U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One) [X]x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended
September 30, 2017 OR [ ]MARCH 31, 2022¨ TRANSITION REPORT
PURSUANT TOUNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT OF 1934
For the transition period from toCommission file
numbernumber: 000-55809IRIS GROVE ACQUISITION CORPORATIONELECTRONIC SERVITOR PUBLICATION NETWORK INC.
(Exact name of registrant as specified in its charter)
Delaware 82-1873116 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 9454 Wilshire Blvd. #612 Beverly Hills, CA 90212 (Address of principal executive offices) (zip code) 310-888-1870 (Registrant's
Delaware | 82-1873116 | |
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
400 1ST AVE N., STE. 100 MINNEAPOLISMN 55401 | 55401 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code)
code: (612)414-7121
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
days). Yes Xx No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yesx No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer" andfiler," "smaller reporting company"company," and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated Filer
Non-accelerated filer Smaller reporting
| Large accelerated filer | ¨ | Accelerated filer | ¨ |
| Non-accelerated filer | x | Smaller Reporting Company | x |
| Emerging growth company | x |
If an emerging growth company, X
(do not check if a smaller reporting company)
Indicateindicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(1) of the Exchange Act. ¨
Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes X ¨No
Indicate the number of shares outstanding of eachx
Securities registered pursuant to Section 12(b) of the issuer's
classesAct: None
As of stock, asMay 23, 2022, the Company had shares of the latest practicable date.
Class Outstanding at
November 14, 2017
Common Stock,its common stock, par value $0.0001 20,000,000
Documents incorporated by reference: None
__________________________________________________________________________
CONDENSED$.0001 per share, issued and outstanding.
TABLE OF CONTENTS
| PART I | ||
| Item 1. | Condensed Unaudited Financial Statements | 3 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 12 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 14 |
| Item 4. | Controls and Procedures | 14 |
| PART II | ||
| Item 1. | Legal Proceedings | 16 |
| Item 1A. | Risk Factors | 16 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 16 |
| Item 3. | Defaults Upon Senior Securities | 17 |
| Item 4. | Mining Safety Disclosures | 17 |
| Item 5. | Other Information | 17 |
| Item 6. | Exhibits | 18 |
| Signatures | 19 |
| 2 |
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Balance Sheet as of September 30, 2017
ELECTRONIC SERVITOR PUBLICATION NETWORK INC.
INDEX TO FINANCIAL STATEMENTS
Balance Sheets as of March 31, 2022 (unaudited)
| 7 | ||||||||||||
| Notes to Condensed Financial Statements (Unaudited) | 8 |
| 3 |
ELECTRONIC SERVITOR PUBLICATION NETWORK INC.
(Formerly CannAssist International Corp.)
BALANCE SHEETS
| March 31, 2022 | December 31, 2021 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 4,601 | $ | — | ||||
| Total assets | $ | 4,601 | $ | — | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accruals | $ | 25,470 | $ | 13,853 | ||||
| Due to a related party | 42,268 | 22,625 | ||||||
| Total current liabilities | 67,738 | 36,478 | ||||||
| Commitments and contingencies | — | — | ||||||
| Stockholders’ Deficit: | ||||||||
| Preferred stock, $ par value shares authorized; shares issued and outstanding | — | — | ||||||
| Series A Preferred stock, $ par value shares authorized; shares issued and outstanding | — | — | ||||||
| Common Stock, $ par value, shares authorized; and issued and outstanding, respectively | 2,143 | 2,143 | ||||||
| Additional paid in capital | 5,974,046 | 5,876,611 | ||||||
| Accumulated deficit | (6,039,326 | ) | (5,915,232 | ) | ||||
| Total Stockholders’ deficit | (63,137 | ) | (36,478 | ) | ||||
| Total Liabilities and Stockholders’ Deficit | $ | 4,601 | $ | — | ||||
The accompanying notes are an integral part of these unaudited financial statements.
| 4 |
ELECTRONIC SERVITOR PUBLICATION NETWORK INC.
(Formerly CannAssist International Corp.)
STATEMENTS OF OPERATIONS
(UNAUDITED)
| For the Three Months Ended March 31, | ||||||||||
| 2022 | 2021 | |||||||||
| Operating expenses: | ||||||||||
| General and administrative | $ | 1,659 | $ | — | ||||||
| Professional fees | 25,000 | — | ||||||||
| Stock based compensation | 97,435 | — | ||||||||
| Total operating expenses | 124,094 | — | ||||||||
| Loss from operations | (124,094 | ) | — | |||||||
| Loss before provision for income taxes | (124,094 | ) | — | |||||||
| Provision for income taxes | — | — | ||||||||
| Net loss from continuing operations | (124,094 | ) | — | |||||||
| Net loss from discontinued operations | — | (72,758 | ) | |||||||
| Net loss | $ | (124,094 | ) | $ | (72,758 | ) | ||||
| Loss per share, basic and diluted, from continuing operations | $ | (0.01 | ) | $ | — | |||||
| Loss per share, basic and diluted, from discontinued operations | $ | — | $ | (0.00 | ) | |||||
| Weighted average shares outstanding, basic and diluted | 21,416,001 | 18,841,878 | ||||||||
The accompanying notes are an integral part of these unaudited financial statements.
| 5 |
ELECTRONIC SERVITOR PUBLICATION NETWORK INC.
(Formerly CannAssist International Corp.)
STATEMENTS OF CHANGES OF STOCKHOLDERS’ DEFICIT
For the Three Months Ended March 31, 2022 and 2021
(UNAUDITED)
| Additional | Total | ||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-in | Accumulated | Stockholders' | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | |||||||||||||||||||||||
| Balance, December 31, 2021 | 1,000 | $ | — | 21,416,001 | $ | 2,143 | $ | 5,876,611 | $ | (5,915,232 | ) | $ | (36,478 | ) | |||||||||||||||
| Warrants issued | — | — | — | — | 97,435 | — | 97,435 | ||||||||||||||||||||||
| Net loss | — | — | — | — | — | (124,094 | ) | (124,094 | ) | ||||||||||||||||||||
| Balance, March 31, 2022 | 1,000 | $ | — | 21,416,001 | $ | 2,143 | $ | 5,974,046 | $ | (6,039,326 | ) | $ | (63,137 | ) | |||||||||||||||
| Additional | Total | |||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-in | Accumulated | Stockholders' | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance, December 31, 2020 | 1,000 | — | 18,775,000 | 1,878 | 3,253,525 | (3,333,402 | ) | (77,999 | ) | |||||||||||||||||||
| Common stock issued for services | — | — | 75,000 | 7 | 6,743 | — | 6,750 | |||||||||||||||||||||
| Common stock issued for debt conversion | — | — | 58,000 | 6 | 14,494 | — | 14,500 | |||||||||||||||||||||
| Common stock units sold for cash | — | — | 8,001 | 1 | 1,999 | — | 2,000 | |||||||||||||||||||||
| Net loss | — | — | — | — | — | (72,758 | ) | (72,758 | ) | |||||||||||||||||||
| Balance, March 31, 2021 | 1,000 | $ | — | 18,916,001 | $ | 1,892 | $ | 3,276,761 | $ | (3,406,160 | ) | $ | (127,507 | ) | ||||||||||||||
The accompanying notes are an integral part of these unaudited financial statements.
