|
Nevada
(State or other jurisdiction of incorporation or organization) |
| |
7370
(Primary Standard Industrial Classification Code Number) |
| |
95-4863690
(I.R.S. Employer Identification No.) |
|
|
Large accelerated filer
☐
|
| |
Accelerated filer
☐
|
|
|
Non-accelerated filer
☒
|
| |
Smaller reporting company
☒
|
|
| | | |
Emerging growth company
☐
|
|
| | | | | ii | | | |
| | | | | ii | | | |
| | | | | iii | | | |
| | | | | 1 | | | |
| | | | | 8 | | | |
| | | | | 33 | | | |
| | | | | 35 | | | |
| | | | | 36 | | | |
| | | | | 37 | | | |
| | | | | 38 | | | |
| | | | | 42 | | | |
| | | | | 52 | | | |
| | | | | 53 | | | |
| | | | | 54 | | | |
| | | | | 60 | | | |
| | | | | 70 | | | |
| | | | | 71 | | | |
| | | | | 73 | | | |
| | | | | 78 | | | |
| | | | | 84 | | | |
| | | | | 85 | | | |
| | | | | 86 | | | |
| | | | | 91 | | | |
| | | | | 93 | | | |
| | | | | 94 | | | |
| | | | | 95 | | | |
| | | | | 97 | | |
| | |
As of August 31, 2021
|
| | |||||||||||
|
Actual
|
| |
Pro Forma As
Adjusted Giving Effect to Conversion of Our Series C Preferred Stock and Series D Preferred Stock |
| | ||||||||||
|
(in thousands)
|
| | |||||||||||||
Cash and cash equivalents
|
| | | $ | 28,929 | | | | | $ | 28,929 | | | | | |
Mezzanine equity: | | | | | | | | | | | | | | | ||
Series C convertible and redeemable preferred stock, $.001 par value, 660,000 shares authorized, issued and outstanding and 0 shares outstanding
|
| | | | 15,135 | | | | | | — | | | | ||
Series D convertible and redeemable preferred stock, $.001 par value, 1,304,000 shares authorized, issued and not outstanding
|
| | | | 29,902 | | | | | | — | | | | ||
Stockholders’ equity | | | | | | | | | | | | | | | ||
Series A, convertible preferred stock, $.001 par value, authorized 70,000 shares, 27,195 shares issued and outstanding
|
| | | | — | | | | | | — | | | | ||
Series B, convertible preferred stock, $.001 par value, authorized 50,000
shares, 17,087 shares issued and outstanding |
| | | | — | | | | | | — | | | | ||
Common stock, $.001 par value, 1,000,000,000 shares authorized, 320,381,519 and 9,066,363 shares issued and outstanding
|
| | | | 3,122 | | | | | | 3,328 | | | | ||
Additional paid-in capital
|
| | | | 40,856 | | | | | | 85,687 | | | | ||
Treasury Stock, 36,300 shares, at cost
|
| | | | (62) | | | | | | (62) | | | | ||
Accumulated deficit
|
| | | | (44,667) | | | | | | (44,667) | | | | ||
Total stockholders’ equity
|
| | | | (751) | | | | | | 44,286 | | | | ||
Total capitalization
|
| | | | (44,286) | | | | | | 44,286 | | | |
Name
|
| |
Age
|
| |
Position(s)
|
| |
Period of Services
|
|
Executive Officers | | | | | | | | | ||
Wes Cummins | | |
44
|
| |
Chief Executive Officer, Secretary, Treasurer, Chairman of the Board
|
| |
Director from Feburary 2007 to December 2020 and March 2021 to Present and sole officer from March 2012 to December 2020 and CEO. Secretary and Treasurer from March 2021 to Present
|
|
David Rench | | |
44
|
| |
Chief Financial Officer
|
| |
March 2021 to Present
|
|
Regina Ingel | | |
34
|
| |
Executive Vice President of Operations
|
| |
April 2021 to Present
|
|
Non-Employee Directors | | | | | | | | | ||
Chuck Hastings(1)(3) | | |
43
|
| |
Director
|
| |
April 2021 to Present
|
|
Kelli McDonald(2)(3) | | |
43
|
| |
Director
|
| |
April 2021 to Present
|
|
Douglas Miller(1)(2) | | |
64
|
| |
Director
|
| |
April 2021 to Present
|
|
Virginia Moore(2)(3) | | |
48
|
| |
Director
|
| |
April 2021 to Present
|
|
Richard Nottenburg(1)(2) | | |
67
|
| |
Director
|
| |
June 2021 to Present
|
|
Jason Zhang | | |
28
|
| |
Director
|
| |
April 2021 to Present
|
|
Name and position
|
| |
Year
|
| |
Salary
($) |
| |
Bonus
($) |
| |
Total
($)(a) |
| ||||||||||||
Wes Cummins
|
| | | | 2021 | | | | | | 52,083 | | | | | | — | | | | | | 52,083 | | |
CEO, President, Secretary and Treasurer
|
| | | | 2020 | | | | | | — | | | | | | — | | | | | | — | | |
David Rench,
|
| | | | 2021 | | | | | | 41,667 | | | | | | — | | | | | | 41,667 | | |
Chief Financial Officer
|
| | | | 2020 | | | | | | — | | | | | | — | | | | | | — | | |
Regina Ingel
|
| | | | 2021 | | | | | | 12,500 | | | | | | — | | | | | | 12,500 | | |
Vice President of Operations
|
| | | | 2020 | | | | | | — | | | | | | — | | | | | | — | | |
Name
|
| |
Shares (#)
|
| |
Grant Date
|
| |
Expiration Date
|
| |
Vesting
|
| |||||||||
Wes Cummins
|
| | | | 3,000,000 | | | | | | 10/20/21 | | | | | | 10/20/31 | | | |
1,500,000 vest on 4/1/22375,000 vest on
each of 7/1/22, 10/1/22, 1/1/23 and 4/1/23 |
|
David Rench
|
| | | | 1,000,000 | | | | | | 10/20/21 | | | | | | 10/20/31 | | | | 500,000 vest on 4/1/22125,000 vest on each of 7/1/22, 10/1/22, 1/1/23 and 4/1/23 | |
Regina Ingel
|
| | | | 600,000 | | | | | | 10/20/21 | | | | | | 10/20/31 | | | | 300,000 vest on 4/1/2275,000 vest on each of 7/1/22, 10/1/22, 1/1/23 and 4/1/23 | |
Name
|
| |
New Salary
|
| |
Effective Date
|
| ||||||
Wes Cummins
|
| | | $ | 300,000 | | | | | | November 1, 2021 | | |
David Rench
|
| | | $ | 240,000 | | | | | | November 1, 2021 | | |
Regina Ingel
|
| | | $ | 120,000 | | | | | | November 1, 2021 | | |
|
Base retainer
|
| | | $ | 25,000 | | |
|
Audit Committee Chair
|
| | | $ | 15,000 | | |
|
Audit Committee Member
|
| | | $ | 8,000 | | |
|
Compensation Committee Chair
|
| | | $ | 10,000 | | |
|
Compensation Committee Member
|
| | | $ | 5,000 | | |
|
Nominating and Governance Committee Chair
|
| | | $ | 5,000 | | |
|
Nominating and Governance Committee Member
|
| | | $ | 3,000 | | |
| | |
Before Offering
|
| |
After Offering
|
| ||||||||||||||||||
Name and Address(a)
|
| |
Total Common
(As-if Preferred was Converted) |
| |
Percentage
Beneficially Owned |
| |
Total
Common |
| |
Percentage
Beneficially Owned |
| ||||||||||||
Directors and Officers:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Wes Cummins
|
| | | | 124,272,414(b) | | | | | | 23.41% | | | | | | 124,272,414 | | | | | | 23.41% | | |
David Rench
|
| | | | — | | | | | | * | | | | | | — | | | | | | * | | |
Chuck Hastings
|
| | | | 2,007,000 | | | | | | * | | | | | | 2,007,008 | | | | | | * | | |
Kelli McDonald
|
| | | | — | | | | | | * | | | | | | — | | | | | | * | | |
Doug Miller
|
| | | | — | | | | | | * | | | | | | — | | | | | | * | | |
Virginia Moore
|
| | | | 4,831,819(c) | | | | | | * | | | | | | 930,000(f) | | | | | | * | | |
Richard Nottenburg
|
| | | | — | | | | | | * | | | | | | — | | | | | | * | | |
Jason Zhang
|
| | | | 18,838,559 | | | | | | 3.57% | | | | | | 18,838,559 | | | | | | 3.57% | | |
Regina Ingel
|
| | | | — | | | | | | * | | | | | | — | | | | | | * | | |
Officers and Directors as a group (9 people)
|
| | | | 150,049,889(b)(c) | | | | | | 28.27% | | | | | | 146,147,973(b)(f) | | | | | | 27.53% | | |
5% Holders: | | | | | | | | | | | | | | | | | | | | | | | | | |
Xin Xu
c/o Xsquared Holding Limited c/o Vistra Corporate Services Center Wikhams Cay II Tortola British Virgin Islands |
