| Stockholders' Equity | NOTE 8: STOCKHOLDERS’ EQUITY The total number of shares of all classes
of stock that the Company shall have the authority to issue is 1,125,000,000 shares consisting of 1,000,000,000 shares of common
stock with a $0.001 par value per shares (increased from 250,000,000 as of April 7, 2017); of which 241,651,943 are outstanding
as of the date of this report and 320,000,000 shares of preferred stock, par value $0.001 per share of which (A) 120,000,000 shares
have been designated as Series A Convertible Preferred of which 100,000 are outstanding as of the date of this report, (B) 1,000,000
shares have been designated as Series B Convertible Preferred Stock, of which no shares are outstanding as of the date of this
report and (C) 1,000,000 have been designated as Series C Convertible Preferred Stock, of which 160,000 shares are outstanding
as of the date of this report. On November 18, 2016, the Board and
the holders of a majority of the voting power of our shareholders approved an amendment to our articles of incorporation to affect
a 200:1 reverse split of our $0.001 par value common stock. The reverse split was not approved by FINRA due to concerns related
to the Series A Preferred Stock litigation discussed in Note 11. The Company plans to resubmit its request to FINRA for approval
of the reverse split once the outstanding litigation has been resolved. Common Stock On January 2, 2017, we granted shares
of restricted stock to Mr. Alex Aliksanyan and Mr. Thomas Grbelja, the Company’s former chief executive officer and chief
financial officer, respectively, pursuant to their separate Restricted Stock Grant Agreements, both dated January 2, 2017, and
the terms of their separate Employment Agreements. Mr. Aliksanyan was granted 13,699,350 shares of restricted common stock and
Mr. Grbelja was granted 6,109,597 shares of restricted common stock. The shares of restricted common stock issued pursuant to these
grants cannot be transferred for six months. These shares were granted for services previously performed in their roles as officers
of the Company. On December 10, 2015, the Company retired
1,000,000 shares of its common stock with a value of $50,000 received from a former employee. Conversion of Convertible Notes On December 31, 2016, the holders of
convertible notes with aggregate outstanding principal and accrued interest balances of $1,185,624 converted their notes into 69,368,539
shares of our common stock. Issuance of Series C Convertible
Preferred Stock On January 6, 2017, we issued 100,000
shares of Series C Convertible Preferred Stock to Mr. Anshu Bhatnagar, the Company’s chief executive officer, for $100,000. In December 2016, one of our convertible
noteholders converted $25,000 of outstanding principal into 25,000 shares of our Series C Convertible Preferred Stock, at a price
of $1.00 per share. Common Stock Warrants The following table sets forth common
share purchase warrants outstanding as of July 31, 2017:
Weighted
Average
Exercise Intrinsic
Warrants Price Value
Outstanding, October 31, 2016 16,055,000 $ 0.058 $ 0
Warrants granted and issued 15,581,467 $ 0.007 $ 160,396
Warrants exercised/forfeited/expired (14,850,000 ) $ (0.054 ) $ 0
Outstanding, July 31, 2017 16,786,467 $ 0.014 $ 160,396
Range of Remaining Contractual Average Average
Exercise Number Life Exercise Number Exercise
Prices Outstanding (Years) Price Exercisable Price
$ 0.006 14,581,467 4.67 $ 0.006 14,581,467 $ 0.006
$ 0.026 1,000,000 4.75 $ 0.025 1,000,000 $ 0.025
$ 0.100 1,205,000 2.42 $ 0.100 1,205,000 $ 0.100
16,786,467 4.16 $ 0.014 16,786,467 $ 0.014 Series A Convertible Preferred
Stock On October 14, 2014, the Company filed
a certificate of amendment pursuant to the July 31, 2014 Board of Directors approval to increase the designated Preferred A shares
from 100,000,000 shares to 120,000,000 shares. The preferred shares were issued at $.001 par and bear dividends at a rate of 10%
per annum payable on a quarterly basis when declared by the board of directors. Dividends accumulate whether or not they have been
declared by the board. At the election of the Company, Preferred Dividends may be converted into Series A Convertible Preferred
Stock, with each converted share having a value equal to the market price per share, subject to adjustment for stock splits. In
order to exercise such option, the Company delivers written notice to the holder. Each share of Series A Convertible Preferred
Stock is convertible at the option of the holder thereof at any time into a number of shares of common stock determined by dividing