| 6 |
ELECTRONIC SERVITOR PUBLICATION NETWORK INC.
(Formerly CannAssist International Corp.)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
| For the Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (124,094 | ) | $ | (72,758 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock based compensation | 97,435 | — | ||||||
| Loss from discontinued operations | — | 72,758 | ||||||
| Changes in Operating Assets and Liabilities: | ||||||||
| Accounts payable | 11,617 | — | ||||||
| Operating activities from discontinued operations | — | (166,550 | ) | |||||
| Net cash used by operating activities | (15,042 | ) | (166,550 | ) | ||||
| Cash flows from Investing activities: | — | — | ||||||
| Cash flows from Financing activities: | ||||||||
| Proceeds from loans - related party | 19,643 | — | ||||||
| Financing activities from discontinued operations | — | 13,459 | ||||||
| Net cash provided by financing activities | 19,643 | 13,459 | ||||||
| Net decrease in cash | 4,601 | (153,091 | ) | |||||
| Cash, beginning of period | — | 175,497 | ||||||
| Cash, end of period | $ | 4,601 | $ | 22,406 | ||||
| Cash Paid For: | ||||||||
| Cash paid for interest | $ | — | $ | — | ||||
| Cash paid for taxes | $ | — | $ | — | ||||
| Supplement disclosure of cash flow information: | ||||||||
| Conversion of debt | $ | 14,500 | $ | — | ||||
The accompanying notes are an integral part of these unaudited financial statements.
| 7 |
ELECTRONIC SERVITOR PUBLICATION NETWORK INC.
(Formerly CannAssist International Corp.)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
MARCH 31, 2022
NOTE 1 NATURE- DESCRIPTION OF OPERATIONSBUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS
Iris Grove Acquisition Corporation ("Iris Grove" or "the Company"HISTORY
Description of business
Electronic Servitor Publication Network Inc. (formerly CannAssist International Corp.) (“the Company”) was incorporated on May 17, 2017, under the laws of the stateState of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. The Company has beendeveloped a technology platform that is specifically designed for esports professionals and gamers. The platform’s functionality will allow its publishing users with omni-channel and technology agnostic streaming functionality so that users can better engage with their audiences on a global level. The platform will also provide in depth engagement analytics. We believe that many esports professionals find it very difficult to showcase their talents while managing the distribution aspects of their careers. The platform will provide these individuals with an easy-to-use solution. The platform will also have content that provides news and information about esports.
On July 1, 2021, Mark Palumbo, a former officer and director of the Company, and Forty 7 Select Holdings LLC, an entity controlled by Greg Shockey (who was an existing shareholder of the Company), entered into an agreement pursuant to which Mark Palumbo transferred all of his shares of Series A Preferred Stock (representing 100% of the Company’s issued and outstanding Series A Preferred Stock), of the Company to Forty 7 Select Holdings LLC in a private transaction. The Series A Preferred Stock provides the holder thereof the right to vote 60% of the Company’s voting shares on any and all shareholder matters and thereby constituted a change of control of the Company. Further, Mark Palumbo contributed shares of common stock held by him to the treasury of the Company for cancellation at no cost (the “Contribution”).
On July 23, 2021, the Company entered into a Technology License Agreement with Phitech Management, LLC, an entity controlled by Peter Hager (“Licensor”), whereby, at Closing, the Company shall be granted a license (the “License”) to use, market, promote and distribute certain technology related to Electronic Sports Gaming, related patent applications, related trade-secrets and associated knowhow, including methods, techniques, specifications, procedures, information, systems, knowledge and business processes required to practice and carry on business in the developmental stage since inceptionfield of data collection, security and management (the “Technology”). The initial term of the License is 10-years (the “Initial Term”) and shall automatically be renewed for successive 1-year terms (each, a “Renewal Term”) unless the Company elects to terminate the License by giving 30 days’ written notice prior to commencement of a Renewal Term. In exchange for the License of the Technology, the Company shall issue to the Licensor restricted shares of its operationscommon stock (which is an amount equal to $2,500,000 divided by $, which was the closing market price of the Company’s common stock on the trading day prior to the effective date of the License Agreement).
On July 23, 2021, the Company and Mark Palumbo entered into an agreement (the “Spin-Off Agreement”) whereby, at the Closing, the Company shall transfer 100% of the issued and outstanding membership units of Xceptor LLC, an entity that was a wholly-owned subsidiary of the Company, to Mark Palumbo (along with the assets and liabilities associated with the prior business) for nominal consideration as a condition of the Change-in-Control (the “Spin-Off”). Furthermore, at the Closing, that certain Technology License Agreement entered into by and between the Company and Mark Palumbo dated April 29, 2019 (the “Palumbo License Agreement”) shall be terminated and the Company shall assign all rights to the underlying Intellectual Property (as defined in the Palumbo License Agreement) to Mark Palumbo.
On September 28, 2021, the Certificate of Incorporation of the Company was amended to effect a change in the Company’s name from “CannAssist International Corp.” to “The Electronic Servitor Publication Network, Inc.” (the “Name Change”).
On October 9, 2021, the Closing of the Technology License Agreement occurred whereby the Company received the License to the Technology and the Licensor was issued restricted shares of the Company’s common stock, at a cost basis of $ per share.