| | | | 44,640,889(d) | | | | | | 8.41% | | | | | | | | | | | | 8.41% | | |
| | |
Before Offering
|
| |
After Offering
|
| |||||||||||||||
Name and Address(a)
|
| |
Total Common
(As-if Preferred was Converted) |
| |
Percentage
Beneficially Owned |
| |
Total
Common |
| |
Percentage
Beneficially Owned |
| |||||||||
Guo Chen
c/o GMR Limited Trinity Chamber PO BOX 4301 Tortola British Virgin Islands |
| | | | 44,640,889(e) | | | | | | 8.41% | | | | | | | | | 8.41% | | |
| | |
Shares of
Common Stock Beneficially owned Prior to the Sale of Registered Shares(a)(b) |
| |
Registered
Shares being Offered(b) |
| |
Shares of Common Stock
Beneficially Owned after the Sale of Registered Shares |
| |||||||||||||||
Name of Selling Stockholder
|
| |
Shares(c)
|
| |
%
|
| ||||||||||||||||||
Deep Field Opportunities Fund, LP
|
| | | | 14,000,000 | | | | | | 14,000,000 | | | | | | — | | | | | | * | | |
Knott Partners LP
|
| | | | 13,481,819 | | | | | | 13,481,819 | | | | | | — | | | | | | * | | |
William Herbert Hunt Trust, Estate
|
| | | | 13,488,182 | | | | | | 13,488,182 | | | | | | — | | | | | | * | | |
| | |
Shares of
Common Stock Beneficially owned Prior to the Sale of Registered Shares(a)(b) |
| |
Registered
Shares being Offered(b) |
| |
Shares of Common Stock
Beneficially Owned after the Sale of Registered Shares |
| |||||||||||||||
Name of Selling Stockholder
|
| |
Shares(c)
|
| |
%
|
| ||||||||||||||||||
Voss Value Master Fund, L.P.
|
| | | | 9,600,000 | | | | | | 9,600,000 | | | | | | — | | | | | | * | | |
Voss Value-Oriented Special Situations Fund
|
| | | | 1,136,364 | | | | | | 1,136,364 | | | | | | — | | | | | | * | | |
Keen Microcap Fund LP
|
| | | | 7,368,182 | | | | | | 7,368,182 | | | | | | — | | | | | | * | | |
Anson Investments Master Fund LP
|
| | | | 7,704,546 | | | | | | 7,704,546 | | | | | | — | | | | | | * | | |
Nokomis Capital Master Fund LP
|
| | | | 5,742,364 | | | | | | 5,742,364 | | | | | | — | | | | | | * | | |
AFOB FIP MS, LLC
|
| | | | 7,868,182 | | | | | | 7,868,182 | | | | | | — | | | | | | * | | |
David S. Hunt
|
| | | | 4,500,000 | | | | | | 4,500,000 | | | | | | — | | | | | | * | | |
Hunt Technology Ventures, LP
|
| | | | 4,350,000 | | | | | | 4,350,000 | | | | | | — | | | | | | * | | |
Kingdom Investments, Limited
|
| | | | 5,000,000 | | | | | | 5,000,000 | | | | | | — | | | | | | * | | |
Placid Ventures, L.P.
|
| | | | 5,000,000 | | | | | | 5,000,000 | | | | | | — | | | | | | * | | |
Bond E Oman
|
| | | | 3,400,000 | | | | | | 3,400,000 | | | | | | — | | | | | | * | | |
Granite Point Capital Master Fund, LP
|
| | | | 4,536,364 | | | | | | 4,536,364 | | | | | | — | | | | | | * | | |
Granite Point Capital Scorpion Focused Ideas Fund
|
| | | | 4,536,364 | | | | | | 4,536,364 | | | | | | — | | | | | | * | | |
Bradley L. Radoff
|
| | | | 3,600,000 | | | | | | 3,600,000 | | | | | | — | | | | | | * | | |
Harvey Master Fund, LP
|
| | | | 3,118,453 | | | | | | 3,118,453 | | | | | | — | | | | | | * | | |
Patrice McNicoll
|
| | | | 2,881,819 | | | | | | 2,881,819 | | | | | | — | | | | | | * | | |
Jimmy Baker
|
| | | | 320,000 | | | | | | 320,000 | | | | | | — | | | | | | * | | |
Star V Partners LLC
|
| | | | 3,255,364 | | | | | | 3,255,364 | | | | | | — | | | | | | * | | |
Anson East Master Fund LP
|
| | | | 2,568,182 | | | | | | 2,568,182 | | | | | | — | | | | | | * | | |
Redcap Investments LP
|
| | | | 2,825,000 | | | | | | 2,825,000 | | | | | | — | | | | | | * | | |
Lyda Hunt-Herbert Trusts – Bruce William Hunt
|
| | | | 2,825,000 | | | | | | 2,825,000 | | | | | | — | | | | | | * | | |
Kenneth R. Werner Revocable Trust
|
| | | | 1,456,819 | | | | | | 1,456,819 | | | | | | — | | | | | | * | | |
Peter Levinson
|
| | | | 1,570,455 | | | | | | 1,570,455 | | | | | | — | | | | | | * | | |
Brian Smoluch
|
| | | | 2,643,637 | | | | | | 2,643,637 | | | | | | — | | | | | | * | | |
Andrew Moore
|
| | | | 4,831,819(d)(e) | | | | | | 3,901,819(d) | | | | | | 930,000(e) | | | | | | * | | |
Bryant and Carleen Riley JTWROS
|
| | | | 1,120,000 | | | | | | 1,120,000 | | | | | | — | | | | | | * | | |
Joseph R. Nardini
|
| | | | 1,347,273 | | | | | | 1,347,273 | | | | | | — | | | | | | * | | |
Harvey SMIDCAP Fund, LP
|
| | | | 2,136,094 | | | | | | 2,136,094 | | | | | | — | | | | | | * | | |
Kelleher Family Trust
|
| | | | 2,462,498 | | | | | | 840,000 | | | | | | 1,622,498 | | | | | | * | | |
TKL Global Investments LLC
|
| | | | 2,102,000 | | | | | | 800,000 | | | | | | 1,302,000 | | | | | | * | | |
Ziyao Wang
|
| | | | 640,000 | | | | | | 640,000 | | | | | | — | | | | | | * | | |
Lance Cannon
|
| | | | 776,364 | | | | | | 776,364 | | | | | | — | | | | | | * | | |
Rohan Kumar
|
| | | | 867,273 | | | | | | 867,273 | | | | | | — | | | | | | * | | |
Alan N. Forman
|
| | | | 560,000 | | | | | | 560,000 | | | | | | — | | | | | | * | | |
Bradley Silver
|
| | | | 560,000 | | | | | | 560,000 | | | | | | — | | | | | | * | | |
Daniel Ondeck
|
| | | | 560,000 | | | | | | 560,000 | | | | | | — | | | | | | * | | |
Eric Rajewski
|
| | | | 696,364 | | | | | | 696,364 | | | | | | — | | | | | | * | | |
Manuel Jesus Bueno
|
| | | | 628,182 | | | | | | 628,182 | | | | | | — | | | | | | * | | |
| | |
Shares of
Common Stock Beneficially owned Prior to the Sale of Registered Shares(a)(b) |
| |
Registered
Shares being Offered(b) |
| |
Shares of Common Stock
Beneficially Owned after the Sale of Registered Shares |
| |||||||||||||||
Name of Selling Stockholder
|
| |
Shares(c)
|
| |
%
|
| ||||||||||||||||||
Pinnacle Investment Group LLC
|
| | | | 1,241,819 | | | | | | 1,241,819 | | | | | | — | | | | | | * | | |
Samantha Gumenick
|
| | | | 560,000 | | | | | | 560,000 | | | | | | — | | | | | | * | | |
Terril Scott Peterson
|
| | | | 719,091 | | | | | | 719,091 | | | | | | — | | | | | | * | | |
Michael Schlotman
|
| | | | 440,000 | | | | | | 440,000 | | | | | | — | | | | | | * | | |
Andrew Russell
|
| | | | 513,637 | | | | | | 513,637 | | | | | | — | | | | | | * | | |
John C. Rijo
|
| | | | 513,637 | | | | | | 513,637 | | | | | | — | | | | | | * | | |
David J. Morton
|
| | | | 256,819 | | | | | | 256,819 | | | | | | — | | | | | | * | | |
BGBY Investments LLC
|
| | | | 256,819 | | | | | | 256,819 | | | | | | — | | | | | | * | | |
Dominic Riley
|
| | | | 160,000 | | | | | | 160,000 | | | | | | — | | | | | | * | | |
1334 Partners LP
|
| | | | 568,182 | | | | | | 568,182 | | | | | | — | | | | | | * | | |
Alexander M. McWilliams III
|
| | | | 56,819 | | | | | | 56,819 | | | | | | — | | | | | | * | | |
Allan Weine
|
| | | | 227,273 | | | | | | 227,273 | | | | | | — | | | | | | * | | |
Allison Wolford
|
| | | | 27,728 | | | | | | 27,728 | | | | | | — | | | | | | * | | |
Alta Fundamental Advisers Master LP
|
| | | | 217,046 | | | | | | 217,046 | | | | | | — | | | | | | * | | |
Andrew Aziz
|
| | | | 56,819 | | | | | | 56,819 | | | | | | — | | | | | | * | | |
Ardsley Ridgecrest Partners Fund, L.P.
