Equity | 12 Months Ended |
Nov. 30, 2013 |
Equity: | ' |
Stockholders' Equity Note Disclosure | ' |
Capital Stock |
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The Company has two classes of stock: |
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? | Series A Preferred stock, $0.00001; 10,000,000 shares authorized; 10,000 issued and outstanding; and, |
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? | Common stock, $0.00001 par value; 2,000,000,000 shares authorized; 18,145,865 and 599,872 shares issued and outstanding as of November 30, 2013 and 2012, respectively. |
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Amended and Restated Charter |
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We filed amended and restated articles of incorporation with the Nevada Secretary of State on each of December 16, 2011 and January 5, 2012, respectively (with the January 5, 2012 version superseding the previously filed version), which amended and restated articles (i) increased our authorized common stock to two billion (2,000,000,000) shares; (ii) reduced the par value for its capital stock from $0.001 per share to $0.00001 per share; (iii) granted authority to our board of directors to effectuate a stock split or reverse stock split without stockholder approval; (iv) elected not to be governed by certain provisions pertaining to “resident domestic corporations” under the Nevada Revised Statutes; and (v) elected not to be governed by certain provisions relating to “issuing corporations” under the Nevada Revised Statutes. A copy of the amended and restated articles was filed as an exhibit to our Definitive Information Statement on Form 14C, filed with the Securities and Exchange Commission on January 13, 2012. The amended and restated articles were effective on February 17, 2012, as stated therein. |
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Stock Incentive Plans |
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2012 Stock Incentive Plan |
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On March 13, 2012, our Board of Directors adopted the 2012 Stock Incentive Plan . The purpose of our 2012 Stock Incentive Plan is to advance the best interests of the Company by providing those persons who have a substantial responsibility for our management and growth with additional incentive and by increasing their proprietary interest in the success of the Company, thereby encouraging them to maintain their relationships with us. Further, the availability and offering of stock options and common stock under the plan supports and increases our ability to attract and retain individuals of exceptional talent upon whom, in large measure, the sustained progress, growth and profitability which we depend. The total number of shares available for the grant of either common stock or stock options under the plan is 56,000 shares, subject to adjustment. As of November 30, 2013, all shares have been granted under the plan. |
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Our Board of Directors administers our plan and has full power to grant stock options and common stock, construe and interpret the plan, establish rules and regulations and perform all other acts, including the delegation of administrative responsibilities, it believes reasonable and proper. Any decision made, or action taken, by our board of directors arising out of or in connection with the interpretation and administration of the plan is final and conclusive. |
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The Board of Directors, in its absolute discretion, may award common stock to employees of, consultants to, and directors of the Company, and such other persons as the board of directors or compensation committee may select, and permit holders of common stock options to exercise such options and hold the common stock issued. Stock options may also be granted by our board of directors or compensation committee to non-employee directors of the Company or other persons who are performing or who have been engaged to perform services of special importance to the management, operation or development of the Company. |
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In the event that our outstanding common stock is changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of merger, consolidation, other reorganization, recapitalization, combination of shares, stock split-up or stock dividend, prompt, proportionate, equitable, lawful and adequate adjustment shall be made of the aggregate number and kind of shares subject to stock options which may be granted under the plan. |
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Our Board of Directors may at any time, and from time to time, suspend or terminate the plan in whole or in part or amend it from time to time in such respects as our Board of Directors may deem appropriate and in our best interest. |
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2012 Stock Incentive Plan #2 |
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On August 21, 2012, our Board of Directors adopted the 2012 Stock Incentive Plan #2. The purpose of our 2012 Stock Incentive Plan #2 is to advance the best interests of the Company by providing those persons who have a substantial responsibility for our management and growth with additional incentive and by increasing their proprietary interest in the success of the Company, thereby encouraging them to maintain their relationships with us. Further, the availability and offering of stock options and common stock under the plan supports and increases our ability to attract and retain individuals of exceptional talent upon whom, in large measure, the sustained progress, growth and profitability which we depend. The total number of shares available for the grant of either common stock or stock options under the plan is 132,800 shares, subject to adjustment. As of November 30, 2013, 17,000 shares have been granted under the plan. |