On October 9, 2021, the Closing of the Spin-Off Agreement occurred whereby 100% of the issued and outstanding membership units of Xceptor LLC was transferred to Mark Palumbo (along with the assets and liabilities associated with the prior business) in exchange for nominal consideration and the Palumbo License Agreement was terminated.
| 8 |
Effective October 9, 2021, as a result of the transactions described above, the business of the Company changed to focus on Electronic Sports Gaming technology and the development of related infrastructure, specifically the development and commercialization of a technology platform specifically designed for the Electronic Sports and Electronic Gaming markets. The platform will provide an omni-channel publishing tool, with talent identity protection and monetization tools provided in line with interaction and media creation services. Further publication and monetization products and services will be developed and acquired to support these efforts.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Company’s unaudited financial statements have been limited to issuing shares to its original shareholders. The Company will
attempt to locate and negotiateprepared in accordance with a business entity for the combination
of that target company with Iris Grove. The combination will normally take
the form of a merger, stock-for-stock exchange or stock-for-assets exchange.
In most instances the target company will wish to structure the business
combination to be within the definition of a tax-free reorganization under
Section 351 or Section 368 of the Internal Revenue Code of 1986, as
amended. No assurances can be given that the Company will be successful
in locating or negotiating with any target company. The Company has been
formed to provide a method for a foreign or domestic private company to
become a reporting company with a class of securities registered under the
Securities Exchange Act of 1934.
BASIS OF PRESENTATION
The summary of significantgenerally accepted accounting policies presented below is designed
to assist in understanding the Company's financial statements. Such financial
statements and accompanying notes are the representations of the Company's
management, who are responsible for their integrity and objectivity. These
accounting policies conform to accounting principles generally accepted in the United States of America ("GAAP"(“U.S. GAAP”), and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) inand reflect all material respects, and have
been consistently applied in preparingadjustments, consisting of normal recurring adjustments, which management believes are necessary to fairly present the accompanying financial statements.
The Company has not earned any revenue from operations since inception.
Accordingly, the Company's activities have been accounted for as those of
a "Development Stage Enterprise" as set forth in ASC 915, "Development
Stage Entities." Among the disclosures required by ASC 915, are that the
Company's financial statements be identified as those of a development stage
company, and that the statementsposition, results of operations stockholders' equity and cash flows disclose activity since the date of the Company's inception. The Company choseas of and for the three month period ending March 31, 2022 and not necessarily indicative of the results to be expected for the full year ending December 31, as its fiscal2022. These unaudited financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year end.
USE OF ESTIMATES
ended December 31, 2021.
Use of Estimates
The preparation of financial statements in conformity with GAAPgenerally accepted accounting principles 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.period. Actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS
Cash
Concentrations of Credit Risk
We maintain our cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. We continually monitor our banking relationships and cash equivalents include cash on hand and on deposit at banking
institutions as well as all highly liquid short-term investments with original
maturities of 90 days or less. The Company didconsequently have not have cash equivalents as
of September 30, 2017.
CONCENTRATION OF RISK
Financial instruments that potentially subject the Company to concentrations
of credit risk consist principally of cash. The Company places its cash with
high quality banking institutions. The Company did not have cash balancesexperienced any losses in our accounts. At times, such deposits may be in excess of the Federal Deposit Insurance Corporation limit asinsurable amount (“FDIC”).
Cash equivalents
The Company considers all highly liquid investments with a maturity of September 30,
2017.
6
______________________________________________________________________
IRIS GROVE ACQUISITION CORPORATION
Notesthree months or less when purchased to Financial Statements
INCOME TAXES
Under ASC 740, "Income Taxes," deferred tax assets and liabilities are
recognizedbe cash equivalents. There were no cash equivalents for the future tax consequences attributable to temporary
differences between the financial statement carrying amounts of existing
assetsperiods ended March 31, 2022 and liabilities and their respective tax bases. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected
to be recovered or settled. Valuation allowances are established when it is
more likely than not that some or all of the deferred tax assets will not be
realized. As of September 30, 2017 there were no deferred taxes due to the
uncertainty of the realization of net operating loss or carry forward prior
to expiration.
LOSS PER COMMON SHARE
Basic loss per common share excludes dilution and is computed by dividing
net loss by the weighted average number of common shares outstanding
during the period. Diluted loss per common share reflect the potential
dilution that could occur if securities or other contracts to issue common
stock were exercised or converted into common stock or resulted in the
issuance of common stock that then shared in the loss of the entity. As
of September 30, 2017, there are no outstanding dilutive securities.
FAIR VALUE OF FINANCIAL INSTRUMENTS
December 31, 2021.
Recently issued accounting pronouncements
The Company follows guidance forhas implemented all new applicable accounting for fair value measurements of
financial assets and financial liabilities and for fair value measurements
of nonfinancial itemspronouncements that are recognized or disclosed at fair value in effect. These pronouncements did not have any material impact on the financial statements on a recurring basis. Additionally,unless otherwise disclosed, and the Company adopted
guidance for fair value measurement related to nonfinancial itemsdoes not believe that there are recognized and disclosed at fair value in the financial statements onany other new accounting pronouncements that have been issued that might have a nonrecurring basis. The guidance establishes a fair value hierarchy that
prioritizes the inputs to valuation techniques used to measure fair value.
The hierarchy gives the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities (Level 1 measurements) and the
lowest priority to measurements involving significant unobservable inputs
(Level 3 measurements). The three levels of the fair value hierarchy are as
follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical
assets or liabilities that the Company has the ability to access at the
measurement date.
Level 2 inputs are inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for the asset or liability.
The carrying amounts of financial assets such as cash approximate their fair
values because of the short maturity of these instruments.
NOTE 2 - GOING CONCERN
The Company has not yet generated any revenue since inception to date and
has sustained operating loss of $3,562 during the period ended September 30,
2017. The Company had a working capital deficit of $1,250 and an accumulated
deficit of $3,562 as of September 30, 2017. The Company's continuation as
a going concern is dependentmaterial impact on its ability to generate sufficient cash
flows from operations to meet its obligations and/financial position or obtaining additional
financing from its members or other sources, as may be required.
7
______________________________________________________________________
IRIS GROVE ACQUISITION CORPORATION
Notes to Financial Statements
results of operations.