|
| | | | 227,273 | | | | | | 227,273 | | | | | | — | | | | | | * | | |
Austin D. Hunt
|
| | | | 113,637 | | | | | | 113,637 | | | | | | — | | | | | | * | | |
B. Riley Securities Inc.
|
| | | | 3,575,455 | | | | | | 2,645,455 | | | | | | 930,000 | | | | | | * | | |
Bansbach Capital Group, LLC Louise P. Bansbach
|
| | | | 1,704,546 | | | | | | 1,704,546 | | | | | | — | | | | | | * | | |
Bitmain Delaware Holding Company, Inc.
|
| | | | 6,818,182 | | | | | | 6,818,182 | | | | | | — | | | | | | * | | |
Black Maple Capital Partners LP
|
| | | | 2,272,728 | | | | | | 2,272,728 | | | | | | — | | | | | | * | | |
Blackwell Partners LLC
|
| | | | 1,455,682 | | | | | | 1,455,682 | | | | | | — | | | | | | * | | |
Boardman Bay Master, Ltd.
|
| | | | 795,455 | | | | | | 795,455 | | | | | | — | | | | | | * | | |
Brett Chiles
|
| | | | 45,455 | | | | | | 45,455 | | | | | | — | | | | | | * | | |
Brian Herman
|
| | | | 227,273 | | | | | | 227,273 | | | | | | — | | | | | | * | | |
Cavalry Fund I LP
|
| | | | 909,091 | | | | | | 909,091 | | | | | | — | | | | | | * | | |
Cavalry Special Ops Fund, LLC
|
| | | | 227,273 | | | | | | 227,273 | | | | | | — | | | | | | * | | |
CBH Bahamas Ltd. as Trustee of the Pardiac Trust
|
| | | | 681,819 | | | | | | 681,819 | | | | | | — | | | | | | * | | |
Columbus Capital Partners, L.P.
|
| | | | 4,545,455 | | | | | | 4,545,455 | | | | | | — | | | | | | * | | |
David Bum Park
|
| | | | 22,728 | | | | | | 22,728 | | | | | | — | | | | | | * | | |
David Durkin
|
| | | | 454,546 | | | | | | 454,546 | | | | | | — | | | | | | * | | |
David G. Swank
|
| | | | 909,091 | | | | | | 909,091 | | | | | | — | | | | | | * | | |
Dawn M. Farrell
|
| | | | 22,728 | | | | | | 22,728 | | | | | | — | | | | | | * | | |
Drew Rossi
|
| | | | 11,364 | | | | | | 11,364 | | | | | | — | | | | | | * | | |
EJS Investment Holdings LLC
|
| | | | 681,819 | | | | | | 681,819 | | | | | | — | | | | | | * | | |
F2Pool Mining Inc.
|
| | | | 11,363,637 | | | | | | 11,363,637 | | | | | | — | | | | | | * | | |
Frederick Baily Dent III
|
| | | | 454,546 | | | | | | 454,546 | | | | | | — | | | | | | * | | |
James M. Clamage
|
| | | | 56,819 | | | | | | 56,819 | | | | | | — | | | | | | * | | |
| | |
Shares of
Common Stock Beneficially owned Prior to the Sale of Registered Shares(a)(b) |
| |
Registered
Shares being Offered(b) |
| |
Shares of Common Stock
Beneficially Owned after the Sale of Registered Shares |
| |||||||||||||||
Name of Selling Stockholder
|
| |
Shares(c)
|
| |
%
|
| ||||||||||||||||||
Jason Alabaster
|
| | | | 18,182 | | | | | | 18,182 | | | | | | — | | | | | | * | | |
John B. Berding
|
| | | | 909,091 | | | | | | 909,091 | | | | | | — | | | | | | * | | |
Jon D. and Linda W. Gruber Trust
|
| | | | 2,272,728 | | | | | | 2,272,728 | | | | | | — | | | | | | * | | |
Jonathan Talcott
|
| | | | 56,819 | | | | | | 56,819 | | | | | | — | | | | | | * | | |
Joseph Robert Nardini Jr.
