The accompanying notes are an integral
part of these financial statements.
The accompanying notes are an integral
part of these financial statements.
The accompanying notes are an integral
part of these financial statements.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2017
(unaudited)
NOTE 1 – ORGANIZATION AND DESCRIPTION
OF BUSINESS
Grey Cloak Tech Inc. (the “Company”)
was incorporated in the State of Nevada on December 19, 2014. The Company was formed to provide cloud based software to detect
advertising fraud on the internet.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The accompanying unaudited consolidated
financial statements have been prepared in accordance with accounting principles generally accepted in the United States of
America for interim financial statements and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the
United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and
footnotes required by accounting principles generally accepted in the United States of America for annual financial
statements. In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements
contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the
Company as of September 30, 2017 and the results of operations and cash flows for the periods presented. The results of
operations for the nine months ended September 30, 2017 are not necessarily indicative of the operating results for the full
fiscal year or any future period. These unaudited consolidated financial statements should be read in conjunction with the
financial statements and related notes thereto included in the Company’s form 10-K for the year ended December 31, 2016
filed with the SEC on April 17, 2017.
Use of Estimates
The preparation of financial statements in
conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues
and expenses during the reporting period. Actual results could differ from those estimates.
Cash
Cash includes cash in banks, money market funds,
and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known
amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value.
GREY CLOAK TECH INC
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2017
(unaudited)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUING)
Revenue Recognition
We recognize revenue when all of the following
conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the product or service has been provided
to the customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of
our fees is probable.
The Company will record revenue when it is
realizable and earned and the computer programming services or marketing services have been rendered to the customers. Additionally,
the Company will record revenue from the sale of its software when the software is delivered to the customer or it will be recognized
ratably throughout the term of the contract.
Concentration
One customer accounted for 100% of total revenue
earned during the nine months ended September 30, 2017 and 2016. 100% of the accounts receivable is due from this customer at September
30, 2017 and December 31, 2016.
Income Taxes
The Company accounts for income taxes using
the asset and liability method in accordance with ASC 740, “Accounting for Income Taxes”. The asset and liability method
provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences
between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred
tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences
are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed
more likely than not to be realized. As of September 30, 2017, the Company did not have any amounts recorded pertaining to uncertain
tax positions.
Fair Value Measurements
The Company adopted the provisions of ASC Topic
820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting
pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.
The estimated fair value of certain financial
instruments, including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because
of the short-term nature of these instruments.
ASC 820 defines fair value as the exchange
price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous
market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes
a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable
inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:
GREY CLOAK TECH INC
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2017
(unaudited)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUING)
Level 1 — quoted
prices in active markets for identical assets or liabilities
Level 2 — quoted
prices for similar assets and liabilities in active markets or inputs that are observable
Level 3 — inputs
that are unobservable (for example cash flow modeling inputs based on assumptions)
The derivative liability in connection with
the conversion feature of the convertible debt, classified as a Level 3 liability, is the only financial liability measure at fair
value on a recurring basis.
The change in Level 3 financial instrument
is as follows:
Balance, January 1, 2017
|
|
$
|
2,038,952
|
|
Issued during the nine months ended September 30, 2017
|
|
|
1,867,043
|
|
Change in fair value recognized in operations
|
|
|
(442,635
|
)
|
Converted during the nine months ended September 30, 2017
|
|
|
(1,424,756
|
)
|
Balance, September 30, 2017
|
|
$
|
2,038,605
|
|
Convertible Instruments
The Company evaluates and account for conversion
options embedded in convertible instruments in accordance with ASC 815 “
Derivatives and Hedging Activities
”.
Applicable GAAP requires companies to bifurcate
conversion options from their host instruments and account for them as free standing derivative financial instruments according
to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative
instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument
that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with
changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative
instrument would be considered a derivative instrument.
The Company accounts for convertible instruments
(when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows:
The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt
instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note
transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over
the term of the related debt to their stated date of redemption.
The Company accounts for the conversion of
convertible debt when a conversion option has been bifurcated using the general extinguishment standards. The debt and equity linked
derivatives are removed at their carrying amounts and the shares issued are measured at their then-current fair value, with any
difference recorded as a gain or loss on extinguishment of the two separate accounting liabilities. During the nine months ending
September 30, 2017, the Company recognized a loss on extinguishment of $211,525 from the conversion of convertible debt with a
bifurcated conversion option.
