecommerce.
Reverse Merger with Indigo-Energy, Inc.
On November 21, 2014, through a wholly-owned
subsidiary of a public shell Company then known as Indigo-Energy, Inc., HDIMAX Acquisition Corporation, a Nevada corporation, was
merged with and into HDIMAX, Inc., a Delaware corporation (“HDIMAX”) (such merger, the “Merger”) pursuant
to the Agreement and Plan of Merger, effective as of September 2, 2014, and as amended effective as of November 20, 2014, by and
among Indigo-Energy, Inc. (our “company” or “we” or “us”), HDIMAX and HDIMAX Acquisition Corporation
(the “Merger Agreement”). HDIMAX was the surviving corporation of the Merger and as such will continue as a wholly-owned
subsidiary of our Company. Upon closing the merger, we changed our name to HDIMAX Media, Inc.
As a result of the Merger, all of HDIMAX’s
common stock was converted into 712,121,205 shares of our Company’s common stock, which represents approximately 94% of the
outstanding shares of our company’s common stock after giving effect to the Merger. The common stock issuance, representing
94% of the outstanding shares of the consolidated Company was accounted for as a reverse capitalization in accordance with accounting
principles generally accepted in the United States (“US GAAP”) and the Rules and Regulations as promulgated by the
United States Securities and Exchanges Commission (“SEC”).
On January 22, 2015, we entered into a Settlement
Agreement in which we cancelled all of the 712,121,205 shares of restricted and unregistered common stock previously issued to
effectuate the merger with Rajinder Brar, the previous sole owner of HDIMAX, Inc. In consideration for the shares being cancelled,
we forfeited our rights to sell advertising and other products on websites previously controlled Mr. Brar and related entities,
with the exception of www.hdimax.com. An outline of the significant terms of the Settlement Agreement
includes, but is not limited to, the following:
|
· |
The 712,121,205 million shares of HDIMAX Media, Inc. (formerly Indigo-Energy) common stock issued to Rajinder Brar, the owner of 100% of the previously outstanding stock of HDIMAX, Inc. immediately preceding the reverse acquisition transaction, were cancelled. |
|
· |
Rajinder Brar, Aneliya Vasileva, and Myles Pressey III, previously appointed as the Company’s officers and Board of Directors immediately following the completion of the reverse acquisition, resigned and forfeited future compensation terms associated with any and all previously agreed upon employment agreements, inclusive of the compensation accrued as of December 31, 2014. |
|
· |
Mr. James C. Walter Sr. was reappointed to serve as a Director charged with appointing new officers. Mr. Walter Sr. served as the Sole Officer and Director of the Company immediately preceding the completion of the reverse acquisition transaction. |
|
· |
The Company’s option agreement to acquire Fashion Style Magazine, Inc., an entity wholly owned by Rajinder Brar, was cancelled. |
|
· |
The Omnibus Agreement and License dated November 21, 2014, by and between the Company and Fashion Style Magazine, Inc. was terminated. The brands and assets wholly owned by Rajinder Brar through Fashion Style Magazine, Inc. were intended to be a core portion of the consolidated Company’s business operations subsequent to the completion of the reverse acquisition. |
|
· |
The Company forfeited all rights to Frontlinewire.com, a brand and website acquired in the reverse acquisition. |
|
· |
The Company maintained all rights to hdimax.com, a brand and website acquired in the reverse acquisition, but agreed to assign those assets back to their original owners by May 1, 2015. We do not intend to further develop or publish content at www.hdimax.com. |
For additional details, including a copy of
the Settlement Agreement, please see our Current Report on Form 8-K filed on January 29, 2015.
On March 9, 2015 we changed our name to Zonzia
Media, Inc. and we are developing a new multi-platform entertainment distribution channel with the goal of being a unique hybrid
of a linear channel, a video-on-demand channel and an over-the-top channel. Our technology will allow our viewers instant access
to our available content.
Use of Estimates
In preparing financial statements in conformity
with generally accepted accounting principles, we are required to make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues
and expenditures during the reported periods. Actual results could differ materially from those estimates.
Cash and Cash Equivalents
We consider all highly liquid instruments with
an original maturity of 90 days or less at the time of purchase to be cash equivalents. We did not have any cash equivalents at
March 31, 2015 or December 31, 2014.
Recently Issued Accounting Pronouncements
There have been no recently issued accounting
pronouncements that were not previously disclosed in our annual report on Form 10-K filed on April 15, 2015 through the date of
this report that we believe will have a material impact on our financial position, results of operations, or cash flows.
2. Going Concern
Since our inception on May 24, 2014, we have
generated immaterial revenues resulting in the incurrence of net losses through March 31, 2015. This has further led to negative
working capital, all which results in substantial doubt about the Company’s ability to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
Our management, Board, and Advisory Board has
focused its efforts and our limited resources on raising additional capital through debt or equity offerings at terms not detrimental
to our planned future operations. As of the date of this report we do not have any firm funding commitments.
3. Related Party Transactions
During the three months ended March 31, 2015
we settled prior obligations due to a related party totaling $340,163 via the issuance of 7,500,000 shares of restricted and unregistered
shares of common stock. The settled obligation also represents that balance outstanding as of December 31, 2014.
During the three months ended March 31, 2015
our Chief Compliance Officer agreed to forgive an accrued bonus at December 31, 2014 totaling $100,000. Since we consider our Chief
Compliance Officer a related party we have determined the bonus forgiveness was in the nature of a capital contribution and no
gain was recognized for the forgiveness of the obligation in the accompanying condensed statement of operations.
We issued a Director 250,000 shares of restricted
and unregistered shares of common stock for cash proceeds totaling $25,000 in January 2015.
As part of the Settlement Agreement we entered
into on January 22, 2015 we cancelled restricted stock award grants to two of our former officers. Since we did not replace a cancelled
award totaling 52,500,000 shares of restricted and unregistered shares of common stock, and effectively repurchased the award for
no consideration as assumed by the application of accounting principles generally accepted in the United States, the unrecognized
grant-date fair value of the award totaling $9,975,000 was recognized during the three months ended March 31, 2015. Additionally,
we cancelled a restricted stock award granted to our current Interim Chief Executive Officer totaling 67,500,000 shares and replaced
the award with the grant of 125,000,000 shares of restricted and unregistered shares as part of a new employment agreement on January
29, 2015. The total compensation cost recognized during the three months ended March 31, 2015 associated with the cancellation
and replacement of this restricted stock award was $47,500,000.
4. Stockholders’ Equity
The following provides information for the
shares of restricted and unregistered shares of common stock that we issued (or cancelled) from January 1, 2015 through the date
of this report:
In January 2015 we issued 75,000 shares of
restricted and unregistered common stock for consulting services valued at $25,000.
In January 2015 we issued 57,971 shares restricted
and unregistered shares of common stock for cash totaling $10,000.
We issued a Director 250,000 shares of restricted
and unregistered shares of common stock for cash proceeds totaling $25,000 in January 2015.
In January 2015 we issued a total of 145,000,000
shares of restricted and unregistered shares of common stock as compensation to our officers, directors, and other consultants
valued at $54,016,061.
In January 2015 we issued 5,000,000 shares
of restricted and unregistered shares of common stock to a former employee of HDIMAX, Inc. valued at $1,900,000.
In January 2015, in accordance with the terms
of our Settlement Agreement with our former Chairman and Chief Executive Officer, we cancelled 712,121,205 shares of unregistered
and restricted common stock. We recognized settlement expense, included in the general and administrative expenses in the accompanying
condensed statement of operations, totaling $107,901 and reversed the previously recognized accumulated deficit adjustment of $820,022
associated with the Settlement.
In February 2015 we issued 142,500 shares of
restricted and unregistered common stock for accounting and legal services valued at $21,179.
In February 2015 we issued a total of 200,000
shares of restricted and unregistered shares of common stock as compensation directors valued at $38,348.
In February 2015 we issued 3,750,000 shares
of restricted and unregistered common stock for consulting services valued at $719,021.
In February 2015 we issued 177,777 restricted
and unregistered shares of common stock for cash totaling $32,800.
In February 2015 we issued 7,500,000 shares
of restricted and unregistered common stock in settlement of previously accrued related party liabilities totaling $340,163.
In March 2015 we issued 100,000 restricted
and unregistered shares of common stock for cash totaling $28,050.
In April 2015 we issued 440,000 shares of restricted
and unregistered common stock in conjunction with the issuance of notes payable for total consideration of $70,000.
5. Accrued Expenses
During the quarter ended March 31, 2015 our
management, with the assistance of our defense attorney, analyzed the merit and likelihood of an unfavorable outcome in the matter
of Congoo, LLC v. HDIMAX Max Media, Inc. Civ. Action No. 3:15-cv-01423. Based on the facts and circumstances, we determined
the likelihood of an unfavorable outcome to be remote. Correspondingly, we reversed the previously accrued obligation of $422,448
as presented in sales and marketing expense in the accompanying condensed statement of operations.
6. Subsequent Events
On April 21, 2015, our Chairman of the Board
of Directors, Myles A. Pressey III, resigned as Interim Chief Executive Officer. On the same date, we appointed Naresh Malik to
serve as our Chief Executive Officer. Mr. Malik possesses extensive experience in the film and entertainment services industry.
Upon the appointment of Mr. Malik, we entered into an employment agreement providing for a base salary of $250,000 and a one-time
grant of 5,000,000 fully vested shares of restricted and unregistered common stock. Mr. Malik is also entitled to receive other
performance based bonuses and customary benefits.