|
| | | | 27,273 | | | | | | 27,273 | | | | | | — | | | | | | * | | |
Knut Grevle
|
| | | | 56,819 | | | | | | 56,819 | | | | | | — | | | | | | * | | |
Mark C. Koontz
|
| | | | 227,273 | | | | | | 227,273 | | | | | | — | | | | | | * | | |
Martin Friedman
|
| | | | 113,637 | | | | | | 113,637 | | | | | | — | | | | | | * | | |
MC Opportunities Fund LP
|
| | | | 795,455 | | | | | | 795,455 | | | | | | — | | | | | | * | | |
Michael Cavanaugh
|
| | | | 170,455 | | | | | | 170,455 | | | | | | — | | | | | | * | | |
Millbrook Consulting Group LLC
|
| | | | 113,637 | | | | | | 113,637 | | | | | | — | | | | | | * | | |
Ohsang Kwon
|
| | | | 2,272,728 | | | | | | 2,272,728 | | | | | | — | | | | | | * | | |
Pacific Capital Management LLC
|
| | | | 568,182 | | | | | | 568,182 | | | | | | — | | | | | | * | | |
Patrick Hanniford
|
| | | | 56,819 | | | | | | 56,819 | | | | | | — | | | | | | * | | |
Paul Choi
|
| | | | 28,410 | | | | | | 28,410 | | | | | | — | | | | | | * | | |
Precept Special Situation Fund, LP
|
| | | | 2,272,728 | | | | | | 2,272,728 | | | | | | — | | | | | | * | | |
Puritan Partners LLC
|
| | | | 1,136,364 | | | | | | 1,136,364 | | | | | | — | | | | | | * | | |
Richard Marks
|
| | | | 568,182 | | | | | | 568,182 | | | | | | — | | | | | | * | | |
Ryan Aceto
|
| | | | 17,046 | | | | | | 17,046 | | | | | | — | | | | | | * | | |
Spencer Gottshall
|
| | | | 11,364 | | | | | | 11,364 | | | | | | — | | | | | | * | | |
Spencer Hemplemen
|
| | | | 227,273 | | | | | | 227,273 | | | | | | — | | | | | | * | | |
Veriton Multi-Strategy Master Fund Ltd
|
| | | | 3,409,091 | | | | | | 3,409,091 | | | | | | — | | | | | | * | | |
James W. Aston
|
| | | | 227,273 | | | | | | 227,273 | | | | | | — | | | | | | * | | |
MACABA Holdings, LLC
|
| | | | 227,273 | | | | | | 227,273 | | | | | | — | | | | | | * | | |
Pangea Capital, LLC
|
| | | | 300,000 | | | | | | 300,000 | | | | | | — | | | | | | * | | |
Marshall Webb Mulligan
|
| | | | 230,000 | | | | | | 230,000 | | | | | | — | | | | | | * | | |
| | |
Per Share Bid Price
|
| |||||||||
|
High
|
| |
Low
|
| ||||||||
Annual | | | | | | | | | | | | | |
Year Ended May 31, 2021
|
| | | $ | 2.25 | | | | | $ | 0.0071 | | |
Quarterly | | | | | | | | | | | | | |
Year Ended May 31, 2021 | | | | | | | | | | | | | |
First Quarter
|
| | | $ | 0.025 | | | | | $ | 0.0071 | | |
Second Quarter
|
| | | $ | 0.03 | | | | | $ | 0.0085 | | |
Third Quarter
|
| | | $ | 0.3499 | | | | | $ | 0.0153 | | |
Fourth Quarter
|
| | | $ | 2.25 | | | | | $ | 0.14 | | |
Year Ending May 31, 2022 | | | | | | | | | | | | | |
First Quarter
|
| | | $ | 2.63 | | | | | $ | 0.6275 | | |
Audited Consolidated Financial Statements:
|
| |
Page
|
| |||
| | | | F-1 | | | |
| | | | F-2 | | | |
| | | | F-3 | | | |
| | | | F-4 | | | |
| | | | F-5 | | | |
| | | | F-6 | | |
Unaudited Consolidated Financial Statements:
|
| |
Page
|
| |||
| | | | F-16 | | | |
| | | | F-17 | | | |
| | | | F-18 | | | |
| | | | F-19 | | | |
| | | | F-20 | | |
| | |
May 31, 2021
|
| |
May 31, 2020
|
| ||||||
ASSETS | | | | | | | | | | | | | |
Current Assets: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 11,750 | | | | | $ | — | | |
Prepaid expenses and other current assets
|
| | | | | | | | | | — | | |
Total current assets
|
| | | | 11,750 | | | | | | — | | |
Deposit on equipment
|
| | | | 3,282 | | | | | | — | | |
Property and equipment, net
|
| | | | 20 | | | | | | — | | |
TOTAL ASSETS
|
| | | $ | 15,052 | | | | | $ | — | | |
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ DEFICIT | | | | | | | | | | | | | |
Current Liabilities: | | | | | | | | | | | | | |
Accounts payable and accrued liabilities
|
| | | $ | 249 | | | | | $ | — | | |
Accrued dividends
|
| | | | 116 | | | | | | 116 | | |
Related party notes payable
|
| | | | 2,135 | | | | | | 1,899 | | |
Total current liabilities
|
| | | | 2,500 | | | | | | 2,015 | | |
Commitments and contingencies (Note 10) | | | | | | | | | | | | | |
Mezzanine equity: | | | | | | | | | | | | | |
Series C, convertible and redeemable preferred stock, $.001 par value, 660,000
shares authorized, issued and outstanding |
| | | | 15,135 | | | | | | — | | |
Stockholders’ deficit: | | | | | | | | | | | | | |
Series A, convertible preferred stock, $.001 par value, authorized 70,000 shares, 27,195 issued and outstanding
|
| | | $ | 3,370 | | | | | $ | 3,370 | | |
Series B convertible preferred stock, $.001 par value, authorized 50,000 shares, 17,087 issued and outstanding
|
| | | | 1,849 | | | | | | 1,849 | | |
Common stock, $.001 par value, 500,000,000 shares authorized, 39,569,335 and 9,066,363 shares issued and outstanding, respectively
|
| | | | 9 | | | | | | 9 | | |
Additional paid in capital
|
| | | | 13,874 | | | | | | 13,874 | | |
Treasury stock, 36,300 shares, at cost
|
| | | | (62) | | | | | | (62) | | |
Accumulated deficit
|
| | | | (21,623) | | | | | | (21,055) | | |
Total stockholders’ deficit
|
| | | | (2,583) | | | | | | (2,015) | | |
Total Mezzanine equity and stockholders’ deficit
|
| | | | 12,552 | | | | | | (2,015) | | |
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ DEFICIT
|
| | |
$
|
15,052
|
| | | |
$
|
—
|
| |
| | |
Fiscal Year Ended
|
| |||||||||
| | |
May 31, 2021
|
| |
May 31, 2020
|
| ||||||
Total Revenue
|
| | | $ | — | | | | | $ | — | | |
Costs and expenses: | | | | | | | | | | | | | |
Selling, General and Administrative
|
| | | | (331) | | | | | | — | | |
Depreciation
|
| | | | (1) | | | | | | — | | |
Total costs and expenses
|
| | | | (332) | | | | | | | | |
Operating income (loss)
|
| | | | (332) | | | | | | | | |
Other income (expense) | | | | | | | | | | | | | |
Interest Expense
|
| | | | (236) | | | | | | (263) | | |
Total Other Income (Expense)
|
| | | | (236) | | | | | | (263) | | |
Net Income (loss) attributable to Common Shareholders
|
| | | $ | (568) | | | | | $ | (263) | | |
Basic and Diluted net loss per share
|
| | | | (0.06) | | | | | | (0.03) | | |
Basic and Diluted weighted average number of shares outstanding
|
| | | | 9,066,363 | | | | | | 9,066,363 | | |
| | |
Series A
Convertible Preferred Stock |
| |
Series B
Convertible Preferred Stock |
| |
Common Stock
|
| |
Additional
Paid in Capital |
| |
Treasury
Stock |
| |
Accumulated
Deficit |
| |
Stockholders’
Equity |
| |||||||||||||||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||||||||||||||
Balance, May 31, 2019
|
| | | | 27,195 | | | | | $ | 3,370 | | | | | | 17,087 | | | | | $ | 1,849 | | | | | | 9,066,363 | | | | | $ | 9 | | | | | $ | 13,874 | | | | | $ | (62) | | | | | $ | (20,792) | | | | | $ | (1,752) | | |
Net Income (Loss)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (263) | | | | | | (263) | | | | | | (263) | | | | | | (263) | | |
Balance, May 31, 2020
|
| | | | 27,195 | | | | | $ | 3,370 | | | | | | 17,087 | | | | | $ | 1,849 | | | | | | 9,066,363 | | | | | $ | 9 | | | | | $ | 13,874 | | | | | $ | (62) | | | | | $ | (21,055) | | | | | $ | (2,015) | | |
Net Income (Loss)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | $ | (568) | | | | | $ | (568) | | |
Balance, May 31, 2021
|
| | | | 27,195 | | | | | $ | 3,370 | | | | | | 17,087 | | | | | $ | 1,849 | | | | | | 9,066,363 | | | | | $ | 9 | | | | | $ | 13,874 | | | | | $ | (62) | | | | | $ | (21,623) | | | | | $ | (2,583) | | |
| | |
Fiscal Years Ended
|
| |||||||||