NOTE 3 - GOING CONCERN
The accompanying unaudited financial statements have been prepared assumingon a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has an accumulated deficit of $6,039,326 as of March 31, 2022. The Company anticipates that it would need approximately $1,500,000 over the Company willnext 12 months to continue as a going concern; however,concern, satisfy its capital commitments and continue its operations in accordance with its current business plan. In addition to revenues generated from sales, the above condition
raisesChief Executive Officer and several shareholders may fund the Company’s operations, if needed, during the next 12 months or until the Company can generate an ongoing source of capital sufficient to independently continue its operations. These conditions and the ability to successfully resolve these factors raise substantial doubt about the Company'sCompany’s ability to do so. The financial
statements do not include any adjustments to reflect the possible future
effects on the recoverability and classification of assets or the amounts and
classifications of liabilities that may result should the Company be unable to continue as a going concern. In order to maintain its current levelThe financial statements of operations, the Company will require
additional working capital from either cash flow from operations ordo not include any adjustments that may result from the saleoutcome of its equity.these aforementioned uncertainties.
NOTE 4 – RELATED PARTY TRANSACTIONS
During the three months ended March 31, 2022, Forty 7 Select Holdings LLC (“Forty 7”) advanced the Company $19,643, to pay for general operating expenses. Forty 7 is controlled by Greg Shockey, an existing shareholder of the Company. As of March 31, 2022, the balance due to Forty 7 is $.
| 9 |
NOTE 5 – PREFERRED STOCK
The Company has designated shares of Series A Preferred Stock. The shares of Series A Preferred Stock have a par value of $ per share. The Series A Preferred Shares do not have a dividend rate or liquidation preference and are not convertible into shares of common stock. Series A Preferred Stock, voting together as a class, have the right to vote 60% of the Company’s voting shares on any and all shareholder matters (the “Majority Voting Rights”). Additionally, the Company shall not adopt any amendments to the Company’s Bylaws, Articles of Incorporation, as amended, make any changes to the Certificate of Designations establishing the Series A Preferred Stock, or effect any reclassification of the Series A Preferred Stock, without the affirmative vote of at least a majority of the outstanding shares of Series A Preferred Stock. However, the Company currentlymay, by any means authorized by law and without any vote of the holders of shares of Series A Preferred Stock, make technical, corrective, administrative or similar changes to such Certificate of Designations that do not, individually or in the aggregate, adversely affect the rights or preferences of the holders of shares of Series A Preferred Stock. Other than the Majority Voting Rights, the Series A Preferred Stock does not have any other dividend, liquidation, conversion, or redemption rights, whatsoever.
NOTE 6 – WARRANTS
In the first quarter of 2022, the Company entered into an Employment Agreement with Anthony Sanneh, an officer of the Company. This Employment Agreement has no commitmentsa term of 2 years and automatically renews for additional 6-month terms unless earlier terminated earlier. This agreement is terminable by each of the parties upon written notice. Under this Employment Agreement, the Company pays a base salary of $1.00 per year and issued options to purchase 500,000 restricted shares of the Company’s common stock at a strike price of $0.39 per share. The options vest over a period of 1.5 years contingent upon service and have an expiry date of 10 years from any thirdthe date of grant. In the event that the agreement is renewed, an additional 125,000 options to purchase restricted shares of the Company’s common stock shall be issued for each 6-month renewal term at a strike price equal to the fair market value of the Company’s common stock on the trading day prior to the grant of the options.
In the first quarter of 2022, the Company entered into an Employment Agreement with Thomas Spruce, an officer and director of the Company. This Employment Agreement has a term of 2 years and automatically renews for additional 6-month terms unless earlier terminated earlier. This agreement is terminable by each of the parties upon written notice. Under this Employment Agreement, the Company pays a base salary of $1.00 per year and issued options to purchase 500,000 restricted shares of the Company’s common stock at a strike price of $0.39 per share. The options vest over a period of 1.5 years contingent upon service and have an expiry date of 10 years from the date of grant. In the event that the agreement is renewed, an additional 125,000 options to purchase restricted shares of the Company’s common stock shall be issued for each 6-month renewal term at a strike price equal to the fair market value of the Company’s common stock on the trading day prior to the grant of the options.
Warrants issued with the following inputs:
| Warrants | 1,000,000 | |||
| Share price | $ | |||
| Exercise Price | $ | |||
| Term | 10 years | |||
| Volatility | – | % | ||
| Risk Free Interest Rate | – | % | ||
| Dividend rate | — |
A summary of the status of the Company’s outstanding stock warrants and changes during the year is presented below:
Activity for the purchasethree months ended March 31, 2022 is as follows:
| Number of Warrants | Weighted Average Exercise Price | Weighted Average Remaining Contract Term | Aggregate Intrinsic Value | ||||||||||||||
| Outstanding at December 31, 2020 | 150,836 | $ | 0.25 | 7.97 | $ | — | |||||||||||
| Granted | 2,667 | $ | 0.25 | 5.00 | $ | — | |||||||||||
| Expired | — | $ | — | — | $ | — | |||||||||||
| Exercised | — | $ | — | — | $ | — | |||||||||||
| Outstanding at December 31, 2021 | 153,503 | $ | 0.25 | 6.92 | $ | — | |||||||||||
| Granted | 1,000,000 | $ | 0.39 | 10 | $ | — | |||||||||||
| Expired | — | $ | — | — | $ | — | |||||||||||
| Exercised | — | $ | — | — | $ | — | |||||||||||
| Outstanding at March 31, 2022 | 1,153,503 | $ | 0.37 | 9.55 | $ | — | |||||||||||
| Exercisable at March 31, 2022 | 403,503 | $ | 0.34 | 8.73 | $ | — | |||||||||||
| 10 |
| Range of Exercise Prices | Number Outstanding 3/31/2022 | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | |||
| $ – 0.39 | 1,153,503 | 9.55 years | $0.37 |
NOTE 7 - DISCONTINUED OPERATIONS
In accordance with the Company is unable
to acquire additional working capital, it will be required to significantly
reduce its current levelprovisions of ASC 205-20, we have not included the results of operations from discontinued operations in the results of continuing operations in the statements of operations. NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS
In November 2016,The results of operations from discontinued operations for the FASB issued Accounting Standards Update No. 2016-18,
"Statement of Cash Flows (Topic 230): Restricted Cash" ("ASU 2016-18"). The
new guidance is intended to reduce diversity in practice by adding or
clarifying guidance on classificationthree months ended March 31, 2022 and presentation of changes in
restricted cash on the statement of cash flows. ASU 2016-18 is effective
for annual and interim periods beginning after December 15, 2017. Early
adoption is permitted. The amendments in this update should be applied
retrospectively to all periods presented. The Company is currently
evaluating the impact of adopting ASU 2016-18, which will only impact
the Company to the extent it has restricted cash2021, have been reflected as discontinued operations in the future.