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Our Board of Directors administers our plan and has full power to grant stock options and common stock, construe and interpret the plan, establish rules and regulations and perform all other acts, including the delegation of administrative responsibilities, it believes reasonable and proper. Any decision made, or action taken, by our board of directors arising out of or in connection with the interpretation and administration of the plan is final and conclusive. |
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The Board of Directors, in its absolute discretion, may award common stock to employees of, consultants to, and directors of the Company, and such other persons as the board of directors or compensation committee may select, and permit holders of common stock options to exercise such options and hold the common stock issued. Stock options may also be granted by our board of directors or compensation committee to non-employee directors of the Company or other persons who are performing or who have been engaged to perform services of special importance to the management, operation or development of the Company. |
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In the event that our outstanding common stock is changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of merger, consolidation, other reorganization, recapitalization, combination of shares, stock split-up or stock dividend, prompt, proportionate, equitable, lawful and adequate adjustment shall be made of the aggregate number and kind of shares subject to stock options which may be granted under the plan. |
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Our Board of Directors may at any time, and from time to time, suspend or terminate the plan in whole or in part or amend it from time to time in such respects as our Board of Directors may deem appropriate and in our best interest. |
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Common Stock |
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Stock Split |
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On June 23, 2009, the directors of the Company approved a three (3) for one (1) stock split (the “Forward Split”) of the Company’s issued and outstanding common stock by written consent in lieu of a special meeting in accordance with the Nevada Corporation Law. |
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On June 29, 2009, we notified The Financial Industries Regulatory Authority (“FINRA”), is the independent regulator for all securities firms doing business in the United States, of our name change and the forward split of our common shares. On July 31, 2009, FINRA declared the name change effective and as a result of the effectiveness of the name change our symbol was changed to MHYS. FINRA also declared our forward split effective with a record date of June 23, 2009 and a payable date of August 5, 2009. |
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On December 28, 2012, the Company’s board of directors approved a One (1) for One Thousand (1,000) reverse stock split. All common stock, warrant and option transactions described herein have been adjusted to reflect the Reverse Split. |
Issuance of Series A Preferred Shares |
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On April 5, 2011, our Board approved the issuance of 10,000 shares of Series A Preferred Stock to our CEO, Dan Grodnik, in consideration of $10,000 of accrued compensation due Mr. Grodnik. The Board’s sole director determined and approved the fair market value of these shares to be $1.00 per share. The shares were issued on April 13, 2011. |
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On April 13, 2011, pursuant to a resolution passed by our director under the authority of our certificate of incorporation, as amended, we filed a Certificate of Designation with the Nevada Secretary of State to create and set for the terms of a series of preferred stock of the Company known as Series A Preferred Stock, par value $0.001 per share. The Series A Preferred Stock is not convertible. Holders of the Series A Preferred Stock do not have any preferential dividend or liquidation rights. The shares of Series A Preferred Stock are not redeemable. Pursuant to the certificate of designation establishing the Series A Preferred Stock, on all matters submitted to a vote of the holders of the common stock, including, without limitation, the election of directors, a holder of shares of the Series A Preferred Stock shall be entitled to the number of votes on such matters equal to the product of (a) the number of shares of the Series A Preferred Stock held by such holder, (b) the number of issued and outstanding shares of our common stock, as of the record date for the vote, or, if no such record date is established, as of the date such vote is taken or any written consent of stockholders is solicited, and (c) 0.0002. |
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The issuance of the Series A Preferred Stock effectively transferred voting control of the Company to Mr. Grodnik. |
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Reorganization and Settlement of Liabilities with Common Stock |
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In June 2009, the Company issued 4,800 shares of common stock upon conversion of notes with predecessors which resulted in an extinguishment charge of $1,124,957 based on the closing price of the Company’s common stock of $240 per share shortly after the extinguishment. |
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On August 5, 2009, the Control Group acquired or received 50,000 shares of common stock, as well as 6,000 shares of common stock from the conversion of $10,000 of notes acquired. In connection with the recapitalization, the convertible notes totaling $55,238 acquired by a Control Group member were paid in full through the issuance of 5,900 shares of common stock during the quarter ended February 28, 2010. Because this note was part of the recapitalization, the conversion of the shares was afforded such treatment. |
