Quarterly report pursuant to Section 13 or 15(d)

Subsequent Events

v3.8.0.1
Subsequent Events
3 Months Ended
Mar. 31, 2018
Subsequent Events [Abstract]  
Subsequent Events

10 SUBSEQUENT EVENTS

 

True Wireless Transaction

 

On April 11, 2018, the Company, True Wireless, Inc., an Oklahoma corporation (“TW, Inc.”) and TW Acquisition Corporation, a newly formed Nevada corporation (“Acquisition Sub”), completed the merger contemplated by the Exchange Agreement by entering into an Agreement and Plan of Reorganization (the “Merger Agreement”).

 

Pursuant to the terms of the Merger Agreement, TW, Inc. merged into Acquisition Sub in a transaction where TW, Inc. was the surviving company and become a wholly-owned subsidiary of the Company. The transaction was structured as a tax-free reverse triangular merger. In addition to the 12,000,000 shares of Company Common Stock and $500,000 cash which has been previously paid to the shareholders of TW, at the Closing of the merger transaction, the shareholders of TW received the following as additional merger consideration:

 

●         152,555,416 shares of newly-issued Company Common Stock, which will give the shareholders of TW, on a proforma basis, a 69.5% interest in the Company’s total Common Shares.

 

●         An additional number of shares of Company Common Stock, if any, necessary to vest 69.5% of the aggregate issued and outstanding Common Stock in the shareholders of TW at the Closing.

 

●         A Promissory Note in the original face amount of $3,000,000, bearing interest at 3% per annum maturing on December 31, 2018.

 

●         3,000,000 shares of newly-issued Company Series A Preferred Stock

 

Following the closing of the merger transaction the Company’s investment in TW consisted of the following:

 

    Shares     Amount  
Consideration paid prior to Closing:                
Cash paid           $ 500,000  
Common stock issued     12,000,000       1,200,000  
Total consideration paid     12,000,000     $ 1,700,000  
Consideration paid at Closing:                
Common stock to be issued at closing     152,555,416     $ 60,683,006  
Series A Preferred Stock to be issued at closing     3,000,000       120,000  
Note payable due December 31, 2018             3,000,000  
Total consideration to be paid           $ 63,803,006  
                 
Total consideration           $ 65,503,006  

  

Following the Closing, TW’s financial statements as of the Closing will be consolidated with the Consolidated Financial Statements of the Company

 

The foregoing summary of the transactions contemplated by the Merger Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement, which is attached as Exhibit 2.1 to Form 8-K filed by the Company with the Securities and Exchange Commission on April 16, 2018, which is incorporated herein by reference.

 

Issuance of Stock

 

On April 13, 2018, the Company issued 152,555,416 shares of Common Stock and 3,000,000 shares of Preferred Stock as consideration for the True Wireless, Inc. merger.

 

On April 25, 2018, the Company issued an aggregate of 525,000 shares of Common Stock to two consultants valued at $0.27 per share.

 

On May 7, 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 True Wireless, LLC and Benson Communications, S.A. de C.V. The settlement had been previously reached on September 29, 2017.