In August 2016,statements of operations for the FASB issued ASU No. 2016-15, "Statement of Cash Flows
(Topic 230): Classification of Certain Cash Receiptsyears ended March 31, 2022 and Cash Payments,
to address diversity in how certain cash receipts2021, and cash payments are
presented and classified in the statement of cash flows". The amendments
provide guidance on the following eight specific cash flow issues: (1) Debt
Prepayment or Debt Extinguishment Costs; (2) Settlement of Zero-Coupon Debt
Instruments or Other Debt Instruments with Coupon Interest Rates That Are
Insignificant in Relation to the Effective Interest Rateconsist of the Borrowing;
(3) Contingent Consideration Payments Made after a Business Combination;
(4) Proceeds from the Settlementfollowing.
Schedule of Insurance Claims; (5) Proceeds from the
Settlementdiscontinued operations
| For the three months ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Revenue - discontinued operations | $ | — | $ | 217,973 | ||||
| Cost of revenue - discontinued operations | — | 157,793 | ||||||
| Gross margin | — | 60,180 | ||||||
| Expenses of discontinued operations: | ||||||||
| General and administrative | — | 82,412 | ||||||
| Professional fees | — | 42,370 | ||||||
| Interest expense | — | 8,156 | ||||||
| Total expenses of discontinued operations | — | 132,938 | ||||||
| Net loss from discontinued operations | $ | — | $ | (72,758 | ) | |||
NOTE 8 – SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of Corporate-Owned Life Insurance Policies, including Bank-Owned;
(6) Life Insurance Policies; (7) Distributions Received from Equity Method
Investees; (8) Beneficial Interests in Securitization Transactions; and
Separately Identifiable Cash Flows and Application of the Predominance
Principle. The amendments are effective for public business entities for
fiscal years beginning after December 15, 2017, and interim periods within
those fiscal years. Early adoption is permitted, including adoption in an
interim period. The amendments should be applied using a retrospective
transition method to each period presented. If it is impracticable to apply
the amendments retrospectively for some of the issues, the amendments for
those issues would be applied prospectively as of the earliest date
practicable. The Company is currently evaluating the impact of this new
standard on its financial statements and related disclosures.
In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial
Statements Going Concern (Subtopic 205-40): Disclosure of Uncertainties
about an Entity's Ability to Continue as a Going Concern". This standard is
intended to define management's responsibility to evaluate whether there is
substantial doubt about an organization's ability to continue as a going
concern and to provide related footnote disclosures. Under U.S. GAAP,
financial statements are prepared under the presumption that the reporting
organization will continue to operate as a going concern, except in limited
circumstances. Financial reporting under this presumption is commonly
referred to as the going concern basis of accounting. The going concern
basis of accounting is critical to financial reporting because it establishes
the fundamental basis for measuring and classifying assets and liabilities.
Currently, U.S. GAAP lacks guidance about management's responsibility to
evaluate whether there is substantial doubt about the organization's ability
to continue as a going concern or to provide related footnote disclosures.
This ASU provides guidance to an organization's management, with principles
and definitions that are intended to reduce diversity in the timing and
content of disclosures that are commonly provided by organizations today
in the financial statement footnotes. The amendments are effective for
annual periods ending after December 15, 2016, and interim periods within
annual periods beginning after December 15, 2016. Early application is
permitted for annual or interim reporting periods for which the financial
statements have not previously been issued. Management believes that the
impact of this ASU to the Company's financial statements would be
insignificant.
Other recent accounting pronouncements issued by the FASB (including its
Emerging Issues Task Force) and the United States Securities and Exchange
Commission did not or are not believed by management to have a material
impact on the Company's present or future financial statements.
NOTE 4 ACCRUED LIABILITIES
As of September 30, 2017 the Company had accrued professional fees
of $1,250.
NOTE 5 STOCKHOLDERS' DEFICIT
On May 17, 2017, the Company issued 20,000,000 founders common stock
to two directors and officers pro rata as founder shares for services
rendered to the Company, valued at $0.0001 par value per share, or a
total of $2,000. The Company is authorized to issue 100,000,000
shares of common stock and 20,000,000 shares of preferred stock.
As of September 30, 2017, 20,000,000 shares of common stock and no
preferred stock were issued and outstanding.
NOTE 6
Management has evaluated subsequent events through November
14, 2017, the date whichthat the financial statements were available to
be issued. Allissued and has determined that it has the following material subsequent events requiring recognitionto disclose in these financial statements.
On April 18, 2022, Mr. Sanneh terminated his service with the Company and, as a result, only 250,000 of the 500,000 options had fully vested. The remaining options have been incorporatedforfeited by Mr. Sanneh.
Effective April 12, 2022, the Company entered into these financial statementsan Advisory Agreement with Greg Shockey, an affiliate of the Company and there are no subsequent
events that require disclosureservice provider. Under this Advisory Agreement, the Company issued options to purchase restricted shares of the Company’s common stock at a strike price of $ per share. The options vest over a period of 1 year contingent upon service and have an expiry date of 10 years from the date of grant. The options were issued in accordancereliance on the exemption from registration under Section 4(a)(2) of the Securities Act.
Effective April 12, 2022, the Company entered into an Advisory Agreement with FASB ASC Topic 855,
"Subsequent Events".
______________________________________________________________________
Danijella Dragas, a third-party service provider. Under this Advisory Agreement, the Company issued options to purchase restricted shares of the Company’s common stock at a strike price of $ per share. The options vest over a period of 1 year contingent upon service and have an expiry date of 10 years from the date of grant. The options were issued in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act.
| 11 |
ITEM 2. MANAGEMENT'SMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Iris Grove Acquisition Corporation (the "Company"
The following information should be read in conjunction with our financial statements and related notes thereto included in Part I, Item 1, above.
Forward Looking Statements
Certain matters discussed herein are forward-looking statements. Such forward-looking statements contained in this Form 10-Q involve risks and uncertainties, including statements as to:
·our future strategic plans
·our future operating results;
·our business prospects;
·our contractual arrangements and relationships with third parties;
·the dependence of our future success on the general economy;
·our possible future financings; and
·the adequacy of our cash resources and working capital.