In May 2015 we issued 1,500,000 shares of restricted
and unregistered common stock for cash totaling $150,000 to an investor. The investor also received a total of 1,500,000 warrants,
each convertible into one share of restricted and unregistered common stock at an exercise price of $0.275 per share for a period
of three years.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
The actual and estimated expenses in connection
with this offering, all of which will be borne by us, are as follows:
SEC Registration Fee |
|
$ |
3,353.15 |
|
Accounting Fees |
|
$ |
25,000 |
* |
Legal Fees and Expenses |
|
$ |
15,000 |
* |
Transfer Agent Fee |
|
$ |
2,000 |
* |
Miscellaneous |
|
$ |
3,000 |
* |
|
|
|
|
|
Total |
|
$ |
48,353.15 |
* |
*estimated
Item 14. Indemnification of Directors and Officers
Section 78.7502 of the Nevada Revised Statutes provides that a corporation
may indemnify directors and officers as well as other employees and individuals against expenses including attorneys' fees, judgments,
fines and amounts paid in settlement in connection with various actions, suits or proceedings, whether civil, criminal, administrative
or investigative other than an action by or in the right of the corporation, a derivative action, if they acted in good faith and
in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, if they had no reasonable cause to believe their conduct was unlawful. A similar standard is applicable
in the case of derivative actions, except that indemnification only extends to expenses including attorneys' fees incurred in connection
with the defense or settlement of such actions, and the statute requires court approval before there can be any indemnification
where the person seeking indemnification has been found liable to the corporation. The statute provides that it is not exclusive
of other indemnification that may be granted by a corporation's Amended and Restated Articles of Incorporation, Bylaws, agreement,
a vote of stockholders or disinterested directors or otherwise.
The Company’s Amended and Restated Articles of Incorporation
provides that it will indemnify and hold harmless, to the fullest extent permitted by Chapter 78 of the Nevada Revised Statutes,
as amended from time to time, each person that such section grants us the power to indemnify.
The Nevada Revised Statutes permit a corporation to provide in its
Amended and Restated Articles of Incorporation that a director of the corporation shall not be personally liable to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability for:
|
· |
any breach of the director's duty of loyalty to the corporation or its stockholders; |
|
· |
acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; |
|
· |
payments of unlawful dividends or unlawful stock repurchases or redemptions; or |
|
· |
any transaction from which the director derived an improper personal benefit. |
The Company’s Amended and Restated Articles of Incorporation
provides that, to the fullest extent permitted by applicable law, none of our directors will be personally liable to us or our
stockholders for monetary damages for breach of fiduciary duty as a director. Any repeal or modification of this provision will
be prospective only and will not adversely affect any limitation, right or protection of a director of our Company existing at
the time of such repeal or modification.
Item 15. Recent Sale of Unregistered Securities
On November 21, 2014, we issued 712,121,205 shares of common stock
in exchange for the all of the issued and outstanding stock of HDIMAX, Inc. There was no underwriter, no underwriting discounts
or commissions, no general solicitation, no advertisement, and resale restrictions are being imposed by placing a Rule 144 legend
on the certificate(s). The one person who received securities, Rajinder Brar, had such knowledge in business and financial matters
that he is capable of evaluating the merits and risks of the transaction. This transaction was exempt from registration under the
Securities Act of 1933, based on Section 4(a)(2) for transactions by the issuer not involving any public offering. All of these
shares were subsequently canceled pursuant to the terms of a Settlement Agreement dated January 22, 2015.
In November 2014 the Company issued 113,636
shares of restricted and unregistered common stock for consulting services valued at $45,454.
In November 2014 the Company issued 712,121,205
shares of restricted and unregistered common stock to effectuate the merger with HDIMAX, Inc. Subsequently, in January 2015, the
712,121,205 shares to complete the merger with HDIMAX, Inc. were cancelled as part of a Settlement Agreement resulting in the disposition
of a majority of the previously acquired assets of HDIMAX, Inc.
In December 2014, the Company issued 375,733
shares of restricted and unregistered common stock for the settlement of discounted convertible notes and accrued interest totaling
$123,463.
In January 2015 we issued 75,000 shares of
restricted and unregistered common stock for consulting services valued at $25,000.
In January 2015 we issued 57,971 shares restricted
and unregistered shares of common stock for cash totaling $10,000.
In January 2015 we issued a total of 145,200,000
shares of restricted and unregistered shares of common stock as compensation to our officers, directors, and other consultants
valued at $54,054,409.
In January 2015 we issued 5,000,000 shares
of restricted and unregistered shares of common stock to a former employee of HDIMAX, Inc. valued at $1,900,000.
In January 2015, in accordance with the terms
of our Settlement Agreement with our former Chairman and Chief Executive Officer, we cancelled 712,121,205 shares of unregisters
and restricted common stock.
In February 2015 we issued 142,500 shares of
restricted and unregistered common stock for accounting and legal services valued at $20,000.
In February 2015 we issued a total of 200,000
shares of restricted and unregistered shares of common stock as compensation directors valued at $38,348.
In February 2015 we issued 3,750,000 shares
of restricted and unregistered common stock for consulting services valued at $719,021.
In February 2015 we issued 177,777 restricted
and unregistered shares of common stock for cash totaling $32,800.
In February 2015 we issued 7,500,000 shares
of restricted and unregistered common stock in settlement of previously accrued related party liabilities totaling $340,163.
In March 2015 we issued 100,000 restricted
and unregistered shares of common stock for cash totaling $28,050.
In April 2015 we issued 440,000 shares of restricted and unregistered
common stock in conjunction with the issuance of notes payable for total consideration of $70,000.
In May 2015 we issued a total of 1,725,445 shares of restricted
and unregistered common stock to third party investors for total cash consideration of $193,050.
In May 2015 we issued 8,000,000 shares of restricted and unregistered
common stock as compensation to our officers for services rendered and 5,059,524 shares of restricted and unregistered common stock
to consultants and advisors for services rendered.
In May 2015 we issued an aggregate of 200,000 in settlement of various
obligations including promissory notes and extensions of promissory notes.
In May 2015 we issued a total of 200,000 shares of restricted and
unregistered common stock as compensation for Board and Advisory Board members.
Item 16. Index To Financial Statements
Exhibit Index
Exhibit Number |
|
Description |
|
|
|
Exhibit 3.1 |
|
Amended and Restated Articles of Incorporation of Indigo-Energy, Inc. (3) |
|
|
|
Exhibit 3.2 |
|
Amended and Restated Bylaws of Indigo-Energy, Inc. (4). |
|
|
|
Exhibit 5.1 |
|
Opinion of Wilson & Oskam, LLP (executed opinion to be filed
by amendment) |
|
|
|
Exhibit 10.1 |
|
Settlement Agreement dated January 22, 2015 (5) |
|
|
|
Exhibit 10.2 |
|
Form of Subscription Agreement |
|
|
|
Exhibit 10.3 |
|
Employment Agreement with Myles A. Pressey III (6) |
|
|
|
Exhibit 10.4 |
|
Employment Agreement with Johnathan Adair (6) |
|
|
|
Exhibit 10.5 |
|
Employment Agreement with Lynwood Bibbens (6) |
|
|
|
Exhibit 10.6 |
|
Employment Agreement with Stanley L. Teeple |
|
|
|
Exhibit 10.7 |
|
Employment Agreement with Naresh Malik |
|
|
|
Exhibit 10.8 |
|
Employment Agreement with Frank McEnulty |
|
|
|
Exhibit 21 |
|
List of Subsidiaries |
|
|
|
Exhibit 23.1 |
|
Consent of Haynie & Company |
|
|
|
Exhibit 23.2 |
|
Consent of Wilson & Oskam, LLP (included in Exhibit 5.1 herein) |
|
|
|
Exhibit 24 |
|
Power of Attorney (included on signature page) |
* Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K.
_______
(1) |
Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed September 4, 2014 |
(2) |
Incorporated by reference to the applicable exhibit of the registrant’s Current Report on Form 8-K filed on November 26, 2014. |
(3) |
Incorporated by reference to the registrant’s definitive Information Statement on Schedule 14C filed on October 20, 2014. |
(4) |
Incorporated by reference to Exhibit 3.1 to our Current Report on
Form 8-K filed October 6, 2014. |
(5) |
Incorporated by reference to Exhibit 99.1 to our Current
Report on Form 8-K filed on January 28, 2015. |
(6) |
Incorporated by reference to the applicable exhibit to
our Current Report on Form 8-K filed on February 4, 2015. |
|
(B) |
Financial Statement Schedules |
The following financial statements of the registrant, along with
the notes thereto and the Report of Independent Registered Public Accounting Firm, are filed herewith.
Financial Statements
INDEX TO FINANCIAL STATEMENTS
Financial Statements of Zonzia Media, Inc. |
|
Report of Independent Registered Public Accounting Firm, Haynie & Company, Certified Public Accountants |
|
|
F-2 |
|
Balance Sheets as at March 31, 2015 and December 31, 2014 |
|
|
F-3 |
|
Statement of Operations for the period from May 24, 2014 (inception)
through December 31, 2014 |
|
|
F-4 |
|
Statement of Stockholders’ Deficit for the period from May 24,
2014 (inception) through December 31, 2014 |
|
|
F-5 |
|
Statement of Cash Flows for the period from May 24, 2014 (inception)
through December 31, 2014 |
|
|
F-6 |
|
Notes to financial statements |
|
|
F-7 |
|
Unaudited Interim Financial Statements of Zonzia Media, Inc. for the three months ended March 31, 2015 |
|
|
|
|
Condensed Balance Sheet |
|
|
F-16 |
|
Condensed Statement of Operations |
|
|
F-17 |
|
Condensed Statement of Stockholders’ Deficit |
|
|
F-18 |
|
Condensed Statement of Cash Flows |
|
|
F-19 |
|
Notes to condensed financial statements |
|
|
F-20 |
|
All schedules have
been omitted because the information required to be presented in them is not applicable or is shown in the financial statements
or related notes.
Item 17. Undertakings
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 foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the Commission 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.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) 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; and
(iii) 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.
(2) 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.
(3) 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.