| | |
May, 31, 2021
|
| |
May, 31, 2020
|
| ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | | | | | | | | |
Net loss
|
| | | $ | (568) | | | | | $ | (263) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 1 | | | | | | — | | |
Accrued paid in kind interest
|
| | | | 236 | | | | | | 263 | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Accounts payable and accrued liabilities
|
| | | | 248 | | | | | | — | | |
NET CASH USED BY OPERATING ACTIVITIES
|
| | | | (83) | | | | | | — | | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | | | | | | |
Purchases of property and equipment
|
| | | | (20) | | | | | | — | | |
Deposit on equipment
|
| | | | (3,282) | | | | | | — | | |
NET CASH USED IN INVESTING ACTIVITIES
|
| | | | (3,302) | | | | | | — | | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | | | | | | |
Sale of preferred stock
|
| | | | 16,500 | | | | | | — | | |
Issuance cost for preferred stock
|
| | | | (1,365) | | | | | | — | | |
NET CASH PROCEEDS FROM FINANCING ACTIVITIES
|
| | | | 15,135 | | | | | | — | | |
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
| | | | 11,750 | | | | | | — | | |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
|
| | | | — | | | | | | — | | |
CASH AND CASH EQUIVALENTS, END OF YEAR
|
| | | $ | 11,750 | | | | | $ | — | | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | | | | | | | | | | | | | |
Interest paid
|
| | | $ | — | | | | | $ | — | | |
Class of Stock
|
| |
Common Share
Conversion Ratio |
| |
Shares
|
| |
May 31, 2021
|
| |
May 31, 2020
|
|
Convertible Series A preferred shares
|
| |
1 to 1429
|
| |
27,195
|
| |
38,861,655
|
| |
38,861,655
|
|
Convertible Series B preferred shares
|
| |
1 to 1000
|
| |
17,087
|
| |
17,087,000
|
| |
17,087,000
|
|
Convertible and Redeemable Series preferred shares
|
| |
1 to 200
|
| |
660,000
|
| |
132,000,000
|
| |
—
|
|
Total
|
| | | | | | | |
187,948,655
|
| |
55,948,655
|
|
| | |
May 31
2021 |
| |
May 31
2020 |
| ||||||
Office and computer equipment
|
| | | $ | 21 | | | | | $ | — | | |
Total cost of property and equipment
|
| | | | 21 | | | | | | | | |
Accumulated depreciation
|
| | | | (1) | | | | | | | | |
Property and equipment, net
|
| | | $ | 20 | | | | | $ | — | | |
Holder
|
| |
Interest
Rate |
| |
Status
|
| |
Principal
Amount |
| |
May 31, 2021
Accrued Interest Payable |
| |
Total
|
| |||||||||||||||
Related Party
|
| | | | 16% | | | | | | Default | | | | | $ | 220 | | | | | $ | 828 | | | | | $ | 1,048 | | |
Non-Related Party
|
| | | | 16% | | | | | | Default | | | | | | 250 | | | | | | 837 | | | | | | 1,087 | | |
Total
|
| | | | | | | | | | | | | | | $ | 470 | | | | | $ | 1,665 | | | | | $ | 2,135 | | |
Holder
|
| |
Interest
Rate |
| |
Status
|
| |
Principal
Amount |
| |
May 31, 2020
Accrued Interest Payable |
| |
Total
|
| |||||||||||||||
Related Party
|
| | | | 16% | | | | | | Default | | | | | $ | 220 | | | | | $ | 713 | | | | | $ | 933 | | |
Non-Related Party
|
| | | | 16% | | | | | | Default | | | | | | 250 | | | | | | 717 | | | | | | 967 | | |
Total
|
| | | | | | | | | | | | | | | $ | 470 | | | | | $ | 1,429 | | | | | $ | 1,899 | | |
| | |
Year ended
May 31, 2021 |
| |
Year ended
May 31, 2020 |
| ||||||
Current expense (benefit) | | | | | | | | | | | | | |
Federal
|
| | | $ | — | | | | | $ | — | | |
State
|
| | | | — | | | | | | — | | |
Total current expense
|
| | | $ | — | | | | | $ | — | | |
Deferred expense (benefit) | | | | | | | | | | | | | |
Federal
|
| | | $ | — | | | | | $ | — | | |
State
|
| | | | — | | | | | | — | | |
Total deferred expense (benefit)
|
| | | | — | | | | | | — | | |
Total income tax expense (benefit)
|
| | | $ | — | | | | | $ | — | | |
| | |
May 31,
2021 |
| |
May 31,
2020 |
| ||||||
Expected income tax expense (benefit) at U.S. statutory rate
|
| | | | 21% | | | | | | 21% | | |
State Tax Expense
|
| | | | 0% | | | | | | 0% | | |
Change in Valuation Allowance
|
| | | | -21% | | | | | | -21% | | |
Income Tax Expense / (Benefit)
|
| | | | 0% | | | | | | 0% | | |
| | |
May 31,
2021 |
| |
May 31,
2020 |
| ||||||
Deferred Tax Assets: | | | | | | | | | | | | | |
Federal Net Operating Loss
|
| | | $ | 175 | | | | | $ | 55 | | |
Valuation Allowance
|
| | | | (175) | | | | | | (55) | | |
Total Net Deferred Tax Assets/(Liabilities)
|
| | | $ | — | | | | | $ | — | | |
Class of Stock
|
| |
Ranking
|
| |
Liquidation Preferences
|
| |||
Redeemable and Convertible Series C shares | | |
Priority 1
|
| | Cash equal to $25 per share plus accrued or unpaid Paid in Kind dividends | | | Ratably share in distribution of assets in proportion to preferential entitled amounts | |
Convertible Series A preferred shares | | |
Priority 2
|
| | Cash equal to $100 per share plus declared or accrued and unpaid dividends | | | Ratably share in distribution of assets in proportion to preferential entitled amounts | |
Convertible Series B preferred shares | | |
Priority 3
|
| | Cash equal to $100 per share plus declared or accrued and unpaid dividends | | | Ratably share in distribution of assets in proportion to preferential entitled amounts | |
Class of Stock
|
| |
Carrying Value
|
| |
Accrued
Dividends |
| |
Accumulating
Dividends not Declared |
| |
Liquidation
Amount |
| ||||||||||||
Redeemable and Convertible Series C shares
|
| | | $ | 16,500,000 | | | | | $ | — | | | | | $ | — | | | | | $ | 16,500,000 | | |
Convertible Series A preferred shares
|
| | | $ | 2,719,500 | | | | | $ | 70,821 | | | | | $ | 767,500 | | | | | $ | 3,557,821 | | |
Convertible Series B preferred shares
|
| | | $ | 1,708,700 | | | | | $ | 45,279 | | | | | $ | 402,400 | | | | | $ | 2,156,379 | | |
Class of Stock
|
| |
Ranking
|
| |
Liquidation Preferences
|
| |||
Convertible Series A preferred shares | | |
Priority 1
|
| | Cash equal to $100 per share plus declared or accrued and unpaid dividends | | | Ratably share in distribution of assets in proportion to preferential entitled amounts | |
Convertible Series B preferred shares | | |
Priority 2
|
| | Cash equal to $100 per share plus declared or accrued and unpaid dividends | | | Ratably share in distribution of assets in proportion to preferential entitled amounts | |
Class of Stock
|
| |
Carrying Value
|
| |
Accrued
Dividends |
| |
Accumulating
Dividends not Declared |
| |
Liquidation
Amount |
| ||||||||||||
Convertible Series A preferred shares
|
| | | $ | 2,719,500 | | | | | $ | 70,821 | | | | | $ | 767,500 | | | | | $ | 3,557,821 | | |
Convertible Series B preferred shares
|
| | | $ | 1,708,700 | | | | | $ | 45,279 | | | | | $ | 402,400 | | | | | $ | 2,156,379 | | |
Service Provider
|
| |
Common Stock
Shares Committed |
| |||
Valuefinder
|
| | | | 18,938,559 | | |
SparkPool
|
| | | | 44,640,889 | | |
GMR
|
| | | | 44,649,889 | | |
Total
|
| | | | 108,220,337 | | |
Agreement Date*
|
| |
Purchase
Commitment |
| |
Deposit Paid
|
| |
Expected Shipping
|
| ||||||
May 27, 2021
|
| | | $ | 4,968 | | | | | $ | — | | | | | |
April 13, 2021
|
| | | $ | 8,512 | | | | | $ | 3,277 | | | |
August 2021 – July 2022
|
|
Total
|
| | | $ | 13,480 | | | | | | 3,277 | | | | | |
Lease Period
|
| |
Monthly
Base Rent |
| |||
Months 1 – 13
|
| | | $ | 25,856 | | |
Months 14 – 25
|
| | | $ | 26,525 | | |
Months 26 – 37
|
| | | $ | 27,193 | | |
Months 38 – 49
|
| | | $ | 27,862 | | |
Months 50 – 61
|
| | | $ | 28,531 | | |