These forward-looking statements can generally be identified as such because the context of the statement will include words such as we “believe,” “anticipate,” “expect,” “estimate” or words of similar meaning. Similarly, statements that describe our future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which are described in close proximity to such statements and which could cause actual results to differ materially from those anticipated. Shareholders, potential investors and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included herein are only made as of the date of this Form 10-Q, and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
Executive Overview
Electronic Servitor Publication Network Inc. (formerly CannAssist International Corp.) was incorporated on May 17, 2017 under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. The Company has developed a technology platform that is specifically designed for esports professionals and gamers. The platform’s functionality will allow its publishing users with omni-channel and technology agnostic streaming functionality so that users can better engage with their audiences on a blank check companyglobal level. The platform will also provide in depth engagement analytics. We believe that many esports professionals find it very difficult to showcase their talents while managing the distribution aspects of their careers. The platform will provide these individuals with an easy-to-use solution. The platform will also have content that provides news and qualifies as an "emerging growth company" as defined ininformation about esports.
The Company's corporate offices are located at 400 1ST Ave N., Ste. 100, Minneapolis, MN 55401. The Company's email website is www.electronicservitor.com. The Company’s telephone number is (612) 414-7121.
The Company’s common stock trades on the Jumpstart
Our Business Startups Act which became law in April, 2012.
Since inceptionOTCQB Venture Market under the Company's operations to the datestock ticker symbol XESP.
On July 1, 2021, Mark Palumbo, a former officer and director of the period
coveredCompany, and Forty 7 Select Holdings LLC, an entity controlled by this report have been limitedGreg Shockey (who was an existing shareholder of the Company), entered into an agreement pursuant to issuingwhich Mark Palumbo transferred all of his 1,000 shares of Series A Preferred Stock (representing 100% of the Company’s issued and outstanding Series A Preferred Stock), of the Company to Forty 7 Select Holdings LLC in a private transaction. The Series A Preferred Stock provides the holder thereof the right to vote 60% of the Company’s voting shares on any and all shareholder matters and thereby constituted a change of control of the Company. Further, Mark Palumbo contributed 7,500,000 shares of common stock held by him to the treasury of the Company for cancellation at no cost (the “Contribution”).
| 12 |
On July 23, 2021, the Company entered into a Technology License Agreement with Phitech Management, LLC, an entity controlled by Peter Hager (“Licensor”), whereby, at Closing, the Company shall be granted a license (the “License”) to use, market, promote and distribute certain technology related to Electronic Sports Gaming, related patent applications, related trade-secrets and associated knowhow, including methods, techniques, specifications, procedures, information, systems, knowledge and business processes required to practice and carry on business in the field of data collection, security and management (the “Technology”). The initial term of the License is 10-years (the “Initial Term”) and shall automatically be renewed for successive 1-year terms (each, a “Renewal Term”) unless the Company elects to terminate the License by giving 30 days’ written notice prior to commencement of a Renewal Term. In exchange for the License of the Technology, the Company shall issue to the Licensor 10,000,000 restricted shares of its original shareholderscommon stock (which is an amount equal to $2,500,000 divided by $0.25, which was the closing market price of the Company’s common stock on the trading day prior to the effective date of the License Agreement).
On July 23, 2021, the Company and filingMark Palumbo entered into an agreement (the “Spin-Off Agreement”) whereby, at the Closing, the Company shall transfer 100% of the issued and outstanding membership units of Xceptor LLC, an entity that was a registration statement on Form 10
on July 7, 2017wholly-owned subsidiary of the Company, to Mark Palumbo (along with the Securitiesassets and Exchange Commission pursuantliabilities associated with the prior business) for nominal consideration as a condition of the Change-in-Control (the “Spin-Off”). Furthermore, at the Closing, that certain Technology License Agreement entered into by and between the Company and Mark Palumbo dated April 29, 2019 (the “Palumbo License Agreement”) shall be terminated and the Company shall assign all rights to the Securities Exchange Actunderlying Intellectual Property (as defined in the Palumbo License Agreement) to Mark Palumbo.
On September 28, 2021, the Certificate of 1934 asIncorporation of the Company was amended to register its classeffect a change in the Company’s name from “CannAssist International Corp.” to “The Electronic Servitor Publication Network, Inc.” (the “Name Change”).
On October 9, 2021, the Closing of the Technology License Agreement occurred whereby the Company received the License to the Technology and the Licensor shall be 10,000,000 restricted shares of the Company’s common stock.
stock, at a cost basis of $0.25 per share.
On October 9, 2021, the Closing of the Spin-Off Agreement occurred whereby 100% of the issued and outstanding membership units of Xceptor LLC was transferred to Mark Palumbo (along with the assets and liabilities associated with the prior business) in exchange for nominal consideration and the Palumbo License Agreement was terminated.
Effective October 9, 2021, as a result of the transactions described above, the business of the Company changed to focus on Electronic Sports Gaming technology and the development of related infrastructure, specifically the development and commercialization of a technology platform specifically designed for the Electronic Sports and Electronic Gaming markets. The platform will provide an omni-channel publishing tool, with talent identity protection and monetization tools provided in line with interaction and media creation services. Further publication and monetization products and services will be developed and acquired to support these efforts.
The Company has noanticipates that it would need approximately $1,500,000 over the next 12 months to continue as a going concern, satisfy its capital commitments and continue its operations nor does it currently engage in anyaccordance with its current business activities generating revenues. The Company's principal
business objective isplan. In addition to achieve a business combination with a target
company.
A combination will normally takerevenues generated from sales, the form of a merger, stock-for-stock
exchangeChief Executive Officer and several shareholders may fund the Company’s operations, if needed, during the next 12 months or stock-for-assets exchange. In most instances the target
company will wish to structure the business combination to be within the
definition of a tax-free reorganization under Section 351 or Section 368
of the Internal Revenue Code of 1986, as amended.
The most likely target companies are those seeking the perceived
benefits of a reporting corporation. Such perceived benefits may include
facilitating or improving the terms on which additional equity financing
may be sought, providing liquidity for incentive stock options or similar
benefits to key employees, increasing the opportunity to use securities
for acquisitions, providing liquidity for shareholders and other factors.