GREY CLOAK TECH INC
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2017
(unaudited)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUING)
Common Stock Purchase Warrants
The Company classifies as equity any contracts
that require physical settlement or net-share settlement or provide a choice of net-cash settlement or settlement in the Company’s
own shares (physical settlement or net-share settlement) provided that such contracts are indexed to our own stock as defined in
ASC 815-40 ("Contracts in Entity's Own Equity"). The Company classifies as assets or liabilities any contracts that require
net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside our
control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement).
The Company assesses classification of common stock purchase warrants and other free standing derivatives at each reporting date
to determine whether a change in classification is required.
NOTE 3 – GOING CONCERN
The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company has generated minimal revenues from operations. Since
its inception, the Company has been engaged substantially in financing activities and developing its business plan and incurring
start up costs and expenses. As a result, the Company incurred accumulated net losses from Inception (December 19, 2014) through
the period ended September 30, 2017 of $6,270,429. In addition, the Company’s development activities since inception have
been financially sustained through equity financing. Management plans to seek funding through debt and equity financing.
NOTE 4 – RELATED PARTY
For the nine months ended September
30, 2017 and 2016, the Company had expenses totaling $72,000 and $80,000, respectively to an officer and director for salaries,
which is included in general and administrative expenses – related party on the accompanying statement of operations. As
of September 30, 2017, there was $0 in accounts payable – related party.
For the nine months ended September
30, 2017 and 2016, the Company had expenses totaling $85,500 and $55,650, respectively to a company owned by an officer and director
for consulting fees, which is included in general and administrative expenses – related party on the accompanying statement
of operations. As of September 30, 2017, there was $26,369 in accounts payable – related party.
NOTE 5 – NOTES PAYABLE – RELATED
PARTY
On July 28, 2016, the Company received a loan
of $15,000 from an officer and director of the Company. The loan bears interest at 8% per annum and due the earlier of January
27, 2017 or when the Company receives financing of over $45,000. During the nine months ended September 30, 2017, the Company repaid
$5,000 in principal.
During the nine months ended September 30,
2017, the Company recorded interest expense of $787. As of the date of this filing, the loan is in default.
GREY CLOAK TECH INC
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2017
(unaudited)
NOTE 6 – CONVERTIBLE DEBT
On September 22, 2016, the Company executed
a convertible promissory note for $5,000. The loan bears interest at 12% per annum. The loan is due on December 31, 2016. In the
event of default, the interest rate increases to 22% per annum. During default the lender has the right to convert the principal
amount and unpaid interest of the loan at a rate of either the lesser of $0.20 or 60% of the lowest trading price during the prior
20 days of conversion. During the nine months ended September 30, 2017 the entire balance of principal and interest was converted
into 219,462 shares of common stock.
On October 5, 2016, the Company executed a
convertible promissory note for $55,000 with an original issue discount of $10,000. The loan bears interest at 12% per annum. The
loan is due on December 31, 2016. In the event of default, the interest rate increases to 22% per annum. During default the lender
has the right to convert the principal amount and unpaid interest of the loan at a rate of either the lesser of $0.20 or 60% of
the lowest trading price during the prior 20 days of conversion. During the nine months ended September 30, 2017 the entire balance
of principal and interest was converted into 1,874,854 shares of common stock.
On January 23, 2017, the Company executed three
convertible promissory notes totaling $100,000. The loans bear interest at 8% per annum and are due on January 23, 2018. The lender
has the right to convert the principal amount and unpaid interest of the loan at a rate of the lower of $0.04 per share or 60%
of the lowest trading price during the prior 20 days of conversion. During the nine months ended September 30, 2017 a portion of
the principal totaling $17,250 was converted into 3,450,000 shares of common stock.
On February 24, 2017, the Company executed
a convertible promissory note for $24,000 with an OID of $4,000. The loan is due on February 24, 2018. The lender has the right
to convert the principal amount and unpaid interest of the loan at a rate of the lower of $0.03 per share or 60% of the lowest
trading price during the prior 20 days of conversion.
On February 28, 2017, the Company executed
a convertible promissory note for $36,000 with an OID of $6,000. The loan is due on February 28, 2018. The lender has the right
to convert the principal amount and unpaid interest of the loan at a rate of the lower of $0.03 per share or 60% of the lowest
trading price during the prior 20 days of conversion. During the nine months ended September 30, 2017 the entire balance of principal
and interest was converted into 6,360,000 shares of common stock.