SIGNATURES
Pursuant to the
requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the city of Henderson, State of Nevada, on May 29, 2015.
|
Zonzia Media, Inc. |
|
|
|
|
By: |
/s/ Naresh Malik |
|
|
|
Naresh Malik |
|
|
|
Chief Executive Officer
(Principal Executive Officer) |
|
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each
person whose signature appears below constitutes and appoints Frank McEnulty and Stanley Teeple as such persons’ true and
lawful attorneys-in-fact and agents for such person and in such person’s name, place and stead, in any and all capacities,
to sign any and all amendments (including post-effective amendments) to this Registration Statement, and any new Registration Statement
filed under Rule 462(b) of the Securities Act of 1933 and to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission and any other regulatory authority, granting unto said attorneys-in-fact
and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents may lawfully do or cause to be done by virtue hereof.
This power of attorney may be executed in multiple
counterparts, each of which shall be deemed an original, but which taken together shall constitute one instrument.
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated
SIGNATURE |
|
TITLE |
|
DATE |
|
|
|
/s/ Myles A. Pressey III |
|
Chairman of the Board of Directors |
|
May 29,
2015 |
|
|
|
|
|
/s/ Naresh Malik |
|
Chief Executive Officer |
|
|
|
|
(Principal Executive Officer) |
|
May 29, 2015 |
|
|
|
|
|
/s/ Frank McEnulty |
|
Chief Financial Officer |
|
|
|
|
(Principal Accounting and Financial Officer) |
|
May 29, 2015 |
|
|
|
/s/ James
C. Walter Sr. |
|
Director |
|
May 29, 2015 |
|
|
|
|
|
/s/ Steven
Sanders |
|
Director |
|
May 29, 2015 |
|
|
|
|
|
|
|
|
Exhibit Index
Exhibit Number |
|
Description |
|
|
|
Exhibit 3.1 |
|
Amended and Restated Articles of Incorporation of Indigo-Energy, Inc. (3) |
|
|
|
Exhibit 3.2 |
|
Amended and Restated Bylaws of Indigo-Energy, Inc. (4). |
|
|
|
Exhibit 5.1 |
|
Opinion of Wilson & Oskam, LLP (executed opinion to be filed
by amendment) |
|
|
|
Exhibit 10.1 |
|
Settlement Agreement dated January 22, 2015 (5) |
|
|
|
Exhibit 10.2 |
|
Form of Subscription Agreement |
|
|
|
Exhibit 10.3 |
|
Employment Agreement with Myles A. Pressey III (6) |
|
|
|
Exhibit 10.4 |
|
Employment Agreement with Johnathan Adair (6) |
|
|
|
Exhibit 10.5 |
|
Employment Agreement with Lynwood Bibbens (6) |
|
|
|
Exhibit 10.6 |
|
Employment Agreement with Stanley L. Teeple |
|
|
|
Exhibit 10.7 |
|
Employment Agreement with Naresh Malik |
|
|
|
Exhibit 10.8 |
|
Employment Agreement with Frank McEnulty |
|
|
|
Exhibit 21 |
|
List of Subsidiaries |
|
|
|
Exhibit 23.1 |
|
Consent of Haynie & Company |
|
|
|
Exhibit 23.2 |
|
Consent of Wilson & Oskam, LLP (included in Exhibit 5.1 herein) |
|
|
|
Exhibit 24 |
|
Power of Attorney (included on signature page) |
_______________
(1) |
Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed September 4, 2014 |
(2) |
Incorporated by reference to the applicable exhibit of the registrant’s Current Report on Form 8-K filed on November 26, 2014. |
(3) |
Incorporated by reference to the registrant’s definitive Information Statement on Schedule 14C filed on October 20, 2014. |
(4)
(5)
(6) |
Incorporated by reference to Exhibit 3.1 to our Current Report on
Form 8-K filed October 6, 2014.
Incorporated by reference to Exhibit 99.1 to our Current Report
on Form 8-K filed on January 28, 2015.
Incorporated by reference to the applicable exhibit to our Current
Report on Form 8-K filed on February 4, 2015. |
Exhibit 5.1
[Letterhead of Wilson & Oskam, LLP]
Date:
Zonzia Media, Inc.
74 N. Pecos, Suite D
Henderson, NV 89074
Re: Registration Statement
on Form S-1
Ladies and Gentlemen:
With respect to the Registration Statement on Form S-1 initially
filed with the Securities and Exchange Commission on May 29, 2015 (the “Registration Statement”) by Zonzia Media, Inc.,
a Nevada corporation (the “Company”) under the Securities Act of 1933, as amended, relating to the sale of up to 43,302,185
shares of Common Stock of the Company, $.001 par value (the “Common Stock”), by the selling stockholders named in the
Registration Statement (the “Selling Stockholders”) and 46,875,000 shares of Common Stock registered for sale by the
Company, we advise you as follows:
We are counsel for the Company and have participated in the
preparation of the Registration Statement. We have reviewed the Company’s Articles of Incorporation, as amended to date,
the corporate action taken to date in connection with the Registration Statement and the issuance of the shares and such other
documents and authorities as we deem relevant for the purpose of this opinion.
Based upon the foregoing and in reliance thereon, we are of
the opinion that, upon compliance with the Securities Act of 1933, as amended, and with the securities or “blue sky”
laws of the states in which the shares are to be offered for sale, the 43,302,185 shares of Common Stock registered for resale
by the Selling Stockholders have been validly issued, fully paid and non-assessable and the 46,875,000 shares registered for sale
by the Company, when subscribed and paid for, will be validly issued, fully paid and non-assessable.
This opinion speaks as of the date hereof
and through the effectiveness of the Registration Statement; however, we assume no obligation to advise you or any other person
with regard to any change in the circumstances or the law that may bear on the matters set forth herein after the effectiveness
of the Registration Statement.
Very truly yours,
Wilson & Oskam, LLP
Exhibit 10.2
HDIMAX MEDIA, INC.
SUBSCRIPTION AGREEMENT
This Subscription
Agreement (this “Agreement”), dated as of _____________, is made by and among ZONZIA MEDIA, Inc., a Nevada
corporation (the “Company”), and the investor identified on Annex I (“Investor”).
WHEREAS, the
Investor wishes to purchase from the Company, upon the terms and conditions stated herein, the number of shares of the Company’s
common stock (the “Shares”) for the consideration set forth on Annex;
NOW, THEREFORE,
in consideration of the mutual promises, representations, warranties and covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investors mutually agree as follows.
ARTICLE 1
PURCHASE OF COMMON STOCK
1.1 Purchase of Common Stock in Exchange
for Cash Payment. Subject to the terms and conditions of this Agreement, on the Effective Date, the Investor listed in Annex
I shall purchase, and the Company shall sell and issue to Investor, the Shares in the amount set forth opposite such Investor’s
name on Annex I in exchange for the purchase price set forth opposite each such Investor’s name on Annex I.
1.2 Subscription Funds. On or
prior to the Effective Date, each Investor shall deliver (in accordance with instructions provided to the Investor by the Company),
cash equal to the amount set forth opposite each such Investor’s name on Annex I (the “Investment Amount”),
or shall otherwise provide evidence of the availability of funds to the reasonable satisfaction of the Company.
1.3 Investor Information. Each
Investor shall deliver complete, final and accurate copies of (i) Annex I, and (ii) an Investor Questionnaire in the form provided
by the Company, setting forth information regarding the identification and certain representations of the Investors, prior to the
Effective Date.
1.4 Delivery. On the date of
this Agreement, each Investor shall (i) pay (by wire transfer in same day funds to an account specified by the Company in writing
or pursuant to other funding instructions specified by the Company in writing), to the Company the amount set forth opposite each
such Investor’s name on Annex I under column 1.b.; and (ii) deliver a counterpart of the signature page of this Agreement.
1.5 Closing. The subscription
shall be deemed to be accepted by the Company, in the amount indicated by the Company’s officer on the Company signature
page, only when this Agreement is executed by such officer on behalf of the Company and delivered to Investor. Upon acceptance
of the subscription by the Company within 90 days of such subscription, this Agreement shall constitute a legal and binding obligation
of both Investor and the Company. The closing of the purchase and sale of the Shares shall take place on what is referred to herein
as the “Effective Date” at the offices of the Company, or at such other location as the Company and the Investors shall
mutually agree, upon the Company providing its countersignature to this Agreement.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE
INVESTOR
Each Investor, severally
and not jointly, represents and warrants to the Company that the statements contained in this Article 2 are true and correct as
of the date hereof and will be as of the Effective Date, except to the extent such representations and warranties are specifically
made as of a particular date (in which case such representations and warranties are true and correct as of such date).
2.1 Accredited Investor Status.
Investor is an “accredited investor” as defined by Rule 501 of Regulation D under the Securities Act. Investor acknowledges
that it has such knowledge and experience in financial and business matters that Investor is capable of evaluating the merits and
risks of an investment in the Shares and of making an informed investment decision with respect thereto. Investor acknowledges
that an investment in the Shares is speculative and involves a high degree of risk and that Investor can bear the economic risk
of the acceptance of the Shares, including a total loss of Investor’s investment. Investor is experienced in evaluating and
investing in early stage or start-up or reorganizing companies such as the Company.
2.2 Investment for Own Account.
Investor is purchasing the Shares solely for Investor’s own account, and, in the event that the Investor should acquire any
underlying securities, will be acquiring such underlying securities solely for Investor’s own account, and not for the benefit
of any other Person. Investor is acquiring the Shares solely for investment purposes and not with a view to distribution or resale,
nor with the intention of selling, transferring or otherwise disposing of all or any part thereof for any particular price, or
at any particular time, or upon the happening of any particular event or circumstance, except selling, transferring, or disposing
of the Shares, in full compliance with all applicable provisions of the Securities Act, the rules and regulations promulgated by
the Securities and Exchange Commission thereunder, and applicable state securities laws. Investor understands and acknowledges
that an investment in the Shares is not a liquid investment.