Month 62 – (10/31/26)
|
| | | $ | 29,199 | | |
| | |
August 31, 2021
|
| |
May 31, 2021
|
| ||||||
ASSETS | | | | | | | | | | | | | |
Current Assets: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 28,929 | | | | | $ | 11,750 | | |
Prepaid expenses and other current assets
|
| | | | 164 | | | | | | 5 | | |
Cryptoassets
|
| | | | 437 | | | | | | — | | |
Total current assets
|
| | | | 29,530 | | | | | | 11,755 | | |
Right of use asset, net
|
| | | | 1,262 | | | | | | — | | |
Deposit on equipment
|
| | | | 13,577 | | | | | | 3,277 | | |
Deposits and other assets
|
| | | | 773 | | | | | | — | | |
Property and equipment, net
|
| | | | 5,224 | | | | | | 20 | | |
TOTAL ASSETS
|
| | | $ | 50,366 | | | | | $ | 15,052 | | |
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ DEFICIT
|
| | | | | | | | | | | | |
Current Liabilities: | | | | | | | | | | | | | |
Accounts payable and accrued liabilities
|
| | | $ | 4,807 | | | | | $ | 248 | | |
Accrued dividends
|
| | | | — | | | | | | 116 | | |
Current portion of operating lease liability
|
| | | | 168 | | | | | | — | | |
Related party notes payable
|
| | | | — | | | | | | 2,135 | | |
Other current liabilities
|
| | | | 7 | | | | | | — | | |
Total current liabilities
|
| | | | 4,982 | | | | | | 2,500 | | |
Long-term portion of operating lease liability
|
| | | | 1,097 | | | | | | — | | |
Total liabilities
|
| | | | 6,079 | | | | | | 2,500 | | |
Commitments and contingencies (Note 10) | | | | | | | | | | | | | |
Mezzanine equity: | | | | | | | | | | | | | |
Series C convertible and redeemable preferred stock, $.001 par value, 660,000 shares authorized, issued and outstanding
|
| | | $ | 15,135 | | | | | $ | 15,135 | | |
Series D convertible and redeemable preferred stock, $.001 par value, 1,304,000 shares authorized, issued, and outstanding
|
| | | | 29,902 | | | | | | — | | |
Total mezzanine equity
|
| | | | 45,037 | | | | | | 15,135 | | |
Stockholders’ deficit | | | | | | | | | | | | | |
Series A convertible preferred stock, $.001 par value, authorized 70,000 shares, 0 and 27,195 shares issued and outstanding, respectively
|
| | | $ | — | | | | | $ | 3,370 | | |
Series B convertible preferred stock, $.001 par value, authorized 50,000 shares, 0 and 17,087 shares issued and outstanding, respectively
|
| | | | — | | | | | | 1,849 | | |
Common stock, $.001 par value, 1,000,000,000 shares authorized, 320,381,519 and 9,066,363 shares issued and outstanding
|
| | | | 3,122 | | | | | | 9 | | |
Additional paid in capital
|
| | | | 40,856 | | | | | | 13,874 | | |
Treasury stock, 36,300 shares, at cost
|
| | | | (62) | | | | | | (62) | | |
Accumulated deficit
|
| | | | (44,666) | | | | | | (21,623) | | |
Total Stockholders’ deficit
|
| | | | (751) | | | | | | (2,583) | | |
Total Mezzanine equity and Stockholders’ deficit
|
| | | | 44,286 | | | | | | 12,552 | | |
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ DEFICIT
|
| | |
$
|
50,366
|
| | | |
$
|
15,052
|
| |
| | |
Three Months Ended
|
| |||||||||
| | |
August 31, 2021
|
| |
August 31, 2020
|
| ||||||
Revenues: | | | | | | | | | | | | | |
Cryptocurrency mining revenue, net
|
| | | $ | 612 | | | | | $ | — | | |
Cost of revenues
|
| | | | 349 | | | | | | — | | |
Gross profit
|
| | | | 263 | | | | | | — | | |
Costs and expenses: | | | | | | | | | | | | | |
Selling, general and administrative
|
| | | | 698 | | | | | | — | | |
Impairment of cryptocurrency assets
|
| | | | (20) | | | | | | — | | |
Stock-based compensation for service agreement
|
| | | | 12,337 | | | | | | — | | |
Depreciation
|
| | | | 3 | | | | | | — | | |
Total costs and expenses
|
| | | | 13.058 | | | | | | — | | |
Operating income (loss)
|
| | | | (12,795) | | | | | | — | | |
Other income (expense): | | | | | | | | | | | | | |
Interest Expense
|
| | | | — | | | | | | (72) | | |
Gain/Loss on extinguishment of accounts payable
|
| | | | 40 | | | | | | — | | |
Gain/Loss on extinguishment of debt
|
| | | | (1,342) | | | | | | — | | |
Total Other Income (Expense)
|
| | | | (1,302) | | | | | | (72) | | |
Net Income (loss) attributable to common shareholders
|
| | | $ | (14,097) | | | | | $ | (72) | | |
| | |
Series A
Convertible Preferred Stock |
| |
Series B
Convertible Preferred Stock |
| |
Series C
Convertible Preferred and Redeemable Stock |
| |
Series D
Convertible Preferred and Redeemable Stock |
| |
Common Stock
|
| |
Additional
Paid in Capital |
| |
Treasury
Stock |
| |
Accumulated
Deficit |
| |
Mezzanine Equity and
Shareholders’ Deficit |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, May 31, 2021
|
| | | | 27,195 | | | | | $ | 3,370 | | | | | | 17,087 | | | | | $ | 1,849 | | | | | | 660,000 | | | | | $ | 15,135 | | | | | | — | | | | | $ | — | | | | | | 9,066,363 | | | | | $ | 9 | | | | | $ | 13,874 | | | | | $ | (62) | | | | | $ | (21,623) | | | | | $ | 12,552 | | |
Extinguishment of Debt
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 30,502,970 | | | | | | 305 | | | | | | 3,173 | | | | | | — | | | | | | — | | | | | | 3,478 | | |
Issuance of Dividends to Preferred Stock
|
| | | | 60,822 | | | | | | 6,082 | | | | | | 29,772 | | | | | | 2,979 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (8,946) | | | | | | 116 | | |
Conversion of Preferred Stock
|
| | | | (88,017) | | | | | | (9,452) | | | | | | (46,859) | | | | | | (4,828) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 172,591,849 | | | | | | 1,726 | | | | | | 12,554 | | | | | | — | | | | | | — | | | | | | — | | |
Service Agreement
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 108,220,337 | | | | | | 1,082 | | | | | | 11,255 | | | | | | — | | | | | | — | | | | | | 12,337 | | |
Issuance of Preferred Stock
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,304,000 | | | | | | 32,600 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | $ | 32,600 | | |
Issuance Costs of Preferred Stock
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (2,698) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | $ | (2,698) | | |
Net Income (Loss)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (14,097) | | | | | $ | (14,098) | | |
Balance, August 31, 2021
|
| | | | — | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | | 660,000 | | | | | $ | 15,135 | | | | | | 1,304,000 | | | | | $ | 29,902 | | | | | | 320,381,519 | | | | | $ | 3,122 | | | | | $ | 40,856 | | | | | $ | (62) | | | | | $ | (44,666) | | | | | $ | 44,286 | | |
| | |
Series A
Convertible Preferred Stock |
| |
Series B
Convertible Preferred Stock |
| |
Series C
Convertible Preferred and Redeemable Stock |
| |
Series D
Convertible Preferred and Redeemable Stock |
| |
Common Stock
|
| |
Additional
Paid in Capital |
| |
Treasury
Stock |
| |
Accumulated
Deficit |
| |
Mezzanine and
Shareholders’ Equity |
| | | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, May 31, 2020
|
| | | | 27,195 | | | | | $ | 3,370 | | | | | | 17,087 | | | | | $ | 1,849 | | | | | | — | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | | 9,066,363 | | | | | $ | 9 | | | | | $ | 13,874 | | | | | $ | (62) | | | | | $ | (21,055) | | | | | $ | (2,015) | | | | | | | ||||||||
Net Income (Loss)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (72) | | | | | $ | (72) | | | | | | | ||||||||
Balance, August 31, 2020
|
