Subsequent Events | NOTE 10. SUBSEQUENT EVENTS The Company has evaluated the events and transactions for recognition or disclosure subsequent to March 31, 2018, and has determined that there have been no events that would require disclosure, with the exception of the following: During the period April 1, 2018, to December 31, 2022, the Company increased its loans from related parties by $690,613, from a total of $5,314,255 at March 31, 2018, to $6,004,868 at December 31, 2022. The increase represents (a) an increase in promissory notes in the amount of $834,176, as a result of (i) $299,750 reclassified from non-related party transactions, (ii) $426,464 reclassified to non-related party transactions, (iii) $4,238,661 converted from accrued compensation, (iv) an increase in discounts resulting from beneficial conversion features of $1,052,494, (v) a decrease in long-term secured promissory notes in the amount of $2,000,000 resulting from the cancellation of debt, (vi) a decrease in unamortized discount of $801,755, (vii) payments to the Company in the amount of $5,500 for stock award payments, (viii) $521,557 converted to common stock, and (ix) payments to related parties in the amount of $499,975; (b) a decrease in accrued compensation of $27,831 as a result of (i) $4,328,302 in accrued compensation, of which $4,238,661 was converted into promissory notes, (ii) $55,000 in accrued compensation reclassified to non-related party transactions, (iii) payments to the Company in the amount of $6,500 for related party stock awards, and (iv) payments to related parties in the amount of $55,972; and (c) a decrease in reimbursable expenses and cash advances to the Company of $115,732. All outstanding related party promissory notes bear interest at a rate of 5 to 7 percent per annum, are due and payable between one (1) year of written demand and December 31, 2024, or upon certain equity funding, and are convertible into the Company’s common stock at a price of between $0.05 to $0.25 per share, or the 20-day average trading price. On October 1, 2018, the Company entered into an Employment Agreement with Mr. Kyle W. Withrow to serve as the Company’s Chief Executive Officer. The agreement replaces any other written agreement with the Company or its subsidiaries, is for an initial term of three (3) years, and provides a base compensation of $150,000 per year, as well as customary bonuses and employee benefits. In addition, the agreement includes a grant to purchase 1,000,000 shares of the Company’s restricted common stock, valued at $10,000, for $0.001 per share. On October 1, 2018, in connection with the Employment Agreement, the Company issued 1,000,000 shares of its restricted common stock at $0.001 per share, for cash in the amount of $1,000. On October 11, 2018, the Company executed an Intellectual Property Agreement (the “Safer Agreement”) with Safer, Inc., a Florida corporation (the “Seller”), for the acquisition of certain intellectual property, as defined within the Safer Agreement, in the area of security and risk management (“Intellectual Property”). Pursuant to the Safer Agreement, in exchange for all rights, title and interest in the Intellectual Property, among other things, the Company shall deliver to Seller: 1. 2. 3. On October 11, 2018, in connection with the Safer Agreement, the Company issued 3,500,000 shares of its restricted common stock at $0.001 per share, for cash in the amount of $3,500. On November 1, 2018, the Company entered into a consulting agreement with MJ Management Services, Inc., for the services of Ms. Calli R. Bucci to serve as the Company’s Chief Financial Officer. The agreement replaces any other written agreement with the Company or its subsidiaries, is for an initial term of three (3) years, and provides a base compensation of $150,000 per year, to be deferred until the Company reaches certain funding goals. In addition, the agreement includes a grant of 500,000 options to purchase shares of the Company’s common stock at an exercise price of $0.10 per share. The options are exercisable for a period of five (5) years, vest quarterly over a period of twenty-four (24) months, and were valued at $0 using the Black-Scholes method. The assumptions used in valuing the options were: expected term 4.75 years, expected volatility 35.59%, risk free interest rate 2.96%, and dividend yield 0%. On November 1, 2018, the Company entered into a Consulting Agreement with Huntington Chase LLC for the services of Mr. Edward W. Withrow III. The agreement replaces any other written agreement with the Company or its subsidiaries, is for an initial term of three (3) years, and provides a base compensation of $240,000 per year. On December 31, 2018, in connection with the Company’s inability to successfully commercialize the intellectual property acquired from PearTrack Systems Group in 2013 (collectively, the “PearTrack IP”), all rights, title and interest in the PearTrack IP reverted to the former licensees and, pursuant to the terms of the collateralized agreement, the related Senior Secured Convertible Note (the “Note”) issued to the former licensees (the “Note Holders”) is canceled. In addition, all rights to future royalties collectible under any sub-license previously issued by the Company for the PearTrack IP reverts to the Note Holders. As a result, in 2018, the Company has recognized a gain on the extinguishment of debt of $2,000,000. On May 1, 2019, the Company entered into a Consulting Agreement with Mr. David Rocke. The agreement is for an initial term of three (3) years, and provides a base compensation of $150,000 per year, to