2.3 Information. Investor confirms
that Investor has had the opportunity to ask questions of, and receive answers from, the Company or any authorized Person acting
on its behalf concerning the Company and its business, and to obtain any additional information, to the extent possessed by the
Company (or to the extent it could have been acquired by the Company without unreasonable effort or expense) necessary to verify
the accuracy of the information received by Investor. In connection therewith, Investor acknowledges that Investor has had the
opportunity to discuss the Company’s business, management and financial affairs with the Company’s management or any
authorized Person acting on its behalf. Investor has received and reviewed all the information concerning the Company and the Shares,
both written and oral, that Investor desires. In determining whether to make this investment, Investor has relied solely on Investor’s
own knowledge and understanding of the Company and its business based upon Investor’s own due diligence investigations.
2.4 Authorization. Investor has
all requisite legal and other power and authority to execute and deliver this Agreement and to carry out and perform its obligations
under the terms of this Agreement. This Agreement constitutes a valid and legally binding obligation of Investor enforceable in
accordance with its terms, subject as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors’ rights and to general equity principles.
2.5 Suitability of Investment.
Investor has carefully considered and has discussed (or accepts the responsibility to discuss) with its own legal, tax, accounting
and financial advisors, to the extent the Investor has deemed necessary, the suitability of this investment and the transactions
contemplated by this Agreement for the Investor’s particular federal, state, provincial, local and foreign tax and financial
situation and has independently determined that this investment and the transactions contemplated by this Agreement are a suitable
investment for the Investor. Investor understands that it (and not the Company) shall be responsible for Investor’s own tax
liability that may arise as a result of the investment in the Shares or the transactions contemplated by this Agreement.
2.6 Restricted Securities. The
Investor understands that the Shares are characterized as “restricted securities” under the federal securities laws,
inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that, under such laws
and applicable regulations, the Shares may be resold without registration under the Securities Act only in certain limited circumstances.
Investor understands that the Shares have not been registered under the Securities Act on the ground that the issuance thereof
is exempt under Section 4(2) of the Act and/or Regulation D as a transaction by an issuer not involving any public offering, and
that the statutory basis for the exception claimed may not be present if any of the representations and warranties of Investor
contained in this Agreement are untrue. The Investor acknowledges that the Shares must be held indefinitely unless subsequently
registered under the Securities Act or an exemption from such registration is available.
Certificates evidencing the Shares will
bear a legend substantially in the form below:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION
AND MAY NOT BE SOLD, OFFERED FOR SALE OR OTHERWISE TRANSFERRED UNLESS REGISTERED OR QUALIFIED UNDER SAID ACT AND APPLICABLE STATE
SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH REGISTRATION OR QUALIFICATION
IS NOT REQUIRED.
2.7 Investor Information. The
residency of Investor (or, in the case of a partnership, limited liability company or corporation, such entity’s principal
place of business) is correctly set forth on the Investor Questionnaire filled out by the Investor. Each Investor shall complete
and sign such Investor Questionnaire providing certain investor representations contained therein.
ARTICLE 3
CONDITIONS RELATING TO THE CLOSING
3.1 Conditions to the Obligations of
the Company at the Closing. The obligation of the Company to consummate the transactions to be performed by it in connection
with the Closing with respect to each Investor are, unless otherwise indicated, subject to the satisfaction of the following conditions
as of the Effective Date, unless such conditions are waived by the Company:
(a) Representations,
Warranties and Covenants. The representations and warranties made by each such Investor in Article 2 hereof shall be true
and correct as of the Effective Date.
(b) Deposit of
Funds. Each Investor shall have deposited with the Company all of the cash needed to satisfy the Investors’ purchase
obligations under this Agreement.
(c) Delivery of Subscription Agreement and Investor Questionnaire. The investor
shall have delivered an executed Subscription Agreement, along with an Investor Questionnaire and any and all other investment
documentation requested by the Company in connection therewith.
3.2 Conditions to the Obligations of
the Investors at the Closing. The obligation of each Investor to consummate the transactions to be performed by it in connection
with the Closing with respect to the Company are, unless otherwise indicated, subject to the satisfaction of the following conditions
as of the Effective Date, unless such conditions are waived by such Investor:
| (a) | Delivery of Subscription Agreement and Investor Questionnaire. The Company shall have delivered
an executed Subscription Agreement to the Investor. |
ARTICLE 4
MISCELLANEOUS
4.1 Governing Law. This Agreement
shall be governed by and construed in accordance with the substantive laws of the State of Nevada without regard to applicable
choice of law provisions thereof.
4.2 No Third Party Reliance. Anything
contained herein to the contrary notwithstanding, the representations and warranties contained in this Agreement (a) are being
given as an inducement to the Company to enter into this Agreement and (b) are solely for the benefit of the Company. Accordingly,
no third party shall be a third-party or other beneficiary of such representations and warranties and no such third party shall
have any rights of contribution against the Investor or the Company with respect to such representations or warranties or any matter
subject to or resulting in indemnification under this Agreement or otherwise.
4.3 Amendment. This Agreement
may not be modified or amended in any manner except in a writing executed by the Company and any Investor whose interest may be
adversely affected by the amendment.
4.4 Counterparts; Facsimile and Electronic
Signatures. This Agreement may be executed in any number of counterparts, and each such counterpart hereof shall be deemed
to be an original instrument, but all such counterparts together shall constitute but one agreement. Counterpart signatures to
this Agreement delivered by facsimile or other electronic transmission shall be acceptable and binding.
4.5 Headings. The section and
paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation
of this Agreement.
* * * * *
IN WITNESS WHEREOF, each of the
undersigned has duly executed this Subscription Agreement as of the date first written above.
INVESTOR
Individuals:
(Includes joint tenants, tenants in common and individual IRA beneficiaries)
Printed Name: Name of Subscriber
(as it is to appear on certificate(s))
__________________________________________
Signature
Accepted by:
ZONZIA
MEDIA, INC.
By: ________________________________
Name:
Title:
Subscription accepted by the Company as to Investment
Amount:
$___________
[Signature page to Subscription Agreement]
Annex I
Subscription Schedule
Name and Address1
of Investor |
(a)
Shares of Common Stock (#) |
(b)
Aggregate Purchase Price ($) |
Name:
Address:
Tax ID:
Wiring Instructions:
Reference:
_________________________
[1]
Listed address is the principal place of business, if a business entity, or address and state of residency, if an individual.
Exhibit 10.6
THIS EMPLOYMENT AGREEMENT this “Agreement”) is made and
effective as of Monday December 1st, 2014, between HDIMAX, Inc. a Delaware corporation having just completed a Merger with Indigo-Energy,
Inc. (together with its successors and assigns, the "Company"), and Stanley L. Teeple, Chief Compliance Officer, (“CCO”)
and Corporate Secretary.
Recitals
The Company and CCO desire to enter into an agreement pursuant to
which the Company will employ CCO as its Chief Compliance Officer and Corporate Secretary subject to the terms and conditions of
this Agreement.
Agreement
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and promises contained herein, the parties agree as follows:
1. Employment.
The Company hereby engages CCO to serve as the Chief Compliance
Officer and Corporate Secretary of the Company, and CCO agrees to serve the Company, during the Service Term (as defined in Section
4 below) in the capacities, and subject to the terms and conditions, set forth in this Agreement.
2. Duties.
During the Service Term, CCO, as Chief Compliance Officer of the
Company, shall have all the duties and responsibilities of this office and such other duties and responsibilities as may be delegated
from time to time by the Board or the Chief Executive Officer (CEO) of the Company in their sole discretion. CCO will report to
the CEO. CCO will devote his best efforts and whatever time and resources are required to fulfill his responsibilities to the business
of the Company and its Subsidiaries.
3. Salary, Bonus and Benefits.
The CEO shall make all decisions related to CCO’s base salary
and the payment of bonuses, if any. CCO’s Annual Base Salary and other compensation will be reviewed by the CEO or Compensation
Committee of the Board of Directors at least annually.
| A. | Base Salary. During the term of this Agreement, the Company will pay CCO a base salary (the "Annual Base
Salary") of $250,000 per annum in accordance with the Company's customary payroll practices. |
| B. | Bonus Plan- Equity Awards. CCO shall receive a one-time grant of shares of common stock in the corporation on
or about 1 January 2015 to be issued not later than June 30, 2015 in an amount to be determined by the CEO and Compensation Committee. |
| C. | Bonus Plan- Completion Bonus and Annual Bonus. CCO shall be eligible to receive an annual bonus in accordance
with Company bonus policy to be established by the Board of Directors. For 2014, CCO shall receive a one-time bonus for successful
completion of the closing of the merger with Indigo-Energy, Inc. in the amount of one-hundred thousand dollars ($100,000). For
2015 and all subsequent years, an annual bonus of not less than five (5%) and not more than thirty-five percent (35%) of his prior
year annual base salary shall be awarded at the sole discretion of the CEO and Compensation Committee of the Board of Directors. |
| (i) | CCO shall either be enrolled in the Company health and welfare insurance program or receive reimbursement for health, dental,
medical, disability, and life insurance premiums for himself and his spouse. |
| (ii) | CCO shall participate in any pension benefit program of the Company at a level equal to senior management. |
| (iii) | CCO shall be reimbursed for all reasonable business related expenses incurred in the performance of his duties in accordance
with the Company’s policies. |
| (iv) | CCO shall be reimbursed for the cost of maintaining a corporate office in Henderson, NV including rent, utilities, phones,
internet and related office expenses at a cost not to exceed $4,000 per month for a period of nine months, at time such expense
shall be reviewed by the CEO and all expenses will be supported by invoices in accordance with the Company policies. |
| (v) | CCO shall receive three weeks of paid vacation annually commencing January 1, 2015. |
4. Employment Term.
Unless CCO’s employment under this Agreement is sooner terminated
as a result of CCO’s resignation or termination in accordance with the provisions of Section 5 below, CCO’s term of
employment ("Service Term") under this Agreement shall commence on the date hereof and shall continue for a period of
twenty-five months through December 31, 2016. On that date the agreement shall automatically renew for an additional 12 month period
unless terminated by either party.