On March 3, 2017, the Company executed a convertible
promissory note for $90,000. The loan bears interest at 12% per annum and is due on December 1, 2017. The lender has the right
to convert the principal amount and unpaid interest of the loan at a rate of 55% of the lowest trading price during the prior 20
days of conversion.
GREY CLOAK TECH INC
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2017
(unaudited)
NOTE 6 – CONVERTIBLE DEBT (CONTINUED)
On March 7, 2017, the Company executed three
convertible promissory notes totaling $90,000. The loans bear interest at 10% per annum and are due on March 9, 2018. The lender
has the right to convert the principal amount and unpaid interest of the loan at a rate of the lower of $0.03 per share or 55%
of the lowest trading price during the prior 20 days of conversion. During the nine months ended September 30, 2017 a portion of
the principal totaling $20,000 was converted into 4,000,000 shares of common stock.
On March 8, 2017, the Company executed two
convertible promissory notes totaling $60,000. The loans bear interest at 10% per annum and are due on March 9, 2018. The lender
has the right to convert the principal amount and unpaid interest of the loan at a rate of the lower of $0.03 per share or 55%
of the lowest trading price during the prior 20 days of conversion.
On March 9, 2017, the Company executed a convertible
promissory note for $66,000. The loan bears interest at 12% per annum and is due on December 1, 2017. The lender has the right
to convert the principal amount and unpaid interest of the loan at a rate of 50% of the lowest trading price during the prior 20
days of conversion. During the nine months ended September 30, 2017 a portion of the principal totaling $38,400 and a portion of
interest totaling $2,530 was converted into 11,135,581 shares of common stock.
On March 14, 2017, the Company executed a convertible
promissory note for $15,000. The loan bears interest at 10% per annum and is due on March 9, 2018. The lender has the right to
convert the principal amount and unpaid interest of the loan at a rate of the lower of $0.03 per share or 55% of the lowest trading
price during the prior 20 days of conversion.
On April 10, 2017, the Company executed a convertible
promissory note for $30,000. The loan bears interest at 10% per annum and is due on April 10, 2018. The lender has the right to
convert the principal amount and unpaid interest of the loan at a rate of the lower of $0.03 per share or 55% of the lowest trading
price during the prior 20 days of conversion.
On August 22, 2016, the Company executed a
convertible promissory note for up to $300,000 and has received a total of $30,000 with an original issue discount of $5,000 in
the first tranche. The loan bears interest at 8% per annum. The first tranche is due on August 22, 2017. In the event of default,
the interest rate increases to 22% per annum. The lender has the right to convert the principal amount and unpaid interest of the
loan at a rate of 56% of the lowest trading price during the prior 20 days of conversion. However, if the stock price is below
$0.10 then the loan can convert at a rate of 46% of the lowest trading price during the prior 20 days of conversion. Additionally,
the Company issued 60,000 warrants as part the convertible promissory note. The warrants have an exercise price of $0.50 and can
be exercised for 5 years. The fair value of the warrants were recorded as a debt discount and amortized over one year. On October
27, 2016, the Company received the second tranche of $30,000 with an original issue discount of $5,000. The second tranche is due
on October 27, 2017. On April 20, 2017, the Company received the third tranche of $45,000 with an original issue discount of $10,750.
The third tranche is due on April 20, 2018. During the nine months ended September 30, 2017, the lender converted $30,000 of principal
and $1,819 of interest into 6,253,733 shares of common stock. As of September 30, 2017, the principal balance owed is $45,000.
GREY CLOAK TECH INC
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2017
(unaudited)
NOTE 6 – CONVERTIBLE DEBT (CONTINUED)
On May 12, 2017, the Company executed a convertible
promissory note for $60,000 with an OID of $3,000. The loan bears interest at 12% per annum and is due on February 20, 2018. In
the event of default, the interest rate increases to 22% per annum. The lender has the right to convert the principal amount and
unpaid interest of the loan beginning 180 days after original loan date at a rate of 61% of the average of the two lowest trading
price during the prior 15 days of conversion.
On June 22, 2017, the Company executed a convertible
promissory note for $33,000 with an OID of $3,000. The loan bears interest at 12% per annum and is due on February 20, 2018. In
the event of default, the interest rate increases to 22% per annum. The lender has the right to convert the principal amount and
unpaid interest of the loan beginning 180 days after original loan date at a rate of 61% of the average of the two lowest trading
price during the prior 15 days of conversion.