the stated value of a $1 per share by the conversion price then in effect. The conversion price for the Series A Convertible Preferred
Stock is equal to $1.00 per share. Each holder of Series A Convertible Preferred Stock shall be entitled to one vote for each whole
share of common stock that would be issuable upon conversion of such share on the record date for determining eligibility to participate
in the action being taken. In December 2016, the Company cancelled
44,470,101 shares of Series A Convertible Preferred Stock and 10,359,892 shares of common stock which were held by Monaker. in
connection with an over issuance of shares of common stock relating the conversion of the Monaker dual convertible preferred shares
(See Note 11). In December 2016, the Company converted
1,155,725 of its Series A Convertible Preferred Stock into 1,155,800 shares of common stock. There were 100,000 and 45,716,385 shares
of Series A Convertible Preferred Stock outstanding as of July 31, 2017 and October 31, 2016, respectively. Series B Convertible Preferred
Stock On July 31, 2014, the Company’s
Board of Directors approved the creation of a new Series B Convertible Preferred Stock and on October 14, 2014 a certificate of
designation was filed with the state of Delaware designating 1,000,000 shares with a par value of $0.001, a stated value of $5.00
per share and convertible into the Company’s common stock at $0.05 per share. The Series B Convertible Preferred Stock will
bear dividends at a rate of 10% per annum and shall accrue on the stated value of such shares of the Series B Preferred Stock.
Dividends accrue whether or not they have been declared by the Board of Directors. At the election of the Company, it may satisfy
its obligations hereunder to pay dividends on the Series B Convertible Preferred Stock by issuing shares of common stock to the
holders of Series B Convertible Preferred Stock on a uniform and prorated basis. Each share of Series B Convertible Preferred Stock
is convertible at the option of the holder thereof at any time into a number of shares of common stock determined by dividing the
stated value by the conversion price then in effect. The conversion price for the Series B Convertible Preferred Stock is equal
to $0.05 per share. Each holder of Series B Convertible Preferred Stock shall be entitled to the number of votes equal to two hundred
(200) votes for each share of Series B Convertible Preferred Stock held. There were no Series B Convertible Preferred Stock outstanding
as of July 31, 2017 and October 31, 2016. Series C Convertible Preferred
Stock Pursuant to authority granted by our
certificate of incorporation and applicable state law, our Board of Directors, without any action or approval by our stockholders,
may designate and issue shares in such classes or series (including other classes or series of preferred stock) as it deems appropriate
and establish the rights, preferences and privileges of such shares, including dividends, liquidation and voting rights. The rights
of holders of other classes or series of capital stock, including preferred stock that may be issued could be superior to the
rights of the shares of common stock offered hereby. The designation and issuance of shares of capital stock having preferential
rights could adversely affect other rights appurtenant to the shares of our common stock. Finally, any issuances of additional
capital stock (common or preferred) will dilute the percentage of ownership interest of our stockholders and may dilute the per-share
book value of the Company. Each share of our Series C Convertible Preferred Stock is convertible into the number of shares of
common stock determined by dividing (i) the stated value ($5.00) by (ii) the conversion price then in effect ($0.05). For example,
our Series C Convertible Preferred Stock contains voting rights which provide each share of Series C Convertible Preferred Stock
with 100 votes for each shares of common stock into which the Series C Convertible Preferred Stock is convertible. Accordingly,
our currently outstanding 160,000 shares of Series C Convertible Preferred Stock (which are convertible into 16,000,000 shares
of common stock) are entitled to 1,600,000,000 votes on any matter presented for a vote to our common stockholders. This has resulted
in the holders of our Series C Convertible Preferred Stock having voting majority voting control of our corporation. There were
160,000 and 35,000 shares of Series C Convertible Preferred Stock outstanding as of July 31, 2017 and October 31, 2016, respectively. |