5. Termination.
CCO’s employment with the Company shall
cease upon the first of the following events to occur:
| A. | CCO’s death. |
| | |
| B. | CCO’s voluntary retirement. |
| | |
| C. | CCO’s disability, which means his incapacity due to physical or mental illness such that he is unable to perform the
essential functions of his previously assigned duties. |
| D. | Termination by the Company by the delivery to CCO of a written notice from the Chief Executive Officer that the CCO has been
terminated ("Notice of Termination") with or without Cause. "With Cause" shall mean termination for any of
the following: |
CCO’s (A) commission of a felony or a crime involving
moral turpitude or the commission of any other act or omission involving dishonesty in the performance of his duties to the Company
or fraud; (B) substantial and repeated failure to perform duties of the office held by CCO as reasonably directed by the Board
or the Chief Executive Officer; (C) gross negligence or willful misconduct with respect to the Company or any of its Subsidiaries;
(D) material breach of this Agreement not cured within ten (10) days after receipt of written notice thereof from the Company;
(E) failure, within ten (10) days after receipt by CCO of written notice thereof from the Company, to correct, cease or otherwise
alter any failure to comply with instructions or other action or omission which the Chief Executive Officer reasonably believes
does or may materially or adversely affect its business or operations; (F) misconduct which is of such a serious or substantial
nature that a reasonable likelihood exists that such misconduct will materially injure the reputation of the Company or its Subsidiaries
if CCO were to remain employed by the Company; (G) harassing or discriminating against the Company's employees, customers or vendors
in violation of the Company's policies with respect to such matters; (H) and/or misappropriation of funds or assets of the Company
for personal use or willful violation of Company policies or standards of business conduct as determined in good faith by the Chief
Executive Officer.
| E. | CCO’s voluntary resignation by the delivery to the Chief Executive Officer of a written notice from CCO that CCO has
resigned. |
6. Rights on Termination.
| A. | If during the term of employment the CCO’s employment is terminated under Section 5 above by the Company without Cause
or Section 5. A. or C. (death or disability), then the Company shall pay a severance pay of four months base compensation and continue
all other benefits as defined in 3. D. above for a period of four months including any pro-rata portion of any bonus or compensation
plan in force at the time. |
| B. | If the CCO is terminated for Cause per Section 5.D. above, then all future rights and benefits will immediately cease but all
rights, compensation and benefits will be brought current and considered earned. |
7. Representations of CCO.
| A. | CCO hereby represents and warrants to the Company that the statements contained in this Section 7 are true and accurate
as of the date of this Agreement. |
| i) | Legal Proceedings. CCO is not the subject of any criminal proceeding. |
| ii) | Securities Law. CCO has not been found in a civil action by the Securities and Exchange Commission, Commodity Futures Trading
Commission, a state securities authority or any other regulatory agency to have violated any federal, state or other securities
or commodities law. |
| iii) | Employment Restrictions. CCO is not currently a party to any non-competition, non-solicitation, confidentiality or other work-related
agreement that limits or restricts CCO’s ability to work in any particular field or in any particular geographic region,
whether or not such agreement would be violated by this Agreement. |
8. Confidential Information; Proprietary Information, etc.
| A. | Obligation to Maintain Confidentiality. CCO agrees that, other than in the course of performance of his duties as an employee
of the Company, he will not at any time (whether during or after CCO’s term of employment) disclose or permit to be disclosed
to any Person or, directly or indirectly, utilize for his own account or permit to be utilized by any Person any Proprietary Information
or records pertaining to the Company, its Subsidiaries and their respective business for any reason whatsoever without the Chief
Executive Officer's consent. |
| B. | Third Party Information. CCO understands that the Company and its Subsidiaries will receive from third parties confidential
or proprietary information ("Third Party Information") subject to a duty on the Company's and its Subsidiaries' part
to maintain the confidentiality of such information and to use it only for certain limited purposes. |
| C. | Compelled Disclosure. If CCO is required by law or governmental regulation or by subpoena or other valid legal process to disclose
any Proprietary Information or Third Party Information to any Person, CCO will immediately provide the Company with written notice
of the applicable law, regulation or process so that the Company may seek a protective order or other appropriate remedy. |
9. Noncompetition and Non-solicitation.
| A. | Noncompetition. As long as CCO is an employee of the Company or any Subsidiary thereof, and for a period ending twelve (12)
months following the Termination Date of CCO’s employment (the "Restrictive Covenant Period"), CCO shall not, directly
or indirectly own, manage, control, participate in, consult with, render services for, or in any manner engage in any business
competing with the Company. |
| B. | Non-solicitation. As long as CCO is an employee of the Company or any Subsidiary thereof, and during the Restrictive Covenant
Period thereafter, CCO shall not directly or indirectly through another entity: (i) induce or attempt to induce any employee of
the Company or any Subsidiary to leave the employ of the Company or such Subsidiary, or in any way interfere with the relationship
between the Company or any Subsidiary and any employee thereof. |
| C. | Submission to Jurisdiction. The parties hereby submit to the jurisdiction of any state or federal court sitting in the State
of Nevada in any action or proceeding arising out of or relating to Section 8 and/or 9 of this Agreement. |
| B. | If the CCO is terminated for Cause per Section 5.D. above, then all future rights and benefits will immediately cease but all
rights, compensation and benefits will be brought current and considered earned. |
GENERAL PROVISIONS
10. Notices.
Any notice provided for in this Agreement must be in writing and
must be mailed, personally delivered or sent by reputable overnight courier service (charges prepaid) to the recipient at the address
below indicated:
If to the Company:
HDIMAX. Inc.
9225 Jane Street
Vaughan, ON L6A 0J7
Attention: Chief Executive Officer
If to CCO
Stanley L. Teeple
2857 Sumter Valley Cir
Henderson, NV 89052
11. Miscellaneous.
| A. | Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect
under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other
provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein. |
| B. | Complete Agreement. This Agreement, those documents expressly referred to herein and other documents of even date herewith
embody the complete agreement and understanding among the parties and supersede and preempt any prior understandings, agreements
or representations by or among the parties. |
| C. | Counterparts; Facsimile Transmission. This Agreement may be executed in separate counterparts, each of which is deemed to
be an original. |
| D. | Successors and Assigns. Except as otherwise provided herein, this Agreement shall bind and inure to the benefit of and be
enforceable by CCO, the Company and their respective successors and assigns; provided that the rights and obligations of the parties
under this Agreement shall not be assignable without the prior written consent of the other party, except for assignments by operation
of law and assignments by the Company to any successor of the Company by merger, consolidation, combination or sale of assets.
Any purported assignment in violation of these provisions shall be void ab initio. |
| E. | Choice of Law; Jurisdiction. All questions or disputes concerning this Agreement and the exhibits hereto will be governed
by and construed in accordance with the internal laws of the State of Nevada. |
| F. | Remedies. Each of the parties to this Agreement will be entitled to enforce its rights under this Agreement specifically, to
recover damages and costs (including attorney's fees) caused by any breach of any provision of this Agreement and to exercise all
other rights existing in its favor. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for
any breach of the provisions of this Agreement and that any party may in its sole discretion apply to any court of law or equity
of competent jurisdiction (without posting any bond or deposit) for specific performance and/or other injunctive relief in order
to enforce or prevent any violations of the provisions of this Agreement. |
| G. | Amendment and Waiver. The provisions of this Agreement may be amended or waived only with the prior written consent of the
Company and Executive. |
| H. | No Waiver. A waiver by any party hereto of any right or remedy hereunder on any one occasion shall not be construed as a bar
to any right or remedy that such party would otherwise have on any future occasion. Neither failure to exercise nor any delay
in exercising on the part of any party hereto, any right, power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided are cumulative and may
be exercised singly or concurrently, and are not exclusive of any rights or remedies provided by law. |
| I. | Waiver of Jury Trial. BOTH PARTIES TO THIS AGREEMENT AGREE THAT ANY ACTION, DEMAND, CLAIM OR COUNTERCLAIM RELATING TO THE TERMS
AND PROVISIONS OF THIS AGREEMENT, OR TO ITS BREACH, MAY BE COMMENCED IN THE STATE OF NEVADA IN A COURT OF COMPETENT JURISDICTION.
BOTH PARTIES TO THIS AGREEMENT FURTHER AGREE THAT ANY ACTION, DEMAND, CLAIM OR COUNTERCLAIM SHALL BE RESOLVED BY A JUDGE ALONE,
AND BOTH PARTIES HEREBY WAIVE AND FOREVER RENOUNCE THAT RIGHT TO A TRIAL BEFORE A CIVIL JURY. |
12. Indemnification.
During and following the employment period, the Company shall indemnify
CCO and hold him harmless from and against any claim, loss or cause of action arising from or out of his performance as an officer,
director or employee of the Company or any of its Subsidiaries or in any other capacity, including any fiduciary capacity, in which
CCO serves at the request of Company to the maximum extent permitted by applicable law and the Company's By-Laws. Expenses incurred
in defending or investigating a threatened or pending action, suit or proceeding shall be paid by the Company in advance of the
final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of CCO to repay such amount
if it shall ultimately be determined that he is not entitled to be indemnified by the Company. To the extent that the Company reduces
the indemnity rights provided for under its By-Laws after execution of this Agreement, the Company's indemnity obligations hereunder
shall be unaffected (to the extent permitted by applicable law).
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the date first written above.
HDIMAX, Inc. and Indigo-Energy, Inc.
By: /s/ Raaj Brar
Raaj Brar, Chief Executive Officer
Chief Compliance Officer
/s/ Stanley L. Teeple
Stanley L. Teeple
Modification of
Employment Agreement
In order to bring the Employment Agreement for Stanley L.