| | | | 27,195 | | | | | $ | 3,370 | | | | | | 17,087 | | | | | $ | 1,849 | | | | | | — | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | | 9,066,363 | | | | | $ | 9 | | | | | $ | 13,874 | | | | | $ | (62) | | | | | $ | (21,127) | | | | | $ | (2,087) | | | | | | |
| | |
Three Months Ended
|
| |||||||||
| | |
August 31, 2021
|
| |
August 31, 2020
|
| ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | | | | | | | | |
Net loss
|
| | | $ | (14,097) | | | | | $ | (72) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 175 | | | | | | — | | |
Gain/(Loss) on extinguishment of debt
|
| | | | 1,342 | | | | | | — | | |
Gain/(Loss) on extinguishment of accounts payable
|
| | | | (40) | | | | | | — | | |
Impairment of cryptocurrency assets
|
| | | | 20 | | | | | | | | |
Stock compensation for service agreement
|
| | | | 12,337 | | | | | | — | | |
Amortization of right of use asset
|
| | | | 28 | | | | | | — | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Prepaid expenses and other current assets
|
| | | | (770) | | | | | | — | | |
Accounts payable and accrued liabilities
|
| | | | 368 | | | | | | 72 | | |
Deposits and other assets
|
| | | | (773) | | | | | | | | |
Payment of operating leases
|
| | | | (25) | | | | | | — | | |
NET CASH USED BY OPERATING ACTIVITIES
|
| | | | (1,435) | | | | | | — | | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | | | | | | |
Purchases of property and equipment
|
| | | | (998) | | | | | | — | | |
Deposit on equipment
|
| | | | (10,300) | | | | | | — | | |
NET CASH USED IN INVESTING ACTIVITIES
|
| | | | (11,288) | | | | | | — | | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | | | | | | |
Issuance of preferred stock
|
| | | | 32,600 | | | | | | — | | |
Issuance cost for preferred stock
|
| | | | (2,698) | | | | | | — | | |
NET CASH PROCEEDS FROM FINANCING ACTIVITIES
|
| | | | 29,902 | | | | | | — | | |
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
| | | | 17,179 | | | | | | — | | |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
|
| | | | 11,750 | | | | | | — | | |
CASH AND CASH EQUIVALENTS, END OF YEAR
|
| | | $ | 28,929 | | | | | $ | — | | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | | | | | | | | | | | | | |
Interest paid
|
| | | $ | — | | | | | $ | — | | |
SUPPLEMENTAL DISCLOSURE OF NON-CASH OPERATING AND INVESTING ACTIVITIES
|
| | | ||||||||||
Right-of-use asset obtained by lease obligation
|
| | | $ | 1,291 | | | | | $ | — | | |
Fixed assets in accounts payable
|
| | | $ | 4,391 | | | | | $ | — | | |
| | |
August 31,
2021 |
| |
May 31,
2021 |
| ||||||
Cryptocurrency mining equipment
|
| | | $ | 5,181 | | | | | $ | — | | |
Office and computer equipment
|
| | | | 156 | | | | | | 21 | | |
Autos
|
| | | | 63 | | | | | | — | | |
Total cost of property and equipment
|
| | | | 5,400 | | | | | | 21 | | |
Accumulated depreciation
|
| | | | (176) | | | | | | (1) | | |
Property and equipment, net
|
| | | $ | 5,224 | | | | | $ | 20 | | |
|
Beginning Balance – May 31, 2021
|
| | | $ | — | | |
|
Cryptoassets earned through mining
|
| | | | 618 | | |
|
Mining pool operating fees
|
| | | | (6) | | |
|
Cryptoassets sold or converted
|
| | | | (155) | | |
|
Impairment of cryptocurrencies
|
| | | | (20) | | |
|
Ending Balance – August 31, 2021
|
| | | $ | 437 | | |
|
Class of Stock
|
| |
Ranking
|
| |
Liquidation Preferences
|
| |||
| Redeemable and Convertible Series C shares | | | Priority 1 | | |
Cash equal to $25
per share plus accrued or unpaid PIK dividends |
| |
Ratably share in
distribution of assets in proportion to preferential entitled amounts |
|
| Redeemable and Convertible Series D shares | | | Priority 1 | | |
Cash equal to $25
per share plus accrued or unpaid PIK dividends |
| |
Ratably share in
distribution of assets in proportion to preferential entitled amounts |
|
Class of Stock
|
| |
Carrying Value
|
| |
Accrued
Dividends |
| |
Accumulating
Dividends not Declared |
| |
Liquidation
Amount |
| ||||||||||||
Redeemable and Convertible Series C shares
|
| | | $ | 15,135,023 | | | | | $ | — | | | | | $ | — | | | | | $ | 16,500,000 | | |
Redeemable and Convertible Series D shares
|
| | | $ | 29,902,044 | | | | | $ | — | | | | | $ | — | | | | | $ | 32,600,000 | | |
Service Provider
|
| |
Common Stock
Shares Committed |
| |||
ValueFinder
|
| | | | 18,938,559 | | |
SparkPool | | | | | 44,640,889 | | |
GMR
|
| | | | 44,649,889 | | |
Total
|
| | | | 108,229,337 | | |
Class of Stock
|
| |
Option Pricing
Fair Value |
| |
Weight
|
| ||||||
Common Stock
|
| | | $ | 0.067 | | | | | | 25% | | |
Conversion Price of Series C Shares
|
| | | | 0.130 | | | | | | 75% | | |
| | | | $ | 0.114 | | | | | | | | |
|
Weighted-average months remaining
|
| | 62.4 months | |
| | | | | |
|
Weighted-average discount rate
|
| | 12.50% | |
Year
|
| |
Office Lease
|
| |
Other Leases
|
| |
Total
|
| |||||||||
FY22
|
| | | $ | 233 | | | | | $ | 46 | | | | | $ | 279 | | |
FY23
|
| | | | 317 | | | | | | 6 | | | | | | 323 | | |
FY24
|
| | | | 325 | | | | | | — | | | | | | 325 | | |
FY25
|
| | | | 333 | | | | | | — | | | | | | 333 | | |
FY26
|
| | | | 341 | | | | | | — | | | | | | 341 | | |
Beyond
|
| | | | 203 | | | | | | — | | | | | | 203 | | |
| | |
Quarterly Period Ended August 31,
|
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Net income (loss)
|
| | | $ | (14,098) | | | | | $ | (72) | | |
Basic and diluted weighted average number of shares outstanding
|
| | | | 269,623,613 | | | | | | 9,066,363 | | |
Basic and diluted net income (loss) per share
|
| | | $ | (0.05) | | | | | $ | (0.01) | | |
|
SEC Registration Fee
|
| | | $ | 33,107.02 | | |
|
Printing Fees and Expenses
|
| | | $ | 60,000 | | |
|
Accounting Fees and Expenses
|
| | | $ | 30,000 | | |
|
Legal Fees and Expenses
|
| | | $ | 250,000 | | |
|
Transfer Agent and Registrar Fees
|
| | | $ | 14,700 | | |
|
Miscellaneous Fees and Expenses
|
| | | $ | 3,000 | | |
|
Total
|
| | | $ | 390,807.02 | | |
Exhibit
No. |
| |
Description
|
|
3.1* | | | | |
3.2* | | | | |
4.1* | | | | |
4.2* | | | | |
4.3* | | | | |
4.4* | | | | |
5.1 | | | | |
10.1* | | | | |
10.2* | | | | |
10.3* | | | | |
10.4* | | | | |
10.5#** | | | | |
10.6#** | | | | |
10.7* | | | | |
10.8#** | | | | |
10.9#** | | | | |
10.10#** | | | | |
10.11** | | | |
Exhibit
No. |
| |
Description
|
|
10.12†** | | | | |
10.13†** | | | | |
21 | | | | |
23.1* | | | | |
23.2** | | | | |
23.3 | | | | |
23.4 | | | | |
24.1* | | | |
| | | |
APPLIED BLOCKCHAIN, INC.
|
| |||
| | | | By: | | |
/s/ Wes Cummins
Name: Wes Cummins
Title:
Chief Executive Officer, Secretary, Treasurer, Chairperson of the Board and Director (Principal Executive Officer)
|
|
| | | | By: | | |
/s/ David Rench
Name: David Rench
Title:
Chief Financial Officer (Principal Financial and Accounting Officer)
|
|
|
Person
|
| |
Capacity
|
| |
Date
|
|
|
/s/ Wes Cummins
Wes Cummins
|
| |
Chairperson of the Board and Director
(Principal Executive Officer) |
| |
December 1, 2021
|
|
|
*
Chuck Hastings
|
| | Director | | |
December 1, 2021
|
|
|
*
Kelli McDonald
|
| | Director | | |
December 1, 2021
|
|
|
*
Doug Miller
|
| | Director | | |
December 1, 2021
|
|
|
*
Virginia Moore
|
| | Director | | |
December 1, 2021
|
|
|
*
Richard Nottenburg
|
| | Director | | |
December 1, 2021
|
|
|
*
Jason Zhang
|
| | Director | | |
December 1, 2021
|
|
Exhibit 5.1
Snell & Wilmer L.L.P.
