Note 14 - Preferred Stock | Creation of Preferred Stock On April 7, 2014, the Board of Directors of the Company approved the designation of two new classes of Convertible Preferred Stock, authorizing the filing with the State of Nevada of Certificates of Designation authorizing the creation of 13,000 shares of Series B 8% Convertible Preferred Stock and 7,000 shares of Series C 8% Convertible Preferred Stock. On May 13, 2015, the Board of Directors of the Company approved the designation of five new classes of Convertible Preferred Stock, authorizing the filing with the State of Nevada of Certificate of Designations authorizing the creation of 13,000 shares of Series D 8% Convertible Preferred Stock, 440 shares of Series E Preferred Stock, 51 shares of Series F Preferred Stock, 1,500 shares of Series G 8% Convertible Preferred Stock, and 500 shares of Series H 8% Convertible Preferred Stock. Series B 8% Convertible Preferred Stock (the "Series B Preferred") The following is a summary of the material rights and preferences of the Series B Preferred Stock set forth in the Certificate of Designation for the Series B Preferred Stock, and does not purport to be complete, and is qualified in its entirety by reference to the full text of the Certificate of Designation for the Series B Preferred Stock. Holders of the Series B Preferred Stock are entitled to cumulative dividends equal to eight percent of the stated value ($1,000) of the Series B Preferred Stock, payable quarterly in cash or common stock at the option of the holder. At the option of the holder, each share of Series B Preferred Stock converts into 60,255.214 shares (60.255 shares post-split) (the "Series B Conversion Ratio") of Common Stock of the Company, provided that, for a period of 36 months from the issuance date of the Series B Preferred Stock, if the Series B Conversion Ratio converts into a number of shares of common stock of the Company totaling less than 61.75% of the then outstanding shares of Common Stock of the Company, then the Series B Conversion Ratio shall be adjusted such that the Series B Preferred Stock shall be convertible into 61.75% of the then outstanding shares of Common Stock of the Company. The Series B Conversion Ratio is subject to adjustment under certain circumstances. The Series B Preferred Stock votes on an as converted basis on any matter submitted to the holders of the Company's common stock. In the event of the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, holders of the Series B Preferred are entitled to receive out of the assets of the Company the stated value per share of Series B Preferred then outstanding, plus all other amounts in respect thereof then due and payable, before any payment or distribution upon dissolution, liquidation or winding up shall be made on any series or class of capital stock ranking junior to Series B Preferred as to such payment or distribution. Series C 8% Convertible Preferred Stock (the "Series C Preferred") The following is a summary of the material rights and preferences of the Series C Preferred Stock set forth in the Certificate of Designation for the Series C Preferred Stock, and does not purport to be complete, and is qualified in its entirety by reference to the full text of the Certificate of Designation for the Series C Preferred Stock. Holders of the Series C Preferred Stock are entitled to cumulative dividends equal to eight percent of the stated value ($1,000) of the Series C Preferred Stock, payable quarterly in cash or common stock at the option of the holder. At the option of the holder, each share of Series C Preferred Stock converts into 51,647.326 shares (51.647 shares post-split) (the "Series C Conversion Ratio") of Common Stock of the Company, provided that, for a period of 36 months from the issuance date of the Series C Preferred Stock, if the Series C Conversion Ratio converts into a number of shares of common stock of the Company totaling less than 33.25% of the then outstanding shares of Common Stock of the Company, then the Series C Conversion Ratio shall be adjusted such that the Series C Preferred Stock shall be convertible into 33.25% of the then outstanding shares of Common Stock of the Company. The Series C Conversion Ratio is subject to adjustment under certain circumstances. The Series C Preferred Stock votes on an as converted basis on any matter submitted to the holders of the Company's common stock. In the event of the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, holders of the Series C Preferred are entitled to receive out of the assets of the Company the stated value per share of Series C Preferred then outstanding, plus all other amounts in respect thereof then due and payable, before any payment or distribution upon dissolution, liquidation or winding up shall be made on any series or class of capital stock ranking junior to Series C Preferred as to such payment or distribution. Series D 8% Convertible Preferred Stock (the "Series D Preferred") On May 13, 2015, the board of directors (the "Board") of the Company authorized a Certificate of Designations, Rights and Preferences designating 13,000 shares of a new series of preferred stock, par value $0.001 per share with a stated value of $1,000 per share, as Series D 8% Convertible Preferred Stock (the "Series D Preferred"). The Series D Preferred Certificate of Designation was filed as an amendment to the Company's Articles of Incorporation with the State of Nevada on May 18, 2015. Holders of outstanding shares of Series D Preferred shall be entitled to vote, on an as converted basis, but subject to a beneficial ownership limit of no greater than 9.99% of the common stock then outstanding (the "Beneficial Ownership Limitation"), on any matter that may from time to time be submitted to the Company's shareholders for vote, either by written consent or by proxy. Holders of Series D Preferred shall be entitled to receive, when and as declared by the Board out of funds legally available therefor, and the Company shall accrue, quarterly in arrears on March 31, June 30, September 30, and December 31 of each year, commencing on the issuance date, cumulative dividends on the Series D Preferred at the rate per share (as a percentage of the stated value per share) equal to eight percent (8%) per