Teeple dated December 1, 2014 I hereby approve the following changes effective January 29, 2015:
1. End of paragraph add word “Agreement”
3.B. Bonus and Equity Awards:
| B. | Bonus
Plan-Equity Awards. Chief Compliance Officer shall receive a one-time grant of
shares of common stock in the corporation within 30 days of signing this Agreement in
an amount of five million (5,000,000) shares. Subsequent stock issuances will be granted
in the amount of two-million five hundred thousand (2,500,000) shares on each of the
following four anniversaries of employment, should the CCO remains employed at that time.
All shares are to be common shares issued with SEC rule 144 Restriction. |
Change “five (5%) to fifteen (15%)”
3. D. (v) Change from three to four weeks
4. Employment Term
Change from 25 months to four years
6.A. Rights on Termination
If during the term of employment the Chief Compliance
Officer’s employment is terminated under Section 5. A., B., C., or E. (death, resignation, retirement or disability),
then the Company shall pay a severance pay of four months base compensation and continue all other benefits as defined in
3.D. above for a period of four months including any pro-rata portion of any bonus or compensation plan in force at the time.
**********signature page follows**********
Approved:
/s/ James C. Walter
James C. Walter, CEO
Accepted:
/s/ Stanley L. Teeple
Stanley L. Teeple
Exhibit 10.7
THIS EMPLOYMENT AGREEMENT
this “Agreement”) is made and effective as of 4/20/2015 between ZONZIA MEDIA, Inc. a Delaware corporation (the
“Company”), and Naresh Kumar Malik, Chief Executive Officer, (“CEO”),
Recitals
The Company and Chief Executive
Officer desire to enter into an agreement pursuant to which the Company will employ Chief Executive Officer as its Chief
Executive Officer subject to the terms and conditions of this Agreement.
Agreement
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and promises contained herein, the parties agree as follows:
1. Employment.
The Company hereby engages Chief
Executive Officer to serve as the Chief Executive Officer of the Company, and Chief Executive Officer agrees to serve the
Company, during the Service Term (as defined in Section 4 below) in the capacities, and subject to the terms and conditions,
set forth in this Agreement.
2. Duties.
During the Service Term, Chief
Executive Officer, as Chief Executive Officer of the Company, shall have all the duties and responsibilities of this office
and such other duties and responsibilities as may be delegated from time to time by the Board of Directors of the Company in
their sole discretion. Chief Executive Officer will report to the Chairman of the Board of Directors. Chief Executive Officer will
devote his best efforts and whatever time and resources are required to fulfill his responsibilities to the business of the
Company and its Subsidiaries.
3. Salary, Bonus and Benefits.
The Board of Directors and Compensation
Committee of the Board shall make all decisions related to Chief Executive Officer’s base salary and the payment of
bonuses, if any. Chief Executive Officer’s Annual Base Salary and other compensation will be reviewed by the Chairman of
the Board of Directors or Compensation Committee of the Board of Directors at
least annually.
| A. | Base Salary. During the term of this Agreement, the Company will pay Chief
Executive Officer a
base salary (the “Annual Base Salary”) of $250,000 per annum in accordance with the Company's customary payroll
practices. |
| B. | Bonus Plan- Equity Awards. Chief Executive Officer shall receive a one-time
grant of
shares of
common stock in the corporation within 30 days of signing this Agreement in an amount of five million (5,000,000) shares.
Subsequent stock issuances will be granted in the amount of two-million five hundred thousand (2,500,000) shares on each of
the following four anniversaries of employment, should the CEO remains employed at that time. All shares are to be common
shares issued with SEC Rule 144 Restriction. |
| C. | Bonus Plan- Completion Bonus and Annual Bonus. Chief Executive Officer shall
be eligible
to
receive an annual bonus in accordance with Company bonus policy to be established by the Board of Directors. For 2015 and
all subsequent years, an annual bonus of not less than fifteen (15%) and not more than thirty-five percent (35%) of his prior year annual base salary shall be awarded at the sole discretion of the
Chairman of the Board of Directors and Compensation Committee of the Board of Directors. |
| (i) | Chief Executive Officer shall either be enrolled in the Company health and welfare insurance
program or receive reimbursement for health, dental, medical,
disability, and life insurance premiums for himself and his spouse. |
| (ii) | Chief Executive Officer shall participate in any pension benefit program of the Company at a level
equal to senior
management. |
| (iii) | Chief Executive Officer shall be reimbursed for all reasonable business related expenses incurred
in the
performance of his duties in accordance with the Company’s policies. |
| (iv) | Chief Executive Officer shall receive four weeks of paid vacation annually.
|
4. Employment Term.
Unless Chief Executive Officer’s
employment under this Agreement is sooner terminated as a result of Chief Executive Officer’s resignation or
termination in accordance with the provisions of Section 5 below, Chief Executive Officer’s term of employment
(“Service Term”) under this Agreement shall commence on the date hereof and shall continue for a period of four
years. On that date the agreement shall automatically renew for an additional 12 month
period unless terminated by either party.
5. Termination.
Chief Executive
Officer’s employment with the Company shall cease upon the first of the following events to occur:
| A. | Chief Executive Officer’s death. |
| | |
| B. | Chief Executive Officer’s voluntary retirement. |
| | |
| C. | Chief Executive Officer’s disability, which means his incapacity due to physical or mental
illness such
that he is unable to perform the essential functions of his previously assigned duties. |
| D. | Termination by the Company by the delivery to Chief Executive Officer of a written notice
from the Chief
Executive Officer that the Chief Executive Officer has been
terminated (“Notice of Termination”) with or without Cause. “With
Cause” shall mean termination for any of the following: |
Chief Executive
Officer’s (A) commission of a felony or a crime involving moral turpitude or the commission of any other act or
omission involving dishonesty in the performance of his duties to the Company or fraud; (B) substantial and repeated failure
to perform duties of the office held by Chief Executive Officer as reasonably directed by the Board or the Chief Executive
Officer; (C) gross negligence or willful misconduct with respect to the Company or any of its Subsidiaries; (D) material
breach of this Agreement not cured within ten (10) days after receipt of written notice thereof from the Company; (E)
failure, within ten (10) days after receipt by Chief Executive Officer of written notice thereof from the Company, to correct, cease or otherwise
alter any failure to comply with instructions or other action or omission which the Chief Executive Officer reasonably
believes does or may materially or adversely affect its business or operations; (F) misconduct which is of such a serious or
substantial nature that a reasonable likelihood exists that such misconduct will materially injure the reputation of the
Company or its Subsidiaries if Chief Executive Officer were to remain employed by the Company; (G) harassing or discriminating against the
Company's employees, customers or vendors in violation of the Company's policies with respect to such matters; (H) and/or
misappropriation of funds or assets of the Company for personal use or willful violation of Company policies or standards of
business conduct as determined in good faith by the Chief Executive Officer.
| E. | Chief Executive Officer’s voluntary resignation by the delivery to the Chief Executive Officer of a written notice from Chief Executive Officer that Chief Executive Officer has
resigned. |
6. Rights on Termination.
| A. | If during the term of employment the Chief Executive Officer’s employment is
terminated
under Section 5 above by the Company without Cause or Section 5. A., B., C., or E. (death, resignation, retirement or
disability), then
the Company
shall pay a
severance pay of four months base compensation and continue all other benefits as defined in 3. D. above for a period
of four months including any pro-rata portion of any bonus or compensation plan in force at the time. |
| B. | If the Chief Executive Officer is terminated for Cause per Section 5.D. above, then all
future rights and benefits will immediately cease but all rights, compensation and benefits will be brought current and
considered earned. |
7. Representations of Chief Executive Officer.
| A. | Chief Executive Officer hereby represents and warrants to the Company that the statements contained in this Section 7 are true and accurate
as of the date of this Agreement. |
| (i) | Legal Proceedings. Chief Executive Officer is not the subject of any criminal proceeding. |
| (ii) | Securities Law. Chief Executive Officer has not been found in a civil action by the Securities and Exchange Commission, Commodity Futures Trading
Commission, a state securities authority or any other regulatory agency to have violated any federal, state or other securities
or commodities law. |
| (iii) | Employment Restrictions. Chief Executive Officer is not currently a party to any non-competition, non-solicitation, confidentiality or other work-related
agreement that limits or restricts Chief Executive Officer’s ability to work in any particular field or in any particular geographic region,
whether or not such agreement would be violated by this Agreement. |
8. Confidential Information; Proprietary Information, etc.
| A. | Obligation to Maintain Confidentiality. Chief Executive Officer agrees that, other than in the course of performance of his duties as an employee
of the Company, he will not at any time (whether during or after Chief Executive Officer’s term of employment) disclose or permit to be disclosed
to any Person or, directly or indirectly, utilize for his own account or permit to be utilized by any Person any Proprietary Information
or records pertaining to the Company, its Subsidiaries and their respective business for any reason whatsoever without the Chief
Executive Officer's consent. |
| B. | Third Party Information. Chief Executive Officer understands that the Company and its Subsidiaries will receive from third parties confidential
or proprietary information (“Third Party Information”) subject to a duty on the Company's and its Subsidiaries' part
to maintain the confidentiality of such information and to use it only for certain limited purposes. |
| C. | Compelled Disclosure. If Chief Executive Officer is required by law or governmental regulation or by subpoena or other valid legal process to disclose
any Proprietary Information or Third Party Information to any Person, Chief Executive Officer will immediately provide the Company with written notice
of the applicable law, regulation or process so that the Company may seek a protective order or other appropriate remedy. |
9. Noncompetition and Non-solicitation.
| A. | Noncompetition. As long as Chief Executive Officer is an employee of the Company or any
Subsidiary thereof,
and for a period ending twelve (12) months following the Termination Date of Chief Executive Officer’s employment (the
“Restrictive
Covenant Period”), Chief Executive Officer shall not, directly or indirectly own, manage, control, participate in,
consult with, render
services for, or in any manner engage in any business competing with the Company excluding relationships with: 1) Faithience
LLC 2) Media Circle of Trust 3) Reboot Entertainment 4) Lavender Pictures 5) Reliance Group of Companies. It is also
understood that due to the nature of the assignment, various productions will run the CEO’s name in credits as Producer
or Executive Producer or similar. |
| B. | Non-solicitation. As long as Chief Executive Officer is an employee of the Company or any Subsidiary thereof, and during the Restrictive Covenant
Period thereafter, Chief Executive Officer shall not directly or indirectly through another entity: (i) induce or attempt to induce any employee of
the Company or any Subsidiary to leave the employ of the Company or such Subsidiary, or in any way interfere with the relationship
between the Company or any Subsidiary and any employee thereof. |
| C. | Submission to Jurisdiction. The parties hereby submit to the jurisdiction of any state or federal court sitting in the State
of Nevada in any action or proceeding arising out of or relating to Section 8 and/or 9 of this Agreement. |
GENERAL PROVISIONS
10. Notices.
Any notice provided for in this Agreement must be in writing and
must be mailed, personally delivered or sent by reputable overnight courier service (charges prepaid) to the recipient at the address
below indicated:
If to the Company:
ZONZIA MEDIA, iNC.