On July 5, 2017, the Company executed a convertible
promissory note for $50,000 with an OID of $7,500. The loan bears interest at 9% per annum and is due on June 26, 2018. The lender
has the right to convert the principal amount and unpaid interest of the loan at a rate of 58% of the average of the lowest trading
price during the prior 15 days of conversion. This loan has prepayment penalties.
On September 27, 2017, the Company executed
a convertible promissory note for $53,000 with an OID of $3,000. The loan bears interest at 12% per annum and is due on June 30,
2018. In the event of default, the interest rate increases to 22% per annum. The lender has the right to convert the principal
amount and unpaid interest of the loan beginning 180 days after original loan date at a rate of 61% of the average of the two lowest
trading price during the prior 15 days of conversion.
During the nine months ended September 30,
2017, the Company recorded interest expense of $50,513 and amortization of debt discount of $434,542.
The Company has determined that the conversion
feature embedded in the notes referred to above that contain a potential variable conversion amount constitutes a derivative which
has been bifurcated from the note and recorded as a derivative liability, with a corresponding discount recorded to the associated
debt.
GREY CLOAK TECH INC
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2017
(unaudited)
NOTE 7 – STOCKHOLDERS’ EQUITY
Authorized Stock
The Company has authorized 500,000,000 common
shares with a par value of $0.001 per share and 75,000,000 preferred shares with a par value of $0.001 per share. Each common
share entitles the holder to one vote on any matter on which action of the stockholders of the corporation is sought.
Common Share Issuances
On February 3, 2017, the Company issued 1,555,119
shares of common stock for the conversion of debt totaling $139,961 and gain on settlement of debt of $10,886.
On February 22, 2017, the Company issued 289,000
shares of common stock for the conversion of debt totaling $8,011 and gain on settlement of debt of $20,889.
On March 1, 2017, the Company issued 300,000
shares of common stock for the conversion of debt totaling $8,100 and gain on settlement of debt of $17,700.
On March 6, 2017, the Company issued 616,895
shares of common stock for the conversion of debt totaling $142,771 and loss on settlement of debt of $80,465.
On March 13, 2017, the Company issued 1,578,926
shares of common stock for the conversion of debt totaling $206,721 and loss on settlement of debt of $21,987.
On March 28, 2017, the Company issued 711,111
shares of common stock for the cashless exercise of 60,000 warrants.
On April 28, 2017, the Company issued 937,427
shares of common stock for the conversion of debt totaling $25,311 and gain on settlement of debt of $31,455.
On April 28, 2017, the Company issued 219,462
shares of common stock for the conversion of debt totaling $5,925 and gain on settlement of debt of $3,672.
On May 10, 2017, the Company issued 360,000
shares of common stock for the conversion of debt totaling $8,061 including fees of $500 and loss on settlement of debt of $20,739.
On May 24, 2017, the Company issued 219,462
shares of common stock for the conversion of debt totaling $5,925 and gain on settlement of debt of $8,155.
On May 24, 2017, the Company issued 468,714
shares of common stock for the conversion of debt totaling $12,655 and loss on settlement of debt of $31,873.
On May 24, 2017, the Company issued 468,713
shares of common stock for the conversion of debt totaling $12,655 and loss on settlement of debt of $31,872.
GREY CLOAK TECH INC
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2017
(unaudited)
NOTE 7 – STOCKHOLDERS’ EQUITY (CONTINUED)
On June 12, 2017, the Company issued 438,468
shares of common stock for the conversion of debt totaling $15,000 and loss on settlement of debt of $18,762.
On July 31, 2017, the Company issued 800,000
shares of common stock for the conversion of debt totaling $7,920 including fees of $500 and loss on settlement of debt of $45,556.
On August 3, 2017, the Company issued 909,090
shares of common stock for the conversion of debt totaling $10,000 and loss on settlement of debt of $30,158.
On August 29, 2017, the Company issued 6,360,000
shares of common stock for the conversion of debt totaling $38,160 including interest of $2,160 and gain on settlement of debt
of $31,073.
On August 30, 2017, the Company issued 1,348,000
shares of common stock for the conversion of debt totaling $4,853 including fees of $500 and loss on settlement of debt of $9,233.
On September 8, 2017, the Company issued a
total of 3,412,074 shares of common stock for the conversion of debt totaling $17,246 including interest $1,740 and fees of $4,256
and loss on settlement of debt of $35,968.
On September 12, 2017, the Company issued 3,450,000
shares of common stock for the conversion of debt totaling $17,250 and gain on settlement of debt of $2,811.
