Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Deficit

v3.5.0.2
Stockholders' Deficit
9 Months Ended
Sep. 30, 2016
Stockholders' Deficit [Abstract]  
Stockholders' Deficit

Note 9 – Stockholders’ Deficit

 

Shares issued to Strategic Capital Markets for Expenses, Deposits and Acquisitions paid for on Behalf of the Company

 

During the nine months ended September 30, 2016 and the year ended December 31, 2015, Strategic , a previous financier of the Company, paid for expenditures of the Company as well as deposits on a landfill acquisition on behalf of the Company. These expenditures primarily related to professional fees incurred for compliance related to being a public company. Total expenses incurred for these services for the nine months ended September 30, 2016 were $112,154, including approximately $62,000 in professional fees and $50,000 for a non-refundable deposit on a landfill that was written off in February of 2016 due to the acquisition not closing. The $112,154 incurred by Strategic during the nine months ended September 30, 2016 were converted to the Company’s restricted common stock at $0.50 per share, or 224,308 restricted common shares as of September 30, 2016. No expenses were paid on behalf of the Company by this related entity between April 1, 2016 and September 30, 2016.

 

Total expenses incurred for these services during the nine months ended September 30, 2015 were $360,778, including approximately $135,778 in professional fees and $225,000 for a non-refundable deposit on a landfill that was written off in February of 2016 due to the acquisition not closing. Strategic also incurred costs to build the Company’s investor relations website of $7,594, $2,000 of which was discounted in the final billing in 2016, reducing the website cost to $5,595.

 

At December 31, 2015, the Company had an amount payable due to Strategic of $592,829, which was settled for 592,829 shares of the Company’s restricted common stock ($1 per share conversion) during 2016.

 

Shares granted to independent board of director member for services:

 

During the nine months ended September 30, 2016, the Company granted two-independent members of the board of directors a total of 46,429 shares of the Company’s restricted common stock valued at $6,786 based on the trailing 10 day moving average of the Company’s share price at the end of each quarter where shares were earned by the Board Members. As of September 30, 2016, a total of 12,500 restricted common shares valued at $1,392 had not been issued and are included in common stock subscribed (receivable) in the equity section of the Company’s consolidated balance sheet. These shares were issued during October 2016. The Company will grant each independent director 12,500 shares of the Company’s common stock quarterly valued based on the 10-day moving average of the stock price at the end of the related quarter.

 

Shares issued to consultant for professional fees:

 

The Company entered into an agreement with a consulting firm for investor relation services throughout a 12-month period, from May 10, 2016 through May 9, 2017. A total of 400,000 restricted common shares were granted and distributed to that firm during the nine months ended September 30, 2016. The granted shares were valued based on the value of the stock on the date of grant, May 10, 2016, of $0.13. The total value of the shares issued was approximately $53,000, amortized monthly over the term of the contract. The Company subsequently cancelled this contract and settled with the vendor to return 200,000 shares of the restricted common stock issued. Total expenses incurred for this contract were $26,300 and restricted common stock valued at approximately $26,300 is expected to be returned to the Company during the fourth quarter of 2016.

 

Shares Subscribed, Issued During the Three Months Ended March 31, 2016:

 

As discussed in note 10, the Company acquired two related party entities; as part of the Consideration for the purchase, the Company granted the Shareholder a total of 3,150,000 restricted common shares of the Company’s restricted common stock as part of the acquisition. As of December 31, 2015, the shares were not issued, and thus were included in common stock subscribed on our consolidated balance sheet. During the three months ended March 31, 2016 all 3,150,000 shares were issued and transferred from common stock subscribed to additional paid in capital.

 

Shares subscribed during the three months ended June 30, 2016:

 

During the three months ended September 30, 2016, the Company settled amounts due to a related entity for expenses paid on behalf of the Company by the related entity and for payment of the short-term acquisition note paid on behalf of the Company by the related entity as part of the WRE acquisition, totaling $250,000. The $250,000 acquisition note with WRE was settled for $1 per share of the Company’s stock for a total of 250,000 subscribed shares of the Company’s restricted common stock. The Company settled $112,154 of expenses paid by the third party for expenses incurred by the Company during the period from January 1, 2016 through March 31, 2016, primarily for professional fees for $0.50 per share subscribed, or 224,308 subscribed shares of the Company’s restricted common stock. The Company also incurred professional fees with a vendor that were settled for 100,000 shares of the Company’s common stock, valued at $13,150 by the share price on the date of Grant, May 11, 2016, multiplied by the shares granted (see above, Shares issued to consultant for professional fees).

 

Shares subscribed during the three months ended September 30, 2016:

 

During the three months ended September 30, 2016, the Company issued 474,308 of restricted common stock to Strategic that were subscribed during the three months ended June 30, 2016 (See above, shares subscribed during the three months ended June 30, 2016). During the three months ended September 30, 2016, the Company issued shares of the Company’s restricted common stock to the Board of Directors as discussed above. As of September 30, 2016, 12,500 shares of the Company’s restricted common stock valued at $1,392 were granted but not issued.

 

Preferred Stock

 

During May 2015, the Company amended the Articles of Incorporation to authorize 10,000,000 shares of the Company’s Series A preferred stock, no par value per share. On September 17, 2015, the Company issued one share of Series A Preferred Stock, no par value, to the Company’s Chairman of the Board. As a holder of the outstanding shares of Series A Preferred Stock, the Chairman is entitled to voting power equivalent to the number of votes equal to the total number of the Company’s common stock outstanding as of the record date for the determination of stockholders entitled to vote at each meeting of stockholders of the Company and entitled to vote on all matters submitted or required to be submitted to a vote of the stockholders of the Company..

 

On approximately January 1, 2016, the Company’s Board of Directors approved 10,000,000 shares of 10%, cumulative preferred stock and $2,000,000 of Shareholder debt was converted into 10,000 shares of this class of preferred stock. During the nine and three months ended September 30, 2016, $150,000 and $50,000 of dividends were accrued, respectively, but not paid to the holder. These dividends are included in accrued liabilities on the Company’s consolidated balance sheet as of September 30, 2016. Total accrued preferred stock dividends as of September 30, 2016 and December 31, 2015 were $150,000 and $0, respectively.