annum on the stated value, payable in cash or common stock at the option of the holder of the Series D Preferred. Each share of Series D Preferred shall be convertible into shares of common stock of the Company, at the option of the holder, but subject to a 9.99% beneficial ownership limitation applicable to each holder, at any time and from time to time after the issuance of the Series D Preferred by dividing the stated value of each share of Series D Preferred by a conversion ratio equal to $0.0025. The Series D Preferred ranks pari passu with all other designated preferred stock issued by the Company. In the event of the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, holders of the Series D Preferred are entitled to receive out of the assets of the Company the stated value per share of Series D Preferred then outstanding, plus all other amounts in respect thereof then due and payable, before any payment or distribution upon dissolution, liquidation or winding up shall be made on any series or class of capital stock ranking junior to Series D Preferred as to such payment or distribution. Series E Preferred Stock (the "Series E Preferred ") On May 13, 2015, the Board authorized a Certificate of Designations, Rights and Preferences of Series E Preferred Stock, designating 440 shares of a new series of preferred stock, par value $0.001 per share with a stated value of $1,000 per share, as Series E Preferred Stock (the "Series E Preferred"). The Series E Preferred Certificate of Designation was filed as an amendment to the Company's Articles of Incorporation with the State of Nevada on May 18, 2015. Holders of outstanding shares of Series E Preferred shall not be entitled to vote on any matter that may from time to time be submitted to the Company's shareholders for vote, either by written consent or by proxy. The Company shall have the right to redeem the outstanding shares of Series E Preferred from the holders at any time after the issuance date at a redemption price per share equal to its stated value, in cash. The Company shall provide written notice to holders of its intention to redeem such shares, and shall have five business days from the date of such written notice to pay such redemption price to the holder by check or wire transfer, at the option of the holder. The Series E Preferred ranks pari passu with all other designated preferred stock issued by the Company. In the event of the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, holders of the Series E Preferred are entitled to receive out of the assets of the Company the stated value per share of Series E Preferred then outstanding, plus all other amounts in respect thereof then due and payable, before any payment or distribution upon dissolution, liquidation or winding up shall be made on any series or class of capital stock ranking junior to Series E Preferred as to such payment or distribution. Series F Preferred Stock (the "Series F Preferred") On May 13, 2015, the Board authorized a Certificate of Designations, Rights and Preferences of Series F Preferred Stock, designating Fifty One (51) shares of a new series of preferred stock, par value $0.001 per share with a stated value of $1.00 per share, as Series F Preferred Stock (the "Series F Preferred"). The Series F Preferred Certificate of Designation was filed as an amendment to the Company's Articles of Incorporation with the State of Nevada on May 18, 2015. Each one (1) share of the Series F Preferred shall have voting rights equal to (x) (i) 0.019607 multiplied by divided by minus The Series F Preferred, with respect to rights on liquidation, dissolution and winding-up of the Company, rank junior to all of the other designated preferred stock of the Company, and on a parity with each other class or series of capital stock of the Company the terms of which do not expressly provide that such class or series shall rank senior or junior to the Series F Preferred. Series G 8% Convertible Preferred Stock (the "Series G Preferred") On May 13, 2015, the Board authorized a Certificate of Designations, Rights and Preferences of Series G 8% Convertible Preferred Stock, designating 1,500 shares of a new series of preferred stock, par value $0.001 per share with a stated value of $1,000 per share, as Series G 8% Convertible Preferred Stock (the "Series G Preferred"). The Series G Preferred Certificate of Designation was filed as an amendment to the Company's Articles of Incorporation with the State of Nevada on May 18, 2015. Holders of outstanding shares of Series G Preferred shall be entitled to vote, on an as converted basis, but subject to the Beneficial Ownership Limitation, on any matter that may from time to time be submitted to the Company's shareholders for vote, either by written consent or by proxy. Holders of Series G Preferred shall be entitled to receive, when and as declared by the Board out of funds legally available therefor, and the Company shall accrue, quarterly in arrears on March 31, June 30, September 30, and December 31 of each year, commencing on the issuance date, cumulative dividends on the Series G Preferred at the rate per share (as a percentage of the stated value per share) equal to eight percent (8%) per annum on the stated value, payable in cash or common stock at the option of the holder. Each share of Series G Preferred shall be convertible into shares of common stock, at the option of the holder, but subject to a 9.99% beneficial ownership limitation applicable to each holder, at any time and from time to time after the issuance of the Series G Preferred by dividing the stated value of such share of Series G Preferred by a conversion ratio equal to $0.0025. The Series G Preferred ranks pari passu with all other designated preferred stock issued by the Company. In the event of the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, holders of the Series G Preferred are entitled to receive out of the assets of the Company the stated value per share of Series G Preferred then outstanding, plus all other amounts in respect thereof then due and payable, before any payment or distribution upon dissolution, liquidation or winding up shall be made on any series or class of capital stock ranking junior to Series G Preferred as to such payment or distribution. Series