Subsequent Events |
3 Months Ended | |||||||||
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Mar. 31, 2019 | ||||||||||
Subsequent Events [Abstract] | ||||||||||
Subsequent Events |
11. Subsequent Events
Effective April 30, 2019, the Company borrowed $50,000 from an institutional investor and issued the investor a 20% Original Issue Discount Convertible Promissory Note (the “April 2019 Note”) in the principal amount of $62,500. The April 2019 Note matures on July 29, 2019. The April 2019 Note is convertible into the Company’s common stock at $0.00125 per share.
Effective May 1, 2019, the Company borrowed $150,000 from another institutional investor and issued the investor a 20% Original Issue Discount Convertible Promissory Note substantially on the same terms as the April 2019 Note in the principal amount of $187,500 (the “May 2019 Note”). The May 2019 Note matures on July 30, 2019.
The Notes have been exchanged for Series B Convertible Preferred Stock and are not outstanding as of the date of this Report.
The Company expects to close an acquisition with a corporation engaged in another line of business (the “Target”). Shareholders of the Target will own approximately 83.3% of the Company on a fully diluted basis if we close the acquisition. As of the date this Report has been filed, we have entered into written acquisition agreements with the Target and its shareholders and holders of our derivative securities. All signatures are being held in escrow pending the filing of this Report on Form 10-Q. We expect that the closing will occur immediately after we file this Report with the SEC.
In preparation for closing, as of May 14, 2019, we filed a Certificate of Withdrawal with the Secretary of State of the State of Nevada withdrawing the Certificates of Designation for all outstanding preferred stock including the super voting Series A Preferred Stock. We also filed Certificates of Designation for a new Series A Convertible Preferred Stock and Series B Convertible Preferred Stock. Although we agreed to issue 236 million shares of common stock to the Chief Executive Officer of the Target, we do not have sufficient authorized capital for the remaining shareholders of the Target or the holders of our derivative securities. Upon closing we will issue Series A Convertible Preferred Stock to the remaining shareholders of the Target and Series B Convertible Preferred Stock to the holders of our derivative securities including our current Chief Executive Officer as disclosed below.
Assuming we will close the acquisition, we have entered into a series of transactions which will be reversed if we do not close the acquisition:
Current shareholders owning common stock will own 0.87% on a fully diluted basis upon the closing of the acquisition.
While the Company expects to complete the acquisition, no assurances can be given. If the acquisition does not close, we will cease our bitcoin mining unless our note holders provide more financing.
The Company recently repaid Mr. Read miscellaneous advances he made to the Company of approximately $27,500. |