On September 13, 2017, the Company issued 2,075,000
shares of common stock for the conversion of debt totaling $7,470 including fees of $500 and loss on settlement of debt of $15,982.
On September 15, 2017, the Company issued 4,000,000
shares of common stock for the conversion of debt totaling $20,000 and gain on settlement of debt of $8,125.
On September 21, 2017, the Company issued 1,670,733
shares of common stock for the conversion of debt totaling $6,015 including interest of $1,819 and fees of $500 and gain on settlement
of debt of $33,681.
On September 22, 2017, the Company issued 833,433
shares of common stock for the conversion of debt totaling $4,584 including interest of $2,084 and gain on settlement of debt of
$42,396.
On September 25, 2017, the Company issued 4,657,247
shares of common stock for the conversion of debt totaling $18,874 including interest of $1,129 and fees of $745 and loss on settlement
of debt of $104,151.
On September 27, 2017, the Company issued 5,161,389
shares of common stock for the conversion of debt totaling $18,874 including interest of $1,133 and fees of $754 and gain on settlement
of debt of $87,891.
Warrant Issuances
As of September 30, 2017, there were 9,696,250
warrants outstanding, of which 2,696,250 are fully vested.
GREY CLOAK TECH INC
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2017
(unaudited)
NOTE 8 – SUBSEQUENT EVENTS
In October and November 2017, the Company
issued a total of 80,773,597 shares of common stock for the conversion of debt including principal of $281,345, interest of $21,873
and fees of $4,508.
On October 16, 2017, the Company filed an Amended
and Restated Certificate of Designation of the Rights, Preferences, Privileges and Restrictions of the Series A Convertible Preferred
Stock (the “Amended Certificate”) with the Secretary of State of the State of Nevada. The Amended Certificate reduces
the number of preferred shares designated as Series A Preferred Stock from 25,000,000 shares to 1,333,334 shares. The Amended Certificate
also changes the conversion and voting rights of the Series A Preferred Stock. The Series A Preferred Stock is now convertible
into the number of shares of our common stock equal to 0.00006% of our outstanding common stock upon conversion. The voting rights
of the Series A Preferred Stock are now equal to the number of shares of common stock into which the Series A Preferred Stock may
convert.
On October 17, 2017, the Company entered into
a Share Exchange Agreement with Eqova Life Sciences (“Eqova”) and issued 1,100,000 shares of Series A Convertible Preferred
Stock in exchange for 100% of Eqova. The shares are convertible into approximately 66% of the total outstanding common stock as
of the date of the closing. Of the total shares issued to Eqova only 550,000 shares are vested and the remaining 550,000 shares
will vest upon sales of $100,000 for three consecutive months or $300,000 gross sales in any calendar quarter. Any unvested shares
as of October 17, 2019, will be repurchased by the Company at a price of $0.01 per share. As part of the acquisition, Patrick Stiles,
is currently the President and CEO of the Company and is a member of the board of directors.
On October 17, 2017, the Company entered into
an employment agreement with Patrick Stiles and has agreed to pay Mr. Stiles and annual base salary of $140,000 and may receive
stock options as determined by the board of directors. If Mr. Stiles is terminated without cause he will receive three months severance
and has non-compete and non-solicitation provisions for a period of one year after his termination.
On October 17, 2017, the Company entered into
an employment agreement with William Bossung and has agreed to pay Mr. Bossung and annual base salary of $140,000 and may receive
stock options as determined by the board of directors. If Mr. Stiles is terminated without cause he will receive three months severance
and has non-compete and non-solicitation provisions for a period of one year after his termination.
On October 17, 2017, the Company issued a Convertible
Promissory Note, in the amount of $30,000, and a warrant to purchase 1,200,000 shares of our common stock, to Fred Covely to satisfy
obligations owed to Mr. Covely by the Company. The Convertible Promissory Note has a maturity date of October 17, 2018 and is convertible
into shares of our common stock at a conversion price equal to fifty percent (50%) of the average of the closing trading price
for our common stock during the three trading day period ending on the last trading day prior to the conversion date. The warrants
have an exercise price of $0.25 per share, may be exercised immediately and expire on October 17, 2020.
On October 17, 2017, the Company issued 41,403
and 146,330 shares of Series A Convertible Preferred Stock, restricted in accordance with Rule 144, to Fred Covely and William
Bossung, respectively.
On October 31, 2017, the Company a total of
45,601 shares of Series A Convertible Preferred Stock and purchased domain names from the officers of the Company.