Hughes Center
3883 Howard Hughes Parkway, Suite 1100
Las Vegas, NV 89169-5958
TELEPHONE: 702.784.5200
FACSIMILE: 702.784.5252
December 1, 2021
Applied Blockchain, Inc.
3811 Turtle Creek Blvd.
Suite 2100
Dallas, TX 75219
Re: Registration Statement on Form S-1
Ladies and Gentlemen:
We have served as Nevada counsel to Applied Blockchain, Inc., a Nevada corporation (the “Company”), in connection with the Company’s preparation and filing with the Securities and Exchange Commission (the “Commission”) of a registration statement on Form S-1, Registration No. 333-258818, originally filed on August 13, 2021, as amended from time to time including on the date hereof (the “Registration Statement”), under the Securities Act of 1933, as amended (the “Securities Act”). The Registration Statement includes a prospectus (the “Prospectus”) relating to the registration of the resale of shares of common stock, $0.001 par value per share (the “Common Stock”) by certain stockholders of the Company named in the Prospectus (the “Selling Stockholders”), as follows:
(i) | The resale of up to 132,000,000 shares (the “Series C Common Shares”) of Common Stock issuable on automatic conversion when the Registration Statement is declared effective by the Commission of 660,000 shares of Company’s Series C Convertible Redeemable Preferred Stock issued in a private placement pursuant to subscription agreements entered into on April 15, 2021; and |
(ii) | The resale of up to 78,409,130 shares (the “Series D Common Shares” and, together with the Series C Common Shares, the “Registered Shares”) of Common Stock issuable on automatic conversion when the Registration Statement is declared effective by the Commission of 1,380,000 shares of Company’s Series D Convertible Redeemable Preferred Stock issued in a private placement pursuant to subscription agreements entered into on July 30, 2021, August 24, 2021, and October 7, 2021. |
This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act in connection with the filing of the Registration Statement. All capitalized terms used herein and not otherwise defined shall have the respective meanings given to them in the Prospectus.
In connection with our representation of the Company, and as a basis for the opinion hereinafter set forth, we have relied upon and examined matters of fact, questions of law, and documents as we have deemed necessary to render this opinion, including the originals, or copies certified or otherwise identified to our satisfaction, of the following documents (hereinafter collectively referred to as the “Documents”):
1. | The Registration Statement and exhibits thereto; |
2. | The Prospectus; |
3. | The Second Amended and Restated Articles of Incorporation of the Company filed with the Secretary of State of the State of Nevada, as amended through the date hereof, certified as of the date hereof by an officer of the Company (the “Articles”); |
4. | The Bylaws of the Company, certified as of the date hereof by an officer of the Company (the “Bylaws”); |
5. | Certificate of Existence with Status in Good Standing with respect to the Company, certified by the Secretary of State of the State of Nevada, dated as of a recent date; |
6. | Resolutions adopted by the Board of Directors and shareholders of the Company relating to the Registration Statement, the Prospectus, the issuance of the Series C Convertible Redeemable Preferred Stock, the issuance of the Series D Convertible Redeemable Preferred Stock, and other actions with regard thereto (collectively, the “Resolutions”), certified as of the date hereof by an officer of the Company; |
7. | A certificate executed by an officer of the Company, dated as of the date hereof, as to certain factual matters; and |
8. | Such other documents and matters as we have deemed necessary or appropriate to express the opinion set forth below, subject to the assumptions, limitations, and qualifications stated herein. |
In expressing the opinion set forth below, we have assumed the following:
A. | Each individual executing any of the Documents, whether on behalf of such individual or any other person, is legally competent to do so. |
B. | All Documents submitted to us as originals are authentic. The form and content of all Documents submitted to us as unexecuted drafts do not differ in any respect relevant to this opinion from the form and content of such Documents executed and delivered. All Documents submitted to us as certified or photostatic copies conform to the original documents. All signatures on all such Documents are genuine. All public records reviewed or relied upon by us or on our behalf are true and complete. All representations, warranties, statements, and information contained in the Documents are true and complete. There has been no oral or written modification of or amendment to any of the Documents, and there has been no waiver of any provision of any of the Documents, by action or omission of the parties or otherwise. |
C. | The Registration Statement, and any amendments thereto, will have become effective under the Securities Act. The Series C Convertible Redeemable Preferred Stock and the Series D Convertible Redeemable Preferred Stock have been validly issued and fully paid. Upon issuance of all Registered Shares issuable upon conversion of the Series C Convertible Redeemable Preferred Stock and the Series D Convertible Redeemable Preferred Stock, the total number of shares of Common Stock issued and outstanding will not exceed the total number of shares of Common Stock that the Company is then authorized to issue under its Articles, as amended. |
On the basis of, and in reliance on, the foregoing examination and subject to the assumptions, exceptions, qualifications, and limitations contained herein, we are of the opinion that the Registered Shares to be resold by the Selling Stockholders have been duly authorized, and, when issued upon conversion of the Series C Convertible Redeemable Preferred Stock and the Series D Convertible Redeemable Preferred Stock in accordance with the terms of the Articles, will be validly issued, fully paid, and nonassessable.
Our opinion that any document is legal, valid, and binding is qualified as to (a) limitations imposed by bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium, or other laws relating to or affecting the rights of creditors generally; (b) rights of indemnification and contribution, which may be limited by applicable law or equitable principles; and (c) general principles of equity, including without limitation concepts of materiality, reasonableness, good faith and fair dealing, and the possible unavailability of specific performance or injunctive relief and limitation of rights of acceleration, regardless of whether such enforceability is considered a proceeding in equity or at law.
We render this opinion only with respect to the general corporate law of the State of Nevada as set forth in Chapter 78 of the Nevada Revised Statutes. We neither express nor imply any obligation with respect to any other laws or the laws of any other jurisdiction or of the United States.
The opinion expressed herein is limited to the matters specifically set forth herein and no other opinion shall be inferred beyond the matters expressly stated. We assume no obligation to supplement this opinion if any applicable law changes after the date hereof or if we become aware of any fact that might change the opinion expressed herein after the date hereof. Without limiting the generality of the foregoing, we neither express nor imply any opinion regarding the contents of the Registration Statement.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement filed by the Company. We also consent to the reference to our firm under the heading “Legal Matters” in the Registration Statement filed by the Company. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the Securities Act or the rules and regulations of the Commission promulgated thereunder.
Very truly yours, | |
/s/ Snell & Willmer L.L.P. | |
Snell & Wilmer L.L.P. |
Exhibit 21
Subsidiaries
Name of Subsidiary | Jurisdiction of Organization | Percent Owned |
Shanghai Sparkly Ore Tech, Ltd | China | 100% |
Applied Blockchain, Ltd. | Cayman Islands | 100% |
APLD Hosting, LLC | Nevada | 100% |
1.21 Gigawatts, LLC | Delaware | 60% |
Applied Talent Resources LLC | Nevada | 100% |
APLD - Rattlesnake Den I LLC | Delaware | 60% |
APLD - Rattlesnake Den II LLC | Delaware | 60% |
Exhibit 23.3
Independent Registered Public Accounting Firm’s Consent
We consent to the inclusion in this Registration Statement of Applied Blockchain, Inc. on Amendment No. 2 of Form S-1 File No. 333-258818 of our report dated August 13, 2021, with respect to our audits of the financial statements of Applied Blockchain, Inc. as of May 31, 2021 and 2020 and for the years ended May 31, 2021 and 2020, which report appears in the Prospectus, which is part of this Registration Statement. We also consent to the reference to our Firm under the heading “Experts” in such Prospectus.
/s/ Marcum LLP
Marcum LLP
New York, NY
December 1, 2021