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Issuance of Common Stock Related to Employment Agreements and Services Rendered |
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? | On August 24, 2009, the Company issued 200 shares per the terms of the employment agreement with Pat Proft which were immediately vested. These shares were valued at $62,000 based on the closing price per share on the date of issuance of $310. |
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? | On September 29, 2009, the Company issued 100 shares of common stock to one individual for Board of Director services rendered to the Company. This issuance was expensed as share-based compensation at a cost of $43,000, or $430 per share based on the closing stock price on the date of issuance. |
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? | On October 6, 2009, the Company issued 100 shares of common stock to one individual for services rendered to the Company as the Senior Vice President of Technology. This issuance was expensed as share-based compensation at a cost of $42,000, or $420 per share based on the closing stock price on the date of issuance. |
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? | On October 16, 2009, the Company issued 2 shares of common stock to two individuals for consulting services rendered to the Company. This issuance was expensed as share based compensation at a cost of $580, or $290 per share-based on the closing stock price on the date of issuance. |
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? | On November 25, 2009, the Company issued 100 shares of common stock to four individuals for legal services provided to the Company. This issuance was expensed as share based compensation at a cost of $10,000, or $100 per share-based on the closing stock price on the date of issuance. |
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? | In December 2009, upon Board approval the Company issued 152 shares to four individuals for consulting and Board of Director services to the Company. These shares were expensed to share-based compensation for $15,200, based on a closing stock price per share of $100 on the date of issuance. |
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? | In January 2010, upon Board approval the Company issued 50 shares to one individual for consulting services rendered to the Company. These shares were expensed by the Company at $9,000, based on a price per share of $180 on the date of issuance. |
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? | Also during January 2010, upon Board approval, the Company issued 20 shares to an outside consulting firm for services rendered. These shares were expensed by the Company at $1,400, based on a price per share of $70 on the date of issuance. |
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? | On February 22, 2010, upon Board approval, the Company issued 145 shares to five individuals for various operational services rendered to the Company. These shares vested immediately and were expensed by the Company at $15,950, based on a price per share of $110 on the date of issuance. |
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? | On February 20, 2010, 1,000 shares of common stock issued to two prior shareholders during August 2009 were cancelled upon a request by the CEO and concurrence by the two shareholders. |
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? | On March 9, 2010, upon Board approval, a revised employment agreement (retroactive to January 1, 2010) was negotiated between the Company and Pat Proft to reflect that half of his monthly $10,000 salary would be paid in the form of stock compensation. Thus, on the date of the agreement, for the months of January, February and March 2010, $15,000 of accrued wages due Pat would be converted into 167 shares of common stock based on the market price on of the Company’s common stock on the preceding day of $90 per share. As of August 31, 2010, accrued wages for shares yet to be issued are $40,000. The liability is included in accrued liabilities in the accompanying balance sheet. |
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? | On March 9, 2010, upon Board approval, the Company issued 375 shares to three individuals for operational consulting and advisory services rendered to the Company. These shares were fully vested and expensed by the Company at $30,000, based on a price per share of $80 on the date of issuance. |
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? | On May 27, 2010, upon Board approval, the Company issued 78 shares to an individual for accounting and advisory services rendered to the Company. These shares were fully vested and expensed by the Company at $2,500 based on a price per share of $30 on the date of issuance. |
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? | On June 23, 2010, upon Board approval, the Company issued 600 shares to five individuals / entities for consulting services rendered to the Company. One consultant, who received 100 shares for services rendered, is a brother of the CEO. These shares were fully vested and expensed by the Company in the amount of $24,000 based on a price per share of $40 on the date of issuance. |
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? | On September 1, 2010, upon Board approval, the Company issued 1,255 shares to three individuals for consulting services rendered to the Company. These shares were fully vested and expensed by the Company in the amount of $39,000 based on a price of $30 per share on the date of issuance. |
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? | On February 18, May 5, June 17, July 14, and October 18, 2011, the Company’s Board approved the issuances of 420, 900, 450, 165, and 3,500 shares of common stock, respectively, to a professional services firm for legal services rendered. Based on the closing market prices on the respective days ranging from $3.20 to $27.00 per share, the Company recorded stock compensation of $50,320 related to these transactions. |