H 8% Convertible Preferred Stock (the "Series H Preferred") On May 13, 2015, the Board authorized a Certificate of Designations, Rights and Preferences of Series H 8% Convertible Preferred Stock, designating 500 shares of a new series of preferred stock, par value $0.001 per share with a stated value of $1,000 per share, as Series H 8% Convertible Preferred Stock (the "Series H Preferred"). The Series H Preferred Certificate of Designation was filed as an amendment to the Company's Articles of Incorporation with the State of Nevada on May18, 2015. Holders of outstanding shares of Series H Preferred shall be entitled to vote, on an as converted basis, but subject to the Beneficial Ownership Limitation, on any matter that may from time to time be submitted to the Company's shareholders for vote, either by written consent or by proxy. Holders of Series H Preferred shall be entitled to receive, when and as declared by the Board out of funds legally available therefor, and the Company shall accrue, quarterly in arrears on March 31, June 30, September 30, and December 31 of each year, commencing on the issuance date, cumulative dividends on the Series H Preferred at the rate per share (as a percentage of the stated value per share) equal to eight percent (8%) per annum on the stated value, payable in cash or common stock at the option of the holder. Each share of Series H Preferred shall be convertible into shares of common stock, at the option of the holder, but subject to a 9.99% beneficial ownership limitation applicable to each holder, at any time and from time to time after the issuance of the Series H Preferred by dividing the stated value of each share of Series H Preferred by a conversion ratio equal to $0.0025. The Series H Preferred ranks pari passu with all other designated preferred stock issued by the Company. In the event of the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, holders of the Series H Preferred are entitled to receive out of the assets of the Company the stated value per share of Series H Preferred then outstanding, plus all other amounts in respect thereof then due and payable, before any payment or distribution upon dissolution, liquidation or winding up shall be made on any series or class of capital stock ranking junior to Series H Preferred as to such payment or distribution. Issuance of Preferred Stock We issued 6,500 shares of our Series B convertible preferred stock to each of Mr. Stephen J. Price and Mr. Gerard Daignault for serving as officers and directors of our company, which shares are convertible into a total of 783,318 shares (post-split) of our common stock, and we issued 3,500 shares of our Series C convertible preferred stock to each of ASC Recap, a related party, and Adirondack Partners LLC, a related party, upon entering into consulting agreements with us, which shares are convertible (subject to a 9.99% beneficial ownership limitation applicable to each holder) into a total of 361,531 shares (post-split) of our common stock. On May 10, 2015, the Company was informed that, effective May 13, 2015, Mr. Stephen J. Price, Chief Executive Officer and Director of the Company and Mr. Gerard Daignault, Chief Financial Officer and Director of the Company shall resign from their respective positions, and all other positions to which they may have been assigned, regardless of whether they served in such capacity (the "Resignations"). The Resignations are not the result of any disagreement with the Company on any matter relating to the Company's operations, policies or practices. In connection with the Resignations, the Company issued 6,500 shares of Series D convertible preferred stock to each of Mr. Price and Mr. Daignault, in exchange for the surrender and retirement of the 6,500 shares of Series B convertible preferred stock held by both Mr. Price and Mr. Daignault. In addition, the Company issued 150 shares of Series E preferred stock to each of Mr. Price and Mr. Daignault in return for the cancellation of all deferred compensation and forgiveness of any and all unpaid expenses accrued and owing to each of Mr. Price and Mr. Daignault by the Company. See Note 13 above for the potential dilution and liability associated with the issuance of these shares. On May 13, 2015, the Company issued Adirondack, a related party, 140 shares of the Company's Series E preferred stock as consideration for cancellation of a certain consulting agreement dated April 7, 2014 and forgiveness of any and all obligations and unpaid expenses accrued and owed to Adirondack by the Company under the consulting agreement. On May 13, 2015, the Company issued to our President 51 shares of Series F preferred stock per the terms of an employment agreement. On May 13, 2015, the Company issued to Southridge II, a related party, 242 shares of the Company's Series G convertible preferred stock as consideration for (i) the surrender and retirement of certain convertible promissory notes held by Southridge II in the aggregate principal amount of $222,078, and (ii) the Company granting Southridge II an investment right to purchase additional shares of series C convertible preferred stock of the Company. On May 13, 2015, the Company issued to Bitcoin 500 shares of the Company's Series H convertible preferred stock as consideration for memberships interests representing 51% of Bitcoin. (See Note 1) On May 27, 2015, the Company issued to Southridge II, a related party, 35 shares of the Company's Series G convertible preferred stock for cash consideration of $35,000. Forfeiture of dividends on Series B Preferred Stock and Series C Preferred Stock During the current fiscal year, all holders of the Series B Preferred Stock and Series C Preferred Stock agreed to permanently forfeit the dividends for which they are entitled from issuance through the quarter ended March 31, 2015. For the fiscal year ended June 30, 2014, the Company had accrued divided payable of $368,219 on these securities. During the year ended June 30, 2015, this liability and the related charge to Additional Paid in Capital were reversed. At June 30, 2015 and 2014, the liability for Accrued dividends payable was $-0- and $368,219, respectively. Further forfeiture of dividends will be evaluated by the respective parties on a quarter –to-quarter basis |