74 N. Pecos Rd, Suite D
Henderson, NV 89074
If to Chief Executive Officer
Naresh Kumar Malik
11. Miscellaneous.
| A. | Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect
under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other
provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein. |
| B. | Complete Agreement. This Agreement, those documents expressly referred to herein and other documents of even date herewith
embody the complete agreement and understanding among the parties and supersede and preempt any prior understandings, agreements
or representations by or among the parties. |
| C. | Counterparts; Facsimile Transmission. This Agreement may be executed in separate counterparts, each of which is deemed to
be an original. |
| D. | Successors and Assigns. Except as otherwise provided herein, this Agreement shall bind and inure to the benefit of and be
enforceable by Chief Executive Officer, the Company and their respective successors and assigns; provided that the rights and obligations of the parties
under this Agreement shall not be assignable without the prior written consent of the other party, except for assignments by operation
of law and assignments by the Company to any successor of the Company by merger, consolidation, combination or sale of assets.
Any purported assignment in violation of these provisions shall be void ab initio. |
| E. | Choice of Law; Jurisdiction. All questions or disputes concerning this Agreement and the exhibits hereto will be governed
by and construed in accordance with the internal laws of the State of Nevada. |
| F. | Remedies. Each of the parties to this Agreement will be entitled to enforce its rights under this Agreement specifically, to
recover damages and costs (including attorney's fees) caused by any breach of any provision of this Agreement and to exercise all
other rights existing in its favor. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for
any breach of the provisions of this Agreement and that any party may in its sole discretion apply to any court of law or equity
of competent jurisdiction (without posting any bond or deposit) for specific performance and/or other injunctive relief in order
to enforce or prevent any violations of the provisions of this Agreement. |
| G. | Amendment and Waiver. The provisions of this Agreement may be amended or waived only with the prior written consent of the
Company and Executive. |
| H. | No Waiver. A waiver by any party hereto of any right or remedy hereunder on any one occasion shall not be construed as a bar
to any right or remedy that such party would otherwise have on any future occasion. Neither failure to exercise nor any delay
in exercising on the part of any party hereto, any right, power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided are cumulative and may
be exercised singly or concurrently, and are not exclusive of any rights or remedies provided by law. |
| I. | Waiver of Jury Trial. BOTH PARTIES TO THIS AGREEMENT AGREE THAT ANY ACTION, DEMAND, CLAIM OR COUNTERCLAIM RELATING TO THE TERMS
AND PROVISIONS OF THIS AGREEMENT, OR TO ITS BREACH, MAY BE COMMENCED IN THE STATE OF NEVADA IN A COURT OF COMPETENT JURISDICTION.
BOTH PARTIES TO THIS AGREEMENT FURTHER AGREE THAT ANY ACTION, DEMAND, CLAIM OR COUNTERCLAIM SHALL BE RESOLVED BY A JUDGE ALONE,
AND BOTH PARTIES HEREBY WAIVE AND FOREVER RENOUNCE THAT RIGHT TO A TRIAL BEFORE A CIVIL JURY. |
12. Indemnification.
During and following the employment period, the Company shall indemnify
Chief Executive Officer and hold him harmless from and against any claim, loss or cause of action arising from or out of his performance as an officer,
director or employee of the Company or any of its Subsidiaries or in any other capacity, including any fiduciary capacity, in which
Chief Executive Officer serves at the request of Company to the maximum extent permitted by applicable law and the Company's By-Laws. Expenses incurred
in defending or investigating a threatened or pending action, suit or proceeding shall be paid by the Company in advance of the
final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of Chief Executive Officer to repay such amount
if it shall ultimately be determined that he is not entitled to be indemnified by the Company. To the extent that the Company reduces
the indemnity rights provided for under its By-Laws after execution of this Agreement, the Company's indemnity obligations hereunder
shall be unaffected (to the extent permitted by applicable law).
**********signature page follows**********
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the date first written above.
ZONZIA MEDIA, Inc.
By: /s/ Myles A. Pressley, III
Myles A. Pressley, III., Chairman of BOD
Chief Executive Officer
/s/ Naresh Kumar Malik
Naresh Kumar Malik
Exhibit 10.8
THIS EMPLOYMENT AGREEMENT this
“Agreement”) is made and effective as of May 2, 2015 between ZONZIA MEDIA, Inc. a Nevada corporation
(the “Company”), and Frank McEnulty, Chief Financial Officer, (“CFO”),
Recitals
The Company and Chief Financial
Officer desire to enter into an agreement pursuant to which the Company will employ Chief Financial Officer as its Chief
Executive Officer subject to the terms and conditions of this Agreement.
Agreement
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and promises contained herein, the parties agree as follows:
1. Employment.
The Company hereby engages
Chief Financial Officer to serve as the Chief Financial Officer of the Company, and Chief Financial Officer agrees to serve
the Company, during the Service Term (as defined in Section 4 below) in the capacities, and subject to the terms and
conditions, set forth in this Agreement. This Agreement shall be enacted in two Stages. “Stage 1” shall commence
on the date stated above. “Stage 2” may be enacted at the sole discretion of the Board of Directors, at any time
until the one year anniversary of this agreement, at which time either the components under Article 3 shall become effective,
or the Agreement and the CFO shall be terminated.
2. Duties.
During the Service Term, Chief
Financial Officer, as Chief Financial Officer of the Company, shall have all the duties and responsibilities of this office
and such other duties and responsibilities as may be delegated from time to time by the Board of Directors of the Company or
the Chief Executive Officer (CEO) of the Company in their sole discretion. Chief Financial Officer will report to the
CEO. Chief Financial Officer will devote his best efforts and whatever time and resources are
required to fulfill his responsibilities to the business of the Company and its Subsidiaries.
3. Salary, Bonus and Benefits.
The CEO, upon recommendation from the
Compensation Committee of the Board of Directors, shall make all decisions related to Chief Financial Officer’s base
salary and the payment of bonuses, if any. Chief Financial Officer’s Annual Base Salary and other compensation will
be reviewed by the CEO or Compensation Committee of the Board of Directors at least
annually.
| A. | Base Salary. During the Stage 1 term of this Agreement, the Company
will pay
Chief
Financial Officer a
base salary (the “Annual Base Salary”) of $182,000 per annum in accordance with the Company's customary payroll
practices. Stage 2 Annual Base Salary shall be adjusted to an executive level compensation as determined by the Board of Directors. |
| B. | Bonus Plan- Equity Awards. Chief Financial Officer shall receive a one-time
grant of
shares of
common stock in the corporation under Stage 1 within 30 days of signing this Agreement in an amount of one million
(1,000,000)
shares.
Stage 2 shall include an additional stock grant in an amount determined by the Board of Directors. All shares are to be
common shares issued with SEC Rule 144 Restriction. |
| C. | Bonus Plan- Completion Bonus and Annual Bonus. Chief Financial Officer shall
be eligible
to
receive an annual bonus in accordance with Company bonus policy to be established by the Board of Directors for 2015 at the
sole discretion of the CEO and Compensation Committee of the Board of Directors. At Stage 2, and subsequent years the
annual bonus shall be a minimum of fifteen percent (15%) and a maximum of thirty-five percent (35%) of the Base Salary an
amount to be determined solely by the Board of Directors. |
| (i) | Chief Financial Officer shall either be enrolled in the Company health and welfare insurance
program when established upon enactment of Stage 2. |
| (iii) | Chief Financial Officer shall be reimbursed for all reasonable business related expenses incurred
in the
performance of his duties in accordance with the Company’s policies from the date of signing this Agreement. |
4. Employment Term.
Unless Chief Financial
Officer’s employment under this Agreement is sooner terminated as a result of Chief Financial Officer’s
resignation or termination in accordance with the provisions of Section 5 below, Chief Financial Officer’s term of
employment (“Service Term”) under Stage 1 of this Agreement shall commence on the date hereof and shall continue
for a period of one year. Upon enactment of Stage 2 under this Agreement, the term shall renew until the four year
anniversary of the date of this Agreement.