Business opportunities may be available in many different industries and
at various stages of development, all of which will make the task of
comparative investigation and analysis of such business opportunities
difficult and complex.
As of September 30, 2017until the Company had not generated revenues and had
no income or cash flows from operations since inception. The Company had
sustained net losscan generate an ongoing source of $3,562 and an accumulated deficit of $3,562 forcapital sufficient to independently continue its operations.
For the period from May 17, 2017 (Inception) to September 30, 2017.
The Company'sended December 31, 2021, the Company’s independent auditors have issued a report raising substantial doubt about the Company'sCompany’s ability to continue as a going concern. At present, the Company has no operations and theThe continuation of the Company as a going concern is dependent upon financial support from its principal stockholders, its ability to obtain necessary equity financing, or its ability to sell its services to generate consistent profitability.
Results of Operation for the Three Months Ended March 31, 2021 and 2020
For the three months ended March 31, 2022, the Company had revenues of $0. In comparison, for the three months ended March 31, 2021, all of revenue and cost of revenue have been included in the loss from discontinued operations (refer to Note 7).
Operating expenses were $124,094 for the three months ended March 31, 2022. Operating expenses include $1,659 of general and administrative expense, $25,000 of professional fees, and $97,435 of non-cash stock-based compensation expense for the issuance of warrants. In comparison, for the three months ended March 31, 2021, all operating expense have been included in the loss from discontinued operations (refer to Note 7).
For the three months ended March 31, 2022, the Company posted a net loss of $124,094, compared to a loss of $72,758 from discontinued operations for three months ended March 31, 2021.
During the three months ended March 31, 2022, the Company used $15,042 of cash in operating activities and generated $19,643 in cash from financing activities. The Company did not use or generate any cash in investing activities.
| 13 |
Liquidity and Capital Resources
The accompanying unaudited condensed financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has generated revenues of $0 during the three months ended March 31, 2022 and had a net loss of $124,094 for the three months ended March 31, 2022. The Company has an accumulated deficit of $6,039,326 as of March 31, 2022. The Company requires capital for its contemplated operational and marketing activities. The obtainment of additional financing, through an additional capital raise, the successful development of the Company’s contemplated plan of operations, and its transition to the attainment of continued profitable operations are necessary for the Company to continue operations.
The Company used $15,042 of cash from operations and/or to successfully locate and negotiate with a business
entity for the combinationthree months ended March 31, 2022. Net cash provided by financing activities for the three months ended March 31, 2022 was $19,643.
As of that target company with the Company.
Management will pay all expenses incurred byMarch 31, 2022, the Company until a
changehad $4,601 in control is effected. There is no expectationcash.
Critical Accounting Estimates and Policies
The preparation of repayment
for such expenses.
The presidentfinancial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities of the Company isdate of the president, directorfinancial statements and shareholderthe reported amounts of Tiber Creek Corporation. Tiber Creek Corporation assists
companies in becoming publicrevenues and expenses during the reporting companies and with introductionsperiod. Note 2 to the financial community.
Tiber Creek isFinancial Statements describes the significant accounting policies and methods used in discussions with many clients somethe preparation of which may
electthe Financial Statements. Estimates are used for, but not limited to, use a changecontingencies and taxes. Actual results could differ materially from those estimates. The following critical accounting policies are impacted significantly by judgments, assumptions, and estimates used in controlthe preparation of the Financial Statements.
We are subject to various loss contingencies arising in the ordinary course of business. We consider the likelihood of loss or impairment of an asset or the incurrence of a Form 10 reporting companyliability, as well as our ability to reasonably estimate the amount of loss in determining loss contingencies. An estimated loss contingency is accrued when management concludes that it is probable that an asset has been impaired, or a liability has been incurred and the amount of the loss can be reasonably estimated. We regularly evaluate current information available to us to determine whether such accruals should be adjusted.
Off-Balance Sheet Arrangements
We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect reincorporationon our financial condition, changes in Delaware. Although no such discussions directly addressfinancial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company the Company may used for suchdoes not believe that there are any other new accounting pronouncements that have been issued that might have a change in control. When, and
if, such change in control is effected, the Company will file a Form 8-K
announcing it.
material impact on its financial position or results of operations.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.
Information not requiredQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable to be filed by Smallersmaller reporting companies.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures.
Disclosures and Procedures
Pursuant to Rules adopted by the Securities and Exchange Commission,
the Company carried out an evaluation of the effectiveness of the design
and operation of its
We maintain disclosure controls and procedures pursuant to(as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act Rules. This evaluation was doneof 1934, as of the end of the
period covered by this report under the supervision and with the
participation of the Company's principal executive officer (who is
also the principal financial officer).
Based uponamended (the “Exchange Act”) that evaluation, he believes that the Company's
disclosure controls and procedures are designed to be effective in gathering, analyzing
and disclosing information needed to ensureproviding reasonable assurance that the information required to be disclosed byin our reports under the Company in its periodic reportsExchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms. Disclosure controlsforms of the Securities and procedures include, without limitation, controlsExchange Commission (the “SEC”), and procedures designed
to ensure that such information required to be disclosed by an issuer in the
reports that it files or submits under the Act is accumulated and communicated to the issuer'sour management including its principal executive
and principal financial officers, or persons performing similar functions,
as appropriate to allow timely decisions regarding required disclosure. This Quarterly Report does not include an attestation reportOur Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of the Company's registered public accounting firm regarding internal
control over financial reporting. Management's report was not subject
to attestation by the Company's registered public accounting firm
pursuant to temporary rulesend of the Securities and Exchange
Commission that permit the Company to provide only management's
report in this Quarterly Report.
Changes in Internal Controls
There was no change in the Company's internal control over
financial reporting that was identified in connection with such
evaluation that occurred during the period covered by this reportreport. Based on that evaluation, they concluded that our disclosure controls and procedures were not effective for the quarterly period ended March 31, 2022.
| 14 |
The following aspects of the Company were noted as potential material weaknesses:
| · | timely and accurate reconciliation of accounts |
| · | lack of segregation of duties |
In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute assurance of achieving the desired objectives. Also, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs.
