Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

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Stockholders' Equity
9 Months Ended
Sep. 30, 2018
Equity [Abstract]  
Stockholders' Equity

8 STOCKHOLDERS’ EQUITY

 

Preferred Stock

 

On June 29, 2018, each of Kevin Brian Cox (“Cox”), the Company’s Chief Executive Officer, and Thirteen Nevada LLC (“13”) entered into separate Exchange Agreements with the Company whereby the Shareholders agreed to exchange an aggregate of 148,741,531 shares of previously issued Company Common Stock for an aggregate of 594,966 shares of newly-issued Company Series C Convertible Preferred Stock.

 

The calculation of weighted average shares was retroactively restated in order to properly account for the above noted share exchange.

 

Common Stock

 

2018 Transactions

 

On April 11, 2018, the Company issued 152,555,416 shares of Common Stock and 3,000,000 shares of Series A Preferred Stock as consideration for the True Wireless, Inc. merger.

 

On April 25, 2018, the Company issued an aggregate of 480,000 shares of Common Stock to two consultants valued at $0.27 per share.

 

In July 2018, the Company issued an aggregate of 1,156,587 shares of Common Stock valued at $0.20 per share to nine parties in settlement of certain disputes between TW and Benson Communications, S.A. de C.V. The settlement had been previously reached on September 29, 2017.

 

As noted above in Note 7, in August 2018, Company reached a settlement with the debt holder and issued 2,175,000 in full settlement of the outstanding debt.

 

During the nine months ended September 30, 2018, the Company granted a consultant 48,000 restricted shares for services rendered. During the nine months ended September 30, 2018 and 2017, the Company recorded total expense of approximately $16,541 and $0, respectively.

 

Stock Options

 

During the nine months ended September 30, 2018, the Company granted its Chief Financial Officer 50,000 options to purchase the Company’s common stock with an exercise price of $0.41 per share, a term of 5 years, and a vesting period of 1 year. The options have an aggregated fair value of approximately $14,700 that was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 2.03% (2) expected life of 1.5 years, (3) expected volatility of 173.02%, and (4) zero expected dividends. The estimated option life was determined based on the “simplified method,” giving consideration to the overall vesting period and the contractual terms of the award.

 

The fair values of the options issued and outstanding are being amortized over their respective vesting periods. The unrecognized compensation expense at September 30, 2018 was approximately $8,100. During the nine months ended September 30, 2018 and 2017, the Company recorded total option expense of approximately $8,100 and $0, respectively.

 

Unit Subscription Agreement - Warrants

 

During January 2018, the Company entered into Unit subscription agreements with seven unrelated companies and individuals. Each Unit was priced at $0.20 and contained: (a) one share of common stock restricted in accordance with Rule 144; and (b) one-half Warrant to purchase an additional share of common stock restricted in accordance with Rule 144 for $0.50 for a period of three years after the close of the offering. For total consideration of $460,000, Units representing 2,300,000 common shares and 1,150,000 3-year $0.50 warrants were issued. The warrants were classified as equity since they have a fixed exercise price and do not have a provision for modification.