5. Termination.
Chief Financial
Officer’s employment with the Company shall cease upon the first of the following events to occur:
| A. | Chief Financial Officer’s death. |
| | |
| B. | Chief Financial Officer’s voluntary retirement. |
| | |
| C. | Chief Financial Officer’s disability, which means his incapacity due to physical or mental
illness such
that he is unable to perform the essential functions of his previously assigned duties. |
| D. | Termination by the Company by the delivery to Chief Financial Officer of a written notice
from the Chief
Executive Officer that the Chief Financial Officer has been
terminated (“Notice of Termination”). “With
Cause” shall mean termination for any of the following: |
Chief Financial
Officer’s (A) commission of a felony or a crime involving moral turpitude or the commission of any other act or
omission involving dishonesty in the performance of his duties to the Company or fraud; (B) substantial and repeated failure
to perform duties of the office held by Chief Financial Officer as reasonably directed by the Board or the Chief Executive
Officer; (C) gross negligence or willful misconduct with respect to the Company or any of its Subsidiaries; (D) material
breach of this Agreement not cured within ten (10) days after receipt of written notice thereof from the Company; (E)
failure, within ten (10) days after receipt by Chief Financial Officer of written notice thereof from the Company, to correct, cease or otherwise
alter any failure to comply with instructions or other action or omission which the Chief Executive Officer reasonably
believes does or may materially or adversely affect its business or operations; (F) misconduct which is of such a serious or
substantial nature that a reasonable likelihood exists that such misconduct will materially injure the reputation of the
Company or its Subsidiaries if Chief Financial Officer were to remain employed by the Company; (G) harassing or discriminating against the
Company's employees, customers or vendors in violation of the Company's policies with respect to such matters; (H) and/or
misappropriation of funds or assets of the Company for personal use or willful violation of Company policies or standards of
business conduct as determined in good faith by the Chief Executive Officer.
| E. | Chief Financial Officer’s voluntary resignation by the delivery to the Chief Executive Officer of a written notice from Chief Financial Officer that Chief Financial Officer has
resigned. |
6. Rights on Termination.
| A. | If during the term of employment the Chief Financial Officer’s employment is
terminated
under Section 5. A., B., C., or E. (death, resignation, retirement or
disability), then
the Company
shall pay a
severance pay of four months base compensation and continue all other benefits as defined in 3. D. above for a period
of four months including any pro-rata portion of any bonus or compensation plan in force at the time. |
| B. | If the Chief Financial Officer is terminated for Cause per Section 5.D. above, then all
future rights and benefits will immediately cease but all rights, compensation and benefits will be brought current and
considered earned. |
7. Representations of Chief Financial Officer.
| A. | Chief Financial Officer hereby represents and warrants to the Company that the statements contained in this Section 7 are true and accurate
as of the date of this Agreement. |
| (i) | Legal Proceedings. Chief Financial Officer is not the subject of any criminal proceeding. |
| (ii) | Securities Law. Chief Financial Officer has not been found in a civil action by the Securities and Exchange Commission, Commodity Futures Trading
Commission, a state securities authority or any other regulatory agency to have violated any federal, state or other securities
or commodities law. |
| (iii) | Employment Restrictions. Chief Financial Officer is not currently a party to any non-competition, non-solicitation, confidentiality or other work-related
agreement that limits or restricts Chief Financial Officer’s ability to work in any particular field or in any particular geographic region,
whether or not such agreement would be violated by this Agreement. |
8. Confidential Information; Proprietary Information, etc.
| A. | Obligation to Maintain Confidentiality. Chief Financial Officer agrees that, other than in the course of performance of his duties as an employee
of the Company, he will not at any time (whether during or after Chief Financial Officer’s term of employment) disclose or permit to be disclosed
to any Person or, directly or indirectly, utilize for his own account or permit to be utilized by any Person any Proprietary Information
or records pertaining to the Company, its Subsidiaries and their respective business for any reason whatsoever without the Chief
Executive Officer's consent. |
| B. | Third Party Information. Chief Financial Officer understands that the Company and its Subsidiaries will receive from third parties confidential
or proprietary information (“Third Party Information”) subject to a duty on the Company's and its Subsidiaries' part
to maintain the confidentiality of such information and to use it only for certain limited purposes. |
| C. | Compelled Disclosure. If Chief Financial Officer is required by law or governmental regulation or by subpoena or other valid legal process to disclose
any Proprietary Information or Third Party Information to any Person, Chief Financial Officer will immediately provide the Company with written notice
of the applicable law, regulation or process so that the Company may seek a protective order or other appropriate remedy. |
9. Noncompetition and Non-solicitation.
| A. | Noncompetition. As long as Chief Financial Officer is an employee of the Company or any
Subsidiary thereof,
and for a period ending twelve (12) months following the Termination Date of Chief Financial Officer’s employment (the
“Restrictive
Covenant Period”), Chief Financial Officer shall not, directly or indirectly own, manage, control, participate in,
consult with, render
services for, or in any manner engage in any business competing with the Company. |
| B. | Non-solicitation. As long as Chief Financial Officer is an employee of the Company or any Subsidiary thereof, and during the Restrictive Covenant
Period thereafter, Chief Financial Officer shall not directly or indirectly through another entity: (i) induce or attempt to induce any employee of
the Company or any Subsidiary to leave the employ of the Company or such Subsidiary, or in any way interfere with the relationship
between the Company or any Subsidiary and any employee thereof. |
| C. | Submission to Jurisdiction. The parties hereby submit to the jurisdiction of any state or federal court sitting in the State
of Nevada in any action or proceeding arising out of or relating to Section 8 and/or 9 of this Agreement. |
GENERAL PROVISIONS
10. Notices.
Any notice provided for in this Agreement must be in writing and
must be mailed, personally delivered or sent by reputable overnight courier service (charges prepaid) to the recipient at the address
below indicated:
If to the Company:
ZONZIA MEDIA, iNC.
74 N. Pecos Rd, Suite D
Henderson, NV 89074
If to Chief Financial Officer
Frank McEnulty
3261 Julian Ave.
Long Beach, CA 90808
11. Miscellaneous.
| A. | Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect
under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other
provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein. |
| B. | Complete Agreement. This Agreement, those documents expressly referred to herein and other documents of even date herewith
embody the complete agreement and understanding among the parties and supersede and preempt any prior understandings, agreements
or representations by or among the parties. |
| C. | Counterparts; Facsimile Transmission. This Agreement may be executed in separate counterparts, each of which is deemed to
be an original. |
| D. | Successors and Assigns. Except as otherwise provided herein, this Agreement shall bind and inure to the benefit of and be
enforceable by Chief Financial Officer, the Company and their respective successors and assigns; provided that the rights and obligations of the parties
under this Agreement shall not be assignable without the prior written consent of the other party, except for assignments by operation
of law and assignments by the Company to any successor of the Company by merger, consolidation, combination or sale of assets.
Any purported assignment in violation of these provisions shall be void ab initio. |
| E. | Choice of Law; Jurisdiction. All questions or disputes concerning this Agreement and the exhibits hereto will be governed
by and construed in accordance with the internal laws of the State of Nevada. |
| F. | Remedies. Each of the parties to this Agreement will be entitled to enforce its rights under this Agreement specifically, to
recover damages and costs (including attorney's fees) caused by any breach of any provision of this Agreement and to exercise all
other rights existing in its favor. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for
any breach of the provisions of this Agreement and that any party may in its sole discretion apply to any court of law or equity
of competent jurisdiction (without posting any bond or deposit) for specific performance and/or other injunctive relief in order
to enforce or prevent any violations of the provisions of this Agreement. |
| G. | Amendment and Waiver. The provisions of this Agreement may be amended or waived only with the prior written consent of the
Company and Executive. |
| H. | No Waiver. A waiver by any party hereto of any right or remedy hereunder on any one occasion shall not be construed as a bar
to any right or remedy that such party would otherwise have on any future occasion. Neither failure to exercise nor any delay
in exercising on the part of any party hereto, any right, power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided are cumulative and may
be exercised singly or concurrently, and are not exclusive of any rights or remedies provided by law. |
| I. | Waiver of Jury Trial. BOTH PARTIES TO THIS AGREEMENT AGREE THAT ANY ACTION, DEMAND, CLAIM OR COUNTERCLAIM RELATING TO THE TERMS
AND PROVISIONS OF THIS AGREEMENT, OR TO ITS BREACH, MAY BE COMMENCED IN THE STATE OF NEVADA IN A COURT OF COMPETENT JURISDICTION.
BOTH PARTIES TO THIS AGREEMENT FURTHER AGREE THAT ANY ACTION, DEMAND, CLAIM OR COUNTERCLAIM SHALL BE RESOLVED BY A JUDGE ALONE,
AND BOTH PARTIES HEREBY WAIVE AND FOREVER RENOUNCE THAT RIGHT TO A TRIAL BEFORE A CIVIL JURY. |
12. Indemnification.
During and following the employment period, the Company shall indemnify
Chief Financial Officer and hold him harmless from and against any claim, loss or cause of action arising from or out of his performance as an officer,
director or employee of the Company or any of its Subsidiaries or in any other capacity, including any fiduciary capacity, in which
Chief Executive Officer serves at the request of Company to the maximum extent permitted by applicable law and the Company's By-Laws. Expenses incurred
in defending or investigating a threatened or pending action, suit or proceeding shall be paid by the Company in advance of the
final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of Chief Executive Officer to repay such amount
if it shall ultimately be determined that he is not entitled to be indemnified by the Company. To the extent that the Company reduces
the indemnity rights provided for under its By-Laws after execution of this Agreement, the Company's indemnity obligations hereunder
shall be unaffected (to the extent permitted by applicable law).
**********signature page follows**********
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the date first written above.
ZONZIA MEDIA, Inc.
By: /s/ Myles A. Pressley, III
Myles A. Pressley, III., Chairman of Board of Directors
Chief Financial Officer
/s/ Frank McEnulty
Frank McEnulty
Exhibit 23.1
Consent
of Independent Registered Public Accounting Firm
As the independent registered
public accountants of Zonzia Media, Inc., we hereby consent to the incorporation by reference in the Form S-1 of Zonzia Media,
Inc., our report dated April 15, 2015, relating to the consolidated balance sheet of Zonzia Media, Inc., as of December 31, 2014,
and the related consolidated statement of operations, stockholders' deficit and cash flows for the period from May 24, 2014 to
December 31, 2014, and the related notes to the consolidated financial statements.
Haynie & Company
Salt Lake City, Utah
May 28, 2015
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