Changes in Internal Controls
Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that no change occurred in the Company's internal controls over financial reporting during the quarter ended March 31, 2022, that has materially affected, or is reasonably likely to materially affect, the Company's internal controlcontrols over financial reporting.
| 15 |
PART II --- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are
On November 4, 2021, a lawsuit captioned CAMRON ELIZABETH v. MARK PALUMBO et al., Case No. CVPS2106116 was filed in the Superior Court of California, County of Riverside against the Company and certain of the Company’s former executive officers (collectively, the “Defendants”). The Plaintiff and the Company (as CannAssist International Corp.) entered into a Consulting Agreement dated November 20, 2020 (the “Consulting Agreement”), pursuant to which Plaintiff was engaged to provide certain sales and marketing services to the Company. As a condition of this Consulting Agreement, Plaintiff was paid a monthly fee and was granted restricted shares of the common stock of the Company that were subject to certain vesting conditions tied to Plaintiff’s service under the Consulting Agreement. The Consulting Agreement also contained provisions that enabled the Company to terminate the Consulting Agreement without cause after 10 days’ written notice. In September 2021, the Company exercised its right to terminate the Consulting Agreement because management of the Company at the time of termination was dissatisfied with the quality of Plaintiff’s services under the Consulting Agreement. Specifically, management of the Company at the time of termination received complaints from third-parties that Plaintiff behaved inappropriately in meetings where Plaintiff made presentations to potential clients and vendors on behalf of the Company. In contrast, Plaintiff alleges, among other things, that the Defendants improperly misclassified Plaintiff as an independent contractor, that certain of the Company’s former executive officers committed sexual harassment and defamation and that Defendants unlawfully terminated Plaintiff. The Company believes that the lawsuit is without merit and intends to defend the lawsuit vigorously; however, there can be no assurance regarding the ultimate outcome of this lawsuit.
Other than as described above, we know of no other material, existing or pending legal proceedings against the Company, and the Companynor is unawareit involved as a plaintiff in any material proceeding or pending litigation. Other than as described above, we know of suchno other proceedings contemplated against it.
Managementin which our directors, officers or any affiliates, or any registered or beneficial shareholder, is aware that certain current and prior blank check
companiesan adverse party or has a material interest adverse to our interest.
ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined by Rule 12b-2 of which Messrs. Cassidy and McKillop, the Company's current
officers and directors, were the officers and directors have received
subpoenas for documents in regard to a formal investigation by the Securities Exchange Act of 1934 and, Exchange Commission requesting documentation regardingas such, are not required to provide the share ownership of those companies. Management has no independent
knowledge or information regarding these subpoenas but believes it is part
of a wider review by the SEC.
Management of the Company has also received subpoenas from the
Securities and Exchange Commission in regard to certain of the transactions
and filings for the past five years of certain of its blank check companies.
Management has no independent knowledge or information as to the intent or
purpose of such subpoenas but believes the SEC is investigating whether the
change in control transaction is considered a sale of a security and if so
whether a broker needs to be used to effect the transaction. Management
disagrees strongly with any such assessment if it were to be so determined.
under this Item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Since May 17, 2017 (Inception),
In the first quarter of 2022, the Company hasentered into an Employment Agreement with Anthony Sanneh, an officer of the Company. Under this Employment Agreement, the Company issued 20,000,000options to purchase 500,000 restricted shares of the Company’s common shares pursuant tostock at a strike price of $0.39 per share. The options vest over a period of 1.5 years contingent upon service and have an expiry date of 10 years from the date of grant. The options were issued in reliance on the exemption from registration under Section 4(2)4(a)(2) of the Securities ActAct. As of 1933
at parthe date of this periodic report, Mr. Sanneh had terminated his service with the Company and, as follows:
On May 17, 2017,a result, only 250,000 of the 500,000 options had fully vested.
In the first quarter of 2022, the Company entered into an Employment Agreement with Thomas Spruce, an officer and director of the Company. Under this Employment Agreement, the Company issued the followingoptions to purchase 500,000 restricted shares of itsthe Company’s common stock:
Name Numberstock at a strike price of Shares
James Cassidy 10,000,000
James McKillop 10,000,000
$0.39 per share. The options vest over a period of 1.5 years contingent upon service and have an expiry date of 10 years from the date of grant. The options were issued in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act.
In the second quarter of 2022, the Company entered into an Advisory Agreement with Greg Shockey, an affiliate of the Company and service provider. Under this Advisory Agreement, the Company issued options to purchase 240,000 restricted shares of the Company’s common stock at a strike price of $0.39 per share. The options vest over a period of 1 year contingent upon service and have an expiry date of 10 years from the date of grant. The options were issued in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act.
In the second quarter of 2022, the Company entered into an Advisory Agreement with Danijella Dragas, a third-party service provider. Under this Advisory Agreement, the Company issued options to purchase 240,000 restricted shares of the Company’s common stock at a strike price of $0.39 per share. The options vest over a period of 1 year contingent upon service and have an expiry date of 10 years from the date of grant. The options were issued in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act.
| 16 |
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
MINING SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
(a) Not applicable.
(b) Item 407(c)(3) of Regulation S-K:
During the quarter covered by this Report, there have not been
any material changes to the procedures by which security holders
may recommend nominees to the Board of Directors.
INFORMATION.
None
| 17 |
ITEM 6. EXHIBITS
(a) Exhibits
31 Certification of the Chief Executive Officer and Chief
Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
32 Certification of the Chief Executive Officer and Chief
Financial Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
| No. | Description | |
| 31.1 | Chief Executive Officer Section 302 Certification | |
| 31.2 | Chief Financial Officer Section 302 Certification | |
| 32.1 | Section 906 Certification | |
| 101.INS | XBRL Instance Document | |
| 101.SCH | XBRL Taxonomy Extension Schema Document | |
| 101.CAL | XBRL Taxonomy Calculation Linkbase Document | |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | XBRL Taxonomy Label Linkbase Document | |
| 101.PRE | XBRL Taxonomy Presentation Linkbase Document |
| 18 |
SIGNATURES
Pursuant to
In accordance with the requirements of the Securities Exchange Act, of
1934, the registrant has dulyRegistrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
IRIS GROVE ACQUISITION CORPORATION
By: /s/ James M. Cassidy
President, Chief Financial Officer
Dated: November 20, 2017
| ELECTRONIC SERVITOR PUBLICATION NETWORK INC. | |
| Dated: May 23, 2022 | By: /s/ Thomas Spruce Thomas Spruce Chief Executive Officer |
By: /s/ Thomas Spruce Thomas Spruce Chief Financial Officer |
19