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? | On June 15 and September 1, 2011, the Company’s Board approved the issuances of 1,000 and 900 shares, respectively to one individual for consulting services rendered to the Company. Based on closing market prices on the respective days ranging from $8 to $20 per share, the Company recorded stock compensation of $27,200 related to these transactions. |
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? | On September 1, 2011, the Company’s Board approved the issuance of 1,500 shares to one individual for consulting and advisory services rendered to the Company. These shares were fully vested and expensed by the Company in the amount of $12,000 based on a price of $8 per share on the date of issuance. |
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? | On August 15 and October 24, 2011, the Company’s Board approved the issuances of 225 and 250 shares, respectively to two vendors for services rendered to the Company. These shares were fully vested and expensed by the Company in the amount of $3,000 based on closing market prices on the respective days ranging from $3 to $10 per share on the date of issuance. |
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? | On November 1, 2011, the Company’s Board approved the issuance of 1,000 shares to one individual for employment services rendered to the Company. These shares were fully vested and expensed by the Company in the amount of $4,000 based on a price of $4 per share on the date of issuance. |
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? | During the years ended November 30, 2011 and 2010 and the period from Inception to November 30, 2011, the Company recorded $96,520, $128,800 and $382,900 in stock-based compensation related to services in general and administrative expense in the accompanying statement of operations. These expenses are exclusive of stock option expense in Note 8. |
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? | On February 8, 2011, the Company entered into a Fee Agreement pursuant to which the Company agreed to issue common stock to Indeglia & Carney, P.C. (“I&C”) for legal services rendered to the Company. During the year ended November 30, 2012, our Board of Directors approved the issuance of a total of 75,941, shares of common stock to I&C in consideration of legal services rendered and recorded a reduction of accrued legal fees of $78,627. For the year ended November 30, 2011, the Board of Directors approved the issuance of a total of 1,935 shares of common stock to I&C in consideration of legal services rendered and recorded a reduction of accrued legal fees of $39,120 during the period. |
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? | In addition, our Board of Directors approved (a) the issuance of a total of 2,500 shares of common stock to a third party attorney in consideration of legal services rendered and an expense of $11,750 based on the stock’s closing market price of $4.70 on the date of the grant; and (b) the issuance of a total of 6,000 shares of common stock to a third party marketing consultant in consideration of services rendered and an expense of $4,800 based on the stock’s closing market price of $0.80 on the date of the grant. |
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? | On February 14, 2012 our Board of Directors approved the issuance of 5,000 shares to a relative of our CEO for $5,000 received on January 3, 2012 based on the stock’s closing market price on the date of the grant. The stock issuance was exempt under Section 4(2) of the Securities Act of 1933, as amended. |
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? | In October 2013 our Board of Directors approved the issuance of 5,000,000 shares valued at $200,000 based on the stock’s closing market price on the date of the grant to a relative of our CEO in compensation for advisory services performed prior to October 31, 2013. |
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? | In October 2013 our Board of Directors approved the issuance of 10,000,000 valued at $400,000 based on the stock’s closing market price on the date of the grant to a third-party consultant in compensation for advisory services performed prior to October 31, 2013. |
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? | In addition, our Board of Directors approved (a) the issuance of a total of 785,000 shares of common stock to a third party attorney in consideration of legal services rendered and an expense of $11,767 based on the stock’s closing market price of $0.015 on the date of the grant. |
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Technology Transfer and License. |
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On February 6, 2012, we entered into two related agreements with Three Point Capital (“3PC”). In exchange for $65,000 in cash and five Class B Units in 3PC’s subsidiary FanCloud, LLC (representing a 5% interest), we transferred certain of our intellectual property related to our mobile application. Concurrently with this transfer, 3PC granted us an exclusive, irrevocable, worldwide license to such transferred technology within the field of cinema. The $65,000 receipt was recorded as “other income” fiscal 2012. |
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On February 6, 2012, in connection with a Technology and Transfer License (above) with Three Point Capital (“3PC”) our Board of Directors approved the issuance of (i) 1,992 shares to three individuals for services, including the development of a long-term business plan and (ii) 1,992 shares to 3PC for services rendered, based on the combined fair market value totaling $1,992 of the Company’s common stock at that time. |
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