Subsequent Events | 3 Months Ended |
Mar. 31, 2014 |
Subsequent Events: | ' |
Subsequent Events | ' |
NOTE 6 - SUBSEQUENT EVENTS |
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In May 2014, the Company entered into an asset purchase agreement to acquire approximately 7,500 cannabis-related internet domain names in exchange for which the Company will: |
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a) Issue 78.5 million shares of the Company’s restricted common stock; |
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b) Issue a promissory note in the principal of $500,000, which will bear interest at the rate of 3.25% per annum and be payable as follows: upon the Company’s receipt of an aggregate of $1,000,000 in funding (whether debt or equity), $100,000 shall be paid, and the Company shall pay the remaining balance of $400,000 in thirty-six equal monthly installments, commencing on the fifteenth day following the first month the Company realizes at least $150,000 in gross revenue; and |
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c) Pay a monthly royalty equal to the product of (i) six percent (6%) and (ii) the excess of the gross monthly revenue over $150,000. The royalty payment shall be payable for a period of thirty-six months from and after the first month in which the Company’s gross revenues are in excess of $150,000. |
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The Company will receive consulting services from the seller of the domain names, for which the Company shall pay the seller $9,500 per month, for a period of twelve months. The seller is also entitled to “piggyback” registration rights on the next Securities Act registration statement filed by the Company, with respect to eight million shares of common stock being issued to the seller. The Company shall bear all registration expenses of such piggyback registrations, other than underwriting discounts and commissions and any legal fees incurred by the seller. |
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In April 2014, the Company entered into an agreement with certain of its shareholders (“Principal Shareholders”) and Kuboo. By way of background, in May 2011, the Company, Kuboo and the Principal shareholders entered into a Stock Purchase Agreement (“SPA”) and the Company and the Principal Shareholders entered into a Principal Shareholders Agreement (“PSA”). Under the April 2014 agreement, (i) the Principal Shareholders released the Company and Kuboo from any obligation to pay them an additional $50,000 under the PSA or SPA (or otherwise), (ii) the Company released Kuboo from any obligation under the SPA to pay to the Company the additional $50,000 specified in the SPA, (iii) the Principal Shareholders agreed to surrender 1,675,604 shares of the Company’s common stock to the Company for cancellation (iv) the Principal Shareholders released the Company from any obligation to register the Company’s common stock shares pursuant to section 10.2 of the SPA or otherwise, and (v) the Company agreed to include on a piggyback basis an aggregate of 300,000 shares of common stock on each of the next two Securities Act registration statements the Company files (an aggregate of 600,000 shares of common stock). |
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Effective, April 9, 2014, the Principal Shareholders surrendered to the Company for cancellation 1,675,604 shares of the Company’s common stock in accordance with the April 2014 Agreement described above. |
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On April 14, 2014, the Company issued an aggregate of 3,730,000 restricted shares of its common stock solely to “accredited investors,” within the meaning of regulation D under the Securities Act of 1933, as amended. These shares of the Company’s common stock were issued to the shareholders of NCAP Security Systems, Inc. (other than Kuboo, Inc., its parent company), in exchange for an equal number of shares of NCAP Security Systems, Inc. The Company’s common shares were issued in full and complete satisfaction of any and all amounts that could be claimed in relation to the shareholders’ investment in NCAP Security Systems, Inc. |
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In April, 2014, the Company received $90,000 from the exercise of outstanding warrants to purchase 450,000 shares of common stock, at an exercise price of $.20 per share. |
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In April, 2014, the Company paid an additional finder’s fee $5,500, related to its issuances of common stock. The Company satisfied this fee through the issuance of 22,000 shares of its common stock. |