be deferred until the Company reaches certain funding goals, as well as 12.5% of Enigma-Bulwark Security, Inc. adjusted gross earnings, as defined within the agreement. In addition, the agreement includes a grant of 6,875,093 options to purchase shares of the Company’s common stock, valued at $39,875 using the Black-Scholes method, at an exercise price of $0.005 per share. The options are exercisable for a period of five (5) years, of which 50% vest when certain performance goals are met, and the remainder vest when certain funding goals are met. The assumptions used in valuing the options were: expected term 4.00 years, expected volatility 38.58%, risk free interest rate 2.15%, and dividend yield 0%. On May 1, 2019, the Company, through its wholly-owned subsidiary, Enigma-Bulwark Risk Management, Inc., entered into a Consulting Agreement with Mr. Michael Gabriele, to serve as its President, and the President of its subsidiary, Enigma-Bulwark Security, Inc. The agreement is for an initial term of three (3) years, and provides a base compensation of $175,000 per year, to be deferred until the Company reaches certain funding goals, as well as 12.5% of Enigma-Bulwark Security, Inc. adjusted gross earnings, as defined within the agreement. In addition, the agreement includes a grant of 2,750,040 options to purchase shares of the Company’s common stock, valued at $15,950 using the Black-Scholes method, at an exercise price of $0.005 per share. The options are exercisable for a period of five (5) years, of which 50% vest when certain performance goals are met, and the remainder vest when certain funding goals are met. The assumptions used in valuing the options were: expected term 4.00 years, expected volatility 38.58%, risk free interest rate 2.15%, and dividend yield 0%. On August 29, 2019, the Company entered into a Non-Compete, Non-Dilution and Registration Rights Agreement (“NC Agreement”) with Mr. David Rocke. The agreement is for an initial term of five (5) years, and provides as compensation a grant to purchase 6,667,000 shares of the Company’s restricted common stock, valued at $66,670, for $0.001 per share, plus the issuance of shares of the Company’s restricted common stock equal to seven percent (7%) of any issuance of common stock through May 15, 2019, originating from any financial instrument issued by the Company or its subsidiaries, in exchange for certain restrictions placed upon Mr. Rocke’s business activities. On August 29, 2019, the Company entered into a Non-Compete, Non-Dilution and Registration Rights Agreement (“NC Agreement”) with Mr. Michael Gabriele, the President of the Company’s subsidiary, Enigma-Bulwark Risk Management, Inc. The agreement is for an initial term of five (5) years, and provides as compensation a grant to purchase 6,667,000 shares of the Company’s restricted common stock, valued at $66,670, for $0.001 per share, plus the issuance of shares of the Company’s restricted common stock equal to seven percent (7%) of any issuance of common stock through May 15, 2019, originating from any financial instrument issued by the Company or its subsidiaries, in exchange for certain restrictions placed upon Mr. Gabriele’s business activities. On August 29, 2019, in connection with the Rocke and Gabriele NC Agreement, the Company issued 13,334,000 shares of its restricted common stock at $0.001 per share for cash in the amount of $13,334, plus 210,000 shares under the non-dilution provision at $0.001 per share for cash in the amount of $210. On August 30, 2019, the Company formed Enigma-Bulwark Risk Management, Inc., a Delaware corporation and wholly-owned subsidiary, and acquired 100% of the common stock of Enigma-Bulwark Security, Inc., a Delaware corporation also formed by the Company. On September 1, 2019, the Company, through its wholly-owned subsidiary, Enigma-Bulwark Risk Management, Inc., entered into a Consulting Agreement with Mr. Clive Oosthuizen to serve as its Chief Executive Officer. The agreement is for an initial term of three (3) years, and provides a base compensation of $180,000 year one, $210,000 year two, and $240,000 year three, to be deferred until the Company reaches certain funding goals. In addition, the agreement includes a $25,000 signing bonus, and a grant of 1,250,000 options to purchase shares of the Company’s common stock, valued at $625 using the Black-Scholes method, at an exercise price of $0.05 per share. The options are exercisable for a period of five (5) years, and vest periodically over a period of thirty-six (36) months. The assumptions used in valuing the options were: expected term 5.75 years, expected volatility 41.3%, risk free interest rate 1.84%, and dividend yield 0%. On September 20, 2019, in connection with the exercise of certain stock options, the Company issued 4,010,470 shares of its restricted common stock to related parties at an exercise price of $0.005, for cash in the amount of $20,052. On October 1, 2019, the Company entered into a Consulting Agreement with Ms. Yinuo Jiang to serve as the Company’s Corporate Secretary effective October 8, 2019, among other duties. The agreement is for an initial term of three (3) years, and provides a base compensation of $100,000 per year, to be deferred until the Company reaches certain funding goals. In addition, the agreement includes a grant to purchase 1,000,000 shares of the Company’s restricted common stock, valued at $10,000, for $0.001 per share. On October 1, 2019, in connection with the Consulting Agreement, the Company issued 1,000,000 shares of its restricted common stock at $0.001 per share, for cash in the amount of $1,000. On October 6, 2019, pursuant to a resolution of the board of directors, the Company issued an aggregate of 6,000,000 shares of its restricted common stock, valued at $60,000, to its officers and directors at $0.001 per share, for cash in the amount of $6,000. On October 10, 2019, the Company entered into a Non-Compete, Non-Dilution and Registration Rights Agreement (“NC Agreement”) with Mr. Clive Oosthuizen, the Chief Executive Officer of the Company’s subsidiary, Enigma-Bulwark Risk Management, Inc. The agreement is for an initial term of five (5) years, and provides as compensation a grant to purchase 4,000,000 shares of the Company’s restricted common stock, valued at $360,000, for $0.001 per share, plus the issuance of shares of the Company’s restricted common stock equal to four and one-half percent (4.5%) of any issuance of common stock originating from any financial instrument issued by the Company or its subsidiaries during the term, in exchange for certain restrictions placed upon Mr. Oosthuizen’s business activities. On October 10, 2019, in connection with the Oosthuizen NC Agreement, the Company issued 4,000,000 shares of its restricted common stock at $0.001 per share for cash in the amount of $4,000. On December 20, 2019, in connection with the exercise of certain stock options, the Company issued 802,094 shares of its restricted common stock to related parties at an exercise price of $0.005 for cash in the amount of $4,010. On September 8, 2020, the Company, through its wholly-owned subsidiary, Enigma-Bulwark Risk Management, Inc., entered into a Joint Venture Agreement (the “JV Agreement”) with Prime African Security, Ltd., a South African corporation (“Prime”), to provide security and risk management services in South Africa. The joint venture formed Prime Enigma Africa (Pty) Ltd., a South African corporation (the “Joint Venture”), for which Prime owns 51% of the common stock and the Company owns 49%. The JV Agreement is for an initial term of three (3) years, and automatically renews unless canceled in writing by either party. On August 31, 2021, in connection with the conversion of related party debt in the amount of $1,238,251, the Company issued an aggregate of 23,066,991 shares of its restricted Common Stock to six (6) related parties, including three (3) officers, of which $941,096 was at a conversion price of $0.05 per share, and $297,155 was at a conversion price of $0.07 per share. On November 5, 2021, in connection with the conversion of debt in the amount of $696,301, the Company issued 2,785,205 shares of its restricted Common Stock at a conversion price of $0.25 per share. On January 1, 2022, in connection with a consulting agreement, the Company issued 2,500,000 shares of restricted common stock at $0.001 per share for cash in the amount of $2,500. Management Changes: On September 19, 2018, Mr. E. William Withrow Jr. resigned as President and Chief Executive Officer. This resignation did not involve any disagreement with the Company. Mr. Kyle W. Withrow, succeeded him to serve as President and Chief Executive Officer until the next annual meeting of the shareholders and/or until he, or his successor is duly appointed. On September 20, 2019, during a meeting of the board of directors, Mr. John D. Macy was not re-elected to the board of directors. On October 4, 2019, Mr. Clive Oosthuizen, Mr. David M. Rocke and Ms. Calli R. Bucci were appointed to the Board, to serve until the next annual meeting of the shareholders. On October 8, 2019, Ms. Calli R. Bucci resigned as Corporate Secretary. This resignation did not involve any disagreement with the Company. Ms. Yinuo “Rachel” Jiang succeeded her to serve as Corporate Secretary until the next annual meeting of the shareholders and/or until she, or her successor is duly appointed. On January 12, 2021, Mr. John L. Ogden resigned as a Board member. This resignation did not involve any disagreement with the Company. Mr. Kyle W. Withrow, the Company’s President and Chief Executive Officer, succeeded him as a director until the next annual meeting of the shareholders and/or until he, or his successor is duly appointed. On April 6, 2021, Mr. E. William Withrow Jr. resigned as Executive Chairman of the Board. His resignation did not involve any disagreement with the Company. Mr. Clive Oosthuizen, a Board member, and the President of the Company’s subsidiary, Enigma-Bulwark Risk Management, Inc., succeeded him. On April 6, 2021, Mr. Kyle W. Withrow resigned as the Company President and Chief Executive Officer, and as a Board member. His resignation did not involve any disagreement with the Company. Mr. Oosthuizen succeeded him as President and Chief Executive Officer until the next annual meeting of the shareholders and/or until he, or his successor, is duly appointed. The vacant Board member seat resulting from Mr. Withrow’s resignation will remain open until a new member is elected at the next annual meeting of the shareholders, or is duly appointed by the Board. On April 12, 2021, Mr. David Rocke resigned as a Board member and consultant. His resignation was preceded by the Company’s inquiry into Mr. Rocke’s performance in connection with his Consulting Agreement dated May 1, 2019. The vacant Board member seat resulting from Mr. Rocke’s resignation will remain open until a new member is elected at the next annual meeting of the shareholders, or is duly appointed by the Board. On April 12, 2021, Mr. Michael Gabriele resigned as President of Enigma-Bulwark Risk Management, Inc. and its subsidiaries. His resignation did not involve any disagreement with the Company. . |